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No One Walks Around Saying, Great, I’d Love To Pay The Full Price

A report from CNBC. “As the United States continues to face record unemployment due to the coronavirus pandemic, 30% of Americans missed their housing payments in June, according to Apartment List. That’s up from 24% who missed their payment just two months earlier in April and about on par with the 31% who missed payments in May.”

The Tampa Bay Times in Florida. “Christie Brand-Edwards and her husband, Robert Johnson, have for years rented out the one-story house in Tampa that they inherited from his parents. Both retired and in their 70s, the home brings in some welcome extra income and covers the cost of its homeowners association fees, taxes and sewer bills. But their tenants stopped paying rent in February. ‘It’s another poorly thought-out action for which there are unintended consequences, which no one seems to care about,’ Johnson said. ‘(People assume) you own property, so you must be rich.'”

From CNN Business. “The ‘price of the pandemic,’ as some agents call it. Many tenants have chosen to leave their apartments in major cities in the United States. In May, according to Zumper, the top four most expensive cities [San Francisco, New York, Boston and San Jose] recorded a decline in one-bedroom apartment rentals from a year ago. In San Francisco, the median rent for a room has dropped 9% from last year. ‘I’m seeing rents are down 10-20%, with high-end and luxury units being the hardest hit,’ said Dave Chesnosky, a Compass agent in San Francisco.”

“In Manhattan, apartment rents with the highest prices are falling the fastest. The median rent for a luxury apartment in May was $ 7,825 a month, a 10% drop from April, according to Douglas Elliman and appraiser Miller Samuel. In New York, realistic homeowners who offer flexible leases, pay the broker fee, or offer incentives are the ones who find tenants, said Kristina Paces, agent for Douglas Elliman.”

“‘No one walks around saying, ‘Great, I’d love to pay the full price’ in this Covid-19 environment,’ she said.”

The San Francisco Examiner in California. “I know you don’t want to hear this, but these are challenging times for San Francisco landlords, and they may be fixing to get a lot worse. The party, which has lasted years, may be over — for who knows how long. That 9.2 percent drop we saw was just the warning shot. Between laid-off workers, who will lose $600 of their weekly unemployment (which was likely the reason they could pay rent in May) at the end of July, the local businesses shutting down and the shift to remote working, we’re about to see a glut of available rental units, followed by a sharp drop in rents.”

“Bad news for small landlords who purchased their income properties late in the game and don’t have the equity to operate with reduced revenue.”

From NBC Bay Area in California. “The pandemic continues to push down the cost of rent in parts of the Bay Area partially because demand is dropping. Real estate agent Patrick Sedillo said, ‘I expected it, because of overcrowding, especially in downtown San Francisco. You are seeing social distancing actually taking the next step. Because of supply and demand. The more supply there is, the less demand there is and they need to get these places rented out,’ Sedillo said.”

From My News LA in California. “The Los Angeles City Council took a preliminary step Tuesday toward putting a vacancy tax measure before voters that would be aimed at compelling landlords to put vacant units on the market to alleviate the city’s housing crunch. According to Councilman David Ryu’s office, the U.S. Census Bureau estimates there are 111,810 empty housing units in the Los Angeles.”

The Orange County Register in California. “The coronavirus lockdown walloped California house sales in May, resulting in a 41.4% drop in transactions from the previous year, the California Association of Realtors reported Tuesday. It was the biggest year-over-year decrease since November 2007. Median house prices, meanwhile, also fell from year-ago levels, the first such drop in eight years. The statewide median house price fell for the first time since February 2012, dropping 3.7% to $588,070.”

The San Francisco Chronicle in California. “The coronavirus pushed Bay Area home sales off a cliff in May. The number of existing, single-family home sales that closed last month fell 51.1% compared with the same month last year and the median price dropped 2.5%, according to the California Association of Realtors. ‘San Francisco is one of the most beautiful cities but between COVID and restaurants and bars closing down, that romantic feature is gone,” he said. ‘Now (they’re) working from home in a two-bedroom apartment and it’s like, ‘Get me out of here,’ Compass agent Paddy Keohe said.”

