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It’s Not Like A Big Plummet, It’s More Of A Flattening Out

A report from RNZ. “As many as 1000 Kiwi forestry workers could be left without jobs after a sudden drop in the price of logs. New Zealand logs are reportedly piling up on wharves in China, which is seeing a glut in supply. Darrin Collett of Woodbank Trading has been riding the ups and downs of the forestry industry for 30 years and said the forestry management business had already laid off four logging crews in the north of the North Island in recent weeks – and one or two more were on the chopping block.”

“Mr Collett had just visited ports and timber processing facilities in China and met with log traders there, and he said there was a lot of worry. ‘We did a circuit up there to see exactly what was going on and it’s fair to say that sentiment is really poor and most of the guys said they didn’t think the Chinese economy was improving.'”

“Another North Island contractor who employed just five workers said they were struggling to find out what was going on. ‘Then you’ve got the buys above us that sell the logs – they’re running around putting us off or trying to make us do four days but you can’t do that to your men. Your men have to have money as they’ve got mortgages.'”

From CBC News. “Canfor’s recent announcement it will reduce production at two more sawmills this summer in Prince George adds to a growing list of more than 20 temporary and indefinite curtailments of such facilities across British Columbia, along with several permanent closures.”

“Tolko employee Jennifer Johnson said she was in shock when she learned last month the sawmill she works at in Quesnel will close this summer. ‘It’s definitely going to be a struggle because there’s not a great deal of jobs that have around the same pay or benefits,’ she said. Johnson and her family had been planning to buy a house, but that’s now on hold. The last day of work will be tough for her and the rest of the staff. ‘There’s probably going to be some tears shed I’m sure,’ she said.”

“A weak U.S. housing market and low harvest levels because of mountain pine beetles, as well as wildfires and land used for caribou protection, are some of the primary factors affecting the industry, said Harry Nelson, an associate professor at the University of British Columbia’s faculty of forestry. ‘Our main market is the U.S.,’ said Nelson. ‘Essentially, we’ve had pretty good U.S. housing markets improving over the last few years, and they’ve just become much weaker this past spring.'”

The Wall Street Journal. “More publicly-listed real-estate companies are taking on short-term debt, assuming additional risk to reduce their borrowing costs. This debt, known as commercial paper, can have terms as short as a single night. It is a popular tool for many companies to cover accounts payable or pay for inventory. The risk, analysts say, is that property companies could be unable to refinance this debt if lenders suddenly lose confidence, for example in the event of a financial panic.”

“‘It would be an unforced error if there were a hiccup in the commercial-paper availability,’ said Stephen Boyd, a senior director at Fitch. ‘Why take that risk?’ Mr. Boyd said more REITs are issuing short-term debt in part because the real-estate market cycle is nearing its end. ‘There are fewer levers to pull off earnings growth, and this is one of them,’ he said.”

From 5280 in Colorado. “Denver is building its way out of the housing crisis—at least for those who can afford luxury condos. The latest Denver Metro Association of Realtors report shows there is now 5.6 months of inventory of attached units worth between $750,000 and $1 million, meaning it would take that long for every luxury condo on the market now to sell.”

“It means the tables have turned in this subset of Denver housing. At long last, buyers of condos in the urban core have regained the upper hand; no need to offer more than asking price or rush to get offers in before you’ve had a night to sleep on the decision.”

“We’ve built ourselves out of the expensive condo shortage, ‘And that’s just the attempt to build out of [the housing shortage] in general,’ says Kentwood Real Estate agent Jill Schafer. ‘But it’s just expensive to build because the land is expensive and everything gets added on top of that, like the cost of labor.'”

“Denver’s average sold-home price was $499,807 at the end of June. But there’s good news at lower ends of the market, too. The close-to-list-price ratio, or the percentage of asking price buyers actually pay, has held below 100 percent across the Denver metro area for nearly one year (since August 2018). On average, Denver metro home buyers pay 99.6 percent of what sellers ask for their homes. This means that buyers are less likely to battle it out over competing offers and overpay for their homes.”

“‘It’s not like a big plummet, it’s more of a flattening out,’ says Schafer. ‘It’s like when you’re driving down a road and you see the speed limit sign and you know you’re going 20 miles an hour over, slam on the breaks, and then it feels like you’re barely going.'”

The Real Deal on New York. “East Hampton Town will use money from the Community Preservation Fund to buy and preserve a property that first hit the market in 2014 for $28 million, but eventually saw its ask plummet to $4.995 million, Behind the Hedges reported. The property at 81 Ocean Avenue was initially listed along with another parcel and put up for auction in November 2015. When the Ocean Avenue parcel didn’t sell, its price dropped to $8 million in 2015, according to Zillow, before finally settling at $4.995 million.”

From Celebrity Net Worth. “The cost to ‘live like a rock star’ (as the real estate listing puts it) just came down a bit, as what was once the marital home of Gwen Stefani and Gavin Rossdale, after the now-divorced couple purchased it in 2006, has gotten a price cut of a little over $10 million to its current asking price of $24.995 million. Two years ago, the mansion was listed at $35 million.”

