A Clear Signal That The Peak Of The Market Has Passed

1. No room for international crater today, I’ll have to catch up this weekend.

2. ‘They estimate some $2.6 trillion of U.S. household debt is subprime’

   Eat yer crowz jingle male.

   1. Is that a lot?

   2. ‘They estimate some $2.6 trillion of U.S. household debt is subprime’

      Noooooooooooo!

      Most stringent lending requirements ever……

      1. You never know who is running around naked on the beach until the financial tsunami tide washes out to sea.

   3. “…They estimate some $2.6 trillion of U.S. household debt is subprime’…”

      Some fun factoids.

      ($2.6 trillion U.S. household debt / population of usa = 327.2 million in 2018) =~ $8,000 for every man women and child (per capita) in the USA.

      The average American household consisted of 2.53 people in 2018

      (2.53 * $8,000) = $20,240 = Average *household* subprime debt

      Median (not mean or average) net worth of US households. (Median [those at the 50th percentile] is often considered a better measure than mean which is skewed by the Ultra Wealthy)

      Per Federal Reserve’s Survey of Consumer Finances. Median household net worth = $97,300

      ($20,240 / $97,300) = 20.2%

      As many as 44.7 million Americans have student loan debt, according to a 2018 report by the Federal Reserve Bank of New York. The total amount of student loan debt is $1.47 trillion as of the end of 2018 — more than credit cards or auto loans.

      Anybody see any issue(s)? <:{{{

      1. Thanks for the maths! No issues here! /s MMT will be awesome and we won’t end up like Venezuela or Zimbabwe (or Puerto Rico, or IL, or NY, or NJ, or CA, or USA). Wait a minute. $ to infinity and beyond!

         1. MMT will make everyone a millionaire. Of course, it will cost $3 million to fill a pickup truck

   4. eet up Jingle_Fraud. eet up.🤣

      1. I’ll be enjoying my filet at Ruth’s Chris when I close the sale this month. Closing dinners are the best!

         1. You got yours, that’s all that matters – to you. Be sure to double up on the crow.

   5. That’s a lot of sub prime. It was $1.3 trillion in 2007, so it’s double that now.

      When I close the sale of this next house by the end of July, I’ll be done selling. It went under contract to the first person to see it.

      1. You got nothing.

3. “It had been luxury housing and we backed way out of that, because I feel there’s a limited market for $4,000-a-month apartments,’ he said, indicating what was planned before was essentially a rental alternative to buying million-dollar downtown condos.”

   Luxury home builders and luxury multi-family builders are all competing for a tiny sliver of the market that doesn’t seem to be expanding. Smart builders would figure out a way to build affordable. You’ll have no problems selling or filling up those multi-family units.

   1. They paid too much for the land. Unnoticed by the MSM, land prices all across the US doubled or tripled in just a few years starting around 2011. In NYC commercial land prices doubled from 2014 to 2016. BTW this tower in foreclosure above is one of those foreign visa deals

      1. Definitely. Milton Friedman said, “That which you tax you get less of, that which you subsidize you get more of.” I’ve been in favor of a vacant land tax. We’d get less inflated land hoarders. This isn’t a new argument. Henry George made it in 1879 in “Progress and Poverty”:

         [He] argued that “because the supply of land is fixed and its location value is created by communities and public works, the economic rent of land is the most logical source of public revenue.”

         1. We already have the economic rent of land … it’s called property tax.

            How about a progressive tax, based on the amount (contiguous?) land you own? I guess counties municipalities could decide on limits, or require improvements within a certain time frame, or other conditions.

            1. We already have the economic rent of land … it’s called property tax.

               I am talking about a tax on vacant, unimproved land.

               How about a progressive tax, based on the amount (contiguous?) land you own? I guess counties municipalities could decide on limits, or require improvements within a certain time frame, or other conditions.

               This would be a monumental and fantastic shift if something like this could pass. We already have a standard deduction that applies equally to everyone when it comes to income. You could make a standard deduction of sorts for property tax and then have a progressively increasing amount based on how much one owns. Land hoarding near prime economic areas is not the same as beanie baby hoarding since land near thriving urban areas and where jobs, schools, public services exists is a positional good of sorts.

            2. I am talking about a tax on vacant, unimproved land.

               Property tax applies to that already.

               There are some beautiful undeveloped areas in the Thousand Islands. Preserved by the heirs of Victorian purchasers in their natural state. The locals appraise them not as undeveloped land, but according to their “best use” potential, as if they were fully developed.

               Their greed will tend to destroy the old forest.

            3. Property tax applies to that already.

               True, but what I am talking about is a progressive property tax whereby the more property one owes, the higher the effective rate goes. It’s a little bit of the same principle that the Canadians are using to prick their housing bubble by taxing foreign owned properties differently. We could agree that everyone should have the ability to own some amount of property with very little property tax rate. Call that the standard property deduction. But after that set threshold is exceeded, then apply a progressively steeper tax rate. If Chicago imposes a 2.1% property tax, limit that to 1 acre or something. But after that 1 acre is exceeded, start increasing the property tax rate.

               Write-offs and abatement could already apply for conservation easements. But too often this is done not in the name of preserving nature, but in the guise of nature-friendly policies that are really just protecting the mega mansion/compounds of the wealthy. I know for a fact this is being done by several of the Utah billionaires.

            4. Wow, what a great idea. First, we make it impossibly expensive to develop land with regulation, NIMBYies, etc . . . Then we tax people (more) for not developing their land. And Milton Friedman is supposed to approve? We are in crazy town.

