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The Good Times Weren’t Going To Last Forever

It’s Friday desk clearing time for this blogger. “The global financial outlook ‘kinda sucks,’ said UC Santa Barbara professor Peter Rupert. This year, because of an 11 percent drop in the median house price, from $718,000 to $655,000, Santa Barbara sits in the middle of the pack as more affordable than Ventura, Alameda, and Santa Cruz counties. The South Coast also had an 11 percent decrease, which pushed its median home price from $1.34 million to $1.27 million.”

“Small details about the housing market can say just as much about how well Americans, and the broader economy, are doing. On Tuesday, Rob Dietz, chief economist for the National Association of Home Builders, posted a research note about one in particular: the size of newly constructed homes. Overall, sizes have been on a downward path since mid-2015. ‘Current declines in size indicate that this part of the cycle has ended,’ Dietz wrote.”

“The Bridgehampton home of the late Sono Osato who died in December, has sold for $26 million. Ms. Osato originally listed the home in March 2018 for $37 million, and the ask was most recently pegged at $34 million.”

“The price tag on a circa-1885 Victorian mansion that once belonged to author Anne Rice has been lowered for the second time in two years. After extensive renovations, the property’s current owner first listed the New Orleans landmark in 2017 for $5 million. The price was dropped to $4.5 million last summer, and now Curbed is reporting that it’s been chopped yet again, this time to $4.3 million.”

“It’s been almost a year since the soapy country music saga ended, and two years since Connie Britton’s character, Rayna James, was killed in a car crash, but fans still flock to see the mansion that stood in as the country crooner’s family home. It’s located in Nashville (of course!), and any fan who wants to step forward can now buy the place for the reduced price of $16 million. The 20,533-square-foot European village-style estate has bounced on and off the market since 2010, when the price was set at a whopping $22.5 million.”

“Metro Vancouver’s rental apartment building sales market is slowing down. Pricing has come off anywhere from seven to 20 per cent in land and in apartment buildings, said David Goodman, principal with Goodman Commercial, which specializes in rental apartment sales.”

“A new price reality has set in and sellers must realize that if they want to sell they’re going to have to come off the record-high asking prices, he said. ‘There have been some buildings on the market for four, five, six months where the ownership is not willing to recognize the realities of the market, so these buildings will simply not sell.'”

“A leading agent has said that estate agency is currently on its knees. Trevor Abrahmsohn of Glentree Estates in London, asked how much more punishment agents can take ‘from this Tory government.’ Abrahmsohn did not confine his criticisms to the Conservatives, also hitting out at Labour’s ‘hate-fuelled stupidity’ in wanting to end permitted development rights.”

“Abrahmsohn said of the ban: ‘Letting agents are not exactly high on anyone’s popularity list. However, like dung beetles or sewage workers, they do perform a necessary function.'”

“Turkey’s state-run real estate company, is offering big discounts on apartments after an economic slump caused a crisis in the housing market. Home-buyers can snap up one of about 3,000 properties for as little as 304 liras ($50) a month, Hürriyet newspaper reported on Friday citing a schedule of sale auctions.”

“Australia’s ailing housing market got a triple tonic this week as the central bank flagged interest rate cuts, the banking regulator eased lending criteria and the threat of tax changes that could have hurt property investment abated with the government’s re-election.”

“But there are at least 80,000 reasons to suggest there’ll be no rapid rebound as the worst housing slump in a generation spreads deeper into the economy. That’s how many apartments were completed in recent years in Sydney — adding about 5% to the housing stock — while Melbourne and Brisbane have also seen relatively large additions, according to the Reserve Bank.”

“That raises the question: Who’s going to soak up all that new supply? On a recent Saturday morning in Wentworth Point, a suburb of high-rise apartments in west Sydney that largely sprung up during a five-year housing boom, the hordes of potential buyers seen at the peak has slowed to a trickle.”

“The hangover is hitting the economy, with signs a multi-year jobs boom is running out of steam as tepid wages and the downer from falling home prices curb consumption. ‘The thing that I think would really shift the balance of risk is if we were staring down the barrel of a softer labor market,’ said Sally Auld, senior strategist for JPMorgan Chase & Co in Sydney. ‘That means that income growth will slow further, and it also brings into play the prospect of forced selling in the housing market, which is not something we’ve had as of yet.'”

