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The Entrepreneur’s Dream Has Quickly Turned Into A Nightmare

A report from the Denver Post in Colorado. “Listings continued to flow into metro Denver’s housing market last month, according to the Denver Metro Association of Realtors. Despite lower borrowing costs, buyers fell short when it came to absorbing the new inventory, even for the most affordable tier of homes, which usually see rock-solid demand.”

“Buyers purchased 5,234 homes and condos in metro Denver last month, a decline of 14.31 percent from May and 14.34 percent from June of last year, according to the DMAR counts. What has been the strongest segments of the market for demand, homes and condos priced below $500,000, experienced a 13.5 percent monthly drop in sales.”

“The number of homes and condos available for sale in metro Denver at the end of June was 9,520, an increase of 7.1 percent from May and up 28 percent from June 2018. Metro Denver hasn’t had so many homes available for sale since October 2013, noted Jill Schafer, head of DMAR’s market trends committee.”

From Yahoo Finance on New York. “The average resale apartment price in Q2 fell 5% from the comparable quarter last year, to $1,641,989, Brown Harris Stevens (BHS) said in its quarterly survey of New York City real estate. During that time frame, resale closings stagnated, and sellers offered their biggest price discounts in nearly a decade, BHS said. ‘Resale apartments sold in the second quarter spent an average of 131 days on the market,’ the firm noted in its report. ‘This figure was 27% more than a year ago, and the highest level in seven years. Sellers offered their biggest price discounts in nine years, receiving on average 96.1% of their last asking price.'”

“BHS’s CEO Bess Freedman, said that ‘Buyers are in the drivers seat’ as real estate prices moderate. ‘If we want to see the market improve, sellers have to adjust their prices,’ Freedman added.”

The Naples Daily News in Florida. “In the Naples area asking prices are coming down. NABOR reports that more than 2,000 sellers reduced their list prices in May. Sales for higher-end homes between $1 and $2 million declined 8.9% over the year. Home sellers have been dropping prices in Lee too, in an effort to attract more buyers. ‘Collier County seems to be ahead of most of the other markets in the state,’ said broker Brenda Fioretti.”

“She offered up one reason the county might be doing better than many other markets in the state, especially on Florida’s east coast. Some areas, such as Miami and Fort Lauderdale, have been overbuilt, she said.”

The Thousand Oaks Acorn in California. “A housing affordability crisis threatens to deepen an already wobbly Ventura County economy that has seen a record number of workers move out of the area due to high prices, an analyst told the Greater Conejo Valley Chamber of Commerce. Last year, Ventura County experienced negative population growth for the first time. Statewide, 156,000 more people left California than moved here, numbers show.”

“Roughly 3,500 homes were permitted in the county in the year before the recession. In 2017 growth in the county had rebounded with 2,500 permits, but in 2018 fewer than 1,500 permits were issued. ‘The bottom fell out last year,’ said Matthew Fienup of Cal Lutheran University’s Center for Economic Research and Forecasting.”

From City AM. “Online estate agent Purplebricks today confirmed it is pulling out of the US, just two years after launch, two months after deciding to shut its Australian arm. The two businesses, it said today, helped drive its losses with a £52.9m operating loss in the countries. It expects withdrawing will significantly reduce the amount of cash it burns through.”

“‘Without a proper grasp of the new markets they were entering, and a downturn in Australia’s domestic housing market, the entrepreneur’s dream has quickly turned into a nightmare,’ said Julie Palmer, a partner at Begbies Traynor.”

“Purplebricks said it was open to selling the business in the US. But would close it if no buyer could be found. It operates in seven states. ‘While there remains a significant opportunity to disrupt the US market, it would take substantially more management time and resources than the company is able to commit at this time,’ said chief executive Vic Darvey.”

This Post Has 75 Comments
  1. Denver and New York City. It just gets worser and worser.

    ‘Listings continued to flow into metro Denver’s housing market…even for the most affordable tier of homes’

    There never was a shortage of shacks and there never will be.

    1. With a flood of Baby Boomers abandoning their homes for retirement communities, baby dearth, and slowing of immigration, it is pretty clear that fundamental US housing demand is toast for the near-term future.

      1. Soros and the Koch brothers have worked hard to increase immigration so we have serious numbers crossing the border again. Since most have not showed at their hearings with congressional help it would be easy to deport them since deportation orders have been issued. However, they do need to hire more agents that will not happen without the reelection of Trump and at least major losses in the house by the Democrats. In the meantime they will drive rental demand.

