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Saddled With Securities That Are Akin To Museum Pieces That No One Is Interested In Buying

A report from the Sun Sentinel. “The housing market in South Florida has been booming for much of 2020 — sparked by low interest rates, high demand and low inventory — but real estate experts say they consider the trend a bubble that probably won’t last. ‘We’re in a huge bubble type thing right now,’ said Teri Arbogast of Keller Williams Partners Pembroke Pines. ‘I already put a house on the market, and I already got a full price offer and I haven’t even shown it yet. The last time I saw this happen was in 2004, 2005.'”

“Dawn Williams Bobo with Prag Realtors in Tamarac said she also sees buyers leveraging the low interest rates to make overpriced offers. ‘It’s enabled a lot of buyers to be in a position to purchase more than what they were typically approved for due to the adjustment in the interest rate,’ Williams Bobo said.”

“The condo market in Broward is favoring buyers for the moment, with sellers willing to make more concessions. The condo market has only increased slightly year over year — about 6 percent — which agents say is probably due to pandemic-related concerns over shared amenities such as elevators and gyms. ‘It’s pretty shocking to see houses fly off the shelve and condos just kind of stay stagnant,’ said Gianpierre Giusti of the Meza Group in Fort Lauderdale. ‘It’s a market where people will over pay for houses and under pay for condos.'”

From Bloomberg. “A $50 billion bond market once heralded as the future of housing finance has been stuck in limbo since the start of the coronavirus crisis, and now proposed regulatory changes have left investors worrying that they might be left holding the bag. At issue are so-called credit-risk-transfer securities offered by Fannie Mae and Freddie Mac. They are tied to Fannie and Freddie’s mortgage-backed securities and pay investors principal and interest as long as the borrowers don’t default.”

“Fannie hasn’t issued the bonds since the pandemic began, and the company’s executives are privately telling some investors that it has doubts about the market’s longterm viability. Freddie, meanwhile, has resumed issuing the bonds after a pause near the start of the pandemic. The lack of activity is starting to worry investors that they will be saddled with securities that are akin to museum pieces that no one is interested in buying.”

“The uncertainty stems from a proposal by Federal Housing Finance Agency Director Mark Calabria that many say would make it uneconomic in some cases for Fannie and Freddie to keep issuing the securities. Calabria’s plan would reduce the capital relief the companies get by issuing CRT by about half in some circumstances, according to Chris Helwig, a managing director at Amherst Pierpont Securities.”

“‘There are pretty substantial, existential risks to credit-risk transfers if Calabria goes through with these plans,’ said Structured Finance Association Chief Executive Officer Michael Bright.”

The Wall Street Journal. “A housing crisis centered on the vast apartment and home-rental markets is emerging in the U.S., threatening to send millions of renters into eviction and leave landlords short billions of dollars. A study of unemployed workers released last week by the Federal Reserve Bank of Philadelphia calculated outstanding rent debt would reach $7.2 billion before the close of 2020. Moody’s Analytics estimates that it could reach nearly $70 billion by year-end if there is no additional stimulus spending. The economic-research firm calculated that 12.8 million Americans would then owe an average of $5,400 from missed payments.”

“Even the larger figure would be far less than what was lost when the $1.3 trillion subprime-mortgage bubble burst, leading to a national wave of defaults and foreclosures. But the tens of millions of people potentially caught in a web of home-rental debt and eviction would far exceed the 3.8 million homeowners who were foreclosed on in 2007-2010.”

“While many landlords have let tenants continue to occupy units without paying all of their rent by establishing payment plans, there are doubts about how many tenants will ever be able to pay back all of what they owe. ‘Am I concerned that some tenants will leave me holding the bag? Yes,’ said Robert Nelson, a New York City landlord who owns middle-income apartment buildings. ‘But what choice do we have?'”

The Times Standard in California. “The housing market grew ever-more strong for sellers in September as the amount of single-family homes on the market in Humboldt County continued to fall and prices continued to rise. The shrinking housing market has allowed new homes coming onto the market to be listed for more than they typically would be worth according to Kessler Team realtor Scott Stephens, who said the inflation has made it tough to give purchasers an accurate picture of what they are buying.”

