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Buyers Now Perceive Them To Be More Overpriced Than Before

A report from Realtor.com. “‘Overall, the slowdown is taking over across the board, and it’s concentrated in the South and West—that’s where the supply has been depleted,’ says Javier Vivas, director of economic research for realtor.com.”

The Mortgage Reports. “There are 10 markets that are starting to ‘feel’ more buyer-friendly, according to Realtor.com. These include places like San Jose, California; Seattle; San Francisco; Salt Lake City; Portland, Oregon; Richmond, Virginia; and Boston.”

“‘In these markets, the demand-supply mismatch and unsustainable price gains are causing market activity to cool relative to last year,’ Vivas said. ‘More of the new and existing inventory being put for sale is failing to attract buyers, who now perceive them to be more overpriced than before.'”

From Broker Pulse on New York. “The real estate rut has traveled east. The picture-perfect Hamptons, which has provided an oasis to many wealthy New Yorkers, is losing value. Sellers are lowering their expectations and accepting lower prices, becoming more realistic. It will take time for transactions to pick up again, as many sellers are disconnected from the current state of the market. ‘It could take another six months or a year for sellers to capitulate,’ says Jonathan Miller of real estate appraiser Miller Samuel.”

From Housing Wire on Connecticut. “The six-acre waterfront Greenwich estate once owned by President Donald Trump is back on the market, with a 29% price cut. The median price of a home in Greenwich fell 17% to $1.69 million in the first quarter from a year earlier, according to a report by Miller Samuel. Meanwhile, the number of luxury houses on the market jumped 68% to 232.”

“‘There’s a recalibration going on at the high end of real estate in some luxury markets, including the markets in the New York area,’ said Jonathan Miller, president of Miller Samuel.”

The Real Deal on New Jersey. “There’s a new No. 1 when it comes to the priciest homes in New Jersey, but it’s coming at about half its former price. A 33,000-square-foot estate in Alpine known as the Stone Mansion was relisted last month for $36 million, NJ.com first reported.”

The Memphis Flyer in Tennessee. “Debbie Sowell, a veteran Midtown real estate agent, says she’s watched the strong housing market soften a bit. ‘There’s a lot [of housing] that started at $330,000 or $315,000, but it needed a bit of work,’ she says. ‘The agent probably thought they could get it, with the market just skyrocketing, but it wasn’t until it came down to under $300,000 that it sold. So, I think the expectation that I can get top dollar for my house even though it needs work is not as strong as it was about a year ago.'”

The Green Bay Press Gazette in Wisconsin. “Former Green Bay Packers coach Jeff Blasko sold his house in Ledgeview following his move to Cleveland to coach for the Browns. Blasko offered the house for $319,900 in February. It sold for $285,000. Blasko paid $290,000 for the property in 2017.”

The North Bay Business Journal in California. “As warm, dry weather finally returns to the North Bay, local real estate experts say the longer time homes are staying on the market in some areas and some price reductions necessary to get them to sell could be indicators that it’s more than the annual summer slowdown in activity.”

“Sales in Napa and Sonoma counties in the first five months of this year were off 11% by volume from that pace a year before, down 17% in dollar volume and decreased 7% in average selling price, according to the latest Bareis listing data analyzed by Better Homes and Gardens Real Estate. Sonoma County residential transactions through May totaled 3,645 (down 9.8% from a year before) for $2.5 billion (down 16.6%) at an average price of $673,111 (down 10%).”

“‘It was a little unexpected that we were down so much in overall volume,’ said broker Gerry Snedaker. ‘It partly reflects the seasonal downturn and the market conditions having reached a lull.'”

“Fix-and-flip deals have been a harder sell since the October 2017 wildfires destroyed about 6,000 homes in the North Bay, according to Mary Szykowny, a Sonoma-based agent. ‘Buyers used to never fear the fixer-upper, but now it has to be really cheap, because they know the cost of construction since the fires and tariffs,’ she said.”

“Lower-end Sonoma Valley condominiums ($360,000-$400,000) are not selling as fast as they used to and sometimes requiring a couple of price reductions totaling up to $30,000 to move the deal, Szykowny said.”

The Pagosa Daily Post in Colorado. “May was a busy month. We are starting to catch up to last year in the stats, but we are still down 9% overall compared to 12% last month. The main restraint is still lack of affordable inventory. If you’re looking for the best deals, check out the inventory listed at $750,000 and above. An example of this is my featured home this month, the Jenkins property. We just did a major price reduction of a half million dollars. This is now a screaming deal.”

