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It Feels Like People Are Stuck

It’s Friday desk clearing time for this blogger. “Colorado home prices have sky rocketed, at the same time that wages have stalled. The City of Denver sponsors a program that helps fill that gap called the Metro Down Payment Assistance program. Rachel Palya got $14,000 toward her home in Englewood. It’s hard not to want to get into the housing market, when there is free money to help pave the way. ‘It’s really nice. I mean why not take the opportunity if it’s there,’ Palya said.”

“‘The bidding-war market of the last few years made it tough for buyers to get in on first-time buyer programs, but today’s softened market is much more receptive,’ says Scott Byer, broker/owner of Colorado Realty. ‘When you buy the place you live, you’re setting your family up for a solid future,’ says Arturo Palomares, with Colorado Realty/Metro Brokers LLC. ‘Renting is throwing money down the drain. Si, se puede (Yes, you can),’ Palomares adds. ‘Si usted gusta vender o comprar una casa, por favor llameme, yo le puedo ayudar.’ He can conduct an entire transaction in Spanish if you need that.”

“Estimates from Chinese real estate website Juwaireveal that US home sales to Chinese buyers are likely to drop to an eight-year low by next March. Juwai’s executive chairman, Georg Chmiel said that worries over US visas and the desire to diversify investments had spurred a collapse in sales to Chinese buyers after a five-year surge. ‘With the trade war going on, it’s easy to imagine a scenario in which you might be forced to sell or your investment might otherwise lose value,’ Chmiel said.”

“The Los Angeles housing market has slowed considerably since last year—when home prices were climbing as much as 8 percent annually. In the very high-end market, Compass agent Ari Afshar says properties with ‘aspirational’ price tags are selling for ‘what buyers know to be real value of the market,’ giving an example of a home on the Bird Streets that was asking $25 million but was scooped up for $15 million.”

“The protracted recovery of home values in Chicago ‘makes me wonder,’ said Yilan Xu, an associate professor in the University of Illinois department of agriculture and consumer economics. ‘In the short term, most people hang in there because they know that in the long run the value will come back.’ But 13 years, Xu said, ‘feels like in the long run it hasn’t come. It feels like people are stuck.'”

“The people who are most stuck are generally middle-class households who have few or no other better-performing assets that can offset the poor performance of their housing investment. ‘For them, home equity is a larger piece of household wealth than for somebody in the more expensive neighborhoods,’ said Geoff Smith, executive director of the Institute for Housing Studies at DePaul University. ‘They may not have the equity they were anticipating for their retirement.'”

“Don’t ever let anybody say that you can’t put a price on oceanfront property because there is a price on this one and it’s pretty jaw-dropping. Last summer I told you about what was Ocean County’s most expensive home for sale at the time, an LBI compound that tipped the scales at a hefty $11,200,000. Well, good news if you fell in love with that one – the price has been reduced by almost a third, currently listed for a frugal (by comparison) $7,999,999.”

“The tortured saga of a years-delayed Toronto condominium project called The Academy begun in 2014 by LeMine Investment Group, appears to be finally coming to an end. On Aug. 20, 3070 Ellesmere Developments Inc. (the subsidiary created by LeMine for the project) filed a Notice of Insolvency where it claimed it had no capacity to pay the millions in loans it owed its creditors. On Feb. 26, investor Xiangdong Zhao won a default judgment against 3070 Ellesmere Developments for making ‘negligent misrepresentations’ about expected dividends.”

“Blocks of expansive flats, some eight floors high, welcome you to Nairobi’s Pipeline estate in Embakasi. The poor roads connecting the estates are busy avenues where residents sell groceries and other food items and where mkokoteni pullers and awkers ply their trade beside stinking garbage. We visited the once posh Buruburu estate too, which is nothing but a shell of its former self. A couple of years ago, this estate was a highly regarded middle-class residential area, just 10 minutes’ drive from the Nairobi city centre. ‘The selling point was the three-bedroom main houses coupled with spacious compounds with parking slots. Now tenants have to share the available space with occupants living in the extensions,’ explains Mike Mulwa, a property agent.”

