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A Number Of Indicators Are Signaling The Post-Crisis Housing Boom Is Coming To An End

A report from the Seattle Times in Washington. “Every year, the Urban Land Institute and the consultancy PwC publish their Emerging Trends in Real Estate report. ‘As this economic cycle entered the history books as the longest in U.S. history, the level of confidence in the real-estate industry has been palpable,’ the report reads. ‘Real estate will continue to perform,’ one experienced investment manager said. ‘We don’t see oversupply or overleverage.'”

“Having spent time covering real estate earlier in my career, such statements tempt me to run for the bomb shelter. Developers are notoriously optimistic and some can resemble lemmings running off cliffs, especially late in the business cycle. Then, Emerging Trends’ plot thickens: ‘Reinforcing the optimism about real estate’s ability to withstand a recession is satisfaction that the property sector’s discipline in this recovery means that ‘this time it won’t be our fault’ if the economy falters.'”

“To be fair, the report admits to the fragility of the expansion. ‘We could be looking at an especially jolting shock to the system,’ Emerging Trends warmed. ‘In the short run, caution is advisable.’ It also reminds us that while coveted West Coast cities are expensive, high housing costs are a national phenomenon.'”

The Marin Independent Journal in California. “The Urban Land Institute ranked San Jose and San Francisco among the top 20 metros for real estate prospecting. The Bay Area scored better this year than in previous years, in part because home prices have leveled off from record highs, said Urban Land Institute senior vice president Anita Kramer. Now, she added, Bay Area properties ‘are worth it.'”

“The Bay Area housing market has leveled off after a record run between 2012 and early 2019. The median price for an existing Bay Area home hit a record of $928,000 in May 2018 and has since dropped to $875,000 in July, according to CoreLogic. San Jose is expected to more than triple the number of new apartments from last year, as investors open about 6,000 units in 2019, according to Rent Cafe. The real estate firm estimates this year Oakland will add 1,850 units, Milpitas nearly 1,700 units, and San Francisco 1,200 apartments.”

“Dan Ramas, a Keller Williams agent in Santa Clara, said many small investors in rental properties find better returns in outlying suburbs. For example, a $400,000 home in Tracy might yield a similar rent as a $1 million property in San Jose, he said. The market has cooled from last year, he said, and interest rates have dropped. ‘It’s becoming a buyer’s market,’ Ramas said. ‘This is the time for investors.'”

The Orange County Register in California. “Orange County may be on the verge of seeing a gain in home sales for the first time in more than a year, new CoreLogic figures show. But the gain is due more to the length of the housing slump than to a sharp improvement in the local housing market. The median price of an Orange County home fell 2.3% during the 22-day period ending Aug. 26, dropping to $715,000.”

“Sales have been down off and on in Orange County since the fall of 2017, with year-over-year drops occurring in 19 of the past 22 months. Last month’s sales tally was competing with already-depressed numbers in August 2018. Orange County home sales still pale compared to August 2017, when 121 more homes sold than in the latest 22-day period.”

The Real Deal on Florida. “Adding to mounting signs that Miami’s housing market is cooling down, home sales in the Magic City dropped 13 percent in August, year-over-year, a newly released report shows. In addition to slowing sales, home prices also dipped slightly in August, compared to July.”

“A number of indicators are signaling that the post-crisis housing boom in Miami and nationally is coming to an end as home prices have risen to a level beyond income levels. Rising construction costs are also making it more difficult to build affordable single-family homes. Developer Stephen Ross of Related Companies told Yahoo Finance in August the housing market ‘is probably in the eighth inning.'”

“Supporting this, a report by Knock said about 88 percent of single-family homes in Miami were purchased in the first quarter after the seller lowered the price. In addition, nationwide, single-family housing authorizations declined for three straight quarters, according to a new report by BuildFax.”

The Press of Atlantic City in New Jersey. “A city already battling a high rate of foreclosures and low home ownership could see both problems worsen due to the recent tax increase. ‘From a standpoint of understanding the impact the taxes have had on residents of Atlantic City — you can see it. You can see people have walked away from their homes,’ said Mayor Frank Gilliam Jr. ‘Thirty percent (an estimated figure of noncasino property owners in the city) of taxpayers cannot sustain the city’s woes.'”

“‘It’s not sustainable,’ said Sheryl Donofrio, 42, who owns a custom-built home on Massachusetts Avenue along with five other lots she and her late husband bought years ago as investments. ‘I think people are going to start a fire sale.'”

“The rub for many homeowners is that with the increased property taxes, they may not be able to find a willing buyer. ‘It’s pretty sad when you can’t sell your home for the bricks and sticks you invested,’ Dorsie Pettit, treasurer of the Bungalow Park Civic Association, said during a recent community meeting.”

“‘When you have to pay this much more, almost overnight, it hurts. It hurts a lot,’ said 71-year-old Anthony Vraim, who has been in Atlantic City since 1972 but has only lived in the resort full time since 2011. ‘And we can’t sell our properties because no one wants to buy them.'”

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This Post Has 166 Comments

  1. ‘A city already battling a high rate of foreclosures and low home ownership could see both problems worsen due to the recent tax increase. ‘From a standpoint of understanding the impact the taxes have had on residents of Atlantic City — you can see it. You can see people have walked away from their homes’

    Walked away? But this is 2019?

    BTW had a great meeting with Jack McCabe in Deerfield Beach yesterday. I’ll be heading to the airport in a few hours, on the road home.