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This Post Has 137 Comments

    1. Chris Thorn.in.yer.$ide.berg’$ theory: “No unemployment, NO HB.B ll $helter.$hack Debacle$!”

      This fella has a few “Theorie$” of his own:

      Howard Marks is worried to hear investor$ say “this time it’$ different” or openly wonder if the hi$toric bull market and economic $uccess “can only get better forever.”

      In a 12-page letter sent to Oaktree clients on Wednesday, Marks questioned nine financial theories he’s heard in recent meetings, including the notion that central bank$ policy can lead to evergreen market succe$$ and that economic rece$$ions can be con$i$tently delayed.

      Here is the full list of hypo $es Marks scrutinized as written in his letter:

      1. There doesn’t have to be a rece$$ion.

      2. Continuous quantitative ea$ing can lead to permanent pro$perity.

      3. Federal deficit$ can grow $ubstantially larger without becoming problematic.

      4. National debt$ isn’t worri$ome.

      5. We can have economic $trength without inflation.

      6. Intere$t rate$ can remain “lower for longer.”

      7. The inverted yield curve needn’t have negative implication$.

      8. Companie$ and stock$ can thrive even in the ab$ence of profit$

      9. Growth inve$ting can continue to outperform value inve$ting in perpetuity

      “The nine propositions reviewed above all represent variations on ‘things can only get better forever,’” Marks wrote. “If they’re the ideas guiding investors today, that should be considered worrisome.”

      market$

      THIS TIME ISN’T DIFFERENT: Billionaire investor warns lazy thinking is taking over market$

      Thomas Franck|CNBC |PUBLISHED WED, JUN 12 2019

      1. “3. Federal deficit$ can grow $ubstantially larger without becoming problematic.

        4. National debt$ isn’t worri$ome.”

        Green New Deal, anyone?

  3. ‘There’s a new No. 1 when it comes to the priciest homes in New Jersey, but it’s coming at about half its former price’

    “50% off is unrealistic” – HBB troll.

    1. Congratulations Mortgage Watch, in this case the price drop does not appear to be directly related to home size. Could be other factors in play, but this looks like some evidence of a price drop.

        2. price drops are fake news, ignore any articles on MSM also. if its not about price increases then its not real END OF STORY, DOOMED TOLD ME TO BUY LYFT and RE

  5. Blasko offered the house for $319,900 in February. It sold for $285,000. Blasko paid $290,000 for the property in 2017.”

    When selling fees are included he probably took a 20 – 25k total loss. Renting may of been about the same over two years but at least there’s not that one time big hit. More stories like this soon to come. He got off lightly.

    1. Knife catchers are still strong in this area as the prices have not gone crazy like in San Jose, LA or Seattle…

    2. Yeah, in a profession like coaching, you’d think the default would be renting rather than buying. He got hired by Cleveland, so maybe he got a relocation allowance. One of our neighbors recently sold to move to Chicago for her employer. She indicated she didn’t need to hold out for top dollar as her employer gave her good relocation compensation.

      1. you’d think the default would be renting rather than buying

        There are tons of people that applies to. But people still have the dream of retiring with the same standard of living they had when working. And real estate is their only hope.

        1. Renting has its risks and downsides that can work against you if your desire is to stay put for a long time.

          If you know there is a very high chance you will be moving on in just a couple/few years, renting should be the way to go – yet some people are philosophically opposed to that idea – goes against their self-image or something.

          2. Renting sux when you want to have a garage with tools to tinker in. Where do you store your hang gliders in an apartment?

          3. There is a lot of ridiculously priced luxury stuff out there. But some apartment complexes actually offer amenities that are nice. The complex I work at is one of those. The gym is really good and it is really convenient to have a good treadmill, spin bike, elliptical, squat rack, weight set, etc on-stie instead of having to drive somewhere to work out. A lot of home purchasers I’ve seen in my area convert 1 room of their house into a home gym or even do something in the garage. It seems like a good apartment with a decent on-site gym would be better.

          4. rms, for a garage and all that I was thinking about detached SFH rentals. Something like 20 to 25% of the homes in my zip code are rentals. A lot of families around here are long time renters, and you don’t really know if they rent or own when you meet and socialize with them.

            OneAgainstMany, If 1) the complex will maintain it and 2) the stuff you want to use is normally free and available when you want it, then it’s a huge win to have an on-site gym.

            Over the years I lived in a lot of apartment complexes, and several had things like a gym, but not many took it seriously in terms of maintenance or equipment. Right now I’m getting major use out of my little gym setup every day as I have less than 4 weeks until knee surgery, but I do find myself wishing I had 3 or 4 machines/setups that I don’t.

