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The Expectation Several Years Ago Was That – Even In A Short Period Of Time – A Home Might Be Worth Considerably More Than You Paid, That Is Not The Case Now

It’s Friday desk clearing time for this blogger. “Has a herd mentality taken hold of buyers in the Toronto-area real estate market of early 2020? Jeffrey Wagman of Forest Hill Real Estate Inc. fears it has. Mr. Wagman points to one sale in Roncesvalles Village that produced an eye-popping $1-million premium to the asking price. Agents are still buzzing about the deal and Mr. Wagman expects the news will make the rounds at the gym and during dinner parties. Mr. Wagman points out that the unbridled run in early 2017 was followed by nearly two years of turmoil. Homeowners in the suburban 905 area code couldn’t sell their houses or close deals already struck, he points out.”

“Early in the summer of 2019, the herd decided it was time to move on, he says. ‘Finally in May or June, people had had enough of it. Away they went.’ Mr. Wagman is concerned about future sales in and around the house at 63 Constance St. that sold for $2.3-million, or more than $1-million above its asking price of $1.298-million. ‘What happens to the next house,’ he asks. ‘That owner’s expecting the exact same result.'”

“Figures published this week showed that just over 21,000 homes were built in 2019, a significant increase compared to the 18,000 completed the previous year. Dublin and the mid-east region of the country accounted for half of these new builds. Orla Hegarty, a lecturer in architecture at UCD said that Ireland is repeating what happened during the Celtic Tiger, when hundreds of low-density estates were built around Dublin.”

“‘We’re making all the same mistakes again — nothing was done to prevent this from happening and it will only get worse,’ she said. ‘It’s like a business — if you have the wrong targets, you do the wrong thing. By saying supply at any cost was the objective, you go back to the problems we had before.'”

“Right out of the gate in 2020, homes prices in Ada County set a new record in January. One real estate agent said panicked buyers have been scrambling to buy houses when they can. ‘I have two examples of physicians who are moving here in the fall, and they were panicking,’ said Kealy Baughman, owner of Trail 27 real estate in Boise. ‘So they bought houses in December, and they’re not moving here until August.’ The median price in Canyon County for January was $256,000, up $1,000 from December but down from November’s record $264,000.”

“‘Many sellers might not realize the value they are sitting on in their home,’ says Tom Hosack, President West Penn Multi-List. Unlike 2007, Hosack says this time there is no artificial bubble in the market. ‘So if you are buying, you should feel confident that the home price is going to continue to rise and your investment is safe,’ he says.”

“Even in more affordable neighborhoods, prices are out of reach for most people. The median single family home price in the Boston area is now over $600,000, and the median condo price is not much lower. But on a recent rainy Thursday night, nearly every chair in a third floor classroom of the community center was filled for Homebuying 101, a class for low- and middle-income people who are looking to buy for the first time in the Boston area.”

“‘Because of what I do, I would hate to say no, that it’s not affordable anymore,’ said Linda Warren-Cato, who has been teaching classes like these for more than 20 years. ‘What I tell people every time I teach the class is that you just have to find a property that your income will support. And you can’t give up, because there are a whole host of ways that you can potentially find a property.'”

“Half an hour before the first session of Homebuying 101 David Glass was already in his seat in the front row. At 63, after a lifetime of renting, he is now in the process of trying to buy for the first time. He got married three years ago and his wife, he said, ‘feels more secure with a home.’ When they first started looking into getting a mortgage, though, ‘we were told we couldn’t even be helped unless we could qualify for $450,000,’ said Glass, who lives in Dorchester and currently works as a truck driver. ‘It’s terribly insane, but it’s the reality. And that’s the scary part, you know, your mortgage payments are going to be high.'”

“The heart of the housing crisis is stark and obvious. The typical Sonoma Valley family does not earn enough income to qualify for a mortgage loan on the typical Sonoma Valley home. Last year, Compass real estate agent Matt Sevenau was trying to help two teachers move to Sonoma because one set of parents lived in town. ‘We were all trying so hard to figure out how to get them a place in Sonoma,’ he said. ‘Their max budget was $600,000 and we just couldn’t find them anything that didn’t need a ton of work.'”

