The Enormous Boom Has Saturated The Market
A report from CBS 8 in California. “San Diego apartment rental prices continue to go up, up, up with the average price of a two bedroom apartment now around $2,200. But, there may be some good news on the horizon. The good news is vacancy rates are starting to creep up in San Diego County, mainly in the North County, Chula Vista and East County, said San Diego County Apartment Association spokesperson Molly Kirkland. ‘All the new stock coming to market tends to be higher end,’ said Devin O’Brien who works at Zumper, one of the largest rental web sites nationwide. ‘We’ve seen pretty much most of California go crazy.’”
The Colorado Real Estate Journal. “Entering 2017, the rapid acceleration of Denver’s multifamily market seems to be cooling. Yet, it’s not doom and gloom but, rather, a settling back onto familiar ground. In mid-January, the Apartment Association of Metro Denver announced that rents across metro Denver decreased by the largest dollar amount in the 36-year history of the report, and it was the second quarter in a row that the average cost of renting an apartment in Denver decreased.”
“Downtown Denver, which witnessed more than half of the new multifamily development in the past few years, may see negative or flat rent growth. ‘There’s just no way around it, because you’re going to deliver all these units,’ said Shane Ozment with ARA Newmark.”
“Massive supply has some experts concerned,’ said Mark Williams with the Apartment Association of Metro Denver. ‘There were nearly 25,000 new apartments build in the last three years and another 25,000 are currently under construction. Prior to this recent development boom, it took from 2002 to 2012 to build that many units.’”
The Chicagoist in Illinois. “If you think Chicago rent is Too Damn High, we have potentially good news—rents could fall soon, because the number of rental units on the market is going to skyrocket this year. Due to a controversial construction boom, the city will get 33 new buildings and roughly 6,600 new apartments in 2017, according to Luxury Living Chicago Realty. If Luxury Living’s estimates are borne out, Chicago will get more new apartments this year than in 2015 and 2016 combined, Curbed reports.”
The Mountain Xpress in North Carolina. “During last year’s fourth quarter, the rental vacancy rate in Buncombe, Haywood and Henderson counties stood at 7 percent, says economist Barbara Byrne Denham of Reis, a real estate research firm. That’s slightly higher than the 6.8 percent vacancy rate Reis reported during the third quarter of 2016. Developer William Ratchford cautions that actual vacancy rates are probably higher than what property managers report.”
“‘People lie about them,’ he explains. ‘Banks start asking questions if the occupancy rate falls below 90 percent.’ Ratchford, whose companies have built several rental developments in the Asheville area, says, ‘We’re starting to worry that the market is becoming oversaturated. Now is the time that rents actually are going to start to come down.’”
From Delmarva Now in Delaware. “A decade ago, city officials cracked down on nuisances to address issues with the rental market –– mainly in the Camden neighborhood near Salisbury University. In Camden, homes once occupied by owners were converted to rentals. A student housing building boom relieved the pressure off Camden. But that has created another problem, Councilman Jim Ireton said. Many of those rental homes now sit empty because their rent prices remain too high for families to afford. ‘I can take you on a tour and show you 500 of them,’ he said.”
The Gothamist in New York. “This is a great time to be alive—if you’ve been spending a ton of money on rent for an apartment in a not-luxury building and have been dreaming of spending a similarly large amount of money for an apartment in a luxury building. According to online real estate firm RentHop, the higher end of New York’s rental market, particularly the Manhattan market, has softened to the extent that one-bedroom rents in luxury buildings are often approaching parity with those of commoner buildings. In some areas, like glamorously desolate DUMBO, RentHop found median non-luxury unit rents now actually exceed rents for comparable luxury units.”
“The enormous boom in luxury units (defined as units in a building with a doorman or gym—rather generous categories, I know) over the past few years has saturated the market in many neighborhoods, and real estate watchers have been reporting since this past summer that the tide has started to turn toward renters. Landlords are cutting rents and offering one and two months free rent and other similar teasers to lure folks in, whereas a few years ago they would have asked you to put down your first born as a security deposit.”
From Michigan Live. “The state’s pension fund lost millions of dollars taking a chance on a private development deal in Ann Arbor. The Michigan Department of Treasury confirmed this week the State of Michigan Retirement Systems lost about half its original $20 million investment in the failed Broadway Village project with the recent sale of the property to a new development team that is planning an entirely new project now. About a decade ago, the SMRS made a $20 million equity investment to become a limited partner in a $172 million redevelopment project on Broadway Street.”
“Ron Leix, a spokesman for the treasury department, said the Great Recession froze bank financing options and stalled the previous development project. Going back more than a decade, the Strathmore Development Co. had plans to build 185 upscale apartments, 138,275 square feet of retail space, 152,689 square feet of office space and a 760-space parking structure. No activity has occurred on the site since 2009 after the existing buildings were demolished by the developer.”
“‘As the real estate market has improved, the general partner recently sold the property, resulting in a loss of approximately half the initial SMRS investment,’ Leix confirmed this week. That’s about a $10 million loss.”
Developer William Ratchford cautions that actual vacancy rates are probably higher than what property managers report. ‘People lie about them,’ he explains. ‘Banks start asking questions if the occupancy rate falls below 90 percent.’
Sounds kinda fraud-y. I wonder if it’s widespread?
Fraud with banks and real estate?
How could that happen?
How could that happen?
The FIRE sector are The Untouchables.
Keep paying the politicians, and the public treasury is yours for the looting.
“The Veneer of Justice in a Kingdom of Crime”
“In an effort to pick up where the Untouchables left off in early 2013, BestEvidence presents “The Veneer of Justice in a Kingdom of Crime.” In addition to analyzing events that have occurred since the Untouchables aired (including events caused by the Untouchables), and in an attempt to answer some of the deeply troubling issues raised by Martin Smith, “Veneer” examines certain implications the DOJ’s pronouncements, since late 2012, that the rule of law is effectively dead (having been supplanted by the management of oversized global banks)”
https://www.youtube.com/watch?v=eHgbRYgpGGs
2banana
Please reread the comment. The banks have done nothing wrong here (except maybe bad lending) it is the developer/owner who maybe commiting fraud. Again I say maybe.
actual vacancy rates are probably higher than what property managers report. ‘People lie about them,’ he explains.
Fraud, lies and misdirection. Amerikka what a fukushima!
The vacancy rates are as reliable as Facebook’s gazillion “Monthly active users” BS.
‘In some areas, like glamorously desolate DUMBO, RentHop found median non-luxury unit rents now actually exceed rents for comparable luxury units’
Ho ho HO, merry Christmas! NY chic is gonna blow a gasket.
It’s a bubble.
This is a symptom of it.
How cheap and easy money distorts the market…
This is a transient phenomenon; once this becomes common knowledge, the renters at the non-luxury places will negotiate harder, with the threat of moving to nicer digs for less money. The adjustment will take time to filter through the whole market, but it will.
luxury units (defined as units in a building with a doorman)
Several of the NYC articles refer to doorman buildings vs. non doorman buildings, with doorman buildings being significantly more expensive. ISTM that an actual doorman is not enough to justify the much higher rent. Is the difference really just the doorman, or is that code for granite countertops, more security, etc?
Having a doorman greet your homies is beyond cool.
Is the difference really just the doorman, or is that code for granite countertops, more security, etc?
Generally “doorman” buildings are nicer, but it depends on the age and ambiance of the building. Sometimes the lobbies are grandiose but apartments are so-so. Sometime apartments in the prewar non-doormen are much nicer than in postwar doormen buildings.
There’re plenty of buildings to choose from simplistic to upscale, with a part-time doorman in an older building vs. a virtual doorman in a new “luxury” building (usually in a not so nice neighborhood) vs. “white glove” overkill vs. even more overkill with a bellhop whose one and only “job” is to press elevator buttons, etc..
I found living in an upscale building less comfortable than in an old established no-special-frills one. I just didn’t enjoy so many porters/doormen/greeters, no privacy at all. And by the way, apart from very nice salaries, tips and bonuses, the doormen are unionized and get pensions. I’d rather open my own doors and press my own elevator buttons than pay for someone else’s pension, LOL.
The only truly useful job of doormen/potters is to accept packages (and to hail taxis in the rain). But even that is easily solved without a doorman if a building is not too big and has a dedicated package room by the lobby. Other than that, a waste of money, IMHO.
“Is the difference really just the doorman, or is that code for granite countertops, more security, etc?”
Having a big enough lobby to host a doorman, and a board or management team competent and uncorrupt enough to reliably pay for one, implies other ultra-luxe amenities that most of us don’t have, like, say, an elevator. A super that shows up more than once a month. A place for mailmen to leave packages so you don’t have to walk to the post office in the snow. Plumbing that lets everyone have a dishwasher. Ah, dreams of the good life…
It’s more a reflection of the low standard of living in NYC than it is a designation of “luxury”. Forget gyms and dog spas and parking, most Park Avenue luxury doorman buildings don’t even have central AC.