          5. @MGSpiffy–

            I should have been clear regarding renting of apartments and their limited storage and utility; sorry!

        2. There is also the issue of many, including Uncle Sam, embracing the “we can all borrow and spend our way to prosperity” philosophy. At such times, borrowing money to grab an ownership stake in some real estate seems like a smart way to avoid the wealth reducing effect on dollar HODLings of future inflation that turns out “higher than expected.”

          I’m not sure how it ultimately works out if everyone plays this strategy.

  6. Says Jonathan Miller, president of Miller Samuel.

    “…‘There’s a re-calibration going on at the high end of real estate…”

    Don’t you just love REIC wordsmithing?

    “re-calibration” Really?

    Hey Jonathan.
    Between you, me and the fence post.
    Why not just man up and state that prices are going down?

    BTW, Jonathan, spend a few more minutes and explain how that “shortage” is playing out.

    1. The market has just shifted somewhat and decelerate in recent months . Prices are making adaption of the movement and is currently compressing a bit. Inventory is up but from historic lows and interest rate is down. There are still many deals out now more than last year and over time, it’s still much cheaper than wasting your money on rents.

  7. The San Diego Union-Tribune
    HOMEBUILDING IN S.D. COUNTY PLUMMETS IN FIRST QUARTER
    Number of residential permits pulled down 58% from last year
    BY PHILLIP MOLNAR
    …

    1. $an Diego has $helter.$hack “monkey poxe$”! … It’$ $preading North to “Thee O.C.”… Oh, my!

      Mi$$ion Viejo, Rancho $anta Margarita, Lake Fore$t, $an Juan Capistrano home sale$ plummet 21% in wor$t O.C. $lump since ’12

      Jonathan Lansner |PUBLISHED: June 13, 2019
      Categories:Business, Housing, Local News, News

      https://www.ocregister.com/2019/06/13/mission-viejo-rancho-santa-margarita-lake-forest-san-juan-capistrano-home-sales-plummet-21-in-worst-o-c-slump-since-12/amp/

  8. “The main restraint is still lack of affordable inventory.”

    – Affordable.
    – These are just houses; illiquid, normally depreciating assets with high carrying costs. Now similar to Dutch tulips in the 17th century.
    – I sense a flood of affordable inventory coming as specu-vestors all rush for the exits.
    – All bubbles end the same.
    – Movie night: Popcorn + HBB 🙂

    1. The tulip bubble didn’t have a central bank doing everything in its power to maintain tulip prices.

      1. Keep roping ’em in Andrea! … Gittyup ye debt$.donkie$, yeeeeha!

        “Lower rate$ are touching the hou$ing market in unexpected ways. Demand for home loan$ has been so robu$t that mortgage lender profit margin$ turned po$itive for the first time in nearly three year$”

        See: The average adju$table-rate mortgage is nearly $700,000. Here’s what that tells us.

        Read: Hou$ing market $entiment hits a 5-year high: a good omen for $ales?

        Mortgage rate$ hold at two-year low$, giving borrower$ another $hot at the action

        Andrea Riquier | Published: June 13, 2019 | MarketWatch

      3. The difference in a nutshell. Saw a story on yahoo where it talked about the slowing Chinese economy. Towards the end it talked about the Chinese waiting for a Federal Reserve rate cut. The Chinese are going to cut their reserve requirements ratios. Our Fed which aggressively raised rates just before an election to hurt our economy, will help cushion the blows inflicted on the Chinese by Trump.

    2. Or will t ::) e re downturn be like the 90safter all
      2018nyc
      2018San Fran
      2019 seattle

      Where’s the mystery ?

  9. it’s concentrated in the South and West—that’s where the supply has been depleted…

    There’s your shortage.

      1. MW is our local housing bear troll. If you follow zerohedge, he is also there and post with tag “Big Fat Bastard”.

    3. Crushing. Housing. Losses. And this is happening while the S&P 500 is still close to all time highs. Imagine how low housing prices will be when it’s at 1000. Good thing everyone has been putting 20% down.

  11. Once upon a time builders built homes that were worthy of handing down through the family. An investment that could last centuries. Can’t imagine the state most today’s track homes will be in 40 – 50 years. Let alone two centuries. Anyone know how long particle board lasts? Or better known by the fancy name “Manufactured Wood”

    1. Houses are rapidly depreciating assets no different than cars. Always have been, always will be.

      1. House = glorified tool shed. The main raison d’etre for modern mass-produced, over priced housing is a profit center for builders, bankers and realtards and a taxable entity for local government.