“From $40,000 to $1.1 million, these sellers are dropping their prices. The biggest reduction was not in Beverly Hills or Blackhawk. Do you love a bargain? All of these homes have seen large price drops. Price On Custom Beaumont Home Drops $40K In Less Than 5 Months. Price Cut! Updated Napa Home On Corner Lot Marked Down By $42K. Previously listed for over $1 million. Charming San Ramon Home Sees Price Cut By $60,000. This cul-de-sac Dougherty Hills home with curb appeal is going for $1.2 million.”

“Blackhawk Country Club home has seen its price drop a total of $100,000 since its December listing. Novato Home Comes With Captivating Views And $100K Price Cut. $118K Price Drop On Updated Mill Valley Home With Views. Hollywood Hills Home Gets Massive Price Reduction. Perched on the hilltop, it has killer views and a $130,000 price cut. Sunny Redwood City Home Sees $240K Price Drop. There’s never been a better time to buy this sunny Redwood City home — on the market for nearly $250K less than its original price. Perfect Family Home In Manhattan Beach Just Got $500K Price Drop.”

“Beverly Hills Home Just Got $955K Price Drop. This five-bedroom home sits on a large lot and is ‘priced to sell,’ according to the listing. $1.1M Price Drop, And Still No Buyer. This Fremont gated estate has a 360-degree panoramic view.”

“After years of sellers being in the driver’s seat, buyers now have the upper hand in the luxury residential sector in Dallas-Fort Worth, says Erin Mathews, real estate agent with Dallas-based brokerage Allie Beth Allman & Associates. ‘For these very high-end homes, for a while there, it was a still a seller’s market,’ she said. ‘It’s a buyer’s market for sure now.'”

“In Dallas County, there were 21 home sales in 2019 above $5 million. Nineteen were posted in MLS and two were private sales, said Mathews, who tracks luxury residential sales. Through the first month of 2020, there was one pending sale in Dallas County and 54 active listings, Mathews said. That includes new properties and resales. In Collin County, there were no public sales above $5 million last year, and there are now seven listings for sale. In Denton County there are seven listings over $5 million, one pending sale and no sales of homes at that price last year. In Tarrant County, there are eight active listings above $5 million, one pending in Fort Worth, and two sales in 2019, both of which were in Westlake.”

“Overall, the $5 million and up housing market has been stagnant for the past three years, Mathews said. ‘If you bought a house two years ago and now find yourself relocating, the expectation several years ago was that – even in a short period of time – a home might be worth considerably more than you paid,’ she said. ‘That is not the case now.'”

“Zillow Research noted that U.S. home values have fallen by more than 20 percent nationwide from a 2007 peak until a 2011 nadir. Many homeowners are currently ‘underwater’ or ‘upside-down’ on their mortgages, meaning they owe more than the home is worth. In Edwardsville, the underwater rate is 7.4 percent, versus 10.4 percent in Metro St. Louis. ‘I think a lot of that has to do with the home-equity loans that occur today,’ said Mayor Hal Patton said. ‘When you factor in your mortgage in plus your seconds on houses, they’re using those funds a lot more loosely to make improvements that may not be on the tax rolls yet or to purchase other things.'”

“New Jersey continues to lead the nation in the rate of foreclosed homes and is doing nothing about it. Foreclosed homes present major problems in neighborhoods. They bring down property values, attract vandalism and are a haven for drug transactions. Yet, legislation I sponsored three times over the years that got through both houses and to Gov. Chris Christie’s desk was vetoed three times. My response to Governor Christie was, ‘The foreclosure crisis that has plagued New Jersey isn’t getting better, it’s getting worse. We not only have the highest rate of mortgage foreclosures in the nation, this is the only state that the foreclosure rate increased during the most recent three-month period.'”

“This ongoing crisis is both a symptom and a cause of a struggling state economy. It was both a housing failure and an economic failure under Governor Christie. His indifference to the economic crisis dragged down our recovery, which in turn depressed home values and allowed vandalism and crime to spread in neighborhoods with empty homes.”

