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Owners May Be Forced To Sell For Less Than Market Value

A report from King 5 in Washington. “If you lost your job, you might be asking yourself what good a deferral does if you owe a large lump sum at the end of it. When Kathy Martin lost her job, she wanted to have a plan in place in case she couldn’t make her house payments. When Martin got the physical forbearance paperwork in the mail and read the fine print, she was shocked to realize she’d have to pay $15,000 in a balloon payment come October. She says trying to get help from her assigned agent was nearly impossible.”

“‘I thought, ‘Wow, that’s crazy,’ so I called her back,’ said Martin. ‘I emailed. I emailed and called. I left the phone on hold for six hours. Nobody called me.'”

“‘This is an interesting trickle effect in the mortgage market,’ said Thomas Gilbert, finance and business economics professor at the University of Washington. ‘The loans are not just owned by the bank. The loan is being sold to an investor, and it’s being packaged and sold to a mortgage-backed security of some other investor.’ That can make it difficult for mortgage companies to just change or re-create one’s loan contract. However, that does not help the millions of Americans currently in forbearance.”

“Martin says nothing changed for her – she’s still on the hook for that massive payment in six months. She says she’s now working three part-time jobs to make her mortgage payment for May. ‘It makes me cry because I really just want to do the right thing,’ said Martin. ‘I don’t want to ruin my credit. I just want to make sure that I’m doing the right thing and that we get through this.'”

From KPTV in Oregon. “For many people, the first of the month means paying their mortgage. And if you can’t pay right now, the federal government is letting you temporarily postpone payments, which is called forbearance. Julee Felsman, a mortgage originator with Guaranteed Rate, says plenty of clients she’s helped get mortgages are now reaching back out with questions. ‘As all this came out, lots of my old clients reached out with questions about forbearance and what to do,’ Felsman said.”

“Forbearance doesn’t mean your payments are forgiven. Felsman says remember that mortgage lenders are a business like any other. ‘Every mortgage someone takes out is actually an investment for someone else,’ Felsman said. ‘Speaking as someone who helps people get mortgages, I can tell you we look at payment history really, really closely as a part of that process,’ Felsman said. ‘When someone comes to me and says I want to get a mortgage, we’ll want to verify the payment history on that mortgage, and it will be apparent that there was a period of time when payments weren’t made.'”

From Money. “As the coronavirus continues to wreak havoc on the economy and travel industry, Airbnb homeowners are starting to wonder if they’re going to be able to make their next mortgage payment. ‘It’s a worrying time,’ said CJ Hunt, an Airbnb host in Hampton Roads, Virginia. ‘There will be a lot of shifts and some people that depend on Airbnb income may not make it.'”

“But Hunt has a plan. Despite having an onslaught of coronavirus-related cancellations through August, she slashed her prices up to 35% and put three properties she was preparing for Airbnb on hold to avoid further economic loss. But it still might not be enough.”

“For those managing short-term rentals, such as Airbnb, who oftentimes juggle multiple mortgages and depend on supplemental income generated in high seasons like spring and summer, this could be a major blow, since some private lenders may require homeowners to make a lump-sum payment once the forbearance period is over.”

“According to Carlos Garriga, Vice President of Research and Industry at the Federal Reserve branch of St. Louis, owners of Airbnbs in desirable coastal areas may be forced to sell their properties for less than market value should they not recover from the economic fallout of the coronavirus. ‘There’s going to be a lot of correlated sales in certain areas, because there are desirable locations or vacation homes,’ said Garriga. ‘There could be a massive number of units sold in these areas.'”

“Austin Hankwitz, a Nashville native and financial analyst, believes that the outbreak has caused a housing bubble effect for Airbnb, which could potentially give millennials and younger homebuyers an opportunity to purchase a home at an affordable price sooner than they thought.”

“‘Airbnb is a fantastic tool for those who travel often, but unfortunately, that’s not happening right now,’ said Hankwitz. ‘This lack of travel and tourism is already causing Airbnb hosts to slash their prices by more than 80% in some cities. If this goes on for much longer, a lot of these cash-strapped hosts will be forced to sell their properties. This flood of new properties for sale might cause home prices to drop sharply in a short period of time. Add to this scenario baby boomers that are considering downsizing to pull equity out of their current homes to aid their retirement funds, and you have a recipe for disaster.'”

The Uptown Messenger in Louisiana. “We reached out to Robert Bergeron, President of Crescent Title here in New Orleans. Have you had a lot of transactions that fell apart in the immediate aftermath of the outbreak? ‘I thought we’d see a lot more early on, but we are starting to see them. When that happens, I try to get on the phone with the buyer and calm them down. One concern is that you might be in default – and default has a lot of significance with penalties – 10% penalties, attorney’s fees, court costs, and more. At the end of the day, we’ll usually just try and talk to the seller and say, ‘hey, why don’t we pause,’ and then grant a two-week extension to the contract. It helps the buyer get their feet on the ground.'”

The Real Deal on New York. “First, it was asking for $50 million. Three years later, it was listed for $28 million. And now, the asking price for a Midtown East mansion at 29 Beekman Place has dropped to $11.45 million. The eight-story, 12,000-square-foot townhouse — previously owned by the sister of the late shah of Iran — has spent six years on the market. Now, Rosewood Realty’s Greg Corbin, Aaron Kline, Chaya Milworn, Branon Serota and Elliot Haft have now been hired to sell the property out of bankruptcy.”

