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Recessions Bring Motivated Sellers Out Of The Woodwork

A report from The Merced County Times in California. “CEO Josh Stech, described Sundae, which is funded by Silicon Valley venture capitalists and has offices in San Francisco, Manhattan Beach and San Diego, as a business which specializes in a niche in the real estate market. ‘The category is homes that need a lot of work,’ said Stech. Stech told the Times, ‘Heading into this crisis, we owned a lot of properties and are now putting them back onto the market. It’s shifted to a buyer’s market, so you need to be thoughtful about doing work on a home if you want it to sell fast.'”

“Home building has paused, according to Stech. ‘There are foreclosure and eviction moratoriums, which is a good thing for a time like this,’ he said. ‘But when that forbearance stops, we might see a wave of foreclosures after this health crisis passes.'”

From Stuff New Zealand. “The next few months could be a unique opportunity to land a trophy home that wouldn’t otherwise be available. There are certain homes in L.A. that you’ll never see on the market unless someone dies, said David Kramer, an agent with Hilton & Hyland, but recessions bring motivated sellers out of the woodwork.”

“‘When things go bad, you see legacy homes sell at reasonable prices. People think those in the high-end market won’t be affected, but they love deals. If you’re looking at a good price for a property — combined with a good loan — that’s a deal. There are definitely some more big sales coming,’ said Kramer, who just listed a gargantuan Spanish villa of more than 40,000 square feet for NZ$164 million in Bel-Air.”

“Although inventory is down, buyers trying to take advantage of the market to snatch up a trophy home have plenty of options. There are currently 45 properties listed for NZ$50 million or more in L.A. County, according to Redfin. Listing agents don’t seem to be shying away either. Twelve of those 45 properties have hit the market since the beginning of March, when concerns over the pandemic began to swell.”

“Chasing a deal? Beverly Hills’ Wallingford Estate — a five-acre promontory property anchored by a 38,000-square-foot mansion — hit the market in April for NZ$156 million, down NZ$65 million from its price in 2018. In Bel-Air, a 10.6-acre prized piece of land with approved plans for up to 180,000 square feet just relisted for NZ$205 million, a cool NZ$41 million shy of its last asking price.”

“Jade Mills of Coldwell Banker Residential Brokerage said interest rates are pushing sales through. ‘Banks are taking longer to get loans done, but they still seem to be getting done,’ she noted. In addition to her usual slew of roles needed to close a deal, Mills finds herself adding another feather to her cap: therapist. In a time where sellers are wary and buyers are asking for more price cuts, it’s the agent’s job to keep everyone happy enough to get the deal done.”

“Many sellers are nervous about listing their home in what appears to be a buyers’ market, but one way the Multiple Listing Service is assuaging their fears is removing the days-on-market data, which can be leveraged into lower offers. If buyers see a property has been on the market for over 100 days, they’re much more likely to seek a bargain than if something just listed last week.”

“Some high-end agents, such as Stephen Shapiro of Westside Estate Agency, aren’t so optimistic about the market. ‘Some people say things are going great. They’re not going great,’ said Shapiro, noting that he’s seen sales drop roughly 30 per cent over the last month. Many of the sales closing had already gone into escrow before the pandemic broke out, and buyers still in escrow are doing one of three things: backing out, asking for an extension or renegotiating.”

“Motivated sellers have been luring deal-seekers with price cuts, but many are simply withdrawing their high-end properties altogether. ‘If someone doesn’t have to sell, this isn’t the environment you want to sell in,’ Shapiro said.”

“In April, Kylie Jenner turned heads when she dropped NZ$60 million on a modern compound in Holmby Hills. The reality star got a decent discount as well, as the 15,000-square-foot stunner first hit the market last summer for NZ$90 million.”

The Los Angeles Times. “Mortgage credit is tightening. Some lenders are increasing FICO score and down payment requirements. One type of low-documentation loan has all but dried up. So-called jumbo mortgages, which in Los Angeles and Orange counties are those for greater than $765,600, have also grown rarer. And two major banks have stopped issuing new home equity lines of credit — a potential source of funds for existing homeowners suddenly in need of cash.”

