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Sellers Were Overpricing Because They Could Get It

https://www.youtube.com/watch?v=yPAs0FfXS3s https://www.youtube.com/watch?v=zZWoVegZRoI https://www.youtube.com/watch?v=5eYXOAWZ0z0 https://www.youtube.com/watch?v=nZjRsEmOiqY https://www.youtube.com/watch?v=iBiSwleTClQ

This Post Has 53 Comments

      1. I started recording the night scenes at around 7:30 PM and finished a bit after 9PM on a Wednesday. Those condos shouldn’t have been dark if anyone was living there. Just how and who is floating all these empty condos is a mystery. And they are building thousands more north. Jack McCabe told me it’s worse up around Hollywood.

        1. If this documentation was performed in the Bay Area, you would have had 20 or more homeless people come solicit / demand some of your financials.

    2. OK – lets group the possibilities
      1. Rich and upper middle class from up north – NY, Boston etc. They use the condos for 4-12 weeks a year. Kinda a waste – but perhaps they dont mind it
      2. Rich Central and South Americans wanting to have money out of the country in case there is a devaluation (i.e. Argentina) or wrong parties take over (i.e. Venezuela in the extreme). A waste – but in the worst case possible in their country – they have a place to stay
      3. Folks from around the world getting the equivalent of the investor H-1B – and just bought property instead of investing in a business

      4. Speculators like 2006-2008.

      2. The one guy I talked to said it was drug money. You can see that during the day it’s bustling. At night most go home somewhere else. If those towers were full the traffic would be intolerable.

        BTW, the lights off the balcony is the port and the cruise ships dock there. Behind that you can see the southern tip of Miami Beach. The 4 nights I was there those towers were almost completely dark.

        Jack and I talked at length about the feds new money laundering crack down, which started in Miami and NYC and has spread all over the west coast now too. People aren’t going to be able to bring in cash anonymously anymore. So who they are going to sell to is a mystery too. Locals can’t afford it.

        1. i am stunned that drug money is a big contributor – Wow!

          Is it that the drug dealers are rich? or is it money laundering to make it ‘clean’

          1. Hard to say. A lot of this stuff was built prior to the crack down 3 years ago. If this is the situation, they’re locked in now! It fits the picture though. It’s right on the water. The salt air/weather alone is gonna eat these buildings up. But if they weren’t built for people to live in but rather to launder money?

        2. It looks a lot like Panama City, Panama. Tons and tons of totally dark high rises, all unaffordable to locals (who live in houses in the shadows of the towers), all built only to launder drug money. Great video, thanks Ben! So what will become of these buildings?

    1. Good article Boo. The old truck from the upstairs neighbors in our condo complex sounded like gun shots as the engine all but died this morning. I kind of feel for them. One of the girls had her Chevy Cruze repossessed a few weeks ago. A tow truck just showed up and hauled it off one morning.

      I don’t know if anyone posted this or not (I’ve been away for a few days), but WSJ had a good article about how the middle class can’t afford their cars anymore:

      https://www.wsj.com/articles/the-seven-year-auto-loan-americas-middle-class-cant-afford-their-cars-11569941215

      1. Home equity has supported the family budget for quite a while now. And that has a big effect on car purchases. When the house stops appreciating car sales crash.

    1. The GMAC bailout under obama about nine years ago. They couldn’t “afford” cars at that time.

      Only $17 billion of taxpayer money flushed down the toilet.

      “A third of auto loans in 2019 had a term period over six years. People cannot afford the cars they are buying.”

      How The GMAC Bailout Was The Biggest Scam Of Them All
      How The GMAC Bailout Was The Biggest Scam Of Them All
      http://www.businessinside

      2. “GMAC fell into financial trouble in part because of its deep plunge into mortgage lending. Its problems then were compounded by the economic crisis.”

        Financing over-priced automobiles wasn’t enough?