            5. First, we make it impossibly expensive to develop land with regulation, NIMBYies, etc . . . Then we tax people (more) for not developing their land.

               Let’s just relinquish property rights and give the government the land.

            6. This would definitely not be popular with the libertarian crowd. But at the same time, the supply of land clearly is fixed. Buying and hoarding empty land is not in the public interest.

               That’s why I said large amounts of contiguous land. A quarter acre with your primary home, sure. 160 acres for a future homestead or retirement estate, sure. Or even a plot of 160 acres in every state. But what OAM is talking about is buying thousands of acres 40 miles outside the city limits and doing NOTHING with it, maybe not even farming it. Just sitting on it for generations and wait for the local gov to come groveling to buy the land. I don’t see a problem with some speculation taxes on that.

               Heh, just had a thought. Even if voters can resist a speculation tax on raw land, they can’t stubbornly hold on to that land forever. If a city needs hoarded land for economic development, they can forcefully purchase it for market value under eminent domain, pursuant to Kelo vs. City of New London.

            7. https://www.businessinsider.com/map-billionaire-doomsday-preppers-2017-6

               where billionaires buy land

            8. This would definitely not be popular with the libertarian crowd.

               I thought the absurdity of my comment would have been self-evident. Apparently, it wasn’t.

            9. That’s why I said large amounts of contiguous land.

               As long as these things would never possibly apply to you, it’s all good. Probably you wouldn’t think a punitive tax on your empty bedrooms was such a great idea.

            10. Just sitting on it for generations and wait for the local gov to come groveling to buy the land. I don’t see a problem with some speculation taxes on that.

                If this is what I choose to do with my land, why can’t I do that? I like open space, I want access to pristine water, so I keep my land open. Do I not have the rights to do as I please with my land?

                You could make your same argument against holding dollars. Sure, one or two hundred dollars, no worries. Wait, you’re just sitting on $1k+??! Tax the crap out of it, you evil horder!!!!!

                Rather than try to take away peoples’ property, why don’t we first work on eliminating the graft and corruption that allows people to amass it illegally/unethically. Maybe once we’ve solved that we can look at other approaches, but just punishing someone for acquiring wealth isn’t representative of freedom in any way, shape, or form.

            11. “But at the same time, the supply of land clearly is fixed.”

                As is the number of water molecules on the planet Earth. Help! We’re going to run out of water!

            12. “…why don’t we first work on eliminating the graft and corruption that allows people to amass it illegally/unethically.”

                Hear, hear!

            13. Let’s just relinquish property rights and give the government the land.

                We are very well on our way to relinquishing property rights for the vast majority of people as the wealthy consolidate more and more of the available property. This isn’t about taking any ones $1k saved up or taxing someone out of their modest home, it’s about billionaires buying up vast tracts of land and eliminating the ability for the public to access it for fishing, hunting, camping, ATVs, hiking, etc.

                Who Gets to Own the West?
                A new group of billionaires is shaking up the landscape.
                New York Times
                June 22, 2019
                Julie Turkewitz

                “The purchase also placed the Wilkses high on the list of well-heeled landowners who are buying huge parcels of America. In the last decade, private land in the United States has become increasingly concentrated in the hands of a few. Today, just 100 families own about 42 million acres across the country, a 65,000-square-mile expanse, according to the Land Report, a magazine that tracks large purchases. Researchers at the magazine have found that the amount of land owned by those 100 families has jumped 50 percent since 2007.”

            14. about taking any ones $1k

                Oh what a relief. This is about enough to take care of a family for a couple of weeks at poverty level. Their wealth, you feel shouldn’t be taken.

                Why would someone become a billionaire running a business that only makes huge losses and is government subsidized?

                Why would someone with a lot of money want to buy up unproductive land rather than invest in productive capital assets? Why would people with little money want to go deeply into debt to imitate this strategy? Why would the government subsidize this activity?

                Is the government actively redistributing wealth to the few? Would this same government given more powers of confiscation behave in the opposite way?

                History says no.

            15. Oh what a relief. This is about enough to take care of a family for a couple of weeks at poverty level. Their wealth, you feel shouldn’t be taken.

                That was a reference to drumminj’s comment about “taxing the crap out of an evil hoarder” for having $1k.
                
                Is the government actively redistributing wealth to the few? Would this same government given more powers of confiscation behave in the opposite way?

                History says no.

                We are reading different versions of history then. The amount of inequality in our country is as high as its ever been. When top marginal tax rates were 70% to 90% there was a much healthier version of capitalism. When capital was taxed higher there was much less speculation, stock buybacks, and financial shenanigans masquerading as productive enterprises.

            16. That was a reference to drumminj’s comment about “taxing the crap out of an evil hoarder” for having $1k.

                Surely you see that it’s a question of degrees. And you feel qualified to say what is “too much” and okay to take.

                The point I (and I presume Blue) are making is that property rights don’t truly exist when you can simply shift the threshold. And what right have you to judge what I deserve and what I don’t???

            17. When capital was taxed higher

                I believe you’re confusing correlation with causation. So many other factors at play/things that have been different in the past 10-20 years.

                Curious to see the argument that the tax rate is the issue, vs, say…greater centralized power and corruption at the federal level, loose monetary policy, TBTF banks, etc etc….

            18. The point I (and I presume Blue) are making is that property rights don’t truly exist when you can simply shift the threshold. And what right have you to judge what I deserve and what I don’t???

