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If It Goes Up, It Must Come Down

A report from the Los Angeles Times in California. “The Southern California median home price barely budged in May, a sign that the housing market remains soft despite a sustained drop in borrowing costs. In May, there were nearly 12% more homes for sale than a year earlier, according to Zillow. Sales, meanwhile, dropped 2.7% from a year earlier. ‘Some buyers are kind of waiting on the sidelines,’ said real estate agent Nabil Suleiman. ‘They believe we are going to see a correction.'”

“To close a deal, more sellers are trimming asking prices or paying for repairs, said Amber Dolle, a San Fernando Valley real estate agent. In May, 14.5% of listings in L.A. County had at least one price reduction, up from 11.9% a year earlier, according to Zillow. ‘Buyers are becoming a lot more judgmental,’ Suleiman said.”

“Last weekend, an agent working with Suleiman held an open house at a three-bedroom home in Westlake. An investor last year paid $550,000 for the house, located just 70 feet from the 101 Freeway. As of Sunday afternoon, the agent said about 15 groups of people had strolled through the 1908 property that was revamped ‘from the ground up’ and listed at $899,000. Marketing materials for the house cite new plumbing, a new foundation, new roof and ‘rain barrels for water conservation.'”

“Among those who stopped by was Charles Doan, who said he was looking at houses for a relative who wants to move from the East Coast. Doan said he thought the remodeled house was ‘very nice,’ but felt the price was ‘too high.’ He noted the home had no garage. He said he believed houses are bound to get cheaper. ‘If it goes up,’ Doan theorized, ‘it must come down.’ As of Monday, Suleiman said no one had submitted an offer.”

The Union Tribune. “The San Diego County median home price stayed at $570,000 in May, the same as it was last May, said CoreLogic. Home prices reached a peak in August 2018 of $584,750 but the price mostly leveled off as sales started to decline. All of Southern California experienced a slow down in sales and price appreciation in May. Alan Gin, economist at University of San Diego, said the slowdown has more to do with affordability constraints than interest rates — something many analysts originally attributed to the sales reduction.”

“‘A lot of people are just priced out of the market at this point,’ he said.”

“Months of declining sales have meant more homes on the market. There were 6,750 homes for sale in May, said the Greater San Diego Association of Realtors. That compares to 6,090 in May last year, and 5,060 in May 2017. Changes among housing types in May: Resale single-family: Median of $620,000, down from $630,000 in April. Newly built: Median of $581,000, down from $639,387 the previous month. The price includes condos and single-family homes.”

The Orange County Register. “Despite Southern California’s biggest supply of inventory since 2014, home sales fell for the 10th consecutive month in May. In four counties covered by the Southern California News Group, the number of existing homes for sale jumped by 15% in a year. Not only are house hunters balking, but regional car sales are down.”

“One bit of encouraging homebuying news was that sales of existing, single-family homes didn’t fall: 15,753 purchases in May was up 0.1% in a year. The median selling price of $559,000 was up 1.6% in a year. But existing condo sales totaled 4,842 — down 5.2% in a year. The median selling price of $450,000 was flat for the year.”

“Builders have suffered the most. Six-county sales of 1,705 new homes were off 18.1% in a year. The median of $534,000 was down 8.3% in a year. Builders lost market share, too, as sales were just 7.6% of the regional total in May vs. 9.1% a year earlier.”

“At the county level, here are May sales results and trends in existing homes on the markets as of June 13: Los Angeles County: $615,000 median, up 1.7% in a year. Sales fell 1.7%, the 13th consecutive drop. Listings were up 15% in a year. Orange County: $720,500 median, down 2.6% in a year. Sales fell 2.6%, the 10th consecutive drop. Listings up 23% in a year.”