“Construction activity — which feeds into gross domestic product — has already plunged as developers scale back because of the glut of apartments hitting the market. ‘We’ve seen the numbers of people attending our open homes drop dramatically,’ said real estate agent Alex Chidiac. ‘The good times weren’t going to last forever.'”

“Florida is getting hit with waves of foreclosures, and we had better pay attention to this disturbing trend. Foreclosure rates have been increasing in Florida for eight straight months, according to ATTOM Data Solutions. Some Florida metros are seeing double-digit increases in foreclosure activity. Last month, for example, foreclosure activity was dramatically up in Volusia (97 percent), Orlando (90 percent) and Miami (45 percent).”

“And all of this is happening in a relatively strong economy with unemployment low and wages rising. In Florida, however, wages aren’t increasing at the same rate as ever-rising housing costs — and that makes us particularly vulnerable to a foreclosure crisis.”

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This Post Has 105 Comments

  1. ‘because of an 11 percent drop in the median house price, from $718,000 to $655,000, Santa Barbara…The South Coast also had an 11 percent decrease, which pushed its median home price from $1.34 million to $1.27 million’

    Eat yer crow Thornberg.

    2. “Eight of Santa Barbara’s largest occupations — farmworkers, retail salespeople, office clerks, cashiers, food preparers, servers, personal care aides, and secretaries — all make relatively low wages, many around $25,000-$30,000 a year.”

      In Santa Barbara, $30k/yr after taxes might put food on the table.

      1. SB has lost it’s charm. Fires, flood and the homeless epidemic are crushing it. It is becoming Puerto Vallarta.

    3. Certainly by now, Thornberg is backpedaling away from his prediction that California housing prices would never fall?

      1. Never? He was one of the first to call the pending collapse in 2006.

        I am sure he will call a downturn when there is evidence one is coming. Another downturn is just a matter of time…

  2. ‘a triple tonic this week as the central bank flagged interest rate cuts, the banking regulator eased lending criteria and the threat of tax changes that could have hurt property investment abated with the government’s re-election’

    ‘But there are at least 80,000 reasons to suggest there’ll be no rapid rebound as the worst housing slump in a generation spreads deeper into the economy’

    The REIC hysteria in Australia has been something to behold. A limp first shack buyer policy proposal and an interest rate cut has them proclaiming “it’s to the moon!” Slog through your foreclosures, and we’ll see how you end up. You’ll be lucky if your banks survive.

    1. “You’ll be lucky if your bank$ $urvive.”

      $ynchronou$ Global $lowing$ = $oft landing$

  3. ‘Florida is getting hit with waves of foreclosures’

    You won’t read that on any large Florida papers.

    1. “Florida is getting hit with waves of foreclosures, and we had better pay attention to this disturbing trend.”

      Who the phuc is “we?”

      “State funding for Visit Florida was slashed by 34 percent to $50 million, reports the News Service of Florida.”

      And these are the good times…sure hate to see things in a recession.

      “To their credit, Florida’s lawmakers did well in pushing through legislation to make texting while driving a primary offense — that means officers won’t need another reason before they can stop a driver who is sending or reading texts while behind the wheel.”

      Good on them!

      “Florida remains one of the worst-funded states for mental health services largely because the Legislature refuses to accept federal funds for Medicaid expansion.”

      Is that where sidewalk-feces comes from?

      “Nearly half of Florida children are not ready for kindergarten: as reported by the Sarasota Herald-Tribune, 47 percent of Florida’s children were not ready for kindergarten in the 2017-18 school year.”

      What’s wrong with a daily-dose of Fruity-Pebbles, Hostess HoHo’s and six hours of the cartoon channel?

      ***

      Florida, a sunny place for shady people.

      1. “Florida, a sunny place for shady people.”

        Sounds like you need to get over to Palm Beach and buy you a $20 million teardown. 🙂

      2. “…Who the phuc is “we?”…”

        Notice that when things are going good its “me” or “I” (as in ‘I am a genius”).

        Now as things turn bad suddenly its a “we” (as in ‘we are all equally responsible’).

        A variation of privatize the profits, socialize the losses.

        1. Often this plays out in the sports world as well. To wit: “They lost.” But, “We won!” I hear this by fans referring to their team of choice.