  2. Is WeWork a Fraud?

    “if you were to contrast the key characteristics of what defines a ponzi scheme with what we already know about WeWork, I think we could safely assume that it could be somewhat judged beyond a reasonable doubt that WeWork is a fraud, both Miguel McKelvey and Adam Neumann seem to be knowing engaging in a fraudulent ponzi-like scheme designed to mislead investors and appear to be nothing more than your average, traditional run of the mill fraudsters, or in their own words….Hustler’s. The magnitude of this fraud and the unprecedented arrogance in which it’s being ruthlessly executed puts it in a league of its own. Now they’re hoping to hustle the big boys on Wall Street, and they will most likely get away with it.”

    https://www.zerohedge.com/markets/wework-fraud

    Article published yesterday details 25 examples of fraud and deception and concludes with above excerpt.

    1. “How did this even begin? The earliest shareholders including a gentleman called Mortimer Zuckerman were not just their landlords AND seed investors. They also happened to own Fast Company and NY Post which were instrumental in propping up WeWork in the press before anybody knew who they were. The headlines they spun about WeWork’s valuation and ‘meteoric’ rise was basically the shareholders advertising their investments. Even Wikipedia’s page (throughout 2015 and 2016) introduced WeWork as the ‘most innovative company of 2015’, citing a Fast Company article.”

      This tactic could only work if the targeted audience was sufficiently dumbed-down, which is why it worked so well.

      A nation of dummys.

      1. “If you are not already acutely aware that Adam Neumann and Miguel McKelvey are fraudsters, count the number of times the word ‘Hustle’ is plastered in neon lights at every one of their tacky ikea-designed offices (or just google the words: wework hustle and click on images).When asked whether how they could come up with a $47 billion dollar valuation, he replied ‘No one is investing in a co-working company worth $20 billion. That doesn’t exist. Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.’. When Miguel was asked about their $20 billion valuation (before it was almost tripled to $47bn), Miguel McKelvey answered ‘Who gives a s***?’.”

        1. “Because Americans are the dumbest investors around, and there’s lots of liquidity in this market.” – Gorge Economou.

          1. And Softbank. What’s most amazing is these fantasy numbers they come up with. No relation to the real world at all. Same with any number of these “new” companies.

        1. Thanks to all the sound advise from JohnDave, doomed, and jingle balls, I have a diverse portfolio of shacks, fake meat and flying car stawk, and a fleet of Tesla’s!

          1. In fairness, Tesla is a cool car and I can understand why some people like it. But I prefer my lifted F150 off road desert beast. It takes me where I want to go. I bought it second hand and made some repairs to it and keep it running. I just grow weary of all these EV owning ersatz environmentalists lording themselves over everybody like they have some superior insight into how the planet’s entire energy system should operate.

          5. Superciliousness was a good one too. Another word I learned this week: vainglorious. I just wish people would learn to use the apostrophe correctly.

          7. The misuse of apostrophe’s is also a pet peeve of mine.

            LOL!

            My wife has a poster in her classroom (English teacher) that says:

            “Let’s eat grandma.
            Let’s eat, grandma.

            Commas save lives!”

          8. apostrophe’s

            Yep! I thought texting (autocorrect?) on cell phones was the cause but I see it in lengthy pieces too.

      1. “But the allegations in Markel’s complaint also provide a remarkable peek into a bizarre company culture, seemingly driven by the whims and quirks of its founders”

        Hmm, that sounds awfully familiar.

    3. Daily chart
      Why WeWork doesn’t work yet
      The office-sharing company has postponed its IPO
      Sep 17th 2019

      WITH ITS stylish shared workspaces and chic occupants, lubricated by fruit-infused water and nitro coffee on tap, WeWork, a firm that rents out temporary offices, had seemed to be riding the wave of a new trend in managing desk-jockey life. But the nine-year-old private company has suffered a setback, announcing on September 16th that it would postpone an initial public offering (IPO) that had been expected to raise $3bn-4bn. Investors, it seems, cannot decide what the firm is worth.

      They have four main worries. The first, and most glaring, is WeWork’s lack of profits. The firm argues that this is explained by the huge investments needed to secure economies of scale. It says that mature locations are profitable—revenues doubled during the first half of 2019 over the same period in 2018, to $1.5bn. But its net losses also rose, if more modestly, to $905m. A second concern is how the company would fare in a recession. It has taken on $47bn in lease payments but has only $4bn in committed future revenues from customers. A third bugbear is corporate governance. WeWork will issue multiple classes of shares that give its flamboyant founder, Adam Neumann, control with a minority stake.
      …

  4. “Having spent time covering real estate earlier in my career, such statements tempt me to run for the bomb shelter. Developers are notoriously optimistic and some can resemble lemmings running off cliffs, especially late in the business cycle.”

    Eee-bola! Head for the hills!!!

  5. The median price of an “Orange County home fell 2.3% during the 22-day period ending Aug. 26, dropping to $715,000.”

    At an annualized rate of decline, that comes out to

    ((1-0.023)^(365.25/22)-1)×100% = -32%.

    No wonder they limited their period of time to 22 days!

    2. “Being an economic refugee is going to be more and more popular as things get weirder and more expensive in the U.S.,” Prescher predicted.

      The exodus increased following the 2008 financial crisis.

    3. Thanks for sharing Mega Mike. You always seem to have good finds. It’s interesting that both some retirees are fleeing the US and also some millennials with crushing student loan burdens who have no hope of paying it back. Seems like economic conditions are pushing hard on both ends of the age spectrum.