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  1. ‘Resale single-family: Median of $620,000, down from $630,000 in April. Newly built: Median of $581,000, down from $639,387 the previous month. The price includes condos and single-family homes’

    ‘The median selling price of $559,000 was up 1.6% in a year. But existing condo sales totaled 4,842 — down 5.2% in a year. The median selling price of $450,000 was flat for the year…Builders have suffered the most. Six-county sales of 1,705 new homes were off 18.1% in a year. The median of $534,000 was down 8.3% in a year’

    So the new builds prices are approaching or below existing shacks. That’s when it’s all over but the crying.

    1. I don’t know about San Diego, but in DC it’s not a really clear-cut comparison. Existing shacks have an easier commute and a nice yard, but they are smaller and the nearby schools are stuffed with future MS-13. New builds have a long awful commute and no yard, but they are bigger and possibly safer.

      In the end, the square footage and schools win out. And hubby is taking the train for an hour every day.

      1. A lot of new builds in San Diego are quite central to employment. They put huge houses on tiny lots (Hi neighbor! I just used the last square of toilet paper, can you spare a roll?) with Mello-Roos tax that circumvents Prop 13. Most of these also have HOA fees. When all’s said and done the Mello-Roos tax and HOA fees are another mini-mortgage. It is not uncommon for these newer developments to have three generations under one roof, then again, even out here in the “sticks,” that’s becoming more common. If you want land here irrespective of house size, your commute will be longer.

  2. “Not only are house hunters balking, but regional car sales are down.”

    What a surprise? No commission checks = no Benz or Beemer purchase?

  3. “The San Diego County median home price stayed at $570,000 in May, the same as it was last May, said CoreLogic.”

    Got permanently high plateau?

      1. Somebody needs to explain the situation to our foreign national Chinese neighbors, who are trying to cash out of their modest, very tiny two-bedroom 1/2 of a duplex. Word is they have already rejected two offers outright that didn’t clear their wishing price of $570,000.

        Perhaps they’ll get lucky by holding out and find another Chinese buyer willing to pay $50,000 over recent comps, like they did when they bought a few years ago.

      2. Yeah, forget the 11 months in between. For what months and when do we start seeing YOY negative numbers for San Diego? IIRC, John’s up on this.

  4. ‘felt the price was ‘too high.’ He noted the home had no garage’

    But it has rain barrels! So what if you have to park on the street, those barrels will be like a science experiment for the kids with the algae and mosquito larvae!

    1. “He noted the home had no garage’

      Wife: What? I love that house, plus the schools.

      John the downtrodden: The kids are three and one.

      Wife: There gonna grow up, what? “Suzanne Researched This”

      Suzanne: This listing is special John, you guys can do this.

      Wife: We can do this.

      John the downtrodden: ok

      Wife: Are you kidding me? This is awesome!

      John the downtrodden: Did you see the size of those rain barrels!

      Wife: Yesss!

      Suzanne: Oh that’s great, now let me get to work.

      https://www.youtube.com/watch?v=20n-cD8ERgs

    2. No garage – in Los Angeles, leaving your car parked outside overnight is inviting expensive “incidents” on a regular basis.

      1. Westlake used to be a nice suburb. I’m not sure about its current state given our local governments.

  6. These 10K to 20K drops in prices are a joke… for the average buyer is not gonna help. when the 500K comes down to 300K…now that is more like. I just know that is not going to happen. I can dream and all, but reality is housing is high and it will continue.

    I have lost hope. Good for the people that got in 2010-2013. Some are halfway to paying the then house off… with fixed mortgages 2.5% to 3.5%. Investors don’t need to sell, they got money and will hold. There’s nowhere to escape to.

    1. ’10K to 20K drops in prices are a joke’

      Median is a lagging statistic. For instance, in Seattle where Californians aren’t writing the articles, they’ll admit some shacks are off 100k. All bubbles pop. So the question always remains, is it a bubble?

    2. “when the 500K comes down to 300K…”

      A $300k house is too much for most families. Their kids will have dental expenses, college expenses, need cars, etc. You don’t need a financial advisor or life coach to do the simple arithmetic.