“The owner was listed as Wansdown Properties, which purchased the townhouse in 1980 for an undisclosed price, according to property records. ‘Due to the nature of the bankruptcy and the desire to have an immediate sale, the property has been priced well below what any private owner would ask,’ Corbin said in a statement.”

From Berkeleyside in California. “Kristen von Bargen, a realtor with Highland Partners, was days away from closing a deal on a $1.7 million home in the Oakland hills when the March 16 stay-at-home order took effect. Her client pulled out last minute and lost his deposit — a steep $50,000. It’s been quiet on the market ever since. ‘I think a lot of people are taking a watch and see attitude,’ said von Bargen. ‘I have several people who want to buy or sell, but they’re just hanging back. People are not willing to take risks right now.'”

“The housing market has shifted: buying and selling have gone virtual and pricing strategies have become more transparent. People expect a price drop to come, and some buyers — including high-earning millennials — may be stepping in to land a good deal.”

“Kenneth Rosen, chairman of the Berkeley Haas Fisher Center for Real Estate and Urban Economics, expects to see a drop in market prices, at some point in the summer or fall. Eventually, he says the cost of a home could dip 5% to 10%. If you want to buy a home in Berkeley, there are certain advantages on your side now. ‘It’s definitely a good time to buy,’ Rosen said, explaining that interest rates are lower and mortgages are cheaper. ‘If you have the financial resources to buy comfortably and you want to live in a house, you can probably get some price concessions, but you won’t have as much choice.'”

“Dolores Johnson, a local independent real estate agent predicts that the pandemic could usher in a buyer’s market. With fewer people looking to buy and homes still being put up for sale, the market could become less competitive. ‘We’ve been a seller’s market for so long, at least 10 years now. This pandemic may lead us into a buyer’s market before the year is over,’ Johnson said. ‘Buyers are likely to get a sweet deal. Now they can ask for a whole lot of stuff. I want you to pay for my home warranty, I want you to pay for the inspections. They can include their demands.’

This Post Has 108 Comments
  1. ‘First, it was asking for $50 million. Three years later, it was listed for $28 million. And now, the asking price for a Midtown East mansion at 29 Beekman Place has dropped to $11.45 million. The eight-story, 12,000-square-foot townhouse has spent six years on the market…to sell the property out of bankruptcy’

    Remember when we were told half off was unrealistic?

    1. I might put an offer in for a place on the beach in Fort Lauderdale today. He listed it at $1.4M, turned down $1.25M cash last year, reduced it to $1.1M this year, and it’s now $990K.
      I would offer $900k even.

      1. Hard Money – how old is the house?

        I think that in 2021 the condition of the house (or maybe its future potential) is going to differentiate the value of houses in a neighbourhood.

        A bunch of the flippers and real-estate quick money guys will be much more cautions (and a bunch will have been hurt by YE 2020).

        So it becomes do you see potential (and for yourself and not for flipping) do you slowly rennovate

        Does this make sense to anyone

        1. In this case I think what makes the shack valuable its that it’s beachfront. That said, it could drop below $900K.

      2. I would offer $900k even

        The implication being that you are a “cash investor”.

        Buying near pre-pandemic asking on the retail market seems sketchy.

  2. “Dolores Johnson, a local independent real estate agent predicts that the pandemic could usher in a buyer’s market.

    COULD?

  3. I have barely got through the beginning of searches and I’ve got a CRE post to do and an international crater filled post to do. Check back later, this thing is just getting started!

    ‘Julee Felsman, a mortgage originator with Guaranteed Rate, says plenty of clients she’s helped get mortgages are now reaching back out with questions’

    That must be awkward.

  4. does it even make sense with all the hosting effort and cleaning effort to rent and Airbnb for 80% off.

    Or is this utter desperation
    —–
    ‘This lack of travel and tourism is already causing Airbnb hosts to slash their prices by more than 80% in some cities. If this goes on for much longer, a lot of these cash-strapped hosts will be forced to sell their properties. This flood of new properties for sale might cause home prices to drop sharply in a short period of time.

    1. But lending was tighter than iced nipples since the last housing crisis. Right? So how did all these lenders approve mortgages that would fail if a few months of Airbnb income dried up? It’s almost like all that tight lending was FAKE NEWS.

      1. They were probably subprime and the interest rate was higher. Plus Mr. Banker wasn’t expecting a Wuhan Swan. He was hoping that the party would continue for a few more years. Plus, it wasn’t his money he was lending,

        1. Mr Banker didnt give a rat ass. These toxic loans were packaged up into MBS and told to the idiots speculators chasing yields. Got commissions already so F**k it.

  5. ‘Tenants Demand Rent Cancelation For At Least Four Months’

    ‘As Barber put it so bluntly, “I need a rent strike for four months or else I will be homeless and you’ll have to find someplace to put me and my daughter.”

    https://bklyner.com/may-1-rent-strike-tenants/

    These governors are going to regret this free sh$t thing they started. Come on Cuomo, pay up!

    1. ‘Ryu says the city doesn’t have the power to make that call, but the federal government does. He’s advocating for rent forgiveness in an upcoming bailout package. “Most Angelenos and American families will not be able to get themselves out of that debt. That’s where we need rent and mortgage forgiveness. So we can actually pull out these families from having this debt that’s inescapable,” he said.’

