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Many Investors Will Have No Choice But To Cut Their Losses Before They Dig A Deeper Hole

A report from the Globe and Mail in Canada. “New condo sales in the second quarter in the Toronto region fell to their lowest level since the Great Recession. Condo weakness is also playing out in the resale market. For investors, who make up nearly 40 per cent of condo owners in the Toronto region, the investment strategy of covering mortgage payments with rental income or expecting prices to climb is less compelling. The pandemic has slowed migration to the city, dried up tourism and slashed jobs. That, coupled with an influx of new condos and Airbnb units turning into long-term rental apartments, has pushed rental vacancies slightly higher and rental prices down.”

“‘The investment strategy of most condo investors has, for the most part, not been about cash flow, it’s mainly been about speculative future price growth,’ said Carl Gomez, an independent real estate economist. ‘If investors do not feel confident about the potential direction of condo prices in the future, then they will bail today. And I think that’s exactly what they are doing.'”

From BlogTO in Canada. “Average rent prices for condos and apartments in Toronto have been consistently declining and a new report suggests that trend is ongoing in many of the city’s neighbourhoods. In the Bay Street Corridor, the average rent was $2,448. This marks a 10 per cent decline from Q2 in 2019. ‘The biggest decline was seen in the Moss Park area with a 14% annual decline. A condominium apartment at 320 Richmond Street East called The Modern, which was one of the most active projects in terms of monthly listings in that area, witnessed a 20% rent decline annually,’ notes the report.”

From London Loves Business in the UK. “According to The Guardian, London rents dropped by 8-18% between February and July. The devastating financial impact of the coronavirus pandemic is forcing many landlords to lower rents or risk sitting on empty units. Many investors will have no choice but to sell their properties and cut their losses before they dig a deeper hole of debt.”

From Gulf News on Dubai. “Myles Bush, CEO of PH Real Estate, admits it’s no secret that prices have dropped by more than 20 per cent within Emirates Hills over the last 12 months. ‘Far too many times I have seen houses take more than a 12-18 months to sell because the listing agent has over promised and under delivered. If the price is right- it will always sell!,’ he said. Emirates Hills has seen similar price falls as the rest of Dubai, with average price per square foot dropping by 30 per cent over the past few years.”

The Hindustan Times. “Gurugram’s rental housing market — recognised as one of the most lucrative housing markets in Delhi-NCR — is decelerating. Experts and property owners have attributed the new trend to returning of salaried professionals, most of who are allowed to work from home, to their native towns and only a few takers for rental properties in the city. ‘Corporate professionals don’t want to stay back in this atmosphere, and new people are not shifting here for work. This month, I made only 50% of the deals as compared to March,’ said Kuldeep Khokri, who owns a property brokerage firm in Palam Vihar.”

“Kartar Adhana, an independent broker operating in and around Sector 29, was earlier charging 15 days’ rent amount from clients as brokerage. ‘Now, I have started charging only 10 days’ rent as my fee. Since I do the business on my own, I can cut the fee a little. But many brokers in the city are actually middlemen who work for big property dealers. They are the ones who are really stuck,’ Adhana said.”

The South China Morning Post. “China’s housing market is blowing hot and cold in a struggling economy, where property investors trying to catch a post-pandemic rebound have been knocked back by local policy disciplinarians. Nowhere is that more evident than the sudden squeeze this month in Shenzhen, the Silicon Valley of China and a speculative hotbed in the southern province of Guangdong that borders Hong Kong.”

“Some homeowners have started slashing their asking price by about 5 to 7 per cent after local authorities introduced harsh measures to clamp down on runaway prices, according to property listings. Some 1,019 units out of 30,000 existing homes listed on Centaline Property’s website are now offering discounts to entice buyers. ‘The measures rained on the parade,’ said Fion He, director of the research centre at Midland Realty. ‘Some owners are willing to lower their asking prices because many buyers are now sidelined by the new curbs.'”

The Hong Kong Standard. “Street shop landlords in core business areas are slashing asking rents amid unprecedented social distancing measures, with the asking rent for a street shop in Causeway Bay plunging by about 80 percent from its peak in 2016.”

“The asking rent of a 1,130-sq-ft street shop on 482 Hennessy Road in Causeway Bay is currently about HK$120,000 per month, or HK$106 per sq ft, according to Centaline Commercial (Hong Kong). In comparison, its asking rent hit HK$600,000 per month four years ago. Meanwhile, the asking rent of two street shop premises, which measure 750 sq ft in total, also plunged by about 48 percent to around HK$130,000 per month, from around HK$250,000 in June.”