      1. A $300k house is too much for most families.

        With houses priced as they are, having a family is a luxury. This is evidenced in the all-time low in the number of children Americans are having.

        1. Limiting the number of children you bring in to the world has huge household financial implications in a housing mania: for example, it is challenging for any larger-than-average middle-class family to survive in California, due to the steep cost of an additional bedroom.

          In our personal circle, the handful of large families with multiple millions in present wealth or future inheritance stay put; those who don’t have a sufficiently large endowment eventually face a household financial crisis which uproots them. The latter scenario has led to several families we have gotten to know quite well over the past decade suddenly packing up and leaving on short notice within the past year, due to the San Diego cost-of-living dry cleaner effect. Seeing this uprooting process already underway against the backdrop of a booming economy is an ominous sign for how the next downturn will play out.

          1. ” …due to the steep cost of an additional bedroom. ”

            Reckon bunk bed$ are kinda out.dated, knot to mention the imposition to developing gender challenges whilst dwelling within the same space.

          2. I spent eight hours of my life assembling the IKEA bunk bed that saved us the need for another bedroom.

      2. You don’t need a financial advisor or life coach to do the simple arithmetic.

        Some of us are acclimated frogs in pots of boiling water. It’s this blog and people like you that remind us how insane it is.

      3. A $300k house is too much for most families.

        You can only spend the money you earn once, but with the miracle of debt you can pay for the family first and then pay for the house in 20 years. With the miracle of a housing bubble, the house will pay for itself.

    3. Very much empathize with the sentiment. These cycles can take painfully long to play out. But becoming hopeless is not going to help. You have to figure out how to prosper in a highly distorted economic system. It is not going to change so that people who want the world to make sense can feel vindicated. We need to make the best of our own opportunities regardless of circumstances and express gratitude as often as possible for the blessings we do receive in life.

      1. our own opportunities regardless of circumstances and express gratitude as often as possible for the blessings we do receive in life.

        Indeed.

          1. You have to figure out how to prosper in a highly distorted economic system.

            For the 99% that seems to mostly involve picking up nickels in front of steam rollers and teaching your kids to never wear capes…or even shirts with sleeves. Sometimes you can snag a really shiny one at the very last second if you’re really clever.

      2. For Sure. This is how I live my life out here in California. I work hard and save. I guess I gotta roll with it. But, not exactly buying an overpriced shack, but rolling with the flow and scamming other people in order to get ahead. Everybody is screwing someone to get theirs.

    4. “These 10K to 20K drops in prices are a joke…”

      If you have a spare 20K lying around that you don’t want or need, I have some very deserving young adult children who could put it to good use. 20K should be enough to cover a year of rent for one of them.

      1. Well, your young adults should get it from you. You’re supposed to help kids get in their started homes.

        I have a 20% down payment, but I just don’t want to use my hard earned money to catch a falling knife.

        1. I don’t have millions to dole out to my kids. The best I can offer is advice on how not to catch themselves falling knives buying an overpriced crapshack at a bubble peak.

    5. I invite you to review Japanese stock and property prices from about 1989 to 2002. It could very well happen in the US. Will it? Who knows.

    6. Glad I did by within the 2010_2013 timeframe, but honestly I am hoping for a crash within the five year time so I can buy a house when I retire in some of the few bubble areas I still like. I used to think I might want to retire in the San Diego area, now I do not want to even visit. It is amazing the bubble areas seem to create a situation which eviscerates the middle class and creates a society I would not want to live in even if the houses corrected to a more normal level.

    7. These 10K to 20K drops in prices are a joke

      They are and it is discouraging. I suggest using it as culling tool for realistic opportunities. These sellers aren’t motivated and the property is unlikely as special as they think. Focus on the motivated sellers who are willing to make significant price reductions.

  8. ‘If it goes up,’ Doan theorized, ‘it must come down.’

    Doan done cracked the code.