      “This shouldn’t even be a political or legal argument. This should be a common sense argument. People are struggling,” he said. “The government told people to stay at home. Don’t go to work. Close down your business. The least we can do is make sure your rent doesn’t go up.”

      https://www.nbclosangeles.com/news/local/as-tenants-fail-to-pay-rent-during-pandemic-councilman-advocates-for-rent-forgiveness/2355460/

      That’s right guberment, you shut it down, now send us all checks and pay my rents! Oh and my gas, not that I need much.

      1. “The rent strike is a cry for dignity: We are all deserving of a home, no matter the color of our skin, financial status, or culture,” Donnette Letford, a member of New York Communities for Change, told The Intercept.’

        ‘Major rent strikes are also expected to take place in California, Pennsylvania, Missouri, and other states across the U.S. “People are looking for something to join because they don’t know what to do,” Kenia Alcocer, an organizer with Los Angeles-based advocacy group Union de Vecinos, told NBC News. “The reason why our campaign is called ‘Food Not Rent’ is because we’re actually telling folks to choose your survival, choose your life, over paying your rent at this point.”

        https://www.commondreams.org/news/2020/05/01/cant-pay-wont-pay-tens-thousands-take-part-covid-19-rent-strike-across-us-may-day

        I want one of those Obammie phones, cuz dignity yall.

        1. We are all deserving

          Oh man, there’s that word again. “Deserve’s got nothing to do with it”.

          I have to laugh, my step-daughter knows that’s a trigger word for me. Now she catches herself when she starts to say she deserves something and says “I know, I know, nobody ‘deserves’ anything” :-). It may be the most important thing I’ve managed to teach her so far.

          1. “fairness”

            I had the same teacher for grades 4, 5 and 6. His motto was “life’s not fair.” The lesson stuck.

      2. “…and my gas, not that I need much…”

        Might as well throw in SUV lease, cable, phone, at a little extra cash for the local cannabis emporium. (To help relieve all that stress caused by watching unpleasant news reports on TV).

      1. Anybody can sue anybody for damages. Can store owners sue? Oh hell yeah! Nice can of worms you’re holding there guvnah!

        1. “The United States Congress and President Trump have the capacity to do this,” said Sean Weber, the creator of a petition on Change.org that calls for the federal government to provide mortgage assistance directly to loan agencies. “If they don’t – well that’s the better question – what will happen? What happens to all of these banks and lenders and renters when this crisis worsens?”

          ‘Weber, a resident of Santa Clarita, California, said it’s an unprecedented move, but a necessary one, and is also calling for a 90-day forgiveness program for all renters and landlords that owe payments on commercial and residential properties, so that everyone from renters to loaners are covered in the interim. Indeed, total payment relief seems to be the universal call that is uniting tenants and landlords alike.’

          “We don’t want to ever have to pay back the rent we’ve lost because the reality is that this economic crisis is going to last far longer than the public health crisis,” Cea Weaver the coordinator for Housing Justice for All, a New York-based group of tenants and housing activists, told FOX Business.’

          https://www.fox10phoenix.com/money/landlords-lenders-brace-for-nationwide-rent-strike

          One of the things I’ve noticed the past few days is the hysteria is lifting. As things are opening up, the “we’re all gonna die!” is losing its power. This was a mass hysteria. It should be interesting in the near future seeing how the fog lifts and peoples reaction.

          1. the hysteria is lifting

            Not everywhere. I’ve got a friend who honestly doesn’t think our kids will be going back to school in fall or ever full-time. Pre-COVID, I would see CNN alerts on her phone.

          2. ‘Before April got away, however, the month ended the way it usually begins — coronavirus permitting. That is, with an elaborate April Fools’ Day joke. In this case, the punchline should be Gov. Gavin Newsom, who finally appears to have overplayed the hand he’s been bluffing with almost since the pandemic panic began more than two months ago.’

            ‘To recap: With COVID-19 cases beginning to pile up throughout much of California, the first-term governor issued a statewide stay-at-home order on March 19. The intention, it bears repeating, was not to achieve the impossible by eradicating the coronavirus, but to flatten the infection curve before our hospital capacity could be overwhelmed. As columnist Brian Goebel has been chronicling on Noozhawk, California largely achieved that goal weeks ago — with the glaring exception being the apparently radioactive U.S. Penitentiary complex in Lompoc, run with such disgrace by the shockingly incompetent federal Bureau of Prisons.’

            ‘By willfully turning off the economy — federal, state and Santa Barbara County — we have unleashed furies that almost certainly will have a longer lasting and much more profound impact than anything this batshit-crazy coronavirus dishes out. Poverty, food insecurity, health and mental wellness issues, educational access and achievement gaps, economic inequality, homelessness, bankruptcies … pick your poison, because it’s all headed our way.’

            ‘As our Brooke Holland reported April 29, a staggering 22,000 jobs have been lost in Santa Barbara County in just the last two months. That’s not quite half the number of residents of Goleta. Nationally, in the last six weeks, more than 30 million Americans have filed for unemployment — nearly a quarter of the U.S. workforce and the equivalent of three out of every four Californians.’

            ‘It’s increasingly clear that Newsom is out of ideas. Two weeks ago, he announced “six indicators” that he said would put the state on a glidepath to reopening. In reality, they’re loaded with ambiguity and contradiction. Perhaps Newsom’s missteps will awaken those of us for whom the overreach and authoritarianism of his emergency declarations doesn’t quite sit right, constitutionally speaking.’