“When it comes to residential accommodation, the Federal Capital Territory (FCT) presents a bundle of contradictions. Some of these housing estates, which have been in existence for more than a decade, are being joined by new ones that have been sprouting in different locations year in year out. However, more than 80 per cent of the houses in these estates are vacant. Some have been vacant since they were completed years ago. And having been exposed to the vagaries of the seasons, a good number of the housing units have witnessed encroachments from the elements.”

“UN Special Rapporteur, Ms. Leilani Farha, stated ‘Successive governments have allowed economic inequality in Nigeria to reach extreme levels, a fact that is clearly evident in the housing sector. These new dwellings do not fulfill any housing need, since many remained vacant, acting as vessels for money laundering or investment.'”

“Sixteen months ago I wrote a story about ghost houses in Auckland – those perfectly good houses that sit empty on so many of our streets because their absentee land-banking owners don’t want the hassle of being a landlord. At that time, the only figure we had to go on in Auckland was 33,000, which came from the 2016 census. This week we learned that the number of empty houses has risen by a staggering 18 per cent in the past five years (2018 census), and the figure in Auckland is 39,393.”

“A North Shore agent, who preferred not to be named, said it is often a ‘cultural thing.’ ‘One colleague says it is very common in Vietnam for people to own several houses. His own parents own three to four houses and they don’t put people in them. It’s all about the capital gain.’ Another one of the firm’s agents in Murray’s Bay noted there were at least half a dozen houses in his street that have had no-one living in them for five to 10 years.”

“According to Propertyology’s research, Australia has produced ‘a tsunami’ of residential apartment construction since the turn of the century. It took Australia 250 years to build 10 million dwellings, but one million have been built in our eight biggest cities in just the last 16 years alone.Propertyology Head of Research Simon Pressley recently referred to the over-development and subsequent shoddy workmanship of many high-rise apartment buildings as “Australian real estate’s equivalent of the Bubonic Plague“, holding grave concerns for all owners of high rise apartments built at any time during the last 20 years.”

“‘Every year, forever and a day, there will be tens of thousands more apartments with major defects that get exposed and very few apartment owners will have any form of financial recourse,’ Mr Pressley said. ‘Consequently, existing apartment owners now have the enormous uncertainty of when-will-it-happen-to-me while the pool of prospective future buyers will forever diminish.'”

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This Post Has 114 Comments

  1. ‘ It’s hard not to want to get into the housing market, when there is free money to help pave the way. ‘It’s really nice. I mean why not take the opportunity if it’s there’

    ‘Renting is throwing money down the drain. Si, se puede (Yes, you can)’

    But there’s no subprime lending going on.

  2. ‘The people who are most stuck are generally middle-class households who have few or no other better-performing assets that can offset the poor performance of their housing investment. ‘They may not have the equity they were anticipating for their retirement’

    Well it was cheaper than renting. So what if they have to collect shopping carts at Wally World until they croak? They could paint the walls dammit!

    1. I have so much money left after “throwing money away on rent” every month that I don’t know where to throw it.

    2. When did it become common to think that buying a house would provide financial assistance in retirement?

      I bought 4 over my life time, I am 96, and have never sold one for more than I paid for it.L

      Of course I am still living in the one I bought in 1966. LO

      2. I know, right? Anyone who sought retirement planning or investment advice from a realtor and thought they were going to get enough return on some piece of property to fund their golden years deserves to spend them in a shelter or the back seat of a car. It’s pure, unadulterated idiocy.

        1. deserves to spend them in a shelter

          People get trained. If you magically got money in your mailbox every day for 40 years, you’d think that was what life was supposed to be like. It’s not UHS that did that to you.

        2. But wasn’t that always the plan, sell you expensive house in NY and buy one cash in FL? My best friends did that last year sold their house in Yonkers for $625k bought one in tomball tx for $275k cash its like their 2nd honeymoon without that monthly burden

    3. The Fed’s plan to use quantitative easing to reflate collapsed housing prices, in order to fund the retirements of millions of long-term housing market gamblers, appears to be in danger of failing.

  3. ‘agent Ari Afshar says properties with ‘aspirational’ price tags are selling for ‘what buyers know to be real value of the market,’ giving an example of a home on the Bird Streets that was asking $25 million but was scooped up for $15 million’

    Phew, for a second there I was worried we might hit that “half off” we were told was unrealistic!

