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Some Homeowners Seem To Be Facing Economic Reality — And Trimming Their Prices

It’s Friday desk clearing time for this blogger. “Guy Therien saw a house on a five-acre property outside of Sherwood last year that he says was beyond his wildest dreams. The Parrett Mountain estate was for sale, but he couldn’t afford it. This year, he owns the place. It’s not that his finances skyrocketed, though he did receive a promotion at work. Instead, Therien was able to purchase the hilltop home for less than half the price of the original owner’s investment.”

“Terry Sprague of Luxe Christie’s International Real Estate in Lake Oswego calls this ‘special pricing,’ based on the owner’s motives and timeline. One of Sprague’s listings in Portland’s Eastmoreland neighborhood is for sale at $2,388,000. The owner invested about $4.5 million in buying and meticulously renovating the 1928 house and landscaped property. A year ago, it was listed by another agent at $3.5 million and it didn’t sell.”

“Some homeowners who have decided to sell their homes despite the coronavirus pandemic seem to be facing economic reality — and trimming their prices, according to research by Weiss Analytics. Sellers in most metro areas have trimmed their home prices by 5 percent to 10 percent, but those levels vary. In Pittsburgh, where an aggressive statewide lockdown has prevented real estate transactions altogether, sellers who cut their prices are listing at an average discount of 20 percent. In Phoenix and Sacramento, the average price cut is just 3 percent.”

“Not surprisingly, New York, an epicenter of the pandemic, had the highest percentage of new listings with discounted asking prices. Some 34 percent of properties that went on the market there were priced below their February values, Weiss says. Other metro areas with high levels of discounts included Baltimore, where 31 percent of new listings were marked down, and Los Angeles, where 30 percent of homes for sale were discounted.”

“Homes priced higher than $600,000 are most likely to be discounted, Weiss says, partly because lenders have pulled back on making jumbo loans. Sellers of some 37 percent of houses in that price range have asking prices below their February values, with a median discount of 7.7 percent.”

“Real estate attorneys are helping a growing number of clients who want to tear-up agreements they signed before the Covid-19 pandemic erupted and the city was shut down. ‘It’s open season on contracts,’ said attorney Scott Claman. ‘More contracts are sick and dying than people from Covid.'”

“A penthouse on East 29th Street that was in contract for $8.68 million and closed for $680,000 less on April 29. An Upper West Side condo in contract for $2.25 million was discounted to $2.025 million, according to attorney Bruce Friedberg. ‘It’s viral,’ said Claman, referring to the rash of Covid-19 closing discounts. ‘You hear of one deal that got done, and then everyone wants to do it. My dad used to say you can’t play poker with 48 cards because you don’t know what’s missing from the deck. This is where we are now—playing with 48 cards.'”

“Big lenders are tightening their requirements for real estate investors, mortgage brokers say, which could further slow activity in places such as Southern Ontario where investor demand had driven up prices and sales. ‘For them to say, you can’t even use money in a home equity line of credit, that is a pretty big thing in our business,’ said Dave Butler, principal broker with Butler Mortgage Inc., who works with real estate investors and is one of many who received an e-mail from Scotiabank announcing the changes.”

“Banks have told brokers they want to see that real estate investors have liquid assets or assets that can easily be turned into cash to cover mortgage payments if renters are unable to make their payments. At the same time, investors who bought properties to rent them on Airbnb are losing business with the provincial restrictions on short-term rentals and the temporary demise of the tourism industry. ‘There have been thousands of real estate investors buying negative cash flow properties, specifically condo investments where their monthly costs far exceed their monthly income on those properties and that is a very real source of concern,’ said Calum Ross, principal broker with The Mortgage Management Group, who mostly works with real estate investors.”

“Buyers are seeking discounts of up to 20 per cent on properties as the housing market reawakens. Estate agents reported a surge in demand yesterday after ministers lifted a seven-week ban on home moves. Property adviser Henry Pryor said he had four clients who had deals put on hold by the lockdown, all of whom were now seeking 20 per cent off the agreed price, but would likely settle for 5 to 10 per cent. He added: ‘There is going to be a Mexican standoff and it will be interesting to see who blinks first. Estate agents will try to convince us that it is business as usual, but buyers will have read the reports about the economy and say they are taking a risk.'”

“Data from a Prague City Hall project shows that rental prices for apartments have dropped one-fifth during the coronavirus crisis, and the number of flats available has tripled, while use of flats for short-term rental has dropped by half. ‘It is obvious that Airbnb’s offers are no longer increasing. On the contrary, vacant apartments and houses that were previously leased via Airbnb are already moving to conventional leases. For example, in Prague 1, fewer than 100 new rental offers per week were added in January and February; at the turn of March and April, this number climbed to 309 new rental offers in one week,’ Golemia data analyst Martina Paříková said.”

“At the foot of the Acropolis hill, in the touristic Koukaki district, the coronavirus lockdown has silenced the sound of Airbnb customers’ wheeled luggage. The tourist industry in Athens, as in many other European capitals, has ground to a halt. Owners of small apartments in Koukaki, who had been renting them on the Airbnb platform in order to provide income during the financial crisis, are once again struggling. ‘The reservations stopped abruptly,’ laments Romina Tsitou, an Airbnb host since 2014.”

“Well ahead of the coronavirus outbreak, experts already predicted that change may come to Hungary’s housing market, as prices over the past five years sky-rocketed both in terms of sales and renting. A drop in the number of transactions that began in the second half of 2019 might have already indicated this. Hungary’s housing market shrank by 58% in April compared with the same month a year earlier. While Budapest saw an average decrease of 5.7%, the decline was more apparent in the countryside where it amounted to 14.1% during this period.”

“In Budapest (examining the case of properties ‘at least’ in good condition), this means a drop from HUF 841,000 (EUR 2,402) per sqm to HUF 793,000 (EUR 2,265), while outside the capital, a drop from HUF 440,000 (EUR 1,257) per sqm to HUF 378,000 (EUR 1,080). The analysis, however, notes that this decline can still pretty much be considered as the continuation (and, of course, the intensification) of a trend that had started months ago before the outbreak.”