    1. “$899,000 to live 70 feet from a freeway? ”

      10 mg brownie$ in the oven = $upplemental income + what? My partner snores? …

  10. ‘Some buyers are kind of waiting on the sidelines,’ said real estate agent Nabil Suleiman. ‘They believe we are going to see a correction.’”
    – Psychology has turned. No putting the toothpaste back in the tube either.

    “In May, 14.5% of listings in L.A. County had at least one price reduction, up from 11.9% a year earlier, according to Zillow. ‘Buyers are becoming a lot more judgmental,’ Suleiman said.”
    – Buyers are becoming a lot more discerning, savvy, etc., but ‘judgemental’?
    – Reality bites. Speculators are exiting the “market” (bubble). This is supported by rising inventory (everywhere). Prices have exceeded the means of shelter-buyers. Shelter-buyers have met, or exceeded their ability to take on more debt. Shelter-buyers are experiencing income stagnation, while RRE prices are “through the roof”. Pun intended. These assertions are supported by the fact that recent lower mortgage rates have NOT resulted in higher sales volumes, and in fact, just the opposite. Credit cycle is done. Stick a fork in it. The Fed will be cutting from here, IMHO, and maybe as early as July.

    “located just 70 feet from the 101 Freeway. As of Sunday afternoon, the agent said about 15 groups of people had strolled through the 1908 property“
    – 1908 Property. Maybe cars not invented yet, so no garage. I’m sure it’s also up to current electrical and earthquake codes…

    “Doan said he thought the remodeled house was ‘very nice,’ but felt the price was ‘too high.’ He noted the home had no garage. He said he believed houses are bound to get cheaper. ‘If it goes up,’ Doan theorized, ‘it must come down.’ As of Monday, Suleiman said no one had submitted an offer.”
    – “Nobody walks in LA”. Gotta have a garage.
    – “the price was ‘too [darn] high.’ ” – Bingo!
    – 15 caravans and ‘no one had submitted an offer’. “Jinkies!”, “Jeepers!”, “Ruh-roh–RAGGY!!!”, “Would you do it for a Scooby Snack?”

    “‘A lot of people are just priced out of the market at this point,’ he said.”
    – Ya think?

    “Despite Southern California’s biggest supply of inventory since 2014, home sales fell for the 10th consecutive month in May.”
    – Sales and prices down, inventory up. And yet the REIC doesn’t seem to “get” it. Insert timeless quotes here:

    “The first principle is that you must not fool yourself and you are the easiest person to fool.” – Richard P. Feynman

    “It is difficult to get a man to understand something when his salary depends on his not understanding it.” – Upton Sinclair

    “People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome.” ~ George Orwell [confirmation bias]

    1. +1 for the Orwell quote

      Some interesting stuff from Peter Schiff
      excerpt:
      This is why people need to buy gold. Paper currencies are going to lose a tremendous amount of value. So, if you want to preserve your purchasing power of your savings, you better be saving real money and not all this funny money the central banks create. . . . Once the market perceives that there is no light at the end of the tunnel, that we are never going back to normal, that interest rates are going to stay negative in real terms forever, that the Fed has no ability to raise rates, that all the new money that has been created will never be destroyed, that the Fed balance sheet will grow in perpetuity so liquidity will never be removed, [disagree begin] then the dollar will fall through the floor. Then we are going to get all that inflation.[disagree end]
      And John Hussman
      excerpt:
      So contrary to the idea that inflation is somehow “dead,” and that government deficits can be endlessly funded by printing pieces of paper that everyone will passively accumulate, my impression is that the coming few years are likely to produce “revulsion” toward an increasing stock of unbacked government liabilities. To some extent, you can see that emerging revulsion in the recent behavior of gold. It’s not something that’s fully taken hold yet, but it will be important to closely monitor the prices of inflation-sensitive assets, including commodities, inflation-protected securities, the U.S. dollar, and other alternative ways of holding purchasing power.

