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You Always Have Some Curmudgeon Saying, Wow, That Bubble Is Going To Burst

It’s Friday desk clearing time for this blogger. “The average asking price of homes in the Lakes Region is definitely inflated by the many high-priced waterfront homes that are on the market. Big time! You’d almost think we were in California or Boston when you look at the $693,157 average asking price. For the first three months of 2019, the average sales price for single-family residential homes was $422,098. That’s a scary number for a lot of folks!”

“The towns that have a lot of waterfront showed the biggest price drop. The overall average sales price in Moultonborough was $732,217, but when you take out the waterfront homes, the average sales price drops down to $257,454! Meredith went from an average of $504,819 down to $293,973.”

“Nelson prices fell 12%, from $215,000 in the first quarter of 2018 to $190,000 in the first three months of 2019, and Albemarle prices dropped 6%, from 2018’s $370,000 median sale price to 2019’s $346,320. Fluvanna prices also fell, down 5% from 2018’s $224,000 to $212,185 in 2019.”

“Tele Jenifer, Charlottesville Area Association of Realtors president noted that some new housing is price competitive with existing housing. ‘New single-family, unattached homes in Albemarle County are selling at a median of $658,000, while existing unattached homes are selling for a median price of $424,000,’ she said. ‘When you consider that new attached homes are selling at $374,000, that gives buyers an affordable choice.'”

“‘Inventory of homes for sale remains a little tight, but it’s not really a sellers’ market out there, so the best advice is to get your home fixed up and ready to present to buyers,’ she said. ‘If it’s not, buyers may go look somewhere else.'”

“It might not feel like it, given the seemingly unending rise in home prices, but homebuyers in the Austin metro area are gaining an edge over sellers, according to Trulia. Those indicators — homes spending more time on the market and home prices being cut — show buyers in the Austin area now enjoy more bargaining power, Trulia economist Elliott Deal says.”

“‘The longer a home stays on the market, the more likely a seller will reduce the price or accept a bid under the asking price,’ Deal tells CultureMap.”

“Once called home by Hollywood icons like Cher and comedian Eddie Murphy, this Beverly Hills mansion is back on the market once again—at a serious price drop. Originally on the market for $85 million just two years ago, the price has decreased over 40%, making the asking price for the secluded property just (lol) $48 million.”

“Real estate agents say continued tight inventory and fewer than usual purchases in January contributed to a double-digit decrease in York County housing sales in the first quarter of this year compared to the same period in 2018. ‘If buyers don’t see that they want, they wait,’ said Julie Grady, president of the York County Council of the Maine Association of Realtors.”

“Eight buyers are now seeking to get out of their contracts and have their deposits refunded at J. Milton & Associates’ long-delayed Parque Towers luxury condo project in Sunny Isles Beach. The developer’s attorney Robert Frankel, said the lawsuits could be motivated by buyers who are looking to get out of their contracts because the condo market has slowed down. He also said ‘a lot of purchasers are Brazilian nationals who are having difficulty getting their funds from their home country.’ He said this has made it more difficult for them to put down the remaining money needed to close.”

“Parque Towers is one of the many luxury condo projects in the wealthy beach town of Sunny Isles. Sunny Isles has about 17 years of inventory of condos priced at $5 million and up, according to a recent report from EWM Realty International.”

“Built for former NBC boss Bob Wright, this magnificent Medouie Creek estate recently had its price cut to $15,250,000. Designed as a place for Wright’s extended family to gather and enjoy the bucolic beauty of Nantucket, MA, the compound was previously listed for $18 million.”

“Lena Dunham was over her Williamsburg pad almost as soon as she bought it, but selling it has taken quite a bit longer. Dunham bought the three-bedroom condo at 60 Broadway for $2.9 million in April 2018. But Dunham must have felt some kind of buyer’s remorse (or realized she had zero desire to be in Williamsburg), because she tossed the 1,987-square-foot loft back on the market just two months later, in July 2018, for $3 million.”

“The apartment disappeared from the sales market late last year, but now it’s back with a newly discounted price tag of $2.65 million and a brokerage switch to Compass. Aside from the loss Dunham is willing to suffer, the biggest change is that she enlisted ASH Staging to furnish the place. The apartment was previously pictured empty but is now fully furnished.”