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This Post Has 126 Comments

  1. ‘I have two examples of physicians who are moving here in the fall, and they were panicking…So they bought houses in December, and they’re not moving here until August’

    This is classic speculation. As is this:

    ‘At 63, after a lifetime of renting, he is now in the process of trying to buy for the first time. He got married three years ago and his wife, he said, ‘feels more secure with a home.’ When they first started looking into getting a mortgage, though, ‘we were told we couldn’t even be helped unless we could qualify for $450,000,’ said Glass, who lives in Dorchester and currently works as a truck driver. ‘It’s terribly insane, but it’s the reality. And that’s the scary part, you know, your mortgage payments are going to be high’

    1. He got married three years ago and his wife, he said

      Mating at 60. Nesting at 63. Driving a truck until 90. Tragedies never have a single mistake behind them. It’s always a trifecta.

      1. I don’t see anything wrong with a person getting married at 60 or buying a house at 63. The only problem I see is the price.

        1. The only problem I see is the price.

          …and at 63 they should be paying cash. But housing always goes up, so they’re safe.

        2. I don’t see anything wrong with a person getting married at 60

          I’ll grant you that! I even considered it myself. It is not however without its consequences. Any of us alive and single on the other side of that marker can list a few from experience, if they wait for the hormones to settle down.

      2. BlueSkye,

        I’m laughing. Now what could go wrong here. Really, you might think you can work until 90 but that’s rare.

        If I was the Lender on this transaction I would require more money down to off set the risks of this 63 year old man needing to retire long before 90.

        Look, proper lending just has to go back to a weighing of risk factors.

        This idea that people have a right to a loan just because they are alive is a joke.

        1. It depends on his retirement does he have a significantly funded 401k and/or pension with those he could retire at normal retirement age and with SS replace most of his present income. He may not have to drive to 90. However, even 66 and ten months is difficult for a truck driver. Those miles do take a toll.

          1. “Work as though you won’t see tomorrow.
            Work as though you’ll live to be 1000.”

            An old Amish saying

          2. Good saying. And what a couple of the older generation of my family basically did…worked hard into their 1990s up until the last days of their lives.

            And they were among the most content people I have ever known.

        3. A WSJ article a couple of weeks ago featured people getting 30-year mortgages at age 90! But there’s no subprime and the lending is sound….

          1. Back in the day, everybody had to put 20% down. So it didn’t matter if the borrower kicked off a week later. The bank just kept the 20%, soldhe house on the courthouse steps for 10% less than market, pocketed a little profit, and moved on.

            But with this zero-down crap…

          2. Back in the day, everybody had to put 20% down.

            The FHA was founded in 1934. My parents bought their first house in California in the early 1960’s with a low down payment FHA mortgage.

          3. FHA allows lower down payments, but they also take that risk out of your hide in the form of mandatory PMI (can’t pay it off early) and fees that last the life of the mortgage. They get that down payment one way or another. And FHA probably wasn’t thinking about 90-year-olds at the time.

          4. And FHA probably wasn’t thinking about 90-year-olds at the time.

            Demographics were different back then. My parents were in their early 20’s when they bought the house and had children, which was pretty much the standard in the neighborhood. Young couples in their early 20’s didn’t have a 20% down payment saved back then. Most were buying with FHA loans.

            Fast forward to the bubble era, I think that for FHA and other low down buyers the plan was to refi with a conventional mortgage after 2 years or so of appreciation (especially if interest rates dropped) and get rid of the PMI. This worked well for those who bought earlier in the bubble. For those buying today, not so much.

          1. Prices fell 14% and cratering fast.

            That’s not what your link says. You might want to choose a link which actually backs up your claims, otherwise you’re just passing off nonsense like a lying realtor, and that does a disservice to Ben’s blog which is based upon factual information. Per your link, median sale price YOY is UP more than 18%.

          4. that does a disservice

            FWIW, the link does say that median sold price is up as you so graciously point out, but that asking prices are dropping like a rock. I have no idea what that means, but out on the open water we call that “confused seas”.