            ‘As an entrepreneur and an employer, I’m not comfortable with government closing private business, restricting commerce, and infringing on our rights and liberties. In our American Republic, it is not the responsibility of an employer or an employee to prove that his or her job is “essential.” Rather, it is the government that must prove it is not.’

            ‘The public health catastrophe triggered in Wuhan, China, cannot be de-linked from the economic disaster we created ourselves.’

            https://www.noozhawk.com/article/bill_macfadyen_gavin_newsom_beach_bumbling_coronavirus_20200501

          3. I think the degree to which hysteria may or may not be lifting still depends on where people get their “news.”

          4. America has always loved a good hysteria. It is just too bad we can’t burn a witch doctor or two to elevate the current one.

          1. the damages are real and substantial

            No question! My point was that lawsuits alone don’t increase money velocity.

    2. “I need a rent strike for four months or else I will be homeless and you’ll have to find someplace to put me and my daughter.”

      Who is “you”? There seems to be some misunderstanding here.

    3. you’ll have to find someplace to put me and my daughter.

      These people are going to learn that Section 8 funding has been exhausted for quite some time and that waiting lists are loooooong.

  6. Moody’s comment on CDN real estate – i.e. potential guidance for banks, insurance co, REITs etc. They are probably doing this to cover their backside – but what write-offs do banks and REITS have to prepare for

    https://betterdwelling.com/canadian-real-estate-prices-could-drop-up-to-30-moodys-advises-institutions/?fbclid=IwAR0jSnZNPkqy9L-4uzgctPAkY7_qrcZT5K-GG3cwQvsH4sbsZkPBuP-pyf0

    Canadian real estate prices are expected to drop in the baseline, and the declines get bigger as the lockdown persists. The S0 baseline shows prices decline 8% in real terms, with a return to breakeven one year later. In the S3 scenario, prices decline 20% in real terms, and recover in late 2024 or 2025. In the S4 forecast, prices fall over 30% well into 2022, and recover in real terms towards the end of the decade. Reconstructing their model with the same macros parliament is using, prices drop about 24%.

    1. also the following:
      —-
      Also worth a note is these scenarios deal with an unknown behavioral response. The assumption is once the real economy reopens, things return back to normal. However, as places like Wuhan have discovered, the psychological impact may be deeper and longer than people think. Despite the reopening of their economy, people are still avoiding things like eating out and shopping. People not spending in the economy leads to a much longer recovery period.

      1. ‘At the start of the COVID-19 state of emergency in Ontario mid-March, new condo rental listings did not decline as much as the number of units being leased did – and last week, six weeks into the crisis, we saw a 26% increase in condo rental listings as investors scrambled to lease their units.’

        ‘So why are rents trending down? The steep decline in demand for rental units has left many investors scrambling to rent their condo unit as soon as possible because every month a unit sits empty, it costs them thousands of dollars. At the end of the day, getting slightly less rent than needed is better than getting no rent at all. ‘

        ‘As it turns out the most coveted rental location – downtown Toronto – is harder hit than other areas in the GTA when it comes to fetching less rent. It is worth noting that downtown Toronto was the most popular location for Airbnb rentals and as demand for short-term rentals has collapsed in response to the Coronavirus crisis, the number of landlords now seeking longer-term renters may have climbed, leading to an above average surge in inventory and decline in rent prices downtown.’

        ‘For many condo investors needing to rent out their units, even short-term blips may prove to be financially disastrous, introducing more volatility into a real estate market impacted by the Coronavirus crisis.’

        https://www.movesmartly.com/articles/average-condo-rents-fall-in-toronto

        1. ‘Real Estate Institute of Australia president Adrian Kelly said both the rental and sales markets have been a “moving beast” during the fast-changing pandemic. “I know of a large cohort of tenants who have become unemployed so they’ve decided to break their lease and move back in with friends and family,” Mr Kelly said.’

          “Tourism in Australia is closed now, so all of those [short-term] properties have gone back on to the long-term rental market.”

          https://www.domain.com.au/news/rental-vacancy-rate-jumps-in-april-amid-pandemic-with-sydney-and-melbourne-at-highest-in-three-years-953097/

        2. Many might not be aware how Toronto is setup. Basically every regional train, the subways all end up at Union Station. Which is why all the big office towers (banks, insurance, system integrators, accounting etc) are within 10 blocks of union. The mid 30’s employees having kids can move out to buy a house in the pseudo burbs and take regional (GO Train) in.

          What this has meant for the last 25 years is that tons of massive condo building have been built for the late 20’s bankers, accountants , IT workers. They have helped rejuvenate a little of the downtown night scene (restaurants, pubs etc) —

          but more importantly there was the history/practice of presale – meant that by the time you took possession 2 years later, you could have made 20-30%. This is not realistic in the mediumpterm.

        3. “…The steep decline in demand for rental units has left many investors scrambling to rent their condo unit as soon as possible..”

          But, but the REIConplex keeps telling us there is a shortage.

          Even worse, where are all those students returning to university in the fall going to find ‘luxury’ student housing?

  7. meanwhile in Hong Kong.

    So if you compare to the US – is this Maui for the sillicon valley rich-rich? is it the hamptons for the hedge fund and banking rich? Is it the florida keys or south beach for the xxx?