“Chris Meadors, a Compass agent in Napa, said, ‘The only phone calls we have received in the last three months’ are from people wanting to move from San Francisco to someplace like Napa County.”

From Illinois Policy. “Illinois’ housing market was one of the weakest in the nation prior to 2020. But as the state economy has been brought to a sudden standstill and nearly 1.5 million Illinoisans find themselves out of a job, the number of families struggling to make their mortgage payments will surge. Economic fallout from the COVID-19 pandemic was made worse by one of the harshest lockdown orders in the nation. As a result, analysis by the Illinois Policy Institute shows Illinois could see mortgage delinquency double, behind only the Great Recession as the worst housing crisis in 30 years.”

“Growth in home equity is negatively associated with mortgage delinquency. If the value of your home goes up, then you are probably not going to experience delinquency. On the other hand, if you become unemployed and are already ‘upside down’ on your loan – owing more on your mortgage than your home is currently worth – then you are more likely to enter delinquency.”

The Salem News in Massachusetts. “A Salem developer charged with being the alleged mastermind of a mortgage fraud scheme that cost banks and mortgage lenders more than $4 million — and almost two dozen apartments from the city’s rental housing stock — is tentatively set to stand trial in October. George Kritopoulos was one of three people charged in a scheme that, prosecutors allege, involved purchasing multifamily homes and converting them to condominiums, using falsified financial information to obtain loans for the projects.”

“Between 2006 and 2015, a dozen multifamily homes in Salem were turned into 21 condos. The condos then were sold to buyers who in many cases would not qualify for a mortgage, using fictitious financial information and documents that were prepared by other defendants, prosecutors allege. When the buyers failed to make payments, the condos would end up in foreclosure. The banks and lenders lost approximately $4.3 million as a result.”

“David Plunkett, an accountant and former assistant register of deeds in Salem, pleaded guilty last year to charges stemming from his role in the scheme and is awaiting sentencing. The third defendant, Joseph Bates III, pleaded guilty in 2018 and has also not yet been sentenced.”

This Post Has 138 Comments
  1. ‘using falsified financial information to obtain loans for the projects’

    Eat yer crowz jingle.

  2. ‘The coronavirus lockdown walloped California house sales in May, resulting in a 41.4% drop in transactions from the previous year, the California Association of Realtors reported Tuesday. It was the biggest year-over-year decrease since November 2007. Median house prices, meanwhile, also fell from year-ago levels’

    Eat yer crowz Thornberg.

    1. Eat yer crowz Thornberg.

      He’ll just blame it on the Wu flu. If it hadn’t come along, prices and sales would be off the charts….mmmm hmmmm…..

    2. Hah hah hah…So much for the oft-repeated false assertion that although transactions volumes have dropped, California prices are still rising.

  3. ‘30% of Americans missed their housing payments in June’

    Is that a lot?

    ‘I expected it, because of overcrowding, especially in downtown San Francisco. You are seeing social distancing actually taking the next step. Because of supply and demand. The more supply there is, the less demand there is and they need to get these places rented out’

    That’s some shortage there bay aryans.

    ‘the U.S. Census Bureau estimates there are 111,810 empty housing units in the Los Angeles’

    It’s been this way for years.

    1. ‘30% of Americans missed their housing payments in June’

      An astounding, eye-popping statistic.

      1. It doesn’t surprise me in the least. Numerous studies have shown most ‘Murican debt donkeys are living paycheck to paycheck. It was tenable buying a shack you couldn’t afford as long as the Fed’s orgy of money-printing kept levitating shack valuations, but now the party’s over.

        1. Heck, I’ve got the money for rent, but still considered hanging on to it until we see how all this shakes out. Remembering how those foreclosed people got to hang out in their foreclosed houses for years…

      2. What does 30% missed mortgage payments amount to dollarwise? So are the servicers getting back stopped by any of the Fed’s lending facilities. Should we see some of servicers in dire straits now?