                In a democracy, this is for society to decide. Again, I am not talking about extremely high taxes on the widow’s mite. We’re talking about high taxes incomes of over $250 million+. I believe in the progressive tax system. It has worked better when it was more progressive that it is now. The very existence of taxes don’t imply the abolition of private property. Taxes and incentives matter greatly and can change behavior. It is why we have had a flood of stock buybacks after the TCJA was passed. It is why charitable giving rises when it can be deducted. It is why housing is inflated because of the MID.

                As for whose right it is to judge, you might very well say that about any taxes. Whose right is it to take away “my” property via income tax, sales tax, or any tax?

                I believe you’re confusing correlation with causation. So many other factors at play/things that have been different in the past 10-20 years.

                Could be, but I don’t think so. Yes, correlation does not imply causation, but it is a prerequisite for causation to be there. I believe that this was causal:

                https://www.nber.org/papers/w17616

                “The macro-evidence from 18 OECD countries shows that there is a strong negative correlation between top tax rates and top 1% income shares since 1960, implying that the overall elasticity is large. However, top income share increases have not translated into higher economic growth. US CEO pay evidence shows that pay for luck is quantitatively more important when top tax rates are low.”

                Curious to see the argument that the tax rate is the issue, vs, say…greater centralized power and corruption at the federal level, loose monetary policy, TBTF banks, etc etc….

                Federal spending as a % of GDP is roughly the same for the past 40 years. The government hasn’t gotten that much bigger. Much of the other things you cite are obvious issues, but the degree to which they influence inequality is difficult to measure because many of them (e.g. corruption) is non-quantitative. I agree that loose monetary policy and TBTF banks are huge issues nonetheless.

            19. We’re talking about high taxes incomes of over $250 million+

                I thought this thread was about taxing undeveloped plots of land? Not sure where income over $250mil comes in here

                Taxes and incentives…can change behavior

                Agree

                It is why we have had a flood of stock buybacks after the TCJA was passed

                Stock buybacks have been increasing ever since they were made legal in 1982, and especially since money became incredibly cheap for companies to borrow. See this chart for the trend: https://www.forbes.com/sites/aalsin/2017/02/28/shareholders-should-be-required-to-vote-on-stock-buybacks/#6c07c6126b1e . Again, correlation != causation.

                Federal spending as a % of GDP is roughly the same for the past 40 years. The government hasn’t gotten that much bigger

                I mentioned centralization of power, not greater spending (or even size) of the fed government.

                Two different things. It’s easier to buy influence when power is centralized, and wealthy donors and large corporations extensively lobby in DC. Do you really not believe this is a contributing factor, and that favorable “regulation”, selective enforcement of laws, and federal monetary support of certain industries may be a large factor in the .01% getting richer?

                You can avoid wealth disparity in at least two ways: 1) tax the crap out of those who make more, and give it to those making less, to level the playing field, and 2) don’t set up an uneven playing field that favors those which already have wealth, backstopping their losses and giving them free money to gamble with.

                It’s clear from your posts that you think greater taxation, more government, and more control is the solution. That the problem up to this point is while we’ve had quite a bit, it’s just not been “enough”.

                I’d suggest the problem is quite the opposite. The government controls too much. It’s picking winners and losers. It’s providing gambling funds to people who get to keep any winnings but not be responsible for the losses. It’s a big stick used to punish and take from those who the masses feel have “too much”, but the only ones affected are those who don’t have so much they can buy influence to protect themselves.

                Take the government’s thumb off the scale.

            20. I thought this thread was about taxing undeveloped plots of land? Not sure where income over $250mil comes in here

                This was in response to Blue’s comments regarding income inequality and tax rates. I want to use the tax code in ways that are beneficial to society at large.

                “It’s clear from your posts that you think greater taxation, more government, and more control is the solution. That the problem up to this point is while we’ve had quite a bit, it’s just not been “enough”.

                That is not really my view. We just see the world differently. There are some instances where I would reduce taxes, some where I would raise them. What I want is smart taxation, efficient government, and smart regulations. I am much more worried about big corporations than I am by big government.

                I want a government strong enough to go after tax cheats, to protect the air, water, and soil from pollution, and to enforce the laws. I don’t view government as the bogey man.

            21. First, we make it impossibly expensive to develop land with regulation, NIMBYies, etc . . . Then we tax people (more) for not developing their land.

                Dan Bongino does an excellent job of describing “new” de facto socialism in Episode 1021 at 35:30.

            22. big corporations…I want a government strong enough

                We have a government that favors the big, the influential, the corrupt and perverted, the elites. Either you want more of this or you want a second revolution. A flying car utopia will not be achieved directly by massive tax increases.

      2. “Now, the residential and retail tower faces both a mortgage foreclosure as well as a UCC action. Prices for the 273 units at the skyscraper range from just over $1.1 million for a studio residence to nearly $7 million for a three-bedroom apartment.”

         What kind of idiot would pay over $1 million for a one-room airbox? Sone New Yorkers must be suckers.

         1. da vieeewwwww da viewwwwwww movin on up…….. we actually had a ground floor apt 1A supers apt with a back yard in Manhattan, now that rare

4. ‘Builders are focused on managing their unsold housing inventory, and many have dialed back their starts to match sales activity…The summer months have been pretty good, but they concede they are having to discount quite a bit to get those sales’

   Each month this goes on mints new FB’s.