Whereas most “commoner buildings” (never heard that term before but it’s hilarious) are 6-story 19th century tenements that certainly didn’t plan for “lobbies” or “doormen” or “elevators” or “structural soundness”. Granite countertops, lol. Many of these tenements still have bathtubs in the kitchen. (Which would be fine except people in the tenements are paying way more than tenement rents!)
This is why it’s best to have little furniture or belongings. You can move at the drop of a hat, with little expense.
I like the idea of everything is a roadcase (Like pro sound/av industry uses) or is on wheels
NY chic is gonna blow a gasket.
Why?
I was wondering that too. I know how to get you angry and that certainly was not the way.
Pension funds going bankrupt even with thier investments heavily in a housing and stock bubble…
Now just imagine a correction…
Over a few years…
This is your warning to get out of bankrupt cities.
They will double or triple your property taxes before they touch one $100,000+ gold plated public union pension.
In Dallas the city is trying to claw money back from the cops.
If I remember the article correctly, that was only part of the solution. Which will be in court for the next 20 years.
The other part of the solution was taxpayers coughing up an additional $1 billion…
It was going to be more than that. IIRC the mayor briefly floated the idea of tripling property taxes, then backed down. Taxes are already sky high. Talk about crashing the economy.
Ha! Triple property taxes.
And that is in red Texas.
Now imagine this playing out in Chicago, NYC, Boston, LA or Philly…etc.
And it will.
Get out now.
It was going to be more than that. IIRC the mayor briefly floated the idea of tripling property taxes, then backed down. Taxes are already sky high. Talk about crashing the economy.
Texans like to brag about not having a state income tax. But their property taxes are already scary. Triple them? That would be cause for a taxpayer revolt.
As for LA, they have Prop 13. The most property taxes can go up is 2% a year. And like TABOR, prop 13 has withstood endless legal challenges. Unfortunately, Prop 13 doesn’t restrict government spending like TABOR does, nor does it restrict the growth of other taxes, like sales or income tax.
“IIRC the mayor briefly floated the idea of tripling property taxes, then backed down.”
The local and state governments are even worse than the Federal gov in this country. They operate almost completely unchecked, and are gouging on taxes in an absolutely shocking fashion.
The local and state governments are even worse than the Federal gov in this country.
Which is why you need something like Prop 13 or better yet, TABOR. When I read of the horror stories in other states, it makes my skin crawl. It does perplex me how taxpayers in other states just grab the ankles and let .gov do what it pleases.
They rip taxpayers to shreds ,see IL for results
If they tripled the taxes on a 2700 sq ft here in the Chicago suburbs, the tax bill would be $30,000 to $36,000 a year.
CA is going to need to follow their lead. Pension scams are out of control.
This is your warning to get out of bankrupt cities.
That’s what suburbs are for, the downside is that you might have a commute to the office. Only millenials and hipsters want to live in the city itself.
I’m glad hipsters have mad a comeback
What makes hipsters better? Is it their bulletproof coffee? Money for concerts and vacations? Youth? Beards?
I have heard several stories of people close to retirement getting a raise for their last year, so their pension is higher. They are all in on it. Then there is the double dipping as a consultant scam.
10k people turn 65 each day.
“…getting a raise for their last year, so their pension is higher.”
That’s usually three years aka “high three” at most real jobs.
Happens all the time. Plenty of stories of folks becoming “the manager” of their department for their last 3 years of their career. Everyone gets their turn.
The problem is that their pension is based on X years of service. But their payments INTO the system are based on a lower salary for X-3 years and higher salary for 3 years. And their payments OUT of the system are from the last 3 years (PLUS paid out vacation, etc.).
I’d have less of a problem with public pensions if:
1. The returns assumed when determining what people pay into the system were based in reality, not wishful thinking;
2. The payments out of the system were based on a blended REAL (not nominal) average of salary over time…so if you made lower salary for 95% of your years and higher salary for 5% of your years, your pension calculation would be based 95% on the lower income years.
This would largely solve the paid out vacation problem, since it wouldn’t impact the whole pension calculation, only one year.
Then there is the double dipping as a consultant scam.
It’s not a scam. A pension is an earned benefit, not a welfare payment.
There is meaningful gaming of the system when it comes to pension systems, and that is what drives many of us crazy.
The biggest one is using the last 1-3 years of salary as the basis for your benefit, as opposed to looking at the whole of the individual’s employment/pay history. This breeds the kind of managerial carousel baloney to juice the pensions that people are getting. People didn’t necessarily “earn” their position other than waiting in line for their turn.
Likewise is the salary “spiking” where people have all their accrued vacation count toward that last 1-3 years of salary in the pension calculations.
The first is a gaming of the system.
The second is an egregious loophole.
Call it what you will. You call it an “earned benefit”. I call these two practices unjustified loopholes that benefit government employees and cost taxpayers HUGE amounts of money.
In Ventura County, as an example, they found that 84% of those people collecting more than $100k in pension benefits are getting more in retirement than they did on the job.
How, from an actuarial, reasonable, and fairness perspective, does this make any sense at all?
I was referring to the so-called double dipping of consultants. Such people earn a pension as part of their compensation for years or decades of employment. Then they earn additional pay for their current employment as consultants.
So is your proposal to not hire retirees even if they are the best person for the job? Or not pay retirement pay to anyone currently under contract? I’m not sure how else to prevent this.
When you are school administrator working the pace of a tree sloth, then milking the system the last year for a fat pension, it is a scam. They spend most of their time on the internet, I know, long ago I was their IT guy.
He’s talking about “consulting” not the pension. dude.
And “consulting” IS a scam.
They clock allot of approved overtime to get their last few years up it counts as total income to set pension payout.
Firemen in motorhomes on the line for 3 weeks straight, etc.
If states could afford it, we might not be talking about it.
Meanwhile, we see deferred maintenance on dams.
People cheat.
This article is long and complicated, so I’m just going to sketch it out:
‘Meet The Wealthy Investors Buying Cheap Portland (OR) Apartment Buildings’
‘The professional and institutional investors who have flocked to the Portland market in recent years are taking advantage of low vacancy rates and strong population growth to make money – and, in the process, driving up rents. “Portland Multifamily Commands Top Dollar,” read the headline of a 2016 forecast from Colliers International, which buys and sells real estate in 66 countries. “The Golden Age of Apartments,” declared a publication from HFO, a Portland-based real estate investment firm.’
‘Two Portland properties that sold at the end of last year, the Titan Manor and the Normandy Apartments, provide interesting case studies into who these investors are. Crispin says that after the building changed hands, she received a letter from Avenue 5, a property management company, promising exciting new changes for residents. She called immediately to request repairs in her unit.’
‘Instead of repairs, Crispin says she and the other residents at the Titan all received no-fault evictions over a period of two months.’
‘Documents show that four different limited liability companies own the Titan Manor. Three listed their address as 10 Clay Street, suite 200, in Oakland, California, and the deed notes that tax statements should be sent to that address.’
‘That’s also the address of the Rogers Family Office and Rogers Family Foundation. The office and foundation manage the wealth of T. Gary Rogers, the former CEO of Dreyer’s Grand Ice Cream, former chairman of Levi Strauss and Co. and former chairman of the San Francisco Federal Reserve Bank.’
‘And though no one with the family will confirm it, documents suggest Rogers’ real-estate holdings – or perhaps those of his philanthropy — also include this rundown Portland apartment building. For example, the Rogers family’s in-house financial advisor, Matthew Semansky, signed mortgage documents for the Titan and is listed on the articles of incorporation for the three LLCs.’
‘Semansky did not respond to multiple phone calls. Another employee at the Rogers Family Office hung up when asked about the Titan Manor evictions.’
‘At the Normandy apartments on Portland’s Northeast Killingsworth Street, residents recently received notices that their rent will more than double on April 1.’
“Sorry to inform you, but the rental market has created enough of a disparity to your present rent that an increase has become necessary,” reads one of the notices, published in The Oregonian. The announcement goes on to cite rising costs and “the steady increase of market rents for similar units in the Portland area,” as the reason one tenant’s rent is increasing from $600 to $1,250 a month.’
‘Virden is the Portland office manager for HFF, a multinational real-estate brokerage with offices in 24 U.S. cities. Halliday is co-head of the firm’s San Francisco office. A 2015 report published by his firm, alongside a photo of Virden, offers some insight into his thinking. The report notes that luxury apartments in downtown Portland are fetching record rents, and driving up prices across the city.’
“The market-wide rent growth is stemming from rents set by new construction” the report reads. “The downtown ‘Class-A’ apartment deliveries have begun to force middle-income earners to seek housing in close-in suburban areas, where Portland’s Urban Growth Boundary continues to constrain supply.”
‘The report suggests that Portland’s rents will continue to rise until they catch up with those in San Francisco and Seattle.’
‘Tom Minnaert owns First Class Property Management, the company hired to manage the Normandy. Minnaert says many of the units are in “atrocious” condition due to years of neglect. He says the new owners bought the property intending to fix it up and expecting to raise the rents.’
“I totally understand. A lot of people look at it, ‘Wow, those landlords are just being greedy and doubling people’s rents,’” he said. “We weren’t doing it just to double the rents, we were doing it to provide better housing and make the property a better property.”
