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The Building Boom Made Possible By A Gold Rush Mentality Among Investors

A report from Curbed Boston in Massachusetts. “It looks increasingly like a buyer’s market in the Boston area. Such a trend would’ve been laughable a short while ago, but new numbers for October from the Warren Group and the Greater Boston Association of Realtors seem to confirm the shift. Detached single-family sales cratered in October, according to the statistics, which analyzed closed deals in Boston proper and 63 municipalities in its orbit. ‘A late summer slowdown in the market is not uncommon, but this year it was more pronounced,’ said Jim Major, president of the Greater Boston Association of Realtors.”

“More choice is behind the paltry sales numbers, as properties languish on the sales market longer and potential buyers watch prices fluctuate. Those buyers have basically adopted ‘a wait-and-see attitude until prices settle,’ Major said. So is the advice now sellers beware? Looks like it. ‘Our years-long seller’s market appears to be coming to an end, as market conditions begin to shift more and more in favor of buyers,’ Major said. ‘As supply and demand continue to become more balanced, buyers can xpect increased bargaining power and a wider selection of homes to choose from, while home sellers will find more competition and may need to become more realistic in their pricing to sell their home in the desired time frame.'”

From Reuters. “Sales of new U.S. single-family homes unexpectedly fell in October following recent strong gains. The median new house price fell 3.5% to $316,700 in October from a year ago.”

From Mansion Global on New York. “Thirty Manhattan homes asking $4 million or more found buyers in the week ending Sunday, the strongest week for the city’s anemic luxury housing market in nearly a year and a half. A confluence of positive economic conditions is driving the boost to high-end home buying, according to Donna Olshan, president of Olshan Realty and author of the report.”

“The most significant among them are widespread discounts on the city’s priciest home as sellers adjust expectations amid a more onerous tax regime and a supply glut that spawned crushing competition among developers and resellers. So far this year, the average home asking $4 million or more has gone into contract with a 10% discount.”

From RE: Miami Beach in Florida. “The big Miami Beach real estate story this week was the bombshell announcement that Purdy Lounge will close its doors for the final time in February. In a much quieter fashion, a number of other Sunset Harbour businesses have closed or are winding down.”

“‘I feel it’s real estate investors unrealistic expectations of what mom and pops can pay for rent. These investors overpay for real estate with the delusion that they can substantially raise rents to increase their returns,’ said Dominic Cavagnuolo, owner of the popular Lucali restaurant.”

From Senior Housing News. “It’s been an eventful and in many ways difficult year for the senior housing industry — and it’s not over yet. We’ve compiled some of the most vivid and powerful quotes that appeared in Senior Housing News this year. ‘It’s a time to throw spaghetti against the wall.’ — Beth Mace, chief economist at the National Investment Center for Seniors Housing & Care (NIC), April 24, 2019.”

“The study quantified that the number of middle-income seniors will nearly double to 14.4 million by 2029, and 54% of them will not have the financial resources for private-pay senior living if today’s rates hold. That’s the data, and then there’s how senior housing pioneer Bill Thomas described the opportunity at Senior Housing News’ inaugural BUILD event: ‘The largest growth opportunity in the field of senior housing is not high-end, highrise high-amenity, urban infill properties. It’s frickin’ America … where people want to live where they want and how they want, but don’t have the housing that makes it possible.'”

From Columbus CEO in Ohio. “Options abound for seniors who may need a continuum of care as Central Ohio’s robust retirement community and assisted living market evolves. Standalone assisted living properties ‘are coming up on every corner,’ says Mark Ricketts CEO of National Church Residences, which owns and operates more than 300 communities. Whether the market will bear the increased inventory remains to be seen, Ricketts says, but he does have concerns that it is being overbuilt.”