            Nobody lies like a Realtor. Nobody.

          5. I have no idea what that means, but out on the open water we call that “confused seas”.

            It tells me that there’s likely a “sea” change underway, and all the information that Ben provides would support that. However, to just blatantly lie and say prices are down when they’re not is downright dishonest.

          7. The math is simple. Either list or sales prices (or both!) are falling in many markets. From the San Diego 92105 median sales price example (Nov ’18 to Nov ’19): 1 – 359/400 = 10.25%

            This is the same sales price as January 2017. Simple arithmetic.

          8. Where’s Mortgage Watch, Mortgage Analyst, Exeter, sc7 and all the others? Might as well play all the parts in this one thread, huh?

          11. @HeadlessBankers

            Lol, I’m not the same as Mortgage Watch/Mafia Blocks/BFB, though I do enjoy his trolling and sometimes encourage it.

          13. I don’t remember seeing these names.

            I don’t think you’ve been here that long. It goes back to 2005.

          14. I don’t like bitchin about the blog. Consider yourself warned.

            FYI – I’m not bitchin’ about your blog. I like it. I think this guy does it a disservice. But I’ll say no more.

          16. I don’t think you’ve been here that long.

            I’ve been commenting regularly for about a year and started following in 2005.

          17. I don’t remember seeing these names.

            Would you mind Headless, telling us what your previous handle(s) was(were)? I’m not always good at following some of the changeups. Others are obvious even to me., like Hwy spelled backwards.

            Your previous name?

          19. I will take it as a compliment to be mistaken as the alter-ego of Mafia Blocks. He has no equal in bringing us all the good news of cratering housing prices. I am only a minor contributor.

        1. They do occasionally, as of late last year they had some pretty steep declines in some CA zip codes projected. They actually wrote an article about it.

          Redfin to me is far more dishonest… it’s always to the moon with them.

          1. Why do you suppose that Zillow started reporting actual closing price again, after erasing that for a couple of years?

  3. ‘Overall, the $5 million and up housing market has been stagnant for the past three years, Mathews said’

    Gosh, the Dallas Morning News never reported this!

    ‘If you bought a house two years ago and now find yourself relocating, the expectation several years ago was that – even in a short period of time – a home might be worth considerably more than you paid’

    It’s nuts to think you could make a mighty profit after transaction costs in 2 years. Same with bidding wars and over-asking blah blah. People inside a mania can’t see it though. I detailed this behavior real time in Sedona last decade. By the time I left the market had been crushed.

    2. It is nuts! That’s why I sold my house in the HIgh Desert (Victorville, CA area) in 2005. In 2003 I paid $121k for it and sold it for $265k. I figured this kind of insanity couldn’t continue and I should make off with the ridiculous profits.

      Some sap paid $326k for it the next year and then in 2007 it was sold twice chasing the market back down. Last sale was $63k in 2011. OOOFFF….. IIRC that was at auction.

      8/30/2011 Sold $63,000 -73.2% $46 Public Record
      9/4/2007 Sold $235,000 -17.2% $173 Public Record
      6/19/2007 Sold $283,717 -13% $209 Public Record
      2/21/2006 Sold $326,000 +23% $240 Public Record
      8/5/2005 Sold $265,000 +119.9% $195 Public Record
      4/3/2003 Sold $120,500 $89 Public Record

      1. That’s an amazing price history, tells such a story of the bubble. Prices went so insane post-2012 we forget just how crazy they went in the early 2000s too.

  4. ‘We’re making all the same mistakes again — nothing was done to prevent this from happening and it will only get worse…It’s like a business — if you have the wrong targets, you do the wrong thing. By saying supply at any cost was the objective, you go back to the problems we had before’

    1. “it’s getting wor$e” + “making all the $ame mistake$ again”

      Well, today is a mile$tone day. Eye’ve $old my 20+ year collection$ of BRK.b this.day, (have kept a few $hares for $hare.holder meeting tickets) … it’$ been quite a ride aboard the BNSF rail.line$! A loverly.day indeed!