“‘Lenders are concerned … with the severity and the duration of what is going on,’ said George Bahamondes, a real estate finance analyst with Deutsche Bank Securities Inc. That can be seen in the data. The Mortgage Bankers Assn.’s Mortgage Credit Availability Index, which measures how accessible loans are to borrowers, has fallen sharply. The April index, released Thursday, was the lowest since December 2014 and a 12% decline from March. The March index had fallen 16% from February.”

“Experts said lenders are tightening standards because they fear they’ll take in less money, whether it’s because of defaults on existing and future loans or mortgage forbearance programs that allow borrowers to delay payments for up to a year. ‘I wouldn’t be surprised if we got back to 2010-2011 type of tightness of credit,’ said Joel Kan, an associate vice president with the trade group.”

“One of the biggest contractions has been in loans that require minimal documentation to prove a borrower’s ability to repay and that can’t be sold to or insured by government entities. Such loans — often referred to as non-QM mortgages — are popular with self-employed borrowers who don’t get W-2 forms detailing their wages.”

“Some major non-QM lenders have announced they’ve stopped issuing loans altogether. That includes Irvine-based Impac Mortgage Holdings, which works with outside brokers as well as directly with borrowers under the name CashCall Mortgage. Impac has cited uncertainty in the marketplace for its decision.”

“Angel Oak Mortgage Solutions of Atlanta, another big non-QM lender, said it temporarily stopped making low-documentation home loans. It started doing so again last week, but with changes. A borrower needs to provide 24 months of bank statements from their business and have a minimum FICO score of 700. Before, only 12 months were needed and borrowers needed only a 600 credit score. Angel Oak said the loans were always only for self-employed borrowers. Previously, loan seekers could qualify using a personal bank statement, but that’s no longer an option.”

“Dave George, a Redfin agent in Orange County, said there is still demand to purchase homes, and by some indications it’s increasing. George said Redfin saw a jump in the number of in-person showings, which are allowed with proper social distancing measures, last weekend in Orange County. At the same time, many of his clients are locked out because they need a low-documentation loan and can’t find one. ‘They are on the shelf right now,’ he said. ‘They can’t get the financing they need.'”

The San Francisco Chronicle. “Three marquee San Francisco tech companies — Uber, Airbnb and Lyft — which exemplified a new generation of megabillion-dollar startups, have now slashed staffs in response to the coronavirus pandemic and shelter-in-place orders. ‘No one is immune,’ said Richard Florida, an urban studies theorist and professor at the University of Toronto. ‘The recession — or depression — will bite everyone.'”

“San Francisco developed a love-hate relationship with the tech sector as Silicon Valley’s epicenter shifted here. ‘The city may have congratulated itself on having the world’s greatest concentration of high-tech startups funded by venture capital, but it was always bemoaning the new urban crisis it faces, with techies driving up housing costs and gentrifying the city,’ Florida said. ‘Now that may turn into (deeper) problems. When people are laid off, they can’t pay taxes.'”

“The influx of highly paid tech workers into the Bay Area accelerated housing unaffordability, said Peter Cohen, co-director at the Council of Community Housing Organizations, a San Francisco nonprofit. Even though the tech boom also helped create middle-wage and lower-wage jobs, developers aimed their production at the high end, ‘which drove housing prices all the higher and out of reach for a very wide range of everyday workers not in those high-paid ranks,’ he said.”

“Now that could change. ‘Perhaps the reduction in some of that highly paid workforce from tech layoffs will begin to dampen housing prices as property owners have to adjust to new characteristics of demand,’ Cohen said.”

This Post Has 76 Comments
  1. ‘Many sellers are nervous about listing their home in what appears to be a buyers’ market, but one way the Multiple Listing Service is assuaging their fears is removing the days-on-market data, which can be leveraged into lower offers. If buyers see a property has been on the market for over 100 days, they’re much more likely to seek a bargain than if something just listed last week’

    Openly discussing market manipulation – check!

    And 100 days? Some of these super expensive LA shacks have been hanging out there for years now.