        1. Love to see the Koch Bros teaming up with Soros to help car wash owners, builders and restaurants find cheap labor. Dick Cheney must be involved too. Happy 4th Eve, tune into the $3 million DC tank roll out.

          1. The Koch brothers according to a company website employs about 130,000 people. Approximately 23000 are in China hence their opposition to tariffs. While I agree with them on AGW, I have always opposed them on immigration and outsourcing. They owned Paul Ryan lock stock and barrel.

          2. “Happy 4th Eve, tune into the $3 million DC tank roll out.”

            Are they planning on having soldiers goose-stepping behind the armor column?

  2. ‘the entrepreneur’s dream has quickly turned into a nightmare’

    Like zillow and redfin, these money bleeding outfits were in a nightmare all along. It’s only when they run out of other peoples money they call it what it is.

      1. I don’t get it either. We’re led to believe the investor class is smarter than everyone else. Hey, give me $50 million to burn through, and 5 -10 years to lose money every year, and I too can pretend to be a successful “entrepreneur”. Call me old fashioned but I thought businesses were supposed to MAKE money, not to lose it hand over fist! All of my businesses have earned profit from the first year, with no outside investment. If I can do that on a lower level, why can’t these geniuses do it with tens of millions to play with? Oh, I know, it’s about SCALE….we lose money on every sale but we’ll make it up in volume. This entire country seems like a freakin’ bubble.

        1. It is neatly encapsulated by stock in Beyond Meat Inc, a company which sells meat with 0% meat content, selling for >150$/share.

          1. Laugh at beyond meat but at least they actually make, move and sell their product. (And it’s actually pretty good too!)

            I look at a company like Uber, who has nothing more than a server, app and a few advertisements and is STILL Billions in debt. How can a company who owns nothing be in debt that much!?!?

          2. How can a company who owns nothing be in debt that much!?!?

            Software engineers and subsidizing rides are both expensive.

          1. Bond yields in the QE-anticipation basement can support bubblelicious asset valuations, even in the absence of fundamental demand, wage increases, or other inflationary pressures.

          2. The long run, in which we are all dead is my best guess when the bubbles will end. My next guess is when the Globalists have achieved world government and no longer have to promote a false prosperity to show that diversity and globalism promote prosperity. Then they can allow the bubbles to deflate reduce everyone’s but themselves living standard and shoot anyone who objects.

        2. All those years and all that energy starting profitable businesses when you could have started a company building igloos in the desert or umbrellas out of newspaper and IPO’d it for billions on Wall Street.

      2. Sunk Cost Fallacy, from Behavioral Economics Encyclopedia:

        “Individuals commit the sunk cost fallacy when they continue a behavior or endeavor as a result of previously invested resources (time, money or effort) (Arkes & Blumer, 1985). This fallacy, which is related to loss aversion and status quo bias, can also be viewed as bias resulting from an ongoing commitment.”

        “For example, individuals sometimes order too much food and then over-eat just to “get their money’s worth”. Similarly, a person may have a $20 ticket to a concert and then drive for hours through a blizzard, just because she feels that she has to attend due to having made the initial investment. If the costs outweigh the benefits, the extra costs incurred (inconvenience, time or even money) are held in a different mental account than the one associated with the ticket transaction (Thaler, 1999).”

        “Research suggests that rats, mice and humans are all sensitive to sunk costs after they have made the decision to pursue a reward (Sweis et al., 2018).

        Arkes, H. R., & Blumer, C. (1985), The psychology of sunk costs. Organizational Behavior and Human Decision Processes, 35, 124-140.

        Sweis, B. M., Abram, S. V., Schmidt, B. J., Seeland, K. D., MacDonald, A. W., Thomas, M. J., & Redish, A. D. (2018). Sensitivity to “sunk costs” in mice, rats, and humans. Science, 361(6398), 178-181.

        Thaler, R. H. (1999). Mental accounting matters. Journal of Behavioral Decision Making. 12, 183-206.

  3. ‘In the Naples area asking prices are coming down. NABOR reports that more than 2,000 sellers reduced their list prices in May. Sales for higher-end homes between $1 and $2 million declined 8.9% over the year. Home sellers have been dropping prices in Lee too, in an effort to attract more buyers’

    This area has been sinking like a turd in a well for years.