The Atlanta-Journal Constitution in Georgia. “Senior housing had a growing reputation as a lucrative sector of real estate, and The Lodge in 2013 seemed perfectly positioned to capitalize on the aging population of Atlanta’s suburbs. The plan was straightforward: Open the assisted living community and fill it with residents, demonstrate a profit and then flip it in a few years for a healthy return. Six years later, the facility that was supposed to be a successful business venture is in bankruptcy. Occupancy suffered as the financial problems dragged down the facility’s reputation and as state inspectors cited the home for one serious violation after another, including untrained, insufficient and abusive staff.”

“‘I know that it’s just a matter of time before someone’s going to die,’ said Mondresia Carver, who managed the facility for several weeks this year but said she was let go after repeatedly expressing concerns. ‘I worry myself to death for those residents.'”

“That kind of story has been repeated at dozens of homes throughout Georgia, an Atlanta Journal-Constitution investigation has found. Fancy senior care facilities like Aspen Village popped up all over the state in recent years, especially in metro Atlanta, as money poured in from across the country and even around the globe. The building boom was made possible by a gold rush mentality among investors hoping to make money on the graying of America.”

“But the tidal wave of retirees expected to create an overwhelming demand for private pay senior care has yet to arrive. Meanwhile, the building boom increased competition, and costs shot up. The result: More than 20% of Georgia’s assisted living communities and large personal care homes had owners or operators that faced recent financial problems, the AJC found.”

“Financial stresses can trigger a range of issues for residents. To fill beds, homes may admit or keep residents whose health needs require a higher level of care than the facility can provide. Cash flow issues can lead to everything from short staffing and neglected maintenance to unappealing meals. The AJC found a host of violations, including one linked to a death, at facilities caught up in a fraud case involving Atlanta senior care owner Christopher Brogdon. He was under financial pressure because of an order to pay jilted investors $89 million.”

“Big banks and private equity funds financed new projects, as did real estate investment trusts, also known as REITs. International investors placed bets on senior housing too. At least five projects in Georgia got money for their projects from wealthy foreigners who wanted to get EB-5 visas. ‘Maybe that was naive on my part, but I don’t think we thought long-term care was going to turn into real estate investment,’ said Melanie McNeil, Georgia’s long-term care ombudsman.”

This Post Has 111 Comments
  1. ‘I know that it’s just a matter of time before someone’s going to die’

    We have a lot of financial media in the US. I’ve followed this senior living bubble for a while, along with apartments, student CRE, etc. I saw someone mention distorted markets the other day. You think? Gluts of luxury no one can afford? Of all sort, and for years.

    Yet with all these talking head and web reporters, how many have mentioned the almost constant distortion to markets by central banks? Yes, the Fed is doing this and the Fed is doing that. Well guess what? These people dying in this “gold rush” senior debacle are the result of Fed distortions too. It’s just that no one in the media will say it.

      1. Did the Fed/govt prevent the bust, or cause it?

        The private banking cartel called the Federal Reserve, has caused every single boom-bust cycle since its 1913 inception as the most efficacious means of transferring the wealth and assets of the bottom 90% to the Fed’s .1% accomplices in the financial sector. The government has been the accessory and enabler rather than the artifacts of this systematic fraud, thanks to our captured and complicit regulators, enforcers, and policymakers.

        1. “transferring the wealth and assets of the bottom 90% to the Fed’s .1% accomplices in the financial sector”

          So how does the financial sector benefit when it takes 10’s of millions of dollars in write-downs on its real estate investments?

          1. “So how does the financial sector benefit when it takes 10’s of millions of dollars in write-downs on its real estate investments?”

            When was the last time that happened?

    1. “Yet with all these talking head and web reporters, how many have mentioned the almost constant distortion to markets by central banks?”

      – Market distortions have serious consequences at many levels. There’s a continuum: Outright death, , Impoverishment due to increasing wealth inequality, Losing a home due to foreclose, Homelessness, Underwater homeowners, Taxpayer bailouts, TINA, FOMO, etc. Financial loss due to inflation, Various and sundry financial anxieties. On and on…

      Contrast these with “Life, liberty, and the pursuit of happiness.”

