A weekend topic starting with Yahoo Finance. "As Wall Street debates the cause of First Republic’s troubles, one analyst blames the nation’s top financial regulators. Fed Chair Jerome Powell and Treasury Secretary Janet Yellen were 'advocates of the strategy called ‘go big at the Fed’, Chris Whalen, Whalen Global Advisors Chairman tells Yahoo Finance. 'After 2018…we had a big problem in the money markets, so I think Chairman Powell…panicked in Washington, and they decided to provide more reserves.'"

"As the COVID-19 pandemic hit, the central bank acted again, bringing the Fed’s balance sheet to nearly $9 trillion. 'What they did, in essence, was throw a lot of money at a perceived problem, but they’ve created a real problem now, which is that interest rates have risen,' Whalen says. 'The Fed has created a huge market risk, so these outliers like Silicon Valley, First Republic, have tipped over in a difficult funding market.'"

From ABC Business. "News wires are reporting the US Federal Deposit Insurance Corporation is preparing to place First Republic Bank under receivership. In simple terms, San Francisco-based First Republic Bank is facing collapse. Its shares crashed 43 per cent by the close of trade in Friday New York trade. Analyst Henry Jennings from stock market newsletter Marcus Today is confident the bank has indeed met its end. 'Another one bites the dust,' he said. He said it was a continuation of the ongoing international banking crisis. 'It will not be the last,' Jennings told The Drum. 'There will be other targets.'"

From Go Banking Rates. "Certain states, like California and Florida have a number of cities on this list where home values have skyrocketed in these 14 years, some well above the median home value of $327,390. Victorville, California: June 2009 Home Value: $140,969. February 2023 Home Value: $401,548. Median Home Value Dollar Growth (2009 to 2023): $260,579. Median Home Value Percent Growth (2009 to 2023): 184.85%. Rialto, California: June 2009 Home Value: $179,345. February 2023 Home Value: $525,678. Median Home Value Dollar Growth (2009 to 2023): $346,332. Median Home Value Percent Growth (2009 to 2023): 193.11%."

"LeHigh Acres, Florida: June 2009 Home Value: $67,222. February 2023 Home Value: $252,472. Median Home Value Dollar Growth (2009 to 2023): $185,250. Median Home Value Percent Growth (2009 to 2023): 275.58%. Kansas City, Kansas: June 2009 Home Value: $40,019. February 2023 Home Value: $163,853. Median Home Value Dollar Growth (2009 to 2023): $123,834. Median Home Value Percent Growth (2009 to 2023).": 309.44%."

The Flathead Beacon in Montana. "Three years since the pandemic building boom began, city managers in the Flathead Valley say demand remains strong, but it’s begun to cool. 'We definitely had that peak in ’21,' Kalispell City Manager Doug Russell said. 'We had a lot of big multifamily projects that started in ’21 and are being built in 2022 … However, there’s no doubt we are seeing a cooling of the residential industry.' 'We are seeing the development occur,' said Whitefish City Manager Dana Smith. 'Unfortunately, it’s just not at that affordable rate for our workforce.'"

From KRDO. "County assessors across the state are now seeing the effect of red-hot housing markets the past two years, and homeowners and other property owners will soon feel the financial pinch. Assessors said that increases in property values -- specifically, for residential properties -- have reached heights never seen before in Colorado. Median increases range from around 40% in El Paso and Pueblo counties, to between approximately 35% and 45% in metro Denver counties -- with increases in the ski resort towns even higher, from 40% to nearly 70%. 'With a lot of our vacant land in rural areas, we're looking at increases of 200%,' said Pueblo County Assessor Frank Beltran. 'I've been in the assessor's office since 1980 and I've never seen increases like this.'"