    1. “…‘agent Ari Afshar says properties with ‘aspirational’ price tags…”

      It’s proof positive that prices are ‘aspirational’ when even the buy anything and everything drug cartel money launderers won’t touch it.

      Maybe they need to bring in a few of the boyz from Miami?

    1. I appreciate that. I have access to some websites which how upcoming foreclosures in several states and I have posted several for California, including some that appear to have obvious fraud involved. They’re out there, and the REIC media are lying liars.

          1. I haven’t commented much but I think I have been following the blog for maybe a year and a half. I moved back to the Bay Area almost two years ago and found this site then. I read all the comments but have only recently begun interacting with you guys. 🤗🤪

      1. Reminds me of the current grocery store fad, where they pick and deliver your groceries to your house for a “fee”. Just how many people do that?

        1. I don’t know, but I don’t want anybody picking out my groceries considering how much bad fruit and vegetables there are in stores these days, not to mention all sorts of cold storage items past their “use by” dates.

        2. The little town next to here had a grocery store that delivered free for a couple of generations. It was a community service to those who couldn’t get around so easily.

        3. Someone on my block gets deliveries from Peapod by Giant. And really, if people are willing to pay for grub hub and door dash, why not. What’s really catching on is the curb pickup at the store. You can pick up the groceries without unbuckling the kids from the car and trying to drag them screeching through the store.

          1. lock gets deliveries from Peapod by Giant. And really, if people are willing to pay for grub hub and door dash, why not. What’s really catching on is the curb pickup at the store. You can pick up the groceries without unbuckling the kids from the car and trying to drag them screeching through the store.

            Yes, that is quite useful for parents! However, I have shifted most of my shopping to Trader Joe’s because they have so many meals/salads that are quick to prepare and are reasonably fresh/healthy (if you know what to get).

    3. Was thinking the repo/liquidity stuff was a result of banks like JPM finding their unicorns (like WeWork) werent going to be able to con money from retail investors. Who knows who deep their into these shyster companies, but thats where the action has been for years now.

      When I was shopping for some safe places to stash money I looked at CDs and all the higher yielding stuff from the big banks had a lot of shady stuff. I think they along with the Bond funds are likely to hit liquidity issues with some of these frauds. I went with 3 and 6 month T-bills as I cared more about return of money than return on money.

      1. For giggles I looked Up the bond funds my investment house offered. For the three funds I clicked on, their top holding in the fund was the State of Illinois. I’m putting cash in the mattress.

  7. ‘These new dwellings do not fulfill any housing need, since many remained vacant, acting as vessels for money laundering or investment’

    I talked with a few people in Miami. When discussing the number of condos, perfect strangers will tell you it’s chalked up to drug money and money laundering. And there are more towers under construction.

    1. The drug trade is so lucrative a 50% loss to launder the money and you still come out way ahead. There is a huge incentive to move as much money as possible as quickly as possible. If you can turn the money into 20 condos in Miami and lose 50% over the next five years, it’s probably an acceptable trade off.

  8. The City of Denver sponsors a program that helps fill that gap called the Metro Down Payment Assistance program. Rachel Palya got $14,000 toward her home in Englewood. It’s hard not to want to get into the housing market, when there is free money to help pave the way.

    That money wasn’t free, you bit*ch. It was involuntarily contributed by taxpayers so the Bolshevik Democrat (redundant) “leadership” in Denver could put non-creditworthy “buyers” like you into ridiculously overpriced shacks that will end up being just another one of your poor life choices.

    1. They have a program like that in The Sacramento area of Ca called neighborhood lyft. Buyers are getting $20k towards their DP. We’ve done a lot of those this summer.

      1. “Buyers are getting $20k towards their DP” = Doing whatever it takes to keep prices elevated.

        Keeping prices elevated = Protects the value of equity for the comps.

        Protecting the value of equity for the comps = Keeping the economy humming.

          2. Obama averaged around 1.5 percent normally the deeper the recession the stronger the recovery but that did not happen under Obama.

          3. It is better than Obama

            When debt expands an order of magnitude more than that GDP, I don’t think it’s nothing to brag about.