      Here is my po$t.party.kool.aide drinking $upporters:

      Home |Economy & Politics |Economic Report

      Con$umer $entiment climb$ in February and returns near 15-year high

      By Jeffry Bartash |Published: Feb 14, 2020

      The number$: A measure of consumer confidence rose in February to within a whisper of a postreces$$ion high, reflecting a remarkably lofty level of optimi$m among Americans about their own finances and the U.S. economy nearly 11 years after the last recession.

      The consumer sentiment survey climbed to 100.9 in February from 99.8 last month, according to the University of Michigan.

      What happened:
      Consumers mentioned improved incomes and wealth more than any time since 1960, most likely reflecting a $tock market that’s $urged to record high$ as well as rising wages.

      That’s got Americans feeling pretty good. A gauge that measure what consumers think about their own financial situation

  6. Tom Hosack should be put in jail for that crap!

    “Housing only goes up! Buy now or be priced out forever!” Yeezus!

    1. “there is no artificial bubble in the market. ‘So if you are buying, you should feel confident that the home price is going to continue to rise and your investment is safe,’ he says.”

      Realtors are liars.

      1. Our entire economy is now based on boom-bust bubble-nomics. Asset classes: Housing, stocks, corp. bonds. Other major expenses also in bubbles: Healthcare and college tuition. One category not in a bubble is wages. Far from it. Just the opposite in real terms. No longer free markets without true price discovery. Central banks run amok. Every asset bubble always pops. This is the grandest one; the everything bubble. The carnage will be epic when it ends. For now the music’s still playing and those that choose to play are still dancing.

        1. It is all true. However it still does not say anything about timing. Even Japan just keeps rolling along. It’s national debt makes us look fiscally responsible.

          1. Japan’s debt is twice our debt as a percentage of its GDP. So why can’t we double our debt? That question may be answered if Bernie gets elected. Four years of Medicare for all, housing for all, free education for all, followed by poverty for all for decades.

        2. You forgot “crypto.” To me, it’s the penultimate symptom – buying and trading “nothing.”

        3. College tuition sticker prices are in a bubble, but price paid has been remarkably stable for the past decade.

  7. “Overall, the $5 million and up housing market has been stagnant for the past three years, Mathews said. ‘If you bought a house two years ago and now find yourself relocating, the expectation several years ago was that – even in a short period of time – a home might be worth considerably more than you paid,’ she said. ‘That is not the case now.’”

    NOW HE TELLS US moment

    1. Around the last three years? Could it be that the Trump tax changes have changed the economics of five million dollar homes? Could it be truck driver’s are no longer subsidizing the tax and interest rate deductions on these homes? In fact, the raising of the standard deduction has reduced the subsidies by renters of homeowners in general. No wonder, the Democrats want to impeach the sob, he is making it much more expensive to be a limo liberal. Maybe Hollywood is not being honest about what is really making them angry about Trump.

      1. Trump is also making The Help much more expensive. The hypocrite liberals jaw on and on about “$15/hr” and “living wage” … until it comes to who’s-going-to-mow-your-lawn and who’s-going-to-clean-your-house and who’s-going-to-pick-your-lettuce and who’s-going-to-watch-your-children. Then it’s the $7 hour Salvadoran “refugee.” Yeah, there’s a living wage.

        You remember what Senator Rand Paul was doing when he was attacked at his home? He was MOWING HIS OWN LAWN.

        2. I’ve said before that these huge estates the elites have (and many non/aspiring elites) are unmanageable without “slave” labor. The time to maintain these places is considerable. I’ve seen houses in coastal San Diego that have small armies there everyday working on some aspect of the property and some of them are very modest in size but being beachfront and with what I surmise is lots of “entertaining” there was a lot of work required to maintain appearances.

          1. ’ve seen houses in coastal San Diego that have small armies there everyday working on some aspect of the property

            Stayed at an AirBnB in La Jolla. The property wasn’t that big and had it been mine I would have done the yard work myself. Yet, as you describe, an army of Hispanics showed up one day and mowed the barely irrigated and mostly brown lawn and did some other “yard work”. I’m sure there were also cleaning ladies, pool guys and who knows what else who came by periodically.

