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Buyers Are Able To Secure Additional Discounts On Properties That Are Already Reduced

Three reports from the Times of London in the UK. “House prices in London fell by 4.4 per cent in the year to May — their sharpest fall since August 2009, according to the Office for National Statistics. It was the 11th successive month that the ONS year-on-year comparison showed a decline.”

“Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: ‘The downturn in London probably isn’t a sign of an impending slump elsewhere but instead reflects the slowdown in net migration, a glut of newbuild flats and valuations correcting from excessively stretched levels.'”

“Property prices go down as well as up. Even a self-confessed novice investor like Jake Turnbull knows that. However, since a nationwide collapse in prices of more than 30 per cent seemed unlikely to the public sector worker, about four years ago he decided to place a ‘significant amount’ of his savings into a company called Saving Stream.”

“The peer-to-peer lender crowdsourced funds from ordinary investors and lent the money on to businesses in the form of short-term bridging loans. In an era of record low interest rates, its pitch was an attractive one: it offered returns of up to 12 per cent and said that investors could act with ‘peace of mind’ since it secured their borrowings against property and left plenty of headroom. Loan amounts never exceeded ’70 per cent of the open market value,’ it said.”

“‘I invested on the basis of that, I thought it was a safe bet,’ Mr Turnbull, 37, says. He wasn’t alone. Now he finds himself among about 9,000 investors facing hefty losses on the more than £150 million of outstanding debt arranged by the platform.”

“Families are being stuck with homes funded by risky loans because a government-backed holding company is blocking their attempts to sell them and pay off their debts. Borrowers in negative equity, lumbered with 125% interest-only mortgages and high-interest equity release deals, have been pleading with UK Asset Resolution (UKAR) — set up by the Treasury — to settle their debts.”

“However, UKAR has been refusing to negotiate settlements — sending one couple to the brink of bankruptcy. To compound matters, the borrowers say UKAR has almost non-existent customer service, takes weeks to answer questions and communicates only by letter.”

“‘I don’t understand why they won’t let me pay off what I owe them — I’ll go bankrupt,’ said Kate Wilson. UKAR will not allow her to sell her house in Carlisle so she can escape her interest-only mortgage, which costs £550 a month. ‘I admit I was naive when I took out the loan, but I have always paid my mortgage and now I just want to sell the house and move on.'”

“Wilson, 42, admits she made a dreadful mistake when she first bought her house in Carlisle. Aged 30, she and her partner at the time were desperate to buy. They did not have a deposit so took out a 125% interest-only deal with Northern Rock, borrowing £161,000 on a £129,000 property. The loan is now on a rate of 5%; she has never missed a £550-a-month payment.”

“When Northern Rock collapsed, her loan was first moved to a bad bank called NRAM, and then to UKAR. Her house has plunged in value and is now worth £95,000. She has repaid some of the original loan but still owes £132,000. She has paid an estimated £70,000 in interest.”

“After putting the house on the market last October, she received an offer of £95,000 in May. But UKAR won’t let her sell the house unless she has the savings to cover the £37,000 shortfall. ‘I’m not allowed to rent it. I want to get rid of it and pay off every penny I owe,’ said Kate. It has been flooded, leaving her with insurance bills of £200 a month.”

From BBC News. “Detached homes in London fell in value by more than £50,000 in a year, according to official figures, driving the slowdown in UK house price growth. Typically, this type of property cost £903,088 in May last year, but fell by 6.1% to £847,998 by this May, Land Registry figures show.”

“‘The scale of London’s fall is also a reminder of the definitive shift in the dynamic in the capital,’ said Jonathan Hopper, managing director of Garrington Property Finders. ‘Buyers are now setting the tempo, dictating terms in price negotiations and frequently able to secure additional discounts on properties that are already reduced.'”

This Post Has 107 Comments
    1. During the Target store dispute conservatives which warned about that were condemned

  1. I would sleep in my car before I signed up for anything like that. How could you not think you would end up getting screwed?