“In the secondary market, a four-bedroom flat at Tai Koo Shing changed hands for HK$10 million, or HK$17,182 per sq ft, after HK$900,000 was slashed from the original asking price. In the primary market, Wheelock Properties canceled the sale of 44 flats at Koko Hills scheduled for Friday.”

The Weekly Source on Australia. “This week Stuart Penklis, residential head at the leading residential apartment development Mirvac, told The Australian 5,000 units will be built this year compared with a peak of around 40,000 a year in 2017 and 2018. ‘The days of selling a project over a weekend and then delivering in three years’ time have gone and we will move back to a normalised market where you will sell some product prior to construction, some during construction and a proportion post completion.'”

“This means that the heat – which means confidence – has evaporated from the buyers’ market.”

From ABC News in Australia. “Australia has recorded its biggest-ever quarterly fall in consumer prices, which dropped 1.9 per cent in the June quarter amid the coronavirus pandemic. The consumer price index goes all the way back to 1948, and the next biggest quarterly drop in prices recorded was a 1.5 per cent fall in December 1953, as Australia came off the back of a Korean War boom in wool prices, then the nation’s largest export.”

“One area where many experts expect prices to keep falling is housing. REA Group’s director of economic research, Cameron Kusher, said rents nationally were back at the same levels they were in March 2017. ‘We certainly saw a flattening of rents, rent reductions, mainly caused by an oversupply of property in the residential market, due to a couple of factors,’ observed Robbie Yeoland, department manager of residential property at Knight Frank. ‘One being Airbnb not having any business and the other with COVID affecting the income of residential tenants.'”

“While consumers may initially enjoy a widespread drop in prices, economists warn extended periods of deflation are one of the greatest economic threats. ‘Sustained deflation can have at least two damaging consequences,’ Saul Eslake explained. ‘First, it can encourage people to put off spending in the belief that they’ll be able to buy things cheaper further down the track, and that can make the downturn worse. Second, falling prices can make it harder to service the level of debt that people have — in real terms, the value of debt goes up when the price level is falling. Given how much debt Australian households have, that would become a serious problem if we had several years of falling prices.'”

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This Post Has 108 Comments

  1. ‘falling prices can make it harder to service the level of debt that people have — in real terms, the value of debt goes up when the price level is falling. Given how much debt Australian households have, that would become a serious problem if we had several years of falling prices’

    I’ll remind Saul that the bubble had popped a couple of years ago and the guberment/central bank ran a coordinated re-flation policy, with the REIC /media happily joining in of course. Enjoy your sh$t sandwich a$$-hats.

  2. Sure seems like a high level of global sawin’ and a slashin’ going on.

    ‘‘The investment strategy of most condo investors has, for the most part, not been about cash flow, it’s mainly been about speculative future price growth…If investors do not feel confident about the potential direction of condo prices in the future, then they will bail today. And I think that’s exactly what they are doing’

    Oh, speculating not investing. Well that’s pretty common actually. Don’t crowd those exits boys and girls, somebody might get trampled!

    1. ‘‘The investment strategy of most condo investors has, for the most part, not been about cash flow, it’s mainly been about speculative future price growth…”

      Ponzi finance blew up on them.

          1. ‘Companies need to abandon … maximizing shareholder value and shift to the idea of corporate governance for the common good,’

            Yes they do. But I won’t hold my breath.

        1. Hyperinflated speculative commodities bubble. The local lumberyard is charging over $5 per 8′ 2×4.

          1. With the Fed’s debasement of the currency and subsequent destruction of the dollar’s purchasing power, everything is going to cost more.

  7. Absolutely nothing was learned and nothing has changed since the past bubble and subsequent collapse. In fact, everything has been repeated but to an even larger degree. The degenerate FED is pumping cheap money like there’s no tomorrow, the stock market is completely and totally detached from fundamentals, the subprime loan outfits continue to fund house, auto, RV and boat loans as if there’s no such thing as a default, and the “consumer” just mindlessly continues to spend every dollar, borrowed or otherwise, that they can get their hands on.

    1. Meanwhile, I guess a lot of people who would be unemployed are still making whatever and selling it to whomever, using the Fed’s life support monies in the transaction.