    1. 200 days, 100 days, 3 days…it doesn’t matter. The cash buying sharks will circle and they are out for blood.

      1. It’s great to know there are all cash buyers in the market, willing and ready to make purchase at current market value. This will relieve the Fed of the obligation to step in with Unlimited Quarantinive Easing as buyer of last resort.

        1. Central bankers only product is debt. Increasing debt levels increases their power and influence. The printing party – with each fake greenback representing debt, i.e. “Good faith and credit of the United States” – is just getting started. Embrace your debt peonage, proles.

        2. at current market value

          I suspect you’re being snark(t)astic but these sharks are looking for a COVID discount. Speaking of which, it’s gotta be at least a week since I’ve been contacted by one.

          1. Current market value considers the crushing effect of COVID-19 quarantine measures on demand, and the likelihood that conditions will improve any time soon. Mr Market is clever this way.

      2. Hard Money

        Sounds like “I’m not a Doctor but I play one on TeeVee.”

        I know a guy who has quite a bit of cash, but he calls himself Mr. Modest.

    2. Openly discussing market manipulation – check!

      Mills finds herself adding another feather to her cap: therapist

      She means personal con-artist and professional liar. Not even embarrassed.

  2. ‘One of the biggest contractions has been in loans that require minimal documentation to prove a borrower’s ability to repay’

    Minimal documentation, wa that? Only this morning were we told loans were air-tight cuz there’s no negative ARM thingie, plus the calendar clearly doesn’t say 2007!

    So why are lenders pulling back? If we had ten years or more of shack prices getting ahead of wages, and we did, the only way that happens is crappy loans.

    1. ten years or more of shack prices getting ahead of wages

      Quite the understatement. As we learned here a decade ago, it’s the stupid price paid that determines defaults, not the pedigree of the loan qualification.

      1. Exactly. In a more perfect financial world, the definition of subprime would include loans made at stoopid prices with stoopid low interest rates and downpayment requirements.

      2. No more affordably priced soup for you!

        People Are Souper Sad About Souplantation Closing — And What That Means For Buffet Restaurants
        by Elina Shatkin in Food on May 8, 2020 11:15 AM
        A bowl of clam chowder at Souplantation, circa 2010. (Michael Saechang/Flickr Creative Commons)

        Buffet restaurant Souplantation announced yesterday it is permanently closing all 97 of its restaurants and laying off 4,400 people. Here in Southern California, where the chain started, the sadness is palpable.

        Parents, kids, college students, broke writers, seniors, hipsters … we all appreciated how you could head to Souplantation to load up on cornbread and clam chowder, drench every vegetable in blue cheese and stuff yourself with soft serve — and how you could do it without spending a ton of money.

        Planning a family dinner for a dozen people from age 8 to age 80? Need a lunch spot to satisfy a bunch of coworkers with diverse dietary preferences? Tired of preparing food for a whiny eight-year-old who can’t be bothered to sit through a meal where you have to look at a menu, place an order and wait for food? Souplantation had you covered.

        Founded by bartender Dennis Jay, the first Souplantation opened in 1978 on Mission Gorge Road in San Diego, reports Sandiegoville. The restaurant had expanded to three locations by 1984, when Jay sold the company to Tony Brooke and Michael Mack.

        The two young entrepreneurs told the Los Angeles Times they had big plans to expand the soup-and-salad bar restaurant to 50 locations by the end of the decade.
        A meal at Souplantation, circa 2016. (Person-with-No Name/Flickr Creative Commons)

        The restaurant chain expanded through the western United States, operating in other states under the brand name Sweet Tomatoes, but its homebase was California, where it had 44 restaurants. In the process, it went public (in 1995) before returning to private ownership (in 2004).

          1. It was a SoCal thing. I ate there a few times back in the day.
            There were a few copycats, IIRC.

            In today’s age of hyper-obesity, I would have thought that soup and salad places would have already gone bust.