‘But it’s a stretch to call the $1,250 for units at the Normandy “market rate.” The average rent in Portland’s Cully-Roseway neighborhood last year ranged from $847 for a one-bedroom unit to $1,175 for three bedrooms, according to the Portland Housing Bureau’s 2016 data.’
‘We weren’t doing it just to double the rents’
I’m going to stick with the “greedy bastards” theory Tom.
Somehow I don’t think it is legal that a new owner of an apartment can break the signed contracts of the previos leases.
Now if there was no lease or it was a month by month lease then all if fair.
And I am guessing that the heavy hand of government in Portland has greatly restricted the building of apartments over the years resulting in a restriction of available apartments…
Because these new owners would lose thier shirts otherwise.
‘manage the wealth of T. Gary Rogers…former chairman of the San Francisco Federal Reserve Bank’
Well, well, what do you think about that?
Genie is out of the bottle.
How deep are the scams and fraud at the fed? We know how bad it is at Fannie, Freddy, FHA and HUD.
Fannie, Freddie, FHA and Hud
I call them Fraudy.
Can the International Criminal Court expand their purview to economic crimes against humanity? That would be super.
Courts are as corrupt as anything. Court systems will NEVER deliver justice.
So, when you have greedy bastards doing this…stuff, what you get is do-gooders like Chloe Eudaly, who ran for Portland City Commissioner solely on a “the rent is too damn high” platform.
They just passed a measure by which landlords have to pay moving costs for tenants caught up in no-cause evictions.
My first thought is that this should be handled by the rental contract, just like when renters have to pay to break a lease. The problem is, there hasn’t been power for renters to be able to do so due to strong rental demand in recent years. But now we’re on the slippery slope toward rent control which I’m absolutely against.
Portland landlords must pay relocation costs to evict tenants without cause.
Government causes a problem (no affordable housing) and then their solution to their own problem causes the problem to get even worse.
And we wonder why bigger government never fixes the problem…
Another small landlord argued the policy will increase landlords’ costs so much that they will raise rents even higher.
Exactly. Law of Unintended Consequences. Who knew?
Why is the lack of affordable housing the government’s fault? Do you think that if the government “got out of the way,” builders would build affordable housing by themselves? Of course they wouldn’t. Luxury units are all that pencil out for them, no matter where the money comes from. More likely, if the market were allowed to work, developers would either concentrate even more into luxury, or build no housing at all.
BTW, do *you* have any ideas how to get that affordable housing built, or are you just going to flog your one-trick pony yet again?
In this instance I agree with 2B. The way most people use the term “affordable housing” as it seems you’ve done here, is to suggest a decree must be made that all or a portion of a building must be set aside for below market rents.
The point is, how about we keep government from backstopping housing at all and see first the affects on home prices, followed by rents.
“Luxury units are all that pencil out for them.”
And how did you arrive at this?
The luxury units are the only ones to pencil out because the builders pay ridiculous amounts for the land underneath these projects.
The developers are only able to pay these moronic land prices because of the loose lending standards of the banks and the Fed’s magical money printing machine.
The rents will have to fall on most of these projects, as you can only ignore the underlying fundamentals for so long.
Simple answer- Don’t pay it.
“Do you think that if the government “got out of the way,” builders would build affordable housing by themselves? Of course they wouldn’t.”
I’d like to see these developers eke a living without the government guarantees… you know, “rugged individualism.”
The luxury units are the only ones to pencil out because the builders pay ridiculous amounts for the land underneath these projects.
They pay the land price because they thought there was demand for another luxury project. They don’t buy the land first and then say “hmmmm, what should we do with it?”
“They pay the land price because they thought there was demand for another luxury project.”
Thanks to federally-guaranteed affordable lending, there is always demand for another luxury project.
Riverside County, CA Rental Rates Crater 7% YoY
https://www.zillow.com/riverside-county-ca/home-values/
Lake Oroville Spillway about to collapse. Hope those people down below are getting out. This could be a horrible disaster. Hope there are good people there willing to help the elderly.
Yes, I was just reading about that and watching some of the video. What a clusterfark. Apparently people were being told “all is well” for the past couple of days and now it’s “GTFO, NOW!”
I think they have a Veterans’ Home in Oroville, if I remember correctly.
So how does this happen?
Poor design? Deferred maintenance? More rain than a 6 sigma event?
The State has plenty of money for giving illegals free health care, gold plated public union pensions and billion dollar trains to nowhere, etc….
If Jerry Brown cries poverty and tries to blame this on someone else…
The amount of rain has been incredible. The Merced River is overflowing and much of Yosemite is closed now. Even So. Cal. has more water than it needs for now.
Lots of rain may mean nothing - Statistically speaking.
Is this a 3 sigma event? 6 sigma event? Engineers are pretty smart as will design well above a “worst case”
However, the best design will fail pretty quick if not maintained properly…
Engineers are pretty smart as will design well above a “worst case”
It depends on when the spillway was built. If it was built pre-computer, engineers overdesigned like heck because they knew their calculations were not precise.
But newer stuff… no go. With sophisticated calculations, engineers can design for whatever level of safety they want, but they can only build what someone is willing to pay for. More likely, whichever engineer designed and bid for the bare minimum of safety is the one who got the contact.
So for the spillway, don’t hold your breath (or, maybe you should).
They reviewed the dam spillway just 12 years ago, they certainly had the ability to access “sophisticated calculations”, this is just about not wanting to spend the money. Yet people reject the assertion that we have third world infrastructure in this country.
FWIW, Europe floods too.
I was in Passau, Germany last summer. The Danube and the Inn rivers merge in Passau, and the place floods, a lot. The town hall building, which is next to the river (the Danube, IIRC) has markers painted on it, showing the levels of the most notable floods. For 2013 the markers looked about 25 feet above street level.
And Paris also flooded not to long ago, when the Seine overflowed its banks. I recall that they had to scramble to move stuff out of the Louvre’s basement and ground level floors.
I just looked at wikipedia, and found this:
Due to its location on the German-Austrian border, and in the south-east of the country, Passau has become a major migrant entry point into Germany. Refugees and economic migrants from the Middle East, Asia and Africa who have reached Europe, often entering either overland via Greece or across the sea via the Mediterranean (see Operation Triton), then head north and sometimes enter Germany. In 2015 the BBC reported that traffickers drive migrants and refugees through Austria and leave them on the side of the autobahn. The migrants and refugees then often walk unaccompanied into Passau, the first German town northwards. This situation has caused the government of Passau to divert funds from flood prevention to housing and feeding the refugees and migrants, around 10% of whom are unaccompanied children
The forecast is horrific for them. 6+ more inches of rain expected in the next 10 days.
+1 And that rain is going to melt some of that 40-ft of snow pack in the mountains above the reservoir.
Hell of a way to run a hundred year drought. This is impossible since the NWS predicted a dry year and we set policy based on its flawless record of predicting climate fifty years in advance.
The real danger is around Sacramento in places like Natomas where 100-yr/old levies are already at flood stage. A 500k-acre-ft gusher would be a huge disaster. You can bet there are some puckered bungholes at CVO in Sacramento.
Dam is almost 50 years old…spillway was never needed (water never got that high).
I’m sure they would have done more work to keep it all in tip-top repair if it was used frequently…I’m guessing they didn’t (do the work).
The car was old. Brakes were never needed.
“The car was old. Brakes were never needed.”
ED ZACHARY! And if California is so self-sufficient, how come they’re requesting FEMA funds from the federal government?
Again, I’m not one of the Cali haters. I personally feel the problem is the officials, not the people in general. It’s a great state in many ways, it was the state of possiblity and dreamed many dreams for the rest of the country. Unfortunately, those dreams are turning into nightmares and it makes me sad to see it.
how come they’re requesting FEMA funds from the federal government?
Because they (FEMA funds) are there?
Why do people build in the path of hurricanes in FL? Because FEMA will save the day.
Shut down the program, and the hands will stop reaching out to the government, and people will slow/stop building in such risky parts of the country.
188,000 Evacuated Near Oroville Dam Spillway
February 12, 2017 10:46 PM
OROVILLE (CBS/AP) — At least 188,000 people were asked to evacuate in the area near the Oroville Dam Sunday after authorities warned an emergency spillway in the structure was in danger of failing and unleashing uncontrolled flood waters on towns below.
The erosion at the head of the emergency spillway threatens to undermine the concrete weir and allow large, uncontrolled releases of water from Lake Oroville, the California Department of Water Resources said. Those potential flows could overwhelm the capacity of downstream channels and levees.
http://sanfrancisco.cbslocal.com/2017/02/12/emergency-spillway-flow-slows-oroville-dam/
That over-topping emergency spillway’s concrete weir is roughly 30-ft tall and 1700-ft wide. The over-topping flow cuts into the soil on the downstream side at the toe creating a void that the weir can tumble into. Not sure of the surface area of Oroville, but imagine the top 30-ft of it pouring out into the valley below. That why the primary spillway is being used to release 100,000-cfs despite its damage; no choice.