   1. Mr. Ben Jones: ” …it just get$ wor$er & wor$er!”

      What will happen once the Federal Fund$ rate is bullied to 0%? (Zero)

      1. Once it dips below 2% you’re not keeping-up with the “basket-of-goods” inflation.

      2. Just how is Trump able to bully the Fed? If he was wrong about the rates it would not cut the rates. The Fed is embarrassed that he was right and actually is late cutting rates, even if it does cut at the next meeting

         1. You’re hallucinating. The Fed should be raising rates.

            1. It’s a very tough call. Raise rates, and risk killing off the economic expansion. Lower them, and risk exacerbating speculative excesses. What’s a poor central banker to do?

            2. The market should determine, if the yields are inverted the Fed needs to cut, if not no need to cut. If inflation gets above the Fed discount rate it needs to raise. It should be simple and transparent any other way encourages manipulation for the .01 percent.

5. An short, excellent read with compelling data:

   Washington Can’t Solve a Housing Crisis That Doesn’t Exist
   Mother Jones
   Kevin Drum
   11 July 2019

   “In other words, virtually nothing in the setup for this op-ed is true. Rents aren’t out of control; housing inventory isn’t low; and rent as a percentage of income is about the same as it was ten years ago. There is no generalized “rent crisis” in America.”

   “Now, there’s no question that a few specific cities have seen big rises. The Bay Area is obviously one, Denver is one, and Seattle is another—though the market has responded recently in Seattle and housing development is now increasing. But if you look at big cities more broadly, there’s not even a generalized urban rent crisis.”

   “I would be delighted to improve housing assistance to the poor, who certainly do pay a large percent of their income in rent. The waiting list for Section 8 housing vouchers, for example, is years-long in most cities, and god knows we should make this program more generous. But can we please stop inventing a “housing crisis” to justify it?”

   https://www.motherjones.com/kevin-drum/2019/07/washington-cant-solve-a-housing-crisis-that-doesnt-exist/

   1. He’s done similar write-ups that I’ve posted here. I’ve got a shorter version: anyone who has ever flown in a big ol’ jet airliner knows there’s no shortage of land anywhere.

      1. You don’t even need a big ol’ jet. Just drive 50 miles from anywhere and there’s nobody, nothing. At least East of the Mississippi. I just drove to visit a relative in a rural area just outside a small city. It’s stunning just how much of the Northeast is nearly unpopulated.

         One of the arguments in favor of excessive immigration is that we have “so much land” that there’s enough for everyone.

         1. There’s enough for everyone in just Texas. Doesn’t mean we’d have a pleasant lifestyle.

         2. Land is not an issue in this country. However water is certainly a limiting factor anywhere west of the Mississippi and in states such as Florida. We are drawing down groundwater in those states where there appears to be plenty of land. California has some open areas precisely because the water was stolen from those areas and sent to LA. We do not need more people in this country particularly the southwest

            1. +1, very much agree

      2. The hundreds & hundreds & hundreds of train.track miles between Truckee, CA & $alt Lake City, UT is knot exactly what one would call: “a high.den$ity $helter.$back zone”

         All.Aboard.Amtrak!

      3. Kevin Drum probably doesn’t believe that the fed put a floor under house prices despite clear evidence. He’s the kind of guy who needs to be issued a hoe and sent to Pol Pot University.

      4. With a globe full of land where 95% of it goes undeveloped, it’s no wonder land is considered “worthless dirt”.

         If you paid more than $500 an acre, you got burned.

         Danville, CA Housing Prices Crater 10% YOY On Plunging Land Prices

         https://www.movoto.com/danville-ca/market-trends/

   2. “An short, excellent read with compelling data:”

      Compelling data. Lots of compelling data. Then, at the very end of the presentation of this compelling data, we are presented with this:

      “POSTSCRIPT: One thing worth pointing out is that it’s just about impossible to get reliable statistics that compare incomes of the poor to average rents of the poor. There’s no question that the poor pay a lot for housing in big cities, but it’s hard to say if that’s gotten significantly worse over the past few decades. It’s also hard to say just how much the average poor household pays.”

      1. There is a big debate on how to measure poverty in general, so
         I do appreciate the fact that the author puts that caveat in. As an aside, there was a great NPR Planet Money story dedicated to the challenge of accurately tracking the homeless as the data has evolved from the “point in time” survey to more real-time measurements. I don’t know if his data is exactly right, but it seems pretty robust. But there may be stuff that isn’t being captured. I do think he is correct about the lack of affordable housing (section 8) vouchers.

         The official poverty measurement didn’t take into account the earned income tax credit and other governmental assistance programs. The supplemental poverty measurement is considered to better capture poverty when cost of living and all transfer payments are included. It is also why California shows up so high:

         https://www.msn.com/en-us/money/personalfinance/states-where-poverty-is-worse-than-you-might-think/ar-BBPnHqL

         1. ““POSTSCRIPT: One thing worth pointing out is that it’s just about impossible to get reliable statistics that compare income”

            Other than that, how’s the play Mrs Lincoln?

            1. “I believe that economists put decimal points in their forecasts to show they have a sense of humor.” – William Gilmore Simms

         2. “There is a big debate on how to measure poverty in general…”

            Economist: “The CPU in your phone is much faster, so despite not having eaten a solid meal in days you’re still ahead of the game, right?”

            1. Yeah, yeah, hedonics adjustments and all that, I get it. I was just curious in his narrative because it doesn’t jive with what I am seeing in my area (greater Salt Lake area). We are not Denver, Seattle, or San Francisco, but affordability is a real concern. Of course Utah is also building the most out of any state, so many rents will not skyrocket. Certainly housing prices have about doubled in the past 10 years.