    ‘Some areas, such as Miami and Fort Lauderdale, have been overbuilt’

    Wa? But shortage? Taxes! Have these UHS been lying to us all these years?

  4. ‘Roughly 3,500 homes were permitted in the county in the year before the recession. In 2017 growth in the county had rebounded with 2,500 permits, but in 2018 fewer than 1,500 permits were issued. ‘The bottom fell out last year’

    The article mentions they haven’t had economic growth in 5 years.

    1. “Ventura County has workers leaving the area and negative population growth.

      Why do they need any new houses at all in Ventura County if the working people are leaving?

      1. All they need is new “multifamily” chipboard apartments for the hordes of new arrivals from south of the border. Somebody’s gotta do all that landscaping and burger flipping while the boomers bemoan their jobless children.

        1. And many of those drug addled boomers will wail “orange man bad” and proclaim with signs on their lawns that in “their America” they welcome the immigrants/slave labor – just not in their neighborhood. Their spawn is “too good” to flip burgers and mow lawns but apparently too dumb to get into a halfway decent college on their own academic merits so those same bolshevik boomers have to pay off some shylock to construct an elaborate hoax that their little couch potato is an athlete.

          I’ve said for years that if people in socal didnt have slave labor to take care of their houses/yards there would be a radical downsizing as most could/would not be able to.

      2. Why do they need any new houses at all in Ventura County if the working people are leaving?”

        Good question. I think many people in Ventura county work in LA county or don’t work at all. Very few new single family homes in Ventura county anyway its locked up by SOAR . A few radioactive homes in east Simi and some million dollar stuff scattered here and there. A few 600K condos , Some stuff in Fillmore.

    1. The article says that new mortgage application s are up 41 per cent from a year ago and refinancing are up 93 percent. Seems more like the bubble is being reinflated than the bankers are failing to reinflate due to the prices , just looking at that data point

      1. Refi volume is the only reason it’s up YoY… by this time last year rates were a multi year high, no one was refinancing.

        1. True need to know the percentage of the mix to know for sure but it is hard to see that the new home sales fell sharply if the overall mix is up 43 percent

          1. Saw a similar story on Fox Business and some knife catches are out. New mortgages are up 10 percent. So while most of the increase was due to refinancing there was a sizable increase in buying a property. A couple of weeks may be an aberration but it sure worth watching

  5. This is the 3rd Denver bubble I’ve lived through. There have always been the equity nomads from CA and oil riggers from TX. There’s always a wake of destruction when the bubble bursts. This time will be worse, because the bubble is being driven by a ton of people moving from CA and TX, plus east coast and midwest.

    The 20% net growth of Denver obscures the significant amount of underlying churn. The city has grown by 100k over the last 10 years, but that growth is the net of ~150k people moving here and ~140k leaving each year. Over 10 years that means a third of the city hasn’t lived here more than a few years. No one here has any context or knowledge of the city, and no one has any meaningful connection to the city. I’m the only person from here I still know, everyone I used to know has left the city. It’s not unusual to see more out-of-state license plates on the road than CO plates.

    The city council is bought and paid for by the REIC. You used to need the approval of your whole neighborhood to put a second story on your house. Now specuvestors can buy whole blocks and put up dozens of $800k slot homes with no input from the neighbors. It’s the wild west for developers, they can do anything anywhere and there are no citizens left to stop the city council.

    Want to buy the worst house in the worst neighborhood? That’ll be $350k. That would’ve been $50k 10 years ago. OK house in a formerly working-class neighborhood? That’ll be $600k+, formerly <$200k. A teardown in an OK neighborhood is $400k+ because someone can put a $1m+ house there or 4 slot homes. An OK house in a nice neighborhood is well over a million.

    People from out of state pay it because they don't know any better. All they know is the past couple years' experience and the only people they talk to are the same. The market everywhere is delusional, but this is an exceptional kind of delusion that will only come to a screeching halt once the steady stream of new suckers dries up.

    1. “People from out of state pay it because they don’t know any better.”

      Their lenders don’t know any better either!

      1. “Their lenders don’t know any better either!”

        Perhaps they do but, hey, it’s not their money.

    2. “The market everywhere is delusional, but this is an exceptional kind of delusion that will only come to a screeching halt once the steady stream of new suckers dries up.”