      3. What about the recent farm bailouts?

        At $28 billion so far, the farm rescue is more than twice as expensive as the 2009 bailout of Detroit’s Big Three automakers, which cost taxpayers $12 billion.

        1. Arguably the farm bail outs are the fault of central planners who forced farmers to borrow money at low rates which increased yields and drove down market price.

          Market prices for farm commodities such as corn and soy collapsed in 2014. This was years in the making.

          2. Forced indeed.

            Central planners lowered rates to such a point that farmers either could choose to borrow to buy more acreage and capital equipment. Farmers who did not do this were undercut by more complex farms that borrowed the funds.

            The central planners ruined the market by flooding it with liquidity, and the result was a collapse in price due to increased yields far above what the market required.

    1. Bad headline. It should say taxpayers will make up and poor public union pension investment decisions.

      “And it is important to remember when it comes to pension funds, that money came from tax payers and public sector workers like teachers and firemen. When lofty returns are not realized, the pension funds will face a shortfall, and either tax payers will need to make up the difference or pensioners will face benefit cuts.

      Because pension benefits are usually guaranteed to never be cut by state constitutions, typically a bankruptcy means higher taxes and fewer public services.”

  6. Virginia police officer suspended after turning in suspected undocumented immigrant over to ICE

    By Louis Casiano
    Published 23 hours ago

    A Virginia police officer was suspended after allegedly turning over a suspected undocumented immigrant to federal authorities following a traffic accident last month.

    The officer discovered one of the drivers didn’t have a Virginia driver’s license and ran a check with the state Department of Motor Vehicles, police said. The check revealed the driver had a violation for failing to appear for a deportation hearing.

    The officer verified the warrant and alerted officials with Immigration and Customs Enforcement (ICE).

    The Fairfax County Police Department enacted a 2007 policy that prohibits officers from confirming a person’s immigration status and detaining them solely based on civil violations of immigration law.

    “This is an unfortunate issue where the officer was confused,” Police Chief Edwin Roessler Jr. said. “We have trained on this issue a lot. This is the first time we’ve had a lapse in judgment, and the officer is being punished.”

    The driver was released from federal custody after three hours and ordered to wear an ankle monitor. Roessler apologized for the incident and ordered an internal investigation upon learning of it.

    https://www.foxnews.com/us/virginia-police-officer-suspended-after-turning-in-suspected-undocumented-immigrant-over-to-ice

  7. The legacy of Mel Watt and obama.

    “The federal government has dramatically expanded its exposure to risky mortgages, as federal officials over the past four years took steps that cleared the way for companies to issue loans that many borrowers might not be able to repay.

    Now, Fannie Mae, Freddie Mac and the Federal Housing Administration guarantee almost $7 trillion in mortgage-related debt, 33 percent more than before the housing crisis, according to company and government data. Because these entities are run or backstopped by the U.S. government, a large increase in loan defaults could cost taxpayers hundreds of billions of dollars.”

    https://www.msn.com/en-us/money/realestate/federal-government-has-dramatically-expanded-exposure-to-risky-mortgages/ar-AAIcp3f?li=BBnbfcN

  9. Who’s the smoker?

    And I never understood how they could fit a sewer system for thousands of housing units onto those tiny strips of land.

    1. South Florida swamps and sandbars are an unusual location for such an enormous city like Miami. It’s almost understood to be a temporary settlement since it’s only a matter of time before the next hurricane levels it again.

  10. I live in the Fort Lauderdale area. Although I don’t doubt many of these are vacant, you also have to remember that everyone operates on a different time here. These aren’t 9 to 5 Ohio jobs….so much hospitality. Often people don’t even walk into a restaurant until 11pm and into a club until after 1am.

    1. I was there for 4 days, it’s not like I didn’t see other than this video. The hotel I was in is 1 year old. I have never been in an emptier hotel. It was rare to hear another person. Half of that hotel is going to be condos, when that half is finished. The was no problem getting a table to eat. A car to rent. And after about 5 PM there was plenty of parking.