      1. By the time some of these people have their student debt paid off they’ll be on medicare with a 15000$ deductible.

    4. From the article:
      “It’s a slow-motion train wreck, and we are in the first car of the train,” said Edd Staton, who lived in Las Vegas before moving to Cuenca, Ecuador, in 2010 and now with his wife blogs about retiring abroad. “It takes a long time to get to the caboose. There is nothing in place that will make this go away.”

      https://www.youtube.com/watch?v=fFnOfpIJL0M
      Tom Petty And The Heartbreakers – Refugee (Official Video)
      “Baby we ain’t the first
      I’m sure a lot of other lovers been burned
      Right now this seems real to you, but it’s
      One of those things you gotta feel to be true”

      – Clearly, the deck is stacked a against the majority of private sector retirees. Public sector pensions, taxes, inflation, Wall St., all strip-mining the bottom 90% (most everyone ex. the elites). Just look at the Fed-induced gross income inequality since the GFC. The Deplorables aren’t stupid, just repressed. 🙂

      https://www.youtube.com/watch?v=ZtYU87QNjPw
      Monty Python – Repressed Citizen

    5. Having lived south of the border, I can say that healthcare, while more affordable, is also very inferior, especially at the government hospitals. There are private ones that are decent, and while they aren’t as expensive as in the US, unless you have private insurance it will be pricey.

      And then of course, there is the whole public safety issue. As a foreign oldster you will have a huge bulls eye on your back.

      1. “And then of course, there is the whole public safety issue.”

        $aving monie$ from e$caping a U$ medical bill of $63,000 for an appendix removal, … verses … Unable to dodge a spray of cheap bullet$ in a plaza gang shootout is something to ponder.

        1. More than the random violence, my understanding is that the biggest risk is being kidnapped and held for ransom. Muggings are super common, they even happen on buses. Of course a mugging means that you lose your wallet and cell phone, so not as bad as a kidnapping.

          1. It can get worse than mere kidnapping. I’m two degrees of separation from this victim.

            Two expats’ murders shook Yucatan in 2016
            By Yucatan Times on January 5, 2017
            The body of Canadian Barbara McClatchie Andrews was found along the Merida-Cancun highway.
            (PHOTO: sipse.com)

            The murders of two foreigners shook the expat community in Yucatan in 2016. The events occurred in the last quarter of the year, and in both cases the victims were Canadians. They had long resided in the municipality of Progreso and the Yucatecan capital, respectively.

            The State Police of Investigation made prompt arrests in both cases, and the accused are prisoners in the Center of Social Reinsertion of the State, with each facing criminal proceedings for the crime of qualified homicide.

            Murder of a photographer

            The first case, which had international repercussions, was the murder of photographer Barbara McClatchie Andrews, whose body was discovered on Friday, September 30, lying in the undergrowth at kilometer 14 of the Mérida-Cancún road.

            Andrews, 74, who was a photographer for National Geographic, died of suffocation due to strangulation.

            The body of the Canadian was found with her face disfigured and blows in other parts of the body because of the savage attack she received, according to results of the necropsy performed by the Forensic Medical Service of the State Attorney General.

            The Canadian lived in Merida for more than a decade and had a photo gallery in her home, called “In La’Kech”, in the Historic Center.

            The photographer had exhibited her work in Canada, US, France, New Zealand, Guatemala and Mexico, as well as visiting 53 countries as part of her photographic work for NatGeo.

            The State Police of Investigation made an arrest in less than a week of the accused of the murder of the Canadian. The detainee was ex-soldier Juan Carlos L. of Veracruz, who served as a driver of the ADO bus line.

            The motive of the crime was robbery.
            …

  7. “Sales have been down off and on in Orange County since the fall of 2017, with year-over-year drops occurring in 19 of the past 22 months.”

    Bumping down the broken staircase…

    Given that Orange County is just north of San Diego, this makes me wonder why San Diego is immune from the incipient housing bust?

      1. Is San Diego past the peak for this cycle, or is this merely a pause? Or perhaps San Diego housing has achieved a permanently high plateau. Time will tell!

        Local
        Dip in House Prices, May Draw More Buyers
        By Ray Huard – SDBJ Staff
        Published Sep 12, 2019 at 11:05 AM | Updated at 11:07 AM PDT on Sep 12, 2019

        People who are in the business of selling and buying new homes and condominiums can take heart from a key index which reported that home prices in San Diego County dropped slightly in July after reaching an all-time peak in June.

        “Sellers are being more realistic, buyers have a better position at the bargaining table,” said Andrew LePage, an analyst with the research firm CoreLogic.

        The median price in July 2019 dropped back to $580,000 — identical to what it was a year ago but a $10,000 decline from the median price in June 2019, according to CoreLogic.

        That may explain an uptick in the number of homes sold in July 2019, although falling interest rates were a contributing factor.
        …

      1. After casting around on Google, I stand corrected. San Diego price appreciation has stalled and the plane is losing altitude.

        1. Wages in “America’s Finest City” lag those paid in Orange County, and good jobs in general are harder to find. When the bottom fell out of the defense/aerospace industry in the 1990’s, San Diego was in a world of hurt. A lot of those displaced engineers were older and their skills were not very transferable.

          1. “When the bottom fell out of the defense/aerospace industry in the 1990’s, … ” yepper$!

            Life is cruel @ time$ …

            They coulda bought cheap desert/$and & rocketed their careers bye moving to Mojave, CA … (Actually, Mojave is near California.City, bad idea!)

          2. When the bottom fell out of the defense/aerospace industry in the 1990’s, San Diego was in a world of hurt. A lot of those displaced engineers were older and their skills were not very transferable.

            Speaking of which…I haven’t watched Falling Down for a long time. Might be educational for my wife :-).

        2. The next que$tion is: how fast the lo$$ & if the landing will result in mostly everyone winding up “underwater$”

  8. “The median price for an existing Bay Area home hit a record of $928,000 in May 2018 and has since dropped to $875,000 in July, according to CoreLogic.”

    A $53,000 hit is throwaway money for a wealthy BayArean. Just ask Chris Thornberg.