          1. Crap, you’re right. I think they intentionally wrote it to mislead by saying “housing payments” instead of “rent”. They know everybody hears “house” and “payments” and thinks mortgage.

      3. Apparently you can get loan forbearance for 4 months, and that gets tacked onto the end of the loan. So why wouldn’t people all do this and hold the cash? It’s a free buffer. If landlords qualify they’re probably doing it as well while making the tenant pay.

        1. Filed under How a Debt Donkey can stockpile cash during an Economic Crisis by stiffing the bank.

    2. ‘the U.S. Census Bureau estimates there are 111,810 empty housing units in the Los Angeles’

      Just the tip of the iceberg showing there. In the rest of the US there are 25 million excess, empty and defaulted houses…. and another 35 million just beginning to empty as boomers die off.

  4. ‘we’re about to see a glut of available rental units, followed by a sharp drop in rents’

    Shortage, shortage, GLUT!

    ‘Bad news for small landlords who purchased their income properties late in the game and don’t have the equity to operate with reduced revenue’

    How are those 5% cap rates looking now?

    1. Is this a nice way of saying the “investment” was never cash flow positive and you were speculating on sweet appreciation?

      “don’t have the equity to operate with reduced revenue’

    2. This is how bubbles burst. HODLers are happy to keep HODLing so long as prices go up, creating an ongoing inventory squeeze and the misleading impression of a shortage. The moment prices drop significantly, the HODLers collectively dump, turning the perceived shortage into an apparent glut, virtually overnight.

    1. Funny how everyone just ignores the looting, rioting and defunding of the police and the crime wave that is surely coming.

      Like it never even happened…

      “Now the coronavirus pandemic has hit, businesses have shut down, the shared amenities that make city life so appealing – the restaurants, museums, concerts and other gathering places – are also shut down. Well off people and young workers have fled the city in droves.”

      1. “Funny how everyone just ignores the looting, rioting …”

        Turn off Fox News are actually take a look outside. The sky isn’t falling. The vast majority of protests where peaceful.

        1. 30% of Americans missed their housing payments in June, according to Apartment List

          Why wouldn’t they when the government tells them they don’t have to?

          1. Maybe because they signed a legally binding contract saying they would? Maybe because honoring your financial obligations is the right thing to do?

        2. Turn off Fox News and read The Washington Post

          “The vast majority of protests where peaceful.”

          “People defied curfews in cities across the country and experienced looting, break-ins and arson.”

          Demonstrators, police clash across nation in another night of protest

          May 31, 2020 at 6:44 a.m. EDT

          Police cars were set aflame, freeways were blocked, windows were shattered and authorities deployed tear gas and even rubber bullets. Multiple governors activated the National Guard and curfews were enacted in several major cities, including Atlanta, Chicago, Louisville, Denver, Miami and Milwaukee.

          California Gov. Gavin Newsom has declared a state of emergency and deployed the National Guard to help enforce a citywide curfew as violent demonstrations continue on the streets of Los Angeles. Mayor Eric Garcetti initially resisted using troops because he did not want to evoke memories of the 1992 Rodney King riots. But conditions have continued to deteriorate in sections of the city where businesses were ransacked.

          One person was fatally shot in downtown Indianapolis and police there are warning residents the city is not safe. Officers are investigating if the shooting is connected to the ongoing protests. A 21-year-old man sitting in their car was also shot dead in downtown Detroit a day earlier after someone opened fire toward a protesting crowd.

          In New York City, two dozen police vehicles were torched, resulting in dozens of arrests. People defied curfews in cities across the country and experienced looting, break-ins and arson. In Philadelphia, demonstrators broke into a store near city hall and attempted to tear down the statue of a former mayor.

          https://www.washingtonpost.com/nation/2020/05/30/george-floyd-protests-live-updates/

        3. The vast majority of protests where peaceful

          The ones a few blocks from where I live weren’t so…sorry but that’s all I care about TBH

        4. LOL….Priceless. All major leftist run cities had major “protests”. Check out the situation in Chicago. Mass chaos, destruction and shootings.