    2. …Can’t imagine the state most today’s track homes will be in 40 – 50 years….

      With *very* few exceptions, build quality of housing here in the OC (SoCal) would make the junk you buy at IKEA look like old world craftsmanship.

      Basically, today’s housing is made from re-cycled plastic, heavy gage tinfoil, papier-mache and stucco.

      Anybody who does their own home maintenance and has walked into a big box hardware store will know what I am talking about. Most lumber department inventory will barely pass the test for firewood. Hardware (bolts, washers, nuts, screws) are so soft that I would never use for any projects that carry any kind of load. Much plumbing is cheap plastic. Have a hard time wrapping my head around that much electrical even passes UL testing. Junk, Junk, Junk as far as the eye can see. You CAN get USA made quality via McMaster-Carr or Grainger. Also, a couple of long-time *quality* Hardware stores (small) still exist here in the OC.

      1. Tear downs almost without exception. I doubt the intended design life span of a modern shack is much more than 15 or 20 years.

      2. I’m in a 20-yr old 3/2 spec ranch. Had to replace (upgrade) the HVAC heat pump with R-410A system, replace double-pane windows due to inert gas leaked, re-finish exterior with high grade Sherwin-Williams coating, replace all light switches and wall plug sockets, replace all interior/exterior door handles and locks, replace bathroom and kitchen faucets, etc. We’ve used-up a couple cars along the way too. I’m certain I’ve had better jobs, more fun and (you know what) than Gandhi.

    3. 1950s-1960s housing is better built, but remember that cold-war stuff was slapped up in a hurry too. They needed to house all those returning Greatest Generation soldiers and their perpetually preggo wives. Heh, maybe HGTV’s trope of “gotta buy/build/reno before the baby” isn’t so new after all.

  12. ‘Having parted ways with some non-Marxists who managed to infiltrate his 2016 presidential campaign, Vermont’s Sen. Bernie Sanders will attempt to clarify this afternoon that he is not like other candidates seeking the Democratic nomination in 2020. Edward-Isaac Dovere notes in the Atlantic that Mr. Sanders will be speaking in Washington this afternoon on “How Democratic Socialism Is the Only Way to Defeat Oligarchy and Authoritarianism.”

    ‘For example, current Sanders speechwriter David Sirota once wrote an op-ed titled “Hugo Chávez’s Economic Miracle”. And Mr. Sirota isn’t the only Sandernista who has lauded the Chavistas. Assessing the current Sanders team, the Journal observed: ‘Voters need to understand that they don’t merely admire Venezuela. By their own words, they want America to emulate it.’

    ‘Mr. Dovere writes today in the Atlantic: ‘Sanders’s inner circle is now committed to democratic socialism in a way that some senior members of his 2016 campaign team were not, though he did deliver a speech about the topic back then as well. This new speech, aides tell me, will go much deeper. Sanders and his aides see this as a moment to reach for the revolution that he’s been dreaming of since he was an angry, underemployed writer in the 1970s, paying his bills through essay writing while being an activist.’

    https://www.wsj.com/articles/the-marx-brother-11560363050

    Notice the MSM hasn’t once said “clown car.”

    1. Federal Re$erve $ocialista QE l … ll … lll … lV … = “Clown loan$”

      2. Continuou$ quantitative ea$ing can lead to permanent pro$perity.

      1. Democratic presidential candidate Bernie Sanders took aim at Jamie Dimon after the JPMorgan Chase CEO criticized socialism in a public appearance on Wednesday.

        The Senator from Vermont and self-described democratic socialist fired back on Twitter: “I didn’t hear Jamie Dimon criticizing socialism when Wall Street begged for the largest federal bailout in American history—some $700 billion from the Treasury and even more from the Fed.”

        1. Ray Dalio has been out there saying that capitalism fundamentally isn’t working for the vast majority of Americans. Venezuelan socialism is not the answer, but what we have now isn’t working for sure.

          1. Bailouts, artificially suppressed interest rate, QE1-3, operation twist, tariffs, Cash for Clunkers, TARP, etc. Which chapters described these? I slept through Free Market Capitalism 101 🙂

          2. You might take a look at “Radical Markets: Uprooting Capitalism and Democracy for a Just Society” for some good ideas on how to reform late-stage capitalism, if it indeed is salvagable from the populism coming from left/right as elite confiscate all of the economic gains of the entire structure of production.