      2. I can see the Feds giving away stupid money like this, after all, they can run deficits. But California state, county and municipal governments always seem to be short on cash. Where is this money coming from? Are they just letting the streets crumble?

        1. New gasoline taxes and yes they let the streets crumble. The last vote on repealing the gasoline tax was a tricky one and the voters agree to let the tax stand IDK why don’t they see its a scam ? The usual support of public safety workers and the threat of falling brides in SLO convinced the voters ? This place is unfriendly towards the middle class.

    2. “That money wasn’t free, you bit*ch. It was involuntarily contributed by taxpayers so the Bolshevik Democrat (redundant) ‘leadership’ in Denver could put non-creditworthy ‘buyers’ like you into ridiculously overpriced shacks that will end up being just another one of your poor life choices.”

      “ridiculously overpriced shacks” = Equity wealth for the comps.

      It’s all good.

    3. And given TABOR restrictions, those gift down payments came out of some other budget. Fed up with that pothole on your street that never gets fixed? Too bad.

      And what’s with Denver subsidizing down payments in Englewood? Should they at least require that the subsidized buy a house in Dumver?

      Oh, and I love this one:

      “To qualify for Metro DPA, you have to have an income less than $139,200, and a FICO score of 640. ”

      So in, other words, 95+% of Metro Denver households qualify. The waiting list must be decades long.

    6. “Denver is committed to achieving housing stability across all income levels,” Fisher said.

      Spreading that social gravy far and wide!

  9. Regarding the budget deficit talks, every higher level Fed .gov employee I know seems to be living high on the hog. While we private sector types scrimp and save for our retirements, they buy Teslas and other luxury cars, live in McMansions and take lavish vacations.

    When I ask them if the budget deficits concern them, they laugh their heads off. For them, life is good and worry free. Layoffs? Not for them! When their wages were frozen they had a hissy fit, never mind that’s business as usual in the private sector.

    1. “Regarding the budget deficit talks, every higher level Fed .gov employee I know seems to be living high on the hog.”

      Q. Why do they do this?

      A. Because they can.

      “While we private sector …”

      (suckers?)

      “… types scrimp and save for our retirements, they buy Teslas and other luxury cars, live in McMansions and take lavish vacations.”

      You work, they reap. I like it.

      “When I ask them if the budget deficits concern them, they laugh their heads off. For them, life is good and worry free.”

      As life should be.

      “Layoffs? Not for them! When their wages were frozen they had a hissy fit, never mind that’s business as usual in the private sector.”

      The only thing that beats this racket is banking.

      😁

        1. I don’t know. One who comes to mind has the title “Division Chief”. As far as I know she was hired as a GS. She’s the one just traded in her BMW for a Tesla.

          Another guy was some kind of attorney working for the DoD. He had cars I could only dream of owning.

          1. I’m sure the Denver Business Center out in Lakewood has a few hotshots, but most of the GS folks have at least a 20-yr slog through the office politics before they’re harvesting any tall cotton.

          3. The DoD has enjoyed generous budgets since 9/11 compared to the bureau(s) within the Dept of the Interior. The spy agencies are top-heavy in computer PhD types, but it’s “open season” on our domestic scientists.

  10. ‘When you buy the place you live, you’re setting your family up for a solid future,’ says Arturo Palomares, with Colorado Realty/Metro Brokers LLC. ‘Renting is throwing money down the drain. Si, se puede (Yes, you can),’ Palomares adds.

    Um, yeah…tell that to millions of FBs who lost “their” houses during the last housing bubble meltdown. I personally knew several – all of whom were living beyond their means – and the financial and emotional toll it took on them, their marriages, and their families was the polar opposite of a “solid future.” Pendejo grande….

    1. I’ve been trading TVIX based on these incessant good cop/bad cop White House trade war tweets and “eying possibility” news stories. It’s all a crock, but it’s been lucrative buying and selling as the stock (a volatility play) moves in a predictable channel between $12+ and 14+. One fine day when the Fed loses control of these Ponzi markets TVIX should soar, but that day can be deferred longer than most retail investors can stay solvent.