  9. I sent in my mail in presidential primary election ballot today. Since I am officially unaffiliated the Centennial state allows me to choose which party’s primary to vote in. And I cast it for good old Bernie. I really want to see a brokered convention and maybe even some riots after Sanders has the nomination stolen again.

    1. Bernie Bros are already on the lookout for the nom being stolen from him. They are scrutinizing the media bias and looking into the electronic vote counting. They are fully prepared to stay home again. Heck, they might even vote for Trump.

      1. I think that it is Ironic, after the Dems screaming about a dozen “Russian Trolls” interfering with the last election that Bloomberg hires hundreds of them recently and that gets a pass.

    2. I would think the best bet would be to vote for mini mike or mr. no malarkey pedo joe. Seeing Bernie lose to one of those two will drive the bros to absolutely madness. The carnage will be quite enjoyable.

      I said elsewhere Trump is forcing the dem party to separate into its two primary components, a criminal component and a communist one. He knows communists rarely poll more than 10% in free elections and the criminals will be enjoying some hard time soon – hopefully.

  11. Things are really getting out of control now with the coronavirus outbreak!

    The Financial Times
    Coronavirus
    Coronavirus latest: Facebook cancels global marketing summit over virus concerns
    new 20 minutes ago

  13. “Early in the summer of 2019, the herd decided it was time to move on, he says. ”

    What’s that saying about the herd going crazy all at once and coming to their senses one by one?

  14. Agents are still buzzing about the deal and Mr. Wagman expects the news will make the rounds at the gym and during dinner parties.

    Not sure about anybody else, but the kind of people who talk about this sort of nonsense aren’t the kind of people I like. They’re the phonies of the world who only care about money and status.

  16. Jeebus, here’s another one:

    Klarna

    Get what you love. Shop now, pay later.

    https://www.klarna.com/us/

    I had just seen “SweetPay” the other day, then just came across this one. There’s also “Afterpay.” I don’t remember any of these last bubble. This is nuts.

    1. Here are a couple more:

      Affirm

      Say yes to adventure. Say yes to gearing up. Say yes to hitting the trail.

      https://www.affirm.com/

      QuadPay

      Any store, split in four

      With QuadPay, you can shop at your favorite stores and pay over four installments.

      https://www.quadpay.com/

      Wow. I had no idea. This is all insane. Then I came across this:

      US lending at point of sale: The next frontier of growth

      Growth in US POS financing has accelerated; traditional lenders can use one or more of five business models to get in the game.

      November 4, 2019 Unsecured lending volumes in the United States are at an all-time high, thanks to improving eligibility rates, enhanced awareness and access, and continued investments in new lending models and start-ups. A key source of growth for some lenders and worry for others has been the acceleration in use of point-of-sale (POS) financing.

      https://www.mckinsey.com/industries/financial-services/our-insights/banking-matters/us-lending-at-point-of-sale-the-next-frontier-of-growth

      This bubble meltdown is going to be EPIC.

      1. This is like layaway. But I remember layaway fading away when everybody was able to get a real credit card, not just a secured card (remember those?). So if people still have Visa and Mastercard, why are they turning to this? Are the CCs maxed out?

        1. a secured card (remember those?)

          Not so much. The first credit cards I remember were the gas station ones. When I wanted some serious credit, around 1970, I walked into the bank and sat at the desk of a Mr. Morgan. “I’d like to borrow $700 for a car.” Mr. Morgan said “I know your dad. I’ll approve your loan.”

        2. This is like layaway.

          I remember layaway when I was a child, but I never did it. I thought that you didn’t get the product until it was paid for. These seem like actual loans with no collateral where you actually get the product right away, paying later.

          1. You’re right, you didn’t get the item until you paid for it. Layaway business picked up in September when parents started paying for Christmas presents. When credit cards came along, there was no reason for layaway at all, and the layaway faded very quickly. But Wal-Mart offered layaway from Aug 30 to December 19 last year, and I wondered why. People must be maxed out on the existing cards and can’t get more cards.