          2. I believe the first time I ate at one of their restaurants was a Sweet Tomatoes location in Monterey. We had a Soup Plantation location nearby in Rancho Bernardo which was my MIL’s favorite place to go with our family, as it spared her from being trapped in close proximity to our wiggly kids around our kitchen table. It was also a favorite eatery for the many seniors who lived in the surrounding 55+ neighborhood, as it offered a reasonably healthy meal at a senior discount, sparing them the hassles of food preparation or cleanup.

            We’re lucky to be fairly adept with the home meal process in our household, although we miss the San Diego restaurant scene, which really blossomed in recent years before getting struck low by the virus. But I can’t imagine how tough this is on people who can’t prepare food at home, and were dependent on a place like Soup Plantation for sustenance.

  3. ‘offices in San Francisco, Manhattan Beach and San Diego…’Heading into this crisis, we owned a lot of properties and are now putting them back onto the market. It’s shifted to a buyer’s market’

    Tom? Tom?


  4. Still no break at the low end. Affordable housing might have to wait for estate sales by those who won’t give it away.

    1. Sure. I look at pending foreclosures all over the country. Like elsewhere, in California it’s everything. Top, bottom, everything. Don’t take my word for it. Start searching the foreclosure sites. Yes, it takes time and effort but that’s what you have to do to know what’s actually happening. I asked not long ago, why doesn’t the media investigate these foreclosures? Go out and see how they got into trouble. The Seattle Times did just the other day and these people are well and truly fooked.

      1. The Oligopoly media and its Real Journalists are all about covering real stories. With a pillow, until they stop squirming.

      2. Not in Brooklyn, NY. The foreclosures are almost all wrecks in really poor neighborhoods. But there are two right near me. Wood frame row houses. Estimated prices, $1 million and $1.5 million. And I’m living in a brick row house purchased in 1994 for $366,500 in today’s money.

        I agree that some of that increase is real, an increase in value for the city compared with the suburbs, but how much? And in any event, will the virus reverse that, or at lease reduce the difference? For what it’s worth, last I looked the NAR said the median existing home price in metro NY was $440,000, also too high, and the metro-wide market has been weak for years.

        As for rents, $1,800 for a studio in a 1960s apartment building constructed in the style of a public housing project is the going rate around here.

        Maybe next year. But the market may freeze up for years before prices reach the point where it will clear. This housing bubble was really far more insane in a few places like NYC and SF than it was overall.

          1. Canarsie was an Italian American neighborhood that flipped to about 99% West Indian in the past couple of decades.

            I biked through there not long ago, and it seems that the core of that community, with the stores and community centers, remains in East Flatbush, not in Canarsie.

            Still, it’s not a bad place. But it’s a place where people who have been moving there can’t pay much more than that, or even that much, and there is only one subway stop at the far end of the neighborhood, the end of the line.

    2. And when you reach that age, you’re also going to “give it away” to someone younger than you and take a financial loss on the transaction as well, right? That seems fair.

      1. If lower prices meant my kids could afford to stay in the area, I’d consider myself to be better off.

  5. The Financial Times
    Coronavirus business update 30 days complimentary
    Fear factor threatens stocks’ Covid-19 fightback
    China’s example suggests that life will not snap back to normal, strategists say
    © FT montage; AP
    Philip Georgiadis in London and Robin Wigglesworth in Oslo yesterday

    Wall Street economists are warning that public fears of coronavirus could undermine efforts to reopen economies, leaving the stock market’s powerful recovery vulnerable.

    Several US states and European countries are tentatively emerging from tight restrictions on movement put in place to stop the spread of Covid-19. President Donald Trump is itching to reopen the world’s largest economy even as he acknowledges that relaxations could lead to a flare-up of cases. The UK is set to ease certain measures from Monday.

    But strategists tracking real-time indicators from countries further along this process, including China, report that it is unlikely that economies will see a quick snap back to normal levels of activity.

    “The economics of ending a lockdown depend on fear and confidence,” said Paul Donovan, chief economist at UBS Wealth Management. “If lockdowns end too early and deaths keep rising, that confidence is missing and the economic downturn continues independent of the lockdown policy.” Dana Peterson, an economist at Citigroup, agreed that the “fear factor is really going to matter” as countries lift restrictions.

