skip to Main Content
thehousingbubble@gmail.com

Either Way, I’m Losing, But Do I Want An Ongoing Loss, Or A One-Time Loss?

A report from the Globe and Mail in Canada. “When he was offered a job in British Columbia, Todd Kemper figured a potential loss on the sale of his house might be the price he had to pay to leave the Alberta market. ‘I looked into my crystal ball and thought Alberta’s a one-trick pony – it always has been – and I do not see it performing well in the near- to mid-term,’ Mr. Kemper said. ‘I thought if you can get out of this market now, do it. … It’s inevitable that intelligent people can read the tea leaves and decide to get out.'”

“Thanks to more than a decade of volatility in Edmonton’s real-estate market, which started in 2009 with a housing-price correction and has continued with long periods of oil price fluctuations, Mr. Kemper’s house had not gained value over his seven years of ownership. He didn’t see that changing. He left Alberta in January, after he sold his Edmonton bungalow for the same price he bought it for in 2013. He considers himself lucky.”

“Position cuts led Carol Fenton, a medical health officer, to look elsewhere for work. In late March, she accepted a job in B.C. Dr. Fenton said she first attempted to rent her Calgary duplex, purchased in 2018, but could not find tenants at a rent that covered her costs. Dr. Fenton then listed the property for $5,000 less than she bought it for. ‘We had, like, nothing – like, no action,’ she said.”

“Dr. Fenton has now dropped the price by $30,000 but has yet to sell. ‘I’ve had two showings.’ She’s currently carrying both places and said she can drop the price further or rent for less than she pays on the mortgage. ‘Either way, I’m losing. But do I want an ongoing loss, or a one-time loss?'”

“Joyce Byrne, a magazine professional who recently moved back to Toronto. She arrived in Alberta in 2005, bought her one-bedroom Edmonton condo in 2007, near the height of the 2006-07 housing bubble. She has rented out the property since 2014 when she took a job in Calgary. Ms. Byrne bought her condominium for $250,000. Thirteen years later, units in her building are currently listed for $170,000, and not selling, she said. Compounding things, Ms. Byrne is currently between jobs.”

“Ms. Byrne said she struggled with the decision but she has now relocated to Toronto. ‘I spent quite a bit of time thinking about whether I could stay in Alberta,’ Ms. Byrne said. ‘The rent [I collect] is lower than I pay for it every month. My tenant is like everybody else – ‘Am I going to have a job?’ I just decided, I have to do something, and I can’t be tied there any longer because of that condo. I have my fingers crossed I can continue to carry it.'”

The Times of Oman. “As the COVID-19 pandemic and global fall in oil prices start to impact the economy, Oman could soon feel the adverse impact of more than 160,000 expat workers leaving the country this year. A manager at a real-estate firm in Oman said his company was feeling the pinch because so many people had been unable to pay their rents before leaving.”

“‘Many of our customers have asked for a reduction in rent right now, but we can only reduce it a little bit,’ he said. ‘We have not been able to fill a lot of the apartments that are now vacant, so our income has greatly reduced. This means we cannot pay our staff on time and have to reduce their salaries. It also means that we might need to cut costs on the maintenance of our current buildings.'”

The South China Morning Post. “The Hong Kong residential market has lost one of its most steady sources of tenants – mainland Chinese students – this summer, after most of the city’s universities moved to online teaching for the coming semester amid the coronavirus pandemic. Rents in some areas close to universities have dropped by about a third year on year. In Sha Tin, which usually caters to students of Chinese University, Baptist University and City University, mainland Chinese renters accounted for 20 per cent to 30 per cent of deals, said Derek Chan, head of research at Ricacorp Properties.”

“‘In previous years, mainland students started looking for flats as early as May or June, because demand would be really high. But they are not coming this year,’ he said.”

“Guo Sitian, a student from Chongqing in southwest China, who was admitted to a master’s programme at the University of Hong Kong, paid two months’ rent as deposit for a room in a flat in Sai Ying Pun in July. But when she learned that the university was switching to remote learning, Guo decided to stay at home and found another HKU student to take over her lease.”

“‘I know some friends [from the mainland] who had also rented flats and then decided not to come to Hong Kong. But some of them can’t find other tenants to sublet to,’ she said.”

