While It’s Not Yet Time To Panic – It’s Almost Certainly Time To Get Ready To Panic

1. ‘I had hoped that this investment would be there for my children in the future but we have been told that our investment is at significant risk. I just want my money back for my family’

   Have you tried stamping your little feet?

2. Fairview, TX Housing Prices Crater 33% YOY As Dallas Homeowners Take The Financial Beating Of Their Lives

   https://www.movoto.com/fairview-tx/market-trends/

3. ‘I will be turning 67 years old early next year … My husband passed away 15 years ago. Mascot Towers is my only asset. I have never in my entire life relied on government support. The stage 1 special levies alone will erode 50 per cent of my savings, I will not be able to ever retire now. At this stage I really do not know what I will do as no one will loan me any money’

   Well it was cheaper than renting Grandma.

   “Oh Ben you so meanie!” Her only asset is a cracked up shoddy airbox? Couldn’t see that coming. And don’t forget, Granny was planning on some nice young couple coming along and taking out a gigantic mortgage and hand her the money so she could drink wine all day for the rest of her life.

   She’s a gambla’.

   1. …. a Degenerate Gambla’….. like all housing-is-an-investment delusion believers.

   2. My husband passed away 15 years ago. Mascot Towers is my only asset.

      So now this greedy old bag wants to pull the helpless widow routine?

      “When housing losses we must eat;
      Let us stamp our little feet!”

   3. Ben, you ARE being a meanie. A couple numbers: 132 units. Stage 1 is $7 million, which is half of grandma’s savings. So she’s worth about $100K total at age 67. She’s already in trouble. I can see why she would gamble on housing appreciation. It might have been her only shot to retire with any dignity at all.

      That said, I wonder why they are trying to pay the levy at all. Borrowing from friends, dipping into savings, and refi on an already cracked building is throwing good money after bad. Financially it seems more prudent for them to simply not pay the levy, not pay the mortgage, wait to get evicted, take the BK hit, and then go rent somewhere else.

      1. So she’s worth about $100K total at age 67

         Was worth. That’s assuming she didn’t “gear up” for the gamble. She may have 20 years to enjoy retirement and $100K is $100 per week. That’s a lot of food and drink. Not insignificant.

      2. Oxide, Oz is different, you can’t discharge mortgage debt in bankruptcy.

         1. Which makes the speculation even more hazardous. At least here if you roll snake eyes, you walk away.

            I recall stories here from bubble 1.0 about Euros getting foreclosed and then having their wages garnished to cover the foreclosure loss. That people would take such a risk is astounding. It’s bad enough to lose your down payment, but to still owe even more even after losing the shack, they must be really optimistic.

         2. So I wonder do they reverse history and send their home debtors to England?

            1. Nice.

4. ‘However, the fund managers kept changing and they kept extending the life of the fund. Now, I will be thankful if I get back anything at all.’”

   You have one recourse in this situation, Dinesh. Stamp your little feet!

5. let me ask you guys this.

   The faster and higher something appreciates? does that necessarily mean that the downtown has got to get back to the absolutely worst historic valuations. Say
   P/E on stock at 15
   Housing Price/Rent at 100 or 120.

   the reason i ask – there are so many 1) individuals/pensions with stocks and mutual funds, and 2) home owners with less than 8 years on the property that the government will be obliged to kick the can down the road with liquidity.

   My opinion is that we should bit the bullet and correct – but i dont think that 90@ of the public and thus the pols agree.

   1. The real question is: How long can they put off price discovery? That’s what you’re really asking. I don’t think it can be answered. It’s anybody’s guess.

   2. Don’t forget there is more than one way to level the valuations, 10% currency depreciation (i.e. inflation) per year will quickly adjust valuations while prices remain about the same. So for example the $500,000 house or $100 stock loses 30% over 3 years but its price stays the same. This is only an example, in reality you might get a bit of both.

      1. You need wage inflation for that to happen. That doesn’t square with the fact that wages remained unchanged in 2018.

      2. Wolf has a thread regarding men’s wages. I can’t understand why the feminists are “chopping at the bit” for men’s jobs.