This Post Has 63 Comments
  1. ‘East Hampton Town will use money from the Community Preservation Fund to buy and preserve a property that first hit the market in 2014 for $28 million, but eventually saw its ask plummet to $4.995 million’

    But half off is unrealistic? Did they say plummet?

    1. Think bail out money got the big banks over the hump in the direst moment of the financial crisis? Think again. How many times are they going to get caught doing this?

      https://www.zerohedge.com/news/2019-07-09/us-authorities-seize-jp-morgan-owned-container-ship-used-13-billion-cocaine-bust

      A long tradition:

      https://www.theguardian.com/world/2011/apr/03/us-bank-mexico-drug-gangs

      https://www.nytimes.com/1988/10/12/business/bank-is-charged-by-us-with-money-laundering.html

      1. I’m am shocked, shocked! that tax-deductible fines of less than two percent of the profits Wachovia and HSBC raked in from laundering billions in Sinaloa Cartel money, along with no criminal charges and impunity from future prosecution for senior bank officers, failed to show these TBTF banks the error of their ways. They specifically assured the public and regulators they would mend their errant ways.

  2. ‘It’s not like a big plummet, it’s more of a flattening out,’ says Schafer. ‘It’s like when you’re driving down a road and you see the speed limit sign and you know you’re going 20 miles an hour over, slam on the breaks, and then it feels like you’re barely going’

    “I gotta BMW payment that ain’t gonna make itself!”

    1. Denver = CRATER.

      Please note that the 90+ “walk score” of your $750K downtown condo includes used needles all over the sidewalk.

  3. ‘Then you’ve got the buys above us that sell the logs – they’re running around putting us off or trying to make us do four days but you can’t do that to your men. Your men have to have money as they’ve got mortgages’

    And it’s a whopping big mortgage in New Zealand!

  4. Top story on CNBC web site today about toughening real estate sales. However the stated cause is: you guessed it! The return of the shortage! Check it out for yourself.

    Do these idiots ever stop this rediculous narrative? Do they really expect everyone to buy the shortage bit? Unbelievable.

    1. They’re telling the truth — they just never finish the sentence, that ending being “caused by home prices that have been ridiculously inflated to prices only the mega-rich can now afford”.

    2. What is amazing is how effective the strategy is at convincing buyers that they need to snap up anything which is close to affordable. They have turned a negative for pricing, slowing sales into a positive, a shortage of houses. It works far better for them than people hearing price follows volume thus the slowing sales means following prices in the future.

  5. “We’ve built ourselves out of the expensive condo shortage, ‘

    Because so many retirees living on inflation-diluted social security and millennials working in Starbucks were all clamoring for expensive condos in Denver. Not surprised when you are that close to the beach and are a center of culture and spectacular architecture with a temperate winter climate to boot. Glad that problem was solved.

    1. Denver has none of the above, but all of the traffic, air pollution, and illegals that Los Angeles does.

      Don’t move here, you’ll regret it.

        1. I nearly had an involuntary bowel movement the first time I saw that creepy demonic blue horse with its glowing red eyes. What the actual f***…and how did the Denver Bolsheviks get taxpayers to pay for that abomination?

      1. The antirealtor. But the thing is 401 a number of years ago when you were saying it, I believed you were just trying to keep too many people from moving there and ruining it. Now, I sense you believe it has been ruined.

          1. they didn’t think the Chinese economy was improving

            Biggest smoldering pile of debt and corruption in the universe, and it’s contagious.

        1. Denver is not a bad place to rent for well below the cost of buying and to make alot of money. I just can’t imagine trying to buy an overpriced used house here and raise a family, knowing that Denver doesn’t have a future…

          1. I think Denver has a future. I just think the yuppies don’t understand that the future looks a lot like the past. It’s a “rural city” in a rural state. When all the bubbles pop it seems to me that it goes back to that. The stock show becomes important again. Hopefully lift tickets get cheap again too.

          2. I-70 to Loveland Pass, Summit County, Vail, and beyond, will never get better.

            I only skied at a resort once this season, at Monarch. I used to buy 4-packs to Loveland (and Loveland Season Pass, and use *all* of the bonus days at Monarch, Crested Butte, Purgatory). And 3-packs to Arapahoe Basin and Winter Park.

            Dumver’s economy may collapse, but I-70 to ski on weekends is over, forever…

          3. I-70 to ski on weekends is over, forever…

            RIP. For all the problems in California, I gotta admit being able to run up highway 50 to the closest Tahoe ski areas in only an hour or so and any of them within ~2 hours is better than almost everything in Colorado. Yes there’s too much traffic on the popular weekends. But still better. 50ft(!) of snow in one month two years in a row now.

    2. SS is broke partially due due the inflated payouts every month. Most collect many multiples of their contribution.

      Is it any surprise SS is bankrupt?

