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I Have Properties That I Think Are Priced Right, And It’s Just Not Happening

A report from the Wall Street Journal. “U.S. home sales slumped in June as home prices for major West Coast cities declined for the first time since 2012, ending the spring selling season with a thud. ‘Prices have dropped in Silicon Valley and sellers just aren’t used to the concept that [prices] can go down,’ said Ken DeLeon, founder of DeLeon Realty in Palo Alto, Calif. ‘There’s just this malaise buyers had of, ‘I feel like it’s gonna drop further.’”

“A deepening slump in expensive coastal markets also shows little sign of reversing. The median price of a home fell in San Jose, Seattle and Los Angeles in June compared with a year earlier, according to Redfin. For San Jose, that was the seventh month of annual price declines. The slowdown in the West Coast markets now spans all price points, including starter homes, which had been the tightest segment of the market. In San Jose, inventory for homes in the bottom-third price tier nearly doubled in June compared with a year earlier, while prices dropped 3.8%, according to Redfin.”

“While price declines are concentrated on the West Coast, other costly markets such as New York, Boston and Denver area also weakening. Denver saw the second-largest increase in starter homes for sale in June, according to Redfin, at nearly 63%. ‘We are entering a buyers market hard,’ said Steve deGuzman, an agent at REX Homes in Denver. ‘Values accelerated so quickly we don’t have a way for the first-time buyer to enter the market.’

The Palm Beach Post in Florida. “Palm Beach County home prices retreated in June after jumping to a post-crash high in May. The median price of houses sold by Realtors last month was $356,990, down from May’s $364,900 and up less than 1 percent from a year ago. The dip might ease an affordability squeeze that’s hampering buyers, but it’s frustrating for sellers. ‘This is a welcome relief for buyers and a caution to sellers who may be overpriced,’ said Jeffrey Levine, President of the Realtors of the Palm Beaches and Greater Fort Lauderdale.”

“Home sales fell in June, typically the busiest buying season in Palm Beach County. Realtors counted 1,692 transactions last month, down from 1,805 in June 2018. It was the slowest June since 2014, when the county’s housing market was emerging from a wrenching collapse. Nearly every economic indicator supports strong demand for homes. ‘We should be throwing a huge party, and of course we’re not,’ says George Ratiu, senior economist at Realtor.com.”

“The disconnect has proven disconcerting for sellers. Douglas Rill, owner of Century 21 America’s Choice, said he’s listing Palm Beach County homes for owners who are confused about why so few offers are coming in. ‘They’re saying, ‘What are you doing wrong?’ Rill said. ‘I have properties that I think are priced right, and it’s just not happening. It’s a little frustrating.'”

The Fresno Bee in California. “The once red-hot California housing sales market is officially now ‘weak,’ state analysts say, but the year-long flattening does not necessarily suggest the state is headed toward an economic downturn. In a brief report issued Monday, the state Legislative Analyst’s Office weighed in on the latest California home sales trends, noting that homes sales statewide in June were down from the same month last year, and notably lower than historic norms.”

“The state analysis, based on data from Zillow, the California Association of Realtors and Moody’s Analytics, estimated 25,900 non-distressed home sales statewide in May. That is below the 28,000 sales number from June of 2018, and below the ‘long-term historical average of 31,400 sales per month.’ Similarly, sales numbers are low in recent months in Sacramento, and sales prices have flattened as well.”

From ABC 7 News in California. “If you want to buy Joe Montana’s mansion in Calistoga, now’s the time. He’s reduced the sale price from $49 million down to $29.8 million.”

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  1. ‘U.S. home sales slumped in June as home prices for major West Coast cities declined for the first time since 2012, ending the spring selling season with a thud’

    It’s sinking in for the REIC.

    ‘Prices have dropped in Silicon Valley and sellers just aren’t used to the concept that [prices] can go down’

    I wonder if Californians have any idea how moronic statements like this make you look.

    1. I wonder if Californians have any idea how moronic statements like this make you look.

      No. They still think that everybody knows they make the most money because they are the smartest. So moronic doesn’t compute.

      1. Santa Rosa Press Democrat
        PD Editorial: California’s shame: 1 in 5 children are living
        in poverty
        One out of every five children in Sonoma County lives in poverty. That reality exists before our very eyes, even if it remains unseen. Most of …
        14 hours ago

          1. Keep cutting rates and pumping those asset prices, baby! Every rate cut and speculative home purchase = more homeless people. Central bankers should be put to death.