      1. ‘According to the report, South Beach with an average rent of $2,165, saw prices go down 2.7 percent compared to last year, and the share of occupied renter households was 66 percent. Sanziana Bona, who authored the RENTCafé report explained, “The median age in this predominantly renting neighborhood is forty, and interestingly enough, the area saw a drop of four percent in renter households. Thus, the sliding demand for rentals fueled by those opting to relocate to quieter areas can point to a decrease in rent prices.”

        https://miamibeachtimes.com/real-estate/floridas-10-most-expensive-zip-codes-mainly-located-in-the-miami-metro/

    1. It takes a lot of balls for Xinhua to argue Macau is a great example of an SAR. Their median income is a paltry USD$23,000, but their “per capita” thanks to inequality is a massive USD$90,000+. It’s a nice place in the tourist areas, but if you venture away it is very poor and dirty. Zhuhai, directly across the border, is a vastly superior city for living standards, incomes, job opportunities, etc.

      Macau level inequality is a big reason for the HK protests — no hope for the future when housing is an asset to launder money out of the corrupt Mainland. The big difference between HK and Macau is education. Most HKers are highly educated whereas Macau folks are expected to work as hookers, cooks, and card dealers, thus some of the lowest educational attainment in East Asia. Why waste educational resources on the help?

      With that said, Macau is worth a visit. The food is fantastic and unique, plus the Iberian architecture.

      1. I was stuck in the Macau airport for a long time once. Never made it downtown. From that perspective it did not seem like a good place to visit. I’d have much rather been stuck in the Las Vegas airport for the same amount of time.

        1. It’s a tiny little city, so a full day is more than you need. I’d highly recommend it for the curry alone. I wouldn’t recommend it alone as a vacation.

      2. My mom lived in Hong Kong for almost 2 years (she is native US). To this day it is her favorite place in the world. She maintains close ties to friends there and took my younger sister there several years ago.

        I find it deeply troubling that our president didn’t speak out more forcefully in favor of the Hong Kong protesters as they seem to epitomize the values of a liberal democracy, freedom of expression, right to self-determination/self-government, assembly, etc.

  13. Ben, you mentioned the Feds money laundering crackdown. Somehow I missed any discussion of this. Do you have a link, or more info regarding this? I wouldn’t be surprised if a huge number of sales here in Nor Cal are Chinese nationals laundering drug money.

    2. IIRC, it was a post regarding LLC’s with anonymous holders. Ie, money launderers. I don’t know how many of these foreign “investors” are laundering money through drug money vs the ones simply exiting there countries currency but I would expect it to be an alarming number if we do ever find out.

      1. The way I remember, it started with the Panama Papers. More reports exposed the feds as actually encouraging money laundering (as they had in Canada for years). Then the New York Times or WSJ did a tiny look-see into LLCs in NYC and found drug/arms dealers and various crooks hiding money. The feds were embarrassed and opened a limited ban on cash transactions in Miami and NYC. More criminal activity was exposed and this was eventually expanded to the west coast and in effect today.

        In one revealing episode, right after the ban in Miami, the UHS there announced a seminar on how to get around it. The feds immediately replied they would be in attendance.

    1. Global News Select
      BOND REPORT: 2-year Treasury Yield Lowest Since Sept. 2017 After Data Shows Cracks In U.S Services Sector
      Provided by Dow Jones
      Oct 3, 2019 10:02 AM CDT
      By Sunny Oh
      Focus on U.S. services sector PMI Thursday

      U.S. Treasury yields slumped Thursday after an indicator of service sector activity suggested a key pillar of the American economy may be more vulnerable than thought.

      What are Treasurys doing?

      The 10-year Treasury note yield slumped 7.1 basis points to 1.526%, while the 2-year note rate , sensitive to expectations for Fed policy, was also down 9.2 basis points to 1.392%, its lowest since Sept. 2017. The 30-year bond yield tumbled 6.1 basis points to 2.027%.
      …

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