    2. Ahhh, lay back, relax, and enjoy the music …

      “…and the ‘consumer’ just mindlessly continues to spend every dollar, borrowed or otherwise, that they can get their hands on.”

      1. If they really wanted the consumer to spend, they would allow some of this sweet sweet ZIRP to bleed from central banks into credit cards. My CC is still 13% APR and I’m sure for others it’s hither. Drop that to 5 and watch the Amazon trucks fly…

        1. “My CC is still 13% APR and I’m sure for others it’s hither. Drop that to 5 and watch the Amazon trucks fly…”

          Shirley, you joke. The interest rate is immaterial to the How-Much-A-Month spending crowd. What matters most to these pukes is how much available money is left on the card and the Monthly Minimum requirement.

          1. From Wikipedia …

            Low introductory credit card rates are limited to a fixed term, usually between 6 and 12 months, after which a higher rate is charged. As all credit cards charge fees and interest, some customers become so indebted to their credit card provider that they are driven to bankruptcy. Some credit cards often levy a rate of 20 to 30 percent after a payment is missed.[38] In other cases, a fixed charge is levied without change to the interest rate. In some cases universal default may apply: the high default rate is applied to a card in good standing by missing a payment on an unrelated account from the same provider. This can lead to a snowball effect in which the consumer is drowned by unexpectedly high interest rates. Further, most card holder agreements enable the issuer to arbitrarily raise the interest rate for any reason they see fit. First Premier Bank at one point offered a credit card with a 79.9% interest rate;[39] however, they discontinued this card in February 2011 because of persistent defaults.[40]

            Research shows that a substantial fraction of consumers (about 40 percent) choose a sub-optimal credit card agreement, with some incurring hundreds of dollars of avoidable interest costs.[41]

            Weakens self regulation Edit
            Several studies have shown that consumers are likely to spend more money when they pay by credit card. Researchers suggest that when people pay using credit cards, they do not experience the abstract pain of payment.[42] Furthermore, researchers have found that using credit cards can increase consumption of unhealthy food.[43]

            Detriments to society Edit
            Inflated pricing for all consumers Edit
            Merchants that accept credit cards must pay interchange fees and discount fees on all credit-card transactions.[44][45] In some cases merchants are barred by their credit agreements from passing these fees directly to credit card customers, or from setting a minimum transaction amount (no longer prohibited in the United States, United Kingdom or Australia).[46] The result is that merchants are induced to charge all customers (including those who do not use credit cards) higher prices to cover the fees on credit card transactions.[45] The inducement can be strong because the merchant’s fee is a percentage of the sale price, which has a disproportionate effect on the profitability of businesses that have predominantly credit card transactions, unless compensated for by raising prices generally. In the United States in 2008 credit card companies collected a total of $48 billion in interchange fees, or an average of $427 per family, with an average fee rate of about 2% per transaction.[45]

            Credit card rewards result in a total transfer of $1,282 from the average cash payer to the average card payer per year.[47]

          2. The average balance on a credit card is now almost $6,200, and the typical American holds four credit cards, according to the credit bureau Experian. Credit card issuers are also giving Americans more room to run up debt, boosting the typical credit limit by 20% over the last decade to $31,000.Feb 12, 2020
            USA Today › money › 2020/02/12
            Credit card debt: Average balance hits $6,200 and limit is $31,000 – USA Today

          3. boosting the typical credit limit by 20% over the last decade to $31,000

            My cards don’t have limits this high, I think the highest is 24K. Even though I have a ~850 credit score. Maybe because I never carry a balance so they see no point in raising the limits. 😉

          4. My cards don’t have limits this high

            I think the 31K is the combined credit available over multiple credit cards.

  8. Does it seem like more and more places around the globe are reporting record COVID-19 numbers? Or is it just an MSM conspiracy to skeer the kiddies?

    4. Missouri tagged as federal COVID-19 ‘red zone,’ breaks daily case record for 10th time in July
      Erin Heffernan 8 hrs ago

      ST. LOUIS — A report this week by a White House coronavirus task force added Missouri to 21 states considered in the “red zone” for new COVID-19 cases and urged leaders to consider more restrictions in virus hot spots.

      The report was made public Wednesday as Missouri topped its single-day high for new cases for the 10th time this month. The state added 1,927 cases, 154 more than the previous high set a day earlier.