            Secured cards were common in the 1980s. It was more akin to a debit card. It was credit, but tied to your bank. If you didn’t pay the bill, they would ding your checking account. If you paid the bill, it showed you could pay and it was easier to get a card. They had very low limits, like $300.

          2. But Wal-Mart offered layaway from Aug 30 to December 19 last year, and I wondered why.

            Can illegals get credit cards?

        3. This is like layaway.

          Except with layaway:
          1) You paid no interest
          2) You didn’t take delivery until it was paid in full, meaning that you had to plan and budget the payments.

      2. So is borrowers’ growing preference to borrow at point of sale and get a line of sight to paying down balances, potentially at lower rates subsidized by merchants.

        LOL. Yeah, you keep telling yourself that.

    1. It’s going to end, and soon. This is essentially the blow-off top. Everything is hyperinflating at the end. But look at what’s happening in China. Their whole economy is melting down in spectacular fashion. The whole supply chain is broken for us. That means economic carnage is coming this way. Those not preparing for an economic disaster right now are the ones who are going to be devastated by it.

      1. Those not preparing for an economic disaster

        We’ll be fine. We’ll be better off if some of the fragility is shaken out of our Globalist Debt ridden situation. I mean, that is, if you’re not the debt riddled insufficient possum out on the end of a fragile Persimmon branch.

      2. I’m going to be optimistic and believe the Chinese when they say that heat kills this virus and this will fade by late spring. I think we’ll see a brief exuberance around Fourth of July when it’s safe to go out again and supply pipelines start to refill. But after the election and Christmas season… hoo boy.

        1. “I’m going to be optimistic and believe the Chinese when they say that heat kills this virus and this will fade by late spring.”

          What about the government radio station emitting a special sound pattern and all the citizenry crank-up the volume on their portable transistor radios so that…Oops, that was the Japanese. Sorry! 🙂

        2. Optimistic projections certainly are better for keeping up stock prices, but you might also want to consider some more dire scenarios for contingency planning purposes.

          Harvard Professor Sounds Alarm on ‘Likely’ Coronavirus Pandemic: 40% to 70% of World Could Be Infected This Year
          By Charlie Nash
          Feb 14th, 2020, 1:15 pm

          Harvard T.H. Chan School of Public Health professor Marc Lipsitch told the Wall Street Journal this week that “it is likely we’ll see a global pandemic” of the coronavirus with up to 70 percent of people infected worldwide.

          “I think it is likely we’ll see a global pandemic,” Lipsitch claimed, adding that “If a pandemic happens, 40% to 70% of people world-wide are likely to be infected in the coming year.”

          What proportion of those will be symptomatic, I can’t give a good number,” he continued.
          …

          2. He also is suggesting that the mortality rate will be 1% which shows how wrong you are but you want us to ignore the fact you were predicting 30 to 40 percent mortality. No the CFR is not moot if you get a pandemic because we have one every year with the flu. If the mortality rate gets down to flu like numbers than it is the strain really is killing mostly 80 year plus individuals and is not having a profound effect on the economy. I stated the numbers he is talking about just a few days ago, they are just the numbers you would expect with a new severe form of the flu. Thus, I said if the coronavirus escape containment it could kill tens of millions. However, I also said if we avoid it for a few more months we may have a vaccine by the time it would come back in the fall.

          3. These arguments are pointless.

            We are finding that confirmed cases are a function of the availability of test kits, not the infectiousness of the virus itself.
            So I believe the that the death rate will be a function of available medical care, not the lethality of the virus itself.

          4. “So I believe the that the death rate will be a function of available medical care, not the lethality of the virus itself.”

            If by ‘death rate’, you mean the official one calculated by medical authorities, then I agree.

            In principle there is a true, unobserved CFR, for the (unobserved) overall number of deaths divided by (unobserved) overall number of cases.

            Deaths tend to be easy to detect. ‘Number of cases’ not so much: Do asymptomatic or mild cases get counted? And how do you count them, given that lots of these folks may never seek treatment, and their condition may resemble the common cold.