    1. “I would sleep in my car before I signed up for anything like that.
      How could you not think you would end up getting screwed?”

      For a through and complete answer to this question I suggest you start by asking people who are now sleeping in their cars.

      1. I think her partner was worried about not getting screwed hence the partner agreed to the debt

  2. “Property prices go down as well as up. Even a self-confessed novice investor like Jake Turnbull knows that.”

    Check.

    “However, since a nationwide collapse in prices of more than 30 per cent seemed unlikely to the public sector worker, about four years ago he decided to place a ‘significant amount’ of his savings into a company called Saving Stream.”

    And he did this because …?

    “The peer-to-peer lender crowdsourced funds from ordinary investors and lent the money on to businesses in the form of short-term bridging loans. In an era of record low interest rates, its pitch was an attractive one: it offered returns of up to 12 per cent and said that investors could act with ‘peace of mind’ since it secured their borrowings against property and left plenty of headroom.”

    Returns of up to 12 percent with peace of mind. Check. (Reminds me of my idol Bernie Madoff)

    “Loan amounts never exceeded ’70 per cent of the open market value,’ it said.”

    Open market value which may drop like a rock.

    “‘I invested on the basis of that, I thought it was a safe bet,’ Mr Turnbull, 37, says.”

    Twelve percent return = a safe bet. Lol.

    “He wasn’t alone. Now he finds himself among about 9,000 investors facing hefty losses on the more than £150 million of outstanding debt
    arranged by the platform.”

    What a bunch of idiots. Clone them.

    1. 12% “guaranteed” return is always a warning sign/red flag. Ponzi territory.

      1. Of course banks are getting 18%+ on credit card balances while paying savers maybe 2.5%. Nice work if you can get it.

        1. “Nice work if you can get it.’

          I resent and I am triggered by your use of the word “work” as it is used here.

          “Work” is a word that should be applied to activities of the borrower, not the lender. “Reap” is a more suitable word to describe the activities of the lender.

        2. “Of course banks are getting 18%+ on credit card balances…”

          And those consumers are perfectly happy to pay that. Nobody put a gun to their heads and forced them to establish a credit card account, borrow money with the credit card, and run a revolving charge balance.

        3. I actually get 1-4% on all purchases I make with a credit card. I am not being taken advantage of at all.

          1. I also benefit from this arrangement. Arguably though, we still are incurring a cost in inflated prices as those selling goods and services have to markup their items in light of merchant fees. Just because we don’t see the cost doesn’t mean it isn’t there. Credit card fees are a form of rent seeking that is insidious.

          2. “…those selling goods and services have to markup their items in light of merchant fees.”

            Good point!

          3. You are getting taken advantage of by paying cash most places and not getting those benefits. You pay for the benefits whether you use them or not in the higher prices at the stores

          4. I am not being taken advantage of at all.

            Sure you are. You’re likely paying 5% more for the same product so that the vendor can accept your credit card but still make a profit.

            Do you think the vendor or the bank are offering you a deal that doesn’t make them each money????

            You are losing in this, they’ve just duped you into thinking you’re coming out ahead.

  3. “When Northern Rock collapsed, her loan was first moved to a bad bank called NRAM, and then to UKAR. Her house has plunged in value and is now worth £95,000. She has repaid some of the original loan but still owes £132,000. She has paid an estimated £70,000 in interest.”

    Still cheaper than renting!!!! 🙂

  4. London price falls are like announcements that Bill Gates is giving away all his money.

    London housing market weakened long before Brexit vote

    “The number of houses brought and sold in London has dropped since 2014, long before Britain’s vote to leave the European Union. This is mainly due to reforms on stamp duty, a tax on residential properties worth £125,000 (Dh573,200) or more in the UK.”

    https://www.thenational.ae/business/property/london-housing-market-weakened-long-before-brexit-vote-1.887828

  5. ‘The downturn in London probably isn’t a sign of an impending slump elsewhere but instead reflects the slowdown in net migration, a glut of newbuild flats and valuations correcting from excessively stretched levels.’