      State health officials also reported seven additional deaths Wednesday and an increase in the percentage of tests coming back positive, up to 9.6% from 8.6% one day prior. At the beginning of July about 4% of tests came back positive.

      The federal report, dated Sunday, was distributed to state leaders. Missouri was added to the highest warning category after its rate of cases rose last week to 131 cases per 100,000 people.

      Missouri is still far below the worst rates in the U.S., including those in Florida, Louisiana and Mississippi, where rates rose to more than 300 per 100,000 residents last week. States that have an infection rate of more than 100 cases per 100,000 residents are considered in the red zone.
      …

    6. No, there are probably more cases. Europe has a summer vacation season too, and some of them re-opened their borders for tourist dollars. This virus loves bars and beaches. Result: they basically destroyed all their good lockdown work in the spring. Now the question is whether cases will lead to more deaths, or whether they’ve already thinned the herd.

      1. This virus loves bars and beaches.

        According to who? Bars I can believe. Beaches, not so much.

        1. Beaches usually have bars on them. Or maybe it’s the casual attitude on beaches?

          WaPo posted an article on how France beat the virus: Severe lockdown (you had to fill out a form to go grocery shopping) followed by extensive contract tracing, and paying salaries for people to stay home. I don’t even have the heart to go to the comment section because I know what it will say. Unfortunately, America is too free, to big, and has too many governments to do such a thing. WaPo is manipulating society to create a President Biden, but even he wouldn’t be able to create such a lockdown. No, I think we’re stuck until the vaccine.

        2. We’re going to test your theory tomorrow afternoon, in a socially distanced beach visit.

    1. The MSM is trying to distort the “Karen” narrative into something it isn’t. A Karen is any self-important harpy with a galactic sense of entitlement coupled with hysteria-tinged neuroticism who has a compulsive need to control others and throw her weight around. Main Karen catchphrase: “I’d like to speak to a manager.” Karens are yet another phenomenon of #ClownWorld, as women who are not fulfilling their natural roles are perpetually neurotic and dissatisfied.

    2. What’s behind their rage? The usual, stupidity & selfishness. Only been going on since ancestors came down from the trees. Amplified greatly by handheld video cameras and social media.

      1. Sometimes I think it’s the female equivalent of the despair of the incels. Except the women’s market value peaked years ago so they have more reason to be bitter than the incels for whom life may yet improve.

        1. Societally, middle-aged white wimmins aren’t worth sh!t. The only things that care about them are hungry cats.

          1. Well…in some ways they have involuntarily entered the men’s world. As in, they are only valued for the money they have or can make, or the care they can provide. And I concede that has to be a jarring transition from how they may have been treated previously. Men get used to being treated as worthless early on and then all improvements seem like icing on the cake to them.

          2. Dogs also care about them. I know several straight middle-aged single women whose choice of canine freinds over human male companions provides evidence.

          3. Societally, middle-aged white wimmins aren’t worth sh!t. The only things that care about them are hungry cats.

            In the US, a large percentage of them are entitled harpies who are not enjoyable to be around.

          4. Carl, interesting thoughts. You’re saying these women are Karens because they coldly treated men like ATMs early on, and now years later the men are returning the favor? OK, I’ll give you that. But what if these Karens were the ones who were young and hot early on? Valued only for the sex and bragging rights they provided to the man. Now that they are older and cooling down, men are looking to trade in for a younger model — and have the money to afford it. That would turn a women into a Karen quickly, hoping to hold on to her man. Ironically, becoming a Karen is a surefire path to driving the man away even faster.

            (I assume we’re talking about married Karens. Single-women Karens are another kettle of fish.)

          5. That would turn a women into a Karen quickly, hoping to hold on to her man. Ironically, becoming a Karen is a surefire path to driving the man away even faster.

            My thoughts exactly.

            (I assume we’re talking about married Karens. Single-women Karens are another kettle of fish.)

            I bet they weren’t always single. Do women ever get that bitter without the help of a man? There aren’t many in that category to study.

    3. Funny that the Karens from several weeks ago were not racial at all. They acted entitled toward everybody regardless of color. Why the shift?

      1. “Karen” is a label stoopid and inarticulate people apply to any female behavior they dislike.

        Completely different group of women…same stoopid label.