      The Fed is a canal of unelected and unaccountable, extra-Constitutional private bankers, with only their selfish interests in mind. They don’t have your back. Just the opposite.

      What are our “Representatives” doing about this? Crickets…
      The media supports the “Everything is awesome” narrative and so don’t think you’ll get anything but lip service from them.

      “Livin’ the dream.”

    2. That AJC article about assisted living/nursing home concerns is right on the money. A must-read for anyone entering that stage of life or looking for care for a loved one. As someone who has worked in these facilities, there are some serious problems in some, but not all. The anecdote about nursing aide who was let go (e.g. the whistleblower) for voicing concern is very accurate. Understaffing for the level of care is rampant. If you want to understand the level of care in a facility, take a couple of aides to dinner and ask them for their unvarnished discussion about the good, bad, and ugly of the facility they work in. They are paid a pittance and they will spill the beans if they know there is no retribution.

    3. My dad lived in a 55+ non-luxury, independent living rental building in Castle Rock, CO for 3-1/2 years. Then he got sick, spent a few weeks in a rehab hospital, and my brother and I moved him to a small (8 residents total) assisted living home in South Denver, then he died 2 months later in September.

      He had a long-term care policy but it wouldn’t have kicked in until late October, and not be reimbursed until a month later.

      We paid $5,000 a month for a room there, $12,500 total.

      1. I am sorry for your loss Apt 401. Your story sounds familiar to that of my grandfather. I still miss him and think about him often. He lived a full life and went quickly when it was his time.

      2. I am sorry just had to move my mother from an assisted living facility to a skilled nursing facility. Unfortunately my father died almost 25 years ago. He was only in his early 60s. It is very difficult to see parents age and die.

      3. Dad lost weight rapidly when he started chemo, and he was already lean having never been overweight. His decline was rapid and painful, but he never shared his misery. I remember one day he said that he just wanted to sit on his åšš and read the newspaper, but he didn’t have an åšš. He just wanted to die at home near family and not be a burden; he did, and he wasn’t, respectively.

  2. ‘It looks increasingly like a buyer’s market in the Boston area. Such a trend would’ve been laughable a short while ago’

    Laugh it up Curbed, while thousands of buyers walk away from their stupid purchases.

    ‘new numbers for October from the Warren Group and the Greater Boston Association of Realtors seem to confirm the shift. Detached single-family sales cratered in October’

    Oh dear….

          1. Compared to San Diego just about everyone has lousy weather. Beantown is a lot warmer than Burlington VT, my hometown. Happy Thanksgiving everyone.

      1. I grew up out there and the winters never bothered me. But I don’t mind cold weather. It’s more the townie provincial vibe of the place I find off putting. There are some beautiful areas along the coast north of Boston. I like the area up around Newburyport and Salisbury and you can get a train into the city there in about an hour.

        1. It’s more the townie provincial vibe of the place I find off putting.

          That was my conclusion after three years of law school there.

      2. You could easily say the same about Seattle. Who wants to live in drizzle and low cloud cover for 9 months of the year? Apparently A LOT of people.

      3. Techwise the area is booming. Tons of money coming in for Pharma, Robotics, AI, etc. I track startups in the area and it’s very, very healthy startup environment. compared to Silicon Valley – which is admittedly larger in VC bucks – the tech is more long term advancements rather than quick scale. Not super scale salaries but quite well compensated.

          1. When companies like Uber can raise billions it is a huge bubble. It is just a story that someday we will have self driving vehicles people can afford

      4. The winters can be bad. I’m a MA native so that’s why I live here, in Cambridge. Never moved for one reason or another. Anecdotally, I spoke to few MA homeowners in the past week…one lives on Cape Cod, the others in greater Boston. Since I’m a long term renter with currently well below market rent, my real estate non-status is often a topic for discussion (and judgment, renters are considered second class citizens, not real adults and perpetually “in limbo”). My walkability factor is probably 97.