    If he keeps the blinders on, perhaps he can continue to ignore the concurrent, ongoing slumps in Australia, Canada, California, New York City, and many other corners of the developed world economies.

    1. By contrast, California may not be a good retirement choice. By the way, what mysterious anti-gravity economic force pushed up home prices above wages in 70% of the largest U.S. counties?

      America’s 25 least affordable housing markets: California home to 17 of them
      Michael B. Sauter | 24/7 Wall Street Updated 4:10 a.m. PDT June 20, 2019

      Housing affordability in the United States is getting worse, with some experts even calling it a crisis. According to a new housing report, median home prices in the first quarter of 2019 were not affordable for average wage earners in over 70% of the nation’s largest counties.

      1. “what mysterious anti-gravity economic force pushed up home prices above wages in 70% of the largest U.S. counties?”

        HGTV.

      2. ” …what mysteriou$ anti-gravity economic force pu$hed up home price$ … ”

        Thee Wanker.Banker$ life.$aving “lender-of-la$t-resort” : NON.gubermint, U$ taxpayer dependant, FED Fund$ Re$erve.

        Tran$ferable Trouble$ for the now named/ branded: “ye$, I’m a “bad.bank”. Here’$ how I got here … back @ the $helter.$hack “Cri$i$ of 2008” I bet for fund$ help, ’cause “financial.thing$” got me$$y kinda OVERNIGHT!

        “As usual this agreement remains $ubject to variou$ condition$ and approval$,” the French bank said.

        Deut$che Bank was one of several banks that benefitted when hedge funds fled Bear Stearns’ prime brokerage at the onset of the 2007-2008 global financial cri$i$.

        But more recently, the German lender has been plagued by several regulatory $candals, including one that resulted in the bank paying a $7.2 billion fine for mortgage bonds it sold in the run-up to the crisis and another $425 million for its role in a $10 billion Ru$$$$$ian money-laundering $cheme.

        Meanwhile, any transfer of Deutsche’s prime brokerage unit to BNP was anticipated to take two or three months of due diligence, a second person familiar with the matter said, adding that talks were proceeding as expected.

        As part of its restructuring, Deutsche’s prime brokerage business is being housed in the so-called “bad-bank” along with the other $84 billion assets slated for wind-down or disposal, the person said.

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        Deutsche Bank’s planned sale of prime brokerage unit to BNP still in ‘preliminary’ stage

        Published: July 18, 2019 12:44 p.m. ET

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        Deutsche’s brokerage recently lost five hedge fund clients

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        Deutsche Bank’s DBK, -0.50% planned sale of its prime brokerage unit to BNP Paribas BNP, -0.34% is not yet a done deal as both sides of the proposed transaction keep a close eye on hedge fund withdrawals, two people with knowledge of the situation told MarketWatch.

        The German lender said its prime brokerage unit was on the block earlier this month when it announced its largest restructuring in decades, including cutting 18,000 jobs, exiting stock sales and trading, and bundling $83 billion of assets into a separate unit for disposal.

        Since then, hedge funds clients have pulled about $1 billion in assets per day from the platform since its July 7 restructuring announcement, according to one of the people. Bloomberg earlier this week reported on the large transfers of assets by skittish hedge funds.

    2. Economically depressed, eskimo climate, or racis.

      But I would bet there are plenty of retirees who AREN’T interested in cruising, protesting, and traveling all over creation. Give them a hospital, a church, a 10-year-old car, a Super Walmart, and unlimited internet/streaming, maybe a public garden plot, and they’re good. For such folks, those are good places to hole up.

        1. Yes, it really does. What do you mean by “coastal?” Within 100 miles of the ocean? If that’s the metric, then I’ve lived over half my life away from the coast, 10+ of that in the Midwest. Much of that on the outskirts of small cities, within a 15 minute drive of the cows. Actually I like it better than the cities.

          But the cities is where the $$ is.