Last week, when one could have been running water down the spillway (before it was discovered to be defective) in an effort to stem the now critical overflow problem at Oroville TPTB instead decided to save some 4 million fish located at the base of the overflow. Word is that this fish gathering effort, people in waders collecting 4 million plus baby fish into metal hand held nets, took around 3 days.
Several articles, and a couple of youtube videos appeared last week describing this fish saving effort in glowing terms. However, since the story has turned serious and lives are now in danger it would appear that most references to this fishy story have mysteriously disappeared off of the internet.
The original title of the article from last week was “Water Gushes from Oroville Dam, Fish at Risk”. It has since been changed to its present title.
……”At the fish hatchery just below the dam – one of a handful the state counts on to sustain its $1.4 billion commercial and recreational fishing industries – 4 million salmon were being trucked to holding ponds adjacent to the nearby Thermalito complex, a system of downstream reservoirs. Those ponds would be safe from the cloudy water conditions, Morse said.
That represents just half the baby fish at the hatchery. Morse said the Thermalito facility can’t accommodate all the fish at risk, so more than 4 million will remain in the hatchery while filtration experts try to devise a solution.
Each year the Feather River Hatchery releases 7 million baby salmon into the Central Valley’s waterways. Last March, state officials estimated that fish raised in the Feather River accounted for 63 percent and 76 percent of the state’s recreational and commercial ocean catches, respectively.
“The loss of hatchery-produced salmon from Feather River Hatchery would be a major blow to salmon fishermen in California,” said John McManus, executive director of the Golden Gate Salmon Association.
At the hatchery Thursday, workers waded waist-deep through concrete holding ponds filled with water the color of chocolate milk. They used screens to push baby fish toward tanker trucks that would transport them a few miles southwest to Thermalito.”
http://www.sacbee.com/news/state/california/water-and-drought/article131743014.html
“Water Gushes from Oroville Dam, Fish at Risk”
Aren’t fish generally able to survive underwater?
I’d think it would be people who are at risk. But then this is California, so who knows?
“Aren’t fish generally able to survive underwater?”
It’s loaded with soil… sort of like people breathing during a haboob.
The googlemap satellite image is unnerving… it’s obvious how low the lake was. I’m sure it’s very different now.
Just a quick reminder to folks reading and lurking to do some emergency prep and get your stuff in order. Get a fire/water resistant safe for the most important documents. They’re heavy but portable. Put all your sentimental stuff and valuables into one sturdy box. Put all of it in a closet near the door so you don’t spend valuable time hunting for things if you have to leave in a hurry.
Disaster can happen to any house, but people in disaster-prone areas should be especially aware. The news tells stories of people lining up for gas. Really, they should have gotten gas and loaded up the car with their papers the minute it started raining, days ago.
A good idea to be ready and know where your important things are.
A bad idea to put it all in a sturdy box in a closet near the door where a random robber can just walk out with it…
An even better idea is to scan it all and save it to a cloud somewhere…
Really, they should have gotten gas and loaded up the car with their papers the minute it started raining, days ago.
It’s been raining most of the time since Christmas.
So much for California’s insurance policy against the next drought.
They raised the cost of water at least for Ventura Co. so the drought did its work.
let no disaster go to waste.
‘We’ve seen pretty much most of California go crazy.’
Good stuff. Thanks for sharing.
And then the DC Housing bubble went “pop”
And the legacy fake news media of the Washington Post thinks this will hurt “affordable housing”
They are so blind.
And they still don’t get it.
—
D.C. region braces for shock from Trump effect on spending, federal workforce
Washington Post | 2/12/17 | Robert McCartney
The Washington region’s prospects aren’t all bad under the Trump administration. A top local economist joked at a recent business conference that demonstrators flocking to rallies in the District will drop bundles of cash, spurring growth from “protest tourism.”
But the area is bracing for shock at the hands of a reinvent-the-rules president who routinely insults the city and a Republican-led Congress that for years has sought to shrink the federal government that is the area’s principal employer.
Officials and analysts expect sharp cuts in federal nondefense spending, which would strain local budgets nationwide and pose a particular threat to economic growth here. In addition, proposed tax changes risk stalling the Washington area’s high-priority efforts to provide more affordable housing. And business leaders say President Trump’s demonization of the capital, highlighted by his calls to “drain the swamp,” has hurt the region’s reputation as a good place to work.
RIF n Roll
house still selling, buyers must be foreigners and don’t see the human tornado
he hasn’t chopped much ,but as he gets frustrated w big gov they’ll be big chop
does anyone more than 30 miles from dc care?
DC? Demand collapsed 26% in the past year. See for yourself.
http://files.zillowstatic.com/research/public/State/State_Turnover_AllHomes.csv
Demand didn’t collapse. Supply collapsed.
Looks like a whole lotta houses for sale and no buyers.
Washington, DC Real Estate & Homes for Sale- 7,081 Homes
http://www.realtor.com/realestateandhomes-search/Washington_DC/radius-10
Washington, DC Real Estate & Homes Price Reduced- 1,978 Homes
Burgeoning inventory up 6% in a month and prices down.
Any thought to why 29% of these debtors slashed their price?
I’m like 22 miles from DC. It’s still expensive.
There is no shortage of real estate, never has been. The boom was all a mirage, there is not much wealth in real estate to begin with:
A house that sells for $200,000 is put on the market. A buyer comes along and decides to buy it with a $40,000 down payment and a mortgage of 360 months @ 7% interest on $160,000(no closing costs here, just to be nice) with a monthly mortgage of $1,064.48. Two years later, the market has lost 15% of its value making the house only worth $170,000. However, the mortgage on the house (assuming the buyer has paid the mortgage each month) is at $156,631.92 after 24 monthly payments on the mortgage. The total payments made were $25,547.52 but only $3,368.08 of the principal was paid off. If the buyer were to sell the house the next day, the house would sell for $159,800 assuming a 6% real estate agent fee deducted from the sale of the house. After paying off the mortgage the original buyer walks away with $3,168.08. However, they spent $40,000 on the down payment and an additional $22,179.44 on interest. That makes for a LOSS of $59,011.36 when you factor in the $3,168.08 difference between the sale price and the mortgage. This doesn’t include any carrying costs, taxes, insurance, HOAs, etc…so how can someone call this a boom? Funny thing is, the $200,000 sale price and the $160,000 mortgage aren’t real, the sale price is made out of thin air and the mortgage is drawn out of thin air so the only real money involved here was the down payment and the monthly payments made on the loan…almost all of it lost.
The real estate ‘bust’ from the late 2000s wasn’t even close to a bust. That’s just a blip made into a mountain by the media and internet community.
All true - but you have to live somewhere.
You need to deduct from your $59,011 figure what a comparable rental unit would cost. Plus an X factor for the headaches of being a renter and add back in the Y factor of taxes, insurance and maintenance of owning a house.
Plus there is a tax benefit of owning over renting. Factor that too.
Your real numbers will be closer.
And I can still remember newspaper articles of when renting was MORE expensive than owning a house. For the factors you just mentioned.
But that was well before ZIRP, 3% NINJA mortgages, easy credit and obama $10 Trillion deficits…
If there is a tax benefit to owning it is very small long term in relation to the total cost of owning a house long term. The government isn’t going to pay people to live in a house, at least not forever. Even the NINJA loans/ZIRP/ Obama Cash can’t prop up the housing market forever. Mortgage markets and the real estate they support will eventually consume themselves and burn out.
And the headaches of renting pale in comparison to owning a house.
“And the headaches of renting pale in comparison to owning a house.”
indeed.
just spent the weekend in the perfect N. Cal weather after 2 months of deluge, catching up on some household repairs:
mainly tracing a pvc leak that seeps under a 35yr old tree in front that I really do not want to cut down.
too impatient & “frugal” (cheap) to hire someone, so as I was trenching the line I joked w/neighbors I was “funding my midlife crisis!!”.
always enjoy the baffled reaction as I meander in to some snotty place in worn jeans & plaid Mike Heck shirt . . . get ignored . . . then the mad scramble to make amends as they process the shiny metal plastic payment.
I should keep it real & bring along a loud Anthony Andrews sidekick w/duffle bag o’ cash.
you my homies.
woof woof
I have had similar experiences, it is amazing that they think that people with a little money cannot do manual labor.
I rent but still end up fixing crap. Landlords don’t do squat, if they do they’re just going to charge it back to you.
I would love to know I’m not going to have to move all my stuff, and it would be nice to be able to swap out all the lighting fixtures and wallswitches and cable in automation and lighting protocol systems, etc.
Can’t wait for the crash! Other than I’ll probably lose my job at the same time.
“so how can someone call this a boom?
If prices are dropping at 7% per year, *nobody* is calling it a boom. So I don’t understand what you’re trying to say.
So when are the “we aren’t building enough housing” people gonna sit down and eat some crow? How many years of housing is too much? How many empty towers are enough that you will admit there is no freaking shortage of land or shacks?
OK, I don’t understand this either. I was pointing out an inconsistency in xstate’s hypothetical example. His hypothetical example was for a 15% decrease in prices over 2 years, but he called it a “boom.” That doesn’t compute.
Meanwhile, I didn’t say anything about a shortage of land or shacks. So no crow for me, I don’t think.