          2. Planet Money Episode 913: Counting the Homeless
            Sarah Gonzalez & Sally Helm

            This episode does a phenomenal job at exploring how the point-in-time (PIT) homelessness survey dramatically underestimates actual homelessness. Something to keep in mind when we think about manipulated/inaccurate statistics in the real estate world (e.g. like days on market) and how that plays out in other areas.

            https://www.npr.org/2019/05/17/724462179/episode-913-counting-the-homeless

        2. “One out of every five children in Sonoma County lives in poverty.”

          Raising children is incredibly expensive, so why have children if you’re impoverished?

          1. One of my central operating hypotheses is that the dramatic decline in the number of children Americans are having is directly linked to the cost of housing. The data is there and so are the surveys. Couples report waiting longer and having fewer children than they want because cost of living is much, much higher.

            Toys R Us bankruptcy was about private equity and debt, this is true. But it was also a canary in the coal mine and an inflection point on the radical demographic shift we are living through.

          2. the number of children Americans are having is directly linked to the cost of housing

            Which means it is directly linked to speculative greed. Americans would rather buy a 3,500 ft2 home at ridiculous prices (that will make them rich) than raise a family. Their parents were raised in 1200 ft2 homes.

          3. Which means it is directly linked to speculative greed.

            Maybe. Is it greed if they think that’s the only way they can afford a family? But to support your point they may have a questionable view of “support”. Not only did they grow up in 1200ft^2 houses, they also grew up going to public school. But now everybody’s kid is going to grow up to be a mover and shaker so public school isn’t enough. Private schools cost as much as similar quality college PLUS room and board.

          4. Carl,
            It’s not so much as public schools, as all the AFTER schools. To give some names around here, Berkeley Academy, Bright Minds, MIT Prep (formerly MIT Prep), Think Tank, Insight Education, Best Brains, etc, and they can get pricey, too.

            Private schools vary. In SV for K-8, parochial schools are still ~$7K, other religious schools can be $15K.

            Now stuck up private (The xxxx, e.g. The Harker School, The Quarry Lane School, The Athenian School) are up there, in the $30K-$50K range, but as a fun note, I’ll add the oldest high school in CA is Bellarmine College prep and its sister (Notre Dame),and it’s “only” $22K (and still all-boys).

          5. Post got managed, $8K-12K or so for other religious, $10K-$15K for non-religious (Montessori, Challenger, Stratford, etc).

          6. OK. My only real experience so far is in Asia where as of a couple of years ago the international schools are $40k/yr/student and the wannabe versions run by locals are $20k. And every ambitious parent with any means sees no choice but to spend it.

          7. BTW, private schools in Sacramento area are likely significantly less then SV. And as a personal note, I’ll add that even if I had the $$$, I wouldn’t want to send my kids to a stuck up private school.

        3. exorbitant housing costs have to be a factor in this poverty.

          Well done, Ben/Janet/Jerome, well done…

          1. Housing is the number one expense in every household budget. Hey, I’ve got a great idea, let’s make it even more expensive! Heckuva job, Obama, heckuva job.

            “…So in that earlier generation, houses weren’t for flipping around, they weren’t for speculation — houses were to live in, and to build a life with.

            And unfortunately, over time, responsibility too often gave way to recklessness. You had reckless lenders who sold loans to people they knew couldn’t afford them. And let’s face it, we also had some reckless buyers who knew they couldn’t afford them and still took out loans. And all this created a housing bubble. And especially in some places like Arizona, it was devastating when that bubble finally burst — triggered a recession. Millions of Americans who had done everything right were hurt badly by the actions of other people. Housing prices plummeted.

            By the time I took office, home values had fallen almost 20 percent from the year before. New housing starts had fallen nearly 80 percent from their peak.

            So because of all these actions we’ve been taking, our housing market is beginning to heal. Home prices are rising at the fastest pace in seven years. Sales are up nearly 50 percent. Construction is up nearly 75 percent. New foreclosures are down by nearly two-thirds. Millions of families have been able to come up for air — they’re no longer underwater on their mortgages. (Applause.)

            And just like the crisis hit Phoenix very hard, thanks to some great leadership here locally, Phoenix has also led one of the biggest comebacks in the country. (Applause.) So you should be proud of what you’ve done here. Home prices in Phoenix have risen by nearly 20 percent over the last year. New home sales are up by more than 25 percent….”

