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Economic Downturns Are Called Corrections For A Reason

It’s Friday desk clearing time for this blogger. “Data from Redfin shows that jumbo loans have taken a big hit during the pandemic as mortgage servicers tighten their lending criteria – some lenders have even stopped issuing them altogether. Jumbo loans fell 37 percent in March. ‘COVID-19 has significantly impacted the lending industry in many ways over the past few months and jumbo loans have been one of the first products taken off of the shelves,’ Redfin mortgage adviser Katie Bradner said.'”

“‘Wells Fargo Home Lending will temporarily stop accepting applications for all new home equity lines of credit after April 30,’ said company spokesman Tom Goyda.”

“‘As of right now, I don’t know of any lender doing cash-out refinancing,’ said Realtor Pam Junge. ‘They can change quickly because this is a very fluid situation, but today, you’d be really hard-pressed to get any cash out on a refinance.'”

“The number of Seattle-area households behind on their mortgages increased 11.4% month-over-month, nearly three times faster than the 3.3% average national rise, according to Black Knight. ‘It feels like we’ve compressed the 2008 financial crisis into the last seven weeks,’ said Tom Schwab, the owner of Westwood Mortgage in Northgate. Wells Fargo and US Bank both adjusted their minimum credit score requirements to 680, including for FHA and VA loans, which typically finance borrowers with credit scores as low as 580, including plenty of first-time homebuyers with low down payments. Navy Federal Credit Union stopped offering FHA loans altogether.”

“Purchasers of higher-end homes have also seen their options restricted. And home buyers everywhere may be expected to put more down than they would have before the crisis. ‘We’re not seeing a decrease in traffic,’ Schwab said. ‘We’re seeing a decrease in the number of solutions we can offer right now.'”

“No one should be worried about losing their home, Federal Housing Finance Agency Director Mark Calabria said on Monday, April 27. That reminds me something Forrest Gump said: ‘Stupid is as stupid does.’ It is utterly irresponsible for Fan and Fred’s regulator and conservator to provide such a baseless reassurance to homeowners. Somehow, someway, repayment is still required, job or no job. And Fannie and Freddie only accounted for about 43% of all mortgages in 2019.”

“National Association of Realtors Chief Economist Lawrence Yun says prices will hold up just fine in most markets, with price drops likely only at the upper end. Great news! But that is the same Lawrence Yun who said in July 2007, ‘Essentially, we see that the existing-home market is stabilizing in a broad cyclical trough and moving in the right direction.'”

“Extell Development Co. is offering price incentives on new contracts signed at One Manhattan Square, a luxury residential tower on the Lower East Side. The remaining inventory will be discounted, some up to 20%, the developer says. The company reports that sales velocity at the tower has been strong. ‘However given today’s uncertainty, we felt that there was an opportunity to re-engage the market with price discounts on new deals,’ Chairman Gary Barnett, says. For-sale residential product across the boroughs have felt compelled to lower prices since Covid-19 entered the scene.”

“Beach closures could potentially outlast the short-term rental restrictions, resulting in more rental cancellations. This year, the lack of clarity surrounding rentals has resulted in a lack of cash flow. ‘All the owners that rely on this money to pay their mortgage payments—all their money stopped,’ says Eric Birchler, the broker owner of Birchler Realtors, with offices in Lavallette, Ortley Beach and Seaside Park.”

“The GTA’s condo rental market has dramatically reversed directions in the course of a single month with a surge in listings since the pandemic hit, real estate watchers say. And they believe a big drop in Airbnb rentals may be playing a role in this trend. ‘We’re seeing renters pull out of the market,’ said John Pasalis, president of Realosophy Realty Inc. And he says while prospective renters are getting scarce, there has been a spike in the numbers of units for rent. ‘So those people are kind of pulling back given the economic uncertainty and the impact on their incomes. And on the flip side, we’re seeing landlords — who need to pay the mortgages and property taxes — scramble to put their units on the market.'”

“Jaco Joubert has studied the effects of Airbnb on condo rental vacancies. He says he’s noticed rents have declined by a few hundred dollars. ‘People are getting more desperate to get somebody[to rent their units],’ said Joubert, adding that price expectations are likely moving lower.”

“Housing experts are seeing early signs of a glut of vacant homes due to Airbnbs becoming standard rentals, home sellers choosing to lease rather than sell and international students staying abroad. ‘It’s very likely to keep falling from here,’ managing director Louis Christopher said, adding there were 15,000 more rental listings compared to the same time in 2019. ‘Last year we had net migration of 240,000. This year could be close to zero but, no matter what, 170,000 dwellings are being completed this year.'”