There is certainly no shortage of luxury apartments. I wonder if some of those buildings will attempt to convert them to luxury condos.
However, if you ask about shortages, there *is* a shortage of middle-class smaller (1500 sq ft) SFH in major cities in reasonable commuting distance. Average SFHs yield so little profit that no one has built them for 20+ years. The increasing population is competing for a finite number of older SFH. Sure, there’s land as far as the eye can see, but only for supercommuters.
Donk you’re drawing a distinction where there is none. A house is a house is a house.
Secondly, where did you come up with the notion there is no profit building SFR’s?
I didn’t say “no profit.” I said little profit, certainly compared to building row houses and air boxes. The source of my notion is simple: if small SHF were among the most profitable, the builders would be building them. But they aren’t, forcing people to write squirrel-food notes the moment a precious cold-war shack comes onto the market. (btw I said small houses. McMansions in far-flung cow country have a different business model.)
I understand that you can build an SFR for $50/sq ft. What’s your going rate for an air box? Surely it’s much less?
However, if you ask about shortages, there *is* a shortage of middle-class smaller (1500 sq ft) SFH in major cities in reasonable commuting distance.
During last decade’s bubble, builders in my town built a few thousand houses like these.
This time around, all they’re building are 3000 sq ft McMansions. They are building fewer houses too. IIRC, during the peak bubble year last time the built over 1000 houses, mostly small ones. This time it’s only 300 houses of which I would guesstimate 90% are McMansions.
The smaller houses, when put on the market, often sell in a single day, with bidding wars. The McMansions take quite a bit longer to sell, usually a few weeks.
Regardless of what you claim to mean, you’re wrong as the margins for SFR are higher than multistory. Typical floorplans are constructed all over the country and have been for years.
Why are so many of both getting built in an environment of collapsing demand?
Thanks, InC. I guess that’s one way to know that Denver has “arrived” as a city. Prices, especially for land, got so expensive that high-margin homes are the only homes that pencil out.
DC area has very few new smaller homes. All of the land within a reasonable commute was mostly built-out by about 1985. There are some urban infill lots but no one is going to build 5 SFH on a 1-acre site on 5 SFH when they can build a 30-40 unit tower.
I wasn’t talking so much about Denver as Ft. Collins/Loveland, though I suspect it’s more of the same in Denver.
When we see another broad home price and rent crash (not pockets of product/location, but broad declines across multiple locations and product types) without one of the following two things occurring, I’ll say I was wrong:
1. Housing starts exceeding 1.5MM housing units for at least a year; or
2. A recession.
Augusta is the second largest metro area in Georgia. Wife and I had noticed lots of new homes going up that were sitting on the market 180+ days. Now they’re starting with the “incentives” in the form of appliance upgrades, wood floors, etc. This story from the Augusta Chronicle sugar coats the situation but they have overbuilt like crazy the last two years expecting a huge influx of “cyber” workers:
http://chronicle.augusta.com/news/2017-02-12/home-construction-dips-2016-costs-increase
They all want to work at Cyber Command!
And besides - it is hard work being in a trade. Even though these skills pay way more than slinging coffee grandes….
—
“Nobody wants to be a carpenter or a brickmason anymore,” said Bowles, this year’s builder association president. “Those jobs are just going by the wayside.”
Nobody wants to be a carpenter or a brickmason anymore
When you have to compete with illegals for those jobs, it’s very understandable why.
Here is a hint.
Illegals doing these jobs get paid very well too…
That’s not what I’ve heard. Why pay them the same for shoddy work?
shoddy work.
also add drunk, late, no-show, overcharge, incomplete work, and other reasons why I just skip the chino-clad clipboard F-3Fiddy Diesel-Dually-Driving pot-bellied dipshits & usually do it myself.
your mileage may vary.
skip the chino-clad clipboard F-3Fiddy Diesel-Dually-Driving pot-bellied dipshits
You left out “with alcohol on their breath”
Manufacturing is cultivated by Germany, Japan, and China, countries with national IQs which meet or exceed America’s. Yet the talking heads intimate that manufacturing is not worth cultivating here in the US. Curious.
“Germany, Japan, and China, countries with national IQs which meet or exceed America’s”
Germany and Japan, probably true. China? Fake news, given the propensity to cheat. Their pollution and shoddy workmanship show that China is a Potemkin Village at best.
Are you really questioning the IQ of Chinese when you can just google the average? They are slightly lower than the German’s or the Japanese but higher than the U.S. Thirty years ago, they had the same IQ as the U.S. but the wave of immigrants and their anchor babies have dropped the average IQ in the U.S.
http://www.statisticbrain.com/countries-with-the-highest-lowest-average-iq/
I have no clue where those stats come from nor do I care. I don’t dispute that other countries have citizens with higher average IQ than the US. But China is not one of them, especially if measured with IQ results submitted by the Chinese themselves, lol.
higher average IQ than the US. But China is not one of them
Think demographically. It’s not national average IQ that counts, but the gross # of people in specific IQ range. How many Han Chinese back in the Middle Kingdom have IQ’s > 160, vs. how many WASP USA citizens in that same category?
Perhaps but show me any evidence that China does not have the same bell shaped curved on IQ that is the norm.
As James Comey said when referring to the Chinese hackers, it’s not that they’re particularly good at it, it’s that there are so many of them.
As to fake info on google, my motto is, look, don’t listen.
I like you but I think you could not be more wrong about this. China had a civilization when the German’s were barbarians, I think you have issues with the Chinese that prevents you from seeing their potential.
“China had a civilization when the German’s were barbarians”
“Had” being the operative word. Indeed, China had a great civilization and much innovation at one time. Incredible art, especially their carving and jade work. The Great Wall is a marvel.
And then what happened? Mao happened, that’s what. He and his henchmen really did a number, from which they have not recovered.
“I think you have issues with the Chinese that prevents you from seeing their potential.”
I have issues with the Chi-COMS, yes. As to potential, China has lots of potential, and always will.
And then what happened? Mao happened, that’s what. He and his henchmen really did a number, from which they have not recovered.
Mao is gone and he is no longer pressing on the spring, it is bounce back time. Just before WWII everyone was concerned about the Nazis but the threat from Japan was laughed off. They were too nearsighted to fly planes etc. We are ignoring a similar threat.
P.S Mao was the biggest killer the world has ever seen so I am not making light of his evil. But Putin is no Stalin and the present Chinese government is not even close to Mao, although there are plenty of people presently out of power in the party that could be another Mao.
“Mao is gone”
But his legacy lives on.
Seriously, Dan, I’m just not that interested in arguing China with you. You’re entitled to your opinion, as am I.
(The man goes into room 12A. Another man is sitting behind a desk.)
Man: Is this the right room for an argument?
Other Man:(John Cleese) I’ve told you once.
Man: No you haven’t!
Other Man: Yes I have.
M: When?
O: Just now.
M: No you didn’t!
O: Yes I did!
M: You didn’t!
O: I did!
M: You didn’t!
O: I’m telling you, I did!
M: You did not!
O: Oh I’m sorry, is this a five minute argument, or the full half hour?
M: Ah! (taking out his wallet and paying) Just the five minutes.
O: Just the five minutes. Thank you.
O: Anyway, I did.
M: You most certainly did not!
O: Now let’s get one thing quite clear: I most definitely told you!
M: Oh no you didn’t!
O: Oh yes I did!
M: Oh no you didn’t!
O: Oh yes I did!
M: Oh no you didn’t!
O: Oh yes I did!
M: Oh no you didn’t!
O: Oh yes I did!
M: Oh no you didn’t!
O: Oh yes I did!
M: Oh no you didn’t!
O: Oh yes I did!
M: No you DIDN’T!
O: Oh yes I did!
M: No you DIDN’T!
O: Oh yes I did!
M: No you DIDN’T!
O: Oh yes I did!
M: Oh look, this isn’t an argument!
(pause)
O: Yes it is!
M: No it isn’t!
(pause)
M: It’s just contradiction!
O: No it isn’t!
M: It IS!
O: It is NOT!
M: You just contradicted me!
O: No I didn’t!
M: You DID!
O: No no no!
M: You did just then!
O: Nonsense!
M: (exasperated) Oh, this is futile!!
(pause)
O: No it isn’t!
M: Yes it is!
(pause)
M: I came here for a good argument!
O: AH, no you didn’t, you came here for an argument!
M: An argument isn’t just contradiction.
O: Well! it CAN be!
M: No it can’t!
M: An argument is a connected series of statements intended to establish a proposition.
O: No it isn’t!
M: Yes it is! ’tisn’t just contradiction.
O: Look, if I *argue* with you, I must take up a contrary position!
M: Yes but it isn’t just saying ‘no it isn’t’.
O: Yes it is!
M: No it isn’t!
O: Yes it is!
M: No it isn’t!
O: Yes it is!
M: No it ISN’T! Argument is an intellectual process. Contradiction is just the automatic gainsaying of anything the other person says.
O: It is NOT!
M: It is!
O: Not at all!
M: It is!
(The Arguer hits a bell on his desk and stops.)
O: Thank you, that’s it.
M: (stunned) What?