        No one talks about a softening market or a possible correction. They all think it’s up, up and away because “everyone wants to live here”. Prices have doubled in the last 5 – 8 years. Construction on every corner, new apartment buildings – that all look the same – still going up all over the place. Cambridge/Somerville and surrounding towns like Arlington, Belmont, Watertown, Newton, Medford are all “GONE” and NEVER coming back (meaning if you didn’t get in, you can’t afford it, you’ll never be able to).

        Well, I don’t tell them as a renter I’ve saved a lot of $$ and could pay cash…but…I want to retire before I’m 70 (my goal is 62, four years) nor do I wish to pay these inflated prices.

        I’m told, “You have to move south of Boston” and endure some of the worst gridlock traffic. You have to move to Lawrence, Brockton or Fall River (higher crime areas), or move two hours drive out to western MA if you want anything “affordable” because (I’m told) prices in greater Boston are NOT going down significantly.

        Nope, not gonna happen here! (I’m told….)

    1. For anyone under age 50 who wants to save for retirement and buy stocks and bonds at price low enough to promise a decent future return, find an affordable place to live, or start a business, a real estate price crash is not a problem. It is a solution.

      The stock market has bubbled up a further 25 percent this year. Based on what? U.S. life expectancy is falling. Do they expect to suck profits from the dead?

      1. Our financial system is a house of cards built on debt, fake money, and fraud. The whole rotten edifice is going to come tumbling down once true price discovery can no longer be held at bay by central bank money-printing.

    2. “The Miami article is worth reading in full.”

      This is a typical trend of a Redevelopment Zone. The velocity of money in an established business and residential area becomes settled. Then a politically connected developer with a cadre of investors arrive with promises of increased tax receipts for the municipality. Gentrification.

    1. Decades after the ADA took effect, how does someone design a building that is so obviously not “accessible”?!

  3. Such a trend would’ve been laughable a short while ago, but new numbers for October from the Warren Group and the Greater Boston Association of Realtors seem to confirm the shift.

    No, what’s going to be laughable is when the FBs who drove housing to such insane valuations end up mailing the keys to their lenders and slinking away under cover of darkness. What’s going to be even more laughable is when the patient and prudent are buying shacks at firesale prices, while their FB neighbors who bought during the bubble years look at the comps and sob disconsolately.

    1. Or maybe just sit in their “homes” for 5 years before the sheriff comes to evict you, banking all that free money……But so many people just pick up and leave at the fist 50cent eviction/foreclosure letter sent to them. I saw this a lot in NYC send an official looking letter to the long time rent controlled tenant and they move without a fight.

    2. With the Wall Street headline stock market indexes hitting record highs on a regular basis, against the backdrop of an earnings recession and rarefied P/E ratios, coupled with housing prices clinging to an ephemerally high plateau, there’s never been a better time to jump into the Everything Bubble. Renters I know are so certain, after a decade of nonstop rent hikes, that home ownership is the ticket that they are desperate to buy any place they can afford rather than continue renting.

      A point of desperation is a good time for restraint, if you can muster it.

      1. With the Wall Street headline stock market indexes hitting record highs on a regular basis, against the backdrop of an earnings recession and rarefied P/E ratios, coupled with housing prices clinging to an ephemerally high plateau, there’s never been a better time to jump into the Everything Bubble.

        I see things from the perspective of the Wall Street-Federal Reserve Looting Syndicate. To me, these rigged, manipulated, Fed-juiced markets look like the perfect set-up for the next Great Muppet Reaping. Investors are all-in, and assume that the Fed’s QE-to-Infinity is going to levitate these Ponzi markets to even greater heights. However, the whole idea of a Ponzi is to bilk the marks, and I have zero doubt that the Fed and its Wall Street grifter accomplices are setting up the next great wealth transfer from the muppetry to the .1% via yet another engineered market crash- so “invest” in this insane bubble at your own peril.

        https://www.marketwatch.com/story/wall-street-optimism-has-reached-extreme-levels-according-to-this-gauge-2019-11-26?mod=mw_latestnews

    1. Ya know, the other night I threw some spaghetti noodles against the wall, and they spelled out “Realtors are liars.”

    2. Everyone has their own method to determine if their pasta is done. Throwing spaghetti against the wall is one that I heard a long time ago. If it sticks to the wall, it is done.