            Without a clear definition of what a case is, this discussion is meaningless, except to people like AlbuquerqueDan who enjoy arguing for the sheer pleasure. And even with a clear definition of a case, there may be a wicked detection problem.

          5. people like AlbuquerqueDan who enjoy arguing for the sheer pleasure

            Lawyers. It’s what we’re trained and arguably wired to do. 🙂

          6. Haha! I was tempted to throw in a dig on lawyers, but didn’t want to inadvertently skewer the ones who number among my friends and family members.

          7. Sadly, it’s an occupational hazard. A good friend of mine went back to a law firm after time in-house and a hiatus. She’s become quite bitchy again.

  20. Over 600 cases outside of China and 3 deaths. Less than .5 percent mortality and dropping. We have had 10,000 flu deaths in this country this year. Wow.

    1. Now 4 with the death of another 80 year old, his daughter who has the virus is expecting to recover fully. Both are Chinese.

      1. The best news from outside China is India had three cases and now they have all fully recovered and India is for now virus free in reported cases. We did add 88 case outside of China with one death. However, we are now capturing more and more of the mild cases, thus the reason we have the dropping mortality rate which is the usual pattern hence the reason why predicting a 30 to 40 percent mortality rate was insane, it showed no understanding of the methodology of predicting the ultimate mortality of a new virus. Of the resolved cases in the last two weeks, the mortality rate has dropped like a stone from around 50% to 15% and continues to drop on a daily basis and will soon reach the upper range I predicted a few weeks ago of 2 to 4 percent. No great feat, since I was just using basic knowledge of epidemics gleaned from actually attempting to learn something prior to posting.

        1. Red Pill and Oxide, this article is interesting and another reason for optimism, at least the Chinese are identifying drugs which are effective against the virus: https://www.shine.cn/news/nation/2002152107/

          Of course, what worries me and maybe Red Pill might have some information, is why the human body has so much difficulty remembering coronaviruses. We do seem to catch the same cold viruses over and over. Do you think that when a vaccine is developed we will have to take it every year unlike other viruses where it is basically one and done?

          1. maybe Red Pill might have some information

            Probably a better question to ask tresho since he’s a physician.

          2. another reason for optimism

            “Chinese researchers have narrowed down their focus to a few existing drugs, including Chloroquine Phosphate, Favipiravir and Remdesivir, after multiple rounds of screening”

            How much is readily available for therapeutic purposes?

        2. “…and will soon reach the upper range I predicted a few weeks ago of 2 to 4 percent.”

          Time will tell. The SARS case fatality rate was ultimately reported at around 10%, though was estimated much lower during the outbreak.

          Perhaps they were using the same flawed math that you and the Chinese Communist Party prefer?

    2. “So I believe the that the death rate will be a function of available medical care, not the lethality of the virus itself.”
      Of course, it is both. The virus will mostly determine how many people become seriously ill. How many die from the pool of the seriously ill is mostly determined by the medical care.

      1. Thus in a warzone in southern Africa, and there are many, it might play out like this. 85% might not become seriously ill and thus will recover without having access to so much as an aspirin. However, 15 percent may become seriously ill and 2/3 may die due to no real medical care, Thus, you could have a ten percent mortality rate. I use southern Africa since while we are going into spring, they are going into Fall. If the virus has escaped containment, that is most likely to be the center of the epidemic since that area will have the shorter days and colder temperatures which the virus likes.

    1. Sorry but El Dorado hills is like 30 miles from downtown Sacramento! I am talking about downtown, midtown, east sacramento, curtis park, college glenn areas. Homes selling less than 2 weeks for 500k plus. Multiple offers.

      1. I’m not sure if you saw it or not, but I got a warning from Ben up above. I’m done talking to you.

    1. My first guess is that power in Germany is heavily taxed, regardless of how it’s generated.

      20% of Colorado’s power is wind, and our rates are fairly low. I don’t buy into the climate change scare, but less brown cloud is always a good thing.

    1. Unless people can go back to work, I don’t see this will help stimulate the economy. Last I heard, the streets in Wuhan are still deserted.

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