      1. ” For such folks, those are good places to hole up. ”

        Fort Bragg! Lots of American flags on Memorial, 4th of Who.lie, Labor & Veterans day! … + clean Pacific ocean salt air (with minuscule China toxicins) & edibles!

        1. Fort Bragg! Lots of American flags on Memorial, 4th of Who.lie, Labor & Veterans day! … + clean Pacific ocean salt air (with minuscule China toxicins) & edibles!

          Oh…something tells me you’re not talking about North Carolina and the 82nd Airborne. I got promoted to E-5 while in the field at Fort Bragg. But there was no Pacific ocean salt air.

    1. Why are they going after this guy only now? He’s been running his L *ahem* Express for years. Were they waiting to entrap some of the bigger billionaire boyz?

      By the way has anyone here even read the book? It’s pretty interesting in the way things are presented.

      1. Who is “they”? I don’t think anybody in power planned to do anything to/about him. But the people who tried to take Trump down failed, and a reporter happened to get new witnesses on Epstein around the same time. So he became a handy weapon to use against some of the original plotters? If you’re going to strike the king it’s critical that you kill him.

        1. If you’re going to strike the king it’s critical that you kill him.

          So we are referring to him as the king now? /s

          1. At least neither he nor his supporters are claiming that his election or reelection is the day that the ocean waters stop rising. The declining sun spots will do that.

        2. By They, I mean the garden variety prosecutors, Department of Justice, Special Victims Unit, etc. Seriously, how this go on this long?

          1. Seriously, how this go on this long?

            I think it was over. He got away with it due to whatever his connection were. Nobody was going to bother with even trying to get him on it ever again.

            But things suddenly changed.

          2. And that’s the key, what changed? Probably a tenuous “association” with Trump. Suddenly Epstein is fair game. I have yet to hear ANYthing about all those associations with the Clintons.

          3. what changed?

            Trump is president. The Department of Justice in under the executive branch. Jeff Sessions, as attorney general, set this ball rolling.

            Two important but overlooked details regarding Trump’s affiliation with Epstein:
            Trump was the only person who cooperated with Bradley Edwards, the attorney for some of Epstein’s victims;
            Lisa Bloom, daughter of Gloria Allred and attorney for Katie Johnson who alleged that Trump raped her when she was 13yo, sought donor cash for Trump accusers

          4. “Trump is president.”

            & as the innocent.as.thee.white.driven.snow.job.

            Right?

          5. as the innocent.as.thee.white.driven.snow.job.

            Trump is unquestionably a womanizer and philanderer. I have yet to see credible evidence that he is a pedophile after 3 years of accusations.

          6. Trump is unquestionably a womanizer and philanderer.

            What boggles my mind is how DJT got the evangelical christian vote with all his baggage with affairs, porn stars, and playboy models. This was the voting block that had it out for Clinton and yet somehow Franklin Graham endorses DJT. Maybe the calculus was worth it for the supreme court justice and a chance to overturn Roe v. Wade.

          7. “What boggles my mind is…”

            How does a guy cheat on (carved from cream cheese) Marla Maples?

          8. What boggles my mind is how DJT got the evangelical christian vote

            Well…obviously they care about those things, but they care about something else more. I think they tend to react more on an instinctive level than long term calculations.

          9. but they care about something else more

            What do you think are the pressing issues for this voting bloc? It’s always been the culture wars to me: abortion, pushing back against gay marriage/homosexuality, and resisting secularism.

            The younger Evangelical Christians see things very different from their parents though on many issues.

          10. What do you think are the pressing issues for this voting bloc?

            I think they see the left as the people they will eventually be in a shooting war with over religious freedom and the bill of rights in general, and “the enemy of my enemy is my friend”. But people avoid saying it out loud in hopes of putting it off as long as possible.

      2. ” …he is a pedophile after 3 years of accusations. ”

        Nothing there?

        Debussy: “music is the space between the notes”

        Addition … Subtraction = same thing
        Multiply … Division = same thing

        Shall eye offer a Nut.cracker Conway “alternate.fact” to support yer lack of actual dtRumpsis intimate knowledge? … Sad!