        2. The definition of this is fascism. Government support business at any cost. Facists are always afraid of socialists.

          1. The final stage is the sale of valuable government assets to the Oligarchy, a la Putin and friends.

    2. ‘Joseph Epstein’s “Socialists Don’t Know History” (op-ed, May 30) on the abysmal historical knowledge of young people brings to mind the prophesy of the keenest of economists, Joseph Schumpeter, in 1942 when he said that capitalism would destroy itself by breeding a “new class: bureaucrats, intellectuals, professors, lawyers, journalists, all of them beneficiaries and, in fact, parasitical on them and yet, all of them opposed to the ethos of wealth production, of saving and of allocating resources to economic productivity.” The 77 years since then has proven Schumpeter a major prophet.’

      https://www.wsj.com/articles/socialists-knowledge-of-history-and-agency-11560359390

      1. “The 77 years since then has proven Schumpeter a major prophet”

        Did “Thee Profit$” envi$ion 3+ Trillion$ taxpayer dollar$ “Nation Building War$” ?

          1. Afghani$tan:
            $till dropping bomb$ … $till growing poppie$

            $till $queezed between Iran & Pakistan … $till Religiously pursuing women’s empowerment$.

            Their future looks Bright!

    3. The longer these bubbles go on, and the higher groceries and everything else get because of the Fed, the more likely it is that we get a Bernie type candidate as President.

      1. Yeah it’s weird how everybody is afraid of socialism (for good reason) but so many seem to like or at least accept the cronyism that leads directly to it. Just like unions. If you don’t like them, don’t screw your people over and the threat will magically go away.

      2. Can’t Bernie Sanders come up with something better than Socialism.

        Bring back the Glass-Steagal Act for instance.

        Tariffs should be designed to protect our jobs and manufacturing base.

        Globalism doesn’t mix with capitalism because it’s a rigged system in favor of the 1%.

        Just go back to the policies in the USA that made the majority middle class flourish when the balance of power was based more on a regulated capitalism.

        People say we can’t go back ,but if something works it’s timeless

        1. Sounds nice, but globalism brings low prices to Americans. No, we didn’t “ask” for Wal-Mart-like prices, but those prices are now baked into our salaries and 401K returns. Once you go lax it’s tough to go back.

          2. If a system is not delivering the basic necessities (food, clothing, shelter, medical care, education, etc.) to its population, then something is wrong and the system either needs to be reformed or thrown out altogether.

      2. Who wants that cheaply made shit from China that isn’t worth the price anyway.

        Today China is producing 80% of our pharmacy . What could go wrong with that.

        Globalism money going all around the world has produced misallocations as well as Casino Nations.

        Sure the system is screwed up right now but Socialism isn’t the remedy.

        1. I was raised in a time when medical costs were low because it was based more on capitalism. Medical for most part was paid for by employers and the costs were low because working people were low risk for making expensive claims.

          Than you got the price fixing of medical costs that caused employers to not want to offer these long held benefits.

          Than what followed was price fixing medical and insurance cartels that departed from Capitalism to price fixing monopolies.

          Than what followed was the Obama care that made one set of people pay more for another set of people. The cartel prices went up and the medical industry went further from pure capitalism to price sitting monopolies.

          1. Capitalism doesn’t work with medical system. Try comparison shopping medical providers services when you are having a stroke or when the hospital you go to is in-network but the ER provider is not.

            Suggested reading: “An American Sickness: How Healthcare Became Big Business and How You Can Take It Back”

    6. When the majority of US renters cannot pay the rent with 50% of their wages, we will elect a socialist like Bernie. We elected a socialist, FDR, when this happened before. It will happen again. Trump is creating jobs but is NOT creating high enough wages to prevent this.

  13. Still insane in Boise…

    Ada homes prices set another record as buyers fight over scarce homes

    “Home prices set yet another record in Ada County in May as buyers struggled to find housing and sellers basked in the warmth of multiple offers.

    The median price of a singe-family home in Ada County rose to $342,990, up nearly $8,000 from the record-setting $335,000 in March. It was 12.5 percent higher than in May 2018, Boise Regional Realtors said.

    Last year, median home prices rose 18.1 percent, according to the Intermountain Multiple Listing Service.

    As the Statesman has reported over the past 18 months, Ada County has set median price records six times. They broke the $300,000 barrier in March 2018.

    Mike Turner, an agent with Front Street Brokers in Boise, doesn’t believe Boise’s market is overvalued. He said the market is being dictated by high demand and low supply.

    “What I would say is that it’s in trouble in the sense of providing a healthy amount of supply for all the people who live and work here,” Turner said. “That’s what I’m worried about.”

    It’s getting harder and harder for first-time buyers to find a home for less than $250,000, he said.