    The push to reopen economies has been one of the factors behind a rebound that has led to global stocks rising by about a quarter from their lows in the March sell-off. On Wall Street, the S&P 500 is just 15 per cent off its all-time high of late February, while the Nasdaq 100 has reached positive territory for the year.

    China’s economy has slowly restarted following a particularly strict lockdown, but data show measures of activity such as property sales and coal consumption in large power plants remain well below pre-Covid-19 levels.

    “China is in a sense an important lesson that you can flick a switch but it does not mean that everything is going to come back to normal,” said Ms Peterson.

    1. In One Chart
      Will the stock market tumble back to its coronavirus lows in March? About 92 years of S&P 500 history says there’s a good chance
      Published: May 3, 2020 at 1:40 p.m. ET
      By Mark DeCambre
      Since 1928, reviewing the past 25 bear markets, there has been a lower price put in by the S&P 500 index 60% of the time
      Getty Images

      Will the U.S. stock market retest bear-market lows put in on March 23?

      That is perhaps the most prevalent question on Wall Street. And while there’s no way of knowing the answer for sure, if history is any guide, when the stock-market slips into a bear market, typically defined by a decline of at least 20% from a recent peak, it tends to return to that low more often than not, according to data from Bespoke Investment Group.

      1. bear-market lows put in on March 23

        You know I’m not a stock market enthusiast. It doesn’t escape me though that the referenced tragic low is only a retrenchment of one year, or two if you squint. S&P 500 @ $2500. Ten years ago it was @ $1000. The optimistic speculator right now is a skinning alive waiting to happen.

        I thought stocks were ridiculously priced in 2000 and did a full exit. The whole price to forecast earnings thing is BS. Sure I “missed out” so consider the source.

        1. We’re in uncharted waters. We have a central bank that came right out and said they have unlimited financial resources to prop it all up – ie. the printing press. They can fook a lot of sheet up with that attitude.

          I’m not a Warren Buffett fan. I think he’s part of the disease, not the cure in this country. However, he just said this:

          “If you can have negative interest rates and pour out money and incur more and more debt relative to productive capacity, you would think the world would have discovered this in the first couple thousand years rather than now.”

          It is a salient point. The reality is that this FED is full of BS, and they are destroying the dollar and the country to try to prop up an everything bubble of their own making. Jerome Powell should be arrested and the FED should be dissolved.

          1. +1000. We will not have sound money or honest markets until we end the Fed, and until these gold collar criminals and their accomplices in Congress, the regulatory agencies, and our corrupt DoJ and FBI are standing in orange jumpsuits and shackles before honest tribunal judges rendering long-overdue justice on these malevolent scumbags.

          2. I take the impression that the banking establishment is not excited about the prospect of negative interest rates.

            The thing which the “no atheists in foxholes” crowd seems happy to ignore is the apparent inability of central banks to normalize interest rates after a crisis. If the push for negative rates succeeds, will we end up with a permanently impaired economy populated by zombie companies which mainly exist to enrich insiders, rather than to competively provide useful goods and services to society? And will the perverse incentive to borrow money when you get paid for carrying more debt wreak havoc on the ability of our financial system to function?

            Nobody fighting in the foxholes needs to trouble themselves with such atheistic concerns.

          3. Markets
            ‘There is no point’ in the Fed going to negative interest rates, argues JPMorgan
            Published Fri, May 8 2020 12:58 AM EDT
            Eustance Huang
            Key Points
            – As markets begin pricing in the possibility of the Federal Reserve going to negative rates, JPMorgan Asset Management’s David Kelly argues that such a policy move makes little sense.
            – Kelly said “there is no point” in negative interest rates, as such a policy has done little for other places that have implemented it, namely Japan and Europe.
            Jerome Powell, chairman of the U.S. Federal Reserve, pauses while speaking during a news conference in Washington, D.C., on Tuesday, March 3, 2020.
            Andrew Harrer | Bloomberg | Getty Images

            As markets begin pricing in the possibility of the Federal Reserve bringing interest rates into negative territory, JPMorgan Asset Management’s David Kelly argues that such a policy move makes little sense.