“‘The hardest thing for me to do right now as a Realtor is to answer the question of what a home is worth versus what its price is,’ Stephens said. ‘The rules aren’t the same anymore right now. With the high demand, higher-than-normal list prices and multiple offers being made on a home, it’s tough to advise clients on what to do — we don’t have a crystal ball.'”

From Palm Springs Life in California. “It seems unlikely, but the coronavirus has created ideal conditions for a dramatic spike in home sales in the Coachella Valley. Michael McDonald of Market Watch LLC, asserts the market conditions are organic, unlike the housing bubble of 2004–2006. ‘That market was driven by an overuse of variable-rate mortgages,’ he says. ‘When interest rates started going back, we had a reset problem, and the only solution at the time was foreclosure. Now, we have forbearance to keep people in their homes.'”

“‘It would not be unusual for a situation like this to generate 10 to 20 percent price gains over a year or year-and-a-half,’ McDonald says. ‘That, by the way, would help solve our inventory problem.'”

“The commercial real estate picture looks much different, as more retail and office spaces become available to a fewer number of businesses with diminishing needs. ‘Commercial real estate is going to be facing a demand challenge,’ says Joe Jack Wallace of CVEP, who takes a wider view of the issue. ‘The downside is, of course, lower commercial real estate values and the reduced tax base that comes with that. This will be a challenge to commercial property owners and the financial institutions that lend to them.'”

The Wall Street Journal. “More lenders are starting to deliver a stern new message to delinquent mall owners: time to pay up. In one recent example, lenders to the Saks Fifth Avenue store at Miami’s Dadeland Mall are foreclosing on the store owner after it defaulted on its mortgage payment in April, and hasn’t paid since, according to court documents filed at a court in Miami-Dade County. The $846 million mortgage is securitized with collateral from 10 Saks stores and 24 Lord & Taylor stores around the country, meaning the lender could seize these properties through the foreclosure process.”

“Some lenders are now worried about fast-falling retail property valuations, which around the country are plunging by as much as 75%. Lenders say they are compelled to conduct foreclosure sales to recoup what is owed them. ‘Every step of the way, everyone is fighting each other to see who will take the loss,’ Jim Costello, senior vice president of research firm Real Capital Analytics.”

“Some mall landlords have given up. The owners of Park Plaza Mall in Little Rock, Ark., ended loan modification talks in the spring and turned the keys over to their lender. The mall was valued at $33.1 million when the negotiations collapsed, down from $142 million in 2011, according to real-estate data firm Trepp LLC. A number of owners are looking at converting malls to residential buildings or warehouses, which are more in demand. But that could result in valuations on the redeveloped properties falling by 60% to 90% compared with pre-Covid-19 levels, according to research analysts at Barclays PLC.”

From Cleveland.com in Ohio. “A New York-based lender who gave a $171.5 million loan to the developers of Pinecrest in Orange now owns Northeast Ohio’s newest shopping and dining center, thanks to financial issues related to the coronavirus pandemic. The transfer happened ‘deed in lieu of foreclosure,’ Orange Mayor Kathy Mulcahy said. This signals that the developers gave up the property instead of facing a foreclosure lawsuit.”

“The shopping center, which opened in 2018, sits on 58 acres off Interstate 271 at Harvard Road. It features 400,000 square feet of high-end retail space, 160,000 square feet of office space, 87 apartment units, a park, a hotel and movie theater.”

From WTOP News on Washington DC. “Apartment rents in the D.C. area remain some of the highest in the nation — but they’re slowly coming down as landlords seek to lure tenants. Zillow reports that reflects what is happening in mostly large, expensive cities across the nation. Rent erosion has landlords responding to a drop in demand and rising vacancies by lowering rental rates.”

“Apartment vacancies are rising in big cities because remote work makes it possible for renters to relocate to less expensive places. But vacancies also are rising as a direct result of the high unemployment rate brought on by the COVID-19 pandemic, particularly among younger workers in the service industries. ‘Their employment, their hours and their earnings have all been hammered, which makes it a lot harder for them to afford their own places,’ said Jeff Tucker, economic research analyst at Zillow. ‘So a lot of those folks are moving home. We’ve seen more than two million young people move back in with their parents.'”

“In addition to adjusting rents, more landlords are now offering concessions to fill vacant apartments. ‘We saw the share of rental listings on our site that were offering concessions more than double this year,’ Tucker said. ‘What that really means in practical terms in most cases is one or two months of free rent. On a yearlong lease, that’s better than a 10% discount.'”