        1. As an attorney, I understand what Kellyanne Conway meant as “alternative facts.” Attorneys present facts favorable to their conclusions and omit facts unfavorable to their conclusions.

          1. what’s “the fact” that a 6’5″ man drowned in 4″ of water … he’s dead, alter that.

  6. U.S. Treasurys set to succumb to quicksand of rock-bottom yields thanks to trade war: JPMorgan
    By Sunny Oh
    Published: July 18, 2019 11:41 a.m. ET
    JPMorgan says 10-year Treasury yield is headed for zero
    Getty Images

    Don’t expect the U.S. to defy the trap of low interest rates as a growing swathe of government bond markets globally fall into negative yield territory.

    That’s from Bob Michele, head of global fixed income at JPMorgan Asset Management, who says the 10-year Treasury note yield is ultimately head to zero as a global trade war slows the U.S. economy to the point that the Federal Reserve will be forced to cut interest rates to rock-bottom levels.

    “The rally in bonds hasn’t even begun yet,” said Michele, in an interview with Bloomberg TV on Wednesday. “We’re in a trade war, you’re seeing the impact on corporate earnings, you’re seeing the central banks forced to scramble to react to that.”

    His comments follows the release of a paper by JP Morgan strategists saying developed-market economies would struggle to extricate themselves from a world of zero and negative yields much like a “sandtrap.”

    1. ” … $trategists saying developed-market economie$ would $truggle to extricate them$elves from a world of zero and negative yield$ much like a “$andtrap.”

      Baaahaaaaaaaaahaaaaaaaaaaaaa … Help! I’ve fallen DOWn & can’t get UP!!!!!

      Go Puerto R.I.C.O!

    2. “TMUBMUSD10Y, -1.02%”
      That negative sign is suggestive of a loss. Do most Marketwatch readers realize that means that long-term Treasurys actually went up by a sizable amount as yields dropped?

      Opinion: We haven’t seen interest rates this low since before Hammurabi, so what bonds should you buy?
      By Howard Gold
      Published: July 18, 2019 8:56 a.m. ET
      U.S. Treasurys still offer somewhat higher returns — and good protection from a bear market
      AISA/Everett Collection
      The Code of Hammurabi contains one of the earliest records of interest rates.

      A couple of weeks ago Jim Bianco, president of Bianco Research, posted that Swiss two-year bonds, yielding negative 0.91%, were close to their all-time lows below negative 1.0 %, which they hit back in 2015.

      He added these might be the lowest rates ever recorded. I checked with the author of the definitive book on interest rates, Richard Sylla, professor emeritus at NYU’s Stern School of Business, and he confirmed it.

      As negative interest rates spread even to emerging Europe, they’re signaling slowing economies or incipient recessions on the continent. In interconnected global markets, the yields on 10-year U.S. Treasury notes (TMUBMUSD10Y, -1.02%) also could head lower as investors, desperate for yield, any yield, pile into U.S. bonds.

    3. So we are losing the trade war with China and the rest of the world but that is convincing everyone to park their money in the US? The MSM is so desperate to bad mouth Trump they cannot see how illogical and contradictory their arguments. The Globalist world is in trouble because uncle sucker is not being taken advantage of anymore. MAGA

      1. Isn’t Pence a red.hat $upporter of these fellow red.hat $lave.worker $helter.$hack borrower$ in this red.$tate?I

        Next: winning position$ of Indiana farmer$

        “Trade. War$ are ea$y!, … but, … complicated!”

        https://graphics.reuters.com/USA-TRADE-CHINA-RVS%20/0100B08N0JS/usa-trade.jpg

        CUTTING WORKER$ AS $TEEL PRICE$ RI$E

        Despite its all-American image, the RV industry relies on import$ for everything from air compre$$ors and appliance$ to bedding fabric$ and the LED light string$ that have become a popular interior feature.

        The cost of metals $urged dramatically after sweeping tariff$ on steel and aluminum were imposed last year. Those prices have since moderated, but manufacturers say many of the price increases on the metal parts they buy haven’t gone away.