O: That’s it. Good morning.
M: But I was just getting interested!
O: I’m sorry, the five minutes is up.
M: That was never five minutes just now!!
O: I’m afraid it was.
M: (leading on) No it wasn’t…..
O: I’m sorry, I’m not allowed to argue any more.
M: WHAT??
O: If you want me to go on arguing, you’ll have to pay for another five minutes.
M: But that was never five minutes just now!
Oh Come on!
Oh this is…
This is ridiculous!
O: I told you… I told you, I’m not allowed to argue unless you PAY!
M: Oh all right. (takes out his wallet and pays again.) There you are.
O: Thank you.
M: (clears throat) Well…
O: Well WHAT?
M: That was never five minutes just now.
O: I told you, I’m not allowed to argue unless you’ve paid!
M: Well I just paid!
O: No you didn’t!
M: I DID!!!
O: YOU didn’t!
M: I DID!!!
O: YOU didn’t!
M: I DID!!!
O: YOU didn’t!
M: I DID!!!
O: YOU didn’t!
M: I don’t want to argue about it!
O: Well I’m very sorry but you didn’t pay!
M: Ah hah! Well if I didn’t pay, why are you arguing??? Ah HAAAAAAHHH! Gotcha!
O: No you haven’t!
M: Yes I have! If you’re arguing, I must have paid.
O: Not necessarily. I *could* be arguing in my spare time.
M: I’ve had enough of this!
O: No you haven’t.
M: Oh shut up!
(Man leaves the office)
http://www.montypython.net/scripts/argument.php
I agree and I respect your opinion even though I have a different one but I think we agree that communism is what created poverty in China and has created a deficiency in honesty in China. One of the reasons I believe the resurgence role of religion in China is one of the most positive signs things may end without a war between the U.S and China.
On this we agree. Belief in and knowledge of the spirit is most important to any society, whether that manifests as religion or as a personal/societal code that values fair dealing with others. That is when things advance, as in the Renaissance.
Crushing of the spirit is what much of the West seems to have embarked upon. One of my friends, who is agnostic, called me over the weekend and was in agony over the suppression of Christianity, while he himself is not particularly a Christian. In fact, he used to revile the faux Christianity of the Bush years. However, he approves of the essence and does not want to see it disappear and is having a personal crisis over it. He believe that if it is crushed, so will the US be crushed.
Housing my good friend housing!
Miami, FL Housing Prices Crater 6% YoY
http://www.zillow.com/miami-fl/home-values/
And Ben, China is the 800 pound gorilla in the room. I think close to 50% of all the growth occurring in the world is occurring in China. If you do not get China right you are unlikely to get anything else right. So can you talk about China too much, perhaps but since it is not a transparent society it is the wildcard on any issue including housing. Until you know or at least reasonably estimate the Chinese demand for U.S. housing and commercial buildings, an accurate estimate of U.S. demand is impossible.
Ok 39% of the overall growth of the world but in many commodities China makes up more than 50% of incremental demand:
https://www.weforum.org/agenda/2016/09/why-china-is-central-to-global-growth
Western civilization started in Greece, currently Europe’s basket case. Ancient history (literally, in this case) is not relevant.
The lesson there is the Greeks that made Greece great were largely displaced by immigrants from other countries. Greece is a lesson but not the one you are trying to use. China is still inhabited by Chinese and Mongols, the same people that made it great once.
I’m saying that there is no lesson to be learned. Your theory about immigration sounds like something cooked up by Madison Grant around 100 years ago.
The Greeks of old were primarily blond hair and blue eyes, and numerous ancient texts confirm that fact. While there are certainly some blonds still in Greece, it is hardly the average Greek today. Clearly due to the importation of slaves, invasions and occupation under the Ottoman Empire the very people changed.
“If you do not get China right you are unlikely to get anything else right.”
China is like the earthen dam at Oroville. The water is like a flood of credit. It spills over and undermines the foundation. The more water or credit there is the more inevitable the ultimate disaster.
The Greeks of old were primarily blond hair and blue eyes…
Like I said, there’s probably little evidence, but certain people like such notions.
The Greeks of old were primarily blond hair and blue eyes,
Greek myths are just myths. LOL
No we have actual writings from that period.
“I think close to 50% of all the growth occurring in the world is occurring in China. If you do not get China right you are unlikely to get anything else right.”
Need…mo…stimulus…(GASP!)…
THE FINANCIAL TIMES
Chinese Economy
China credit growth slows as stimulus wanes
Bank loans grow at slowest pace since 2006 as policy focus shifts to financial risk
an hour ago
by: Gabriel Wildau in Shanghai
Chinese credit growth slowed last month, a sign that Beijing policymakers are balancing pro-growth stimulus ahead of a political transition against the need to address the risk from rising debt.
Economists have warned that growth in debt — especially corporate borrowing — poses a threat to financial stability in China and the country’s medium-term growth prospects. Communist party leaders have acknowledged the risks, but they have shown reluctance to accept the short-term pain that would likely accompany aggressive deleveraging, including lay-off and corporate bankruptcies.
Some analysts had expected that President Xi Jinping would go all out to stimulate growth this year to strengthen his hand as he seeks to place his political allies in key positions at a five-yearly Communist party congress that will convene in November. But the latest data suggest that the parallel need to control debt growth is also influencing policy.
…
“The huge increase in net new lending in China last month was seasonal. Growth in outstanding loans actually slowed to a 10-year low in January. Broad credit growth also slowed last month and is set to decelerate further in the months ahead,” Chang Liu, China economist at Capital Economics in London, wrote on Tuesday.
…
Manufacturing is cultivated by Germany, Japan, and China
Actually, the Japanese are offshoring too. From what I have read, only grads from elite schools like Tokyo U get the good jobs, because there are so few of them. The Germans are offshoring jobs too. They build a lot of VWs and BMWs overseas, especially in the Americas. There is a huge Daimler plant in Hungary that is being expanded (I have a cousin who works there).
Japan is betting on manufacturing in India.
http://delhimumbaiindustrialcorridor.com/
The western countries import new people by droves and still send jobs offshore. Something is missing, no?
What’s missing is some sort of control of corporations to limit their relentless pursuit of profit.
A failure of government not corporations or the free enterprise system. It is corporations role to maximize profits but there is no need to allow unlimited amount of goods into a country without taxation.
Yeah, that’s what I meant. Corporations exist to make as much as profit as possible. Regardless of how profitable they are, Wall Street always demands more. If that happens to be bad for the environment or the corporations’ employees or the country as a whole, it doesn’t matter. More profits is the agenda always. There was a documentary that came out around a dozen years ago called The Corporation. It made the point that, if you met an individual who had the same attitude towards making money, you might call him a psychopath.
“a psychopath.”
I have spent 50 years immersed in the “corporate” world. The key to understanding corporations is that they are always groups of people. They are not beings in and of themselves with any kind of will or motivation. A corporation which behaves like a psychopath only does so because of the people who make it up, and the cowardice of most. I have known a couple of exceptions to Mikeys Rule. I’ve also been thrown off the roof of some which follow the rule.
There can be temporary deviations. Corporate management can pursue goals other than maximizing profit for a short period. At some point Wall Street takes notice and starts putting on the pressure.
Look at Bill Gates. Currently he’s concerned about sick people in the Third World. When he was CEO he was a hard-driving monopolist seeking growth and profits by any means possible. Why did he become a different person? It’s about the system, not the individual.
Or maybe Dollar Bill is trying to buy his way into Heaven.
It is always about the individual. No system can make an honest group out of dishonest members, nor the other way around.
The non-compliant individuals get fired if they stand in the way of the corporation’s goals. They’ll be ethical on their own dime.
I get the feeling you have no experience fighting the good fight.
It depends what you mean by fighting the good fight. Along with some colleagues I did battle against an a–hole boss for couple of years and eventually convinced his boss to get rid of him. But that was actually good for the company’s bottom line, so it’s not an example of what I’m talking about.
If the USA defends their 25% of world GDP market like all other countries do, then Chinese growth will stall. Might decline.
No system can make an honest group out of dishonest members, nor the other way around.
You’d be surprised. People tend to bow down to authority and imitate the group (”monkey see monkey do”, “follow the leader”).
Corruption is contagious, especially when the rot spreads from the top.
This is why the current situation is so dangerous.
I suspect the current situation has always been dangerous, like going all the way back.
stawks and homes work in an inflationary environment!
It all comes down to how you define inflation…
Oh dear. RE in the Hamptons are plummeting. When even the grifters on Wall Street - the chief beneficiaries of our Obama-Fed-Goldman Sachs “recovery” - are seeing their housing prices crash, you know it’s going to get bad in flyover country.
http://www.businessinsider.com/second-home-buyers-and-tourists-leave-the-hamptons-for-hudson-valley-2017-2
New Canaan property heads south for GE CEO
By Alexander Soule Updated 8:16 am, Monday, February 13, 2017
For the third time and heading into the 2017 spring listing season, General Electric CEO Jeff Immelt and spouse Andrea have cut the price of their New Canaan mansion, now listed at just over $4.7 million.