   3. P/E on stock at 15
      Housing Price/Rent at 100 or 120.

      Rent below 25% of take home pay. Take home pay could be dismal for a significant many whose jobs were only possible during the biggest credit bubble in history; bankers, brokers, coders and Tesla factory workers are all going to go begging when there is a real correction.

      Millions and millions of houses which are now held as someone’s big “investment” will become abandoned. They won’t be worth much, so if you have actual savings you will be among the few lucky ones.

      1. I don’t know, near the airport I see used shacks up for sale 100% more expensive than 10 years ago and the realtor description tells me it’s a great investment opportunity. (/sarcasm)

6. ‘But we can hardly call this endless cycle of boom and bust ‘bringing sanity back to the Irish property market’ can we?’

   Housing is an expense, not an investment. People in Ireland should know that better than anyone.

7. Rent Controls in CA – Here we go.
   https://www.nytimes.com/2019/09/11/business/economy/california-rent-control.html

   California lawmakers approved a statewide rent cap on Wednesday covering millions of tenants, the biggest step yet in a surge of initiatives to address an affordable-housing crunch nationwide.

   The bill limits annual rent increases to 5 percent after inflation and offers new barriers to eviction, providing a bit of housing security in a state with the nation’s highest housing prices and a swelling homeless population.

   Gov. Gavin Newsom, a Democrat who has made tenant protection a priority in his first year in office, led negotiations to strengthen the legislation. He has said he would sign the bill, approved as part of a flurry of activity in the final week of the legislative session.

   The measure, affecting an estimated eight million residents of rental homes and apartments, was heavily pushed by tenants’ groups. In an indication of how dire housing problems have become, it also garnered the support of the California Business Roundtable, representing leading employers, and was unopposed by the state’s biggest landlords’ group.

   That dynamic reflected a momentous political swing. For a quarter-century, California law has sharply curbed the ability of localities to impose rent control. Now, the state itself has taken that step.

   “The housing crisis is reaching every corner of America, where you’re seeing high home prices, high rents, evictions and homelessness that we’re all struggling to grapple with,” said Assemblyman David Chiu, a San Francisco Democrat who was the bill’s author. “Protecting tenants is a critical and obvious component of any strategy to address this.”

   A greater share of households nationwide are renting than at any point in a half-century. But only four states — California, Maryland, New Jersey and New York — have localities with some type of rent control, along with the District of Columbia.

   1. Cheaper rent, fewer leases, more homeless. Way to emulate Venezuela, shitheads.

   2. I looked this up. In Maryland, only College Park (UMD main campus) and Takoma Park have some kind of rent control. I don’t know about College Park, but Takoma Park is new-age socialist hippy.

   3. does it cap rent reductions?
      5% after inflation is hilarious.
      add the solar roofs for homes not being built in 2020

   4. The Democrats did such a great job of vote harvesting, they eliminated any check on their insanity. Actually is good for 2020, not that I would expect Trump to carry the state but I can see the Democrats losing House seats. A lot of Democrats own rental properties, I think they will not vote in droves and many may even vote Republican.

8. My new short-term gig is really cutting into my posting time – I meant to make this post in the previous thread back at lunch time.

   Seattle/98040 – I went down to the south end to grab some teriyaki for lunch (one advantage of working from home). There were quite a few number of open house signs out, so I took the long way there and wound up driving past 6 or 7 in total. I saw a very good number of signs up. Open houses in bloom here.

   Not a single one I drove past today had a car or visitor that I could see, except for the obvious Realtor(tm) C-class parked to the side. Nobody at any the open houses I passed by.

   A complete 180 from 2017 – when there would be a open house on the route I took to get lunch, the street would be practically blocked off as cars belonging to potential buyers lined both sides of the road.

   Just driving up one street /route that includes the (now) $2.8M house that txchick57 was briefly looking at and is still listed, there is a new construction on a small lot subdivided from a teardown @ $2M, down from $2.3M. Unsold after at least 8 months on the market. I go by it often enough and never see any activity. Also now on the same street is a 50 year old house that’s not too bad for $1.2M – nicely staged, fresh paint and landscaping. But just crickets for visitors every time I drive by. In prior years, one of the local builders would have snatched it up on day 1 with cash so they could tear it down and build a $2.5-$3M house on the lot.