        Elkhart’s RV industry anchors a large network of related transport equipment companies, including utility trailer makers and specialty bus manufacturers, who rely on the same supply chains. Matt Arnold, president of utility trailer manufacturer Look Trailers based in Middlebury, Ind., said the axles he buys had three price hikes and are now 28% higher than before tariffs, while his Chinese tire rims were hit with a 65% tariff.

        (For a graphic on how tariffs drive up trailer costs, see: tmsnrt.rs/2O3HLvO )

        His rim supplier shifted to a source in Vietnam, but those still cost 8% more than he was paying before. In response, he boosted his trailer prices by about 20%, but that tanked sales. So far, he’s had to shutter his Georgia factory, laying off 80 people, and cut about 10% of his workforce in Indiana.

        https://www.reuters.com/article/us-usa-trade-china-rvs/trumps-tariffs-trip-up-the-all-american-rv-industry-idUSKCN1UD18.

        1. The low initial unemployment figured show that it is an outlier. The latest Philadelphia manufacturing index is showing a sharp rebound. The steel and aluminum being used is now much more likely to be American. Undoing 30 years of globalism is not without challenges but at least we are trying

          1. “Undoing 30 years of globalism is not without challenge$ but at least we are trying”

            Mega Wanker.Banker $upported Bidne$$ will alway$ $eek the the lowe$t common denominator$ + highe$t prophetability!

            Why is the $ea the king of a thou$and stream$? … Because it lies below them.

            Visit Di$neyland, it profit$ from a place called Fana$ty.land

  7. AOC is in for some trouble… Scherie Murray was born in Jamaica, West Indies, and came to New York City with her family when she was nine. Growing up in Southeast Queens, Scherie learned early on about the importance of hard work, the value of a good education and the strength of a united community.

    https://scheriemurray.com/#about

      1. AOC is going to be challenged for reelection by a republican black Jamaican with a great resume..

        1. No worries, Thee gop zombie$ will chant for him to go.back! to his $h*thole Island.

          1. More likely MSM and Democrats will attack her for not really being black since she deviates from the approved ideology

          2. Him! … He married his sister then had a sex change. Nut.cracker Conway “alternate.fact” # 986 … Sad!

          3. Democrats will attack her for not really being black

            Maybe Trump Jr. will question whether she really is black like he did Kamala Harris since she hails from Jamaica.

          4. Both from October 2018

            Blacks Like Trump? Don’t Blame Kanye:

            The problem for Democrats is that blacks are leaving their political plantation in increasing droves. In a bit of irony, they are pouring across ideologically open borders. Heeding candidate Trump’s call of “what the hell do you have to lose,” they have found they had nothing to lose by embracing the rising job opportunities, declining unemployment, and reduced crime those racist Republicans were offering compared to life in the gerrymandered inner-city Bantustans where liberal Democrats have held sway for decades.

            African-American Support for Trump Surges to 35%:

            So what’s Trump doing differently? Simply, his administration is working for black Americans.
            It’s working-class blacks that lose the most from illegal immigration, both in terms of lost employment and increased competition driving their wages down. For that reason, it should come to no surprise that twice as many black voters support Trump’s policy on deportations than oppose it.
            In January, the black unemployment rate fell to its lowest point in recorded history, and has continued to fall since.
            Under Obama, the labor-force-participation rate for black Americans across the board dropped from 63.2 percent to 61.7 percent, the percentage of blacks below the poverty line grew from 25.8% to 26.2%, and average incomes declined from $35,954 to $35,398.
            The number of black owned businesses has SURGED 400% under Trump, according to the small business financier Guidant Financial.
            With all that, what’s not to like? It’s a shame the mainstream media doesn’t report on stories like this – but I think we’re all aware that’s by design.