      1. “One fine day when the Fed loses control of these Ponzi markets TVIX should soar, but that day can be deferred longer than most retail investors can stay solvent.”

        Perhaps longer than most retail investors will live. We’re in a 20+ year long bubble.

    2. As far as I know Chinese firms listing in the USA did not have to follow basic regulatory and accounting oversight.

      I’m confused why this was ever allowed in the first place.

    3. U.S. eyeing possibility of delisting Chinese firms from U.S. exchanges- source ??

      Yeah…I heard that today on the radio…Trump will ratchet up until he “wins” or he implodes the whole thing…I still take the position that china is far more resilient to tough times than the USA…

      1. china is far more resilient

        They have a long history of getting pissed off when the crops fail. I hope they are able to throw off the yoke of the CCP.

      2. Maybe but while our economy is resilient China’s economy continues to slow as production moves to other countries. The production does not even have to move to the US for us to benefit, a move to Mexico helps our exports. Of course, the bigger benefit is we are not finding China’s military build up. The globalists threw Biden under the bus to get Trump when they figured out Trump is not desperate to get a deal with China, he will accept a great deal but no deal works for him and our country.

  15. ‘a home on the Bird Streets that was asking $25 million but was scooped up for $15 million’

    ‘But 13 years, Xu said, ‘feels like in the long run it hasn’t come. It feels like people are stuck’

    ‘an LBI compound that tipped the scales at a hefty $11,200,000…the price has been reduced by almost a third, currently listed for a frugal (by comparison) $7,999,999’

    Wasn’t somebody just saying yesterday “they” wouldn’t let shack prices fall? Well they’re falling all over California. What happened to the IPO thing? Don’t tell me the UHS were a lion!

  16. Just what role should government be playing in peoples lives? Should government be sugar daddies that pick the winners and losers.?

    What a moral hazard that was created by the government banker/investment bank bail out. I had visions 10 years ago of all the creepy contortions that would happen. Surprise, socialism was one of the contortions I was worried could evolve.

    1. “Just what role should government be playing in peoples lives?”

      The government should leave people alone.

      “Should government be sugar daddies that pick the winners and losers.?”

      When it comes to the banks the answer is “Yes”. As for everyone else, the answer is “No”.

      “What a moral hazard that was created by the government banker/investment bank bail out.”

      There was no moral hazard created. The government allowed the banks to save the system; The government did this by saving the banks.

      Saving the banks allowed for the endless creation of wealth via endless price increases of assets that was fueled by an endless amount of debt.

      “I had visions 10 years ago of all the creepy contortions that would happen.”

      You should probably maybe think of changing your medications.

      “Surprise, socialism was one of the contortions I was worried could evolve.”

      Surprise, this contortion you know as socialism is well ahead of you.

      1. Mr Banker,

        There were many ways to handle the crisis that the banker criminals caused, the first would be jail.

        You need medication if you think the system was saved by the bail out. Maybe you were saved if you really are a banker, but it was at the expense of the rest.

          1. Oh good, I always thought Mr Banker played a great evil Banker. For a minute I thought he was serious.

    1. Companies reporting endless series of negative earnings ain’t all that no more.

      News that sanity has returned must be sending shivers down the spines of Wall Street casino gamblers and their Modern Momentary Theory enablers at the Fed.

      The Financial Times
      IPOs
      IPO crashes send chills from Wall Street to Silicon Valley
      Broader reset expected in valuations for highly-touted start-ups
      A Peloton display during its IPO in New York. Peloton tumbled to one of the worst first-day performances of the year on Thursday.
      Richard Waters in San Francisco and Richard Henderson in New York yesterday

      A series of IPO crashes, as investors turned their backs on some of Silicon Valley’s most prized companies, has prompted forecasts of a broader reset in valuations after the long tech boom.

      Endeavor Group, the Hollywood talent agency that has expanded rapidly into new areas of digital media, became the latest company to pull its initial public offering, after the fitness bike start-up Peloton tumbled to one of the worst first-day performances of the year on Thursday.

      Wall Street has also been spooked by the collapse of a planned IPO for office space rental company WeWork, which repeatedly slashed its mooted valuation after investors balked at its huge losses and corporate governance.