    1. A $53,000 hit is throwaway money for a wealthy BayArean. Just ask Chris Thornberg.

      For others though, it means they can’t turn around sell that house they bought last year without taking a loss as The Starting Point

      The “Sure Thing” aint no more…

      1. They might have to keep driving that old Toyota for a few more years, as there won’t be any “equity to extract” to pay for the Tesla.

        I wonder how long until California bans the sale of new cars with ICE’s? Unless they cover the loophole I could see a thriving market for out of states car coming off their leases. I guess they could write the law to ban the registration of all ICE cars starting with model year X, so it wouldn’t matter if they’re used.

        1. g with model year X, so it wouldn’t matter if they’re used.

          Colorado is the best state to buy an EV in. They give a tax credit of $5k.

  10. It kinda looks like price appreciation in SoCal has gone into reverse. Buy now, and catch yourself a falling knife.

    Southern California builders cut prices 8% as new-home sales jump 13%
    New homes’ median of $554,000 was down 8%; all-home median was up 2%.
    By Jonathan Lansner | jlansner@scng.com | Orange County Register
    PUBLISHED: September 3, 2019 at 12:04 pm | UPDATED: September 6, 2019 at 3:24 pm

    Southern California builders sold 13% more homes in July than a year ago as prices fell 8%.

    CoreLogic reported 1,719 newly built homes were sold in the six-county region vs. 1,516 a year earlier. Builders’ 13% sales increase far outpaced the region’s 3% rise for resales of existing homes.

    This meant local builders grew their market share: New homes were 7.8% of July sales regionally vs. 7.1% a year earlier.

    As for cost comparisons, Southern California’s new homes had a median selling price of $554,000, down 8% over 12 months. Compare that with the median for all homes sold: $540,000, a 2% increase in a year.
    …

    1. Interesting, per that article new home sales numbers are down only in Orange and Ventura counties and up everywhere else, even in wretched LA county.

      1. The only Congress critter with the guts to name the puppet masters who have bought and paid for “our” elected officials.

    2. You have to admire the balz on folks who keep snapping up homes into the headwinds of a real estate bust.

      Zillow partners with homebuilders to marry iBuying and newly built home buying
      Homeowners can sell their home to Zillow, wait up to 8 months for their new home
      September 20, 2019
      Ben Lane
      KEYWORDS direct buyer Homebuilder Homebuilders homebuilding IBUYERS iBuying Zillow Zillow Offer Zillow offers construction

      Homeowners who want to sell their existing home and buy a newly built home can now do so all in one transaction and wait as long as eight months to move out, thanks to a partnership between Zillow and nearly a dozen homebuilders.

      Zillow announced this week that it is partnering with homebuilders Ashton Woods, Brookfield Residential, Fischer Homes, H&H Homes, Hartford Homes, Kerley Family Homes, M/I Homes, Mattamy Homes, Oakwood Homes, PulteGroup, and Shea Homes on a program where homeowners who want a newly built home can sell their existing home to Zillow but stay in the house for as long as eight months while their new home is being built.

      “When home shoppers buy a new construction home from one of Zillow’s homebuilder partners, they will have the opportunity to sell their existing home directly to Zillow, on their own timeline, through Zillow Offers,” the company said in a release.

      One of the advantages of the program, according to Zillow, is an extended closing period – between seven days and eight months – which could prevent buyers from having to move twice or carry two mortgages simultaneously. Buyers would also not have to worry about the traditional home sales process of showings, open houses, staging, and the like, features touted by all iBuyers.

      “One of the last things buyers want to deal with when searching for a new home is the stress and hassle that comes along with selling their existing home,” said Zillow Brand President Jeremy Wacksman. “With Zillow Offers, we are allowing homeowners a quick and efficient way to sell their current home and buy a brand new house – all on their timetable – so they can focus on what really matters: getting settled into their dream home.”
      …

  13. “Every year, the Urban Land Institute and the consultancy PwC publish their Emerging Trends in Real Estate report. ‘As this economic cycle entered the history books as the longest in U.S. history, the level of confidence in the real-estate industry has been palpable,’ the report reads. ‘Real estate will continue to perform,’ one experienced investment manager said. ‘We don’t see oversupply or overleverage.‘ ”

    “Having spent time covering real estate earlier in my career, such statements tempt me to run for the bomb shelter. Developers are notoriously optimistic and some can resemble lemmings running off cliffs, especially late in the business cycle.“

    – Global real estate markets remind me of this. Since real estate, along with virtually every other asset class, has been transformed by the “magic” of central banks cheap credit/easy $/financialization into a speculative asset class, these adages apply as well. There’s no upside from here, IMHO.

    “Ladies and gentlemen, the Captain has turned on the fasten seat belt sign. We are now crossing a zone of turbulence. Please return your seats and keep your seat belts fastened. Thank you.”

    Humpty Dumpty.

    – Bob Farrell’s 10 Rules for Investing

    – 1. Markets tend to return to the mean over time

    – 2. Excesses in one direction will lead to an opposite excess in the other direction

    – 4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways

    – 9. When all the experts and forecasts agree — something else is going to happen

    – 10. Bull markets are more fun than bear markets

      1. I briefly used one of those after the knee replacement surgery. When your knee doesn’t fully bend is when you learn just how low a toilet seat is.

        1. Note to MGSpiffy: I saw your post from yesterday. Glad to hear you’re progressing on the pain front. Keep exercising, the bending will improve.

        1. Mom’s still going strong. Dad’s prostate cancer moved into his spine causing terrible pain, but he didn’t complain about it. As he withered away I remember he once said, “All I want to do is sit on my ash and read the newspaper, but I don’t have an ash!”

          1. Mom’s still going strong.

            That’s wonderful! I remember raised toilet seats from my grandmother more than 30 years ago. She had both hips replaced.