         3. Eye propose a HB.B ll bar.bee.q @ the beach in San Simeon! (Free parking!)

            “There is a big debate on how to measure poverty in general, …”
            +
            “It is also why California shows up so high:”

            Hear$t Ca$tle only ever had less than < 10 owner occupied residents in its heyday!

            39,747,267
            California is a large state on the west coast of the United States that is home to one of the world's most diverse populations. Our current estimate for California's population in 2019 is 39.75 million$.

6. “UBS’s consumer credit analysts are more concerned about long-term trends because consumers’ finances aren’t recovering as well as their credit scores might indicate.”

   And in related news as the 1% continue to hoover up and otherwise stripmine the remaining wealth of the 99%…

   https://www.bloomberg.com/news/articles/2019-07-12/americans-financial-anxiety-remains-high-despite-strong-economy?srnd=premium
   Americans’ Financial Anxiety Remains High Despite Strong Economy
   By Alexandre Tanzi | July 12, 2019, 7:28 AM MDT

   “Gallup’s annual survey on personal finances, conducted each April, found that 40% of Americans say they are either running into debt or barely making ends meet. And, about one-in-five say they have saved nothing at all for retirement.”

   Everything is awesome, but I think somebody’s a lyin’, since “debt is the new wealth” isn’t working out.

   1. The trend is positive though. If this data is to believed, Americans are less anxious than they were 3 years ago.

   2. “Everything is awesome, but I think somebody’s a lyin’, since ‘debt is the new wealth’ isn’t working out.”

      Bahahahahahaha … Shirley, you jest.

      If debt isn’t working out for you then you are positioned on the wrong end of it.

      1. BTW, I’m debt free and so is our college Sr. Just sayin’. The system sucks, but I don’t accept it. You can imagine my opinion of bankers, present company excluded, of course…

         1. Red, You should be inclusive and not exclude anyone. Unless they are cisgender white male Christians, of course.

   3. And in related news as the 1% continue to hoover up

      There’s a big difference between the 1% and the .01%. Is the engineer at Amazon making $350k/year working 60hrs/week the great oppressor you suggest?

      1. I would say it depends on how NIMBY-ist they are and what they think about zoning restrictions and if they prevent the ability for duplexes, 4-plexes, and apartments to be built in their city.

7. LOL Phil Simm

   Price and tax history
   Price history
   DATE EVENT PRICE
   7/2/2019 Listed for sale $5,300,000(-35.8%)
   12/31/2017 Listing removed $8,250,000–
   5/19/2017 Listed for sale $8,250,000(+432.3%)
   5/25/1999 Sold $1,550,000(+163.6%)
   6/24/1997 Sold $588,000(+110%)

   Tax history
   YEAR PROPERTY TAXES TAX ASSESSMENT
   2019 $53,529– $4,402,000–
   2018 $53,529(-25.9%) $4,402,000–
   2017 $72,237(+2.6%) $4,402,000–
   2016 $70,388(+1.7%) $4,402,000–
   2015 $69,199(+1%) $4,402,000–

   1. Intercepted!

   2. To be fair, Zillow says the house was built in 2002. So that jump from $1.55 million to $8.25 million includes the new structure.

      That said, what a POS. From the pic you can tell right off that it was an early-bubble era soulless McMansion. For that kind of money, I would buy a late 19th century Victorian or early 20th century Tudor revival or Craftsman bungalow estate and renovate it to the hilt.

8. “On the residential side we’ve already seen a fairly significant uptick in King County of listings above $1.5 million”

   Trickle down, baby!

   Always starts with the rich. Next, your house.

9. It’s all fun and giggles for the cuts on the million+ housing, but i don’t see NO cuts for the average working schmuck paycheck-to-paycheck type of housing, you know for the people that actually need to live in the houses and pay 50% + of income in rent/mortgage.

   I mean, how many of you care if a house went from 2.5M to 1.9M? this is useless for most people.

   what’s your price range?

   1. “paycheck-to-paycheck type of housing”

      It’s already happening if you care. But you get relief from dozen or more govment agencies and the Fed so it can mask it somehow.

   2. You might have missed the part about the Santa Clara apartments…

      And the Dallas shacks!

      1. * Santa Clara apartments…

         Yeah some apts dropping $150 to $200 per month is no relief in the silicon valley. So what? 2900 to 2699 per shoe box?

         There was an article about Fresno and Sacramento rents increases from all the people moving there and away from SF bay area and LA metro… Those people are fhoooked.
         I guess any drops here and there is progress

   3. Why buy a house when you can rent it for half the monthly cost?

      Buy it later after prices crater for 70% less.

      Poway, CA Housing Prices Crater 28% YOY As Sellers Slash And Slip Deeper Underwater

      https://www.movoto.com/poway-ca/market-trends/

      1. The market is quite bifurcated. The market for larger more expensive homes that are actually cheaper on a square foot basis is slow but the competition for smaller homes that people can stretch their budgets to “afford” is making up a larger share of the market. I see this in the zip codes in San Diego I follow where price per square on the smallest homes is still going up and they sell relatively quickly while the larger homes don’t seem to be selling.

         1. This may be attributed to a shifting of upper wealth tier of housing demand down to lower quality tiers of supply as housing becomes decreasingly affordable. At the tipping point, wealthy people who need to buy a home will opt for a lower-tier home within their budget rather than stretching to purchase a top-tier home, particularly if slowing or negative appreciation is anticipated going forward. This leaves buyers of lesser means competing with wealthier individuals for scarce inventory at lower quality tiers, while sellers of high-end inventory are left high-and-dry unless they are willing to slash their prices.