      I disagree that inflation is inevitable unless we get some form of MMT. Until then, I think the US will fare better than most other developed economies (Germany excluded), so the dollar won’t collapse

      1. The definition of inflation is an increase in the money supply. Price increases follow. We already have massive inflation, but it’s obfuscated via BS gov’t. stats. Just look at asset prices, higher ed., healthcare, to name a few. U.S. and Western world turning Japanese. Banana republic stuff. Gold is a store of value. Gold is inflation protection. Stock markets are headed lower big time, IMHO.

        1. “The definition of inflation is an increase in the money supply.”

          Inflation typically occurs through wage increases as experienced by post WWII American factory workers when the other industrial countries were bombed flat. Now there’s an abundance of manufacturing…and lower wages. The increased money supply (credit) we see today is being used to “roll-over” existing debt that cannot be serviced because of flat wages over the last fifty years.

        2. Agree that inflation is in ll areas you mention. I should have been more specific, i.e., generalized, significant increases in the price of all goods and services. Once that gets entrenched, an increase in inflation (generalized) expectations, which really gets the ball rolling.

        3. “The definition of inflation is an increase in the money supply.”

          No, the definition of inflation is green cheese, in the form it exists on the moon.

        4. Wa$, 120 tissues per box, now: 107 count$ … Kleenex = $tealth inflation$

          Don’t cry for me Argentina …

      2. Savings? What savings?
        I agree with the points about metals being a good long-term store of value and a hedge against the inevitable crash, but I don’t know many people younger than 50 with ANY truly investable cash sitting around. The cost of just living a basic life with a decent apartment and car is so high that I know couples with more than $150k annual household income who still only have a few thousand stashed away. Anyone who has children will be even worse off still.

        Then there is the problem of dealer price versus spot price. If I want to buy a single ounce of gold today I have to pay about $50 over spot. If I want to sell an ounce to a coin dealer, I have to accept less than spot. This means it would take a minor miracle for there to be any profit in the next few years.

        For typical people out there who aren’t boomers with hundreds of thousands of dollars sitting around looking for investments, I’d recommend spending your extra money on survival supplies instead. Get yourself a good 4×4 truck or jeep, a generous supply of arms and ammo, several months worth of water and food, outdoor gear, maybe an RV or camper, easily bartered items like whiskey, cigarettes, tampons and toilet paper, etc. If you have more money than that look into buying a small piece of farmland or a bugout cabin in the middle of nowhere. If you really believe that severe inflation will hit in the next decade, then you wouldn’t scoff at these suggestions. I’d rather have these things than a suitcase full of heavy gold bars to lug around.

        1. We have both inflation and deflation:

          Inflation in the things we need (shelter, healthcare, transportation) and deflation in the things we want (entertainment, electronics, clothing apparel, etc.).

          1. “entertainment” / deflation$ … (Thankfully, thee youngin’$ is growed up.)

            Visiting Di$neyland’s $tar War$ attraction$? Save yourself $200 by reading the fine print

            CNBC | Jacob Passy |Published: June 26, 2019

            Certain experience$ at Star Wars: Galaxy’$ Edge come with $trict policie$ for latecomers and no-shows

            “Visitor$ with reservations for Savi’s Work$hop must check in no earlier than 15 minutes prior to their reservation. If they’re late or mi$$ their reservation, they will still have to pay $199.99 per builder (each reservation accommodates one builder and two additional non-builder guests.) Cancellation$ are not accepted, and reservations may not be exchanged, sold or bartered.

        2. Get yourself a good 4×4 truck or jeep, a generous supply of arms and ammo…

          That’s the redneck plan. And if the coasts fell into the ocean some of them would be cheering like that annoying fat middle eastern lady in that video that got a lot of airplay right after 9/11.

          1. “That’s the redneck plan. And if the coasts fell into the ocean some of them would be cheering like that annoying fat middle eastern lady…”

            I can’t tell if you’re attempting to offer a serious rebuttal to my ideas, or just taking a potshot. Either way, your comment reads as nonsensical.