      > Speculators are exiting (rising inventory) + shelter-buyers are priced out = “the steady stream of new suckers” is drying up (air pocket).

      “Trees don’t grow to the sky” – German proverb

      I agree with Ben. There never was a shortage, just another Fed-induced asset bubble mania.

  6. What I have been saying for some time is all the globalists learned from 2008 is to intervene early when bubbles start to deflate. We are seeing European central banks stepping on the accelerator, China easing credit and the Fed suggesting they might ease. Of course particularly with China and Europe it only means a bigger bust but it certainly delays things. MMT works until it doesn’t, of course it is no different than what Mugabe did in Zimbabwe. However he did get away with it for around a decade. Not sure why this cannot go on for years.

    1. ” …the Fed $ugge$ting they might ea$e”

      dtRump, Kudlow, Ha$$ett, Mnuchin, $heldon, Navarro, Moore & Ro$$ LLC.:

      “Lower the damn Fed Fund$ interest rate$ to 0% NOW!”

      That doe$n’t $ound like a $uggestion to me.

      1. It is the Fed that is suggesting it might cut. I never said the Trump team is not advocating strongly for a cut. However no matter how vociferously they say it, it is still just a suggestion because Trump cannot cut or order that the rates be cut.

        1. However no matter how vociferously they say it, it is still just a suggestion because Trump cannot cut or order that the rates be cut.

          Perhaps not indirectly, but he has threatened to replace Powell if he doesn’t get his way. But in any event, the bully pulpit of the presidency is awfully powerful. I think Powell pushed back for a little bit, but no longer. We were supposed to have 2-3 more rate increases this year. Now the consensus forecast is 3-4 cuts. The only thing that seems to have impacted this is DJT opining for lower rates. The Fed is going to use tariffs as cover to say the economy is slowing down. Either way, DJT will get easy money policy and the party can continue.

          1. He will get the easy money because Europe is in trouble. The Fed hates Trump and even raised interest rates just before the 2018 election. They are a globalist organization and Powell could careless about being chairman compared to offending the bankers who will make him rich if he is compliant to their wishes not Trump’s desire. Just ask Mr. Banker whether he or Trump calls the shots.

  7. Attention Nike, cleanup on isle 3 Kaepernick wet himself again.

    Report: Kaepernick moves Nike to pull flag shoe

    Nike struck down a plan to release a shoe featuring the original version of the U.S. flag this week at the request of Colin Kaepernick, according to a report by The Wall Street Journal.

    The shoe, the Air Max 1 Quick Strike Fourth of July, featured a logo of the original U.S. flag, the design of which by popular lore is credited to Betsy Ross, with 13 stars in a circle.

    The Journal reports that Kaepernick told Nike it shouldn’t use that version of the flag, as he and others consider it an offensive symbol due to its connection to a time when slavery was legal.

    1. Okay I’ll bite. That really does sound over the top.

      The time of slavery was pretty much all of human history up until around 200 years ago. So I’m curious to see where this ends up.

      1. foo: Wrong
        slavery is still every where in the world. Including the U.S.
        Look at for more info.

      2. AZ governor’s reaction seems a bit thin-skinned. Why not just put the good ‘ole red, white, and blue flag on the shoes? That is what they are doing, right? Seems like manufactured outrage to me.

        1. What happens when our flag is made into an oversize camping chair & swim trunks & @ 400# fat dude that ate x9 bean & cheese burritos then commences to process his nutritious intake in a gaseous fashion?

          The federal flag code says that “The flag should never be used for advertising purposes in any manner whatsoever.” In the District of Columbia, a flag being “printed, painted, attached, or otherwise placed a representation” on any “article of merchandise” for the purposes of advertising is a misdemeanor, can lead to a fine of $100 or imprisonment of less than 30 days.

          Basically, Leepson said, the image of the flag shouldn’t be used on any commercial items, including apparel.

          The code also bans the material of a flag from being converted into clothing of any kind.

    2. “Kaepernick told Nike it shouldn’t use that version of the flag, as he and others consider it an offensive symbol due to its connection to a time when slavery was legal.”

      Kaepernick the SJW and his friends consider the Betsy Ross flag an offensive symbol but takes money from Nike whose symbol is synonymous with sweatshops.