            1. scarce inventory at lower quality tiers

               It’s like the tide going out before the tsunami hits.

            2. “This may be attributed to a shifting of upper wealth tier of housing demand down to lower quality tiers of supply as housing becomes decreasingly affordable.”

               Any fact to back up this opinion? I doubt this is true.

            3. Maybe the new rules on tax deductions are affecting the higher end more. You can’t deduct those huge mortgage interest payments anymore.

            4. The high end is unquestionably being hit by the $10K SALT cap AND the $750K limit for MID.

         2. I’m seeing this as well now that I’m looking at a replacement property for a 1031 exchange. In Poway, $1M is a 40yo dated 2,400sf house whereas $1.35M is a nice 3,000sf house.

            https://www.zillow.com/homedetails/12815-Indian-Trail-Rd-Poway-CA-92064/16747111_zpid/

            https://www.zillow.com/homedetails/16135-Bennye-Lee-Dr-Poway-CA-92064/16747181_zpid/

            https://www.zillow.com/homedetails/16068-Country-Day-Rd-Poway-CA-92064/16749183_zpid/

            https://www.zillow.com/homedetails/16258-Windpiper-Rd-Poway-CA-92064/16749223_zpid/

            1. #3 and #4 look amazing!

            2. “#3 and #4 look amazing!”

               +1 That’s quite a bump in standard of living for $300k.

            3. quite a bump in standard of living

               Most definitely! That difference makes the 1031 exchange much more palatable.

            4. That’s quite a bump in standard of living for $300k.

               I see that all the time in my metro area. You can see pretty shabby places in the high $100ks/low $200ks. But when you go up about $300k more you get significantly better value for money, sometimes like 3x-4x better.

10. “A recent survey found that 58% of Americans are concerned the real estate market will crash, that there will be a ‘housing bubble and price correction’ by 2020.”

    Ben is doing the Lord’s work.

11. To the Moon ALICE!

    https://www.cnbc.com/2019/07/12/bidding-wars-are-heating-up-heres-how-to-win-your-dream-home.html

12. “‘We expect that the price-chopping isn’t over, though, with more discounts to come this summer as sellers try to stand out from the pack and attract a buyer,’ says Out East General Manager Matt Daimler.”

    These sellers should try writing a love letter, maybe include a family picture, and let buyers know how much the house meant to them.

13. Glendale, CA Housing Prices Crater 17% As Mortgage Defaults And Inventory Surge Across California

    https://www.movoto.com/glendale-ca/market-trends/

14. An email was sent to me by an agent today, yes today, not 2016:
    “Write a letter
    Yes, writing a sappy letter to the seller telling them all about you and why you love their home is shameless pandering, but sometimes shameless pandering works. Include a picture and don’t hesitate to include your cute kids or four-legged friends.”

    1. Strange, nothing about feeding the squirrels?

    2. “and don’t hesitate to include your cute kids or four-legged friends.”

       https://www.gettyimages.com/photos/growling-dog

       1. I think this one’s my fave: https://www.gettyimages.com/detail/photo/beagle-puppy-sitting-high-res-stock-photography/186448000

          Cute little beagle never hurt a fly!

          1. I feel all warm and fuzzy now. 🙂

    3. Did you manage this properly and forward the email to the authorities?

15. Not a lot after AOC gets MMT implemented.

    1. AOC is going to be slinging drinks again before too long, after she committed the cardinal sin of calling Nancy Pelosi a rayciss. The corrupt corporate Democrats were never going to let upstarts like the Gang of Four horn in on their patronage and graft rackets, or play the identify politics card against the entrenched Democrat old guard. AOC had her time in the spotlight, but the petulant child act has pissed off too many of the Powers that Be in the Democratic Party establishment. Rest assured, Pelosi and her allies are plotting a Night of the Long Knives to deal with AOC and her posse and remove a serious internal threat to party discipline and cohesiveness.

       1. +1 Nullify the AOC Putsch!

       2. The globalists are making the hard choice right now, Trump economic nationalism or AOC’s brand of socialism which actually does require the rich to pay. The globalists prefer to have the middle class pay for the programs which allow people to survive on the type of wages paid by the Amazons and Ubers of this world. Unless Nancy get AOC in line, the Globalist may just decide four more years of Trump and then reasserting control is preferable.

16. “Phil Simms has put his expansive Franklin Lakes mansion on the market again. The former New York Giants QB first listed his Old Mill Road home for $8.25 million in 2017. The house is currently listed on Zillow for $5.3 million.”

    Does Nike make a “chasing the market down” running shoe?

    1. Yes, it has a white flag on the back of the shoe.

17. ‘It had been luxury housing and we backed way out of that, because I feel there’s a limited market for $4,000-a-month apartments,’ he said….

    Any male REIC shill who predicates his his market assessment on “I feel” needs to be picked in the jimmies on general principle. No need to rely on feelings when the hard data makes it crystal clear how small the market is for ridiculously overpriced “luxury” apartments.

    1. I meant, kicked in the jimmies.

18. Enjoy your home. Time has a way of righting a slumping market. If you can hang on to a home for five to 10 years or more, you improve your chances of riding out a downturn unscathed.”