        2. Success has many fathers; failure is an orphan.

          Often attributed to JFK, but it’s a rework from Tacitus Agricola, 98 AD: “This is an unfair thing about war: victory is claimed by all, failure to one alone”

  5. “Abrahmsohn said of the ban: ‘Letting agents are not exactly high on anyone’s popularity list. However, like dung beetles or sewage workers, they do perform a necessary function.’”

    Not one, but two self references to excrement. Maybe a career change will help Trevor’s self image.

    1. Related: the Tories are paying the price for Brexit betrayal. From a 6 week old party.

  6. Berkeley loves its sanctuary label, but a housing crisis is testing its liberal values
    Washington Post
    Scott Wilson

    “Faced with sharp criticism from a changing population, city leaders have banned people from living in recreational vehicles here, proving that even the most accepting of cities is not immune to the demands that often accompany wealth and gentrification. Businesses and residents have complained about the RVs’ blighting of city streets and the burden they place on public safety and sanitation services.”

    “If they kick people out of their campers,” he said, “then there will just be more people on the streets.”

    1. Some gems of quotes:

      “The pressure we are feeling as local politicians is telling us that, as people spend more and more on housing, they feel more and more aggrieved by so-called blight.”

      And:

      “Harrison, the Berkeley council member, recalled a constituent saying: “I paid a million dollars for my place, and they [RV dwellers] have a better view.””

      1. So I guess one lesson we are learning is that it makes even the most so-called liberal/progressives pretty upset and far less tolerant of homeless RV dwellers and tent encampments on the sidewalks when you pay $1.5 mil for a $150k shack. Much easier to push the problem over to Oakland. Got it.

      2. “I paid a million dollars for my place, and they [RV dwellers] have a better view.”

        Then trade places with the RV dweller. What? No? That’s what I thought. Now go eff yourself.

          1. The English queen has something similar that follows her outings away from the castle so that she a has a private restroom.

    2. Berkeley (2 weeks ago) was much cleaner than downtown San Francisco, no urine scent, no poop on the sidewalks.

  7. How high is this 2nd Bitcoin bubble going to go? I have to say I am shocked that it’s happening again. I guess bubbles can be reinflated over and over and over again, with an endless supply of suckers.

    1. I dont own any bitcoin but I dont see how its any different than gold. In the words of Schiller gold is a bubble that has lasted millenia. It has very limited industrial uses, its hard to lug around, and the supply jumps randomly. Bitcoin has no industrial uses, is effortless to move around, and has a finite supply. I just think its a bit odd that everyone who wants to buy gold laughs at the butcoin crowd. Btw I have some gold.

      1. I don’t know what you’ve been reading, but a lot of the gold bugs are heavy into crypto.

        Ok, let’s assume Bitcoin is “like gold.” How do you explain all the other cryptos that are spiking just like Bitcoin?

        1. Maybe as RE falls out of favor as a money laundering option the cash will recede into bitcoin, like Angelo Mozilo’s hairline during the 80s.

        2. It’s a free market. The only thing that gives something value is people’s belief in it.

    2. I believe this is a consequence of the Fed’s punchbowl removal failure
      The proof will be when and if they ever normalize rates.

  8. Somebody posted yesterday about twelve year olds having no hope of owning real estate . I don’t think current potential buyers have any hope of affordable housing. Casino Nation with shelter.

    I’m hoping for a big fat quick crash .

    1. It’s actually turning into a tangible stress we’re sometimes encountering around here.

      Lots of 2-income tech families, and others with kids have voiced that “shit, unless our kids will need to be even more successful than we were, when they are adults they won’t be able to buy the house they grew up in”. And some of the kids have overheard or otherwise picked up on it. There’s always been a segment of over-achievers in high school, but it’s gotten a lot worse/bigger in a generation – kids taking 4+ AP classes plus extra-curricular that looks good on paper – they literally don’t have a life outside of studying/working.

      1. they literally don’t have a life outside of studying/working.

        Which is normal to Chinese people…so they’re totally ready to serve their American overlords for a shot at the dream, just like they never left China. My wife totally doesn’t get it when I tell her there’s another way.

        1. Unfortunately, it’s gone well beyond the Chinese/Asian immigrant/tiger mom sector. Thanks to our unregulated flow of information, more and more youth are hearing there are there are more monkeys chasing fewer bananas than ever.