      2. “Funny how everyone just ignores the looting, rioting and defunding of the police and the crime wave that is surely coming.”

        H. G. Wells nailed it with, “The Time Machine.” In the future the Eloi are acquiescent, passive and non productive.

  5. They seemed to have glossed over a few details…

    “San Francisco is one of the most beautiful cities but between COVID and restaurants and bars closing down, that romantic feature is gone,”

  6. “…The Los Angeles City Council took a preliminary step Tuesday toward putting a vacancy tax measure before voters that would be aimed at compelling landlords to put vacant units on the market…”

    And exactly how would such a tax be enforced?

    Yet another useless bureaucracy in the making.

  7. ‘Is the nation’s largest public pension fund following the lead of rabid Robinhood day traders by speculating in risky investments in a desperate attempt to boost returns? The answer to that snarky question is no. But it lays bare the key conundrum faced by both by jejune speculators and serious professionals alike: how to generate returns in a world of record-low interest rates and elevated asset values. The California Public Employees’ Retirement System will borrow to leverage its assets, currently nearly $400 billion, by 20%, according to a Wall Street Journal op-ed by Ben Meng, its chief investment officer.’

    https://finance.yahoo.com/m/335b12e6-d04d-3c4c-8786-8552ffe79c61/calpers-has-a-fix-for-its.html

      1. “FYI – leverage works both ways.”

        If it works out then these guys are heroes.

        If it doesn’t work out, well, what the hell, it’s not their money.

        1. If it doesn’t work out, well, what the hell, it’s not their money they’ll just get a bailout funded by taxpayers.

          There, fixed it.

          1. An evil rich union goon? Kiss that money goooodbye. Probably in China thanks to that 1000 talents commie running Calpers that was hand picked to steal your pensions by Gavin Gruesome. Enjoy!

          2. Better work. I have several hundred thousand dollars with these guys.

            LOL! I’ll tell you the same thing I tell my friend from high school who works for Corrections: Better have a Plan B.

            But he denies CALPERS is underfunded (though they freely admit they’re underfunded). Or that he just might not get the gold-plated pension he expects.

          3. fjm
            June 17, 2020 at 11:06 am
            The old and rich robbing from the young and poor. Its the American way.

          4. But he denies CALPERS is underfunded (though they freely admit they’re underfunded).

            The denial is the same here in the Centennial state. I know public servants who whistle past the graveyard. PERA is perhaps the most underfunded pension in the country.

            https://coloradosun.com/2019/07/09/colorado-pera-bad-year-explained-charts/

            Just 20 years ago, Colorado’s public pension had more than 100% of the money it needed to pay retirement benefits in perpetuity.

            Today, it’s only 59.8% funded, with $31 billion in unfunded benefits owed.

            Every man, woman and child in the state would have to cough up about $6000 to make PERA whole. $24,000 for a family of four. As long as TABOR stands, that won’t be happening.

        2. If it doesn’t work out, they’ll just say that “no one could have seen it coming”! That’s what deposed Governor Davis (and no doubt others) said after the last crash that gutted CA finances in general, and CALPERS in particular.

      1. I wonder where the Millennial day traders got their gambling chips?

        Key Words
        ‘Cooped-up’ millennial traders have sparked a new pandemic — it won’t end well, warns Princeton economist
        Published: June 17, 2020 at 2:13 p.m. ET
        By Shawn Langlois
        There’s a whole new breed of trader out there. Getty

        ‘Don’t confuse day traders with serious investors. Serious investing involves broad diversification, rebalancing, active tax management, avoiding market timing, staying the course, and the use of investment instruments such as ETFs with very low fees… Don’t be misled with false claims of easy profits from day trading.’

        That’s Burton G. Malkiel, Princeton economist and Wealthfront’s Chief Investment Officer, sharing his thoughts Wednesday on what he describes as “the day-trading pandemic.”

        Malkiel, who wrote the widely read investment book, “A Random Walk Down Wall Street,” blamed a sudden surge of inexperienced traders on the new reality facing the younger generation.