“Economic downturns are also called ‘corrections’ for a reason — they enable peak-level prices to come back down to a reasonable level. The crisis may cause land prices to come down somewhat, said Astor Cos. CEO Henry Torres, who has pioneered certain neighborhoods with projects like Valencia in South Miami. He has a project that will break ground in August. ‘A project that normally takes 18 months could take 24,’ he said. ‘I don’t think we’re going be building anything less expensive.'”

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This Post Has 123 Comments

  1. I couldn’t even get through my searches for all the crater. So I just stopped and prepared this post. I’ll have plenty more this weekend, but the crater keeps pouring in.

    This is a credit event. The CCP virus accelerated it, but the bubble had already popped.

  2. ‘It’s very likely to keep falling from here’…there were 15,000 more rental listings compared to the same time in 2019. ‘Last year we had net migration of 240,000. This year could be close to zero but, no matter what, 170,000 dwellings are being completed this year’

    That’s funny Louis because I remember you telling the suckers buy now it’s to the moon less than a year ago. Oh well, they’re all fooked now and you still have your job.

    1. That Zillow link yesterday to San Diego homes in the 1 million+ range was interesting, you can widen the price range and get listings for the past week, 2 weeks, month, etc and it looks to me like inventory has increased in that county by 50% in the last month based on a SD U-T article from earlier in the month. Got CR8R?

      Also, it looks like every POS dwelling in that city is listed for 1mil, decent places at 2mil. WTF? 100 year old in OB for a mil? Outta yer fricking mind! Once the old movie theater closed and got replaced with a Starbucks or something the place was toast.

      2. it looks like every POS dwelling in that city is listed for 1mil

        It’s sadly not much of a cutoff. What’s interesting is when you see how much more you get with every $200K increment.

  3. ‘No one should be worried about losing their home, Federal Housing Finance Agency Director Mark Calabria said on Monday, April 27. That reminds me something Forrest Gump said: ‘Stupid is as stupid does.’ It is utterly irresponsible for Fan and Fred’s regulator and conservator to provide such a baseless reassurance to homeowners. Somehow, someway, repayment is still required, job or no job. And Fannie and Freddie only accounted for about 43% of all mortgages in 2019’

    So many things about all this. Foreclosures are low! Stop paying your mortgage and your rent, we’ll send you a check! Alls well!

    I kinda doubt the guberment, who actually takes our money, is going to paper over all the broke a$$ decisions made in 10-20 years of insanity.

    ‘Yun says prices will hold up just fine in most markets, with price drops likely only at the upper end. Great news! But that is the same Lawrence Yun who said in July 2007, ‘Essentially, we see that the existing-home market is stabilizing in a broad cyclical trough and moving in the right direction’

    This is like the virus predictors. Sure they were off 80-90% from the get-go, but they’re the experts we should listen to now!

    How many of these people have said, year after year, prices are rising faster than incomes? Because that’s the case, the only way prices kept going up was crappier loans.

  4. I’ve been working in Southern Colorado this week. You can buy land in Huerfano County for $2,000 an acre.

    I will never buy an overpriced house in Denver.

    2. I once stopped in Walsenburg. What a desolate place. I don’t see how land there could be worth more than zero.

        1. shipping pounds of weed to Texas

          Somehow I suspect that only a very, very small percentage of land there is growing weed and that the wealth isn’t exactly being shared.

        2. Once weed is more widely legalized it will be grown in more convenient places. The price of land in remote parts of northern California has been falling since legalization.

      2. I once stopped in Walsenburg. also. Stayed overnight with a doctor I had trained with. I woke up in the morning to find his house empty. His wife had gone into labor & they were both off to the hospital. I swear I had nothing to do with it.

  5. ‘It feels like we’ve compressed the 2008 financial crisis into the last seven weeks’

    Seattle prices fell long ago.

    ‘Wells Fargo and US Bank both adjusted their minimum credit score requirements to 680, including for FHA and VA loans, which typically finance borrowers with credit scores as low as 580, including plenty of first-time homebuyers with low down payments. Navy Federal Credit Union stopped offering FHA loans altogether’

    This last outfit was one of the nuttier lenders out there.

  6. Merced Mayor Murphy sends letter to Govenor Newsom: ‘California is too big for “one-size-fits-all” approach’

    ‘Dear Governor Newsom: I am writing to you as the Mayor of the City of Merced. When the tsunami of COVID-19 was threatening to overwhelm our healthcare system you made the right call to close all non-essential businesses.’