            ~Barrack Hussein Obama
            8/6/2013

            https://obamawhitehouse.archives.gov/the-press-office/2013/08/06/remarks-president-responsible-homeownership

      2. Carl, you’re being a little unfair.

        There are a lot people in SV who haven’t seen a true housing downturn (so I’m not counting temporary dips), both American and foreign (e.g. Chinese), and thus expect real estate to quickly recover and shoot to the moon.

        Think about the Chinese experience – it seems every time housing in China starts to correct, the government opens the spigots. OTOH, I saw growing up that housing prices didn’t always shoot up.

    2. ‘Prices have dropped in Silicon Valley and sellers just aren’t used to the concept that [prices] can go down’

      You mean they completely forgot about the last bust?

  2. Also from the WSJ piece:
    ‘The spring selling season is crucial because about 40% of the year’s sales take place in March through June. Falling sales during most of this period have puzzled economists. They struggle to explain why the housing market has remained soft while the rest of the economy has been booming.’

    ‘Borrowing rates have fallen to their lowest levels in two years, wages are rising and unemployment is at a 50-year low. “It doesn’t make economic sense,” said Lawrence Yun, the NAR’s chief economist.’

    Stamp em’ Larry!

    ‘The lack of momentum during the spring could now mean a prolonged slowdown in the market, some economists said. “The demand this cycle is certainly showing signs that perhaps it’s reached its full capacity,” said Ralph McLaughlin, deputy chief economist at real-estate data provider CoreLogic.’

    Wa? Ralph do you mean housing markets don’t go up double digits for a decade, fall a few months and then back to the moon Alice?

    Sacré bleu!

    1. “Falling sales during most of this period have puzzled economists. They struggle to explain why the housing market has remained soft while the rest of the economy has been booming.’

      ‘Borrowing rates have fallen to their lowest levels in two years, wages are rising and unemployment is at a 50-year low. “It doesn’t make economic sense,” said Lawrence Yun, the NAR’s chief economist.’”

      Have these fawking asshats ever considered prices as compared to wages? Good lord, they call themselves economists? Oh, that’s right, eCONomists.

      1. You might have noticed they never use price to income ratios anymore. Last decade it was kinda common.

        1. This clown is an economist and he says “it doesn’t make economic sense” that the housing market is slow? I’ll tell you what doesn’t make economic sense – the high prices you blithering idiot!

    3. Record low unemployment, lower rates than last year, and demand stll down. This to me is a clear sign that once the business cycle turns and unemployment goes up, the bottom will drop out on prices.

      You’re FOOKED Larry. Eat your crow Danielle Kale.

      1. “Record low unemployment, lower rates than last year, and demand stll down.”

        We’re close to learning about what happens after too many hair-of-the-dog hangover cures. Eventually they don’t work anymore.

  3. ‘Prices have dropped in Silicon Valley and sellers just aren’t used to the concept that [prices] can go down’

    ‘It doesn’t make economic sense’

    ‘‘We should be throwing a huge party, and of course we’re not’

    ‘They’re saying, ‘What are you doing wrong?..I have properties that I think are priced right, and it’s just not happening’

    The STENCH of failure!

    1. The only statistic needed to explain what’s happening is that shack prices went up faster than wages for over 90 months.

      1. “… shack prices went up faster than wages for over 90 months.”

        Translation: Magically conjured up equity income went up faster than earned income for over 90 months. Huge sections of the economy depended on this magically conjured up equity income because old fashioned and some-would-call-obsolete earned income just wasn’t pulling its fair share.

        However we have entered the “Now What?” stage of our Miracle Economy, an economy of which seventy percent of it is powered by consumer spending, consumer spending that is directly related to magically conjured up equity income.

        Stay tuned for further developments (and go long on popcorn futures).

        1. ” …an economy of which $eventy percent of it is powered by consumer $pending, consumer spending that is directly related to magically conjured up equity income.

          Stay tuned for further developments (and go long on popcorn future$).

          Chris.Thorn.in.yer.$ide.berg: “NO unemployment, NO HB.B ll $helter.$hacks debacle$!”