    If they need cash flow? Will the sell for a 20% loss in the fall

    —-
    Some of Hong Kong’s wealthy property owners are cashing in their luxury houses, often slashing the price to sell at a loss, as the city faces the threat of its worst recession ever.

    “People are losing jobs or getting pay cuts because their companies are not doing well. Thus the business owners, who are the major purchasing force of these luxury homes, are not doing well either and some may already be seeing liquidity problems and need quick money to stop bleeding,” said Vincent Cheung, managing director of Vincorn Consulting and Appraisal.

    “We are not sure whether such owners are having liquidity issues and are in urgent need of money, but one thing for sure is that everyone now does not want to wait any longer. Slashing 20 per cent to 30 per cent from the original asking price is not a big deal for them.
    “They just want to cash out as soon as possible to either pour back into their own business or put into other investments, stocks or even cheaper properties in other regions or in other countries.”

    https://www.scmp.com/business/article/3082523/hong-kongs-business-elite-are-cashing-their-luxury-villas-loss-they-brace?utm_source=Facebook&utm_medium=share_widget&utm_campaign=3082523&fbclid=IwAR21t2jeOLIS5z_To59lP8dkGbFugYt-kW3AZUWMBkJdkBQwtMz3oyk1pBU

  8. ‘The already-reeling used-vehicle market is hanging in the balance as Hertz Global Holdings Inc. negotiates with its creditors, a Benchmark Co. analyst said.’

    ‘The rental-car company has been seeking leniency from lenders and U.S. government support to avoid a bankruptcy filing, Chief Executive Officer Kathryn Marinello said in an interview Wednesday. Hertz has missed lease payments related to the vehicles it rents out and has until May 4 to either make them or convince lenders to waive a potential default.’

    “The risk for the auto sector occurs if the creditors of the debt using the rental vehicles as security decide to liquidate the fleet to repay the bonds,” Benchmark analyst Michael Ward wrote in a report Friday. “A fire sale of a significant portion of the Hertz fleet could add to the price volatility in the used vehicle market.”

    ‘Used-car prices at auction have plunged since much of the U.S. economy began to shut down in mid-March. Values are expected to remain depressed for months as dealers and rental-car companies alike sell down inventory to adjust to lower demand.’

    https://auto.economictimes.indiatimes.com/news/aftermarket/fire-sale-of-hertz-rentals-poses-risk-to-broader-auto-sector/75506323

    Easy to force a shutdown, not so easy to get out of the hole. Way to go guberment dumba$$es!

    1. ‘On CNBC, Nate Forbes, owner of the luxury mall operator The Forbes Company, said it collected just 19% of April rents and expects May to be worse. The group owns high-end malls in Michigan and Florida, including Somerset Collection in Troy, MI, and The Gardens Mall in Palm Beach Gardens, FL.’

      https://www.streetinsider.com/Corporate+News/Luxury+Mall+Owner+Nate+Forbes+Said+He+Collected+Just+19%25+of+April+Rents%2C+Said+May+Could+Be+Worse/16821015.html

      Give Nate an Obammie phone too.

    2. do the auto makers – GM, Ford, Nissan, Toyota fund the rental car companies?

      Or is there a bank (or other financial instrument) that pays the auto maker up front and they are now screwed

    3. Maybe they could have another parking lot (field) fire like the one in Florida that destroyed thousands of stored rental cars.

      It will be interesting to see the market suddenly flooded with low mileage, 2020 model year cars. If the price is right I would be amenable to snapping up a car with under 10K miles for less than half of MSRP, maybe a third of MSRP?

      I wonder though, if some hedge fund will buy them all for pennies on the dollar, then resell them later as things start to improve.
      I just took a looksie at cars dot com. Not seeing any used car price softening yet, but we’ll see what happens when the rentals flood the market, if they do.

      1. I wonder though, if some hedge fund will buy them all for pennies on the dollar, then resell them later as things start to improve.

        That’s tough to pull off profitably on a product that everyone understands depreciates quickly. Although I suppose it could work if the automakers went out of business before demand picked up.

        1. It has to be pennies on the dollar. In other words, snap up a rental car with a new MSRP of 30-40K for a few thousand, then wholesale it later for 10K. But yeah, cars get stale fast, and if the used market doesn’t rebound, they could get stucco.

          Still, I remember during the previous crash’s aftermath that used cars, because they are cheaper, had a lot more demand than new ones. Of course it’s possible that there might be no real remand for a long time.

  9. “I emailed. I emailed and called. I left the phone on hold for six hours. Nobody called me.”

    Those of us who did not borrow to buy overpriced used housing and have been living below our means for years don’t have these kinds of problems.

    Debt is slavery.

    1. Those of us who did not borrow

      The time for us to warn others is over. The consequences are upon them.

  10. Pandemic sucking the economic life out of several Colorado counties, hitting tourism spots especially hard:

    “Tourism accounts for about 40% of jobs in some mountain counties, and about a 10th of jobs along the Front Range, said Brian Lewandowski, executive director of the Business Research Division at the University of Colorado’s Leeds School of Business.

    Retail and personal services, other hard-hit sectors, will slowly come back and eventually, restaurants and bars will too as restrictions ease in more populated areas. But tourism-dependent areas face a more difficult path to recovery. Their retail and restaurants and service providers depend on outsiders showing up.”

    https://www.denverpost.com/2020/05/01/coronavirus-pandemic-economic-colorado-counties-tourism/

    Governor Polis doesn’t want “outsiders showing up” with his non-enforceable no outdoor recreation more than 10 miles from home order. Everybody needs to stay home and hide under their beds.