            If you think it’s “redneck” to own an off-road vehicle and weapons, well all I can say is I pity you (and your wife, if you have one). And don’t fool yourself – a WHOLE LOT of people would be cheering if California or New York fell into the sea, but that is a fantastical and hypothetical scenario that you brought up. My comment was based on a realistic assessment of what we will see in the next decade, based on existing trends.

          2. I can’t tell if you’re attempting to offer a serious rebuttal to my ideas, or just taking a potshot.

            Neither. I’m originally from Wyoming. Just commiserating and observing and trying to inject a little humor :-).

        3. I’d rather have these things than a suitcase full of heavy gold bars to lug around.

          More so if you live anywhere near the border.

          1. “I can’t tell if you’re attempting to offer a serious rebuttal to my ideas, or just taking a potshot.

            Neither. I’m originally from Wyoming. Just commiserating and observing and trying to inject a little humor :-).”

            Oh, sorry, it’s hard to tell online sometimes. A doff of the ol’ cowboy hat to ya.

            (comment wouldn’t nest in the proper space)

          2. Oh, sorry, it’s hard to tell online sometimes. A doff of the ol’ cowboy hat to ya.

            True. I made the assumption that “Vinnie” from “Vegas” was unlikely to be sensitive about redneck jokes :-). Back atcha.

  13. “A $300k house is too much for most families.”

    Isn’t this exactly why we need to keep the GSEs humming with federal guarantees to back up their loans? Without federally guaranteed megaloans from Fannie and Freddie, what private lender would make crazy Ponzi finance deals with households that are unlikely to ever be able to repay the loan amounts?

      1. the emperor

        He is the biggest, fattest, ugliest, most corrupt Emperor in history. This will be interesting.

  14. How is the bond market looking early this summer, against the backdrop of a housing market that is rolling over?

    1. The Economy
      May 30, 2019
      The Bond Market Gazes Into Future, Only Sees Pain
      By Eric Levitz
      Nothing gold can stay.
      Photo: Johannes Eisele/AFP/Getty Images

      …like a dour wallflower who brought his copy of The Uninhabitable Earth to a party, the typical bond investor can’t join in the sheeple’s good cheer — for he knows too much about where all this is headed.

      Or so two recent trends in global bond markets would suggest. The first is that the prices of ten-year government bonds are rising across the developed world. When investors see trouble on the horizon, they move their capital out of equities and into such bonds since the governments of wealthy nations tend to pay back their debts, irrespective of medium-term economic conditions. Thus, the fact that investors have been bidding up the price of government bonds suggests that they’re feeling a bit spooked.
      A related — but decidedly more alarming — development is that this frenzy in ten-year bond buying has actually pushed the yield on long-term U.S. Treasury bonds beneath the yield on short-term ones. This phenomenon is known as an “inverted yield curve,” and it is one of the most reliable indicators that the American economy is headed for a recession in the near future. The logic behind this correlation is simple. In ordinary times, investors will demand a higher yield on long-term bonds than short-term ones, since locking your money into a Treasury for a decade is riskier than doing so for just three months. After all, a bond that pays 2.5 percent interest may be appealing today, when inflation remains below 2 percent — but if prices start spiking five years from now, and the Federal Reserve drastically raises benchmark interest rates, then that bond will plummet in value.

      Therefore, if investors are willing to pay a premium to tether themselves to today’s interest rates, they ostensibly believe that inflation isn’t budging for a long time, and that the Federal Reserve will actually be cutting interest rates in the near future — something that the central bank rarely does in the absence of adverse economic developments.
      …

      1. “When investor$ see trouble on the horizon, they move their capital out of equitie$ and into such bond$ since the government$ of wealthy nation$ TEND to pay back their debt$, irrespective of medium-term economic condition$.” There

        Professor, is the word: “tend” a categorical imperative?