   Winter is coming early.

   1. Definitely snowballing (aside from dream prices coming down to reality) here too. There is something very satisfying knowing realtor is having empty open houses 7 days a week.

   2. “Not a single one I drove past today had a car or visitor that I could see, except for the obvious Realtor(tm) C-class parked to the side. ”

      Sounds like there will be some good deals soon on repo’d Benzes. Too bad they’re junk.

      1. Sounds like there will be some good deals soon on repo’d Benzes. Too bad they’re junk.

         No interest in Benzes, except maybe, just maybe an E63 AMG Wagon if somehow priced at a steal. I miss my M5 wagon.

         Good thing my current ride (5er wagon) still has another 10 years or so in it – it’s a 2006 and it just crossed 100K and I’m stickler for keeping it like new. Since moving here, I’ve been putting maybe 4K miles a year on it.

         So yeah, probably a Tesla in a few years if stars align. I just can’t seem to care about having an SUV – at least not the current crop. But I will say the new safety tech that’s been showing up the last few years makes a compelling case.

         1. just maybe an E63 AMG Wagon if somehow priced at a steal

            Have you seen the new Audi RS6 Avant? Either of those cars would make a great grocery-getter 😀

            1. Haven’t seen it actually. Are they bringing it stateside? (spiffy googles) oh wow, they are.

               But.. gah.. that rear roof line! It’s a longroof and not supposed to be trying to be a hatchback 🙂

               Still, it’s not like BMW is going to offer anything other than SUVs anymore…

         2. My heart is with the older Audi S5 Prestige with a V8 and Manual transmission. Sadly Audi has headed toward the small displacement engine and turbo-charger, so they’re wringing every last bit of power per liter at the expense of a shorter engine life.

            1. The Audi S5 Prestige is a very good looking car. Coupe or Convertible?

               Sadly Audi has headed toward the small displacement engine and turbo-charger, so they’re wringing every last bit of power per liter at the expense of a shorter engine life.

               They are all doing that, and yes engine life is a big part of the compromise, along with expense of upkeep. That’s one of the reasons I want to keep my current car – this is almost exactly it – https://www.foxmotorsports.com/index.php?page=sales&details&id=6 – same year, colors, most options the same. It’s the last of the non-turbo straight sixes and has been surprisingly (for a BMW) low maintenance so far. No complaints about power, even on the hills around here, and it’s way more smooth and refined than the turbo-4 which replaced it (honestly surprised at how lumpy/meh the turbo 4 feels)

            2. “Coupe or Convertible?”

               Coupe. I’m also a manual transmission kind of guy. I just can’t get excited about a 6, 7 or 8 speed automatic.

            3. I’m also a manual transmission kind of guy. I just can’t get excited about a 6, 7 or 8 speed automatic.

               Totally understand, and will make a toast to it every day.

               If my left ankle hadn’t self-destructed, I would still be driving a stick. Since I was a young man starting out, my cars were: 1 auto, 8 manuals. Getting old + hereditary osteoarthritis is a biatch.

            4. If my left ankle hadn’t self-destructed, I would still be driving a stick. Since I was a young man starting out, my cars were: 1 auto, 8 manuals. Getting old + hereditary osteoarthritis is a biatch.

               Yeah, everything I’ve had so far has been manual using heavy race clutches but I was really questioning that a year ago when I got a bad sprain in my left ankle.

               But the last straw is now the DCTs are faster. I can put up with a lot for more performance. But I won’t put up with a lot for less performance, even though I enjoy it under ideal conditions.

   3. Winter is coming early.

      Maybe prices will still go up, like you said. Or maybe the biggest housing bubble in history is headed down. Who knows?

      1. Maybe prices will still go up, like you said. Or maybe the biggest housing bubble in history is headed down. Who knows?

         Where did I say they may go up? They’re ALL showing price cuts.

         My thought was this: you want to move to that neighborhood for schools, location, yada. The delta between what you get with with one of the new constructions @ 2.0 or 2.8 and the older house at 1.2, which wasn’t snapped up on day 1 for a change, makes the new construction a much tougher sell unless you got show off money to burn. The builders are getting cold feet and just trying to clear inventory now. And that 1.2 house would have been 1.4-1.5 18 months ago, and it’s not the only one like it I’ve seen come on the market and not sell right away, keeping the chill on.