    Worst.advice.ever. Let me fix the sentence: “True price discovery has a way of asserting itself and laying waste to bubbles. Bail now, because this is as good as it it’s going to get and the longer you hang onto your overpriced shack or chase the market down, the deeper your losses are going to be. Don’t become a cautionary tale like the dipsh*ts who took “advice” from REIC touts and shills. The Everything Bubble is toast and those who bail first are going to get out most intact.

19. Realtors are liars.

    1. Anthropologists just uncovered the earliest known Haiku written in a cave on Mt. Fuji in Japan circa 3000 BC. It reads:

       The wind blows
       The snow flies
       Realtors lie

       1. Were there realtors in 3000 BC? (:

       2. I guess that means we have a new dubious “oldest profession”.

    2. “Realtors are liars.”

       Name a profession that doesn’t lie about what they do?

       1. Looks like we got a troll here.

       2. Prostitution.

       3. “Name a profession that doesn’t lie about what they do?”

          I can’t think of any other professions that research their lies.

          “This listing is special John, you guys can do this.”

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

          17 Biggest Lies Your Real Estate Agent Might Tell You When Buying a

          Lauren Hamer
          December 7, 2017

          1. That wall probably isn’t load-bearing

          https://www.cheatsheet.com/money-career/lies-real-estate-tell-when-buying-home.html/

20. Although nobody raised their hand for Dede Rogers…

    Every Dem on Debate Stage Endorses Publicly Funded Health Care for Illegal Immigrants

    By JACK CROWE
    June 28, 2019 8:23 AM

    https://www.nationalreview.com/news/every-dem-on-debate-stage-endorses-publicly-funded-health-care-for-illegal-immigrants/

    Remembering Dede Rogers

    By: Dorothy Rodgers-Abbey

    My Daughter, Mentally Ill and Homeless, Has Passed Away at 60

    Dorothy Jo (Dede) Rogers died instantly when she was struck by a car in Huntington Beach, Cal. on March 9, 2019. She was born July 8, 1958 in Greenwich, Conn.

    Her illness became graphically evident when she burned our family home to the ground on September 6, 1980 at age 22. After the fire, I met with Dr. Robert Daly, Bridgeport, (The Deinstitutionalization of Mental Hospitals in the United States) He said that Dede’s future life would be most difficult because of the closure of mental hospitals, inadequate replacement facilities and prohibitively expensive private hospitals. Dede was diagnosed as bi-polar with schizophrenic tendencies.

    Insurance covered a year’s stay at Highland Hospital, Asheville, N.C. Unfortunately, after this intensive therapy, Dede was released to the wide, wide world with no halfway house or transition plan. She had spent a year in jail for the arson prior to her hospitalization. Thus began a life of homelessness and jail.

    Typically of the mentally ill, Dede self-medicated with alcohol and drugs. As a mother and responsible citizen, I write this obituary to make mental illness a reality in all of our lives, and advocate for an expansive treatment program, now sadly inadequate. The mentally ill person and loved ones tragically have to deal with stigma: individuals are “crazy” as well as their family having “crazy” genes. Mental illness is as real as diabetes or heart disease. It is a disease of the brain that can be treated with public awareness, understanding, and proven medical practice. Mental illness, in one form or another, affects 1 in 5 Americans.

    https://namisantafe.org/remembering-dorothy-jo-rogers/

    1. The US Supreme Court was well intentioned but they made it too difficult to keep people in institutions against their will. The road to hell is paved with good intentions, both the mentally ill and the general public has suffered due to the decision.

21. Carver, MA Housing Prices Crater 20% YOY As Boston Area Housing Inventory Balloons

    https://www.zillow.com/carver-ma/home-values/

    *Select price from dropdown menu on first chart

22. There is no doubt that the top is in, and we are on the way down.
    Bay Area near Apple HQ:

    https://www.zillow.com/homes/San-Jose-CA/4865-Rio-Vista-Ave/19602435_zpid/

    Peak ZEstimate: $1.9M (Jul-Aug 2018)
    Listed 49 days ago at $1.595M
    Price cut to $1.35M
    Now in Pending state
    ZEstimate has now dropped to $1.3M to $1.43M i.e. nearly 25% down from the peak.

    1. Okay, so $1.35M paid-off in 15-yrs so that they can pay the kid’s college tuition. Dad will work overtime on Tue and Thu while mom clips grocery coupons. No problem, right? 🙂

23. Is a China trade deal in doubt?

    Business
    Trump team fears new face on China trade team signals tougher stance
    Chinese Commerce Minister Zhong Shan, regarded by some White House officials as a hard-liner, greets a Bangladeshi delegate in Beijing on July 4. (Pool/Reuters)
    By Robert Costa and
    David J. Lynch
    July 10

    The Trump administration is increasingly concerned about prospects for a trade deal with China, amid an unexpected reshuffling of the Chinese negotiating team and a lack of progress on core issues since the Group of 20 summit in Japan, according to U.S. officials and senior Republicans briefed on the discussions.

    Commerce Minister Zhong Shan, regarded by some White House officials as a hard-liner, has assumed new prominence in the talks, participating in a Tuesday teleconference alongside Chinese Vice Premier Liu He, who has headed the Chinese trade team for more than a year.
    …

    1. If China does not agree to a deal another $300 billion dollars plus worth of goods gets a 25% tariffs. Supply chain moves to Indonesia and Vietnam. China is crushed economically and less likely to have the resources to challenge us militarily. Indonesia and Vietnam’s people have more money and eat better so we sell them the soybeans we use to sell to China. The status quo before Trump was much worse than any of the outcomes to the trade war.