“The pandemic and the resulting postponement of Dubai’s long-awaited World Expo, which was supposed to commence in October, ensures the city’s yearslong price slump will persist for at least another year. ‘Last year, we said values would go down 7% to 10%’ in 2020, said Haidar Tuaima, head of real estate research at appraisal firm ValuStrat. ‘Now 7% is very much on the optimistic side.'”

“A plot of land at Hong Kong’s former Kai Tak airport has failed to sell at auction in a sign the city’s worsening economic crisis is starting to take its toll on the property market. The government rejected all four offers received for the 19,788 square metre site after they failed to meet the reserve price, it said in a statement. It is a reversal from the heady days of last year, when developers were paying top-dollar for land at Kai Tak. The city had its worst slump on record in the first quarter, and key economic drivers such as tourism and retail sales are in free-fall.”

“Property price cutting has nearly doubled and tripled in Australia’s two largest cities, new data shows, signalling a slowing housing market. More than 13 per cent of property listings in Sydney and 10.7 per cent in Melbourne had their prices discounted in April, according to Domain data. ‘It’s a good leading indicator of where prices are going to go,’ Domain senior research analyst Nicola Powell said. ‘When you see an increase in the proportion of listings with a discount, it normally means that you’re going into a softening market.'”

“Sydney’s Northern Beaches region, which includes suburbs as far south as Manly and as far north as Palm Beach, saw the highest proportion of discounted properties in the country at 17.6 per cent in April. Prices in the area were coming down from a high peak, Joshua Perry from Belle Property Dee Why said, which meant widespread discounting was expected. ‘There’s always some owners who aren’t adjusting, but most are now seeing that what is happening now is a fair price,’ Mr Perry said.”

“The BNZ has sounded alarm for the residential construction industry, saying house prices are likely to fall 12 per cent. Head of research Stephen Toplis said the bank was very unsure construction would be the economic saviour people were hoping for, given the big obstacles in its way, the biggest being unemployment. And there were three other ‘massive’ obstacles affecting housing demand: lower population growth, weaker house prices and a freeing up of AirBnB properties.”

“With tourism on hold, more AirBnB properties would hit the market, boosting the housing supply. As demand weakened, house prices would fall, as low as 12 per cent, for about three years, and this would further suppress demand for new housing, ‘as already-nervous investors stay clear of the market.'”

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This Post Has 127 Comments

  1. The title for the last article:

    Housing shortage could be soon be over: BNZ

    There never was a shortage. At this time, falsehoods are rampant. But foreclosures are piling up and anyone who is interested can contact me. If you already have I’ve got your contact saved.

    FWIW, I’ve never seen so much global crater in the news.

    1. This is indeed a fine collection of international crater! Looks like things are really accelerating now. Coming soon to a town near me?

  2. ‘Therien was able to purchase the hilltop home for less than half the price of the original owner’s investment’

    Less than half, that’s the spirit!

    ‘One of Sprague’s listings in Portland’s Eastmoreland neighborhood is for sale at $2,388,000. The owner invested about $4.5 million in buying and meticulously renovating’

    You gotta role with it.

  3. ‘investors who bought properties to rent them on Airbnb are losing business with the provincial restrictions on short-term rentals and the temporary demise of the tourism industry. ‘There have been thousands of real estate investors buying negative cash flow properties, specifically condo investments where their monthly costs far exceed their monthly income on those properties’

    So how is lending tight when lenders could see these were greater fool purchases? Thousands, there will be mass defaults Toronto. Oh and you got a record number of new airboxes to be delivered!

    1. “‘There have been thousands of real estate investors buying negative cash flow properties, specifically condo investments where their monthly costs far exceed their monthly income on those properties and that is a very real source of concern,’ said Calum Ross, principal broker with The Mortgage Management Group, who mostly works with real estate investors.”

      Air tight lending standard!

      1. People like Calum were the cause of the problems. He ‘greased the skids’ to get investors approved – even when they should not have been (cash flow negative)

        All he wanted was the commission – to pay for his BMW lease and to be able to buy cosmos for the bimbos at the nicer bars.

        I would love if a regulatory body could do an audit on a few of these guys. I keep remembering the scene in The Big Short – they were talking to mortgage brokers in FL (in a bar). I forget the term – but one guy wanted the worst candidates show he would get the huge commission

        ——-
        ‘There have been thousands of real estate investors buying negative cash flow properties, specifically condo investments where their monthly costs far exceed their monthly income on those properties and that is a very real source of concern,’ said Calum Ross, principal broker with The Mortgage Management Group, who mostly works with real estate investors.”

        1. I would love if a regulatory body could do an audit on a few of these guys.

          And which of our captured, complicit regulators are going to perform a real audit?

      2. “Air Tight”, indeed. I think the meaning of that term in the mortgage market is changing to the Urban Dictionary version. Some of these lenders will get every orifice filled if events keep their vector.

        1. No, the lenders will order their Congressional hirelings to make taxpayers airtight by bailing out Wall Street, again.