From Patch Virginia. “Do Overpriced Listings Sell? Check out how many Old Town Alexandria Sellers needed to drop the price and provide closing costs to sell! For this analysis, we looked at the homes that sold in the past 90 days and reviewed the price drop information. A vast majority of homes had no price drop, but there were some homes that required a single price adjustment before closing. Additionally, we analyzed the homes that received closing costs from the seller and the impact a single price drop has on homes receiving closing costs.”

“In the past 90 days, there was a total of 200 homes that sold in Old Town Alexandria, VA with no price drop and 40 homes that sold with a single price adjustment before selling. Home requiring no price drop sold for over $10K above their list price, had a median days of market of 5 days and 19% of these homes received closing costs. Homes requiring a single price drop had a median days of market of 33 days and 38% of these homes received closing costs. Furthermore, for the homes requiring a single price drop, these homes went under contract in about 4 days after the price drop.”

“This data reinforces the market statistics and market forces of supply and demand…homes that are priced right, sell faster and sell for more. Overpriced homes take longer to sell and ultimately sell for less and it is only after the price is adjusted down to closer to their market value do they go under contract in roughly the same number of days that a correctly priced home sells for.”

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This Post Has 118 Comments

      1. By a real estate family to a hedge fund guy.

        Not to “a hedge fund guy,” to a fraudster who should have gone to prison but bought his out of it by paying almost $2 Billion.

        1. Met fans are so sick of the Wilpons they are desperate for anyone to buy the team. I hope we don’t end up regretting it.

        2. From the Mets fan site:

          “There was a fantastic quote in one of the de Blasio articles, that describes the Wilpon tenure in a nutshell”

          “Several individuals from Sterling Equities — the Wilpon/Katz family business that owns the Mets — including Mets president Saul Katz donated more than $4,000 to de Blasio’s failed presidential campaign on Sept. 19, 2019.

          De Blasio ended his run on Sept. 20, 2019.”

        3. the amount of sleeze of some of these finance guys is just unbelievable. Read up on this – SAC Capital paid the fine for insider trading and not supervising traders, not Cohen. He got away without a fine – just a suspension. Meanwhile some working class guy that is going 15 miles/hr over the limit – is going to get dinged large in Conn.

          “It’s a huge victory for him not to get fined personally,” said Ross B. Intelisano, a securities lawyer at the law firm Rich, Intelisano & Katz. “In a ‘failure to supervise’ case, the S.E.C. is usually pretty aggressive in getting fines, so it seems like a hollow victory” for the S.E.C., he said.

  3. ‘That market was driven by an overuse of variable-rate mortgages,’ he says. ‘When interest rates started going back, we had a reset problem, and the only solution at the time was foreclosure. Now, we have forbearance to keep people in their homes’

    Jeebus, thank you for Palm Springs Life, signed HBB.

    ‘It would not be unusual for a situation like this to generate 10 to 20 percent price gains over a year or year-and-a-half’

    Here’s the thing about these price increases the REIC is throwing out: how could it possibly appraise? It’s either not true or you have massive appraisal fraud. Of course I have shown and could post many reports showing the credit to lower priced buyers has cratered, leaving higher priced shacks to sell, resulting in a higher median. And there is fraud too, as witnessed with the San Diego crimi…, I mean loan out fit recently.

  4. ‘Fannie hasn’t issued the bonds since the pandemic began, and the company’s executives are privately telling some investors that it has doubts about the market’s longterm viability. Freddie, meanwhile, has resumed issuing the bonds after a pause near the start of the pandemic. The lack of activity is starting to worry investors that they will be saddled with securities that are akin to museum pieces that no one is interested in buying’

    This is a credit event and the bubble has already popped.

  5. ‘We’ve seen more than two million young people move back in with their parents’

    Is that a lot?

    2. “…two million young people move back in with their parents…”

      And the inverse.

      All those years of party time have left many parents HELOC’d up to their eyeballs. So they sell [bad neighboorhood], salvage what they can, and move in with the kids [good neighboorhood] who are also up to their eyeballs in debt, but have 30+ years to pay it off. A family version of kick the can down the road.

      Whole situation is morphing into a Far Eastern model. Multi-generations living in same household are the norm, not the exception.