  10. For the properties in SoCal I’ve been watching on Redfin, Movoto, etc., I’ve seen an increasing surge of “Back on Markets” after being in “Pending” status. Some of these properties were pending for up to 60 days, then re-listed. The estimates below aren’t for all properties I’ve looked at, just the ones I favorited and received status updates on afterwards:

    BACK ON MARKET (after Pending Sale)
    PRE-COVID: avg. 1/10 properties
    APRIL 2020: avg. 3/10 properties
    MAY 2020: avg. 5/10 properties (jumbos and HELOCS shitcanned month prior)
    JULY 2020: avg. 6/10 properties + price reductions

    This week in particular the price reductions have spiked. Here’s a shack that was originally listed for $499K, was dropped $9K, then $15K, then $5K, and just this week was dropped an additional $70K (14.9%), for a total price reduction of $100K — 20% off original list from April:

    https://www.movoto.com/inglewood-ca/10816-s-burl-ave-inglewood-ca-90304-202_dw15102799/for-sale/?utm_source=ios-app&utm_medium=com.apple.UIKit.activity.CopyToPasteboard&utm_campaign=tofriend?utm_source=ios-app&utm_medium=com.apple.UIKit.activity.CopyToPasteboard&utm_campaign=tofriend?utm_source=ios-app&utm_medium=com.apple.UIKit.activity.CopyToPasteboard&utm_campaign=tofriend

  11. “‘The investment strategy of most condo investors has, for the most part, not been about cash flow, it’s mainly been about speculative future price growth,’ said Carl Gomez, an independent real estate economist.

    Die, speculator scum.

  12. Many investors will have no choice but to sell their properties and cut their losses before they dig a deeper hole of debt.”

    I love seeing these greedy landlords and flopped speculators over a barrel. The sooner speculative excesses get purged from the financial system, the better.

  13. Far too many times I have seen houses take more than a 12-18 months to sell because the listing agent has over promised and under delivered. If the price is right- it will always sell!,’ he said.

    Take note, greedhead sellers and delusional realtors.

  14. “Street shop landlords in core business areas are slashing asking rents amid unprecedented social distancing measures, with the asking rent for a street shop in Causeway Bay plunging by about 80 percent from its peak in 2016.”

    Is that a lot?

  15. Given how much debt Australian households have, that would become a serious problem if we had several years of falling prices.’”

    Sounds like a problem for profligate governments and debt donkeys, not for the prudent and responsible.

  17. Why is it that corrupt, incompetent leftist administrations from Venezuela to Puerto Rico let their power grids become decrepit and unable to supply demand? Is it because collectivists, aka Democrats, are too busy looting the productive economy and diverting money into patronage and graft rackets to do proper maintenance and capital investments in power generation infrastructure?

    https://www.msn.com/en-us/news/us/puerto-ricos-power-grid-fails-hours-ahead-of-potential-arrival-of-tropical-storm/ar-BB17l0tN

    1. Why is it that corrupt, incompetent leftist administrations from Venezuela to Puerto Rico let their power grids become decrepit and unable to supply demand?

      Assuming they are still democracies does that mean their voters never vote based on that? Or once you’re in, your money and power no longer come from staying in office so the voters don’t matter?

    2. The heat is definitely influencing my thinking about where the ultimately retire 11-13 years from now. Last winter in the DC area was like a typical winter in Atlanta.

  20. Will today’s epically horrible GDP number be enough to shock Mr Market back into re$ponding to economic fundamental$?

    1. Coronavirus
      Economy in reverse: Initial jobless claims rise for second week, GDP falls by record 33 percent
      It’s the biggest economic contraction on record, dating to 1947.
      Image: Unemployment
      People who lost their jobs wait in line to file for unemployment at an Arkansas Workforce Center in Fayetteville in April.Nick Oxford / Reuters file
      July 30, 2020, 5:34 AM PDT / Updated July 30, 2020, 5:47 AM PDT
      By Lucy Bayly

      More than 1.43 million people filed for unemployment benefits for the first time last week, according to weekly data released Thursday by the Department of Labor. It’s the second-straight week that the number has risen, and the 19th week in a row that the U.S. has seen more than a million claims. For context, the prior peak was in 1982, when the weekly figure hit 695,000.

      The extent of the economic damage wrought by the coronavirus pandemic was further revealed on Thursday, with gross domestic product for the second quarter sinking by a record 32.9 percent annualized, according to data from the Bureau of Economic Analysis.
      …

    2. The “33 percent decline” number being cited in the MSM only makes sense if the word “annualized” is included. Don’t know if the oversight reflects mathematical ignorance or deliberate intent to sensationalize.