    ‘Thankfully, the early worries of an overrun healthcare system have not materialized in Merced. Many days, there are not any hospitalizations for COVID-19 in Merced or Merced County. Use of ventilators has been a rarity. Conversely, much of our healthcare workforce has been laid off and medical care facilities are closed. A portion of our hospital has even closed due to a lack of patients. Important procedures unrelated to COVID-19 have been deferred, which are known to lead to poor health outcomes for our residents.’

    ‘If the capacity of our healthcare system was the primary reason for the business closures then it should also be the primary reason for allowing businesses to reopen, albeit in a manner that focuses on enhanced safety protocols and minimizes the risk of increased transmission.’

    ‘Business closures have led to a sharp spike in unemployment claims. Unemployment is a well-established risk factor for suicide, substance abuse, domestic violence, and other societal challenges. I urge you to look at public health not only through the lens of disease transmission, but the broader context of the negative impacts of an economic recession or economic depression on our lives.’

    https://mercedcountytimes.com/10804-2/

    1. Democratic Governors Reopen

      Trying to salvage an economy shouldn’t be a partisan issue.

      ‘Liberals and their media friends assert that GOP governors will have blood on their hands if they ease their coronavirus economic shutdowns. Don’t look now, but even a couple of Democratic governors are making plans to reopen. Colorado Gov. Jared Polis quietly let his state’s stay-at-home order expire last weekend. Retail curb-side deliveries are now allowed, and personal services like hair salons will be given an all-clear on Friday. Mr. Polis says he hopes to let bars, restaurants and clubs open by mid-May if the health-care system isn’t stressed.’

      ‘Recall the initial aim of state lockdowns was to flatten the infection curve and ease pressure on hospitals—not eradicate the virus—which Colorado and most states have achieved. Nearly 15,000 Coloradans have been infected, and 2,700 have been hospitalized at some point. But only 960 people are currently hospitalized, and the state has nearly 5,000 available beds.’

      ‘Mr. Polis is accepting that most people will probably get infected without a vaccine breakthrough. “Basically this is a really tricky balance between trying to continue to keep the disease transmission at a level at which it won’t overwhelm our hospital systems and allow people to still try and earn a living, frankly,” said Jill Hunsaker Ryan, executive director of the Colorado Department of Public Health and Environment.’

      https://www.wsj.com/articles/democratic-governors-reopen-11588288763

      1. ‘Mr. Polis is accepting that most people will probably get infected without a vaccine breakthrough’

        It’s estimated 200-400k people die every year in the US from medical error. Why don’t we shut it down? Trade-offs. We make these trade offs all the time. Flying, driving a car.

        1. Flying

          FWIW, we expect flying (on airlines), when done right, to be virtually bullet proof. Not a single 737 Max crashed in the US, and we still grounded them, and they are still not certified to fly.

          I think Polis realized that everyone is sick of being quarantined and knows people are saying “eff it”, so he let shelter at home expire. Plus it helped that the tsunami of cases didn’t happen and the temporary hospital being set up at the convention center won’t be needed.

        2. If you think some of the libtard leaders’ edicts are arbitrary and capricious in this country, read about whats going down in France and Spain. Children not allowed out at all for weeks at a time, lots of hefty fines. Thank God we are armed to the teeth in this country or we’d all be in gulags courtesy of the pedocrats.

        3. “… It’s estimated 200-400k people die every year in the US from medical error….” “…Trade-offs..”

          Exactly.

          A little more perspective.

          Here is a factoid that you will *never* hear from the hysterical MSM.

          How Many People Have Died From Falling Down Stairs? According to the most recent data on stairway accidents in the United States, an estimated 12,000 people die from falling down steps each year.Dec 13, 2017

    2. ‘If the capacity of our healthcare system was the primary reason for the business closures then it should also be the primary reason for allowing businesses to reopen, albeit in a manner that focuses on enhanced safety protocols and minimizes the risk of increased transmission.’

      A pretext? It sure feels that way.

        1. It’s not a conspiracy when Democrats are on MSM saying “don’t let a crisis go to waste” and readily shifting goal posts.

      2. In other words, masks. Darnit, we’ve been wearing masks in Maryland for 13 days now and no decrease in the number of cases. Maybe they’re just doing more testing?

        1. Maryland

          Your state department of health has a .gov website page giving day by day statistics. Look at ICU beds and deaths to get more insight. Number of cases is rather nebulous.

        2. we’ve been wearing masks in Maryland for 13 days now and no decrease in the number of cases. The most recent US Navy ship to have a COVID-19 outbreak had already been at sea for 30 days before the first case broke out on board. So maybe the incubation period is much longer than currently thought.