      1. Pasta – I use the “al dente” method. Saves cleaning the wall every time.

        Real Estate – I use the “stick a fork in it” method. It’s done! 🙂

  4. “Sales of new U.S. single-family homes unexpectedly fell in October following recent strong gains.

    “Unexpectedly”? Maybe these Real Journalists should be chatting with folks like Ben who have a proven track record when it comes to calling bubbles, instead of quoting bought-and-paid-for REIC shills.

    1. Maybe these Real Journalists should be chatting with folks like Ben who have a proven track record when it comes to calling bubbles, instead of quoting bought-and-paid-for REIC shills.

      You assume they are looking for the truth.

      1. You know what happens when you assume. The purpose of the press is to promote the narrative held by the billionaires that own the MSM Bloomberg jumped into the race since despite controlling the narrative people like Warren just are not getting it done. She does seem to be backing away from positions outside the narrative and certainly is following the party line on immigration:
        https://www.breitbart.com/politics/2019/11/27/elizabeth-warren-ice-is-cruel-to-deport-indias-college-graduate-illegals/

  5. A confluence of positive economic conditions is driving the boost to high-end home buying, according to Donna Olshan, president of Olshan Realty and author of the report.”

    Hey Donna, maybe the Wall Street grifters who are buying those high-end homes should look at the confluence of ominous socioeconomic conditions that are causing social unrest to erupt around the world against rapacious and unaccountable elites. It’s coming to Manhattan, one of these days, and when it does I would not want to be living in an ultra-luxury skybox or condo, much less paying a huge mortgage for the privilege, when public anger at the elites and their swindles boils over.

    1. There was a boost from lower rates, but that was/is a temporary interruption of the downward trend. The Conference Board’s Consumer Confidence “Plans To Buy A Home” index is a good forward-looking indicator. This is trending down. Pending home sales (PHS) data (out today) is also a leading housing indicator along with new home sales (NHS). PHS was also down today…

      While it’s never a straight line, the trend is clear, at least to me. The Fed may extend the market cycle (and they do via enormous interventions, such as the current cycle, for example), but they can’t prevent it.

  6. “Sales of new U.S. single-family homes unexpectedly fell in October following recent strong gains. The median new house price fell 3.5% to $316,700 in October from a year ago.”

    At least the used home sellers are still able to find buyers willing to pay over the 2018 price in San Diego, according to local media reports.

    1. Authoritative Case-Shiller Index Reports Small Rise in Home Prices in San Diego
      Posted by Chris Jennewein on November 26, 2019 in Business
      Home for sale in Del Mar
      A home for sale in Del Mar in August. Photo by Chris Jennewein

      San Diego-area home prices posted a small monthly rise in the latest report Tuesday from the widely-followed Case-Shiller index, but are up only 2.8% over the past year.

      Local home prices rose 0.1% from August to September following a decline of 0.2% between July and August. The trend over the past 12 months has been mixed, with ups and downs locally and a slowing in growth nationally.

      “September’s report for the U.S. housing market is reassuring,” says Craig J. Lazzara, managing director of S&P Dow Jones Indices. “The national composite index rose 3.2% relative to year-ago levels.”

      “It is, of course, too soon to say whether this month marks an end to the deceleration or is merely a pause in the longer-term trend,” he added.

      1. “…are up only 2.8% over the past year.”

        Weren’t San Diego prices recently rising at double digit annual rates, or was that the pre-2007 collapse period?