      2. 1-(1-0.329)^0.25 = 9.5%

        In English, a 9.5% one-quarter GDP decline occurs at a 32.9% annualized rate.

        More skeer the kiddies?

        1. a 9.5% one-quarter GDP decline

          That number is hidden in page six of the attachments to the BEA report.

          It isn’t logical to “annualize” the second quarter number when the first quarter is already known to be quite different.

    4. Got gubmint bonds?

      The Financial Times
      Coronavirus business update 30 days complimentary
      Markets Briefing Equities
      Stocks drop and government bonds rally on bleak GDP data
      Gloomy reports from US and Germany lay bare damage suffered due to coronavirus
      Naomi Rovnick and Philip Georgiadis in London and Hudson Lockett in Hong Kong 14 minutes ago

      Global stock markets dropped on Thursday after figures laid bare the enormous damage suffered by the US and German economies as coronavirus brought activity to a standstill in spring.

      The US recorded its largest contraction in postwar history with GDP shrinking at an annualised rate of 32.9 per cent in the second quarter, or 9.5 per cent quarter on quarter.

      The fall was slightly narrower than expected but US stocks slid at the open, and the benchmark S&P 500 was down 1.5 per cent in morning trading, with Nasdaq giving up 1 per cent.
      …
      European markets had tumbled earlier in the session after data showed Germany’s economy contracted even more than expected at the peak of the coronavirus outbreak in Europe.

      Germany’s Dax was the worst performer of the major indices, dropping 3.1 per cent to a five-week low. The nation’s economy shrank 10.1 per cent in the second quarter from the first as business investment, exports and consumer spending collapsed.

      Global bond markets rallied on Thursday as the stock drop sent investors looking for safe assets.

      Gains for highly rated government debt pulled UK 10-year borrowing costs to an all-time low of 0.07 per cent. The US 10-year yield fell to 0.54 per cent, the lowest since the record trough reached in March’s market chaos.
      …

    1. What kind of sanitation procedure is needed for a hotel to convince the average customer that it is safe to spend the night in a shared dormitory?

      1. I suppose one could ask a similar question about flying metal tubes with shared seating, air space, and cramped lavatories.

        Footnote: Three of my young adult kids have flown somewhere over the past month; so far, no COVID-19 cases are in evidence.

        1. Clearly your children have been active participants in BLM/Antifa protests, which confers instant immunity from COVID. The MSM and CNN-anointed public health expert St. Greta assure me of this.

          1. Avoiding BLM protest zones is fortunately a piece of Dad’s advice my kidz have followed.

        2. Apparently the sort of people coming to Vegas right now are satisfied with whatever is in place.

          “Passenger traffic at the Las Vegas airport climbed to over 1 million in June but was still 76 percent off the same month last year, according to numbers released today.

          In June 2019, before the coronavirus pandemic, a total of 4,444,263 travelers passed through McCarran International Airport.

          Still, the 1,041,823 passengers last month dwarfed the count of 392,336 in May, just as Las Vegas was emerging from the coronavirus shutdown, airport officials reported.”

          https://lasvegassun.com/news/2020/jul/28/las-vegas-airport-passenger-traffic-tops-1-million/

      2. What kind of sanitation procedure is needed A bulldozer and a complete rebuild would work for me.

      1. Farmland bubble continues to collapse:

        ‘As farm-level prices for chickpeas have declined significantly the past two years, so have U.S. and Idaho chickpea acres. More than half of all chickpeas, also known as garbanzo beans, produced in the United States are grown in Idaho and Washington. U.S. chickpea acres began soaring starting in 2016, when they hit 325,000, up from 207,000 the previous year. They jumped to a record 603,000 acres in 2017 and then reached 850,000 in 2018. That’s when farm-level prices were near 40 cents a pound, but as prices began falling, so did acreage.’

        ‘Dirk Hammond, administrative services manager for George F. Brocke and Sons, which processes pulse crops in Kendrick, Idaho, said the declining prices and acres are a result of oversupply. “There is a lot of supply and not enough demand,” he said.’