    Turner found that from January through May, only 600 homes sold in Ada County in that price range. A year ago, for the same period, 1,200 homes sold. In the first five months of 2017, 1,800 homes did.

    “The reason we’re seeing such jumps in median price is that there’s no houses out there at that price,” he said. “If there was inventory at that price point, people would grab them.”

    The median price in Canyon County in May was $243,103. That was down from $248,500 in April, which was the second month in a row the median set a record.

    Rick Gehrke, agent with RE/Max Executives in Nampa who sells in both Ada and Canyon counties, said he recently sold three homes in that price range, all in Nampa. For two of his buying clients, Gehrke wrote at least 10 offers each before sellers accepted.

    “It’s been hard working as a buyer’s agent to get through multiple-offer situations and not overpay,” he said.

    Other details from the new Intermountain Multiple Listing Service report:

    ▪ The median price for the 792 existing homes sold in Ada County was $329,000. For the 369 new homes sold, the median was $389,000.

    ▪ In Canyon County, 350 existing homes were sold, with a median price of $232,700. There were 148 new homes sold, with a median price of $268,582.

    ▪ Highest median prices: Northeast Boise, $530,000; Eagle, $499,900; North Boise, $497,750.

    ▪ Lowest median prices: Northwest Caldwell, $226,200; Northwest Nampa, $232,250; Southwest Caldwell, $238,245.

    1. The same goes for all the far flung areas in WA, OR and NV. That’s where all the money has been running from the tony areas of CA, OR and WA.

    2. “It’s been hard working as a buyer’s agent to get through multiple-offer situations and not overpay”

      But lending is air-tight…

    4. Very depressing to hear, as I really wanted to move to Boise and become a net contributor to the economy there. Things are a good deal until they aren’t. There comes a point where the whole reason people flocked there in the first place is suddenly no longer relevant, and demand will fall off a cliff. People liked the idea of moving to Boise because of its reputation as a clean, low-stress, low-crime, low-traffic, and affordable family environment. It seems that this isn’t the case any more, and so the herd will set their sights on the next big stampede. From what I understand, job and wage growth has been absolutely paltry in that area compared to cost of living appreciation. Another community ruined by coastal equity locusts, many of whom will probably move away after a couple years leaving long-term locals high and dry. It’s a real shame!

      1. Boise is over. Every ex-cop moved in with their bloated pension.
        That grey inversion layer all winter is something they keep quiet.

        1. ” Every ex-cop moved in with their bloated pension. ”

          No firemen?

          @ 80% + of their “overtime enhancement$” final year based $alaries, it might bee that they travel to, like Hawai’i in the winter or other $uch $unny place$?

          2. Actually for California @ least, the days of bloated by overtime & airtime pensions will come to an end @ some point thanks to PEPRA which applies to new hires post 1/1/13.
            https://www.calpers.ca.gov/docs/forms-publications/summary-pension-act.pdf
            4 things to note:
            1) cap on max wages;
            2) average of 3 years wages rather than highest 12 months;
            3) overtime and other wage inflators aren’t included in wage calculations;
            4) no more buying extra years to increase your pension (air time.)
            Firefighters sued over #4 (which applied to both new and existing members) and lost in the CA Supreme Court this spring.

      2. “People liked the idea of moving to Boise because of its reputation as a clean, low-stress, low-crime, low-traffic, and affordable family environment. It seems that this isn’t the case any more, and so the herd will set their sights on the next big stampede.”

        That’s my fear for the Salt Lake region.

        2. Boise has an increasing population of over-educated LGBTQ and radical feminists these days who look-down on the locals as irredeemable.

      3. I’m still 15 years from, but I’ve started to think about where to relocate. And thank goodness I don’t need to “be near grandchildren.” So I was checking out city data etc and finally threw my hands up. Who knows what these places will look like in 15 years? My guess is they will all be sh!tholes. I’ll just wait until right before I retire and then choose whatever last fortress may be left. My guess is the Great Plains, Texas, or Appalachia.

        1. I’d be concerned about Texas 15+ years from now given global warming and energy costs in retirement.

          When I lived there (TX), everybody just sort of normalized the fact you ran A/C 24/7 for much of the year. Energy costs 20 years ago for my first house in TX were 2-3x what I pay now for a house in WA that is 50% larger. When I had my apartment in Austin in ’07-’08 there would be ‘rolling blackouts’ of a sort during times of peak electricity demand – we were required to have ‘smart thermostats’ that the electric company would turn off for a hour or more at a time, usually in the afternoon. It only took minutes for it to become uncomfortable after they did that.