The Sydney Morning Herald in Australia. “The Sydney-based, yacht-loving son of a wealthy Chinese businessman has been accused of having more than $200 million flow through his Australian property development company without any records to show for it. Richard Minfeng Gu headed up the AXF Group and its property, mining and mineral water empire until this year when Malcolm Howell was appointed by courts to liquidate the business which collapsed under debts of more than $200 million.”

“‘Nothing adds up,’ said Mr Howell. ‘It’s a real mystery to us as to how he has used $200 million of creditors’ funds.'”

“It’s been a bad year for the controversial property developer, 37, with his yacht ‘Fat Fish’ impounded, his fleet of luxury cars repossessed, fending off bankruptcy and having Mr Howell appointed by the court to liquidate his empire.”

“Mr Gu found himself the centre of embarrassing publicity this year when, for the third time, he failed to close on a high-end Sydney real estate deal. The first was in 2016 when he forfeited his million-dollar deposit when he failed to complete the $19.8 million purchase of actress Cate Blanchett’s house in Hunters Hill. That was followed by AXF Group’s defaulting on the deal to buy the Potts Point apartment of well-known architect Deece Giles in December 2016 for $3.9 million. Mr Gu said at the time the property was too small.”

“Mr Gu reneged on his agreement to pay $19 million for a Point Piper mansion this year. He said it was a ‘misunderstanding’ as the deposit was really two years’ rent and he had decided he didn’t like the house.”

“However, the repossessors have not been able to locate a 2009 Range Rover. Mr Howell told creditors Mr Gu also had five Mercedes he had failed to include in his list of assets. Mr Gu said those cars were owned by him personally and not by the company. Mr Gu was at the wheel of one of his Mercedes when he was caught drink-driving in Sydney’s CBD in 2015 not long after he had moved from Melbourne to Sydney.”

“According to reports at the time, on the night he was charged he launched into a tirade against police, saying: ‘I will kill you. I drank drove, who gives a f–k … charge me, who cares? I earn millions of dollars. I don’t care.'”

This Post Has 74 Comments
  1. ‘The rent [I collect] is lower than I pay for it every month. My tenant is like everybody else – ‘Am I going to have a job?’ I just decided, I have to do something, and I can’t be tied there any longer because of that condo. I have my fingers crossed I can continue to carry it’

    You hang in there Joyce, don’t give it away.

      1. Semper fidelis (Latin pronunciation: [ˈsɛmpɛr fɪˈdeːlɪs]) is a Latin phrase that means “always faithful” or “always loyal”. It is the motto of the United States Marine Corps, usually shortened to Semper Fi. However, as of late 2020 the USMC was considering changing the venerated motto to “Realtors Mentior” which means, “Realtors Lie.”

  2. ‘Mr. Kemper’s house had not gained value over his seven years of ownership’

    I’m pretty sure the UHS have told us repeatedly Edmonton red-hot. Could they be a lion all this time?

  3. “‘Nothing adds up,’ said Mr Howell. ‘It’s a real mystery to us as to how he has used $200 million of creditors’ funds.’”

    Bahahahahah ..a real mystery, huh. Well the next paragraph of the article just might offer up a clue or two. Here …

    “It’s been a bad year for the controversial property developer, 37, with his”

    1. “… yacht ‘Fat Fish’ impounded…

    2.”… his fleet of luxury cars repossessed.”

    It is always interesting to me to see investors throw money at money managers who openly and eagarly burn through money as if there was an endless supply of the stuff.

    1. Bahahahahahahaha … I’ve heard tales of casino gamblers in Vegas openly voicing wonder about just who it is that pays the light bills and where could they possibly get all the money.

    1. “In barter transactions, the parasites get cut out of the deal altogether.”

      Suppose one organized a ‘firm’ for purposes of establishing barter relations. (One might even call it a “household”.)

      Is there a way to structure economic production units to cut out tax authorities?

  4. “Position cuts led Carol Fenton, a medical health officer, to look elsewhere for work. In late March, she accepted a job in B.C. Dr. Fenton said she first attempted to rent her Calgary duplex, purchased in 2018, but could not find tenants at a rent that covered her costs.

    The first rental I looked at when I moved to Colorado Springs was owned by a lady who was moving overseas, and told me she had to rent it for $2,000 a month “to cover my mortgage.” I told her I was under no obligation to cover her mortgage, and would look elsewhere.