  5. Mr Market is keeping a brave face against a sh!tstorm of gloomy economic data releases.

    Dow, S&P 500 fall but breadth readings suggest stock market gains
    Published: May 15, 2020 at 10:53 a.m. ET
    By Tomi Kilgore

    The Big 3 stock market indexes are all down in morning trading Friday, but but market internals are pointing to a stock market rally, led by small-capitalization stocks. The number of advancing stocks outnumbered decliners 1,492 to 1,164 on the NYSE and 1,511 to 1,325 on the Nasdaq. Volume in advancing stocks represented 57.1% of total volume on the Big Board and 49.8% of total volume on the Nasdaq. Meanwhile, the Dow Jones Industrial Average (DJIA, -0.86%) fell 98 points with 20 of 30 components losing ground, the S&P 500 (SPX, -0.87%) shed 0.5% and the Nasdaq Composite (COMP, -0.87%) lost 0.6%, while the Russell 2000 index of small-cap stocks (RUT, 0.89%) rallied 0.5%.
    …

  7. Real Journalists:

    “The number of newly confirmed cases of COVID-19 in the U.S. each day has been declining, as has the number of deaths. This is great news, and we should be hoping that the falling numbers are a sign that the pandemic is beginning to subside. But the mainstream media has been relentlessly pumping out stories that warn of “disaster” if the lockdowns are lifted “too soon”. According to the mainstream media, by “ignoring science” we are inviting a “second wave” which will be even deadlier than the first one. And it is certainly true that as we end the lockdowns more people will get exposed to COVID-19, but right now I do not know of a single hospital in the entire country that is currently being overwhelmed by this pandemic. As long as our hospitals can handle it, there is no reason to continue the lockdowns.”

    http://endoftheamericandream.com/archives/why-does-the-mainstream-media-seem-so-desperate-to-keep-the-coronavirus-lockdowns-going

    1. ‘The pandemic has brought out the bully in many governors who act as if there are no limits on their emergency powers. A 4-3 majority on Wisconsin’s Supreme Court disagreed Wednesday, and the ruling underlines the importance of democratic safeguards even during emergencies. The U.S. Constitution grants states broad police powers to protect public welfare, and many states like Wisconsin have laws that let governors suspend rules during emergencies. But this doesn’t mean that governors can do whatever they want whenever they proclaim an emergency.’

      ‘Wisconsin’s GOP Legislature on April 21 sued Ms. Palm for issuing a rule without undertaking an emergency rule-making as required by state law. Ms. Palm argued she issued an “order,” not a “rule.” But state law defines a rule as a “general order of general application” to all people while an “order” is issued to “specific” individuals.’

      ‘In other words, Ms. Palm could order infected individuals to quarantine. But she can’t on her own direct all non-essential businesses to shut down and people to stay home without providing citizens with de minimis procedural safeguards including notice and a hearing if legislators ask. Emergency rule-making also gives the Legislature a veto. While this process could take about two weeks, Ms. Palm had plenty of time before extending her March order through May.’

      “Rulemaking exists precisely to ensure that kind of controlling, subjective judgment asserted by one unelected official, Palm, is not imposed in Wisconsin,” Justice Patience Drake Roggensack wrote for the majority enjoining the stay-at-home order. “When a grant of legislative power is made, there must be procedural safeguards to prevent the ‘arbitrary, unreasonable or oppressive conduct of the agency.’” Two Justices wrote concurrences underscoring how the separation of powers is a bulwark for individual liberty.’

      ‘Wisconsin has been less affected by the coronavirus than some Midwest states with 507 currently hospitalized compared to 1,330 in Michigan, 1,381 in Indiana and 4,473 in Illinois. Most flare-ups have been in meatpacking plants and nursing homes. Wisconsinites can be trusted to protect themselves and fellow citizens. This is the first legal decision enjoining a state Governor’s shelter-in-place order, and several challenges brought by businesses that claim shutdowns violate their due process rights are percolating in federal courts. Democracy and the rule of law don’t end because there’s a pandemic.’

      https://www.wsj.com/articles/democracy-lives-in-wisconsin-11589498820

      1. It doesn’t take much to summon forth the inner Nurse Ratchet in these power-mad collectivist harpies.

    2. According to the mainstream media, by “ignoring science” we are inviting a “second wave”

      The word science literally means things we know. We don’t know what will happen, therefore it cannot be science. Call it a calculated risk, but don’t call it science.

      1. Stop with the pessimism, already. You clearly are a Democrat hoping to exploit the coronacrisis to political advantage!

      2. new cases yesterday. Not seeing this as good news

        The press is misleading you with half-news. The number of new cases is not a news story. The rest of the story is number of new tests performed. If they test 100,000 new people every day and 10% are positive then we approximate that 10% of the population has an active infection. It doesn’t mean that the number of people infected is on the increase at all. Is it possible that every single newsperson/politician/medical expert has such a dim light bulb?

        If 10% of the test sample is positive for six weeks and the burn on the infection is 10 days, then 40% of the population has had the infection and is over it (one way or the other). That story wouldn’t have you hiding under your bed though. We don’t need to test everybody, only a statistically significant sample. Just my take on it.

        1. As far as I can tell, the number of cases reported in the MSM is roughly equal to the number with a positive test result. So if maybe 3% have been tested, the numbers we see are implied implicitly assuming that 97% of the population has zero cases, a heroic assumption.

          Feel free to correct me if you have contrary evidence.

          1. implied implicitly assuming that 97% of the population has zero cases

            Not at all. If 3% of the population has been tested, then 97% have simply not been tested. Nothing implies that the untested are all negative. The only assumption necessary is that the 3% tested is a valid sample of the entire population. If it is, you have a pretty good idea how many are sick in the entire population, from the sample. If so, the entire population has an infection rate similar to the positive test rate of the sample.

            Further testing in the same timeframe is redundant, but the media likes reporting on the ever increasing “number of cases”. The numerator is useless without the denominator. It’s a logical fail, used on purpose.

          2. “The only assumption necessary is that the 3% tested is a valid sample of the entire population.”

            Agreed.

            But my point is that, so far as I can tell, the MSM doesn’t include any estimate of the number of deaths for the 97% who haven’t been tested.

            I may be missing something, but based on how the total number of confirmed cases in the U.S. climbs by 27,500 or so daily, I don’t think I am.

            Roughly speaking, the confirmed cases are those who tested positive, the confirmed deaths are the subset of these who died, and the 97% who haven’t been tested are (implicitly) treated as though their numbers of cases and deaths are 0.

            This is an attorney’s approach to case and death count estimates, not a statistician’s.