      1. Not an expert in SS but I’d want some kind of multiple for the money put in after 40 years. The current retirement age is 66 and life expectancy is 78. So a working person pays into the system for 40+ years and withdraws from the system for 12 years. So people who worked for living collecting multiples of what they paid in must be the least of the problems.

        1. retirement age is 66 and life expectancy is 78

          Actually, if you are 66 now, the IRS says your life expectancy is 86. So just try to get to retirement age.

          If I collect for only 10 years, I will just about get back what I paid in. If I live to 86 I will collect about twice what I paid in.

          1. “If I collect for only 10 years, I will just about get back what I paid in. If I live to 86 I will collect about twice what I paid in.”

            A real life example why SS doesn’t work, is bankrupt and will Implode very soon.

          2. If I collect for only 10 years, I will just about get back what I paid in. If I live to 86 I will collect about twice what I paid in.

            At what interest rate on the money you put in?

          3. At what interest rate

            I can’t find that on my statement! The better question might be at what rate of inflation. The dollar I put in 40 years ago to support my grandmother was worth more than the dollar they are paying me.

          4. The real issue with SS is disability that is collected as a form of unemployment insurance in depressed areas. Those who get on SS disability stay on for life and they collect forever.

            Also a problem are spouses who never collected SS but who get survivorship benefits and who collect 1/2 of their husband’s benefits during their lifetime.

          5. spouses who never collected SS but who get survivorship benefits and who collect 1/2 of their husband’s benefits

            If the “husband” dies, the surviving spouse can collect 100% of his benefit. 1/2 the benefit is while the husband is still alive.

            Even better, if the guy was married to three different women during his life, each for 10 years, they all can collect.

          6. They often don’t mention the HUGE boost that Social Security got in the 1980s, when women entered the professional workforce. Before that, the women paid little into SS but they collected SS from their husbands. When women began working, they paid a lot in and still collected. In other words, a lot more pay-in for the same amount of payout. Of course that windfall is long gone by now.

        2. Thank financial repression for the problems of social security. Our money was forced into treasuries which paid next to nothing.

          1. “Thank financial repression for the problems of social security. Our money was forced into treasuries which paid next to nothing.”

            For correct handling the money should have been turned over to bankers.

          2. Another question that should be asked is this. If a generation paid higher taxes for say 25 out of 45 years, and if such taxes paid for Government outlays that benefited all generations, than how do you credit this.
            So, baby boomers got levied with higher taxes.

            The Greatest Generation paid less into Social Security, but they loss life savings in the Great Depression ,and they fought World War 2, which everybody now was the beneficiary of.

            I’m just saying that every generation gets levied in one way or another.

            This generation warfare is something I think the real culprits of stealing from society want to promote. Everybody knows who the real thieves are.

  6. “…New Zealand logs are reportedly piling up on wharves in China, which is seeing a glut in supply….”

    Oh, Wow… Another “shortage”

  7. “New Zealand logs are reportedly piling up on wharves in China, which is seeing a glut in supply.”

    Sounds like a blatant indicator of a construction crash in China. I wonder if their ever-so-rosy growth figures will reflect this development.

  8. The last projection was for 6.2 percent growth this quarter which would be the lowest in 27 years. MAGA

  9. The risk, analysts say, is that property companies could be unable to refinance this debt if lenders suddenly lose confidence, for example in the event of a financial panic.”

    That most peerless prognosticator, Old Yellen, has assured us there will not be a new financial crisis “in our time.” So borrow and spend with wild abandon, property companies.

  10. “‘It’s not like a big plummet, it’s more of a flattening out,’ says Schafer. ‘It’s like when you’re driving down a road and you see the speed limit sign and you know you’re going 20 miles an hour over, slam on the breaks, and then it feels like you’re barely going.’”

    These analogies by REIC shills desperate to spin the bad news are going from lame to ludicrous.

    1. ‘It’s like when you’re driving down a road and you see the speed limit sign and you know you’re going 20 miles an hour over, slam on the breaks, and then it feels like you’re barely going.’

      Oh well. That’s the brakes I guess.

      1. A better analogy is that you’re in The Hindenburg and you just collided with the mooring mast.

        Oh, the humanity!

    2. “These analogies by REIC shills desperate to spin the bad news are going from lame to ludicrous.:

      You use what works. These analogies work because the nation is populated by dummies.

      1. I kinda like this better:
        “Whatsoever you do to the least of my people, you do unto me.”
        Matthew 25:40
        Has a nice ring to it. 🙂

      1. This goes back a long way to the Franklin scandal of the Reagan era and before that…actually probably all the way back to Babylon. I wouldn’t expect too much from the Epstein investigation. There are too many powerful people who are either compromised or willingly committed to darkness. In DC, you’ve got the Gray Old Perverts and the Deviant Evil Molesters. In the words of the inimitable Kinky Friedman, if you want to understand politics, analyze the derivation of the word: poly as in many and ticks as in blood sucking parasites.

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