          1. The IMF just upped the growth rate for the US this year while cutting the overall world growth rate. Seems like the US is doing something right. MAGA

        2. I keep thinking about that article that professor posted yesterday in the Washington Examiner which is ominous if true:

          “Growth in home prices, the main source of wealth for most Americans, is shrinking, fueling concern that the longest economic expansion in U.S. history is nearing an end.”

          1. Quick, somebody alert the Fed:

            Action must be taken imminently to Make America’s home prices Grow Again (MAGA)!

      2. The Fed and other central banks blew another housing bubble. The distortions and misallocation of capital are massive. The Fed both blows and sucks!

        “it doesn’t make economic sense”

        The crux of the matter: No one cared while the bubble was inflating; fat commission checks rolling in. Now with sales and prices declining so are those checks and it’s a big deal all of the sudden.

        Asymmetric response here based on greed, now turning to fear. Mean reversion and price discovery are a b*tch as many are now on the wrong side of the trade. Worse still, it’s not just housing this time; it’s the everything bubble. Central banker heads should roll.

    2. Boy oh boy, plug Palo Alto real-estate into the NY times buy vs rent calculator. Then plug in Zillows expected appreciation for PA. The answer is hell no rent don’t buy. I think that is the economics of the situation at the moment.

      1. Don’t be silly. Plug in that rents will always go up and that there is no depreciation on a house.

      2. Ca is the state most effected by re prices. Hey already ha b.c. e biz and peeps w money leaving. See how moneywalks.com

  4. Oh dear…

    Justice Department to Open Broad, New Antitrust Review of Big Tech Companies

    Inquiry signals Barr’s deep interest in tech sector, poses threat to companies such as Facebook, Google, Amazon, Apple

    ‘The Justice Department is opening a broad antitrust review into whether dominant technology firms are unlawfully stifling competition, adding a new Washington threat for companies such as Facebook Inc., Google, Amazon.com Inc. and Apple Inc.’

    ‘The review is geared toward examining the practices of online platforms that dominate internet search, social media and retail services, the department said, confirming the review shortly after The Wall Street Journal reported it.’

    ‘The new antitrust inquiry is the strongest signal yet of Attorney General William Barr’s deep interest in the tech sector, and it could ratchet up the already considerable regulatory pressures facing the top U.S. tech firms. The review is designed to go above and beyond recent plans for scrutinizing the tech sector that were crafted by the department and the Federal Trade Commission.’

    https://www.wsj.com/articles/justice-department-to-open-broad-new-antitrust-review-of-big-tech-companies-11563914235

    1. “The Justice Department is opening a broad antitrust review into whether dominant technology firms are unlawfully stifling competition, adding a new Washington threat for companies such as Facebook Inc., Google, Amazon.com Inc. and Apple Inc.”

      No mention of Microsoft these days?

  5. Somebody was complaining about only seeing luxury shacks get hit:

    ‘The slowdown in the West Coast markets now spans all price points, including starter homes, which had been the tightest segment of the market. In San Jose, inventory for homes in the bottom-third price tier nearly doubled in June compared with a year earlier, while prices dropped 3.8%’

    ‘While price declines are concentrated on the West Coast, other costly markets such as New York, Boston and Denver area also weakening. Denver saw the second-largest increase in starter homes for sale in June, according to Redfin, at nearly 63%. ‘We are entering a buyers market hard’

    I post major schlongings primarily because it is a more interesting sign of a bubble popping, like the one Joe Montana just took. But what’s happening at the top runs downward in price categories.

    Besides, I could post a couple hundred prices cuts everyday on 150k or 250k shacks. It would be more than anyone could read.

    1. https://www.ibtimes.com/cnbcs-cash-pad-tv-show-premiere-hosts-jojo-jordan-trailer-cast-2807994

      After competing as a contestant on “The Bachelor” Season 20, JoJo returned to reality TV to once again try to find love, this time on “The Bachelorette” Season 12. It was during her time on this series that she found her fiancé, former pro quarterback Jordan.

      Now, the duo’s going from one reality show to another. After already finding love with each other, “Cash Pad” sees the couple helping others find love…with their housing properties. JoJo and Jordan are taking their hobby of house flipping and using the skills they’ve acquired from their time spent with the activity to help others with their projects.

      What could go wrong?

    2. Prices are falling everywhere. In the high rent districts, ghettos, slums and vacation areas…….. irrespective of the braying, foot stamping and clucking.

      And the realtors are lying about it all the way down.