24. Does it seem like the risk premiums on your portfolio HODLings are getting sucked into a black hole?

    And what could this development portend for future risk asset prices?

    1. History has not dealt kindly with the aftermath of protracted periods of low risk premiums.

       — Alan Greenspan

    2. The Black Hole Engulfing the World’s Bond Markets
       By John Ainger
       July 12, 2019, 9:00 PM PDT
       It is growing.
       Photographer: Joel Saget/AFP via Getty Images

       There’s a multitrillion-dollar black hole growing at the heart of the world’s financial markets. Negative-yielding debt — bonds worth less, not more, if held to maturity — is spreading to more corners of the bond universe, destroying potential returns for investors and turning the system as we know it on its head. Now that it looks like sub-zero bonds are here to stay, there’s even more hand-wringing about the effects for mom-and-pop savers, pensioners, investors, buyout firms and governments.

       1. Why invest in a bond that will lose you money?
       …

       1. “The Everything Bubble is toast and those who bail first are going to get out most intact.”

          The negative yields spreading like Ebola through the developed world’s sovereign bond markets are consistent with a collapse of the Everything Bubble.

          Nobody who sees this coming wants to catch themselves a falling knife of collapsing risk asset prices when even negative-yielding sovereign debt can offer a temporary safe haven.

          1. “…those who bail first are going to get out most intact.”

             This was the strategic default crowd, IIRC.

       2. Will sub-zero yields eventually reach American shores, afflicting Treasurys?

          1. Only a totally dumbed-down population of ignorant pukes would buy into such a stupid idea as negative-yield bonds so the answer to your question is a definite yes.

             1. My prediction is for this development to ensue whenever we next experience another major meltdown in risk asset prices.

             2. Only a totally dumbed-down population of ignorant pukes would buy into such a stupid idea as negative-yield bonds

                Something I hadn’t thought about before…with the talk about going “cash-less”, can one remove their savings from a financial institution that offers a negative interest rate? Where might they move it to?

                With cash, you can pull it out and keep it at home (or illegally in a safe deposit box, etc). But in a cashless world, you’re screwed, eh??

             3. in a cashless world, you’re screwed

                Real tangible money might find a use under such circumstances.

          2. My wife just returned from Germany. No shortage of “boiled frog” attitude stubbornly waiting it out!

       3. People that are buying them are thinking the bonds are the least bad alternative. They could invest 1 million Euros in their stock market but they are worried about a stock crash, they could lose 20% or more, they could hide it under their mattress but with all the crime the immigrants have brought that is too risky, they could lose it all. They could invest in their housing which is already 9 times their earnings and set for a crash, they could lose 50% or more. Thus, they decide that a bond that is guaranteed to lose them only .2 percent per year looks good. Wait for the 50% crash in housing and then buy a house with the money from the bond. It is not without logic given their circumstances.

          1. ABQDan has the right of it. Bonds look like the smartest kid in the dumb row.

          2. Totally agreed with you (for once 🙂 ). The negative yields are a risk asset crash insurance premium that Eurozone sovereign bond buyers are willing to pay.

          3. “Thus, they decide that a bond that is guaranteed to lose them only .2 percent per year looks good.”

             This part is incorrect. If yields get sucked further down the black hole, then today’s buyers will earn a capital gain. With a little luck of timing, such gains could prove especially large at an opportune time to reallocate into equities when they are on sale at a deep discount.

             1. The other potential sources of capital gains are with respect to Euro deflation or relative currency appreciation. For example, if deflation takes hold, the bonds will be repaid in Euros with increased real value compared to when they were purchased. And if the Euro appreciates relative to the dollar, then U.S. investors in Eurozone bonds will reap a currency conversion gain over time.

       4. Another answer to question 1. :

          Eurozone bond investors expect that some combination of Euro deflation or currency appreciation relative to rival currencies will offset the negative yields to provide a positive real return.

25. Interesting article and graph:

    https://moneymaven.io/mishtalk/economics/housing-bubble-reblown-last-chance-for-a-good-price-was-7-years-ago-QG1On8G8NECXH1co69i64Q/

    1. Sounds about right, as the Fed’s Housing Bubble reflation efforts kicked in circa 2012. Several work colleagues bought then, and came out alright over time.

26. Winter Park, FL Housing Prices Crater 27% YOY As Boomer Reitrement Trend Ends

    https://www.zillow.com/winter-park-fl/home-values/

27. The strain of Housing Bubble 2.0’s astronomical increases in California living costs are increasingly impacting two groups:

    1) Homelessness is ever more prevalent, due to families without sufficient income or financial wealth to get onto any rung of the property ladder. The homeless community is unavoidably visible in public spaces of any sizable metro area.

    2) Comfortably housed Middle Class families with children and two full-time adult workers are finding themselves unable to make ends meet, and moving out of state in order to maintain household budgets and living standards.

    1. I can personally attest to both of these developments. Every time I enter a downtown area in any California metro, it feels like I have entered a homeless camp. And many younger middle class two-earner families we know are moving out of state, having given up on ever finding a comfortable level of financial security here.

       1. Growing up, most of my cousins in San Diego/So Cal area used to look down at the Utah clan as kind of backwards (probably true). They were the cool ones and were just so far behind them. Funny how most of them live here now.

          1. Many of the families we knew over the years have relocated to Utah.

    2. “A new life awaits you in the off-world colonies! A chance to begin again in a golden land of opportunity and adventure!” —Bladerunner

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