        “The coronavirus has wrought devastating harm to the health of our nation and to the vibrancy of our economy,” he wrote. “With respect to financial markets, it has also given rise to a full-blown mania. Individuals, cooped up at home, working remotely on flexible schedules, with no social activities and no live sports to watch and bet on, have increasingly turned to day trading in the stock market.”

        1. “Day-trading pandemic”

          I love it. What else would you call it, when people are apparently salivating to buy stock in a bankrupt company that has already said the stock will become worthless?

        2. I’m enjoying reading about all the Robinhood day traders. The sub-reddit wallstreetbets is fun.

      2. Opinion: The first crack appears in bulls’ thesis that the stock market will rise no matter what
        Published: June 17, 2020 at 2:05 p.m. ET
        By Nigam Arora
        Money printing by the Federal Reserve has propelled stocks for more than a decade. But that effect may soon wear off
        AFP/Getty Images

        Stock market bears think bulls’ buying is misplaced and based mostly on momentum. Bulls counter that they have a thesis: Stocks will rise no matter what happens to the economy and with the deadly virus.

        But now the first crack has appeared in bulls’ argument. Let’s explore this with the help of a chart.

        1. Is it conceivable that the Fed is, in fact, somehow limited?

          “A crack appears

          Fed Chairman Jerome Powell is a smart man. The way he came across in his press conference after the FOMC policy decision last week was troubling in that he was going to do whatever it took without regard to consequences and limits. Why would a smart man like Powell show such intransigence?

          Pat Toomey, a U.S. senator from Pennsylvania, was able to get the truth out of Powell. Now it is clear that Powell is being clever in exhibiting intransigence because he wants everybody to believe that the Fed is all in and there are no limits to what the Fed can do.

          Based on the exchange with Toomey, it is clear that Powell knows his limits and, in reality, what the Fed can do has limits. The Fed may have difficulty going far beyond the present programs. Here are the key excerpts from what Powell said:

          • “We’re not actually increasing the dollar volume of things we’re buying. We’re just shifting away from ETFs toward this other form of index.”

          • “If market function continues to improve, then we’re happy to slow or even stop the purchases.”

          • “And I don’t see us as wanting to run through the bond market like an elephant doing things and snuffing out price signals and things like that.”

          The crack in the bulls’ thesis is that contrary to their belief, the Fed is becoming measured and may have difficulty expanding its balance sheet beyond $10 trillion. In plain English, unlimited money printing is highly unlikely.

          1. Fed is becoming measured and may have difficulty expanding its balance sheet beyond $10 trillion.

            “As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions.”

            Links take too long to go through. You can google it if you’re interested.

            I see no reserve requirements as a disaster in the making. It’s as if they are trying to destroy the currency.

          2. I see no reserve requirements as a disaster in the making. It’s as if they are trying to destroy the currency.

            They definitely decided that protecting the currency was not the top priority about 12 years ago. I’m sure they’d prefer to be able to milk it a lot longer before putting it down, though.

          3. They definitely decided that protecting the currency was not the top priority about 12 years ago.

            Yes, even longer ago than that. But going to a zero reserve requirement is insane. This action brings us near to Zimbabwe territory.

          4. This action brings us near to Zimbabwe territory.

            That decision made this action inevitable…eventually. The future is here.

          5. For all intents and purposes, the reserve rate has been about zero for a couple of decades. I can’t imagine what strategy is behind this revelation, like it’s something new.

          6. For all intents and purposes, the reserve rate has been about zero for a couple of decades.

            The reserve requirement isn’t an interest rate. It has NEVER been zero before. This means that the multiplier effect has no meaning. The 10% reserve requirement at least used to put SOME limitation on dollars being created. Now there is no constraint. It’s whatever amount the FED wants to create.

          7. The 10% reserve requirement

            That reserve requirement is for banks, not the Fed. It limits the lending banks can do based on their deposits.

            Reserve requirements only applied to demand accounts, like checking.