    1. To be fair to Polis (of whom I am not a fan) he did lift the shelter at home order, while Arizona’s governor extended it in the Grand Canyon state, even though AZ has fewer cases and deaths than CO, and with a larger population to boot.

      And judging by the amount of road traffic I’m seeing, few are hiding under their beds.

      1. The 10 mile order is horsesh*t.

        I will stay out of Chaffee and Gunnison Counties, because their sheriffs ordered non-residents not to visit.

        Meanwhile, the trails of the Front Range Open Space parks are getting destroyed by erosion.

        1. The 10 mile order is horsesh*t.

          It’s virtue signalling. He knows its unenforceable. Colorado is reopening and he knows he can’t stop it, so he’s pretending to be in charge.

          But h could have dug his heels in and extended the stay at home order, which few were obeying.

  11. Is $50 bn alot? Or is that a meaningless amount for a company like Berkshire Hathaway that is rolling in cash?

    The Financial Times
    Berkshire Hathaway Inc
    Buffett’s Berkshire Hathaway slumps to $50bn loss
    Stock market sell-offs dent investment holdings despite uptick in operating profit
    Warren Buffett’s Berkshire Hathaway shifted a large portion of its cash pile into US Treasuries in the first quarter
    © AFP via Getty Images
    Eric Platt in New York
    3 hours ago

    Warren Buffett’s Berkshire Hathaway swung to a $49.7bn loss in the first three months of the year, as the sharp sell-off in global stock markets hammered its investment portfolio.

    The sprawling industrial conglomerate disclosed on Saturday that its stock portfolio, which includes shares in blue-chip groups such as Apple and Bank of America, declined by $55.5bn in value in the quarter alongside the 20 per cent drop in the S&P 500.

    That decline more than offset the improvement in underlying earnings at Berkshire, which owns railroad Burlington Northern Santa Fe, insurer Geico and chocolate maker See’s Candies. Operating profits rose 5.7 per cent from a year earlier to $5.9bn, as investment gains from its insurance business climbed.

    “The amount of investment gains [and] losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” the company said in a statement.

    Berkshire’s cash pile swelled to a record $137bn and the group shifted a large portion of that into US Treasuries in the first quarter, a filing with US regulators showed.

  12. We Have Become Karen Nation:

    “It was one thing to indulge Karen her entitled behavior when she was getting a free order of fries or month of cable. It’s quite another when Karens become the State’s target audience for public policy.

    And the true Karens are the ones who are never satisfied. When they get the first thing they want it gives them the impetus to continually push the boundaries of what they can get away with.

    Karens, at heart, are simply spoiled children who have never had boundaries properly set. A little power creates a self-reinforcing feedback loop.

    And that has enabled the worst people in the world to destroy the global economy because a bunch of frightened Karens can’t cope with the stress of living. The State cannot have people engaging in peaceful noncompliance with their edicts.

    Karen-ness is a mental disorder. It’s the horrific admixture of narcissism, self-importance and solipsism which can only come from being encouraged to act badly thanks to cowardice. It leads to treating everyone else like they exist only to serve them.

    Karens used to be a joke at best. They used to be Veruka Salt in Willy Wonka or the starting point of a female lead in a rom-com.

    Now they run the world.

    Karens are proto-Brown Shirts. They are the ultimate useful idiots of the Elite and they are destroying the world we live in. Because they are happiest when the State does something. They have no boundaries at home, so they welcome any time the State gives them what they want and then use that to bludgeon everyone else into line.”

    https://tomluongo.me/2020/04/22/we-have-become-karen-nation/

    1. “I’ve never paid my rent late. I’ve always paid my rent on time,” said Mendoza. The Imperial Beach mother of two worked for a non-emergency medical transport company, driving cancer patients or seniors in assisted living to appointments. She was let go of her job in late March due to the coronavirus.’

      “We went from 55 trips to four trips a day, they laid off four other people, and I was one of them and since then I haven’t worked,” said Mendoza.’

      ‘Mendoza says she’s trying to provide for her 17-year-old daughter and 9-year-old son. “What am I going to tell my kids two months, three months from now? That we’re going to be homeless, and we’re going to live in a van. I don’t want to do that,” she said.’

      https://www.nbcsandiego.com/news/local/imperial-beach-mother-among-the-many-struggling-to-pay-rent/2317172/

    2. Karens, at heart, are simply spoiled children who have never had boundaries properly set.

      How did they get that way? I have my ideas, but they are usually best left unsaid.

      1. Dumb, talentless and lazy and no ones ever told them otherwise. Not their parental units, not their teachers, not the media nor society. We can’t even call the morbidly obese unhealthy anymore, those disgusting sows get held up as the ideal of beauty by our commie media.

        1. We can’t even call the morbidly obese unhealthy anymore

          The Reaper doesn’t care about wokeness or sjw’s.

          1. I couldn’t…had to bail at the one minute mark. I can’t stand to be around people like that, I could never work retail without losing it and/or getting fired.

          2. The best ones are police body cams like “menopausal rage meets taser,” or “don’t bring a knife to a gun fight.”

    3. Karen-ness is a mental disorder. It’s the horrific admixture of narcissism, self-importance and solipsism which can only come from being encouraged to act badly thanks to cowardice. It leads to treating everyone else like they exist only to serve them ??