          No wonder polls are showing the today’s American teens/Gen Z are more stressed and pessimistic than any cohort that has come before.

          1. No wonder polls are showing the today’s American teens/Gen Z are more stressed and pessimistic than any cohort that has come before.

            My point is just that they are becoming more like their Chinese peers. And mostly I don’t consider that a good thing.

          2. My doctor buddy just moved to the Bay Area and said that all the other kids have no social life (and are children of immigrants, China, India, etc.). He says they just study and do music to get into Stanford so they can afford a crap shack some day. His daughter hates it so they’re looking to move back to SoCal.

            Birthrates are crashing in America. We’re at 1.7 offspring per mom and we need to be at 2.1 to sustain the population.
            Maybe because nobody that goes through today’s K-12 success machine wants to put kids through the same. It’s bleak. If we shut down immigration like Japan housing prices will eventually fall to meet demand. Unless we do 100 year mortgages…

          3. “Birthrates are crashing in America.”

            Look at the young ladies these days. They’re either over-weight PAWG feminists or foodie date IG weekend sluts, and talk about CC debt. I warn my son almost every other day to open his eyes, stay frosty!

          4. Carl,

            Sorry, it wasn’t clear which groups you were referring to.

            And yeah, it’s not a good thing, except for the ‘education business’. More degrees doesn’t magically make more high paying jobs.

            Magoo,
            Our elite, who do not feel the consequences of their decisions, think that we desperately need to keep increasing the population to keep all the pyramid-like schemes running (so they can continue to profit to the moon). The concept of ‘steady state’ goes against all their greed.

          7. I didn’t coin it.

            I figured that. Thought I’d provide the definition so anyone else unfamiliar with it wouldn’t have to look it up.

          8. “He says they just study and do music to get into Stanford so they can afford a crap shack some day. His daughter hates it so they’re looking to move back to SoCal.”

            Plenty of SoCal Asian immigrant children are cut from the same cloth.

          9. “Plenty of SoCal Asian immigrant children are cut from the same cloth.”

            +1 Irvine, CA.

          10. Birthrates are going down but the population keeps increasing via immigration , illegal aliens, and other lax rules. 40 percent of the people living in the US were not born in the US. I heard 1/3 of Guatemala is living in the US.

            Our church gives weekly backpacks of food to poverty families which are almost all immigrants…legal or illigeal. 5 years ago we gave out about 300 a week…now it is over 1500. I would say the majority are 90 percent Hispanic. There is a mass migration from South of the border to the US. At what point is the system overloaded.

          11. rusure,

            I’d argue it’s already overloaded – or course I used to live in Texas and was closer to the front lines of the influx if illegals. It appears that pretending we are not experiencing a huge influx of illegals is in the best interest of some of the elite corporate/money interests and by extinction, lawmakers.

            No matter if Trump is going to be the worst president ever or not, his stance on illegal immigration is already resonating with masses of the population who are most affected and least listened to. And the silence from other parties and the actions (watch their actions, not their words) of even some republican party members are very telling as to who their masters are. If the political establishment at large thinks things are ‘going back to normal’ after the next election, I need to sell them some bridges I have…

    1. Q: Why did the REALTOR cross the road?

      A: To lie to the used house buyer on the other side of the road.

  11. “And all of this is happening in a relatively strong economy with unemployment low and wages rising.

    This “relatively strong economy” is a chimera predicated on debt-fueled consumption. Public and private debts have tripled since 2008 (heckova job, Ben & Janet) and now the financial stress cracks are widening as leading indicators like delinquency rates on credit car and subprime auto loans are hitting levels last seen during the 2008 Great Financial Crisis.

    “This sucker could go down.” — George W. Bush

    1. chimera predicated on debt-fueled consumption

      Debt is not prosperity. It’s poverty in a nice suit of clothes.

  12. Debt donkeys sink deeper into the red, as “day to day costs continue to soar.” Yet Fed economists claim our supposed sub-2% inflation is too low. Does not compute….

    https://www.cnbc.com/2019/05/23/nearly-25-percent-of-americans-are-going-into-debt-trying-to-pay-for-necessities.html

    American have an average of $6,506 in credit card debt, according to a new Experian report out this week. But which expenses are adding to that balance the most?