  6. ” inventory for homes in the bottom-third price tier nearly doubled in June compared with a year earlier, while prices dropped 3.8%, according to Redfin.”

    I guess Yun will have to modify his shortage of lower end homes narrative to “shortage of lower end homes in many regions”

    Yep, move the line in the sand back another notch. Still a few to go before telling plain truth. CNBC next? C’mon Diana you can do it. It wont hurt too bad. Talk to the editor.

  7. Denver saw the second-largest increase in starter homes for sale in June, according to Redfin, at nearly 63%. ‘We are entering a buyers market hard,’ said Steve deGuzman, an agent at REX Homes in Denver. ‘Values accelerated so quickly we don’t have a way for the first-time buyer to enter the market.’

    This video will get them buying like no tomorrow.
    https://www.youtube.com/watch?v=DwAwcnjI2tg

    2. This video will get them buying like no tomorrow.

      I think that video just set my (surgery) recovery back by a week

  8. In all seriousness, the masses are in for a pretty big shock, once the full reality eclipses the press narrative. So far they take stock in the happy talk coming from Yun, CNBC, and numerous REIC types in their localities.

    Pretty easy to see the shifting sands, and evident from this article in the Hbb. Notice the trend in last few months? The curve is starting downward. Next step is acceleration as folks lose confidence. Just like last go around, basically. Feel bad for the unwashed who are yet to experience but will soon enough.

    1. Eeee-bola Palm Beach!

      Once again, the most expensive area falls first. Sign of a bubble popping.

      1. If you remember, there were shills on this blog around March and April claiming all is well and to the moon soon! I was trolling them day and night, and when their BS low interest rate comeback spring selling season faded, they too faded with it!

        YOU ALL TRUMP HATING WISHING THE MARKET TO CRASH LOL

        1. ‘they too faded’

          Remember the one who said, “Vancouver prices aren’t down!”

          Vancouver shack prices have been sinking like a turd in a well for three years.

  9. The Montana house

    “Sadly, it only has 3 bedrooms.

    But it does feature a basketball court, a bocce ball court and a wine cellar.”

    WTF! I was just getting out my checkbook when I found out it only have 3 BR! NO DEAL!!!!

  10. “The Palm Beach Post in Florida. “Palm Beach County home prices retreated in June after jumping to a post-crash high in May. The median price of houses sold by Realtors last month was $356,990, down from May’s $364,900 and up less than 1 percent from a year ago. The dip might ease an affordability squeeze that’s hampering buyers,”

    Affordability squeeze that’s hampering buyers?

    I have been in the market to buy a house in Palm Beach County twice since 1983 (1983 and 2003 – 2012). Neither time did or would a median house price drop from $364,900 to $356,990 have afforded me the ability to buy a house and maintain a financially responsible life.

    1. ‘This is a welcome relief for buyers and a caution to sellers who may be overpriced’

      “I just got a Cadillac and those payments ain’t gonna make themselves!”

      ‘Home sales fell in June, typically the busiest buying season in Palm Beach County…It was the slowest June since 2014, when the county’s housing market was emerging from a wrenching collapse’

      These sorts of comparisons keep coming up.

  11. “While price declines are concentrated on the West Coast, other costly markets such as New York, Boston and Denver area also weakening. Denver saw the second-largest increase in starter homes for sale in June, according to Redfin, at nearly 63%. ‘We are entering a buyers market hard,’ said Steve deGuzman, an agent at REX Homes in Denver. ‘Values accelerated so quickly we don’t have a way for the first-time buyer to enter the market.’”

    Eeee-bola is spreading EVERYWHERE!

    1. Would somebody buy a
      Ford Taurus for. 100 thousand if it was financed at 1% for 30 years? Especially if the Ford Taurus was only worth 25 thousand.

      I’m just saying that the financing of a product doesn’t make it more valuable in present tense.

      Lenders use to figure that 60 percent of the loans would turn over within 7years. I’m sure the turnover is more now.

      The point is why should the present value of a product rise just because it’s financed, especially when in the early years of the loan your payments are almost all interest and very little principal pay down.

      1. People are paying (borrowing) over $80,000 for pickup trucks now, so nothing shocks me anymore.

      2. “The point is why should the present value of a product rise just because it’s financed, especially when in the early years of the loan your payments are almost all interest and very little principal pay down.”