  5. Compounding things, Ms. Byrne is currently between jobs.”

    You mean, she’s unemployed? Oh dear. That could make bringing tens of thousands of dollars to the table to get out from under her underwater alligator might be a problem.

  6. ‘Either way, I’m losing. But do I want an ongoing loss, or a one-time loss?’”

    The loss only gets bigger from here, Dr. Fenton. After 11 years of extend and pretend, the Keynesian fraudsters at the central bank are losing their ability to print away the financial reckoning day.

  7. I have my fingers crossed I can continue to carry it.’

    Sounds like an emotion-based strategy, Ms. Byrne. Let us know how that works out for you.

  8. This means we cannot pay our staff on time and have to reduce their salaries. It also means that we might need to cut costs on the maintenance of our current buildings.’”

    The cascading defaults can’t be far off now.

  9. “‘Nothing adds up,’ said Mr Howell. ‘It’s a real mystery to us as to how he has used $200 million of creditors’ funds.’”

    China’s regulators are as corrupt and criminally negligent as ours.

  10. “According to reports at the time, on the night he was charged he launched into a tirade against police, saying: ‘I will kill you. I drank drove, who gives a f–k … charge me, who cares? I earn millions of dollars. I don’t care.’”

    He could’ve just said, “It’s a big club, officers, and you ain’t in it.”

  11. The last HBB thread developed an unfortunate problem. Here’s a suggestion: Go back to Reddit and seethe. Seethe there, don’t bring it here. There is no “downvote” button here you can press when you get triggered. GO BACK TO REDDIT.

    1. I actually like downvote buttons. Here’s why: On Marketwatch (and Yahoo before they removed comments), I’ve noticed a trend where all of the “orange man bad” types were getting 5x-10x as many downvotes as upvotes, signaling that the narrative isn’t working and they’re in the minority.

      1. I’ve also noticed that the orange-man-good comments were also getting downvoted. TheHill is going the same way. Everyone is hating. You can’t really trust any of it. I take the elimination of comment sections as a good sign that there are still thinking people in the country.

  12. Ready for higher mortgage rates?

    The Financial Times
    Coronavirus business update 30 days complimentary
    Yield curve
    Yield curve steepens after Fed policy shift
    Sell-off in long-dated Treasuries follows pledge to let US inflation run above 2%
    Colby Smith in New York
    4 hours ago
    Line chart of Difference between five-year and 30-year Treasury yields, basis points showing Yield curve steepens as 30-year Treasuries sell off

    The US yield curve steepened sharply on Thursday following the Federal Reserve’s announcement that it would allow inflation to run above its longstanding target in order to make up for periods of undershooting.

    The difference between five-year and 30-year Treasury yields widened to the largest gap in three months — 119 basis points — thanks to a sizeable sell-off in longer-dated Treasuries.

    The yield on 30-year Treasuries, which rises as prices fall, surged over 0.08 percentage points at one point to 1.5 per cent, the highest level since June. The yield on the benchmark 10-year note rose 0.06 percentage points to 0.75 per cent, while five-year Treasury yields climbed by a smaller magnitude of 0.03 percentage points to hover around 0.3 per cent.

    Investors attributed the back-up in longer-dated Treasury yields to the possibility of higher inflation, which erodes the real return that bondholders earn on their fixed interest payments for government debt.

    In order to achieve higher inflation than it has managed in recent years, the Fed is likely to hold short-term rates very low for a long time. Two-year Treasuries barely budged, their yield steady at 0.15 per cent.

    1. In order to achieve higher inflation than it has managed in recent years, the Fed is likely to hold short-term rates very low for a long time. Two-year Treasuries barely budged, their yield steady at 0.15 per cent.

      “A long time.” You mean longer than the 20 years of artificially low rates we’ve already had? I guess this will be going on long after I’m dead.

      1. By the way, I am going to laugh heartily when these cucks end up desperately trying to raise rates to battle an inflation inferno. I’m sure we’ll hear “nobody coulda seen it comin’.”

      1. He’s trying to jawbone the stonks even higher. The Robinhooders will fall for it hook, line and sinker.

        1. Are you missing out on the opportunity of a lifetime to make a fortune buying call options on Wall Street share prices!?