After initially listing their home at 705 West Rd. in May 2016 at $5.5 million, the Immelts shaved $500,000 from the price last October, dropping the price below the $5.3 million they paid for the property in 2001 a year after its construction in a gated cul-de-sac.
With the newest reduction, the listing is running at a 14 percent discount from its original price last May, with Judy Dunn in the New Canaan office of Houlihan Lawrence representing the Immelts as the listing agent. The Immelts listed the home for sale last year as GE (NYSE: GE) readied to move its headquarters to Boston from Fairfield.
The house at 705 West Rd. has six bedrooms and totals 11,500 square feet of space on four acres of land.
A little more detail from the NC article:
‘During last year’s fourth quarter, the rental vacancy rate in Buncombe, Haywood and Henderson counties stood at 7 percent…That’s slightly higher than the 6.8 percent vacancy rate Reis reported during the third quarter of 2016.’
‘Either figure represents a huge improvement over the 1 percent vacancy…cited in a January 2015 report covering Buncombe, Haywood, Henderson and Transylvania counties..
From 1% vacant to 7% in two years. And they are building like mad. What will the vacancy be in a year from now?
He did say it was a “Yuge Improvement”
It will be an even “yugger improvement” a year from now…
Considering a vacancy rate in excess of 1% is far above trend, that is stunning.
1%? vacancy is good? where r u getting that number
Record high vacancies and record low demand.
Ooooph.
Despite the real estate market standing on the precipice of another collapse, at least the stock market keeps going up!
Business News | Mon Feb 13, 2017 | 9:33am EST
Wall Street opens at record highs as ‘Trump trade’ resumes
Traders work on the floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., December 21, 2016. REUTERS/Andrew Kelly
Wall Street’s three main indexes hit record intraday highs on Monday, helped by gains across sectors, as the “Trump trade” re-ignited following a brief lull.
The Dow Jones Industrial Average .DJI was up 63.13 points, or 0.31 percent, at 20,332.5, the S&P 500 was up 5.79 points, or 0.249989 percent, at 2,321.89 and the Nasdaq Composite was up 17.99 points, or 0.31 percent, at 5,752.11.
…
“standing on the precipice of another collapse”
Obviously, the markets do not agree. The markets tend to have reasonable visibility one year ahead. Their reaction shows they do not see another housing collapse one year from now. Could there be one more than one year from now? perhaps, we will have to see what the market tells us later this year.
Just the absence of Obama is enough to raise the GDP by .5%. Just not having to worry about more business regulations raises animal spirits. The economy recovered from the recession despite the policies of Obama not because of them. It was a weak recovery due to his policies. Time was enough to allow deleveraging of the consumer.
true,but we are in the 7th year biblicly speakin
Are we fat or skinny at the moment? I don’t know anymore.
Fat for the slaughter.
Just the absence of Obama is enough to raise the GDP by .5%. Just not having to worry about more business regulations raises animal spirits. The economy recovered from the recession despite the policies of Obama not because of them. It was a weak recovery due to his policies.
That sounds like a bunch of assertions with no evidence. Plenty of research showed that the sluggish recovery was caused by weak demand, not confidence problems.
Clear proof in the graph and the engine of growth in the U.S. has always been small business:
https://www.advisorperspectives.com/dshort/updates/2017/01/10/nfib-small-business-survey-small-business-optimism-skyrocketed-in-december
PS the graph also shows that it is a great predictor of future recessions and right now it is not seeing any. As a leading indicator it turns down prior to the recession.
ABQ is really dropping fast lately, I get zillow reports. I wonder when it will affect Santa Fe?
The Federal Reserve printing money and buying stocks through proxy isn’t a “market”.
http://www.zerohedge.com/news/2017-01-25/caterpillar-posts-record-49-consecutive-months-declining-retail-sales
“Animal spirits”……….that’s funny.
A little dated but still shows why while this board sees the “big one”, at most what we are looking at is an aftershock, household debt as a percentage of GDP is far below where is was in the last recession:
https://fred.stlouisfed.org/series/HDTGPDUSQ163N
The Household Debt Service Ratio has been falling since the last housing bubble peak due to foreclosure activity and low interest rates. It’s not like people have been paying down debt. A small percentage of families got crushed. What happened in 2008 is more likely a fore shock.
I agree with your comments about the Household Debt service ratio but this is not measuring that it is measuring absolute debt. Yes a lot of the debt was wiped out by foreclosure but more is being wiped out by people just paying their mortgages every month while we still have a relatively low level of new purchases of houses.
Your incorrect conclusion is probably due to the reference to the tortured GPD headline statistic.
The actual “absolute” mortgage debt has been trending up slightly for the past few years. Auto, student and ccd debt also.
http://www.calculatedriskblog.com/2016/11/ny-fed-household-debt-increased.html
Once again the measurement is a combination of the absolute debt measured against the GDP which has also been rising so the two links do not contradict each other.
Blue, the Total Debt Balance and Composition graph is very telling indeed.
Growth in total mortgage debt has been very low as compared to the 2003-2008 timeframe, and is well below overall home price growth from 2013 to 2016.
This strongly implies either a) more conservative borrowers or b) more stringent lenders.
It doesn’t seem to indicate either a) large numbers of people using their homes as a piggie bank, or b) irrationally loose credit markets.
There is nothing “conservative” about 3% downpayment mortgages with down payment assistance.
Hi rental I tried to respond to you up above but neither attempt has succeeded. I agree with 1.5 million unit analysis.
“This strongly implies either a)…”
It could imply that there are a few former mortgage customers who have been crushed and are no longer participating in the borrow to own housing game. This could also play into the surge in building of rental units.
The rise in other types of personal credit do not speak to me of more “conservative borrowers”.
I agree with you with respect to auto/student loan borrowing…credit card debt seems pretty steady at the moment.
From a mortgage perspective though, the data screams “conservative”. That said, I’m probably taking information I’ve received elsewhere to influence my conclusions.
One of the particularly interesting reports that comes out is the Freddie Mac Refinance Report.
The data is very telling. In addition to providing data with respect to cash out refinances, it also shows transition rates, which answers questions like:
What percentage of people who had a 30-year loan refinanced into another 30-year loan?
What percentage of people went from a 30-year loan to a 15-year loan?
Etc., etc., etc.
As a study of contrasts:
In Q3 2005, 11% of those refinancing a 30-year loan went into a 15-year loan (4% went to a 1-year ARM)
In Q3 2016, 25% went from 30-year to 15-year, 0% went to a 1-year ARM.
The lowest such reading I saw was 5% going from 30-year to 15-year amortization.
The highest such reading was 33% in 2002.
5% is indicative of a “who gives a crap” view toward having debt.
33% is indicative of people who are not stretched on their mortgage payment and wish to pay off the debt. Remember, in 2002, the 30-year mortgage rate was 6.5%–giving an incentive to pay it off.
25% is not too far off from 33%, and quite interesting given how low rates are now as compared to 2002 (the lower the rates are, the fewer people would care to pay off the debt…all else equal). All else equal, attitudes are probably not to dissimilar from 2002.
The report also notes relatively tame cash out refinance activity compared to history (although I’m interested to see what is reported in the Q4 numbers).
Tame cash out numbers + relatively high numbers of people going from 30-year to 15-year loans (even with low rates) + slowly growing mortgage debt, even in light of significant increases in home prices = relatively conservative borrowers, or relatively tight credit markets.
Link to the reports if you care to read them:
http://www.freddiemac.com/finance/refi_archives.html
Just one more thought.
“In Q3 2016, 25% went from 30-year to 15-year…”
What’s missing is when these folks bought. If most of them bought before 2005 they could last year refinance with a 15 year term and have a lower mortgage payment.
“What’s missing is when these folks bought. If most of them bought before 2005 they could last year refinance with a 15 year term and have a lower mortgage payment.”
Yes, that is true, but what is also true is that they could (if they wanted to), refinanced and gotten a new 30-year loan instead and had an even lower payment.
Going from a 30-year amortization schedule to a 15-year schedule indicates a choice to pay off a loan faster than necessary.
If more people are choosing to pay off debt faster, isn’t that indicative of more conservative views toward having debt?
You can also look at the other side…how many went from a 15-year schedule and refinanced into a 30-year?
The high that I see was Q3 2007, at 59%…people got stressed and stretched, and refinanced to lower their monthly payment en masse.
The low was 6% in 2003…almost no one stretched out the amortization.
The most recent reading for this stat was 24%, which I call medium (59% was batsh*t panicked, and 6% was totally chill). There are a meaningful number of people stretching their payments out further.
It is intersting that a higher percentage are going from 30 to 15 than from 15 to 30 (although it’s close). I wonder about numbers? How much money is being converted to a 30-year mortgage from 15 year vs. 15-year from 30.
As a whole, with existing mortgages (ignoring any net new borrowings for new homebuyers) are existing mortgageholders accelerating their repayment of debt? or slowing it down?
That all sounds nice…… Prefaced by the fact there are foreclosure moratoriums in effect in all 50 states.
Fraudy’s data manipulation. Who will trust this?
Only idiots or blinds.
Don’t like what the data says, attack the data.
And so where is the data showing something different?
