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The Fever Rages Until The Sky Is Falling, Sell, Sell, Sell

A weekend topic starting with NPR. “VANEK SMITH: ‘Who are these people with this cash?’ He says all this started some years back.’ A handful of, like, ski bum, techie startuppy types moved into Bozeman from big cities, and they started telling their friends about it. And their friends started getting, like, second homes and ski cabins there, and the town slowly started to change.'”

“SEAN HAWKSFORD: ‘It’s a lot of people from California. It’s caused a lot of kind of anti-California resentment here. You see people who just – for lack of a better way to phrase it, just look like they’re from California. You know, like, you don’t look like you’re from – you know, like…’ SMITH: (Laughter) ‘What does that mean?'”

“HAWKSFORD: ‘There’s a certain look about people that are from Montana. Like, I think you tend to look a little bit more practical in the way that you dress rather than fashionable. Yeah, you see somebody who’s wearing, like, a big parka with a furry hood on it and is wearing really tight leggings when it’s 15 below zero out. And like, I don’t know if you’ve been here for very long.'”

The Shoreline Times in Connecticut. “Rose Ciardiello, a real estate agent, recently listed a Guilford home for $200,000 more than the owners purchased it for just a few years ago. Within hours, offers came in well over the $975,000 asking price, she said. Ciardiello said people moving to the area are driving up the asking price, and often making cash offers. Ciardiello, who primarily sells homes in Madison and Guilford, has called this the ‘COVID market.”

“Ciardiello said residents of New York City and other major metropolitan areas began to buy up houses in the shoreline area, opting to move to less populated areas that were seeing large day-over-day increases in coronavirus cases. ‘Basically, they originally took up all the rentals,’ she said. ‘Then they started buying the lower-end homes. Then they started buying very expensive homes. We’re still seeing, not only New Yorker, but I’m getting folks from New Jersey, Pennsylvania, the West Coast.'”

“Colette Harron, a real estate agent, sells homes through the shoreline area, but especially in Essex, Old Saybrook, Lyme and Old Lyme. ‘The prices are up,’ she said. ‘I don’t know if they’re going to keep on going up, because I can’t predict the future. But definitely prices are up about 20 percent from two years ago. Harron said she knows a driving factor for buyers moving to the area is the pandemic, ‘because we’ve been here forever, and (the market) has never been like this. I haven’t seen it like this since 2004, when it was the height of the market.'”

The Charlotte Business Journal in North Carolina. “Could Charlotte’s strong seller’s market for housing be coming to an end? David Hoffman, a longtime local Realtor, believes the answer to that question is yes — and it could happen sooner than people may think. Hoffman said he is already seeing signs of a looming shift here, one being the turning ratio in coming soon and active listings versus pending sales. A year ago, in a growing area like Ballantyne or Fort Mill, he said there were three pending single-family home sales to one active listing. Fast forward to now, and coming soon and active listings are starting to outpace pending sales at the opposite ratio, he said.”

“‘My team’s seeing it because we’ll do a coming soon and, before we go live, three other homes will have hit the market,’ said Hoffman, CEO of Charlotte-based David Hoffman Realty, which has 40 agents. ‘In three weeks, we’ll go from zero houses to three houses. We’re seeing like one (new listing) a week, while last year there wasn’t one a month.'”

“He’s also noticing that buyers are beginning to become more selective, which he expects to continue due to the high prices and more homes hitting the market this year. That’s leading to some price reductions. ‘We’re still selling above market when the home shows like a model,’ he said. ‘But when the home has any major flaws, you’re starting to see that buyers are pickier than people are realizing.'”

The New York Post. “It only took eight years. A British financier has snapped up billionaire Vincent Viola’s Upper East Side townhouse at 12. E. 69th St. for the slashed price of $59 million, according to property records and sources. That may sound like a lot of dough, but the Versailles-style home, built in 1883, first hit the market for $114 million in 2013. At the time it was the city’s most expensive home on the market.”

The International Press Agency. “Affordable housing is scarce, while at the same time many apartments remain empty. This is a problem that many cities are struggling with. The government of the Balearic islands in Spain has now found a solution. A total of 56 apartments, most of them on Mallorca, will be turned into social housing for seven years. Residents are expected to pay only 30 percent of their income as rent, and the owners will be compensated for this.”