        ‘Craig Fleener, a farmer in Moscow, Idaho, didn’t plant any chickpeas this year, partly because of a tough harvest year in 2019 due to late rains, but mostly because of the price drop. “That’s the main thing,” he said. “The price drop was very dramatic. That’s just not enough money.”

        https://www.postregister.com/farmandranch/crops/miscellaneous/idaho-u-s-chickpea-acres-decline-significantly/article_f348a19c-7821-5e82-99cd-3612ab2571b5.html

          1. Good reminders here that Quantitative Easing in the absence of fundamental demand is ultimately deflationary…

          2. Police: Short-term renters get drunk, shoot at neighboring home in Herriman area

            ‘Hansen said the home is a short-term rental, and he believes the three men are in Salt Lake County on business. Police believe there was alcohol involved in this incident, “hence the poor decision-making,” Hansen said. He noted that it is indeed illegal to drink alcohol while carrying a firearm, adding that it is also “a really bad idea.”

            https://kjzz.com/news/police-short-term-renters-get-drunk-shoot-at-neighboring-home-in-herriman

          1. Does it have water rights? That makes a big difference out here.

            The local city paid about $5M for the old Hewlett Packard campus, because it had huge water rights. The city kept the water rights and practically gave the campus away to some business park developer. The campus to this day is a ghost town, with just a handful of small tenants,

          2. Does it have water rights?

            Haha, not even close. If it had water rights the price would be way higher. We’re talking desert scrub with no utilities, water – anything. Oh, and there are “impact fees” which are like $15,000. The land should be free.

      2. The AutoNation CEO had said on business news channels that he was accelerating used car business. Also AutoNews (behind a payroll is talking about the sellers market for used.

        Does this mean that New Auto sales are going to suffer?

        ————
        The company had previously laid off thousands of staff, as car sales have been hurt due to the coronavirus pandemic. CEO Mike Jackson said that it may not rehire those workers because the shift to e-commerce and online purchasing may be here to stay, according to Bloomberg. AutoNation said that 45% of customers purchased their vehicles online in the second quarter.

        Separately, J.D. Power said that the used vehicle market continued to bounce back in June, with wholesale prices increasing last month. The market researcher expects prices to reach “pre-virus levels” by the end of the year. Used vehicles represented nearly 30% of AutoNation’s revenue last quarter.

        1. From Barons
          Used car pricing hit a new high – did they move up from clunkers to recent Toyotas

          ———

          The car market is huge, employing millions and generating trillions of dollars in manufacturing, retail, service, and financing. Preowned vehicles are an important part of the value chain. Used-car pricing can affect, for instance, what new cars—and car parts—can sell for, as well as how long used cars will stay on the road. Lower used-car prices, of course, also reduce trade-in values for shoppers seeking a new ride.

          Roughly 40 million used cars were sold in the U.S. in 2019. About 17 million new cars were sold.

          Used-car pricing hit a multiyear trough in April, falling about 9% year over year. New-car sales plummeted as well, falling almost 50% year over year in the same month. But used-car pricing hit a new high in June and another in July.

          1. From Barons
            Used car pricing hit a new high – did they move up from clunkers to recent Toyotas

            Yep. Welcome to Bizarro world, where you can have 50 million people lose their jobs and yet have new and used cars setting price records. This whole thing is a joke.

          2. A strange headline considering new vehicle prices are plunging and are now less costly than used vehicles.

          3. Welcome to Bizarro world, where you can have 50 million people lose their jobs and yet have new and used cars setting price records.

            From what I’ve seen, most brands are heavily discounting new cars. The main exceptions being Toyota and Honda.

            I recall during the previous crash that new car sales plummeted and used car prices rose. Some explanations were given: cash for clunkers, fewer trade ins, people couldn’t afford a new car which increased demand for used, etc.

  22. The disconnect between the oligarch-looted, COVID-ravaged real economy and the Fed’s rigged Ponzi markets are becoming more surreal by the day. Venezuela and Zimbabwe also saw their stock markets hit new highs as their corrupt central bankers pushed the money printing into hyperdrive. Even our fake Soviet-style official statistics can no longer conceal the extent of our accelerating economic collapse.

    https://www.marketwatch.com/story/economy-suffers-titanic-329-plunge-in-2nd-quarter-gdp-shows-and-points-to-drawn-out-recovery-2020-07-30?mod=mw_latestnews

  23. US renters owe $21.5 billion in back rent – so far. With the Republicrat duopoly prioritizing bailouts for the Wall Street grifters, individual renters don’t have a hope in hell of getting any kind of meaningful financial assistance to alleviate their plight. Only a massive wipeout of speculators and a curbing of the Fed – the latter highly unlikely – will bring back affordable housing. The sooner the proles realize this and start voting accordingly, the better for a lasting economic recovery.

    https://www.reuters.com/article/us-usa-housing-evictions/u-s-renters-owe-21-5-billion-in-back-rent-republicans-offer-no-eviction-relief-idUSKCN24U394

    1. ndividual renters don’t have a hope in hell of getting any kind of meaningful financial assistance

      They got a $1200 check and $1000+ per week unemployment. Whose fault is it that they chose to not pay the rent and spent the money on cr@p they didn’t need.