      1. Lots of poeple i knew growing up lived in a 2 family house we lived upstairs over our grandparents until i was 9 when my father had our 2 family house built . I know different scenario, but saving for the big down payment was the goal, Ive never seen any documents of them having a mortgage from a bank, but i did know they borrowed from family and paid it all off in i think 5 years.

        1. I think 2-family housing is mostly a New York thing.

          I grew up in downstate NY and 2 family houses were all over the place, especially in the outer boroughs and close-in suburbs.

          1. I was in a two-family, downstairs from my grandparents, until age 10, here in the NY area.

            People should be able to use their houses differently. Some years you have a family two two kids in a one family. Then you have a two family with your aging parents or a tenant in the other unit.

          2. I was downstairs from my grandmother (and Great Grandmother for a couple years) until I was eight in Buffalo.

      2. Whole situation is morphing into a Far Eastern model. Multi-generations living in same household are the norm, not the exception.

        That leaves a whole lot of empty houses. Looks like lower rents and house prices as far as the eye can see.

    3. I doubt many of those millions of young people living with Mom and Pop are starting families, pointing to an even bigger baby bust ahead that will hammer future real estate demand for decades to come.

      1. Most young couples I know, including those with decent incomes who live on their own and not in Mom’s basement, have no children and have no plans to have any. Many see having a family as a huge liability. Toss in the pandemic and I think we are headed towards a huge baby bust.

        1. Most young couples I know, including those with decent incomes who live on their own and not in Mom’s basement, have no children and have no plans to have any.

          That’s both my sons at this point. They saw what a drain they were on my wife and I and want no part of raising their own in what’s going to occur in the world going forward.

          1. in the world going forward

            I think they understand that things just keep getting worse and that any kids they have will be worse off than they are.

      2. A cursory glance around the world from combat zones, economic collapse and infrastructure turned to rubble there is no stopping a woman’s nesting urge.

        1. There will always be some who have kids. But collapsing birthrates, even in places like Mexico, show women can fight back the instinct.

          1. Agreed. However, I have been around a couple of ladies who regret not having children, and they just have to share their moodiness; think kryptonite.

  6. ‘Some lenders are now worried about fast-falling retail property valuations, which around the country are plunging by as much as 75%…‘Every step of the way, everyone is fighting each other to see who will take the loss’

    Sounds like price discovery.

    1. ‘A number of owners are looking at converting malls to residential buildings or warehouses, which are more in demand. But that could result in valuations on the redeveloped properties falling by 60% to 90% compared with pre-Covid-19 levels’

      90%? Step right up, we got yer a$$-poundings right here!

      1. Not an ass pounding for future buyers, lenders, tenants.

        That’s the thing to remember when talking about bailouts. The future is better off without them, as was discovered after 2008.

      2. yesterday the posting mentioned u-place (in U-Village) in seattle that was moving from Condos to Apartments. I had mentioned that U-Village is very trendy.

        The thing is – when its booming you might get top $ for condos in a former mall location (or nearby). When the economy is suffering and the condo market is trending down, it is impossible to get the top $. So the deal makers have to start looking at more regular priced apartments etc.

        1. BUT- who in their right minds want to live in the U -Village? Homeless starting fires in the alleys. Dining turns into hopscotch around crap and puke. You don’t go out in the evening for fear of being attacked. My friend, who is married to a surgeon,was scared by a con artist at Met Market. He held her “hostage” by having his accomplice stand by her car, with her friend inside, telling her to go inside to the ATM and get his money for repairs he made on her car. (none were made- he was only targeting her). She was afraid the man would hurt her friend. Who would WANT to live in the U-district/Village area?

          1. i am not disagreeing that it got worse in 2020. But U-Village is still upscale – apple and microsoft stores, fancy women’s clothing stores etc.

            Think about other areas that must be suffering much more

    2. “The mall was valued at $33.1 million when the negotiations collapsed, down from $142 million in 2011, according to real-estate data firm Trepp LLC. ”

      Is this a lot? 50% off is unrealistic.

  7. ‘Do Overpriced Listings Sell? Check out how many Old Town Alexandria Sellers needed to drop the price and provide closing costs to sell!’

    Eat yer crows taxpayer.