          1. at sea for 30 days

            The Kidd was doing counter narcotics operations off the coast of Central America. As I understand this sort of thing, it is an intercept, search and seizure mission. They probably weren’t isolated the whole time.

            My SIL was on one of these missions off Columbia. Some bad guys were caught. They sailors even went ashore once.

  7. ‘I don’t think we’re going be building anything less expensive.’

    You already are, you just won’t admit it yet.

  8. if you were close to the edge revenue wise, why didnt you do a cash-out in April with the low rates just in case.

    You might be out of luck for a very long time
    —-
    “‘As of right now, I don’t know of any lender doing cash-out refinancing,’ said Realtor Pam Junge. ‘They can change quickly because this is a very fluid situation, but today, you’d be really hard-pressed to get any cash out on a refinance.’”

  9. ‘Currently every car dealer in the land will be staring at their balance sheets and the stock that’s on it wondering whether they’ll be taking a bath on a dramatic price drop in the not too distant future. Traders have told Car Dealer Magazine they are already receiving stupid offers from cheeky customers looking to take advantage of what they think will be a serious adjustment in used car prices.’

    ‘And with stories like the 18-plate McLaren 720S, that lost more than half its original price in an online auction, this week circulating on social media the cheeky offers are likely to intensify.’

    ‘But dealers are hoping counterparts in the trade hold their nerve.’

    ‘The big fear is when the economy starts to open up again, returning car dealers who have faced weeks of little to no revenue, will start liquidating stock in an attempt to get cash back in the bank.’

    ‘One independent dealer told Car Dealer Magazine: ‘We are desperate to get going again. We have sold a few cars online, but the cheeky offers from customers have started to flood in. They all think we are desperate to sell.’

    ‘It only takes a few desperate dealers to start accepting those 25 per cent and under offers for the whole house of cards to fall.’

    ‘And it is this sort of distress selling that could see prices tumbling and cause an even bigger shock for the motor trade.’

    https://cardealermagazine.co.uk/publish/investigation-car-dealers-need-hold-nerve-used-car-prices-attention-turns-happens-next/191381

    1. ‘It only takes a few desperate dealers to start accepting those 25 per cent and under offers for the whole house of cards to fall.’

      Sounds like affordable automobiles are soon to come!

        1. “What would I do with it?”

          If you live in the Colorado Front Range, 99% of you would use it to commute, alone, to a job that does not and never will require the hauling or towing capacity of a F-350. And you’d probably keep it looking really shiny and sparkly, because reasons.

          Jeff’s post on some thread a while back about hauling a truck bed full of joint compound is why people need trucks like this for work.

          In Sparky World, large orders of jobsite materials are delivered by Quality Electrical Distributors or Consolidated Electrical Distributors. Most people who are running jobsites have a company van or truck and gas card.

          1. I’ll make the exception for people with a large trailer or 5th wheel – the recent advances in powertrains and features have made that a lot easier and safer than it used to be.

            But for everyone of those, you have 10+ construction (or office) workers who need to ‘look the part’ when going to work or the grocery store.

          2. I was speaking specifically to commuters.

            That is a nice toy for taking the whole family and towing the RV or boat to the lake. The majority of miles driven in those large trucks on the Colorado Front Range are commuters who drive alone.

          3. And you’d probably keep it looking really shiny and sparkly, because reasons.

            For those trips to Home Despot, to buy light bulbs or an air filter for the furnace

          4. With their stubby short beds many new trucks are actually pretty useless for hauling. I can put almost as much stuff into my Volvo (I’ve hauled quite a bit of firewood with that old wagon).

  10. Once stored in a salt cave, is it costly to bring your Black Gold back to the surface again?

    The Financial Times
    Coronavirus business update 30 days complimentary
    Coronavirus: free to read
    Oil
    Oil traders turn to salt caves and train cars in storage crisis
    | Free to read
    Crash into negative prices jolts producers into cutting back
    Brimming tanks and an armada of supertankers suggest the world is running out of places to stow its fuel
    © Matthew Busch/Bloomberg
    David Sheppard and Neil Hume in London 5 hours ago

    From salt caverns in Sweden to train cars in Chicago, oil traders spent the past two months stuffing unwanted crude into any available space after demand collapsed in the face of the coronavirus pandemic.

    Traders called on locations they usually ignored, including barges on rivers normally used for making relatively small deliveries to inland markets. Rail cars were filled up and so were “frac” tanks, normally used for holding water and chemicals used in the hydraulic fracturing process.

    In late April, benchmark US crude prices fell below zero for the first time in history. Traders due to take delivery of oil at Cushing, Oklahoma, struggled to access the storage they needed, forcing them to pay rivals to take the crude off their hands. Brimming tanks and a growing armada of floating supertankers suggested that the world was running out of places to stow its fuel.