          Appalachia sounds interesting.

    5. “Mike Turner, an agent with Front Street Brokers in Boise, doesn’t believe Boise’s market is overvalued. He said the market is being dictated by high demand and low supply.”

      If we eliminate those “fed.gov” backstopping guarantees, and return to an household income driven economy Boise, ID would go into a tailspin. It’s just desert scrub after all.

    7. OneAgainstMany

      Of course you can’t price shop when your in the middle of a medical emergency. But you can set prices for insurance before a life saving measure takes place.

      I’m not opposed to a mandate that life saving measures to be performed to humans. But most of medical is elective and you would have more time to value shop.

      Come on, the medical industry is taking advantage of the fact that people need life saving measures at times , therefore gouge the public with price fixing monpolies.

        1. You don’t have the ability to value shop these days because of the way the system is set up. You get few choices .

      1. I have no sympathy for cigarette flippers. It’s disgusting and it could cause a fire, especially in the dry desert climate in my area.

    1. RealWHORES have recently adapted “inventory shortage” to “shortage of affordable inventory.”

  18. Housing costs exacerbate income inequality
    The Washington Post
    Michele Lerner
    13 June 2019

    “Households with incomes in the top 25 percent have seen their housing costs fall, while those with incomes in the bottom 10 percent have seen housing costs — including mortgage payments and rents — rise the most.”

    1. That study was from ApartmentList.

      Housing costs have gone up precipitously, but so have rents. In some cases renting is becoming almost as unaffordable relative to income growth than buying a house. This feeds into my thesis that the only way to avoid the buy vs. rent equation is to come up with a “none of the above” solution (e.g. homeless, move back in with relatives, live in vehicle/RV, flee the country, etc.).

      1. Eventually, the financial stress caused by the housing bubble will lead to more populism if not social unrest

      2. Noticed that here as renters were getting hit with double digit percentage increases every year. After everything is figured in, our owning costs per month are about even with the rents asked for similar sized house around here. Give it enough time and they’ll be less.

        The kicker for most people wanting to buy is coming up with the down payment – what was the list the other day that had ‘years needed to save up down payment’ and many cities were listed at 30-50 years?

        Along with researching fulltiming, we’ve given some thought to the ‘family compound idea’ – since our lot is 3/4 acre, I’ve scoped out a spot that might work for a large 2-level ADU – think 600-900 sq ft. Expecting that in a decade when all (5) our kids are in their 20s, one or more of them may be struggling , and we are centrally located for a lot of jobs in the Seattle area. So the Mrs. and I have talked about the idea of having a place for them to use while they either get on their feet, rebound (hopefully not from divorce r*pe), or are saving up like crazy, rather than renting it out for extra income. A lot of issues there – making sure the kids wouldn’t see it as a permanent alternative, what if 2 or more need help at the same time, etc. It’s an ongoing discussion based on the idea that our kids are staring out with the deck stacked against them much more than we faced.

        1. I wouldn’t be surprised to see BOTH rents and prices both here (Silicon Valley) and Seattle area drop dramatically, with rents dropping first. My anecdote: after the dot-bomb bubble burst, I was able to negotiate a roughly 30% drop in rent.

          1. Around here, I think we’ll see SFH purchase prices fall more than comparable SFH rents. We’re just way behind on absorbing the influx of people with families that moved here for jobs over the last 7 years.

            However, I do think we’ll see equal or bigger and/or faster drop in apartment rents. They’ve built a serious excess of studio/1/2 bedroom apartments targeting unattached high-earning 20-somethings.

            I.e. the added supply is out of whack with the added population, and will shape the next bust a little bit.

        2. Note I’m not saying your purchase didn’t make sense for you (I’m pretty sure houses like yours aren’t available too often), but just noting that projecting out rent vs buy is complicated and there are a lot of unknowns, including tax rates, major repairs, inflation rates, etc.

          1. rent vs buy is complicated

            Perhaps. If property prices drop 50 to 75% it isn’t that complicated. If the bubble goes on for another few decades up 10% YOY, it isn’t that complicated that way either. How long can the unsustainable go on, or is it already over.

          2. True that you never know what unexpected things will hit a homeowner – heck, we could have a 140′ tree fall down and hit the house. It HAS happened before to our house.

            I was just going over the numbers from our first year, factoring in SALT benefit, taxes & ins, and avg maintenance and comparing them to what we’ve seen on the rental market around us. It’s hampered by low supply – I’m seeing just 21 detached homes currently listed for rent in the entire zip code (pop 26K) with only 7 of them below $4k/mo – not enough data points to have high confidence, but from a cash flow perspective, it seems like we are comparing quite well – it’s the price of entry and size of commitment that are the big hurdles/money sinks.