  10. Published today, an edict proclaimed from the Church of the Perpetual Lockdown:

    “Denver warned residents Monday they could face another stay-at-home order if the resurgent spread of COVID-19 is not soon brought under control, saying “what we are doing isn’t working.”

    https://www.thedenverchannel.com/news/coronavirus/denver-warns-new-stay-at-home-order-possible-if-covid-19-spread-not-curbed

    It’s not legally enforceable, but I predict they’ll do it anyway, along with curfews being announced this week and extended to the end of January, or longer…

    1. See also:

      “Denver Health has postponed all elective surgeries scheduled for Tuesday and is closely monitoring the use of hospital and ICU bed space. The city warned residents Monday that a new stay-at-home order was possible if the positivity rate and hospitalizations did not turn around.

      The Colorado Hospital Association’s Julie Lonborg said hospitals are worried that if the ICU beds continue to fill, there won’t be enough specially-trained staff to work in them.

      She said one reason more people suffering from other illnesses are now in the ICU than earlier, is that in March and April, officials began telling people to avoid hospitals to reduce the spread of the virus.

      Officials have admitted that the message may have gone too far as patients with severe illnesses like heart attacks and strokes avoided care.

      Lonborg said now hospitals are urging people to come back but some are coming back sicker because they’ve delayed treatment.”

      Translation: please die at home in your bed from disease that could have been treated, WE’RE ALL IN THIS TOGETHER.

      “As for deaths from COVID-19, the state remains far from the darkest days of the pandemic in April where there were more than 30 COVID deaths a day. But those numbers have been rising as well.

      While the state hasn’t recorded double-digit deaths since July, there have been 9 deaths recorded on two days in October, and the increasing hospitalizations could be an ominous sign that a growth in the number of deaths will follow.”

      https://www.cpr.org/2020/10/26/coronavirus-is-roaring-back-in-colorado-with-record-high-cases/

        1. “There are those who claim flu cases haven’t vanished at all, but are instead being recorded as Covid-19. Sceptics say Covid tests are unable to distinguish between coronavirus and flu, but this is simply untrue.”

          Charlie Munger: “Never underestimate the power of incentives.”

          Mr. Banker: “If incentives are awarded to increased reported cases of coronaviruses then increased cases of coronaviruses will be reported.”

          If a person dies who tested positive for coronavirus then coronavirus is what he died of.

          Mortorcycle accident? Coronavirus.

          Ninety years old and heart stops beating? Coronavirus.

          2. Wife: Did I get fat during quarantine?
            Husband: You weren’t skinny to begin with!
            Time of Death: 11:00pm
            Cause: Coronavirus

          4. These husbands aren’t exactly Fabios themselves.

            Of course, most of this could be solved with those 15-minute tests for infectiousness, but somebody in gov is holding it back.

          5. those 15-minute tests

            My impression is that they only work if a person has a humdinger of an infection. You won’t get as many false positives and you won’t pick up asymtomatic cases or mild infections.

            The much revered, misunderstood by the math challenged and misleading “CASES” number would collapse. The media would be hard pressed to keep people afraid and government would lose leverage for justifying lockdowns.

            Why would anyone in government hold that up?

          6. Define “humdinger.” Humdinger means enough virus to spread the disease to someone else. And yes, such a test WILL pick up asymptomatic cases. Symptoms and virus do not correlate. Anyone can have a humdinger amount of virus but still show no symptoms.

            Dr. Michael Mina at Harvard is pushing the paper tests. His ideal is for everyone to test themselves every morning and self-isolate if they show infectious. However, that would require billions of tests. However, it would be much more practical to use the tests at point of entry, e.g., at hospitals or dentist offices so at least people can get their health care.

        2. With so many sheltering in place from the pandemic, this seems likely to be a relatively mild flu season.

          1. But I thought we are all being careless and reckless, causing the foretold Covid surge. If Covid is surging, where is the flu surge?

          2. It’s only late October, early in flu season. We won’t see the flu surge for another month at least. And we’ll likely see a time and location correlation between flu cases and COVID cases, since they have similar transmission.

  11. As reported by Real Journalists, published today:

    “The party houses pose a risk to Airbnb’s reputation and business as the $18 billion company prepares to go public this year. In many neighborhoods, people have been turned off by the rentals’ noise and annoyances. Complaints about party houses across sites like Airbnb and Vrbo soared 250 percent between July and September compared to last year, according to Host Compliance, which provides local neighborhood hotlines across the United States and Canada.