      I wouldn’t be surprised if they have money saved from the unemployment windfall and are waiting for rent jubilee

  24. How is it possible that Case Shiller was up? I just dont get it. With Seattle up 6.8% – i am following stuff downtown – i would estimate that asking are dropping about 10%

    —————-

    he S&P CoreLogic Case-Shiller 20-city price index posted a 3.7% year-over-year gain in May, down from 3.9% the previous month. On a monthly basis, the index increased 0.4% between April and May.

    What happened: The national index released as part of the report noted a 4.5% increase in national home prices over the past year.

    Phoenix continued to lead the country with a 9% annual price gain in May, followed once again by Seattle with a 6.8% increase. Tampa, Fla., came in third, with a 6% uptick.

    But a look at the individual cities in the 20-city index shows that home-price growth could be slowing. Overall, the pace of price growth only increased in three of the 19 cities Case-Shiller analyzed — the 20-city list again didn’t include Detroit this month because transaction records for Wayne County, Mich., were unavailable, the report noted.

    1. Case-Shiller uses stale data. It’s representative of what was happening in past months.

      Today’s price declines will eventually be reflected in some future data release, after it’s too late to help today’s buyer avoid catching themself a falling knife.

  25. Germany – only 2 years to recover. With all the troubles in the EU economies – i cannot see this

    —
    Germany is facing another crisis as the country has lost almost 10-years of economic output wiped out in the second quarter amid the pandemic.

    Germany’s economy shrunk by 10.1% in the second quarter, and the countries statistics office said the GDP index had adjusted for inflation, but the calendar effects crashed to 94.26 in the period of April to June.

    The statistics office said, “Most recently, the chain index was lower at 93.19 in the fourth quarter of 2010, so that’s roughly 10 years ago.”

    This will cause Chancellor Angela Merkel more worry over her economy as exports collapsed. Durin the financial crisis in 2009, Germany’s economy only shrunk by less than 5%.

    Despite this construction companies are not expecting collapse due to the coronavirus recovery package. The German Institute for Economic Research (DIW) warned that recovery could take up to two years to recover the loses.

    DIW economic chief Claus Michelsen said: “The signs are clearly pointing to recovery.

    “But despite strong growth, it will probably take two years before the historic slump in spring is made up for.”

    1. put pressure

      How? There’s no way to make any office cheaper than someone’s guest bedroom. Lower taxes to make up for the office cost?

      1. I don’t know what pressure they can bring…. But look how quickly Barclays caved.

        Without banking, investment houses, how can NYC support its incredible govt costs

  27. The market is unbelievably crazy in the Sacramento area. Houses are being snapped up as soon as they appear on the market, maybe even before. Buyers are in a total panic 🙁

    Perhaps it is people fleeing from crowded SF or other parts of the Bay Area? I don’t know. But it is an INSANE market, especially considering that the entire US economy has collapsed, with 30+ million unemployed, and likely many more millions to follow in the coming months.

    1. The market is unbelievably crazy in the Sacramento area.

      Not sure if you’re ben or somebody else, but yes it’s a little crazy right now in Folsom. But it’s not so shocking when you think that there haven’t been any tech layoffs here as far as I know, and suddenly everyone works from home and doesn’t want to go to the gym. So home is more important than before, AND lots of people with money can suddenly live this far away from the bay area and still drive into work once in a while if necessary and buy a house here for 1/3 the price of there. I think it’s a temporary situation, but temporary could still take a while to work itself out. It could all change in a heartbeat if Intel starts laying off or talking about closing some locations.

      1. I am talking about the Roseville-Rocklin area. It is intensely crazy there. If you had told me that the GDP would fall 33% and we STILL have bidding wars over houses, I would have called you crazy. But here we are! Looks like the Fed has destroyed price discovery in the housing market as well.

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