Anecdotes don’t count.
Spot on my brother…. spot on.
San Francisco, CA Rental Rates Crater 7% YoY
http://www.zillow.com/san-francisco-ca/home-values/
New Canaan, CT Housing Prices Crater 10% YoY
http://www.zillow.com/new-canaan-ct/home-values/
https://research.stlouisfed.org/publications/economic-synopses/2016/02/10/the-dynamics-of-mortgage-debt-in-default/
https://www.reddit.com/r/investing/comments/5ttcaz/my_wife_and_i_are_considering_buying_our_first/
PB-
On a recent post, I noted that the most logical explanation of rent-to-income AND price-to-income ratios both being high at the same time was NOT because of freely available debt, but more likely due to supply constraints (as low rates and freely available debt would tend to drive more development of housing–thus resulting in lower rents).
Your reply was that another logical explanation was that landlords were raising rents because they perceived for-sale housing to be the competition, and therefore were pricing based on for-sale housing prices.
As I noted yesterday, I don’t think that is the case because landlords see their competition as other landlords, and they can only raise rents if there is sufficient demand relative to supply of rentals.
A thought I had last night was that IF what you were saying was true, then we should have seen high rent-to-income levels in the recent past (2005-2007)–as landlords should have been pricing off of the sky high home prices then.
The best thing I could find (without making a term paper out of it) was here:
http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2016/03/household-expenditures-and-income
Figure 6 shows rent to income levels for various tiers of housing prices going back to ‘00. During the bubble years, the rent-to-income DID NOT spike along with home prices–so, if there is a link between high home prices and high rent, it didn’t show up at all from 2005-2007.
On the other hand, I would submit that landlords couldn’t raise rent then because there was too much vacancy…as there was a vacancy rate during that timeframe of approximately 10%.
it sounds like if they buy they are on the financial edge which is never good. However, even if you ignore that, without knowing the city and the prospects for growing employment and population growth, I do not see how you can give advice.
Newton, MA Rental Rates Crater 9% YoY
http://www.zillow.com/newton-ma/home-values/
So UBS is seeing two rate hikes this year. I wonder about the rest of them, .50 hardly seems earthshattering when it comes to mortgages:
http://fortune.com/2017/02/13/gold-donald-trump-shinzo-abe-japan-fed-fund-rate-hikes/
Well, I live in San Diego and pay $1350 for a one bedroom in one of the less expensive complexes. A new place was built directly behind me and they charge over 2k for a one bedroom! That complex is 90% empty after a year still. Hopefully, more complexes are built and rents drop. Pay sucks here so not sure how people are paying the sky high rents?
San Diego doesn’t pay well. Never understood that.
The rationale has always been that “quality of life” makes up for the lower pay, or as some call it “Sunshine dollars_. When I lived there the common wisdom was “Want better pay? Love to LA.”
I would put Denver in the camp too. Must be the brown cloud?
Young people want to live in Denver so they can ski and go hiking in the mountains. Or at least that is the party line.
The brown cloud is mostly a winter issue, especially when there is a thermal inversion.
Isn’t Denver 2 hrs from hiking and skiing? Might as well live in Fresno, 2 hrs from Yosemite. Or Reno.
I can imagine that there’s an unstated assumption that, because skiing is an expensive hobby, it makes sense that the cost of living is high in Colorado.
Also, it sounds like the skiing is at least a two hour drive away from Denver.
Isn’t Denver 2 hrs from hiking and skiing? Might as well live in Fresno, 2 hrs from Yosemite. Or Reno.
I believe that there are more and better jobs in Denver than in Fresno.
Much cheaper COL in Fresno and less traffic. Not that F-no is nice.
And u have tabor
U almost forgot to remind us !
People could also live in Minneapolis, Des Moines, or Omaha and fly to the ski areas a few times every year.
Sure. For me it’s the summer weather in those places that’s the deal breaker. Winter just adds insult to injury.
Yeah but then you’d have to return to your home in Minneapolis, Des Moines, or Omaha. No thanks.
And u have tabor
U almost forgot to remind us !
Apparently, I don’t have to remond you.
How much did you say your property taxes were going up this year?
Lower utility bills and free fun outside all of the year is a factor.
Lower utility bills in San Diego?
Let me introduce you to my good friend, San Diego Gas and Electric.
Before it was bought out, SDG&E used to boast thatit was “San Diego owned and operated.” Many years ago some people had bumper stickers that read “Welcome to San Diego, owned and operated by SDG&E”
in SD, you don’t need heat or AC 83% of the year. Cheap!
Sounds like you need some new appliances.
Tabor will be gone in few yrs. All the midwestern white millennials who moved to CO in last decade will see to that.
That depends if those millenials have kids.
in SD, you don’t need heat or AC 83% of the year. Cheap!
I can see you have never lived in Southern California. If you are more than 1 mile from the coast you will run the A/C a lot more than that. And in California they have “tiered pricing”.
I have friends in San Diego who tell me that a utility bill of $500 for a house isn’t uncommon for them. Heck, when I lived there 20 years ago, $200 a month wasn’t unusual.
Tabor will be gone in few yrs
Maybe twenty. I suspect that a lot of those millenials won’t be sticking around.
People have been predicting TABOR’s imminent demise for 20+ years. Given how tax increase props are consistently still being defeated, I’d say TABOR still has legs.
“The state’s pension fund lost millions of dollars taking a chance on a private development deal in Ann Arbor.”
Another State pension funds hard luck story
Chasing the higher risk, higher return because they could not make the 8% return that they assumed to fund the pensions they promised.
‘Amityville Horror’ House Sells For $605,000; Seller Paid $950,00 In 2010
http://www.newsday.com/classifieds/real-estate/amityville-horror-house-sells-for-605-000-1.13104819
U.S. inflation expectations at highest level since 2015: NY Fed
http://www.reuters.com/article/us-usa-fed-survey-idUSKBN15S1W1
Do you really believe wages will triple or quadruple to meet grossly inflated prices?
Of course not.
Prices will continue to fall to dramatically lower and more affordable levels meeting wages… which accelerate the economy and create jobs like nothing else can.
Yes. Higher inflation is on its way.
http://oilprice.com/Energy/Crude-Oil/Permian-Drilling-Costs-Surge-Are-The-Days-Of-Cheap-Oilfield-Services-Over13256.html
Meanwhile the production cost of a barrel of oil is $6.
In an alternative universe.
It’s reality my friend. Domestically and internationally.
As I said a few days ago be careful what you wish for with China because its capacity cuts can cause worldwide inflation. Case in point iron ore which has doubled in a short time frame, it may go back down but right now it is causing inflation including in the drilling of oil. Iron ore prices:
http://www.shanghaidaily.com/business/finance/Capacity-cuts-boost-raw-material-prices/shdaily.shtml
http://www.businessinsider.com.au/iron-ore-explodes-back-above-90-a-tonne-2017-2
What are those inscrutable Chinese pouring these days? More rebar?
I know a guy who runs an environmental cleanup gig for oil wells. He makes really good coin.
What are those inscrutable Chinese pouring these days? More rebar?
What the Chinese are up to is paying down debt. As I have posted numerous times China has very little governmental debt and has extremely low external debt. What is does have is high SOE debt. This debt has built steel plants and iron ore mines which are mining very low grade ore and similar mines of other metals. China has decided correctly by just taking off line is least efficient, most polluting steel mills and iron ore mines it can make the rest of them highly profitable which will allow them to pay their debts without governmental assistance. That is what is happening and it means more inflation for the entire world. As I said recently be careful what you wish for when you say China is going to be forced to reduce its debt and lower its GDP growth.
Gasoline now up almost 59 cents year to year:
http://www.eia.gov/petroleum/gasdiesel/
And down $2 in 2 years…… with a long way to fall.
Oil will be 85 by dec 2015.
Oops
“What the Chinese are up to is paying down debt.”
That’s a cute magical thinking sort of thing. The mills that closed defaulted on their debts. Credit expansion causes inflation, cascading defaults is deflationary.
China - spending on black lung research?
Gasoline now up almost 59 cents year to year
Your mileage may vary.
Today it was $1.91 in Longmont. That’s about what it was a year ago. Two years ago it dropped to about $1.75
be careful what you wish for with China because its capacity cuts can cause worldwide inflation.
Same here. Capacity cuts via restricting availability of labor (immigration) might lead to inflation.
“Quicken, Feds To Square Off In Mortgage Case”
http://www.detroitnews.com/story/business/2017/02/13/quicken-feds-square-mortgage-case/97837614/
“The loans involved inflated appraisals, poor credit risks and borrowers with insufficient incomes”
No one will go to jail. As usual.
“Last year a federal judge in Washington, D.C., moved the case to Detroit, saying the Eastern District of Michigan is the appropriate forum because the alleged unlawful activity occurred in or near Detroit.”
Scant few in the MSM are willing to open the curtains concealing the festering wound of the American rust-belt.
Swamp got its new crocs.
–matis
–mnuchkin
–flynn
–kelly
–pompom
–ciao baby
–haley’s comet
–putzder
–pharmacy price
What would a swamp ecosystem be without crocodiles?