          3. This is an attorney’s approach to case and death count estimates, not a statistician’s.

            They are “test positives” and not necessarily health care cases. But they are called “cases”. You are not an attorney, right?

          4. I have close friends and relatives who are attorneys, but for the life of me, I cannot assume their worldview.

          5. Most of the testing is done on people who feel sick or have been exposed to someone who is confirmed sick, so the sample is not remotely representative.

          6. Yes, the sample is unrepresentative.

            And that’s a huge problem in the case of a highly contagious disease with asymptomatic cases.

            Is the infection rate higher or lower among the 97% who haven’t been tested? Can’t tell from the presence or absence of symptoms. We really have no idea without some kind of scientifically designed testing protocol.

    4. Nobody, and I mean NOBODY, is “ignoring science” more than the effin libs who are suppressing news of potential treatments like HCQ and possibly Ivermectin, and even supplements. Even the medical journal The Lancet got into the politics business, accusing Trump of playing politics with an epidemic, while of course playing politics themselves.

      I believe we can mostly open up with masks. Haircuts are tough with mask straps, but I guess you could take off the straps and use scotch tape. Unfortunately I don’t have a good answer for the restaurant/bar industry.

      I do think we’re going to have a summer lull, not due to warmth so much as due to Vitamin D from the sunlight. It won’t be a total lull like the flu, but enough to keep take the pressure off the hospitals. I do worry about the autumn. A second wave is a very real threat. By then, we should be stocked up with PPE and possibly treatments. Always keep 6 weeks of food and supplies on hand, as we could have sudden local lockdowns.

        1. If we’re going to have dentistry and haircuts at all I think we’ll have to accept the provider masking up and the receiver unmasked. Which is probably good enough if the provider does it well on their side.

          2. I visited my dentist yesterday for the first time since COVID-19 Stay at Home measures went into effect. He and all his staff wore masks, plus he has a high efficiency, fine scale air filter to remove droplets, etc.

            I went in good conscience, as my antigen tests earlier this week came back negative.

          4. Antigen was negative? Meaning you’ve never had COVID?
            Then what was the “worst cold ever” that everybody in CA had in January/February? We had a bad flu season… maybe it was one of those.

          5. you’ve never had COVID

            I think the antigen test is for the active virus, not post infection, which would be an antibody test.

            PB, was it one of those Abbott “rapid tests” that gives results in minutes? I heard they were proving extremely unreliable compared to the couple of days lab tests.

            My dentists started wearing masks when AIDS was going around.

          6. Probably should have said “antibodies”, though I am almost certain that the word “antigen” came up in connection to the test.

            But at this point, I assume I had a flu strain not covered by the vaccine.

            Genalyte and San Diego Blood Bank team up to fight COVID-19
            David Wellis, CEO of the San Diego Blood Bank, said collaboration is something that San Diego does best.
            Author: Carlo Cecchetto (Anchor)
            Published: 11:01 PM PDT May 13, 2020
            Updated: 11:43 PM PDT May 13, 2020

            SAN DIEGO COUNTY, Calif. — Call it a match made in biotech heaven.

            Genalyte, a San Diego based health care analytics company, just rolled out a quick and very accurate antibody test for COVID-19. The San Diego Blood Bank has the extra capacity for drawing blood right now.

            Together they formed a partnership that will allow people know whether they have the antibodies, and turn that knowledge into a product that could save lives.
            …

          7. Tried to get a haircut in CO today. Turned away because I didn’t have a mask. Insanity.

      2. I believe we can mostly open up with masks

        My region in NY opened today (Phase I). We can go in most stores now. People were not all wearing masks, clerks and shoppers. Either nobody knows what the rules are or most don’t care anymore.

        As for fall being a disaster; unless the testing results are totally bogus, at least 1/3 of the people have already been exposed.

  8. https://www.bloomberg.com/news/articles/2020-05-14/economists-see-georgia-s-reopening-as-bellwether-for-nation

    “Georgia is a bellwether mainly because the reopening has been so aggressive,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC, who cited in a research note Wednesday an almost 20% drop in Georgia’s Covid-19 patients in the past week or so.’

    “The other aggressive states, like Florida and Texas, are still opening up more slowly,” Stanley said in an interview. “So if Georgia is successful then, in theory, no one is going too fast – there should be a strong presumption that reopenings everywhere else should be successful.”

    Everything is opening up in Arizona. Diners are busy. I got a haircut day before yesterday. Going out to eat tonight. The bed-wetters are all wet.

    1. I’m not so sure that the notion of a second wave of C-19, or a claim people might not get immunity are grounds to keep the Natioñ shut down.

      Lets get serious here . The evidence is shown that humans develope immunity to Corona type viruses in the past. If humans couldn’t develope immunity than you better kiss the human race goodbye.
      With the Black Plauge humans even developed immunity.

      With the black Plauge the second wave hit 20 years later, and the third wave hit 40 years later with it being more weaker with more people with immunity. And this was back in the days when they had bad water, didn’t have the modern day plumping system, the little ice age was going on, and no doubt people were mal nourished on average.

      In 1918 the USA troops got that bug bad, but again the stress of war and again people being Mal nourished.
      Medical science had nothing to combat it either.

      Also, the history of viruses, shows they get weaker, not stronger.

      When it’s obvious who the vunerable people are, than why do you shut down the entire population?

      The only reason I am wearing this stupid mask is in respect for other people and I don’t want to get a thousand dollar fine. I’m shoring up my immune system so I don’t get a worse outcome from getting it. I have never been a vaccine taker , except for a couple times while young. when they forced you to take them at school. In the last 60 years or more whenever I did get some kind of flu I threw it off within 24 hours usually .

      I think the modern day plumbing system , clean water, and more food did more to cure deaths than the vaccine theory.

      They shoot the vaccine right into your blood, which isn’t the normal way a bug gets into the body usually.

      We, don’t have the luxury of closing down until cure as some are proposing . It’s just nonsense and fear mongering and political postering.