    Patrik Kinnerfors, chief executive of Scandinavian Tank Storage, which has almost 4m cubic metres of storage capacity including underground caverns in Sweden and Norway, said he was inundated with inquiries in March and April. “All of our caverns are rented out and should be more or less full before the summer,” he said.
    …

    1. PS In case my post on the growing oil glut seems off topic, note that it is also a credit event.

  11. Housing is cratering.

    strong>Denver, CO Housing Prices Crater 17% YOY As On Broker Concedes, “Housing Is Becoming More Worthless With Each Passing Day”

    https://www.zillow.com/denver-co-80202/home-values/

    *Select price from dropdown menu on first chart

    As one Denver broker conceded, “If you’re a buyer, the broker is lying to you. I know a liar when I hear one. I’ve been lying my entire life.”

  12. Housing is cratering.

    Denver, CO Housing Prices Crater 17% YOY As On Broker Concedes, “Housing Is Becoming More Worthless With Each Passing Day”

    https://www.zillow.com/denver-co-80202/home-values/

    *Select price from dropdown menu on first chart

    As one Denver broker conceded, “If you’re a buyer, the broker is lying to you. I know a liar when I hear one. I’ve been lying my entire life.”

  13. A lot of the immigration in Toronto (GTA) and Vancouver is upper middle class from China, India and else where. The rule is that you get a student visa – and when you complete the degree, you get the equivalent of a US green card for 1 year to look for a real job. With that you are place on permanent residence path – and can be a citizen.

    Daddy and Mommy have bought a bunch of these folks 1 brd condos. That dries up if folks are not ready to go for Sept semester.

    https://www.senecacollege.ca/home.html
    west of Toronto is apparently 2/3 students on student visas.

    —-

    “The GTA’s condo rental market has dramatically reversed directions in the course of a single month with a surge in listings since the pandemic hit, real estate watchers say. And they believe a big drop in Airbnb rentals may be playing a role in this trend. ‘We’re seeing renters pull out of the market,’ said John Pasalis, president of Realosophy Realty Inc. And he says while prospective renters are getting scarce, there has been a spike in the numbers of units for rent. ‘So those people are kind of pulling back given the economic uncertainty and the impact on their incomes. And on the flip side, we’re seeing landlords — who need to pay the mortgages and property taxes — scramble to put their units on the market.’”

    1. “That dries up if folks are not ready to go for Sept semester.”

      Ditto around the U.S. too. If Fall classes are limited to on-line it’s going to be game-over for the student housing biz.

    1. Amazon stock is off 8% today and it’s still early. Wasn’t some investing guru saying just yesterday that you can’t lose with Amazon shares, quarantine or not?

      1. I dumped the last of my stocks at market closing price on Wednesday. The last of them were all in the Fidelity Contrafund FCNTX, of which its top 10 holdings in descending order are Amazon, Facebook, Microsoft, Berkshire Hathaway, Salesforce, Visa, Adobe, United Health, Netflix, and Google.

        We are in the “return to normal” peak just following the “bull trap” of the March 23rd low, on the classic chart that was also often applied to housing in the last bubble burst. Next up: fear, capitulation, and despair.

        Nothing against the FCNTX fund except for its 0.85% expense ratio, when I start buying back in I’ll be buying FXAIX which mirrors the S&P 500 and has an expense ratio of only 0.015%.

        1. I dumped the last of my stocks at market closing price on Wednesday”
          probably a good move.
          I sold most of my equities years ago . Stock buybacks drove this market to where it is now and the FED is trying to keep it there,
          Good luck with that.

          1. Geeze…lots of y’all are reportedly dumping stocks to cash out short term Unlimited Quarantinive Easing gains.

            I hope it isn’t too late for Lil Sis to cash in some chips before the next leg down gains momentum.

          3. I know. But how does the chart factor in Unlimited central bank efforts to short circuit the capitulation process?

          4. I can’t answer that. But I’ll sleep better being out of this rigged casino. Our humble blog host has mocked the practitioners of technical analysis, which I am not.

            All I’m gonna do right now is watch and wait…

          5. ‘mocked the practitioners of technical analysis’

            In jest maybe. There’s some basis of truth: I like Elliot Wave (Fibonacci). It’s useful for broad market turns IMO. These guys really get into the weeds, which I don’t have time for.

          6. Ben Jones sorry if I misquoted and thanks for the clarification. There are some interesting statistics about technical analysis in the book A Random Walk Down Wall Street by Burton G. Malkiel.