        That would only happen if the marginal bidder was mindlessly willing to pay the absolute maximum amount his monthly income would allow.

        1. But doesn’t that happen all the time? How many people buy furniture at rent to own places? Must happen a lot because they are everywhere. So what are those people doing they are agreeing to rent for x number of months which really means they are paying two or three times the purchase price of the furniture. This is happening for two reasons, one these people do not have basic math skills and two they have no self control. They are five year olds in an adult body. Make due to you can really afford it is not an option for them. These same people are now wanting houses and this is why they want no down payment loans. If they were just hurting themselves it would be bad enough but to the degree they get loans for houses they drive up the prices for sensible people.

          1. This is happening for two reasons, one these people do not have basic math skills and two they have no self control.

            The principle of delayed gratification. But I think the roots of this behavior go deeper. The further someone is from a goal, I think the less they believe there is a realistic chance of achieving it. So it’s not all that irrational for short-term spending on now “in-the-moment” items instead of saving up for something far away and distant. When you feel the deck is stacked against you, often times you take whatever you can in the moment. Not saying this is correct behavior, but I think it helps us understand it better.

      3. Would somebody buy a
        Ford Taurus for. 100 thousand if it was financed at 1% for 30 years? Especially if the Ford Taurus was only worth 25 thousand.

        They shouldn’t. But there is a crucial difference between things that can be made in a factory and housing. With housing, all of the housing “have’s” become somewhat of a cartel of sorts. Sure, they won’t actively admit this, but since their house is their biggest asset, they will prevent more building in the name of protecting “the character of the neighborhood” or “we don’t want apartments” or “too much density”. This is done via zoning and NIMBYism and through city councils. The net effect is to reduce supply and prop up home prices.

        So then you get massively long commutes and “drive ’till you qualify” scenarios. But getting back to my point: there is a fundamental difference in the supply of housing and the supply of widgets in the barriers that get placed in front of house building.

        Keep in mind, I ALSO acknowledge that lax lending, easy money policies, play a huge role in this. The issue is multi-factorial.

  12. ‘There’s just this malaise buyers had of, ‘I feel like it’s gonna drop further.’”

    Malaise? I feel pure schadenfreude at seeing speculators and FBs slipping deeper underwater. The harder the Fed’s asset bubbles and Ponzi markets crater, the better.

    1. Somebody’s got to take a stand against this disgustingly vile crap. These people are mentally deranged.

      1. I’m all for tolerance and acceptance but the absurdity has gone far beyond all reasonableness.

        1. I find if you give a inch, than the mile wants to be taken.

          It’s getting pretty bizarre.

    3. It’s catering to such constituents which virtually guarantees the Democrats are doomed to lose in 2020.

      1. +1 Nice catch!

        “Psychological operations are operations to convey selected information and indicators to audiences to influence their emotions, motives, and objective reasoning, and ultimately the behavior of governments, organizations, groups, and individuals.” —wiki

        1. Let’s boil these words down a bit so as to collect their essence.

          Here …

          1. Dumb ’em down.

          2. Profit.

          1. From the Wikipedia link …

            “PSYOP involves the careful creation and dissemination of a product message. There are three types of products that are used to create these messages. They include White products which are used in overt operations and Gray and Black products which are used in covert PSYOP. White, Gray, and Black don’t refer to the product’s content but rather the methods used to carry out the operation.

            “In order for PSYOP to be successful they must be based in reality. All messages must be consistent and must not contradict each other. Any gap between the product and reality will be quickly noticed. A credible ‘truth’ must be presented which is consistent to all audiences. Primarily it is a component of offensive counterinformation but can be used defensively as well.”

  14. The indicators for market shift are not always big obvious, headline grabbing things.

    If you understand Florida markets, you realize the seasonality. Why spring is big here is that it is the tail end of the tourist season which is generally regarded to be October through April. Flurry of buying is typical before domestic snowbirds and Canadians return home.

    To see a big dropoff in this key metric in Florida means decline of absolute peak. Have not seen same data for my woods here in Sarasota. Clearly there was big uptick from earlier months but not sure how it measured from prior years. Prices on barrier islands have not moved significantly downward yet, but are not appreciating either. Watching closely and ready to buy when prices crash.

  15. Actually just went back to see reference to June in Palm Beach. That may be typical close dates for contracts signed in April.

    1. Only 4 out of 10 people owned homes in the early 30’s. It was a Nation of renter’s. Home loans were based on 50 % down , only 5 year term with balloon payment.