“The Long Island State Senate majority and Town Supervisor Laura Gillen have announced a $215,000 grant to study and address the Island’s shortage of affordable housing. The funding will explore how the Town of Hempstead can keep people in their homes.”

“”The Town of Hempstead has several hundred zombie homes, and foreclosure is causing property values to plummet,’ Sen. Kevin Thomas said.”

“Gillen said that many families on Long Island struggle to make their monthly mortgage payment, and deal with housing instability. She also said that Long Island has not recovered from the housing market collapse a decade ago. The median home value in the town is just over $400,000 — 40 percent higher than everywhere else in the state, and double the median value for the rest of the country, according to Gillen.”

“‘The tide of foreclosure has battered many of our communities,’ Gillen said. ‘On top of that, homeowners are feeling the pressure even more today due to tax policies that include capping deduction on state and local taxes.'”

“Perhaps you have heard that tech initial public offerings are blooming like wildflowers this spring. Lyft, Pinterest, Uber, Zoom, Slack and more are coming, almost all of them headquartered in the San Francisco Bay Area. Host Molly Wood talked with Glenn Kelman, CEO of Redfin, a real estate company that offers both brokerage services and data.”

“Kelman: ‘The laws of supply and demand are already at work. That’s why people are renting U-Hauls and driving to Oregon. I think in some ways, whenever there’s a huge tech rally, you always have some curmudgeon saying, ‘Wow, that bubble is going to burst.’ I don’t know if I want to characterize myself as a curmudgeon, but I left San Francisco to run Redfin 14 years ago, and I always planned to come back. One of my kids the other day said, ‘If we ever came back, do you think we could afford it?” I don’t know, man. I don’t know. If I’m worried about it, everybody else must be, too.'”

“The Fed is treated these days like a holy citadel that can’t be challenged, yet few institutions have made more egregious mistakes in recent decades. In 2003 then Governor and later Fed Chair Ben Bernanke declared that ‘disinflation risk will remain a concern for some time.’ That was on the cusp of a multiyear burst of 3% GDP growth, but the Fed kept feeding a subsidy for easy credit that triggered commodity inflation and the housing bubble. Then as that bubble headed for bursting in 2007, Mr. Bernanke saw little reason to worry.”

“‘We have spent a bit of time evaluating the financial implications of the subprime issues, tried to assess the magnitude of losses, and tried to determine how concentrated they are,’ Mr. Bernanke said in May 2007. ‘There is a sense that, although there is always a possibility for some kind of disruption,’ the ‘financial system will absorb the losses from the subprime mortgage problems without serious problems.'”

“To our knowledge neither Mr. Bernanke nor anyone else at the Fed have acknowledged being wrong for feeding the credit mania that led to panic, or for the failure of the Fed’s financial regulatory oversight. Tim Geithner, then president of the New York Fed that regulated Citigroup, received a promotion to Treasury Secretary.”

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This Post Has 56 Comments

    1. Oh the horror! So what if Fannie and Freddie go away and mortgage rates balloon. nobody needs mortgages anymore they just manifest money and its available. Did you forget about the IPO’s…. everyone is taking Lyfts and the new flying Uber self driving taxis with there briefcases full of millions of dollars on there way to pickup a $8 mocha and $15 avocado toast. FREE FREE FREE, money is FREE, just imagine it!

      1. These Ginnie Mae changes are hitting FHA and VA more than F&F. But FHA is the entry buyer which stops the move up buyer and they have been most aggressive in pushing lending standards down. This refi change brings to mind: why is the government backing cash out refis at all? Something like 85% of government backed shack loans have nothing to do with first time buyers (real ones, not the 3 year rule) getting a house. They even back second house loans and investors! (Please keep your government backed investments down to 10 shacks.)

        But still, these Ginnie Mae changes are an earthquake to the REIC.

        1. why is the government backing cash out refis at all?

          Preach! Truer words were never spoken!

          1. Why does government need to subsidize SFH purchases at all?

            Times must be more desperate than when they started doing this in the Great Depression.