            Small banks had zero reserve requirements for decades, medium ones 3%, large ones 10%, but this didn’t have to be working cash in the vault. They could borrow the required amount from the Fed overnight. The fee for this is the Federal Funds Rate. It’s just a tax on banks and has been very close to zero.

            Just my simple minded understanding or misunderstanding.

          8. That reserve requirement is for banks, not the Fed.

            The FED makes the rules that the banks must follow. Reserve requirements were never zero before. The FED has done something unprecedented to make money creation much easier. I understand why they did it, but they’re making a big mistake.

          9. they’re making a big mistake.
            You might be right, and disaster might follow. My opinion is it’s a nothing burger. The Fed has the bank’s backs with easy and spontaneous lending if there is a run on a bank. The Fed was lending the required reserves (just overnight and at interest). It was a revenue stream for the US Treasury, not a safeguard to society. Any reserves that were technically required were not there.

            Canada never did play this game.

          10. capital reserves

            I should have said capital “requirements” to stay as accurate as possible.

          11. The Fed has the bank’s backs with easy and spontaneous lending if there is a run on a bank.

            Just one more minor point for clarification, then i’ll stop beating this dead horse.

            My worry wasn’t about a run on the banks.

            My worry is about a rapid devaluation of the dollar. I know the dollar has been losing value since it was created, but it was at a slow enough pace that it was easily adapted to. Depending on how fast money is created in the future, adapting to it may become nearly impossible.

      1. Prices fell 13% and cratering fast.

        This is good news!

        Clifton, VA Housing Prices Crater 14% YOY As Fairfax County Slips Deeper Into Foreclosures And Mortgage Defaults

        https://www.zillow.com/clifton-va/home-values/

        *Select price from dropdown menu on first chart

        As one Fairfax County broker lamented, “How can we possibly sell a resale house when builders are selling new houses for 20% and sometimes 30% less?”

  8. “As we predicted, May home sales took the full impact of the coronavirus pandemic as much of the state remained in lockdown during the past few months and caused three straight months of double-digit sales declines, which we haven’t experienced since the Association began reporting monthly home sales in 1979,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young.’

    ‘The statewide average price per square foot** for an existing single-family home was $281 in May 2020 and $292 in May 2019.’

    https://finance.yahoo.com/news/full-impact-coronavirus-pandemic-hits-155100154.html

    Check out the table at the bottom, Santa Cruz and Santa Barbara. And the UHS says everyone wants to go to Napa. Price change says nope.

    1. With Prop 13, I don’t understand why anybody with even a modicum of common sense would buy a house in CA. Paying 5x the property taxes of your neighbors, not to mention the price of the house, for the exact same services is a fool’s errand.

        1. “The old and rich robbing from the young and poor. Its the American way.”

          fjm
          June 17, 2020 at 11:05 am
          Better work. I have several hundred thousand dollars with these guys.

          Reply

          1. So, the old and rich are the bad guys.

            First, nobody puts a gun to you head to buy overpriced real estate. Ok, boycott buying if you think it’s a rip.

            Look to you wonderful Politicians that bailed out the culprits of the Banking scam in ,2008.Same Political traitors sold out to Globalism, job and manufacturing outsourced. Thank Walmart for wreaking small business with their cheap China goods monopoly.

            The average older person doesn’t even know what’s going on ,but they do know that they aren’t making anything on saving accounts,
            The Oligarchy is screwing every age group , so get it straight who has screwed the younger generation.
            So, go ahead and go for. Communism where everyone is equally poor, instead of the proper corrections.

          2. The old and rich robbed the young and poor by sending the poor’s jobs to China, Mexico, and India, and by importing cheap illegals to do jobs that should have paid a living wage.

            It feels good to say “tax the rich who have more than $10 million.” But I’d rather have the 20+ million jobs back and recoup the money that way.

        2. “The old and rich robbing from the young and poor. Its the American way.”

          In the middle-east the radicals lose their life fighting for the cause while the wealthy moderates who control them live in Tuscan homes on the Mediterranean with scantily clad women half their age. It’s not the American way; it’s the human way.