    Worse, the party houses raise safety issues. Between March and October, at least 27 shootings were connected to Airbnb rentals in the United States and Canada, according to a tally of local news reports by Jessica Black, an activist fighting short-term rentals. The tally was verified by The New York Times.

    Over the years, Airbnb employees have pushed executives to do more to address the party houses, said six people who worked on safety issues at the company. But they said the start-up largely prioritized growth until a deadly shooting last Halloween at an Airbnb made national headlines. Five people died.”

    http://archive.is/WRMr8

    1. But they said the start-up

      How big does a company have to become to no longer be considered a start-up? They had $2.6B in revenue in 2017.

      I get it that it’s almost no longer possible to start a company in a garage the way HP or Apple were, but when do companies like AirBnB stopped being called “start-ups”

      1. Wikipedia …

        “A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable economic model.[1][2] While entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to become registered, startups refer to new businesses that intend to grow large beyond the solo founder.[3] Startups face high uncertainty[4] and have high rates of failure, but a minority of them do go on to be successful and influential.[5] Some startups become unicorns; that is privately held startup companies valued at over US$1 billion.”

        So, I gather from this a startup that is under one billion dollars graduates into becoming a unicorn the moment it goes over over billion dollars.

        Learn sumptin’ new every day.

        1. Some useless trivia …

          Wikipedia has this to say about Unicorns:

          “A unicorn is a term in business world to indicate a privately held startup company valued at over $1 billion.[1] The term was coined in 2013 by venture capitalist Aileen Lee, choosing the mythical animal to represent the statistical rarity of such successful ventures.[2][3][4][5] Decacorn is a word used for those companies over $10 billion,[6] while hectocorn is used for such a company valued over $100 billion.”

  13. Looking at a listing this morning that dropped 35k that has a 1br apt pool house in the back yard. Got me thinking…in CA many many people were building mother in law apartments in the backyard to use on Airbnb. Now that Airbnb isn’t so popular, perhaps times are going to get really good for putting multiple generations on the same property more cheaply.

    1. Lets do the math my car gets 44 mpg and I commute about 120 miles per week. If gas goes from $3 a gallon to $6 its going cost me an extra $8. Hardly the end of the world.

      1. “Lets do the math my car gets 44 mpg and I commute about 120 miles per week.”

        So you drive a clown car 12 miles to work every morning.

      2. Hardly the end of the world

        Because you can’t see past the end of your nose. When the cost of everything doubles, the world around you will be changed.

  16. How we love our debt donkeys?

    Trump’s $1.1BILLION debt mountain: How the President owes huge sums linked to his towers and golf courses with $900m due to be repaid within the next four years as Covid hammers the real estate market
    He has a $1.1 billion mountain of debt, according to the Financial Times, $900 million of it due in next 4 years
    The President has an estimated net worth of $2.5 billion but most of that is made up of real estate
    Trump’s TV checks were his major source of cash before he entered the White House in 2016
    Analysis shows how some of his debts are due to be paid within the next two years
    Trump owes as much as $340 million to Deutsche Bank – his biggest single banking backer
    Refusal to publish his tax returns means that his finances remain opaque

    1. As long as housing prices continue cratering, all is well.

      God Bless President Donald J. Trump and God Bless America!

        1. Heres another one, not by Trump but still killing it – weekend at Bidens:
          https://www.youtube.com/watch?v=Qu6PH9E5jiA&feature=youtu.be

          Thought one of the comments was interesting – in my country we couldnt make fun of our leader like this. The fascist left are the same everywhere throughout time – humorless and afraid of being mocked for the orwellian reality they create. Remember when the left had that giant blow up balloon of Trump at their rallies? Trump fans didnt hate, they wanted their own – it must have destroyed what few brain cells they have left because their NPC circuitry cant process humor.

  17. “‘Am I concerned that some tenants will leave me holding the bag? Yes,’ said Robert Nelson, a New York City landlord who owns middle-income apartment buildings. ‘But what choice do we have?’”

    Talk to your lenders, and negotiate down your own payment until you can get by on 1/3 of their unemployment insurance payment.