          5. African-American Support for Trump Surges to 35%:

            That 35% was never true support among blacks. Look at the Rasmussen poll again. The 35% is Trumps overall approval rating, not with blacks. His approval rating in one Reuters poll bounced from 11% to 22% in one week after the whole Kanye episode, but only with black men (his approval with black women went from 6% to 9%). The key point though is that most people who watched that awkward interview with Kanye and DJT in the white house realized that Kanye was off his meds and was completely crazy. Many also felt that DJT was taking advantage of Kanye’s mental illness and using him as a political prop.

            Trump got about 8% of the black vote in 2016. Hardly much of anything, but better than the 6% Romney got in 2012. Maybe Trump can improve his standing with black voters. If he gets maybe 12% black support it will be a coup for his camp. Latest Reuters poll shows 82% disapproval, 11% approval, and 5% mixed from black respondents. But it would be a lie of realtor proportions to claim DJT’s support with blacks is “surging”.

          6. Trump Jr. will question whether she really is black

            I’ve never met anyone who’s skin was actually black. So much attention drawn to something by the same people tell us shouldn’t matter.

          7. I’ve never met anyone who’s skin was actually black.

            And I’ve never met a white person who actually has white skin. More and more Americans are going to grow up mixed race. I would be in favor of following France’s lead in explicitly not collecting census or any information based on race (or ethnicity). Human race should be enough.

          8. “I would be in favor of following France’s lead in explicitly not collecting census or any information based on race (or ethnicity). Human race should be enough.”

            How would Democratic politicians keep track of their constituents if race and ethnicity were omitted from the Census questionnaire?

      2. “Scherie Murray was born in Jamaica, West Indies, and came to New York City with her family when she was nine. Growing up in Southeast Queens, Scherie learned early on about the importance of hard work, the value of a good education and the strength of a united community.”

        The Hedleys – In Living Color
        youtube.com/watch?v=0DorVltB6z0

      1. He supported Yellen if you want his role. His administration was one QE after another with trillions of Yellen Bucks created and nine trillion added to the debt. So you asked for it you have it.

        1. Be$t year$ for farmer$: 2013

          Kenyan.Obama … 6 years in … Po$t $hrub American Financial Chernobyl meltdown$

          Keep yer faith, yer gonna need$ it!

  8. “Housing affordability in the United States is getting worse, with some experts even calling it a crisis. ”

    Back in the day lots of builders specialized in starter homes in starter developments. Homes that were built on a budget, with a minimum of frills. Selective upgrades were available if buyers wished, but the basic home usually included a budget for budget appliances, the code minimum of outlets and light fixtures, contractor grade flooring, unfinished basements, and no garages.

    The idea was that the (mostly younger) buyers would add improvements as they could afford them, gradually increasing the value of their property in the process.

    All of my siblings bought these starter homes, and helped each other finish their basements, build their garages, replace their cheap vinyl flooring with nicer materials, etc.

    And they were indeed affordable. I can’t help but believe there’s huge pent-up demand for this type of housing still, if only the builders would content themselves with lower profits.

    1. I can’t help but believe there’s huge pent-up demand for this type of housing still, if only the builders would content themselves with lower profits.

      Of course there is. But you can’t blame the builders for making as much money as they can. The question is why are there perverse incentives that drive the builders away from what is needed and how can we change that?

      1. Easy its been right in front of us for decades. Prime time pricing Do not give any builder, corporation any tax credits or incentives to build luxury housing. But give tax breaks, no city fees to people who build what we should call “blue collar housing” SFH say under $150k or 1 bd apartments for $99k or less. I remember in Astoria they had big promotions 1 bdrm $99K apartments in 1999 now they are 400-500K with upgrades ….luxury pays full price

        1. ^This

          Incentives work. If you made federal loans only available to housing that was 2x – 3x of the median income of a MSA, watch how quickly starter homes would get built. People don’t buy houses, they finance them. With appropriate financing restrictions, you could easily get starter homes built again (though they might be townhouses/rowhouses).