    A full 23% of Americans say that paying for basic necessities such as rent, utilities and food contributes the most to their credit card debt, according to a new survey of approximately 2,200 U.S. adults that CNBC Make It performed in conjunction with Morning Consult. Another 12% say medical bills are the biggest portion of their debt.

    That makes sense, given that day-to-day costs continue to soar. Middle class life is now 30% more expensive than it was 20 years ago. The cost of things such as college, housing and child care has risen precipitously: Tuition at public universities doubled between 1996 and 2016 and housing prices in popular cities have quadrupled, Alissa Quart, author and executive director of the Economic Hardship Reporting Project, tells CNBC Make It.

  13. I hope everyone is going to have a nice extended memorial day weekend they can relax and enjoy.

    Looks like I blew out my knee the other day, or more specifically a last piece of cartilage gave way and I’ll be needing to upgrade it to titanium rather soon. Can wait to see what sort of cluster fark our medical insurance coverage turns out to be… “Well, the nurse that came by for 20 seconds is in-network, but the meds she gave you are out of network so we’ll need to balance bill you for the entire two thousand tablets in the case at defense contractor prices…”

    1. “This surgery is subject to blackout restrictions in your ward.”

      Get well soon Mortgage Gacked Securities!

    2. Total bummer. Sorry to hear that MGSpiffy. Wish you a speedy recovery. Don’t skip the rehab stuff.

      1. I knew it was in my future, but didn’t know it was this close.

        I literally a WTF event where bone hit bone. Super painful. That last bit of cartilage must have just detached and slid to the side. I had xrays of the knee taken back in 2017 and I could see the difference between those and the new ones at a glance. Bone spurs, gaps gone, you name it. I’m trying to work out the logistics. Maybe July. Gotta get in shape to survive the recovery.

        1. Sorry to hear about your situation. Do as much as you can prior to surgery, drop weight and build strength. It’ll make all the difference.

        2. Maybe consider swimming, if that is an option. I’m still playing racquetball as I approach my seventh decade walking the planet, but I am mentally prepared to resort to swimming as a low-impact aerobic activity if a future leg injury or other health concern ends my racquetball career.

          Fyi, two decades ago, I ruptured my achilles tendon. After recovering from the surgery is when I started getting seriously into racquetball. There can be athletic activity after recovering from a leg injury.

          1. Prof Bear,
            All the options on are on the table. It’s primarily due to hereditary osteoarthritis which very weirdly is manifesting itself early only on my non dominant side.

            jordan,
            This is probably the kick in the balls that gets me into actual action instead of talk/wishing where it comes to weight. I’ve got 35 pounds to lose. Detoxing from sugar will bring headaches for a few weeks, but I’m ready for it.

            For the last 2 months I’ve been working out in a mini-gym I’ve setup in my home. If anything I’m pushing harder how.

          2. For the last 2 months I’ve been working out in a mini-gym I’ve setup in my home. If anything I’m pushing harder how.

            I am a bit jealous of that setup. One benefit of having a house like yours is that it accommodates a mini-gym. All I want is a great treadmill.

          3. OneAgainstMany,

            Thanks for the compliment.

            It isn’t so much that the house had a dedicated space for it, but that the Mrs and I aren’t that attached to the notions of a ‘traditional’ house setup. That ‘workout area’ is what you pass going from the front door to the kitchen and is across from the first living area. It also has a full size arcade cabinet and large bookcase across from the workout equipment. We just sort of fit stuff where it seems to go best. We also converted the living room overlooking the deck into a dual office, which is open to the kitchen.

            That said, it is great to have the equipment in the house. about 7 or 8 years ago we used to go a gym in Bellevue (torn down since to make room for more apartments) religiously every day, but that meant getting up at 6:00am, driving over, working out, driving back, then showering up, and then going to work. Not having to travel, or deal with other people saves a TON of time and hassle. Unfortunately we stopped going after I had to have an unexpected surgery that cut into my core muscles. It took months to recover, and in that time we lost the habit.

    3. Best wishes! I’ll climb a mountain for you this weekend with my still functioning Gen-X knees.

      Your post the other day about the ex-wife draining your retirement to spend it on partying was very sad.

      More young men are learning that the juice just isn’t worth the squeeze.