      2. Wait, what did he say? I know he gave some remarks in earlier in the day, but did he say something else? I’m not keeping up.

        1. “Inflation averaging”…but over what time horizon?

          Longer than a quarter or a year, I assume, as we already have inflation measures over those time horizons.

  13. Santa Clara, CA Housing Prices Crater 10% YOY As One Bay Area Broker Conceded, “Sellers Are Willing To Take A Loss Just To Escape From Bay Area”

    https://www.zillow.com/santa-clara-ca-95051/home-values/

    *Select price from dropdown menu on first chart

    As a noted economist stated, “A house is a rapidly depreciating asset that empties your wallet every day it owns you.”

    1. A month or so ago, when I posted that the current “social unrest” by radical leftist seemed to be lifted right out of the playbook of Russia’s 1917 Bolshevik Revolution, a poster I’ve never seen before or since accused me of “bald-faced anti-semitism.” Never mind that I was citing historical truths from Alexander Solzhenitsyn’s “200 Years Together,” which described the masterminds and bankrollers behind the “Russian” revolution and who the most sadistic torturers were in the Bolshevik Chekist secret police and the Gulag. Now two of three violent radical leftists who tried to kill the 17-year-old kid standing guard against BLM-Antifa looters in Kenosha, Wi, turn out to be members of The Tribe, which is less than 2% of the U.S. population. To that poster, wherever you are: care to explain?

      The prosecution rests.

      1. >barnaby33
        >May 14, 2020 at 8:23 am

        >Wow Boo Randy, such bald faced anti-semitism. In a
        >lesser poster that might be acceptable, but an avatar
        >of your stature? That’s just beneath you.

        Indeed, I remember.

      1. In the absence of a legally authorized peace officer force, people like these will naturally rise up and take control.

        1. In the absence of a legally authorized peace officer force, people like these will naturally rise up and attempt to take control.

          FTFY. Just wait until there is no penalty for taking them out. For now their opponents are still trying to live in a rule of law world and are waiting for the law to assert itself.

    2. “A GoFundMe page set up for Kyle Rittenhouse to cover his legal expenses has meanwhile been deleted by the platform.”

      WTF?

      1. Lin Wood, the attorney who represented Richard Jewell when the FBI and MSM tried to railroad him for the Atlanta Olympic bombing, will be leading the legal team representing Kyle Rittenhouse. He has the only AUTHORIZED page collecting money for Rittenhouse’s defense.

        https://twitter.com/LLinWood?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1299044828421017601%7Ctwgr%5E&ref_url=https%3A%2F%2Fwww.zerohedge.com%2Fgeopolitical%2Fkenosha-shooter-hit-6-charges-including-first-degree-murder

        1. Lin Wood, the attorney who represented

          He also represented Nicholas Sandmann (aka the MAGA hat kid with the “punchable” face).

  14. Edmonton has one of the most volatile real estate markets in North American. The price of the little postwar house I used to own in SE Edmonton has been up and down like a roller coaster. We bought it in 1989 for 61K from a guy who had paid 10K more ten years earlier. We sold it for 95K in 1995. In 2005 and again in 2018 it was supposedly worth over 300K.

    1. It is government policy to stampede the Millennials into overpaying for housing, so richer older generations can make one last score and afford a few extra cruises.

      (Actually, perhaps they won’t be taking cruises).

  15. Who could have possibly guessed this would happen?

    “‘I’ve never had to think about my own safety in this way before’: Shaken by summer looting in affluent neighborhoods, some Chicagoans are moving away.”

    Chicagoans ponder moving away to escape downtown looting – Chicago Tribune
    https://www.chicagotribune.com/real-estate/ct-re-moving-looting-riots-protests-0826-20200826-ps432obfcbg3jhcinoyn4izbwq-story.html

    (snip)

    “’They want to feel safe,’ Murillo said. ‘They want to be able to come outside their homes and enjoy their neighborhood amenities, whether it’s running at the park, enjoying a nice little dinner, shopping. But with everything going on, there are a lot of residents who are not feeling safe right now.’”

    Imagine that.

  16. Salesforce To Cut 1000 Jobs

    “This is actually not a sign that anything is wrong with Salesforce. In fact, just the opposite, salesforce is thriving as a company,” said President of Joint Venture Silicon Valley Russell Hancock. “That company is going like gangbusters, the layoffs are simply because they’re restructuring.”