        1. According to this article, the median home price in San Diego County increased from $280,000 in June 2009 to $590,000 in June 2019. The average annualized rate of increase over the ten years was ((590/280)^(1/10)-1) × 100% = 7.7%.

          The recent rate of appreciation is considerably slower.

          1. Real Estate News
            San Diego home price hits all-time high: $590K
            This two-bedroom, one-bath, 825-square-foothome on 30th Street in South Park is listed for sale at $600,000 on the Redfin website. It’s only slightly higher than the county’s new median of $590,000.
            (Howard Lipin/The San Diego Union-Tribune)
            By Phillip Molnar
            July 26, 2019
            3:49 PM

          2. California, 950 mile$ of Pacific $shoreline

            High tide$ … Low tide$

            Beecarefull $wimming in $hark churning water$!I

            Today$ report from $olana Beach: lot$ of foam & red (-) tide$

  7. ‘The plan was straightforward: Open the assisted living community and fill it with residents, demonstrate a profit and then flip it in a few years for a healthy return’

    This is how I spotted the apartment bubble. When buyers are losing money, the only reason imaginable is the idea of flipping to a greater fool or cash-out refinancing.

    ‘Six years later, the facility that was supposed to be a successful business venture is in bankruptcy. Occupancy suffered as the financial problems dragged down the facility’s reputation and as state inspectors cited the home for one serious violation after another, including untrained, insufficient and abusive staff’

    And this is the outcome. Businesses have to make money or somebody gets hurt. This concept of not needing to make money should be cut out of the business world like the cancer that it is.

    1. Businesses have to make money or somebody gets hurt. This concept of not needing to make money should be cut out of the business world like the cancer that it is.

      Matt Levine laid out 3 main avenues that VCs and start-ups target when they run loss making companies in the short run and sacrifice profitability for growth. If they can turn the corner, it is something like this:

      “But there are other answers that involve the company actually making money. One is a loose “economies of scale” thing, like, the more widgets you produce the cheaper it will be to produce them until eventually you are profitable, etc. One is a loose “network effects” thing, like, if everyone is buying and loving your widgets then surely you should be able to find new ways to make money by connecting all of those loyal community members. One is a loose “predatory pricing” thing, like, if you come to dominate the market and kill off all your competitors by losing money on every transaction, then you can raise your prices to monopoly levels and start making money on every transaction.”

      The big question is whether these start-ups are more like Amazon or more like MoviePass. Time will tell.

  8. ” … was made po$$ible by a gold ru$h mentality among investor$ hoping to make money on the graying of America.”

    Install a 600$f “granny $helter.$hed” (aka: “wilther.in.place”) then rent/$hare the main 3700$f $helter.$hack for ca$h revenue$ from drug recovery $tudent$! Ea$y.

    NON.bank Private Equitie$ ETF REIT fund$ to the re$cue!I

    (Where did$ they find all those monie$ to Di$tribute$?)

    1. This is the biggest and worst lie currently being perpetrated by the REIC bought and paid for media (CNBC’s Diana Olick, in particular).

      1. Yup. And I haven’t bought stocks anytime recently.

        I wanted a 20% correction before buying stocks again. After these fake sugar highs make that 25-30%. Sitting and waiting.

    1. “Is your FOMO telling you to jump head first into the stock market?”

      Short answer: no. 🙂

  9. Got subprime?

    The Financial Times
    Leveraged loans
    Yield-crazed investors pile into US subprime car loans
    ABS are motoring despite weakening consumer economy and rising delinquencies
    Used cars are shown for sale in National City, California, U.S., June 30, 2017. REUTERS/Mike Blake –
    Robert Armstrong
    November 25, 2019

    The market for securities backed by the riskiest US car loans is booming, as yield-crazed investors shrug off nagging concerns over the health of the American consumer.