      I just sent my 19yo nephew a copy of “Bachelor Pad Economics” by Aaron Clarey, whether or not he reads and internalizes it is beyond me, but at least I tried…

      1. My references in 2006 before ultimately getting a prenup before eloping in 2008:

        Shacking Up: The Smart Girl’s Guide to Living in Sin Without Getting Burned

        Living Together: A Legal Guide for Unmarried Couples

        Money Without Matrimony: The Unmarried Couple’s Guide to Financial Security

        Unmarried to Each Other: The Essential Guide to Living Together as an Unmarried Couple

        1. My references in 2006

          Thanks for the list — I’ll have to check some of these out, given my situation.

      2. Bachelor pad Economics
        I sent one to my stepson last Christmas.
        Hopefully he read it and “got it”.

      3. Apartment 401, Redpilled Redhead, drumminj, MWR, etc 🙂

        I have a specific shelf on which I have been setting aside books for my son, once he is free of his mother (who would burn every one of them). Here are some of the titles on it, including Bachelor Pad Economics.

        https://imgur.com/a/D9xTqiu

  14. “Birthrates are crashing in America.”

    Isn’t this a good thing, like fewer people at the beach?

    1. You can’t get rich without people to produce stuff and people to buy it. Was Adam the richest man in the world or the poorest? The whole planet was his yet his standard of living sucked once he got booted from the garden. He needed other people to help make stuff with “his” resources.

      1. But growth from population can be supplanted with growth from productivity. In any event, I don’t see population slowdown as anything but a good. Until we figure out how to prevent massive plastic islands, we should slow down a bit.

  15. “The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.” — Frank Zappa

    1. And we can finally stop this charade and just put a bullet in Assange’s head and be done with this First Amendment nonsense.

    2. “Today, things have changed more than slightly: the world is hopelessly overpopulated, pollution is indescribable, rainforests are dying, overfished seas are degraded to cesspools and trash dumps, and it is believed that a large proportion of insects have already been destroyed by electrosmog. Only five percent of the population still works in agriculture, organic food is only available at a high surcharge, and 500 nuclear power plants are awaiting the GAU. Realistically speaking, most humans are wearing mind-cuffs, rotating the hamster wheel on their way to the final phase of the debt money system.” LOLZ

  16. “It’s located in Nashville (of course!), and any fan who wants to step forward can now buy the place for the reduced price of $16 million. The 20,533-square-foot European village-style estate has bounced on and off the market since 2010, when the price was set at a whopping $22.5 million.”

    These Dutch auction sales can take forever if the auctioneer drags his feet on reducing the offer price to market value.

    1. I guess there’s a shortage of people with buckets of money and boxes of stupid?

  19. Is $7.8 billion alot?

    The Financial Times
    Emerging markets
    Emerging market stock funds suffer $3.8bn withdrawals
    Trade war concerns over 7 days to May 22 takes losing streak to five consecutive weeks
    Troubled times: investors fear Trump policies will hit emerging markets
    © FT montage
    Richard Henderson in New York May 23, 2019

    Investors have pulled money from emerging market stock funds in the past week at the fastest rate since the crises last year involving Turkey and Argentina, as concerns mount over the trade stand-off between the US and China.

    Funds that invest in emerging market stocks lost $3.8bn in the week ending Wednesday, according to EPFR Global, which tracks mutual and exchange traded funds. The weekly total was the worst in a string of outflows that now sits at five consecutive weeks and $7.8bn.

    This compares to an 11-week stretch of weekly outflows ending in July that hit $17.1bn at the height of the economic and political crises in Turkey and Argentina last year.
    …

  20. Did you sell in May and go away?

    The Financial Times
    US equities
    US market jitters set to persist on trade war uncertainties
    Investors wait for resolution to impasse between Washington and Beijing
    The exterior of the New York Stock Exchange. The shadow of the US-China trade dispute is hanging over financial markets © EPA
    Richard Henderson in New York yesterday

    It has been the worst week on US equity markets since — well, only since two weeks ago, but the mood among investors and Wall Street analysts soured notably. Instead of seeing the US-China trade war as a temporary headwind that will end in a deal, more forecasters have set the imposition of higher and more damaging tariffs as their base case. The unease is buttressed by the spectre of softening global growth. Poor economic data in the US this week and downward revisions to gross domestic product forecasts signal trouble ahead.