      1. A return to sane housing prices would fix the Prop 13 conundrum. New buyers pay 5x-10x more in property taxes than the house next door because they paid 5x-10x more for the house itself. The bubble and inflation is what lead to this kind of inequality.

        “The old and rich” – what’s funny is these older people who paid $80k for their house look at the young people moving into the neighborhood paying $1.5 million and say “wow, they must be really rich to afford that.” Most of the older people I know just assume that the young people paying these prices are rolling in money because they see the new cars and the house prices, the home renovations and two incomes. What they can’t see is that these young people are buried under more debt than the older generation could imagine is possible.

        1. And some of those more old-fashioned boomers probably think the kids are all paying 12% interest. That’s why the kids are getting such knee-jerk reactions.

        2. Quite a few young people in their 30s make great money. Not every young person is swimming in student loan debt.

          And young people seldom waste money on frivolous things like cable TV and landline phones…

          1. And young people seldom waste money on frivolous things like cable TV and landline phones…

            Instead, they spend it on food delivery, SBux, travel, and a new iPhone the minute an updated version is released.

          2. Instead, they spend it on food delivery

            What blows me away is that people will pay to have McDonald’s delivered

          3. “Instead, they spend it on food delivery, SBux, travel, and a new iPhone the minute an updated version is released.”

            Lol you forgot avocado toast

      2. fjm has The Narrative down pat.

        Post-Structuralist provided a more realistic assessment, but it might be hard for some to accept.

        1. oxide,
          The old people as a group didn’t rip off the younger generation. The very old ,as the ones who fought World WW2, saved every following generation. I don’t get this claim that the “Old” as a broad term screwed younger people.

          1. as a broad term screwed younger people.

            People of any generation screw themselves by taking on debt to keep up or get ahead. It’s stupidity, and that is not imposed externally.

            A story as old as time.

    2. “the UHS says everyone wants to go to Napa”

      This is purely anecdotal, but in my suburban neighborhood there have been 3 houses put up for sale during Covid. All went sale pending immediately (one has already closed, one had 3 offers), at record insane prices (even higher than the record insane prices of fall 2019), all would require jumbo loans.

      I have no idea where the buyers are getting the money considering all that has been written about the jumbo loan market freezing up.

    1. They did. People in the mortgage business are reporting record interest. IMO, the fed buying MBS might have brought us to a blow off top. They might have kicked this can another year or two.

  9. What percentage of sales of house sales is psychology? The news across my State is the polar opposite of most headlines noted here. People are purchasing from afar to move to a low Covid part of the Country. A local Title company acquaintance says there are 130 sets of keys at her office this week waiting for out of State new owners to show up. I’ve been checking the papers, the MLS info (not a disclosure state so the data is limited) and at this blip in time the storyline is holding. Purchasing property in the spring and summer in this part of the country has always reminded me of the Sirens in Greek mythology.

    1. People are purchasing from afar to move to a low Covid part of the Country

      Seems like there’s some risk to that strategy.

      1. Few parts of this country will be low-COVID for long. Look at China. Virus free for a couple months and then *boom* it’s back to the lockdowns.

        Everybody keep 6 weeks of supplies on hand, because lockdowns will come back.

    2. I’m guessing it has more to do with getting out of the Marxist run blue cities than getting away from Covid. Peoples’ eyes are opening to what’s unfolding in large cities. More and more want to live rural now.

  10. “… vacancy tax measure …”

    Vacancy taxes are a great way to prevent speculators from externalizing costs and artificially reducing supply.

  11. I’m listening to Powell’s testimony before Congress. He comes off as such a smart, well-meaning, earnest, genuine guy.

    An excellent frontman for the vast redistribution efforts.

    1. I dunno if they can keep pumping the QE at the recent rate without permanently damaging the future economic outlook.

      1. We passed that point years ago. The damage the Fed has done, not just to the financial system, but even more so to the social fabric by widening wealth inequality to obscene levels, has been catastrophic. Younger generations have no stake in a system which views them only as serfs on the incorporated globalist plantation, and they’re starting to get very, very pissed off, as the recent protests have shown.