      DJT ??

  13. Matt Taibbi — As the Covid-19 crisis progresses, censorship programs advance, amid calls for China-style control of the Internet:

    “Americans could be moved to reconsider their “understanding” of the First and Fourth Amendments, as “the harms from digital speech” continue to grow, and “the social costs of a relatively open Internet multiply.”

    This interesting take on the First Amendment was the latest in a line of “Let’s rethink that whole democracy thing” pieces that began sprouting up in earnest four years ago. Articles with headlines like “Democracies end when they become too democratic” and “Too much of a good thing: why we need less democracy” became common after two events in particular: Donald Trump’s victory in the the Republican primary race, and the decision by British voters to opt out of the EU, i.e. “Brexit.”

    Who needs to win elections when you can personally reestablish the social order every day on Twitter and Facebook? When you can scold, and scold, and scold. That’s their future, and it’s a satisfying one: a finger wagging in some vulgar proletarian’s face, forever.

    In the Trump years the sector of society we used to describe as liberal America became a giant finger-wagging machine. The news media, academia, the Democratic Party, show-business celebrities and masses of blue-checked Twitter virtuosos became a kind of umbrella agreement society, united by loathing of Trump and fury toward anyone who dissented with their preoccupations.

    When the Covid-19 crisis struck, the scolding utopia was no longer abstraction. The dream was reality! Pure communism had arrived! Failure to take elite advice was no longer just a deplorable faux pas. Not heeding experts was now murder. It could not be tolerated. Media coverage quickly became a single, floridly-written tirade against “expertise-deniers.”

    At the outset of the crisis, America’s biggest internet platforms – Facebook, Twitter, Google, LinkedIn, and Reddit – took an unprecedented step to combat “fraud and misinformation” by promising extensive cooperation in elevating “authoritative” news over less reputable sources.”

    https://taibbi.substack.com/p/temporary-coronavirus-censorship

    1. One of my friends posted this earlier this morning on FB. One of his more left-leaning acquaintances commented that it all made sense except the part about Russia-gate being a hoax so none of it was trustworthy to him. No acknowledgement that someone right about all those other things was probably also right about that one sacred cow, too. There are even detailed supporting links from Taibbi throughout the article but none of that matters.

    2. In the Trump years the sector of society we used to describe as liberal America became a giant finger-wagging machine. The news media, academia, the Democratic Party, show-business celebrities

      This is why I stopped attending the local comic con. It turned into a huge finger wagging extravaganza. Of course now the local convention is in danger of death as it has been postponed from July to Thanksgiving weekend, and I doubt many will be buying tickets for November.

      Live by the Karen, die by the Karen

  14. Since everyone is talking about sexual assault again because of Biden I have some thoughts.

    There use to be women who were called ” groupies” who were on the make for rock stars, famous people, or powerful people. This is far different than a women who is minding her business and gets a sexual attack from a overly aggressive jerk who doesn’t care if they get clear signs of mutual sexual interest, as opposed to just being friendly.

    A lot of women are just friendly and it’s not to be confused with sexual interest.

    Joe Biden strikes me as a dumb ass type strutting around like a peacock thinking he was Gods gift to women as a powerful Senator.
    Who goes around kissing supporters or comes up behind women and smells their hair , which is a sexual gesture. Biden just can’t control himself. Biden has displayed anger control issues also which is a Hallmark of the out of control sexual jerk.

    Not only should Biden be watched because he’s old and mentally deficient , he’s also has always been a dumb ass fake politician who got a good gig and just rode it. There is just no core character coming from the man.

    1. Google Play removed the episode of CNN’s Larry King Live in which Tara Reade’s mother called in about her daughter being sexually harassed by an unnamed prominent Senator.

      There is literally a gap between episodes, as if it never happened.

      When we talk about Real Journalists (with Mr. Jones’ graceful permission) on this blog, this is what we are talking about.

      It’s no different than when Stalin had his executed adversaries edited out of photographs back in the day…

    2. Published yesterday:

      “A woman says she was sexually harassed by presumptive Democratic Party presidential nominee Joe Biden when she was 14 years old.

      The woman, Eva Murry, told Law&Crime that Biden complimented her on the size of her breasts at the First State Gridiron Dinner & Show in 2008, a long-running roast of and party for politicians, journalists and prominent business figures held each year in Delaware. Murry says she remembers the event occurring sometime around May of that year.

      One friend and her sister said that Murry told her details of the alleged incident more or less immediately after it happened. Four other friends of Murry’s said they were told about the incident, with the same details, between two and three years after it originally occurred.

      “I remember walking into the lobby and being in awe of all the people in such fancy clothes,” Murry said in an interview. “Our two parties of people gravitated towards each other and everyone started saying their hellos. When it was Biden and my aunt’s turn to say hello he quickly turned to me and asked how old I was. I replied with my age and he replied with the comment ‘Fourteen? You’re very well endowed for 14!’ I was confused but it was definitely weird, he looked me up and down and hovered his eyes on my chest so I had some clue [about] the notion of his comment but didn’t fully understand at the time. We quickly separated from his area after the encounter.”