    Growing unease

    While “deal or no deal” headlines around trade talks have dominated investors’ attention, the latest economic data are quietly building a picture of weakness.

    Two reports this week in particular were disappointing. On Thursday the manufacturing purchasing managers’ index hit its lowest monthly level in nine years, dropping to 50.6, below the consensus expectations of 53, according to IHS Markit data. That still shows an expansion in the manufacturing sector, but only just. A reading below 50 represents a contraction.
    …

  21. A nation of broke-assed losers …

    Nearly 25% of Americans are going into debt to pay for necessities
    https://www.cnbc.com/2019/05/23/nearly-25-percent-of-americans-are-going-into-debt-trying-to-pay-for-necessities.html

    (snip)

    “American have an average of $6,506 in credit card debt, according to a new Experian report out this week. But which expenses are adding to that balance the most?

    “A full 23% of Americans say that paying for basic necessities such as rent, utilities and food contributes the most to their credit card debt, according to a new survey of approximately 2,200 U.S. adults that CNBC Make It performed in conjunction with Morning Consult. Another 12% say medical bills are the biggest portion of their debt.

    “That makes sense, given that day-to-day costs continue to soar. Middle class life is now 30% more expensive than it was 20 years ago. The cost of things such as college, housing and child care has risen precipitously: Tuition at public universities doubled between 1996 and 2016 and housing prices in popular cities have quadrupled, Alissa Quart, author and executive director of the Economic Hardship Reporting Project, tells CNBC Make It.

    “It’s now common to be just scraping by.”

    😁

    “A majority of Americans have less than $1,000 in savings and more than 70% of U.S. adults say they’d be in a difficult situation if their paycheck was delayed by a week, according to a survey of over 30,000 adults conducted by the American Payroll Association released in September.”

      2. From the article:

        “A Redfin analysis found these buyers are leaving too-hot-to-touch big-city markets — among them, San Francisco and Seattle, where the tech boom has sent housing prices into the stratosphere. The brokerage found that many millennials are instead buying in more reasonably priced neighborhoods around places like Salt Lake City, Oklahoma City and Raleigh, North Carolina. That, in turn, is driving up housing prices in those communities.”

        Equity locusts coming to my city. Cities mentioned in this article that are relevant: Lehi, Vineyard, and Daybreak (South Jordan). Notably absent was Herriman which is going gangbusters. Salt Lake County and Utah County are sheer madness right now.

        1. In Oklahoma City that likely means a large house and yard or acreage at a fraction of the coastal madness.

  22. Manhattan skybox prices fall the most since 2010. Manhattan, I’ll remind you, is home to the Wall Street grifters who were the chief beneficiaries of the Fed’s “No Billionaire Left Behind” monetary policies. If RE there is cratering, despite the trillions of Yellen Bux lavished on the financial sector, what’s going to happen in Flyover Country USA?

    https://www.bloomberg.com/news/articles/2019-05-24/manhattan-home-prices-fall-most-since-2010-attracting-buyers

    1. Another good excerpt:

      “There is also more pressure on families to earn two incomes, rather than letting one choose to be the stay-at-home parent. This could be a particular challenge in the Salt Lake City area, where families are generally larger, mostly because of the influence of the Church of Jesus Christ of Latter-day Saints, and about 28% of the population is under 18, compared with nearly 24% nationwide.”

      The frustration is palpable among my extended family. My sister-in-law is a young mom with two children. Her husband is not college educated but rather a blue-collar workers. They have been living rent-free with their parents since they were married. The dream of owning a home close to family but know this is a pipe dream. They can’t compete income wise with tech earners going to Adobe and the other tech companies at the point of the mountain.

      1. They can’t compete income wise with tech earners going to Adobe and the other tech companies at the point of the mountain.

        They shouldn’t have to. Dual income tech workers should be in a completely different housing market than single income blue collar workers. So either there’s a problem at the upper side of middle class, or the blue collar worker hasn’t mentally processed their cramdown and is looking for something that’s out of their league…or both.

  24. I was sorry to read this:

    Real estate columnist Kenneth Harney dies at 75
    Chicago Tribune-21 hours ago
    … of the syndicated real estate column “The Nation’s Housing,”

    1. Was Kenneth honest?

      I read a few of his pieces, but his writing was too wordy sort of like Greenspan talking. Well, seventy-five was a full life. Blue skies!

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