      2. There was a informative interaction:

        Politician: Chair Powell, you’ve done such an epic job helping the economy, I’d support a lifetime appointment for you. Question: What is to stop another chair from undoing your work? [translation: what if someone comes in and decides asset price inflation is not a prudent policy for the country? I’ve put a lot of money in my stocks and real estate and don’t want to lose any]

        I actually missed the answer to this very interesting exchange because I had to step away. I’d be fascinating in reading the testimony and seeing how Powell responded. I caught the first part which was some response about how the Fed’s mandates were legally enshrined but beyond that I missed.

      1. Greenspan: Erudite, competent (though incomprehensible)
        Bernanke: Professorial, brilliant
        Yellen: Well meaning, smart
        Powell: Humble, genuine

        The Fed is the tool; government and Wall Street are the controllers. Always good to have a confidence-inspiring frontman.

  12. “… condos then were sold to buyers who in many cases would not qualify for a mortgage, using fictitious financial information and documents that were prepared by other defendants, prosecutors allege. …”

    Damn — having flashbacks to Fresno 2007-2012. DA’s always went after the easy to prosecute little fish (i.e. my clients) and let the true culprits slide. Indeed the alleged victims — the mortgage companies — where almost always complicit.

    1. Your hero Obama appointed corrupt AGs who made sure that not a single Wall Street banker or captured regulator went to prison for causing the 2008 financial crash.

      1. The Obama Administration made an ill-advised decision not to criminally charge bank fraudsters. But it was local DA’s who chose to prosecute people who were basically just clerical functionaries in larger scams. The feds have jurisdiction over most banks but there were many non-bank actors who county DA’s could have prosecuted.

  13. “The Los Angeles City Council took a preliminary step Tuesday toward putting a vacancy tax measure before voters that would be aimed at compelling landlords to put vacant units on the market to alleviate the city’s housing crunch.

    It’s about time. The only way to make housing affordable again is to ruthlessly punish speculation.

    1. The only way to make housing affordable again is to ruthlessly punish speculation.

      Speculation is self-punishing in a free market (a market with no government intervention). It is government bailouts that make bad speculation worthy of punishment.

  14. “The coronavirus lockdown walloped California house sales in May, resulting in a 41.4% drop in transactions from the previous year, the California Association of Realtors reported Tuesday.

    Is that a lot?

  15. The number of existing, single-family home sales that closed last month fell 51.1% compared with the same month last year and the median price dropped 2.5%, according to the California Association of Realtors.

    How long before famished realtors refuse to waste their time dealing with greedheads who won’t price their shacks to sell in a cratering market?

  16. Occasionally the GOP wing of the Republicrat duopoly has to pretend to represent the public interest against the monopolistic practices and arbitrary censorship of the Oligopoly’s creepy Orwellian tech companies. Nothing will come of this, as companies like Google and Facebook go all out to suppress any and all challenges to The Narrative.

    https://www.bloomberg.com/news/articles/2020-06-11/facebook-google-lawsuit-shield-targeted-in-gop-senator-s-bill?sref=5CqwjcI3

    1. The place is two houses down from the Playboy Mansion. Maybe the sellers are throwing in a little extra to justify the price increase.

  17. It’s a beautiful evening here in Chaffee County, Colorado. Found an open campsite on the road to the Mt Shavano trailhead, on the north side of the ridge with a nice breeze. All it costs is the gas to get here. Thank you HBB for helping me never buy an overpriced used house in Denver.

    1. Pack heat – for the two-legged creatures of course. The great outdoors isn’t what it used to be.

      1. The great outdoors isn’t what it used to be.

        Probably still beats downtown Seattle, though.

      1. Listening to 93.7FM KSBV “The River Rat” radio broadcasting from Salida I wouldn’t be surprised if they played that.

        Corporate radio sucks. 93.7 plays the deep cuts. When you listen to corporate radio from Denver it’s like they took everybody’s greatest hits album and made a greatest hits album from that with an ever repeating playlist of the same 30 songs.

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