            “There is no point … at all in going to negative rates,” Kelly, who is chief global strategist at JPMorgan Asset Management, told CNBC’s “Squawk Box Asia” on Friday.

            “Negative rates have not helped the Japanese economy, they haven’t helped the European economy,” Kelly said, in reference to the well-documented economic challenges in those places despite the adoption of such policies. “All they do is clog up the banking system, make it more difficult for everybody to operate.”

            Furthermore, that’s not needed at a time when the government is “essentially enabling and monetizing unlimited fiscal .. expansion,” he said.

            “If you want to stimulate the economy directly, just put more money into the hands of consumers and businesses, Congress doesn’t seem to have any shyness about doing that,” Kelly said, adding that he expected an additional $2 trillion of stimulus “before this is over.”

            That’s on top of the more than $2 trillion already approved. The historic amount of stimulus comes at a time when economies worldwide have been ravaged by extensive restrictions implemented to stem the spread of the coronavirus pandemic.

            Coupled with reports of the Federal Reserve stepping in to buy bonds, some of which include those in the high-yield space, Kelly said: “That’s tremendous monetary expansion right there, you don’t … need to go to negative rates … to try and help that along.”

          4. The Case for Deeply Negative Interest Rates

            Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003.

            This scumbag is one of them – the problem people. Of course he’s going to be yammering on for negative rates. There’s a guillotine with his name on it.

        2. Stocks were averaged price for about one minute in 2009. Other than that they have been overpriced since early 1996.

          The market is expecting this. Unemployment has soared, so businesses can cut worker pay. The federal government is borrowing like crazy, so those same workers will keep buying, and at inflated prices because there will be less competition. Therefore, more profit — lower costs, still sales.

          Can that go on forever? I guess it can go on until this country has no future left to sell. We’ll see if Generation Greed times it right for their exit from the planet.

          “I’m spending my children’s inheritance.” And their future income from their own work.

    2. The market is in a sucker’s rally right now, and it’s going to rally even more as the medical profession makes even more strides in treatments and vaccines. Unless something unusual happens, I’m still going to wait a while (like 8-12 months) before buying into anything.

      1. October is usually an interesting month for the stock market. This year’s could be especially interesting.

  6. developers aimed their production at the high end, ‘which drove housing prices all the higher and out of reach for a very wide range of everyday workers not in those high-paid ranks

    I don’t think new units at the high end drove up the prices at the low end. Let’s see what effect the Airbnb implosion has. If we could only end cheap money too then we could really see what drove the “shortage”.

  7. Let’s see….

    -Wash your hands
    -Cover your mouth when you cough or sneeze
    -Don’t go out when you’re sick
    -Footwear soles are dirty

    Some really profound $hit right there. There’s a bunch of educated fools that need to be fired.

  8. “The next few months could be a unique opportunity to land a trophy home that wouldn’t otherwise be available.

    Keep trying to drum up that non-existent demand, REIC shills.

  9. In addition to her usual slew of roles needed to close a deal, Mills finds herself adding another feather to her cap: therapist.

    You mean, plausible liar.

  10. “Many sellers are nervous about listing their home in what appears to be a buyers’ market, but one way the Multiple Listing Service is assuaging their fears is removing the days-on-market data, which can be leveraged into lower offers.

    Falsifying the data to con more of the sheeple into making the worst financial mistake of their life. Shows how disreputable the entire REIC – an industry of dissemblers – has become.

  11. ‘Now that may turn into (deeper) problems. When people are laid off, they can’t pay taxes.’”

    In progressive Meccas that exalt the supreme Democrat virtues of dependency, parasitism, and rejection of personal responsibility, a decimated tax base could be a problem.

    1. I decided to retire when we were being force-fed with the LGBTQ snowflake nonsense. There’s no opting-out for gov contractors; gotta suck it up. [phuc that!] 🙂

  12. In recent years most churches have been “led” by pulpit prostitutes for the globalists, while turning away from preaching anything that resembles actual Christian gospel and instead chasing the almighty dollar. Now it looks like some of them might be reclaiming their traditional role as promoting Bible-based morality and virtue, instead of craven subservience to the globalists and their Democrat minions.