            What absolutely can’t be predicted is the future, and it may very well skew heavily in favor of one group or the other compared to today, so I am in agreement with you that all other things being more or less equal, it’s a guess.

        3. if you’re paying taxes on 3/4 of an acre you might as well build some kind of cassita. Less taxing is you just get a travel trailer.

    2. What kind of BS narrative is this? The top 25% are not locked into “their” housing costs. The rich can buy cheap houses and watch “their” housing costs rise too.

    1. “TruAmerica Multifamily announced Monday that it acquired Allanza at the Lakes with an undisclosed partner for $152 million.”

      Is the undisclosed partner a state teacher’s pension fund?

      1. Allanza at the Lakes – I can tell you this is one of those complexes that looks okay from the outside, but the units are very cheaply made and the whole complex is absolutely PLAGUED with crime and obnoxious ghetto behavior. Vegas bends over backward to hide its crime stats to benefit the real estate and tourism industries. But when you watch an area for a long time and have access to neighborhood services like NextDoor, Ring Camera app, Facebook neighborhood groups, etc. you get a true picture of local crime rates. Most of the incidents never make the news at all. You couldn’t pay me enough to live at The Lakes long-term, it’s a crime-ridden cesspool.

        1. @Vinnie Vegas

          Vegas bends over backward to hide its crime stats to benefit the real estate and tourism industries.
          Just like Disneyland, anything that can be covered up, is. My brother had a co-worker kill her herself at work – not a word.

          …neighborhood services like NextDoor, Ring Camera app, Facebook neighborhood groups, etc. you get a true picture of local crime rates
          A flip in my neighborhood just had all the new appliances stolen in broad daylight. I was surprised that no one saw it because the neighbors here can be really nosy and intrusive. Some have taken it upon themselves to patrol overnight. They upset a local who they stopped three times while walking her dogs at 2 AM. The next morning on Nextdoor she announced that on her next walk, if approached, she would shoot them. God, I love this street.

          The houses for sale here are turning into Dutch auctions, $10K at a time.

          …You couldn’t pay me enough to live at The Lakes long-term, it’s a crime-ridden cesspool.
          That was the first neighborhood (technically, The Section Seven) we lived in when we got here in 2006. It was nice then.

          1. Yeah, the criminals are getting more brazen all the time. They know full well that the police won’t respond for several hours, and then only to take a report that ends up in a stack of thousands more. Most of the crimes I’m seeing reported by neighbors are in broad daylight in the middle afternoon. The Ring Camera has an app where you can share videos with the whole neighborhood when something happens, and it’s unbelievable how many prowlers and potential burglars are lurking around these “nice” neighborhoods all day and night, trying to get into homes and yards and cars. I predict that this will keep getting worse and in about 3 – 5 years Las Vegas will be absolutely unthinkable for any sane person to live in. It’s arguably already there. I’m a fit, hyper vigilant guy with a CCW who is armed 24/7 and I am getting out ASAP. All the seniors moving here for the entertainment and weather are going to be in for a rough time, as they will become prime targets for the thieves and robbers.

  26. The CPI print just 2 days ago was 1.8%, ex food and energy 2%, which means groceries and gas are actually deflationary.

  27. Shortages and more shortages of housing in San Diego

    https://www.sandiegouniontribune.com/business/real-estate/story/2019-06-12/homebuilding-tanks-in-san-diego-county?utm_source=Voice+of+San+Diego+Master+List&utm_campaign=be4fbcfd18-Morning_Report&utm_medium=email&utm_term=0_c2357fd0a3-be4fbcfd18-81843721&goal=0_c2357fd0a3-be4fbcfd18-81843721

    San Diego County homebuilding dropped 58 percent in a year, with a reduction in apartment building largely cited as the reason.
    By PHILLIP MOLNAR
    JUNE 13, 2019 6 AM
    A historically low number of homes were built in San Diego County in the first three months of 2019.

    There were 1,180 residential permits pulled in the first quarter, a drop of 58 percent compared to the same time last year, said the Real Estate Research Council of Southern California. It was the most significant drop of the seven Southern California counties.

    The drop was largely the result of a reduction in the seemingly unstoppable apartment market. There were 556 multifamily permits pulled in the first quarter, a drop of 70 percent from 2018. While the apartment and condo market fluctuates heavily, because one approved project can mean hundreds of units, it was still notable because the apartment building pace had also slowed significantly at the end of last year.

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