      1. That was the reminder for me when I saw it as well — we had a similar situation to deal with a few years back for my father when we sold his home of three decades. It was a few months of work and about two dumpster loads of what we could not donate to charity.

        I just thought it strange that they whoever put this home up for sale didn’t deal with that first, and just took the photos as is — and absolutely pathetic that Mr. Gotcher went along with it, apparently in too much of a hurry to get his 6%. Does he seriously think a half million dollar listing can be shown in this condition?

        1. If the stuff came with it looks like some valuable capodimonte trinkets mugs etc you can sell on ebay maybe even a lot…. thousands of dollars worth

        2. It was a few months of work

          I’m still working on it. Sole heir to a single woman. I’m just starting to see a light at the end of the tunnel.

        3. We had a most interesting experience disposing of the final garage-full of junk from my parents’ place. The junk dealer we contacted didn’t show up on time, but a rival cruising the hood stopped by to inspect our HODLings. They kindly offered to cart off all the old metal pipes and other metal sundries. When the original guys showed up, they expressed ire that there wasn’t much metal to be found in their scrap haul.

          To which I say, if you snooze, you lose.

      2. That’s tough. It’s bad enough clearing out a home for the living. (Did so for my parents a few years ago.)

        1. clearing out a home for the living

          There are moving companies who specialize in helping seniors downsize. I’m using one to help find homes for the plethora of handwork books and materials my mother had.

    1. “committed to open borders”

      Meanwhile, today in Dumver, the following narrative:

      “A coalition of more than 35 local organizations will march from Denver to Aurora to denounce white supremacist violence Saturday morning.

      The “March for Justice” will begin at the Martin Luther King Memorial in City Park at 10 a.m. and protesters will march along E. Colfax Ave., ending at the ICE detention facility in Aurora.”

      https://www.thedenverchannel.com/news/local-news/march-for-justice-will-see-people-march-from-denver-to-auroras-ice-facility-this-saturday

      It’s a narrative. See also the following narrative from two days ago:

      “After protesters had marched in front of Choate’s house a few times, the police dressed in riot gear formed a line and moved toward them. The protesters moved away from Choate’s house and headed back toward the original meetup spot. Along the way, demonstrators told the police more than a few times to go fuck themselves.”

      https://www.westword.com/news/anti-ice-protesters-demonstrate-outside-home-of-geo-facility-warden-johnny-choate-11488109

      I do not support private, for-profit prisons, but the optics on this protest are admittedly bad. Keep it up and you’ll be handing Trump a 2020 victory like that of Nixon’s “silent majority” in 1972…

    1. So people with coastal property in areas that have been prone to hurricanes since time immemorial have finally decided that it’s a bad idea to live there?

      I can’t imagine what could go wrong living on a small, flat as a pancake island when a hurricane hits, smothering the island with huge swells.

          1. The left just lies about the cost of green energy. When it says that new green is cheaper than old coal it is using clearly incorrect assumptions. It will do things like assume that wind turbines last 50 years. It is doubtful that they last 25 years and there is data to show that they last 15 years. They assume in the fake numbers that the utilization of the wind turbines is far above real world experience etc. Thus, the cost of the energy is far higher than claimed and the reason that it is clear the higher percentage of new green energy a country uses the higher its people pay for energy. If it is not true why are countries like China and India still building so many new power plants and importing so much coal? Just another example:
            https://wattsupwiththat.com/2019/09/18/climate-concerned-indias-coal-imports-surging/

          3. It is doubtful that they last 25 years and there is data to show that they last 15 years.

            I don’t know. But I just saw a Wyoming news story about how Casper is making room for (and money from) putting the blades that can’t be recycled into the landfill. I didn’t realize there were already blades at end-of-life. And that they would need to go into giant landfills.

        2. What I don’t get is that Colorado generates about 20% of it’s power from wind, yet the average price is 11 cents per kwh, and 8 cents in my little burg.

          Are the German installing windmills where there is no wind? Or are they relying too much on wind power? Or are they just taxing electricity to death to pay for social programs?

          1. The eastern part of Colorado is uniquely suitable for wind power. Also Colorado still has old coal plants which are fully depreciated. As Colorado shuts down the legacy coal plants and moves more to solar, you will see the price spikes. Also, the wind power was heavily subsidized and when the subsidies go away and the wind turbines need to be replaced it will prevent the cheaper wind from offsetting the higher solar.

          2. Germany is trying to produce solar power in areas with limited sun and wind power in areas with expensive land. Very few people consider how much land is required to produce energy with the alternatives, if you have relatively cheap land like Eastern Colorado with perfect wind conditions it is more viable but if rely too heavily on wind you have serious problems when the wind does not blow. In any event, here is a good article on the assumptions, I have seen many others but you have to dig since the globalist MSM hides the data:
            https://www.americanexperiment.org/2018/06/limited-lifespans-wind-turbines-result-higher-costs-energy/

            P.S T. Boone Pickens has the best plan for the US both from a green and energy independence prospective. Wind turbines in the western plains and NG vehicles were his way or achieving energy independence and a cleaner environment. Obama ignored his plan. Had Obama followed the plan he could have been a successful president instead of a failure. The left consistently lets the perfect be the enemy of the good. The economic boom we could have had by turning our transportation needs to fracked NG would have been amazing. It would have also have reduced both real pollution and the emission of co2. Instead we followed the Musk pipe dream and still have a insignificant number of EV vehicles on the road and have Chinese made solar panels about to fill our dumps with toxic waste. The amount of EV vehicles we have now on the road is little more that we were promised by 2011 and the working class is still heavily subsiding the toys of the rich.