  9. “…and finance his new mortgage at 3.5 percent.”

    Aaaaaand, it’s gone! Already underwater when you signed on the dotted line.

    And that house in Eastmoreland? I track that neighborhood. The house is directly across from the dumpster-diving-protest-everything libruhls at Reed College and the sellers are just as delusional. Most houses in that area are $500K-$1.5M with insane taxes. Forget all that…why on earth would you invest $3M in a < $2M home? Even at that "discount" it's been on MLS for over a year. Good luck!

    1. Eastmoreland is still one of the most beautiful neighborhoods in the entire country. I lived in a crappy neighborhood just to the east when I was in grad school and loved riding my bicycle through Eastmoreland and across the Sellwood Bridge to get to and from school.

      1. Did a quick Google street view of the area. Yes, it’s beautiful, but I’ve done suburban hikes through some incredibly beautiful neighborhoods in the DC area.

        I guess it depends what you like. If you like big wealthy houses, Potomac, Bethesda, and Chevy Chase are glorious, as is a planned development in Richmond, VA. In the Richmond development, the first house built there is Agecroft Hall, a 14th century black-and-white Tudor originally built in Manchester and transported and reassembled in the 1920s. Other wealthy houses were built around it. For neighborhoods, of smaller cutesy houses, there’s Takoma Park, which I walked through many a time.

        1. “one of the most beautiful neighborhoods…”
          Well, there is a reason I’m tracking it. But most beautiful in the “whole country”? Nah.

          “it’s beautiful, but…”
          Yes, well, this is Portland. Every city has at least one of what Portland has. (Well, except for the bagpipe-playing Darth Vader, to my knowledge. And he’s from Virginia, not here, but I digress.) But for some reason people come here and give Portland out-sized credit for things. Baffling to me. You’ll find neighborhoods just as nice in places like Cleveland and Spokane.

          Many of the houses have charm but it’s the trees that bring out the neighborhood, IMO.

    2. I put an offer in with my brother in law who lives and works in Sacremento for a triplex with 3 garages separate off alley in midtown last downturn for 375k. The intent was to keep one open for visiting all of our family in the area. It sold for 375k to another . My brother in law ended up getting a nice single Victorian style home in midtown for 235k . I heard it is worth more now but I visit him often and would never pay much more myself all these years later.

  11. we interrupt the virus to ask you to bitch about the 3 trillion etc spending
    tweet-# @ fb-email -call
    and bitch

    1. And of course the easiest way to get people some money is to lower interest to ZERO percent on their credit cards for a year or two

      1. Zero interest rates (or below) are reserved for the Fed’s primary dealer accomplices. The debt serfs will see their already usurious credit card rates go even higher to cover all the delinquencies.

        1. It always cracks me up how little the Politicians really think of people.

          A thousand dollars a month Universal Income. Who could live on that? Actually free health care might be the biggest freebie that the homeless get and others, including ilegals.
          A certain Political Party seems to like a bunch of downtrotten people who they can turn into voters. That party wants to let 16 year olds vote as well as felons in jail, and no doubt non Citizens (who have already been voting.)

          And who is the real force behind that party – would be Globalist, the elite, Big Corporations and Big Pharma, Wall Street and the one percenters and Banks. The other Political party sells out also. That’s why they all hate Donald Trump, even members of his own party.
          I can only hope that the Republican Party sees the error of their ways because the other party has gone off the deep end.

          1. Actually free health care might be the biggest freebie

            Yes. IF they are going to spend trillions trying to stimulate the economy, then IMO it should be there. Pay everybody’s healthcare (and let the health insurance companies die) and let housing get really cheap, but make them hustle to eat and buy toys. I think that’s the fastest way to get the real economy going again.

          2. I’m wondering if I could keep my current federal gov’t pension AND get another $1000/month or whatever amount they’re talking about. 🙂

  13. “Guy Therien saw a house on a five-acre property outside of Sherwood last year that he says was beyond his wildest dreams. The Parrett Mountain estate was for sale, but he couldn’t afford it. This year, he owns the place. It’s not that his finances skyrocketed, though he did receive a promotion at work. Instead, Therien was able to purchase the hilltop home for less than half the price of the original owner’s investment.”

    Way, way, way too much money still sloshing around.

    1. “…The owner invested about $4.5 million in buying and meticulously renovating the 1928 house and landscaped property..”

      Works out to about $2.2mm for improvements.

      Must be some place to behold.

      How on earth do you spend $2.2mm just on ‘improvements’?

      1. Six corporations own every major media outlet in America. All of them are owned by globalist oligarchs who use their media empires to influence, not inform.

  15. “He adds there’s a large number of buyers who are eager to lock in a loan while employed and mortgage rates are low.”

    Got FOMO? Cheap money gimmicks still working on the mouthbreathers. The time to buy a house is when rates are at 10% and nobody can get a loan. Wake me up when with artificially low interest rate garbage is finally over with.

    2. Wake me up when with artificially low interest rate garbage is finally over with.

      I’ve long since given up on the return of reasonable interest rates.

    3. First we have to cross the zero bound. The Fed’s holding that powder dry until it’s really needed.

      1. Negative interest rates part 2: a game of dominoes called “yield curve control”
        Phillip Streible
        Friday May 15, 2020 16:07
        Kitco Commentaries | Opinions, Ideas and Markets Talk
        Featuring views and opinions written by market professionals, not staff journalists.

        History was made back in 2013 when twelve builders spent eight days setting up 277,275 domino pieces in a record-breaking display that took only ten minutes to topple. Only 272,297 fell, but it was more than enough to set a record.

        Once the question of negative interest rates was brought up to Federal Reserve Chairman Jerome Powell last Wednesday, he reiterated that “such a policy wasn’t on the table.” Still, it appears that the Fed could reverse its course if the economy further declines. What we have seen over the past couple months are those final 4,978 dominoes beginning to fall and there is little anyone can do to stop it. Now I am only looking forward, not in the rearview mirror as to what could have been done. Personally, I think the first domino fell on August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value and abandoned the gold standard. All other suggestions will need to be discussed over a cigar and scotch once the social distancing restrictions are lifted.