      Nike is facing a new wave of anti-sweatshop protests

      By Marc Bain August 1, 2017

      Among them are claims that workers at a Nike contract factory in Hansae, Vietnam, suffered wage theft and verbal abuse, and labored for hours in temperatures well over the legal limit of 90 degrees, to the point that they would collapse at their sewing machines.

  8. Another day, another notch lower in Treasury yields…


    U.S. Treasury yields hit lowest rate since 2016 as stocks rise

    By Vildana Hajric and Jeremy Herron
    Jul 03, 2019 | 7:05 AM
    U.S. Treasury yields hit lowest rate since 2016 as stocks rise
    The “Wall St” street sign in front of the New York Stock Exchange. (JOHANNES EISELE / AFP/Getty Images)

    Bonds extended gains globally as investors weighed the prospect of more dovish appointees to two of the world’s major central banks. American equities edged higher in thin trading ahead of a holiday.

    Ten-year Treasury yields dipped to the lowest rate since November 2016, German rates turned more negative and Italy’s slipped below 1.7%.

  9. I am still flabbergasted that sellers pay 4-6% commission to sell their house in 2019. Darn the NAR is brutal!

  10. Coal continues to swirl the drain.

    ‘President Trump has not commented on the rash of recent coal producer bankruptcies, which have not been saved by his promises to save and revive the industry. Despite Trump’s declaration that “coal is back” as recently as last year, U.S. coal consumption has fallen to its lowest level since 1978, according to the Department of Energy.

    Since his election, 51 coal plants have closed and eight coal companies have filed for bankruptcy, CBS News reported. ‘

    The sad part is that these former minors resist job retraining like it is a bad thing.

    1. Coal plants cannot be built fast enough in China. Miners are not minors so learning to code at age 55 is not going to help them

  11. “Coal plants cannot be built fast enough in China.”

    ( kinda funny when a State builds a coal burning plant right @ the edge of another State & let’s the prevailing winds disperse the exhaust. Haha)

    ENVIRONMENT | JULY 2, 2019 / Reuters

    China’s Shandong province plan$ further coal usage cut$ over next five year$

    In May, China’s energy bureau has set mandatory renewable power quotas for each of its region for 2019 and 2020, asking Shandong to reach the portion of renewable energy use in total energy mix to 10% in 2019 and 11% in 2020.

    The province also ordered tighter coal quality specifications for the fuel. Coal must now have an energy content of 5,000 kilocalories per kg from the current 3,700 to 4,300 kilocalories per kg in the coming three to five years.

    Shandong vowed to trim coking capacity by 16.86 million tonnes by 2020 and to put out capacity plans, targeting independent refineries, steel mills, fertilizer makers and aluminum smelters, by July.

    Reporting by Muyu Xu and Shivani Singh; editing by Christian Schmollinger

    1. One province highway, China is not only constructing massive numbers of coal plants within it’s country it is constructing 300 plants outside its country

      1. China is set to add more new coal generating power than the US has and by 2045 is scheduled to have 1010 GW or almost four times are present capacity. The Sierra club and Greenpeace is saying this see the March 28th issue of Engineering and Technology

  12. Would China be adding our capacity within the next twenty five years if it leaders really believed in AGW? Would China be adding that capacity if solar and wind were really cheaper? China is a major supplier of wind and solar equipment it has to import massive amounts of coal from Australia at prices much higher than the US prices. Could it be that people who are claiming solar and wind are cheaper than existing coal plants are cooking the books? Why is it that states with a higher percentage of renewable energy have electricity rates far higher than states with low percentages unless the renewable is old fashion large scale hydro?

  13. Hey, of course it makes sense, it’s New York …

    New Yorker Hotel battles with man claiming to own building


    “The New Yorker Hotel is locked in a court battle with a man it says is a shameless freeloader who scored a year rent-free under an obscure legal loophole — and then filed a phony deed to commandeer the entire Midtown building.

    “Now the real owners of the 43-story structure topped with the iconic New Yorker sign are scrambling to get Mickey Barreto’s alleged fraud reversed.””


    “The city Finance Department, which says only a court can void a bad deed, gets 40 new deed fraud complaints each month.”

    They get 40 new deed fraud complaints each month. FORTY!


    “A Manhattan Supreme Court judge called Barreto’s ownership bid ‘bizarre’ and said it was ‘abundantly clear’ Barreto is not the owner — but only ordered Barreto to remove public references to himself as the owner.”


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