         Nationally, I can’t say how things will play out, but all of us here have a good idea. Locally, which I keep an eye on, there’s no question – the market is slowing and prices are pulling back. The question is for how long/how far and the fear is the answers are “a lot”

         1. Where did I say they may go up?

            When you bought the place and it was suggested that you might have bought at the peak of the bubble.

            1. oh, maybe so. I did spell out the risk we took.

               We’ll see just how good a deal we did or did not get on the purchase (notably cheaper than these others), and if it will even matter in the long run. 😉

               If I have it my way, I won’t be moving anytime soon (or later) anyway.

            2. I won’t be moving anytime soon (or later)

               Same here, and glad that it doesn’t matter.

            3. I’ve been pretty clear about that since I started hanging out here again. This is the place the Mrs and I want to be and stay and grow old in, which is why I’m pushing our finances so hard for the next 5-10 years.

               Life -could- throw us a curve ball that necessitated a move, but then again, odds are it won’t.

      2. With foolish talk like “houses going for $1 million”, we know which direction prices are going.

         There isn’t a house on the planet that can’t be built profitable for $120k.

9. “Welcome to Tiger Hills. Since the properties went into tax forfeiture, two have sold. Twenty-nine lots — just over 40% of the lots in Tiger Hills — have yet to be sold out of forfeiture. Judy and Richard Carlson purchased their Tiger Hills property as a lot and built on it, moving in in 2011, she said. Later, the purchases slowed way down. ‘I don’t know why, but it doesn’t seem like anyone’s interested,’ she said.”

   If you think it’s hard to sell a house in a real estate bust, try selling land. There are, oftentimes, no buyers at all.

10. Wells Fargo, Bank of America, Quicken Loans, others want DTI requirement eliminated from QM lending rules

    Coalition of massive lenders, trade groups call on CFPB to change QM rules

    https://confoundedinterest.net/2019/09/11/briar-patch-wells-fargo-bank-of-america-quicken-loans-others-want-dti-requirement-eliminated-from-qm-lending-rules/

    1. Wells Fargo, Bank of America, Quicken Loans, others want DTI requirement eliminated from QM lending rules

       Well, back to liar loans are we wishing to be?

       1. Yup. They are being sneaky.

          Here is the current situation, which Calabria (replaced Mel Watt) says is an unfair advantage to gov:
          a. Private lenders can back loans up to 43% DTI
          b. F&F/USDA/FHA can back loans more than 43% DTI (QM patch)

          Here is what Trump/Calabria wants to do:
          a. Private lenders can back loans up to 43% DTI
          b. F&F/USDA/FHA can back loans up to 43% DTI (QM patch expires)

          Here is what the banks want:
          a. Private lenders can back loans more than 43% DTI
          b. F&F/USDA/FHA can back loans more than 43% DTI

          The banks must be running out of buyers again and are looking to scrape the bottom of the barrel. Who are they going to sell this crappy >43% DTI paper to? Those guys in Denmark offering the negative interest rates? And I guess they expect another bailout when this blows up.

          1. F&F/USDA/FHA can back loans

             Ridiculously irresponsible lending/borrowing will only hasten the bust. Only in a mania would anyone consider pledging away nearly all their take home pay for their whole working life. Without house appreciation, it’s impossible, and house appreciation is unnatural.

          2. Good summary Oxide. Hit the nail on the head.

11. Some trivia:

    I recently met a woman whose N.Y Yankee fan of a husband, while in the stands at Dodger Stadium, caught the 100th home run of a N.Y. Yankees baseball player (see the link below). After his catch he was immediately approached by security who (bottom line) wanted the ball. In return for the ball (which he surrendered to security) he and his wife got to meet some Yankee baseball players, got lots of autographs, and got lots of other goodies (baseball caps and such).

    My point is: The value of the baseball – up until the moment the baseball went over the wall and scored the 100th home run for this baseball player – had the value of every other baseball at the game. But the moment it went over the wall its value changed – forever. Its value went up – way up – up to the point of becoming almost sacred.