  18. A report from the Sun Sentinel. “The housing market in South Florida has been booming for much of 2020 — sparked by low interest rates, high demand and low inventory — but real estate experts say they consider the trend a bubble that probably won’t last. ‘We’re in a huge bubble type thing right now,’ said Teri Arbogast of Keller Williams Partners Pembroke Pines. ‘I already put a house on the market, and I already got a full price offer and I haven’t even shown it yet. The last time I saw this happen was in 2004, 2005.’”

    “Dawn Williams Bobo with Prag Realtors in Tamarac said she also sees buyers leveraging the low interest rates to make overpriced offers. ‘It’s enabled a lot of buyers to be in a position to purchase more than what they were typically approved for due to the adjustment in the interest rate,’ Williams Bobo said.”

    The Times Standard in California. “The housing market grew ever-more strong for sellers in September as the amount of single-family homes on the market in Humboldt County continued to fall and prices continued to rise. The shrinking housing market [Historically low interest rates] has allowed new homes coming onto the market to be listed for more than they typically would be worth according to Kessler Team realtor Scott Stephens, who said the inflation has made it tough to give purchasers an accurate picture of what they are buying.”

    “‘The hardest thing for me to do right now as a Realtor is to answer the question of what a home is worth versus what its price is,’ Stephens said. ‘The rules aren’t the same anymore right now. With the high demand, higher-than-normal list prices and multiple offers being made on a home, it’s tough to advise clients on what to do — we don’t have a crystal ball.’”

    – It’s [another] bubble, driven largely by historically low mortgage rates. Rates down, prices up, but so are DTI’s and property taxes. Debt must now keep expanding to keep the economy going. Asset price inflation in stocks and housing is the conduit. This works until it doesn’t. There’s still an affordability ceiling for shelter-buyers with a traditional mortgage. From bubble to bubble, but bubbles always pop. Oh, the insanity!

    1. I wasn’t alive yet then but it could be a Nixon 1972 electoral college landslide this year. And after Portland is finished burning itself to the ground, they need to be expelled from the United States, not a penny of federal dollars to rebuild that sh*thole.

    1. There is something seriously wrong with this guy’s faculties. If you watch his speeches now vs. 4 years ago he doesn’t even sound the same.

      1. “he doesn’t even sound the same”

        I am guessing his 5 days “preparing” for the debates included a couple of days in the shop for a blood transfusion and having his @ss shot full of steroids, Cholinesterase inhibitors and Memantine.

        Too bad it wore off in the last 1/2 hour and he turned into the Green Lantern and told everyone to expect $6 gasoline, exorbitant heating bills and a couple of million layoffs after he was elected.

  23. Maybe someone can explain this to me.

    Cheap money/low interest rates makes real estate prices go up. But doesn’t printing money decrease purchasing power, which would also make prices go up? Both these combined are creating the bubble?

    1. And after decades of it, here we are. Best to focus on getting out of debt so that you can handle what comes next.

  24. What happens in Philadelphia tonight after it gets dark and the Sons Of Obama continue their Burn Loot Murder temper tantrum?

    Note that last night, the pasty white, haven’t seen the sun in a decade, revolutionary army of 125 pound warriors mobilized at midnight (organized on social media that allows this but bans all #BadThink) in Portland to Burn, Loot, Murder in their own city to show “solidarity” with Philadelphia.

    “This sucker could go down” — George W. Bush

      1. Let them loot and burn the Targets, WalMarts and Krogers, Then when they don’t get rebuilt the civic leaders can wring their hands over the lost sales tax revenue and whine about “food deserts”

        2. “Let them loot and burn the Targets, WalMarts and Krogers…”

          Great timing, IMHO. It’ll resolve any doubts among the silent majority.

  26. Real Journalists — 90,000 Told to Flee as California Fires Nearly Double in Size:

    “As two wildfires raged across Southern California on Tuesday, nearly doubling in size overnight and forcing thousands more people to flee their homes, the state’s utility companies are again coming under scrutiny for their potential role in sparking new blazes.

    Southern California Edison said its equipment may have played a role in starting one of the fires, the Silverado Fire, which had churned through more than 11,000 acres in Orange County.

    The fire raised more concerns about whether utilities have substantially improved their safety efforts, and whether the company should have more broadly shut off power in Southern California this week. Edison’s posture stood in contrast to Pacific Gas and Electric, which turned off power to a broad swath of Northern California beginning on Sunday over fears of dangerous wildfire conditions.”

    http://archive.is/IAndO

  29. “‘The hardest thing for me to do right now as a Realtor is to answer the question of what a home is worth versus what its price is,’ Stephens said.