      Apparently in 1934 the FHA created the 30 year note with the 10 to 20 % down payment. The conventional lenders followed and started giving similar loans.

      These loans really took off in the 1950’s.

      But it looks like originally it was a government program during the Great Depression to stimulate buying.

      1. It’s interesting how we have morphed into a society where now buying homes is a “right” and never mind if you can afford it or not.

        I don’t know if one set of people should pay for another set of people to have something they can’t afford.

        In California we are now told that our taxes are going to pay for ilegals health care.

        Really, the government’s power to tax to redistribute wealth is getting abusive.

      3. Reading classic California murder mysteries shows this — in Perry Mason, for example, the vast majority are renters, not owners.

  17. ‘I have properties that I think are priced right, and it’s just not happening.

    You thought wrong dude. Connect the dots. It’s not Fermat’s Last theorem.

  18. In the general news the presidential hopefuls are now saying “Medicare for anyone who wants it .”

    Bernie Sanders is still sticking to “Medicare for all” however.

    How would Medicare for whoever wants it work?
    I think the Medicare for all didn’t gain the traction the Dems thought it would ,so now it’s the old just promise everything.

    1. How would Medicare for whoever wants it work?

      This would be the “public option” that was killed by insurance companies when the Affordable Care Act was launched. The idea would be to allow individuals who had not reached Medicare age to be able to buy into Medicare. It would make private insurance compete vs. Medicare.

      Often when I was in the med-surg unit I would go to care coordination meeting. It was generally a meeting between social work, PT, OT, and case managers in preparing patients for discharge. Sometimes they went home with home health, other times they went to a skilled nursing facility. A lot of what we did revolved around what insurance did. Most patients who had Medicare or Medicaid were a lot better off financially from a coverage point of view than private insurance.

    2. Democrats are all about promising goodies for everyone (“It’s a basic human right”), then figuring out who gets to pay for it and how later (or just never having that discussion)…

      1. promising goodies for everyone

        Reminiscent of junior high student body elections.

    2. but finding a decent home you can afford on a working person’s wage has, in many cities, become nearly impossible.

      QFT

  21. Financial News
    El-Erian: Are central banks losing their big bet?
    Like seasoned gamblers, central bankers may soon discover that not all bets pay off over the longer term
    By Mohamed El-Erian
    July 22, 2019 3:25 pm GMT

    In recent years, central banks have made a large policy wager. They bet that the protracted use of unconventional and experimental measures would provide an effective bridge to more comprehensive measures that would generate high inclusive growth and minimise the risk of financial instability.

    But central banks have repeatedly had to double down, in the process becoming increasingly aware of the growing risks to their credibility, effectiveness, and political autonomy. Ironically, central bankers may now get a response from other policymaking entities, which, instead of helping to normalise their operations, would make their task a lot tougher.
    …

    2. It must be frustrating for the fed to try and resuscitate the economy while simultaneously obligated to pumping a $1-trillion/yr into the middle-east in economic aid, diplomatic, military, etc., that would otherwise be used for badly needed “shovel-ready” infrastructure projects.

  23. Whatever became of Chris “I love crow” Thornberg? Given that the front page of today’s dead tree edition of the Wall Street Journal says, “U.S.Home Sales Sag; West Coast Prices Fall” in black and white, I would think Chris might want to point out that this is unpossible.

        1. I said desirable. Whether any of us agree or not, the Tesla is desired by many and has to be compared accordingly. The fact that I can get a Yaris for under 20k doesn’t really matter. Even the Civic Type R is 40k+ now, which I consider the best example of an economy car desirable enough to be compared to Tesla.

      2. “Kelley Blue Book today reported the estimated average transaction price for a light vehicle in the United States was $37,285 in June 2019.”

    2. I posted this the other day. It was a bumper sticker on an old beat-up Toyota Yaris: “Dave Ramsey makes me drive this.”

      Buying a reliable used car 3-4 years old is probably always the right financial decision. A no-car lifestyle would save someone tons of money if their living situation can accommodate. Anyone who has to haul children and doesn’t live in a metro area with good public transportation can’t make that work.

      A major key in controlling one’s finances is minimizing the big things: housing, transportation, and medical. When it comes to buying autos, I’ve always found that Edmunds True Cost to Own is a good barometer of which autos will cost the least in a 5-year time period. That takes into account repairs, maintenance, depreciation, and fuel costs.