        As the crisis deepens and growth forecasts begin to see further setbacks, the Fed will take one last action after we dip into negative rates. They will take from the Bank of Japan’s playbook and adopt “yield curve control.” Simply put, the Fed will buy as many bonds as necessary to hold yields at specific levels across the curve. At this point, we will continue to see the balance sheet expand at a rapid rate causing another surge in the price of gold, as indicated in the charts below.
        …

  16. Since we are in the very early innings of the ballgame, it seems quite premature to pile on to poor Uncle Warren’s COVID-19 track record.

    Howard Gold’s No-Nonsense Investing
    Opinion: Dud stock picks, bad industry bets, vast underperformance — it’s the end of the Warren Buffett era
    Published: May 15, 2020 at 8:00 a.m. ET
    By Howard Gold
    The chairman of Berkshire Hathaway seems to prefer the S&P 500 to his own company’s stock
    Warren Buffett, chairman of Berkshire Hathaway. Bloomberg News/Landov

    When it comes to investing, Warren Buffett, chairman of Berkshire Hathaway (BRK.B, -0.46%), is unquestionably the greatest who ever lived, posting an extraordinary record over more than five decades. From 1965 through 2018, Berkshire racked up a 20.5% compound annual return, more than double that of the S&P 500 (SPX, -0.12%), including dividends.

    Buffett also is a beloved multibillionaire in an age when the superrich are vilified. His homespun wisdom and Midwestern humility have made him the most sacred of all cows to a business media hungry for wit and personality.
    …

      1. I’ve seen a couple of MSM attacks on America’s favorite grandfatherly billionaire over the past few days. Not only are they mean spirited in tone, but they overlook how it is way too early to predict how things will look at the other end of COVID-19.

        1. “but they overlook how it is way too early to predict how things will look at the other end of COVID-19.”

          I haven’t seen any death rate math in a while.

      2. Beg to differ, Ms. Oxide.
        Uncle Warren is a globalist crony capitalist in bed with all the right politicians. He is no more folksy than Bill Gates or Jeff Bezos.
        That whole persona is a media-spin creation. He and Jamie Dimon are cut from the same cloth. JMO.

        1. “Uncle Warren is a globalist crony capitalist in bed with all the right politicians.”

          Warren Buffett Exposed: The Oracle of Omaha and the Tar Sands

          By Steve Horn • Friday, February 3, 2012

          On January 23, Bloomberg News reported Warren Buffett’s Burlington Northern Santa Fe Railway (BNSF), owned by his lucrative holding company Berkshire Hathaway, stands to benefit greatly from President Barack Obama’s recent cancellation of the Keystone XL pipeline.

          If built, TransCanada’s Keystone XL (KXL) pipeline would carry tar sands crude, or bitumen (“dilbit”) from Alberta, B.C. down to Port Arthur, Texas, where it would be sold on the global export market.

          A key mover and shaker behind the push for more rail shipments is Warren Buffett, known by some as the “Oracle of Omaha” – of “Buffett Tax” fame – and the third richest man in the world, with a net worth of $39 billion. With or without Keystone XL, Warren Buffett stands to profit enormously from multiple aspects of the Alberta Tar Sands project. He also, importantly, maintains close ties with President Barack Obama.

          Buffett, Berkshire Hathaway, BNSF and the Tar Sands
          Many eyebrows were raised in August 2008, when two of the richest men on the planet, Warren Buffett and Bill Gates, sojourned to Alberta’s tar sands patch. The Calgary Herald wrote “they took in the oilsands, apparently with awe.” According to a reliable but confidential source quoted in the story, the two men “visited the booming hub to satisfy ‘their own curiosity’ but also ‘with investment in mind.’”

          And while he told the media he wasn’t interested in doing so at the time of the trip, Buffett soon became a major investor in tar sands related assets. A year after his visit to the oil sands, in November 2009, Buffett’s Berkshire Hathaway purchased BNSF Railway as a wholly owned subsidiary.

          BNSF Railway is the second largest freight railroad network in North America. BNSF “plans $3.9 billion in capital spending this year, an increase of 11 percent from 2011,” according to a recent article by Bloomberg.

          BNSF serves as a vital cog in the oil sands procurement process. In the November/December 2008 edition of BNSF’s employee magazine, “Railway,” BNSF produced a piece titled, “Alberta oil Sands: No sour deal.”

          https://www.desmogblog.com/warren-buffett-exposed-oracle-omaha-and-tar-sands

    2. I’ll be interested to see how well Uncle Warren’s flotsam stays afloat once the afterglow of Unlimited Quarantinive Easing fades away in the coming months.

      The Financial Times
      Coronavirus business update 30 days complimentary
      Berkshire Hathaway Inc
      Warren Buffett’s Berkshire dumps most of Goldman Sachs stake
      Famed investor backed the bank in 2008 but sold bulk of shares as pandemic developed
      Warren Buffett’s Berkshire Hathaway came to the rescue of Goldman in 2008, investing $5bn in the aftermath of Lehman Brothers’ failure
      © via/REUTERS
      Eric Platt in New York an hour ago

      Warren Buffett’s Berkshire Hathaway has dumped the bulk of the stake in Goldman Sachs that it acquired in the depths of the financial crisis, a regulatory filing revealed on Friday night.

      Berkshire said it had sold more than 10m shares in Goldman in the first quarter, a holding that was worth $2.3bn at the end of last year and represented 2.9 per cent of the investment bank. It had just 1.9m Goldman shares left at the end of the quarter, a stake of less than 0.6 per cent.

      Berkshire also trimmed its holding in JPMorgan Chase from 1.94 per cent to 1.88 per cent.