      2. I think the builders are between a rock and a hard place. in any market where there are jobs and demand the land prices are so high entry level housing is impossible to build so they hope they can lure the wealthy. In a lot of the country there are more than enough existing homes many selling for under replacement cost and are perfect for entry level but there are either insufficient jobs or insufficient numbers of young people who want to live there. With cheap land builders could build massive numbers of low margin houses. It is no different than autos Tesla could have been a profitable niche luxury auto makers low volume high profit. It is trying and in my perhaps not too humble opinion failing to be a high volume low margin vehicle producer. Now days in housing there is no where that the high volume low margin housing model works. Not high demand in Ohio due to demographics and not high demand on the coasts because few people can afford the land costs built into any unit.

        1. “Now days in housing there is no where that the high volume low margin housing model works.”

          AQDan, what is the volume #’s for u$ed Rv’$ & Wal-Mart tent$?

        2. Vehicles are built on assembly lines, houses mostly aren’t (yet). Until we get better pre-fab and modular construction where you can make housing like a factory, you can’t really compare housing to vehicle manufacturing.

          Also, housing has a huge input cost that is highly variable, which is land. You rightly point this out, but it bears reemphasizing. Making and selling widgets (or autos) isn’t dependent on land costs.

          Here is an interesting op-ed in the WSJ from a few weeks ago about the inherent tension about the housing “have’s” in thriving urban areas that basically push back against new density:

          “Cities are the engines of U.S. economic growth, but housing costs put them out of reach for many Americans. One major reason is that cities severely limit new residential construction, especially apartment buildings. For example, San Francisco permits tall buildings only in its northeast corner and Bayview, which together comprise less than a sixth of the city. Housing laws that favor tenants also reduce the incentive for developers to supply new apartments, as Milton Friedman and George Stigler observed as far back as the 1940s. Recently New York state approved a permanent extension of rent control in nearly one million apartments, and Oregon has made it more difficult to evict nonpaying tenants.”

          “The problem is that local voters have an interest in restricting the housing supply. Existing homeowners worry that new housing will lower the prices of their homes. Existing tenants want price controls to limit rents. While prospective residents want new housing in cities, they don’t get to vote in local elections.”

          https://www.wsj.com/articles/to-encourage-new-housing-tax-it-11562526409

      3. ” …how can we change that? ”

        That kinda of thinking is knot gonna make Mr.banker a happy camper.

        1. Cap the Salt Deduction and give it a few years and land prices will drop on the coasts and demand will rise in the low tax states. That is how it is fixed and we just need to sit back and eat our pop corn.

          1. ” …land price$ will drop on the coast$ and demand will rise in the low tax state$. ”

            Yeah, cause everything is happening in Alaska & Wyoming, here comes the million$.of.folk$ $tampede!

          2. That is how it is fixed and we just need to sit back and eat our pop corn

            I actually agree with this to some extent, though my time horizon is still about 9 years out. If we get inflation, eventually the MID will be meaningless and the doubling of the standard deduction already made it less compelling to write of mortgage interest.

          3. End cheap and easy credit.

            You don’t solve a problem by putting bandaids on the symptoms.

          4. You don’t solve a problem by putting bandaids on the symptoms.

            Perhaps. We are addicted to cheap credit. But when you have an drug addict, there is a very real risk that a cold turkey end to the drug will kill the patient. You have to ween them off gradually. This is what will likely happen with inflation and the MID. It’s not what I want to happen, but it is what I think will happen with DJT pushing for lower rates and the Fed stepping away from quantitative tightening next month.

          5. You have to ween them off gradually.

            No you don’t. Nobody is going to die from having their credit limit cut off.

          6. Nobody is going to die from having their credit limit cut off.

            If you severely restricted credit in the US in dramatic fashion you would have a massive demand shock that would almost certainly send the US economy into a recession, if not a depression. Metaphorically speaking, it would do great damage to the US economy. Maybe not kill it, but severe injure it.

    2. “… if only the builder$ would content them$elves with lower profit$”

      Hey, my mega dualwheeled die$el belching “pickup truck” & my wife’$ American made BMW convertible aren’t gonna send in the payment$ bye themselve$!!!

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