      “I think we have reached a turning point in terms of valuations,” said Jay Ritter, a finance professor at the University of Florida. “There’s a reset going on right now. Sanity has returned.”

      The sharp reversal in sentiment follows signs of growing doubts among stock market investors about the prospects for some of Silicon Valley’s most heavily touted consumer tech “unicorns”, or companies that were valued at more than $1bn in the private market.

      Of the five most valuable unicorns to make it to Wall Street this year, three — Uber, Lyft and Peloton — have seen their stocks trade down since listing, with an average decline of 28 per cent.
      …

  18. I took some time this morning to look for some of those Combined Cycle Coal plants around the country and find out how they’re doing.
    Dang if I couldn’t find a one. They’re Unicorns.

    1. Pretty common now adays. Many homes I watch go contingent only to fall out of “contract”. That one looks like they will need to knock off $110,112 to find that once available but now mythical foreign buyer

  25. The globalists in Great Britain are using the same play book as the Democrats. These phony scandals are just to keep the system which has hurt working class people in the developed countries and made billionaires going. The evil Globalist Empire is striking back:
    https://www.bbc.com/news/uk-49862859

  26. Maybe we should not let sixteen year old children mandate our policies. No the science is not settled. In fact, the underpinnings of AGW have just been destroyed. Basically, the warmists have argued that there had been a plunge in co2 in the atmosphere over the last 15 million years which caused a massive cooling, if a plunge in co2 can cause a massive cooling then a surge in co2 over the last one hundred years can cause a warming. However, the co2 plunge has now been discredited, do not expect to hear about this on MSNBC:
    https://wattsupwiththat.com/2019/09/25/a-clean-kill-of-the-carbon-dioxide-driven-climate-change-hypothesis/

    1. Anyhow, the greenhouse gas theory isn’t logical, and the guy who originally made it up was certifiably insane.

  28. Oh no. Not another failed flip, and in La Jolla CA to boot. Mother daughter team Maxine and Marti put it up for 10.75m and failed to attract any knife catchers. Now up for no reserve auction

    https://www.conciergeauctions.com/auctions/715-muirlands-vista-way-la-jolla-california?utm_source=Email&utm_medium=Auction_Alert&utm_campaign=715-muirlands-vista-way-la-jolla-california

    https://www.zillow.com/homedetails/715-Muirlands-Vista-Way-La-Jolla-CA-92037/16851156_zpid/

    1. They listed almost $1 million above the upwardly biased Zestimate.

      And by the way, do you know anyone who pays a mortgage at upwards of $51,000 a month? LOL!

      $10,750,000
      6 bd
      6,980 sqft
      Price cut: $876 (9/25)
      715 Muirlands Vista Way, La Jolla, CA 92037
      For sale Zestimate®: $9,774,638
      Est. payment: $51,460/mo

      1. “And by the way, do you know anyone who pays a mortgage at upwards of $51,000 a month? LOL!”

        Johnny Carson’s ex-wives shelter likely cost something like that, each!

      1. How’s the view from just below the top of the highest hill on the roller coaster?

        Real Estate News
        San Diego home price down annually for first time in 7 years
        Otay Mesa development
        The Veraz townhome project at the Playa del Sol development by Pardee homes on Otay Mesa is just one of the housing projects being completed in the area. The project was photographed on September 20, 2019 in San Diego, CA.
        (John Gibbins / The San Diego Union-Tribune)
        The median home price in San Diego County was down 0.1 percent annually, but sales were up
        By Phillip Molnar
        Sep. 25, 2019
        12:53 PM

        San Diego County’s median home price in August was down annually for the first time in seven years, albeit a small reduction, real estate tracker CoreLogic said Wednesday.

        The median price of $584,000 was down 0.1 percent from the same time last year at $584,500. The last time prices were down year-over-year was March 2012.
        …

        1. Wasn’t March 2012 near the onset of the Fed’s quantitative easing bailout to reflate the housing market?

          San Diego real estate investors must be crowding around the exit door to the burning theater about now.

  30. Anybody who has done any research at all on climate change knows it’s not settled science. Add to that, for over 40 years none of these predictions have come true.

    These are low information voters that they want to scare. I find it to be pretty evil, but I also think it’s the Communist.

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