          3. Wind and solar don’t need subsidies any more. They are the most economical, not even considering the environmental benefits.

            “The TVA directors voted overwhelmingly to close the Paradise 3 and Bull Run plants. Three of the four people appointed by Trump to the board joined the majority voting to close down the coal units. “It is not about coal. This decision is about economics,” Tennessee Valley Authority Chief Executive Bill Johnson said. “It’s about keeping rates as low as feasible.””

            Wind and solar have already won. The next pivot will be towards developing better battery storage to eliminate/reduce costly peaker plants.

          4. Wind and solar don’t need subsidies any more. They are the most economical…Wind and solar have already won.

            More tedious wrongheaded misinformation. The TVA has been shifting from old coal plants to natural gas & nuclear. The little sliver of solar input is from heavily government subsidized private installations who get paid above market rates.

            It’s all simply laid out on the TVA dot gov site.

          5. Cost of Electricity By Source

            Generation Type Low ($/MWh) High ($MWh)
            Gas Combined Cycle 42 78
            Gas Peaking 156 210
            Nuclear 112 210
            Wind 30 60
            Solar PV Thin Film Utility Scale 43 48

            Game. Set. Match.

            Solar and wind will + batteries will take out nat gas peaker. Nuclear is clean, but is tremendously expensive which is why so many nuclear plants are being phased out across the US. Personally, I think they should keep nuclear running and subsidize nuclear’s higher cost until we have sufficient battery tech to support continuous electricity with renewables only.

          6. Game. Set. Match.

            You are an undisputed champion at the cow patty toss. Apparently too lazy to look at the TVA website response to your previous game over post. Dishonest by intent, ignorance or mania, it really is a difference without a distinction.

          7. Apparently too lazy to look at the TVA website response to your previous game over post. Dishonest by intent, ignorance or mania, it really is a difference without a distinction.

            What are you talking about Blue? Everything on TVAs site supports what I said: they continue to phase out coal (because it is uneconomical) and add reneweables. It is uncertain whether they will add or remove nuclear.

            What is clear from TVAs site is that they will add more solar than any other energy source (their words: “Solar expansion plays a substantial role in all futures“:

            2019 Integrated Resource Plan

            Here is their plan for solar:

            “Solar: Add between 1,500 and 8,000 MW of
            solar by 2028 and up to 14,000 MW by 2038 if a
            high level of load growth materializes. Additions
            may be a combination of utility and distributed
            scale. Future solar needs are driven by pricing,
            customer demand, and demand for electricity.”

            “Wind: Existing wind contracts expire in the early
            2030s. Consider the addition of up to 1,800 MW
            of wind by 2028 and up to 4,200 MW by 2038 if
            cost-effective.”

            “Storage: Add up to 2,400 MW of storage by
            2028 and up to 5,300 MW by 2038. Additions
            may be a combination of utility and distributed
            scale. The trajectory and timing of additions will
            be highly dependent on the evolution of storage
            technologies.”

            It’s all there, just like I said. They are adding renewables more than any other energy source.

          8. Everything on TVAs site supports what I said: they continue to phase out coal (because it is uneconomical) and add reneweables. I

            They’ve added predominantly gas fired. The solar is private investment with government subsidy and is a whopping 3% of their supply. Did I mention government subsidy, guaranteed for twenty years?

            This would never have happened without government subsidy, because it’s wasteful and uneconomical.

            Sure the TVA has a PC forecast. If you want a better world in 2030 don’t subsidize old bad technology hoping it will somehow improve to defy the laws of physics. Just design life to use less energy.

          9. The solar is private investment with government subsidy and is a whopping 3% of their supply.

            I consider renweables to be hydro, wind, and solar. So that would be about 12% of their total portfolio. The key though is that is their current portfolio. Obviously renewables are going to grow because they are the most economical. You can see this in their recommendations under “Range of MW Additions and Subtractions by 2028 and 2038”.

            It might not matter anyway though. There are enough individual players who are willing to do stuff that will bypass the utilities quickly if they don’t transition to renewables in a big way, like that Herriman, UT large scale solar apartment complex that I linked to in conjunction with Rocky Mountain Power and Dominion Energy.

    2. Does Jimmay Buffett have a jukebox @ his cheeseburger joint? Eye wanna slip in some coin & play: “We is from the gubbermint, come.to.help ya’ll! ” bye Ronnie Raygun & $emper Paratu$ Bro$

      (Doe$ “county” = Fed$?)

      But the county require$ that when more than 50% of a home is damaged, that it be completely rebuilt to meet modern $torm-re$iliency code$ and — in her flood zone — on stilt$. That would cost at least $200,000, money she doesn’t have.

      (“Big Gubbermint, i$ Bad Gubbermint!!!” … But wait, … “Eye’ve fallen down & can’t get up! HELP!” )

      1. The county has applied for $5 million of the HUD money
      2. … has done more than 3,000 FEMA buyouts
      3. This year, HUD made available $16 billion for climate resilience
      4. … with $75 million of Irma-relief cash from the U.S. Department of Housing and Urban Development,
      5. … with local and state governments using federal grants from the last disaster to pay for buyouts

      But Florida runs on touri$m and real e$tate revenue$, and managed retreat is a phrase that makes real e$tate li$ting agent$ nervou$. But there’s another Florida housing bubble waiting to pop. The Union of Concerned Scientists warns of a coming housing crash — from Miami to San Mateo, California — on a $cale worse than last decade’s foreclo$ure cri$is, caused by climate change — from flooding to heat waves and wildfires.

    1. Potter, quoted by Bloomberg, cautioned that the Fed “may have to expand the central bank’s balance sheet through outright purchases of U.S. Treasury securities, to ensure stable liquidity conditions at the end of the quarter as well as at year-end.”