From Market Watch. "Growing up in the California Bay Area, one of the most expensive housing markets in the U.S., tech worker Ramya Jagarlamudi knew the high bar he had to meet to own a home. But then came the twist: His wife’s employer asked all employees to return to the office. 'It was a bit of a surprise,' Jagarlamudi, who works as a software engineering manager, said. 'So I started ruling out Sacramento as an option, and started focusing on the Bay Area.' They settled on a new home in Tracy, Calif. — 65 miles west of the Bay Area — for slightly over $1 million. The builder, Lennar, had dropped prices slightly, and offered to pay closing credits of up to $6,000 as an incentive. The couple closed on the home in late April."

"Jagarlamudi decided to take an adjustable-rate mortgage with a California-based credit union called Golden 1. The couple took out a mortgage with a five-year term at a rate of 5.6%. 'My hope is once rates go down, I can refinance,' he said."

"For many aspiring homeowners, buying a home worth $1 million can seem daunting. But in California, given high home prices in the state, a homeowner’s monthly mortgage payment can run up to nearly $4,000. Yet the median annual household income is only around $82,000. Put more bluntly: In one year, given the 2021 estimated income from the U.S. Census Bureau, a household in California would have spent nearly 64% of its pre-tax income on their mortgage."

From RTE Brainstorm. "Property prices in Ireland and across Europe are falling for the first time in around a decade. But are we now looking at a bubble bursting — and a further fall in prices — or just a bit of a cooling off period? By January 2022, prices were 15% higher in Ireland than the previous year and they finally began falling in January 2023. But although prices are technically falling across Europe, they're falling from great heights. Public broadcaster LSM reports the Latvian housing market saw a 10% rise in prices between 2021 and 2022, while Slovenian prices also reached record highs in 2022, according to national broadcaster RTV."

"Finnish prices are also down on last year and demand is at a seven-year low, reports broadcaster YLE. Lithuanian property prices saw a whopping 22% increase at their peak in 2022 and unlike in most other European countries, price increases have slowed but not actually decreased, for now, reports Lithuanian National Radio and Television, LRT. Sweden has seen its property prices plunge by around 15% and faces a recession."

"Interest rates seem to have played a part in reversing a very long trend. House prices in Europe had been steadily on the rise since the last bubble burst. Eurostat data shows prices have increased by 47% overall since 2010. Of the 24 EU countries whose data Eurostat recorded, prices increased in 24 countries and decreased in just three. House prices more than doubled in Estonia (+199%), Hungary (+174%), Lithuania (+142%), Luxembourg (+136%), Latvia (+133%), Austria (+126%) and Czechia (+125%)."

"Prices 'simply can't keep increasing at the pace at which they did last year because people can't afford it. It's as simple as that,' says says Kieran McQuinn, Research Professor with the ESRI and adjunct professor of economics at TCD."

From Newsroom. "Although Kiwis are arguably the most extreme property fanatics in the Anglosphere – at least those who have and can afford property – there are common threads that we share with other countries. In New Zealand homebuilders have produced record numbers of new homes in the past year, and housing shortage estimates are no longer being regularly reported in the media. However, eerily familiar headlines are commonplace overseas and call for 106,000 additional homes in Australia, 250,000 in Ireland, 3.5 million in Canada, 4 million in the UK and 6.5 million extra homes in the US to resolve their respective housing shortages and achieve affordability."

"If a rush of new supply is added to a hot, buoyant housing market, as was the case in Ireland before the global financial crisis, then this simply feeds housing speculators and causes prices to race further ahead of incomes and rents. My recent research article on rental property purchases in Auckland found that nearly all are speculative and amount to bets placed on future capital gains. A further paper I co-authored found that investors’ speculative activity pushes up house prices. That said, it is critical to recognise that investors are enabled by a well-heeled accomplice: the bank."

"Residential property investors are a core client of banks throughout the Anglosphere. Investors’ largest presence is in Australia where a fifth of all taxpayers own a rental property and over a third of new mortgage debt is used to fund investment purchases. Over the past decade roughly a quarter of new home loan debt in New Zealand was channelled to investors. In America a quarter of homes are sold to investors with an increasing presence of institutional buyers. Canadian cities have seen a steady increase in investor activity, which currently nets a fifth of home purchases. In the UK, ‘Buy-to-let’ loans account for 14 percent of new mortgage debt."