        3. Why is the government sitting back while the Bitcoin Ponzi scheme rages full tilt?

        1. “To come up with the down payment, I had saved 50% of my salary and 100% of my bonus each year from ages 22 to 26”

          Where was he living while he was doing this?! In an old van? With his parents?

  2. No room again for international crater. I’ll catch up this weekend.

    ‘I think in some ways, whenever there’s a huge tech rally, you always have some curmudgeon saying, ‘Wow, that bubble is going to burst’

    Said without irony by a guy losing hundreds of millions flogging shacks.

    Have you ever heard of self-driving flying cars?

    1. ‘Uber Technologies Inc. is alleged to have destroyed livelihoods and operated in Australia illegally, in a lawsuit brought by thousands of taxi and limousine drivers, broadening legal challenges ahead of one of the biggest initial public offerings this year.’

      ‘Law firm Maurice Blackburn filed the class-action suit Friday in the Supreme Court of Australia in the southern state of Victoria. It claims lost income and loss of taxi license values for the more than 6,000 drivers and license holders that Maurice Blackburn said have already signed up to the action. The court confirmed the lawsuit was filed early Friday.’

      ‘A spokeswoman for Uber said the ride-hailing company hadn’t been served with a class-action claim, and denied allegations it operated in Australia illegally. She said the company would vigorously defend against any such claim.’

      ‘The suit, which Maurice Blackburn said took about 18 months to bring forth, comes as Uber seeks to raise between $7.9 billion and $9 billion in an initial public offering. The company late last month lowered its target valuation, setting a range of $80.5 billion-$91.5 billion, and released first-quarter financials that confirmed revenue growth is slowing and it is continuing to post burgeoning losses.’

      https://www.wsj.com/articles/uber-faces-class-action-lawsuit-from-australian-taxi-drivers-11556865171

      It’s gonna be another twitter…

      1. Why don’t they all just sell their cars and put it into Bitcoin? Then you don’t even have to work anymore.

    1. “Massachusetts Market Health
      Data through Feb 28, 2019
      104 Average days on Zillow
      4.2% Homes with negative equity (8.2% US Avg) (Jun 30, 2018)
      Delinquent on mortgage (1.1% US Avg) (Jun 30, 2018)”
      Note that homes with negative equity in june 2018

  4. ‘The Town of Hempstead has several hundred zombie homes, and foreclosure is causing property values to plummet,’ Sen. Kevin Thomas said’

    ‘Gillen said that many families on Long Island struggle to make their monthly mortgage payment, and deal with housing instability. She also said that Long Island has not recovered from the housing market collapse a decade ago. The median home value in the town is just over $400,000 — 40 percent higher than everywhere else in the state, and double the median value for the rest of the country, according to Gillen’

    ‘The tide of foreclosure has battered many of our communities,’ Gillen said. ‘On top of that, homeowners are feeling the pressure even more today due to tax policies that include capping deduction on state and local taxes’

    Sounds like the price is the problem Kevin.

  5. ‘some new housing is price competitive with existing housing’

    This is when you are well and truly fooked Tele. Eeee-bola where ever this place is!

      1. Nice catch. Calling all specuvestors, hello?? Chinese millionaires…IPO millionaires… Where ya all go?

  7. “Once called home by Hollywood icons like Cher and comedian Eddie Murphy, this Beverly Hills mansion is back on the market once again—at a serious price drop. Originally on the market for $85 million just two years ago, the price has decreased over 40%, making the asking price for the secluded property just (lol) $48 million.”

    B…b…but a random REIC troll on the HBB assured us that drops of such magnitude were completely and utterly inconceivable. Cuz it’s different this time.

  8. “Perhaps you have heard that tech initial public offerings are blooming like wildflowers this spring. Lyft, Pinterest, Uber, Zoom, Slack and more are coming, almost all of them headquartered in the San Francisco Bay Area.

    By November, I predict these “wildflowers” will be seriously wilted, along with the portfolios of the bag holders who “invested” in them. Nuclear winter is coming to SF and every other Tech Bubble 2.0 wonderland.