      Simple investing advice: Buy what the Fed buys.

      1. “Simple investing advice: Buy what the Fed buy$.”

        Corollary: “Don’t $hoot until ye see their blood$hot eyeball$”

    2. Does the fact that everyone knows more QE is the plan and has hedged against it change the efficacy of it?

      1. FT Collections
        The future of the eurozone
        Opinion Tail Risk
        Why the ECB’s ‘QE infinity’ may have stolen the future
        There is a growing acceptance that monetary policy has reached its limits
        Laurence Fletcher
        FILE PHOTO: European Central Bank (ECB) President Mario Draghi delivers a speech during a ceremony to mark the 20th anniversary of the launch of the Euro, at the European Parliament in Strasbourg, France, January 15, 2019. REUTERS/Vincent Kessler//File Photo
        Investors have nagging doubts about the long-term effectiveness of Mario Draghi’s and the ECB’s efforts © Vincent Kessler/Reuters
        Laurence Fletcher in London September 12, 2019
        …
        Some investors were pleasantly surprised by the decision to keep quantitative easing going until shortly before the central bank raises interest rates. Given the inflation and growth outlook, this could end up resembling the fabled “QE infinity”.

        But fund managers are also concerned about whether the package can actually get the eurozone out of the low growth, low-inflation predicament it is in. On that front, the ECB’s own forecasts suggest it will struggle, sending markets right back to where they started.

        The ECB has few alternatives to QE — it has, in some ways, become a prisoner of the market’s expectations, much of which it has created.

        “If you don’t meet these expectations you create such dislocations and you end up back in the fourth quarter of 2018,” said Pilar Gomez-Bravo, director of fixed income at MFS Investment Management, referring to the sharp sell-off in markets ahead of the ECB ending bond-buying in December.

        But continuing down the path of yet more QE for the foreseeable future may not produce the growth the ECB desires.

        Unless you believe that such changes to monetary policy magically produce extra economic growth, then QE works by “borrowing” economic growth from the future, as lower bond yields bring forward economic projects, such as building a factory.
        …

        1. ” ..as lower bond yields bring forward economic project$, such as building a factory. ”

          Guess what also brings thang$ forward: “Tariff.childs” Trade.War$.

          2. Or not.

            Markets
            Watchlist
            CNBC TV
            Top Stories
            Politics
            Trump says he doesn’t need a trade deal with China before the 2020 election
            Published Fri, Sep 20 2019 12:37 PM EDT
            Updated Fri, Sep 20 2019 4:15 PM EDT
            Kevin Breuninger
            Key Points
            – President Donald Trump on Friday said he doesn’t think he needs to strike a trade deal with China before the 2020 presidential election.
            – Trump also said he is “not looking for a partial deal” with Beijing, moving away from his suggestion last week that he would consider an “interim deal.”

            President Donald Trump on Friday said he doesn’t think he needs to strike a trade deal with China before the 2020 presidential election.

            “No, I don’t think I need it before the election,” Trump told CNBC’s Eamon Javers during a news conference at the White House alongside Australian Prime Minister Scott Morrison.

            “I think people know that we’re doing a great job,” Trump said, referencing his administration’s work on the economy and the military. “China’s being affected very badly. We’re not, we’re not being affected,” he said.

            His relationship with Chinese President Xi Jinping is strong, Trump added, but “we have, right now, a little spat.”

            Trump also said he didn’t want a “partial deal” with Beijing, moving away from his suggestion last week that he would consider an “interim deal.”

            “We’re looking for a complete deal. I’m not looking for a partial deal,” Trump said.
            …

        1. So what. As long as he upholds their laws and assimilates to Swedish culture, it shouldn’t matter what his name is.

  21. “The Bay Area housing market has leveled off after a record run between 2012 and early 2019.”

    Unlike every other record run in the history of finance, this one will end with prices leveling off on a permanently high plateau. There is no chance whatever of a price crash, nosedive, crater, or hard landing. None.

    1. “There is no chance whatever of a price crash, nosedive, crater, or hard landing. None” -Sir JD McD00Med the realtor of upmost integrity and honor

    1. We got our Peloton tread last week. I researched competitors for a long time (LifeFitness, Woodway, Norditrac, True, Landice, etc.). I run a lot and it’s pretty easy for me to see the appeal of Peloton within the first week of using it. I don’t know what the right price for the stock is, but I am so excited to have the tread.

      Why We Love To Call Everything a Bubble

      “But why is making those calls so popular? Well, for one thing it allows you to feel sophisticated. You can furrow your brow, shake your head sagely, talk about how “history always repeats itself,” and then cite something you once read in Charles Mackay’s Extraordinary Popular Delusions and the Madness of Crowds. And as pointed out by Mark Dow, a longtime trader and the brains behind the Twitter account @BehavioralMacro, there’s a nice element of unfalsifiability to bubble calls. “You can’t prove something isn’t a bubble,” he says, “because tomorrow ‘could be the day.’ And there’s always a tomorrow.” ”

      “When I ask McNamara what prompted him to play along with the joke about a portfolio of bubble positions, he tells me, “As someone who works in markets, I’ve learnt the hard way that an awful lot of the time when the market is pricing something seemingly strangely, either a) the market is right or b) even when the market is wrong, it’s really hard to profitably take the other side.””

      1. Sounds like you are one that will utilize this expensive alternative to a traditional treadmill unlike a vast majority of consumers who want to “get fit” only to let there equipment gather dust. Mabye it’s just me but after dropping about 5k on a treadmill, that $40/mo subscription seems a bit over the top. I would think another company (Mabye google / amazon) will swoop in on this and offer free equipment or free lease with a monthly commitment to make it up. Perhaps less of a price tag by using a VR headset, a much less expensive treadmill, and a service subscription could accomplish this. Just my thoughts…

        1. I would think another company (Mabye google / amazon) will swoop in on this and offer free equipment or free lease with a monthly commitment to make it up.