"Based on current Auckland house prices and market rents, investors are buying dwellings with gross yields below 4 percent. This is simply the ratio between annual gross rent and the purchase price. Of course, a landlord will never realise a gross yield because they must pay outgoings including insurance, rates, property management, maintenance, etc from their rental income. Even if you disregard interest payments, which tends to consume much, if not all, of the rental income, investors’ cash-on-cash returns will be considerably less than 4 percent. Put into context, current term deposit rates are over 5.5 percent."

"Unsophisticated 'Ma and Pa investors' can potentially be excused for failing to appreciate the concept of risk and return, but it is inexcusable for commercial banks to lend on such ‘businesses’ incapable of outperforming a risk-free return in the absence of speculative capital gains. This same fundamental issue is facing all countries in the Anglosphere."

Yahoo Finance Canada. "For many young homebuyers, the days of being able to follow in their parents' footsteps and buy a traditional, detached starter home have largely come to an end in Canada's big cities, according to realtors. 'In most cases, I would say the traditional idea of the starter home is completely dead,' said Rhiannon Foster, the owner of the Opportunity Homes Collective under Century 21 In Town Realty in Vancouver."

"That's the same trend that Cailey Heaps, a Toronto-based realtor says she's seeing, as the price of single-family homes has soared in recent years. 'It's remarkable to think about a starter home being north of a million dollars. That just seems wild to me, but in reality, that's what it is in Toronto unless you're in a condominium,' she said."

From Mises.org. "The latest Canadian housing data showed a slight uptick in prices and a pause from 2022’s correction, and a new wave of dip buyers has already begun to call this a buying opportunity, as if valuations at ten times average annual income and 50 percent more expensive than their cash flows were anything but still extremely overvalued. This is merely the most recent development in what appears to be the end of Canada’s massive housing bubble and the beginning of a potential 2008-style recession for the Canadian economy."

"Following the 2008 global financial crisis (from which Canada emerged relatively unscathed), the Bank of Canada’s record-low interest rate policy fueled an unprecedented bull market in Canadian real estate. While prices showed signs of reversal in 2019, the events of 2020 provided justification for the Bank of Canada’s mind-boggling balance sheet expansion, which virtually quintupled in a matter of months. Central planners had decided to pour metaphorical gasoline on the country’s already raging-hot fire, creating an outright manic buying frenzy."

"The penultimate state of the bubble in late 2021 was astronomical: Residential property prices in Toronto and Vancouver had doubled to quadrupled in little more than a decade. Canada’s overall nonfinancial debt amounted to almost 350 percent of gross domestic product (GDP) and household debt surpassed 110 percent of GDP, both higher than the levels seen in the United States before the 2008 global financial crisis."

"Homeownership rates surpassed the two-thirds mark. Canadian real estate, construction, and financial sectors combined to form over 28 percent of GDP! By almost every statistical measure, Canada’s housing bubble was one of the largest on record. As is typical of every bubble, timeless tropes were regurgitated in order to justify the madness."

"The most often repeated argument was that the Canada Mortgage and Housing Corporation (CMHC), Canada’s public mortgage insurer and a Canadian version of Fannie Mae, would never allow a bubble to occur because they are supposedly more responsible than US regulators. This argument fails on numerous counts."

"The seeds of a bust are sown throughout a boom in the form of malinvestments rendered profitable by artificially low interest rates, and thus the severity of a recession is ultimately determined by the degree to which malinvestment permeates the economy. It is safe to say that after more than a decade of nationwide real estate malinvestment, a significant portion of Canadian bank assets is correlated to housing, which will expose Canadian banks to the threat of insolvency in the event of a large-scale market correction."