        “Thou shalt not steal,” for example, is a categorical

    2. Credit Markets
      Treasury Yields Decline Following Weak Economic Data
      Yield on 10-year Treasury falls to lowest level in more than 2 ½ years
      By Ira Iosebashvili
      Updated June 25, 2019 4:49 pm ET

      The yield on the 10-year Treasury note fell to its lowest level in more than 2½ years Tuesday after weak U.S. economic data bolstered the case for the Federal Reserve to cut interest rates in coming months.

      The benchmark 10-year yield, which helps set borrowing costs on everything from mortgages to corporate loans, settled at 1.994%, the lowest level since November 2016, from 2.021% on Monday.
      …

  15. The average Millennial (AKA the buyers) is paid 25 percent less on average than the average Baby Boomer (AKA the sellers) were at the same point in their lives, even though the Milliennials have higher educational attainment, lower levels of drug use and teenage pregnancy, etc.

    https://www.wsj.com/articles/playing-catch-up-in-the-game-of-life-millennials-approach-middle-age-in-crisis-11558290908

    So how can the Boomers use the government to force the Millennials to bid up the price of homes? How about increasing the debt to income ratio to 50 percent?

    https://larrylittlefield.wordpress.com/2017/12/09/fannies-mae-and-freddie-macs-stealth-economic-war-on-the-millennials/

    They are social engineering a generation to permanent serfdom, or at least trying.

    1. You hit the nail on the head. Glenn Kelman, CEO of Redfinn, admitted a couple of months ago that our current monetary policy was basically protecting the wealth of the boomers at the expense of millennials:

      “I view much of our economic policy as a way to defend the wealth of baby boomers. People get up in arms about protecting the value of their home and making sure that it increases. When the city wants to increase density, everybody living in a single-family home, who is usually between the ages of 40 and 65, absolutely freaks out and prevents that construction.”

      1. I’m a late boomer, the value of my Brooklyn house has skyrocketed. But that good does that do me?

        What we’d really like is to be able to continue to live near our millennial children, and they’d like to stay in the area. But they could never afford these prices.

        It’s a amazing how many policies of the past 40 years are based on people not being good in families — battle of the sexes, battle of the generations. If you care about the next generation, you lose too!

        1. “But they could never afford these price$”

          Visit with Mr. Banker, heloc to the la$t drop, build a granny flat out back, move in, you get a $parklin’ new place, the youngin’s get to dwell in the main space … (Charge them prevailing rate$ per visit.),

          Don’t find fault, find.a.$olution!

          1. Granny flats do seem like a reasonable solution. Salt Lake City just passed a new ordinance allowing their widespread adoption. I’m interested in seeing what happens.

    1. The “rent-to-own” scams are just another version of low-hanging fruit to attract the suckers off of the fence.

  17. Are you ready for the next cryptocrater?

    Opinion: Bitcoin is very likely to crash soon, research shows
    By Mark Hulbert
    Published: June 27, 2019 12:06 p.m. ET

    The high probability of a decline derives from the rapid pace of its price rise, which in recent days has become parabolic
    Getty Images
    A visual representation of digital currency bitcoin.

    CHAPEL HILL, N.C. (MarketWatch) — The odds are overwhelming — above 80% — that bitcoin will crash in coming months.

    I base this bold prediction on a study, “Bubbles for Fama,” that appeared earlier this year in the Journal of Financial Economics. Its authors are Robin Greenwood, a finance and banking professor at Harvard Business School and chair of its Behavioral Finance and Financial Stability project; Andrei Shleifer, an economics professor at Harvard University; and Yang You, a Ph.D. candidate at that institution.

    This prediction has nothing to do with the particulars of bitcoin (BTCUSD, -13.61%) I hasten to add. It might be, as this cryptocurrency’s true believers insist, that it will eventually dominate the monetary system, replacing gold as well as paper currencies as both a means of exchange and a store of value. But even if that turns out to be true, bitcoin would still be vulnerable to a crash. That’s because the high probability of its crashing derives solely from the rapid pace of its price rise, which in recent days has become parabolic.