    Deals have been “going gangbusters” in subprime auto asset-backed securities (ABS), said Jennifer Thomas, an analyst at Loomis Sayles, a Boston-based firm managing $286bn of assets. At $29bn so far this year, issuance of subprime auto ABS is on track to surpass 2018’s record haul of $32bn, according to data from Finsight, despite softer sales of new cars and trucks this year.

    The lower-rated slices of recent deals are “five or six times oversubscribed”, said Ms Thomas. “The market is trading very well.”

    1. “…as yield-crazed investors shrug off nagging concerns over the health of the American consumer.”

      These investors are probably listening to Bloomberg and CNBC. Where, daily, I hear how strong the consumer is.

  10. Seniors aren’t going to move to overpriced care places. It all goes back to what’s affordable. Everything goes back to what’s affordable so what’s the point in building la la Land senior care housing.

    It’s going to be a big problem as the Boomers age. The system wants to take every penny a senior has ,( and that includes the health Care system,) before they die. It’s a different form of extraction of wealth by price fixing monopolies

    I don’t use the health care system very much in my life but it’s because I was blessed with pretty good health. But, I have friends that use it to the max.

    1. I don’t think any segment of the population thought health care would rise this high in the last 25 years.

      Employers use to pay the bulk of health care costs in the good old days. The employers slowly took away those company benefits.

      How could anyone really plan for this level of increase? Same with the fake housing market.

      1. As illegal immigration created a glut of workers, there was no need to provide insurance as a benefit. Then due to both uninsured illegals and the newly poor native workers, the ERs of this nation were flooded and the costs passed on to the people who still had insurance. It all started with effectively open borders promoted by the billionaire globalists.

    2. I’ve been getting all of my dad’s mail since July. The amount of his health care billed to Medicare and Medicare supplemental policy are hundreds of thousands of dollars, multiple hospital visits in four months.

      1. Maybe 25-yrs ago I remember reading, “Roughly 80% of our healthcare expenses will occur during the last 6-months of life.” The obesity epidemic has likely reshaped that function.

          1. “Americans who are not health-care economists tend to resist the concept of QALYs and DALYs because they lead the system not to pay for one person’s health care in order to pay for another’s. This is considered “rationing” of health care, and rationing is generally condemned under a variety of names, most memorably as “death panels.””

            “In fact, though, every nation rations health care every day. No country—not even the richest oil sheikdoms—can afford to pay for every advanced surgical procedure and every costly drug that modern medicine knows how to provide. Accordingly, health-care systems are constantly making choices—rationing—about which treatments to pay for.”

            “The United States, too, rations health care. Just ask any of the 29 million uninsured Americans who generally can’t see a doctor or pay for a prescription until they’re sick enough to go to the emergency room. But the U.S. does its rationing in a different way.”

            “In other rich countries, there’s a basic floor of care that everybody gets, which means there’s a ceiling as well—the system simply won’t pay for certain drugs or procedures. In the U.S., millions of people have no floor except the emergency room, and others have no ceiling. With the right insurance plan, there’s almost no limit to what money can buy in American health care, regardless of the age or condition of the patient. And so we continue to spend huge sums on that small, generally elderly segment of the population with chronic illnesses, while millions have no health insurance.”

            https://www.theatlantic.com/health/archive/2017/06/how-we-spend-3400000000000/530355/

      2. IIRC, end-of-life pain medication for my mom 3.5 years ago had a $3,000 copay. Luckily, there was a financial assistance program.

  11. “But, I have friends that use it to the max.”

    appendix removal: $75,000+
    Diabete$ = RICO inve$tigation$

    1. Friend of mine went in for a cough and just needed a round of 10 dollar antibiotics.

      Bill came in at 22 thousand with a $2,700.00 copay with insurance paying the rest.

      Does anybody think that these kind of charges are sustainable.?

      And God forbid if the government takes over health care.

      1. “…with a $2,700.00 copay…”

        Your friend might be able to negotiate a 20% discount by paying in full within the first 10 business days. Call them, first.