            That book and The Millionaire Next Door by Thomas J. Stanley and William D. Danko have greatly influenced my financial decisions and spending behavior.

            Not buying an overpriced used house in Denver has been the best financial decision of my life, thanks to this blog…

          7. Risk off?

            The Financial Times
            Markets Briefing Equities
            US stock sell-off wipes out gains for the week
            S&P 500 falls after Big Tech raises red flags over virus impact and US-China tensions ratchet higher
            © AFP via Getty Images
            Colby Smith in New York, Philip Georgiadis in London and Hudson Lockett in Hong Kong 7 hours ago

            US equities dropped for a second straight week, as investors took stock of the damage being done to business by the coronavirus crisis following a slew of corporate earnings.

            The S&P 500 closed lower by 2.8 per cent on Friday, erasing its gains for the week. The Nasdaq Composite came under pressure as well, dropping 3.2 per cent following red flags in overnight results from Amazon and Apple, two pivotal companies in a tech sector that has led the US market’s rebound in recent weeks.

            Amazon warned that the cost of hiring new workers and protecting them from the virus could leave it with an operating loss in the second quarter — a disclosure that sent its shares lower by more than 7 per cent on Friday. Apple also nodded to the uncertainty of the economic outlook, withholding guidance for the current quarter. Its shares fell over 1 per cent.

            “When we hear from the likes of bigger tech companies in terms of how hard it is to predict even the next quarter, that brings the risks back to the forefront,” said Marvin Loh, senior global markets strategist at State Street Global Markets.
            …

      2. In the IT world some believe that Amazon Web Services (AWS), their cloud biz, is supposed to be taking over the world. Curiously, our on prem customers have been buying servers like there is no tomorrow. Sparc lives.

        1. And we are selling hardware like there’s no tomorrow , 400 Gb/s short range it’s all for the cloud and not Amazon but their competitors. Working from home is so weird like a warm up for retirement and one last move. Just have to decide where.

          1. Working from home is so weird like a warm up for retirement

            Yup, I’ve had the same thought. Get up when you feel like it, take prolonged breaks when you feel like it, etc. As long as your work gets done, it’s all good.

          2. Same here. Good chance to think through how much social distancing from beloved spouse will be needed to stay connected yet mutually independent.

  15. Been drinking a lot of vodka and vitamins for a few days, haven’t eaten anything but going to make fish sandwich with Starkist tuna fish pack and greek yogurt forappx 100 cals per pack in my hoard. I got like 80 of them LOL. Good vibes.

  16. “National Association of Realtors Chief Economist Lawrence Yun says prices will hold up just fine in most markets, with price drops likely only at the upper end. Great news! But that is the same Lawrence Yun who said in July 2007, ‘Essentially, we see that the existing-home market is stabilizing in a broad cyclical trough and moving in the right direction.’”

    2005
    https://www.amazon.com/Are-Missing-Real-Estate-Boom/dp/0385514344

    2007
    https://www.amazon.com/All-Real-Estate-Local-Sellers-ebook/dp/B000OYF016/ref=sr_1_3?dchild=1&qid=1588358547&refinements=p_27%3ADavid+Lereah&s=books&sr=1-3&text=David+Lereah

    1. Leslie Simpleton Young
      The market will level out like a “Soufflés”. 2005
      That was some soufflé
      I bought a townhouse in Rancho Mirage, CA for 75% off the peak.

    2. The fact that he has any credibility with mainstream media goes to show you plenty of people are willing to drink the Kool Aid from industry spin doctor. I think my dog can probably make better home price prediction than this clown and at least my dog isn’t on the real estate industry payroll

    1. One thing is I could really use a hair cut. I prefer it short but I haven’t had a cut in over a year and now it’s very long and I could tie it back in a pony tail. I have cutters but the last time I tried, I screwed it up badly and had to go the barber, LOL.

    2. Your diet/lifestyle sounds like an old friend of mine. I knew him since kindergarten. He was big on vodka and mj, then he got into LSD and pills. Several DUIs and some jail time later and I had pretty much lost contact with this failure to launch, save for a couple of phone conversations between his jail stints. Years later I heard his mom found him dead in her bathroom of a heroin overdose. Stay safe out there.

  18. From the email:

    Flash: AEI estimates 4.17 million loans (7.87%) out of 53 million outstanding mortgages are already in forbearance as of April month end

    Combining data from the MBA’s mortgage loan forbearance report through April 19, 2020 and internal AEI sources, we project that as of April 30, 2020, 4.17 million loans are already in forbearance.