    ‘Though Airbnb and Uber have made big job cuts, the industry has also fared better than others have because employees can work remotely. “What happened after the pandemic is the difference is one between thriving and surviving, so we now actually have people whose jobs were utterly dependent on human interaction and those jobs are being eliminated,” Hancock added.’

    https://sanfrancisco.cbslocal.com/2020/08/26/salesforce-to-cut-1000-jobs-after-record-sales-stock-surge/

    1. “Shareholder value.” Gotta cut headcount to goose your share price. This is how billionaires become trillionaires, by forcing the overworked serfs to work harder for less money.

    2. I strongly suspect that SFDC’s period of meteoric growth is ending. This won’t be their last layoff.

      During the crazy growth days they told their employees that they were “family”. Probably just a way to keep the talent from jumping to another FAANG /SaaS firm for a few more bucks.

  17. Oh dear. Customers who bought gold and silver via the COMEX are now demanding delivery of the physical precious metals they paid for at an unprecedented pace. This will only accelerate now that the Fed is going to be doubling down on its currency debasement. But what happens when the COMEX runs out of physical gold and silver at the same time the Fed’s bullion bank market-riggers have massive short positions while prices and demand for physical metal are both surging?

    https://www.sprottmoney.com/blog/COMEX-Silver-in-September-craig-hemke-august-25-2020

  18. Man accused of stabbing yelled ‘Black lives matter,’ asked to be shot, police say

    By QUINCY SNOWDON,
    Staff Writer -August 26, 2020

    Witnesses told Aurora police that Sinclair used at least one knife to stab Conner in the side as Conner ran away from him near 16305 E. Alameda Place. Conner attempted to defend himself with a wooden stick during the melee, according to an arrest affidavit obtained by The Sentinel. One woman told authorities that she heard Sinclair tell Conner: “I’m going to kill you and your dog.”

    Conner was later treated for serious injuries at a local hospital, including a collapsed lung. Longshore confirmed that Conner survived the stabbing and remains alive as of Wednesday.

    Police have recommended charging Sinclair with one count of attempted first-degree murder and one bias-motivated crime charge. Colorado Bureau of Investigation records describe the latter charge as “felony ethnic intimidation.”

    https://sentinelcolorado.com/orecent-headlines/man-accused-of-stabbing-yelled-black-lives-matter-asked-to-be-shot-police-say/

    1. By the time the dust settles on the aircraft design problems and the lack of passenger issues for airlines, the industry will be unrecognizable.

      A lot of fancy schmancy airports are going to have trouble repaying their construction bonds too. The Dumver airport’s current remodeling and expansion projects are currently stalled.

      The remodel project in the terminal (the part with the huge tent roof), which was a billion dollar pork barrel project as nothing was wrong with the terminal, was halted mid project before the pandemic as there were problems with the contractor, who was fired. The terminal was left a wreck and allegedly they were looking for a new contractor to finish it. Then the truth came out: they were out of money and needed to sell more bonds. Then Covid happened.

      Concourse C, where Southwest has its gates, was being expanded for Southwest. That too came to a quick halt.

      All this megabuck spending was justified by DIA’s yoy passenger growth, though the bulk of passengers would switch airplanes and never set foot in the terminal, which was going to have absurd additions like a rock climbing wall.

      A true example of what happens when you have Yellen bucks looking for a place to die. Had they been required to pay historic bond rates the boondoogle would probably not have happened.

      1. Billion dollar renovation? They built the entire Dallas Cowboys football stadium for that, complete with retractable roof. It would have been cheaper just to rip DIA down and start again.

        1. Like I said, it was a boondoggle. Keep in mind that some of those new “world class” airports cost billions. The Beijing airport cost $25B.

          The US is often ridiculed for having old, “dumpy” airports. Like it matters. I was in Chicago Midway last December. It was a dump, but so what? The plane landed, I grabbed my bag and headed to the hotel.

    1. The recovery is going to be a slow one, says Keynesian fraudster at the Fed.

      “Slow one” and “V-shaped” have nothing in common. But we already got the “V-shaped” in the stock market. Uh-oh……

Comments are closed.

Back To Top