    The Harvard researchers found that when a runup exceeds certain thresholds, the odds grow markedly of a crash, which the researchers define as a 40% drop over a two-year period. That probability becomes 50% whenever a security’s prior runup is 100% or more over a two-year period. When the price increase becomes at least 150%, the crash probability rises to 80%. (See accompanying chart.)

    Bitcoin’s recent price action more than qualifies. It has risen more than 440% over the past two years. It is up more than 270% just since the beginning of this year. The S&P 500 (SPX, +0.44%) over the past two years is up “only” 20%.

    To be sure, you could argue that the Harvard study doesn’t apply to bitcoin, since the researchers focused on the stock market rather than cryptocurrencies. But I’m not so sure. The researchers reached their conclusion after studying nearly a century of data in both the U.S. and foreign stock markets. Their conclusions were broadly similar regardless of the time period or the country.

    Though the researchers don’t speculate as to why their conclusions have broad applicability, one suspects that it derives from some basic traits of human psychology — traits that were memorialized centuries ago in the Greek myth of Icarus. Icarus, you will recall, soared too high with wings of wax — wings that melted when he flew too close to the sun, leading to his death.

    https://www.marketwatch.com/story/bitcoin-is-very-likely-to-crash-soon-research-shows-2019-06-27?mod=mw_theo_homepage

    1. “Though the researchers don’t speculate as to why their conclusions have broad applicability, one suspects that it derives from some basic traits of human psychology — traits that were memorialized centuries ago in the Greek myth of Icarus. Icarus, you will recall, soared too high with wings of wax — wings that melted when he flew too close to the sun, leading to his death.”

      Another $uspect idea: “nothing ventured, nothing gained”

      Beside’$, everything dies, … even bad deci$ion$.

  18. “…the slowdown has more to do with affordability constraints than interest rates — something many analysts originally attributed to the sales reduction.”

    Buyers must have paused due to affordability constraints. It couldn’t possibly be that nobody wants to catch themself a falling knife.

  19. The real issue is not starving millenials to protect boomers. That is a very narrow perspective.

    Corporate interests dominate the reasons why jobs went to China, et.al. and wages shrank here in the USA. The quality of living at a fixed cost (some would argue) went up.

    In response to the GFC, the Major Banks were saved along with terrible businesses (GM). My issue is the gubmint did not, and has not, reinstated Glass-Steagall. Additionally, corporate governance and term limits weren’t even mentioned by the dumbocrat candidates at last nights debate.

    Defined benefit pensions were beneficiaries as well, however, taxes will need to increase as these are due state and local public employee plans, IF the markets cannot return above average rates. Or, defaults will result and depression is likely. The fed screwed up by QE, Twist, etc. Using a tax balanced approach would have been better in lieu of these policies.

    But all of these issues started with the warping of the New Deal morphed into ACA. Millennial issues also relate to ecducation, skill set, etc, and listening to liberal college personnel on truly workable solutions.

    It’s much bigger than boomers grabbing the pie. There’s a ton of Caretakers who really lived beyond their means on gubmint subsidies, which won’t be as gratuitous for us boomers.

    1. “My issue is the gubmint did not, and has not, reinstated Glass-Steagall.”

      +1 Sad how little cooperation $4-trillion buys these days.

      1. Corporate governance and term limits weren’t even mentioned by the dumbocrat candidates at last nights debate.

        Agree wholeheartedly with implementing a 21st century Glass-Steagall. Laws being written by lobbyists is an issue as well.

        There’s a ton of Caretakers who really lived beyond their means on gubmint subsidies, which won’t be as gratuitous for us boomers.

        Certainly the share of boomers who will retire in poverty is going up. I am sympathetic to many boomers, especially those in hard times. My point though is that millennials as a cohort are doing far worse than any previous generation. Boomers had some pain dealt out, but millennials are being decimated by it.

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