    Of these 4.17 million loans, Fannie and Freddie account for 1.844 million and Ginnie for 1.19 million, with the overall forbearance rate standing at 7.87%, the Fannie/Freddie rate standing at 6.15%, and the Ginnie Mae rate standing at 10.82%.

    We are able to report these additional forbearance trends relating to Fannie Mae loans:

    -Not surprisingly, credit score, debt-to-income ratio, and loan size are all highly correlated to forbearance take up.
    -Current LTV has a weaker correlation.
    -Population density has a high correlation, which is not surprising given the epicenter of the coronavirus is in the dense Northeastern US.
    -With the exception of loans originated pre-2009, origination year has minimal impact on forbearance take up.
    -Take up was greatest in the hard hit states of New York, New Jersey, Connecticut, and Louisiana (Mardi Gras was in February), along with tourism-heavy Florida, Nevada, and Puerto Rico.

    1. The only reason why the dollar has any value is because we have the nukes and ways to distrube them. Our military power defines the dollar.

      1. “I took my temp earlier and was 197 F.”

        FWIW, your tea water boils at 212-degrees F.

        1. 197 F

          It is the perfect temperature to brew coffee.

          He said he was hitting the antiseptic pretty hard.

  21. Listening to this Jack$$$ made any kind of statement reminds me of back in the days when those Tobacco executives tell you smoking is not bad for you…believe in your own peril. Especially know who this guy works for and how wrong he was in 2007.

    “National Association of Realtors Chief Economist Lawrence Yun says prices will hold up just fine in most markets, with price drops likely only at the upper end. Great news! But that is the same Lawrence Yun who said in July 2007, ‘Essentially, we see that the existing-home market is stabilizing in a broad cyclical trough and moving in the right direction.’”

  23. The reports of my death are greatly exaggerated.
    — Mark Twain (attributed)

  24. Lots of speculation in Cardiff!

    Bailing on properties with approved plans:

    2387 Newport Ave, Cardiff By The Sea, CA 92007

    2381 Manchester Ave, Cardiff, CA 92007

    Offloading tear downs or gut remodels:

    2290 Manchester Ave, Encinitas, CA 92007
    04/30/2020 Price Changed $1,450,000 $1,166
    04/21/2020 Price Changed $1,500,000 $1,206
    04/16/2020 Listed $2,149,000 $1,728

    2386 Newport Ave, Cardiff, CA 92007

    1912 Mackinnon Ave, Cardiff, CA 92007

    1585-87 San Elijo Ave, Cardiff, CA 92007

    Flipped and ready:

    1702 Westminster Dr, Cardiff, CA 92007

    1. It’s ridiculous. You’d have to score on an IPO/buyout jackpot to afford these prices.

      1. With the way prices are falling it won’t be long before the pool of buyers includes truck drivers and street sweepers.

    2. I lived in Cardiff for 8+ years, but east of the 5 where you have some space to breathe. Lots of old places west of the 5 got torn down towards the end of my duration and replaced with 2 or 4 plexes with just a strip of land <3' wide bordering these monster sh!t boxes. Oh, and no
      parking too so tons of cars on the street – total pain to drive down any of the roads west of the 5. I preferred to ride my bike around that part of town, at least I could get around. Commutes are horrific as theres next to nothing nearby that pays well. The density west of 5 in Cardiff really ruined what was a mellow surf town when I moved there in 96.

      1. next to nothing nearby that pays well

        Law firms moved from downtown to buildings east of I-5 between Del Mar Heights Rd and Carmel Valley Rd. Plenty of tech and biotech are in Sorrento Valley. Good pay but still not pay that justifies these prices.

    3. Then there’s Property taxes along with all the other taxes yea you better have some serious money. Chinese money or did that go away ?

      1. Property taxes

        Because of Mello-Roos and CC&Rs in areas nearby, property taxes in some of these coastal communities are relatively low and the ability to do what you want with the property is attractive. Buying a tear down or gut remodel keeps your property tax base low. I think most people underestimate the costs of building out the property and getting all the approvals. My mom had architectural plans for a second story addition and solicited bids but didn’t go through with it because of the costs and intervening health problems. She ultimately decided on and completed an exterior and front landscape remodel 2.5 months before she passed.

  25. What keeps them from laundering the dough into high end real estate?

    California
    Dirty money piling up in L.A. as coronavirus cripples international money laundering
    DEA seizing bulk cash amid the coronavirus pandemic
    The Drug Enforcement Administration is seizing bulk cash amid the coronavirus pandemic, which has hobbled money laundering schemes and created a backlog of drug proceeds in Los Angeles.
    (Drug Enforcement Administration)
    By Matthew OrmsethStaff Writer
    April 29, 2020
    2:11 PM

    Dirty money is piling up in Los Angeles. In the last three weeks, federal agents made three seizures that each netted more than $1 million in suspected drug proceeds.