      You can buy a $35k Tesla right now (220 mile range with software locked features and no autopilot). Over 5-7 years the costs are going to be comparable to a Toyota Camry.

      1. That’s BS.
        First off, Edmunds doesn’t have TCO for the Model 3.
        Second, it very much depends where you live. In SV, Tesla superchargers over over $0.20/KWH (co-worker has one & uses super charger), so for 75K miles that’s at least $4,000 for electricity.
        Then there’s the impact of the higher purchase price, including NO possibility for negotiation, higher financing costs, higher tag costs (first year AND every year thereafter in CA). Teslas do have maintenance, and it’s not necessarily cheap, like $1000 windshield replacement (yep, seen it), and having to use a special car wash (yep, can’t just go to any).

        BTW, I have another friend with a Model 3 Performance who loves it – but ouch, $65K! I’ll pass – my current car was very cheap, but still running great at 221,000 miles, and even with mediocre gas mileage and expensive oil changes, it’s a heck of lot cheaper than buying something new.

        1. In SV, Tesla superchargers over over $0.20/KWH (co-worker has one & uses super charger), so for 75K miles that’s at least $4,000 for electricity.
          Then there’s the impact of the higher purchase price, including NO

          A lot of older Model S cars have unlimited free supercharging, but model 3 cars do not. Of the 6k miles I have driven in my Tesla, I have used a supercharger for about 100 miles of that. 90% of the miles driven by someone in a Tesla will be spent charging at home, not a supercharger. I pay $.05 kWh for electricity, which is why my mpg equivalent is about 175/mpg.

          Yes, you can purchase a $35k Tesla right now. You just need to call since it’s not on the website. The $38,900 model is the standard range + model. My wife is going to order hers next month.

          I will agree with you that car washing is more expensive. When I had my beat-up Honda Civic I didn’t care about going through a car wash tunnel. Now I have to spend my time doing a hand wash because I don’t want my car’s paint to be by lodged debris stuck to a car wash tunnel spinner.

          1. I pay $.05 kWh

            Is that on average because you charge for free at work?

            Rocky Mountain Power rates are higher than that.

          2. BTW, the Model 3 Performance does get free supercharging. Also, note that PG&E rates are also >$0.20 per kWH (I was surprised Tesla charged more) – and while you can get cheaper night rates, then your peak time rate goes up, so a lot depends on location (e.g. CA vs UT) and usage.

            And a lot depends on what you assume comparable vehicles are (e.g. Edmunds assumes a $27K Camry – that’s not a base model), new vs used (used Teslas are still expensive), and maintenance and repair assumptions (cost AND availability – IF you car is sitting because you can’t get it fixed quickly, that’s a major extra cost). Teslas don’t have enough of a track record to really compare.

          3. Is that on average because you charge for free at work?

            I don’t charge for free at work. I pay rates for City of St. George electricity (municipal operated electricity rates)>

          4. a lot depends on location (e.g. CA vs UT) and usage.

            Yes, I would agree with that. Also worth noting, Tesla purchasers in CA get an additional $2500 CA state credit. I didn’t get that being a UT resident. That makes up for a lot of extra increase in CA increased electricity rates. If I lived in CA and had a Tesla, I would definitely look at rooftop solar (but that would be hard since we rent an apartment in St. George).

            I would also make sure to schedule recharging during non-peak hours. I have a cousin from Texas and a brother-in-law both in solar sales in CA and they do a very brisk business. I am distantly related to the founder of Vivint (Vivint Solar).


            it’s a heck of lot cheaper than buying something new.

            Buying a new vehicle is almost always a worse financial decision, hence my Dave Ramsey comment above. But I drive a lot since I commute and so I get quite a bit of enjoyment in driving in my model 3. Also, I get to deduct the full federal mileage reimbursement of $.58 per mile driven, even though my actual costs are far less. For me, the model 3 doesn’t exactly beat out a reliable used car, but it’s not that much of a premium to have a car I actually want when when I add in the extra oil changes and fuel costs I was paying.

          5. I don’t charge for free at work.

            Oh. How does a majority owner get charged at the work location for charging the car?

          6. Oh. How does a majority owner get charged at the work location for charging the car?

            Separate meters are installed at all EV charging stations, including for residents who have EVs.

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