  13. A tiny handful of Democrats – law professor Jonathan Turley being one of them – have sounded the alarm on the FBI becoming an NKVD-like adjunct of the Deep State for railroading political opponents. Ironic how former 60s radicals like Crooked Hillary have subverted the system to become far more repressive and corrupt than anything they were protesting against back in their student days.

    1. Ironic how former 60s radicals like Crooked Hillary have subverted the system to become far more repressive and corrupt than anything they were protesting against back in their student days.

      Almost like they weren’t actually offended by it, they just wanted to win.

  14. Oh dear…despite developers offering deep discounts, Hong Kong’s weekly Running of the Lemmings was a flop, as real estate agents outnumbered prospective skybox “investors.” Meanwhile, the stamping of little feet from previous buyers who got thrown under the bus before the ink was even dry on their contracts is triggering seismic detectors all over the Pacific Rim.

  15. <you need to be thoughtful about doing work on a home if you want it to sell fast.

    Does this mean that COVID killed the Minimalist Millenial Gray renovation? Praise be.

    I wonder how Chip and Joanna are doing down in Waco. I bet they’re getting a great price on shiplap.

    1. You know, as a (borderline) millennial the thing I hate most about myself is that I love the da[]n gray. I suppose a tiger cannot change its stripes.

      Funny thing is that my parents seem to have fallen for it as well. They are renovating a place themselves and every other thing is a shade of grey, with white (white, white… white) accents.

      I think some sort of dark-ish natural wood cabinets are the most classic style though, so that’s what I would go for. But not cherry. Oh god not cherry. You can always change a countertop and walls must be repainted anyway on occasion.

      1. There was a time not so long ago when functionality was what mattered, not aesthetics. Isn’t it interesting that now there’s suddenly all of this money available, at the pinnacle of house prices no less, to tear out a bunch of flooring and cabinetry which has decades of life left? They’re all speculators, thinking they’re making their houses more valuable for when they sell.

  16. ‘Freefall: that was the verdict of economists at ING after a survey of the Spanish services sector showed a reading of 7.1 for last month.’

    ‘The number was unbelievable. Above 50 indicates expansion, below is contraction. March’s reading, 23, was considered abysmal. April’s illustrated how the virus lockdown had brought the all-important sector to a near standstill.’

    ‘Wave after wave of data is underlining the economic devastation sweeping Europe.’

    ‘In Germany, the eurozone powerhouse, figures last week showed industrial production contracted by a record 9.2% in March — even more than expected. France’s statistics agency admitted the economy was operating at a third of its usual level.’

    1. Is the unprecedented scale of economic devastation underway ever going to be reflected in stock prices, or will the central banking establishment’s ongoing efforts to paper over the situation with a blizzard of eldctronic money printing $erve to indefinitely forestall price discovery?

      Time will tell.

  17. You gotta love this.

    H.R.6666 – COVID-19 Testing, Reaching, And Contacting Everyone (TRACE) Act

    116th Congress (2019-2020) |

    Introduced in House (05/01/2020)

    116th CONGRESS
    2d Session
    H. R. 6666

    To authorize the Secretary of Health and Human Services to award grants to eligible entities to conduct diagnostic testing for COVID–19, and related activities such as contact tracing, through mobile health units and, as necessary, at individuals’ residences, and for other purposes.

    1. and, as necessary, at individuals’ residences, and for other purposes.

      I don’t know about anybody else, but when I have unannounced visitors I like to open my door with the nose of my pistol, if I open it at all.

      1. I look out a window to see who it is, then decide if I want to open or even answer the door. Some people are installing those “Ring” devices with a camera and speaker, so they can see who it is and ask them what they want without opening the door.

        The Centennial State is a “castle doctrine” state, or as we call it, the “make my day law”. Burglars seem to be aware of this, as burglaries are pretty rare in my nabe, and when people are robbed it’s usually because someone left their garage open and some thug stole their bike or snow blower.