      2. Was this at an ER? Even an urgent care place would have been maybe a few hundred dollars to a cough. Or is there something else we aren’t being told?

          1. I went to the ER last year, and it didn’t cost $27,000, It was exactly $1532 and I only paid $75 out of pocket. What did they do for the $27,000? Give him every possible scan?

          2. It was exactly $1532 and I only paid $75 out of pocket

            I went a month ago, got mis-diagnosed, and it was more than that. $512 out of pocket (largely due to deductible)

    2. That’s more than my fake knees cost last year. An appendix can be removed in an outpatient operation. Now if it’s already burst that’s a whole other beast.

      1. I bought some camping gear off a guy recently who was basically liquidating assets due to a job loss (company folded), followed by medical issues that financially had pretty much wiped him out. It was sad – he loved back-country camping, as do I, and had a ten-year-old dog who was his inseparable companion, but that he might not be able to keep due to possibly being homeless soon. I gave him a good price for his gear & bought him dinner, but it makes me sick to see what the oligarchy and their financialization of everything is doing to this country and ordinary people.

  12. A couple of things worth pointing out today:

    1) JAMA put out a paper confirming a 3-year trend of declining life expectancy for Americans. The causes are multi-factorial and range across all races. The causes for the lowering of US life expectancy are varied, but generally believed to be opioids, alcoholism, higher smoking rates (women targeted in 70s by tobacco and now we see the results), distracted driving (cell phones and car usage), cardiovascular deaths (strokes & heart attacks), and suicide.

    2) Fly-over is where these “excess deaths” are rising the highest. Ohio, Pennsylvania, Kentucky and Indiana account for 1/3 of the total decrease mortality. Notably, California and Wyoming are the only states that had an improvement in life expectancy. All other developed countries are doing much better than the US in life expectancy, despite the fact that we spend 2x on health care what the OECD average is.

    3) The implication of this as it relates to housing is that we continue to see an acceleration of the boomers and even younger deaths (death rates ticked up markedly for 24-65 year-olds). This will translate to more housing stock and less demand at the margins.

    4) Lots of articles are trotting out that Zillow study that shows that 1/4 of the total US housing stock will be on the market by 2037. This echoes what I have been saying for a while in that the broad-based, meaningful correction won’t really happen for about another decade. It’s going to be rough for renters and knife catchers for the next 5-10 years. But after that a flood of inventory should open up.

  13. Here is a Business Insider article discussing the mismatch between boomer housing and millennial wants based on that Zillow study of the high number of housing turnover expected by 2037:

    https://www.businessinsider.com/gen-x-millennials-dont-want-baby-boomers-empty-houses-2019-11

    By the way, the Zillow study isn’t anything new. Fannie Mae’s Economic and Strategic Research Group warned of the “beginning of a mass exodus looms on the horizon” in 2018. George Mason University also warned about that “the significant number of older owners in relatively large homes may portend a ‘baby boomer sell-off’” (also from 2018).

    Interestingly enough, one of the factors cited as disrupting the senior housing (assisted living, independent living, skilled nursing facility, memory care for dementia/Alzheimer’s, etc.) in the article above is self-driving cars.

    1. I don’t know, I think baby boomers are going to want to get out before 2037. On average their houses are just to big . There might be a uptick in reverse mortgages, but I think the boomers want to exit now.

      1. Boomers are a huge cohort and their ages and health–thus their ability to age in place–vary widely. But I think you are right. If there is enough media and consternation about a potential future collapse due to a huge supply surge, the rush to the exit could accelerate and you’d have a feedback loop of boomers selling early, which in turn leads more boomers to sell early for fear of not getting out while prices are at an all-time high, which lead to prices dipping. Rinse and repeat.

    2. “…one of the factors cited as disrupting the senior housing…is self-driving cars.”

      Which don’t yet exist. And more people are thinking they won’t exist for decades, if ever.

      (I’m talking about full level 5 autonomy . Though lower levels could be helpful too.)

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