    1. lots of cash out there looking for a place to hold up. Cheap money was distributed for way too long. Too many of us waiting on the sidelines for a “bargain.”

      1. Powell should have raised the benchmark rate a full percentage point, get downright serious with rate normalization. It would have been a great opportunity to demonstrate the fed’s independence.

        1. They say, record low unemployment today, still borrowing $1 trill a year and can’t raise rates.

          1. The crazy gov’t borrowing and demographics are why they can’t raise. At this point I’d say the overall economy is almost irrelevant, except as it impacts additional gov’t spending.

        3. It would have been a great opportunity to demonstrate the fed’s independence.

          The Federal Reserve is neither federal nor a reserve. It’s independence is the problem.

          2. You notice they never follow up with the prepositional phrase to define exactly what they are claiming independence from. But we all know what it is….independent from having to take any responsibility for their bad decisions.

          3. Making Sense of the Federal Reserve:

            The Federal Reserve Banks are not a part of the federal government, but they exist because of an act of Congress. Their purpose is to serve the public. So is the Fed private or public?

            The answer is both. While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends. Holding this stock does not carry with it the control and financial interest given to holders of common stock in for-profit organizations. The stock may not be sold or pledged as collateral for loans. Member banks also appoint six of the nine members of each Bank’s board of directors.

          5. What is the Fed?

            The Federal Reserve, “the Fed”, is the central bank of the United States of America that was created in 1913 by Congress. It is a banking cartel that has a government-granted monopoly on the creation of money and credit. The Fed literally loans “money” (Federal Reserve Notes) into existence. Federal Reserve Notes are paper promises backed by nothing of intrinsic value and they are only functioning as money because the government forces them on the public through legal tender laws. Federal Reserve Notes are referred to as dollars but are not. The definition of a dollar is a weight of silver (371 grains). To put it simply, the Fed is a group of banks running a national counterfeiting operation with the protection of the government.

            http://endthefed.org

          2. Well, at least Powell is somewhat intelligent. I can’t believe Herman Cain and Stephen Moore were even up for discussion. At least the GOP senators had the good sense not to put those two in charge. DJT wants to cut rates and they would have been the yes-men to do it.

  10. “I think in some ways, whenever there’s a huge tech rally, you always have some curmudgeon saying, ‘Wow, that bubble is going to burst.’”

    The bubble is toast. You can stick a fork in it.

    2. These houses in CA all look fancy from the curb-appeal front, but in the back they look like some flyover country box. I know somebody in Brentwood (Norcal) who is in a whole neighborhood of these.

      2. “These houses in CA all look fancy from the curb-appeal front, but in the back they look like some flyover country box.”

        Hence the cliché, “faux wealth.”

    1. I checked Redfin’s link to the photos from when it sold 9/18 & you are correct, nothing has been updated, still the same cheap generic lipstick on a 1950s pig decor flippers seem to favor.
      Interesting that although Zillow reports that it also sold 3/20/18, for $541,000, Redfin omits that transaction.
      David Ave. has a lot of traffic, thus places on David tend to take awhile to sell. I assume w/ 2 units this is a rental investment, altho’ it’s listed as SF. I doubt it would have a positive cash flow at that asking price.

      1. Thanks for the confirmation. I was pretty confident it was in the same condition as I remembered from last year. Problem is the price, they need more 8’s. I should throw em an offer of $888,888.88 And tell them I want a year supply of avocado toast and a love letter describing why I should consider this flip history shack

  16. The New York Times website has dropped its paywall for a few days, here’s an interesting item:
    Over 60: Why Own When You Can Rent?

    Of the 30 most populous cities in the United States, New York has the largest share of households of renters age 60 and over — 572,132, to be precise — according to the apartment-search website RENTCafé.

    In 2017, renters who were 60 or older made up 27 percent of the city’s rental population, a 20 percent increase over the previous decade, according to RENTCafé’s analysis of American Community Survey data from the United States Census Bureau. And senior renters outnumbered senior homeowners in Manhattan, Brooklyn and the Bronx, as is the case for renters in general. They even outnumbered those in the under-34 demographic, if only by half a percent.

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