      The Goldman disposal by Mr Buffett is the clearest sign yet the world’s most prominent investor is intent to sit on the sidelines of the stock market. Since coronavirus sparked a market sell-off in February, Berkshire has not clinched one of the multibillion-dollar investments for which it is known, and Mr Buffett has signalled the market rebound fuelled by central bank interventions has made it less likely it will soon do so.

      Revelation of the sale is also noteworthy after Mr Buffett addressed the differences between the 2008 market panic in which he acquired the stake and the present crisis.

      “The range of possibilities on the economic side are still extraordinarily wide,” Mr Buffett told shareholders at Berkshire’s virtual annual meeting this month. “We do not know exactly what happens when you voluntarily shut down a substantial portion of your society.

      “In 2008 and 09 our economic train went off the tracks and there were some reason the roadbed was weak . . . but this time we just pulled the train off the tracks and put it on its siding . . . and I don’t know of a parallel.”
      …

      1. Perhaps I should have said “jetsam”?

        jet·sam
        /ˈjetsəm/
        noun
        unwanted material or goods that have been thrown overboard from a ship and washed ashore, especially material that has been discarded to lighten the vessel.
        “there was plenty of good kindling among the jetsam on the beach”

  17. 0% 84 month auto loans clearing inventory. 3.5% jumbo mortgage loans moving white elephants. That’ll work for a while. Then what? Go lower! Negative rates – it’s all the rage. After -1% exhausts the buyer pool, then what? Go even further negative – it’s infinite! Ladies and gentleman, we’ve found financial nirvana!

    1. “…Ladies and gentleman, we’ve found financial nirvana!..?

      Thought experiment:

      If interest rates go to -100%, does that mean that you could walk into your favorite store, pick out what you want (say its a pair of high end Nike’s shoes) and just walk out (Kinda what they do now in South Central Los Angeles)?

      1. Of course.

        And with Unlimited Quarantinive Easing, we need never worry about running out of free Nike’s.

    2. 0% 84 month auto loans clearing inventory

      Is it? The local Ford Dealer has almost 400 new vehicles in inventory. The Chrysler dealer has 200. I’m not seeing the ubiquitous temporary tags.

      1. Complete gossip (no published data to back me) but local SoCal wholesalers are crammed with lease returns since the auction venues are not currently operating. I expect to see some good deal when the backlog starts to come under the gavel later this summer…

    1. What is the correct word? Side piece? Other woman? How can there be a “good” word for that? A mistress by any other name would be a… mistress?

  21. Instead, Therien was able to purchase the hilltop home for less than half the price of the original owner’s investment.”

    Could’ve waited another year and got it for a quarter of the original owners investment.

    1. “…asking price of $35 million. He bought the 10-bedroom, 16,000-square-foot spread for $23.3 million in 2017…”

      Let’s all WebX into the Billionaires new math class:

      Increase in ask is about $11.7mm over 3 years ~= 1000 days.

      That’s ‘appreciation’ of about $11,700/day.

      If your in the Billionaires club, $11,700 is about how much you make during the time it takes to refill your coffee cup.

      These guys are definitely a different breed of cat.

      1. the time it takes to refill your coffee cup

        In this particular case, it’s about how much he loses in that time.

  23. ‘There have been thousands of real estate investors buying negative cash flow properties, specifically condo investments where their monthly costs far exceed their monthly income on those properties and that is a very real source of concern,’ said Calum Ross

    I’m not concerned, Calum. I feel pure schadenfreude as I watch these greedy speculators hemorrhaging big money on their rapidly depreciating shacks each month.

  24. Hungary’s housing market shrank by 58% in April compared with the same month a year earlier.

    Is that a lot?

    1. From what I heard from the relatives over there, Germans are their equivalent of the “Chinese all cash buyer”

      Also I am told that outside of Budapest prices are still fairly low, even around Lake Balaton

  25. “Buyers are seeking discounts of up to 20 per cent on properties as the housing market reawakens.

    Real clever, knife catchers. You’ll be part of the next big wave of foreclosures.

  26. As demand weakened, house prices would fall, as low as 12 per cent, for about three years, and this would further suppress demand for new housing, ‘as already-nervous investors stay clear of the market.’”

    Or it could drop 60-80% and stimulate demand for new housing.

    1. Hmmm … in the big picture the Centennial state is a very small player. If he wants to keep tabs on his quislings, I would expect him to stay in the north east.

  29. Jerome “Janet” Powell is to appear on 60 Minutes. I haven’t watched 60 Minutes, or CBS, in years, but can only imagine what kind of powder-puff questions the fawning Real Journalists will ask their idol, between lavishing praise on him for “saving the economy” meaning, facilitating the transfer of wealth and assets from the increasingly pauperized middle class to the Fed’s oligarch accomplices.

    https://www.reuters.com/article/us-usa-fed-powell/feds-powell-to-appear-on-cbs-60-minutes-on-sunday-cbs-idUSKBN22R2US

  30. With all the bad news on bank loan losses, are higher bank stock prices in the bag?

    The Financial Times
    Coronavirus business update 30 days complimentary
    Federal Reserve
    Federal Reserve warns of potential ‘strains’ on US banks
    Financial stability report highlights elevated risks from loan losses and falling asset prices
    ‘All told, the prospect for losses at financial institutions to create pressures over the medium term appears elevated,’ the Fed said.
    © AFP via Getty Images
    Laura Noonan in New York and James Politi in Washington 37 minutes ago

    US banks risk losses from the coronavirus crisis that could strain their finances even though they entered the tumult with strong balance sheets, the Federal Reserve warned in its semi-annual review of America’s financial system.

    Banks have set aside tens of billions of dollars for potential loan losses since the pandemic began and said that they were so strong going into the shutdown that they will be able to continue to pay dividends.

    The Fed warned, however, that lenders could face “material losses” from lending to struggling borrowers who are unable to get back on track after the crisis.