    Realtors are liars.

  30. I have never seen such bad candidates as the Biden/,Harris ticket.

    For God Sakes, some mentally deficient old corrupt jerk is going to rule.
    And that fluff puppet Harris who they really want to put in to take us down the path of Racism and other false narratives destroying everything America as been about.
    These Canadates will destroy the USA , and they haven’t earned the positions of leadership they seek.

    This is some kind of nightmare that the silly Harris was picked based on gender and race. This should insult anyone who wants these jobs based on merits and abilities.
    Than you got the fake news protecting these jerks and by keeping their radical positions ambiguous , as well as evidence of corruption by Joe Biden.

    I’m horrified over the Biden and Harris ticket and all the Commies who will be appointed to high positions like Sanders and AOC.
    It use to be in elections in USA you felt like either party would defend the USA and the interest of the Citizens.
    These despots want to change the USA and sell out the Citizens to our enemies.

    1. Sure looks like socialism is saving capitalism then last 12 mos.
      Wall St got $4 trill in a flash. Farmers? Airlines?
      When do we get less gov and less spending?

      2. “Sure looks like socialism is saving capitalism…”

        The terminology you seek is “Crony Capitalism.” There’s also a Wikipedia page too.

  33. How do you take back the fake news and the suppression of news. They are supressing freedom of speech with punishment of job loss and thug attack.
    Really, I have never seen anything like this.

    1. “How do you take back the fake news and the suppression of news.”

      Blogs and blogcasts seem to be doing this in that the originators of information presented by the blogger travels directly to the reader/viewer without being filtered out by an editor.

      The MSM is dying because alternative media is killing it.

  34. Looks like the soonest we could see another stimulus is Feb 2021.
    Markets finally crashing. No more free cheese. Let’s see what is behind the curtain.

  35. No group think to it. A slow watch of a hijacking of the Government .
    The people on this blog aren’t group think types . Ben Jones is as independent as you get in the recording of the housing situation and everything tied into it.
    If you have valid grounds to vote for these creeps than maybe you should state your reasons rather than a right wing group think attack that’s meaningless.

    1. Ok, I don’t know where that guy went but I think he was responding to my posts calling me right wing group think and the blog also.
      He didn’t dispute my post on why Biden/ Harris was so great, but just named called me right winged group think.
      Anybody who reads my posts knows I go into great detail as to why I object to the Dem party these days.

  38. Philadelphia looted again last night, justice once again achieved by looting Foot Locker.

    #Forward

    1. Yup. They’re so supportive of BLM that they use it as a cover to line their own pockets with loot. Humans have an instinct to never let a crisis go to waste, at all levels of society.

    2. Listening to the CBS Morning Propaganda with Gayle (gee I wonder how Oprah’s best friend got this job) King and not one word about the Philly Looting or the interview on Tucker Carlson’s show last night where a credible witness said that Joe Biden is ‘blatantly lying’ when he says that he has no knowledge of Hunter Biden’s deals and “I remember looking at Jim Biden in saying how are you guys getting away with this? Like, aren’t you concerned? And he looked at me and he laughed a little bit and said. ‘plausible deniability.'”

      However they did run a well written, rehearsed and produced interview of 2 blacked out silhouettes of witnesses that were on the Breonna Taylor Grand Jury that claimed “police officers the day of the botched raid at her apartment were “negligent” and “criminal.”

  40. Why is Mr Market so glum all of a sudden? Is it due to the sinking realization that new stimulus is dead in the water for now?

    1. Markets
      Wall Street losses gain steam, with the Dow dropping 750 points amid coronavirus fears
      Published Tue, Oct 27 2020
      6:00 PM EDT
      Updated 2 Min Ago
      Fred Imbert

      U.S. stocks fell sharply on Wednesday, following their European counterparts, as investors worried that the latest increase in coronavirus infections could halt the global economic recovery.

      The Dow Jones Industrial Average dropped 777 points, or 2.8%, and was on pace for its lowest close since early August. The S&P 500 dipped 2.9% and the Nasdaq Composite traded 3.1% lower.
      …

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