    The reason, according to the city’s top drug enforcement official: The coronavirus pandemic has slowed trade-based money laundering systems that drug trafficking groups use to repatriate profits and move Chinese capital into Southern California.

    With storefronts closed, supply chains in disarray and the global economy in peril, these complex schemes are hobbled and cash is backing up in Los Angeles, Bill Bodner, special agent in charge of the Drug Enforcement Administration’s Los Angeles field division, said in an interview.
    …

    1. “…drug trafficking groups use to repatriate profits and move Chinese capital into Southern California.”

      How much of the SoCal illegal drug trade is driven by China?

      1. ‘Cartels are scrambling’: Virus snarls global drug trade

        Coronavirus is dealing a gut punch to the illegal drug trade, paralyzing economies, closing borders and severing supply chains in China that traffickers rely on for the chemicals to make such profitable drugs as methamphetamine and fentanyl.

        One of the main suppliers that shut down is in Wuhan, the epicenter of the global outbreak.

        2. “supply chains in China that traffickers rely on for the chemicals to make such profitable drugs as methamphetamine and fentanyl.”

          Fentanyl has killed a hell of a lot more people than caronavirus.

          2. Strange how fentanyl deaths are now where in the news, or even proclaiming how few there have been this month.

          3. Strange how fentanyl deaths are now where in the news

            Or news about the enhanced counter-narcotic operations announced at the WH press conference on April 1st.

    2. With storefronts closed

      So that’s why there’s a donut shop on every corner in SoCal.

  27. Also the Neato BotVac is pretty cool. It sucks up everything but you have to pre-prepare furniture and things so it can go everywhere. I got the full on animal version because I’m an animal. LOL 🙂

    2. Unless your house looks like a model home, I don’t see how those bots can be useful

      1. I currently rent an apartment but in the past I did own a big house with half acre land, nearby a lake with ducks in it, but no more. It’s good to have that but also big house = big expenses and stuff. I’m drinking right now so I can’t remember the exact year but it was like year 2006 or 2007 after the last property downturn. I put 20% down, lived there for 4 years, it went up in price from the everything bubble, then I sold it and back to renting for the past few years. Learn to code, bitches. Live small.

        1. ahhhh the two most dangerous words in the American language “live small” If we did that millions of people will be permanently unemployed, Malls will close forever, The cascading effect will be felt for generations……migrants will go home and Americans will be forced to pick their pwn fruits. Houses will be affordable and will barely increase in price…….do you think we can handle this ?

          2. We’re finding out at this very moment.

            And the tentative answer is: Not for very long.

          3. Sure we can. Way too many malls and brick and mortar stores in this country anyway — they were overbuilt in the naughts in ignorance of the soon in coming shift of much of retail sales to online.

            It’s ugly in the short term, because you’ll have all of these empty stores that no one needs. Some could get repurposed to other operations like medical or office space (there have been little bits of that happening in this area).

            Old enough to remember when produce was picked by Americans; actually did a little bit of it myself one summer when I was a kid (tomatoes and green beans).

            And “learn to code” is getting stale here. Those jobs were all outsourced decades ago. “Learn to add value” is more to the point. I can see the desire for bad karma to fall on those who greedily sought to enrich themselves directly at the expense of others, but some folks were just working hard and playing by the rules, and ended up losing their jobs through no fault of their own. Try to have some empathy at least once it a while.

          1. Like, I had many kilogram bars and Kruggerands and they were so awesome. The weight of it in your hands, truly satisfying in a fundamental way. Nothing like it. I got it originally at $300 but now it’s way more expensive.

    1. Housing recovery is a cascading ripple effect of falling home prices to dramatically lower levels that are even affordable to the common man. Meanwhile, Wall Street can enjoy choking on the vomit of its highly leveraged gambles.

      1. Thats what they are scared to death of Frugality of the masses. Many businesses will reopen but without the volume they will toss in the towel in 2-3 months…

        Do we really need a new car when the 6 year old car runs fine and has only 70K miles and we just bought 4 new tires last month? Do we spend $20,000 on renovating the apartment and try and get $500 a month more later or just slap a coat of paint on and get $50 a month more this week? do we spend $8-10 a day at starbuxx or bring our own lunch and coffee? How much of this frugality mindset will sink in?

  30. I once went to the city before it went down and I actually got up on them about 3 weeks before. I go up on the roof they let people do that back then.

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