    Now the baseball went over the wall because the batter whacked it over the wall. It is not as if the baseball had anything to do with this feat no more than any other baseball would have had anything to do with the feat if any other baseball was used. But this baseball is treated as if it is special, almost sacred.

    Go figure.

    https://www.cbssports.com/mlb/news/yankees-gary-sanchez-becomes-fastest-catcher-and-al-player-ever-to-100-home-runs/

    1. My great uncle (who would be 104 if he were still alive today) had a home run baseball signed by Babe Ruth at Yankee stadium. He was a young boy in the 1920s when he got it. When he died, the ball was taken by somebody in his brother’s family. Not sure what ever happened to it or if was worth anything.

       1. I ran across this …

          “One of the most famous autographed baseballs in history — the one signed by Babe Ruth with a promise to hit a home run for an ailing 11-year-old boy — was sold for $250,641 by Grey Flannel Auctions on Thursday night.”

          Babe Ruth-autographed baseball sold for $250,641 at auction
          https://www.espn.com/new-york/mlb/story/_/id/10418153/babe-ruth-autographed-baseball-sold-250641-auction

       2. Nothing brings out the ugly in a family like wills and estates. There are many examples of family raiding the house of the deceased for valuables even before the funeral. If you ever acquire anything small and valuable, give it to your favorite heir before you die, or put it in a safe deposit box.

          1. family raiding the house of the deceased

             On the bright side, the house cleans out faster. As an only child to a single mother, I knew cleaning out my mother’s house was going to suck, big time. I’m just starting to see the light at the end of the tunnel 3 years later.

             1. Before I graduated from nursing school, I went to work one day a week at an assisted living center because I had zero experience with patient care (I have an IT/operations background). The amount of stuff that the older residents had in boxes was astounding. And then we usually had a death every month or so, and all of it was just tossed. I learned a lesson that people just pack around stuff. It seems universal. Marie Kondo might be the pendulum swinging too far the other way, but probably not.

          2. raiding the house of the deceased for valuables even before the funeral.

             In many cases, before there is a need to call an ambulance.

          3. My mom has already handed off a couple of family heirlooms my way, as well as to my sisters. I think it’s good to dole out the treasures whilst you are alive.

    2. Related to my point is the magic of the number 4 when associated with the earth’s future temperature. The story goes something like this: Exceed a 4 degree Celsius rise in earth’s temperature and we are doomed.

       Go here:

       Impacts of a 4°C global warming: 1. A 4°C world
       https://www.greenfacts.org/en/impacts-global-warming/l-2/index.htm

       Note that the number 4 has a magical quality about it that would be absent for a number such as, say, 3.9 or 4.1. A flat rounded out number such as 4 should arouse suspicions that It is probably just a made up number but for some reason, in many circles, these suspicions are never aroused.

       FWIW.

       1. the number 4

          The number doesn’t matter. The message that you need to give us all your monies is timeless and universal.

    3. My spasms of Swedish Death Cleaning continue thorought the year.

       I’m surprised at how many momentos I’ve kept for so long that I now don’t really car for, or see any value in. To the trash they (mostly) go. So many things that once mattered to me … just don’t. Even many photos. I’m surprised at how much our picture taking habits have changed over the decades thanks to technology. Fortunately, 10 TB of redundant storage for a lifetime of media is the size of a couple decks of cards. (2x 5TB 2.5″ external HDD)

       I’ve mentioned before that the Mrs and I have done a fair amount of RV window shopping. If we keep up the purging for another year, I could totally see us being able to move all the contents we care about from our house into a 5th wheel just 1/7th the size sq ft-wise and it would have a decent chance of all fitting (ignoring furniture).

       That’s not to say we would have to give up things we have come to rely on when needed like our guest room, but it sure is liberating to not feel the pull of so much stuff, to have big open room, and clean surfaces without clutter to annoy the mind.

       1. Good thing that you don’t collect artwork, or you would be stuck providing a building with a controlled environment.

       2. heh. I used to keep old love/hate letters from all my ex-beaus. I figured I should preserve some memory of the relationship, good or bad. Then I thought, would THEY keep anything that I had written to THEM?

          Yeah, it all went to recycle that day, guilt free.