    “The strains on household and business balance sheets from the economic and financial shocks since March will likely create fragilities that last for some time,” the Fed wrote. “Financial institutions — including the banking sector, which had large capital and liquidity buffers before the shock — may experience strains as a result.”

    Lael Brainard, a Fed governor, added: “Forceful early interventions have been effective in resolving liquidity stresses, but we will be monitoring closely for solvency stresses among highly leveraged business borrowers, which could increase the longer the Covid pandemic persists.”

    In its report, the Fed laid out the risk of another decline in asset valuations, despite a rebound from their lows at the end of March and beginning of April.

    “Asset prices remain vulnerable to significant price declines should the pandemic take an unexpected course, the economic fallout prove more adverse, or financial system strains re-emerge,” the Fed said.
    …

  31. Stock prices have reached what looks like a permanently high plateau.

    — Irving Fisher, October 16, 1929

    1. There are plenty of plateau predictors out and about today.

      A brief history of the 1929 stock market crash
      ValueWalk
      Apr 8, 2018, 10:05 AM
      stock market crash 1929
      Hulton Archive /Getty Images
      – The stock market crashed in 1929, plummeting into a correction.
      – Margin buying, lack of legal protections, overpriced stocks and Fed policy contributed to the crash.
      – There are ways to protect investors can protect a portfolio from downturns.

      On October 16, 1929, Yale economist Irving Fisher wrote in the New York Times that “Stock prices have reached what looks like a permanently high plateau.” Eight days later, on October 24, 1929, the stock market began a four-day crash on what became known as Black Thursday. This crash cost investors more than World War I and was one of the catalysts for the Great Depression. Irving Fisher’s declaration went down as the worst stock market prediction of all time.
      …

    1. Adolph Hitmer has no trouble getting her hair cared for, because she’s “essential”, you know.

  33. A closely watched pot never boils over.

    Markets
    Fed Warns of Significant Hit to Asset Prices If Crisis Grows
    By Jesse Hamilton
    and Rich Miller
    May 15, 2020, 4:00 PM EDT
    Updated on May 15, 2020, 5:42 PM EDT
    – Commercial real estate could endure major stress, Fed says
    – Fed flags risks in twice-yearly report on financial hazards
    The Marriner S. Eccles Federal Reserve building in Washington, D.C.
    Photographer: Andrew Harrer/Bloomberg

    The Federal Reserve issued a stark warning Friday that stock and other asset prices could suffer significant declines should the coronavirus pandemic deepen, with the commercial real estate market being among the hardest-hit industries.

    The Fed made the assertion in its twice-yearly financial stability report, in which it flags risks to the U.S. banking system and broader economy. The document highlighted the central bank’s race to intervene in markets and temporarily dial back regulations on financial firms in response to the Covid-19 crisis.
    …

  35. Watch: Pissed Realtor Goes on Foul-Mouthed Rant Against Anti-Maskers

    By Infowars.com Friday, May 15, 2020

    An irate realtor upset over people refusing to wear face masks went on an obscenity-filled rant while driving and uploaded it to social media.

    In the video seen over 3 million times, the woman, who says she’s a realtor, directs an expletive-laden tirade toward non-mask wearers and people who don’t wear gloves as protection against the coronavirus.

    Warning: Graphic language. Viewer discretion advised.

    https://www.newswars.com/watch-pissed-realtor-goes-on-foul-mouthed-rant-against-anti-maskers/

      1. Its been that way for years, just apply content of character to POC and FB will ban you for up to 30 days……..shhhhhh….eric garner was arrested 30 times and was out on bail, and rumor has it he was going to have part of his foot amputated from his severe diabetes.

    2. Perhaps it’s time for someone to out the realtor, and promote them to a position of national spokesperson for the Lockdown Left? If they put it on social media themselves, they obviously are looking for the attention.

    1. For those of us who consistently live below our means, there is no housing crisis.

      1. That 401 has to be the biggest take away from reading ben’s blog. i was fortunate to have parents who saved and budgeted well. My father was a brick layer so winters were always slow to non existent work.

        1. There are folks who were clearly living beyond their means who are being affected by this, but at the same time there were folks that weren’t who are also being affected.

          But we can all be thankful that being smug and judgmental and anonymous on the Internet doesn’t cost anything.

          1. But the ultimate question will they learn this time and put payday lenders out of business because they will never need them again?

    2. The housing crisis is roughly confined to 30% of the head of household population. The top 30% own outright, so they’re just watching it on the news. The mid 30% have modern skills, and they’re making their mortgage or lease payments despite living in an inflated market. The bottom 30% are struggling with low incomes, job insecurity and they have no business entering into a lease or owning a home. These are the “month to month” folks who are being preyed upon by the financiers and realtors.

  39. Amendment to Keep Feds out of Citizens’ Internet History Fails — by 1 Vote

    SEAN MORAN
    15 May 2020

    The Senate voted against an amendment on Wednesday sponsored by Sens. Steve Daines (R-MT) and Ron Wyden (D-OR) that would curb law enforcement agencies’ ability to obtain web browsing and Internet search data without a warrant.

    The Senate voted on amendments on Wednesday to H.R. 6172, sponsored by House Judiciary Committee Chairman Jerry Nadler (D-NY), which would reauthorize provisions relating to intelligence gathering under the Foreign Intelligence Surveillance Act (FISA). The legislation passed through the Senate on Wednesday.

    https://www.breitbart.com/politics/2020/05/15/amendment-to-keep-feds-out-of-citizens-internet-history-fails-by-1-vote/

    1. “Voting in the Senate is the ultimate step in the legislative process. When a bill is passed by the Senate and the House of Representatives, it is sent to the president for his signature. He can sign the bill into law or veto it. If vetoed, the bill is sent back to the chamber of origination. Congress can overturn a presidential veto with a two-thirds majority in both houses.” —senate.gov

    2. Dianne Feinstein (D-CA) always votes for easy access, i.e., no search warrant, to everyone’s personal information. Erich Honecker was probably her idol.

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