          The tread was $4k, or $4300 with delivery. We did purchase the extended warranty for $300 (usually would never do that, but with it being a new piece of equipment and how much I use it, I figured it was worth the risk).

          Many people buy workout equipment and they sit in the garage gathering dust. One video review I watched that was very helpful was between the Norditrac Commercial and the Peloton Tread. One of the comments in the YouTube video was, “But which one holds more laundry!”

          The # of Americans with gym memberships has skyrocketed in the past couple of decades. But the # of Americans actually routinely using said gym memberships is also pretty low and not unlike an unused treadmill. The appeal of Peloton is the live classes. It can see how that would be very motivating. I, however, mostly just run and listen to articles/podcasts/etc. So when my year free of subscription runs out, I don’t think I will continue to pay for the monthly subscription. But my wife is excited to take the classes, so we will see if there is value for her.

    3. Mrs. Chino is a spinning enthusiast and has a Peloton bike (she had a Home Spin and a Cycleops previously). She thoroughly enjoys it and uses it regularly, but we have concerns about the music copyright issue and what impact that will have on the program variety going forward.

      If she ends up having to pedal to “Ave Maria” and “Twinkle Twinkle Little Star” we’ll probably end up selling it. She could just as easily ride a lower cost bike in front of the big screen playing a spinning DVD, and still does from time to time.

      1. They do have the Peloton digital subscriptions that can be used with any piece of exercise equipment. I’m not much of a spin person since I find it hard to go more than 20 minutes on a bike. But maybe I just haven’t found the right spin instructor to keep me motivated.

      1. ‘After being down twelve months in a row, home sales were up 9.5%, year-over-year. There were 161 homes sold in Santa Cruz County last month. The average since 2003 is 158. Pending sales were also up, year-over-year, for the first time in thirteen months. Two hundred and thirty-eight homes went into escrow last month, a jump of 25.9% compared to last year.’

        ‘Inventory continues to expand. It has been higher than the year before fourteen months in a row. Last month, it was up 5.5% over last year.As of September 5th, there were 402 homes for sale in Santa Cruz County. The average since January 2003 is 681.Days of In ventory was seventy-five.The average since 2003 is one hundred and thirty-nine.’

        ‘It took only thirty-one days to sell a home last month. That is the time from when a home is listed to when it goes into contract.’

        1. only thirty-one days to sell a home

          One of these things is not like the other.

          Good you had a safe trip home. Looking forward to your post on the discoveries.

        2. I was using some of the MW cherry picking technique specifically the -9% average sale price ;). Opening statement seems a bit contradictory though (Single family, resale homes opposed to new mabye ?)

          “Market Commentary
          Home Sales Prices Continue to Weaken

          “The median sales price for single-family, re-sale homes was down for the third month in a row, year-over-year. It fell 4.4%. It was down 0.9% in August from July. The average sales price fell 9% from July, and it was down 0.7% year-over-year”

          On another note, 2 properties that went pending / contingent here 3 months ago, both show now as cancelled. A handful of others that I watch have been withdrawn from the mls. I do see homes sell but a vast majority have gone for far less than list.

          1. Description confirms my observations about the kitchen.
            “Luxurious marble backsplash adorns the gourmet kitchen with quartz countertops, Viking appliances, and 6-burner stove.”

            Previously sold for $320K on 11/3/2017. It was probably a live-in reno flip.

        1. The War on Men must continue, at least if you are a Democrat.

          Opinion
          Devine: Elizabeth Warren’s war on men is an insulting, losing strategy
          By Miranda Devine
          September 18, 2019 | 10:35pm

          Elizabeth Warren made the political calculation this week that she doesn’t need men to win the presidency.

          “We’re not here today because of famous arches or famous men,” she told a rally in Washington Square Park Monday night.

          “In fact, we’re not here because of men at all,” she said, emphasizing the “m” word like an expletive.

          Great. Then she won’t mind if men don’t vote for her, nor women who like men.

          It’s a losing strategy, taken straight out of the playbook of Hillary Clinton.
          …

        2. She has a male problem and a minority problem and anyone who is not a leftist problem. She went too left in the debates to make it back to the middle in the election. Her views on immigration, green energy, healthcare and issues such as reparations just do not fly off college campuses. Bernie forced all the Democrats too far to the left and Harris and Booker forced them to endorse reparations . It probably would not have mattered if Biden was a strong candidate but he is a horrible candidate just like Hillary.

  27. Debt donkeys gonna donk. Oh wait, they can’t:

    “The years after graduation are usually a time to pile on debt, whether for that new car, the mortgage for a first home, credit card purchases or any of the other accoutrements that come with starting out in life.

    But a significant number of those getting out of college have a high level of student loan indebtedness that could negatively impact their chances of borrowing their way to owning life’s finer things.”

    https://nypost.com/2019/09/21/borrowing-money-to-get-life-started-hard-for-grads-with-debt/

    You do not borrow your way to own fine things. Bad New York Post, bad 🙁

  29. “I lost $900,000 in real estate right when the recession hit. I was heavily invested, about 13 million bucks to be exact. I came home one day and I just didn’t feel good, I was kind of sick to my stomach. I felt nervous about what was going on in the money markets and I asked a friend to help me out. In 3 days, I sold all of my property in Texas, Oklahoma and Mexico. I lost $900K. I got a call from Merrill Lynch telling me that’s the smartest investment decision I had ever made because the recession was about to come. I lost a lot, but it could have been a lot worse.” —Terry Bradshaw, NFL legend

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