  18. It seems many people are breathing some relief, and I’m not sure why. An epidemic curve has a relatively predictable upslope and once the peak is reached, the back slope can also be predicted. We have robust data from the outbreaks in China and Italy, that shows the backside of the mortality curve declines slowly, with deaths persisting for months. Assuming we have just crested in deaths at 70k, it is possible that we lose another 70,000 people over the next 6 weeks as we come off that peak. That’s what’s going to happen with a lockdown.
    As states reopen, and we give the virus more fuel, all bets are off. I understand the reasons for reopening the economy, but I’ve said before, if you don’t solve the biology, the economy won’t recover.

    1. ‘I’m not sure why’

      The first clue to me was people hoarding onions and potatoes. It was clear there was some major dumbassery going on.

        1. Don’t mess with shelter or food , or even health care.

          Shelter prices has to track with local average incomes and job base, or it’s fake .

          Foreign money can drive up a market as well as short term speculators that have nothing to do with local wages or local job base.
          Artificial low interest rates also mess up real long term value.

          Before these kinds of bubbles 90 % of the RE market was end user locals looking to stay long term.

          Lenders made non owner occupied buyers put more money down and pay a higher interest rate because it was considered a higher risk loan.

          Lending that isn’t based on risk is just faulty lending.

          A appraisal is false if it’s based on false demand by short term speculators, or even temporary lower interest rates. Becàuse a 30year note is attached to most RE purchases, it is what is the ability to pay the loan for a long time. Gov backed RE loans screws up normal risk analysis.

          Also lenders would assume that a high percentage of loans would turn over in 7 to 10years with people moving up or their needs changing.

          In the old days local Banks would hold on to their loans for about 2 years until they became “seasoned”, meaning the secondary market would buy them because they had some stability. Now the Gov backs anything .

          Just like before, they are making loans based on the idea that real estate always goes up verses can the loan applicant pay this loan long term.
          This potential for prices crashing makes lending a joke because if the appraisal
          Is based on anything that doesn’t hold up long term it’s a joke.

          They went from medical insurance pricing being based on risk to it being based on what your income is under Obamacare, with a tax penalty if you don’t want to engage in this Commie way of figuring insurance costs.

          Education costs rose because the Gov. backed loans that were based on any price higher education wanted to charge.

          No doubt the lobbyist that buy off the Politicians have created this World of Government bucks being used to jack up price fixing monopoliy prices.

          Gov tax payer dollars has managed to destroy any rhyme or reason to pricing.

          And this big Government wants to get bigger and interfer more in commerce .

          This is just big money lobbyist rigging the deck by using Government funds to prop up the price of industries. This isn’t capitalism, or even Communism. This is rigged markets ism.

      1. The first clue to me was people hoarding onions and potatoes.

        Despite all the meat shortage fear mongering, there was plenty of meat at the store this weekend. They even had rib roasts on sale. The TP aisle was chock full again. Plenty of onions and potatoes too. It looked completely normal, except for the face masks and the social distancing. Since the city and county are both mandating masks in public, they won’t let you enter the supermarket without a mask and if too many are in the store they make you wait in a line outside. I’ve never seen a line at Safeway, but I have seen them at King Soopers. I haven’t stepped into a Walmart since this nonsense began.

        I recall receiving advice on this blog late February (not from you, Ben) to go and hoard all I could, that families were filling multiple shopping carts in preparation for the apocalypse, and that if I waited there would nothing left to buy. I did pick up a few things, mostly frozen stuff that would eventually get consumed one way or the other, but didn’t go crazy.

      2. Luckily the toilet paper hoarders must have run out of shelf space, as we were finally able to replenish our houeshold supplies before hitting a crisis era level of shortage.

    2. if you don’t solve the biology

      People have short memories. Our leaders never hoped to “solve the biology”. They only hoped to slow the unknown but inevitable, because only so many hospitals. That’s why no one was in actual quarantine, only in moderately reduced frequency of social contact.

      We never came close to hospital capacity (good thing). The hospital my daughter works at has put regular staff on 50% hours. Not surge staff, regular staff. This is no longer about “solving the biology”, as if we ever could.

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