      “I feel his comments were verbal sexual harassment,” Murry told Law&Crime. “I think I was too naive to realize exactly what it meant at the time but I vividly remember the uncomfortable feeling I had in the pit of my stomach during the whole encounter. It wasn’t Biden’s words alone that made me so uncomfortable, it was the look, the tone, the whole general vibe was off.”

      https://lawandcrime.com/high-profile/woman-claims-biden-sexually-harassed-her-when-she-was-14-years-old-by-complimenting-her-breasts/

      1. “I feel his comments were verbal sexual harassment,”

        As Tom Brady illustrated in an SNL skit, it’s only harassment when the wrong guy does it. Not defending Biden, he is a creep.

        1. So the problem isn’t so much what Biden does, it’s that his “I’m the wrong guy in this situation” detector is broken? 🙂

  15. Hi Ben,

    I would be interested to hear your opinion on how we eventually do get out of this. I understand your point that this never should have happened. But it did, and now here we are, and we gotta look forward. The milk has been spilt.

    So in your opinion who SHOULD take the hit (eat the shIt sandwich)? The renters, the landlords, the mortgage investors, or the government? And, perhaps more importantly, who WILL take the hit?

    Thanks,

    Foo

    PS – My guess is that the government will try to bail everyone out, but it will be an unmitigated disaster like the small business loans are. It’s just impossible to administer programs of this scale.

      1. You don’t think Newsom and other Gov will declare evictions & foreclosures to halt, etc? I can clearly see that coming around June.

          1. Yep, you can live in your home as long as you and your family feel safe there. Just stay home..don’t worry about the mortgage. Fed will be pressured to step in around August/Sep

    1. I agree with you. We are foo(ked) beyond repair.
      Bailout for everyone…..except for us. That’s what will happen,

      1. Bailout for everyone

        I don’t need a bailout. I wasn’t living like a broke gambler buying things I didn’t need (mostly) or couldn’t afford. I didn’t promise to pay what I did not have. I cut my own hair this morning for the first time in 30 years.

        I would like to be able to get down the Erie Canal to Lake Ontario in my cruiser soon. Is that too much to ask?

        1. I just finished watching a few Wahl clipper tutorials then thought “what the hell” call the person who normally cuts my son’s hair (the most non-preferred activity) to see if she’ll cut my son’s and husband’s hair on the down low for cash.

          My son and I broke quarantine yesterday visiting his teacher and her two kids; we hung out in her backyard for a bit. If I go silent in a month or so, assume 👾 got me.

          1. Cash under the table…breaking stay-at-home ORDER?
            I think you’re gonna get flagged if you’re not careful

    2. Considering that WE are the government (for as long as the vote and some of the Constitutional Amendments remain effective) WE, along with most of the world that holds and/or trades in USD, will bail out the gamblers. That’s all QE is, anyway.

      Major cracks are appearing in our society now. As as fan of Harry Harrison’s “Stainless Steel Rat” pulp-scifi series (ah, the books of my misspent youth) I see a lot of opportunities for the self-confident coming.

  16. ‘I thought, ‘Wow, that’s crazy,’

    Not half as crazy as the number of people in this country who think their inability to stick to the terms of a purchasing agreement they signed should now become someone else’s problem.

  17. “…owners of Airbnbs in desirable coastal areas may be forced to sell their properties for less than market value should they not recover from the economic fallout of the coronavirus.”

    I’d argue market value is whatever price someone is willing to pay.

    1. I’d argue market value is whatever price someone is willing to pay ??

      And, what ever price the seller is willing to accept…

        1. T add. Most people have an economic shock (or a few) in their lives. Those who followed the sinister advice or Realtors to go into debt to their eyeballs made themselves fragile. Now we have a spectacle of fragility, all encouraged over the years by the realtor debt cheerleaders. There are millions right now that can’t sell for what will make them whole, and they won’t be able to hold on by their fingernails. They’ll have to walk away. Others will sell the house for whatever someone will pay.

  18. “‘This is an interesting trickle effect in the mortgage market,’ said Thomas Gilbert, finance and business economics professor at the University of Washington. ‘The loans are not just owned by the bank. The loan is being sold to an investor, and it’s being packaged and sold to a mortgage-backed security of some other investor.’ That can make it difficult for mortgage companies to just change or re-create one’s loan contract. However, that does not help the millions of Americans currently in forbearance.”

    I would imagine a lot of these are on the FED’s balance sheet, since they have been buying up MBSs like candy for some time now.

  19. “Owners May Be Forced To Sell For Less Than Market Value”

    Why would an owner choose to sell for less than the price the market will bear? Makes absolutely no sense…

    1. “…owners of Airbnbs in desirable coastal areas may be forced to sell their properties for less than market value should they not recover from the economic fallout of the coronavirus.”

      Is the Fed planning to put a floor under the prices for which AirBnB HODLers sell? Market value will never be discovered if that happens.

  20. Facebook AD

    “🚨🚧🛑‼🚨
    STOP PAYING RENT AND PAYING YOUR LANDLORDS HOUSE! Buying a home is one of the best appreciating assets you can ever invest in. Your properties value increases by 6% percent every year, while the U.S. Dollar depreciates by 9%. That is a 15% total increase in your wealth EVERY YEAR if you a buy a house! Buying a house can also resemble a bank account because all you are doing is paying yourself back (paying your mortgage loan) which is building equity on your property. With an average mortgage of 3,000$ a month you will have generated 36,000$ a year in equity!”

    1. Will people stop paying rent while buying there own place? Sounds kinda illegal, but you never know in California…

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