          1. heh. I used to keep old love/hate letters from all my ex-beaus

             I still have a box of those in a closet upstairs. And an email archive folder for each of my long-term exes.

             I never look at them, but it feels like I’d be deleting part of my past/history….

             1. deleting part of my past/history….

                New girlfriends like to do that for you.

             2. “New girlfriends like to do that for you.”

                +1 LMFAO…so true!

             3. New girlfriends like to do that for you.

                Not so funny when you’re the child of divorced parents. Perhaps that’s why I’m okay with putting up pictures of my husband’s nieces and nephews taken at his first wedding.

             4. “New girlfriends like to do that for you.”

                I still carry a kangaroo leather coin purse with a bill clip that was a gift from a girlfriend over 35-yrs ago. When my wife says, do you have a $20?, and I say, sure…on my dresser, and she’s says, you get it. She won’t even touch that coin purse because she knows where it came from, LOLz! I’m glad I don’t have that sort of baggage. 🙂

12. Pink Floyd – Wish You Were Here (with lyrics)

    https://www.youtube.com/watch?v=DPL_SV3n7IU

    1. +1

13. Aren’t older people supposed to downsize and reduce their living expenses, absent income from employment upon retiring?

    Why am I reading so many stories like this? Didn’t anyone learn anything from the last bubble about the level of risk in real estate?

    1. I think that a lot of people continue to work after they “retire”. Not surprising as the average monthly Social Security check is about $1400, meaning that many don’t even get that petite sum.

14. Is the Fed missing a historic opportunity to drive interest rates to below zero in order to sustain the ongoing rally in stocks, bonds, real estate, precious metals, commodities, and almost everything else rich people own?

    1. They’re saving it for October 2020. Say what you will about Trump, but anyone with money does NOT want Warren in the White House.

       1. I dunno… she would definitely juice Fannie and Freddie.

          She’s either just as corrupt as everyone else and really smart, or just really stupid. I honestly can’t tell.

          1. Since she is hanging with Hillary I vote for the former.

15. Charlotte, NC Housing Prices Crater 28% YOY On Ballooning Housing Inventory As Demand Plummets

    https://www.zillow.com/charlotte-nc-28217/home-values

    *Select price from drop-down menu on first chart

    1. Fake news yet again. Average sale price in Charlotte is up YOY.

       Mr. Jones, why so salty? I’m not trolling your comment section but for some reason, any comment that doesn’t paint a picture of doom and gloom is met with furious anger from you. It comes across not as market research but as an unhealthy obsession bordering on a mental disorder. You like to tell everybody to “stamp their little feet” but you seem to do a lot of foot stamping at any glimmer of positive news or a comment that might suggest anything other than catastrophic collapse.

       I agree that the market has taken a turn and I’ve posted real links to real properties reflecting this. How far it goes is anybodies guess. I’d be happy to see a substantial price reduction as I’m sitting in cash on the sidelines waiting for just that.

       1. I don’t get mad about anything. I’m not doing market research. If you don’t like what I’m doing leave and never come back. And tell everyone you meet to never visit here, please. You are wasting my time which I don’t have enough of. This isn’t media. I’m not competing. I make no money here, it costs me money. I owe you or anyone else nothing. I said I do this so I know what’s going on.

          But what I can’t stand is ungrateful posters and whining. I’ll say this: my blogs have had millions of comments. I don’t read them. Don’t know what’s in them. Don’t have time. I scan them for racial slurs and the like but that’s it. I don’t care what you say and never will. It’s irrelevant to what I’m trying to do which is stay up with what’s happening.

          But I will ban your sorry ungrateful ass at the drop of a hat. Got that?

          1. What do you know, I’m banning posters at the drop of a hat. You know what that means to me? More free time.

             Cee ya!

16. Speaking of a cracked building reminds me of Dolphin Towers Sarasota FL
    An Unlikely Heroine Steps in to Save Crumbling Dolphin Tower
    When downtown’s Dolphin Tower threatened to collapse, an unlikely heroine emerged. https://www.sarasotamagazine.com/articles/2015/10/1/an-unlikely-heroine-steps-in-to-save-crumbling-dolphin-tower

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