“Vacant apartments and houses are a worldwide issue. In Europe, 11 million housing units are empty, with Spain being the leading country with 3.4 million vacant housing units. At the same time, over 4 million people have no roof over their heads in Europe. This means there are almost three times as many vacant apartments as there are homeless people.”

“A lot of the empty apartments and houses are located in tourist areas like the Balearic islands and were built during the real estate boom until the housing crisis in 2008. A lot of the properties have never been lived in. According to The Guardian, many apartments were bought as an investment and without the intention of ever living in them.”

The South China Morning Post. “Like countless parents throughout China, those of 34-year-old Yuan Yin want to do everything they can to support him and his future wife as they prepare to get married. But the weakened property market in Sheyang county, Jiangsu province, is making it difficult to pull together a wedding dowry – marriage expenses traditionally offered by the groom’s family in the country.”

“Yuan is a migrant worker, living and working in Guangzhou – nearly 1,700km (1,056 miles) away from his parents. They had hoped to provide him and his fiancée with about 800,000 yuan (US$123,000) by selling a small shop the parents own on a main commercial street, but the shop’s value has plummeted amid the coronavirus-fuelled recession, and not a single buyer has inquired about the property since they listed it months ago.”

“‘Local home prices [in Sheyang county] have dropped from 10,000 yuan [per square metre] in 2019 to just about 7,000 yuan now,’ Yuan said. ‘Whether I can start a business, get married, or even have a child is based on the value of our family home. I bet all ordinary Chinese families think the same.'”

“‘I feel so stressful when seeing how property prices are falling,’ said Li Feng, who has to pay mortgages on two flats in downtown Tianjin, where prices have dropped to less than 40,000 yuan per square metre from 50,000 yuan in 2017 when he made the purchases. As of October, Tianjin property prices had fallen by as much as 21.8 per cent from their peak in March 2017, the National Business Daily report said.”

“‘I already feel that stagflation has arrived because our income has stagnated in the past two years, but prices of necessities have all soared,’ Li said. ‘I thought that Tianjin’s housing prices would pick up, since the authorities were easing interest rates during the Covid outbreak, but strangely that did not happen.'”

From CTV News in Canada. “Earlier this month, a Senneville home that was built in 1865 sold for $8 million, making it the most expensive house sold on the Island of Montreal so far this year. According to the real estate who sold the property, the new owner has a lot of work to do. ‘There are millions of dollars that need to be put into this property to upgrade it, on the outside (and) on the inside,’ said Joseph Montanaro.”

“All over the island and beyond, realtors are seeing a phenomena that was almost unheard of five years ago. Homes are regularly selling for well above the asking price. In Ste-Adele, realtor Michel Desjardins said he’s never seen so many offers coming in significantly above the asking price. ‘We list a house on Saturday and it’s sold on Sunday. We never saw that in the Laurentians for many, many years,’ he said.”

“Many realtors have dubbed it ‘the COVID market.’ According to the Quebec Professional Association of Real Estate Brokers, the prices of single family homes are rising dramatically all over the province. On the Island of Montreal, they were up 19% last year; in Laval, 20%; and on the north shore 27%.”

“One economist recently made headlines when he told BNN-Bloomberg the Canadian housing market may be one of the biggest bubbles ever. ‘We have a situation where home prices are up 18 percent, year over year, with practically no wage growth,’ said David Rosenberg, the chief economist of Rosenberg Research.”

“Real estate agents are split on where the market is going. ‘I’m telling everybody, the price that we’re asking is a COVID price and in two, three, four years, it won’t (be) worth probably that much money,’ said Desjardins. But Hampstead realtor Rebecca Sohmer sees it differently. ‘I don’t see an end to it, I really don’t,’ she said. ‘There are too many buyers for the properties for me to believe it’s going to end anytime soon.'”

The Globe and Mail in Canada. “Flipping through The Globe and Mail’s real estate section these days is a boggling experience. This Friday’s showed clear signs of madness at both the high and low ends of this season’s red-hot market. A four-bedroom mansion in Oakville, just west of Toronto, recently sold for $18-million. A three-bedroom townhouse, also in Oakville, sold for $1,050,000, $250,000 ‘over asking.’ A little Toronto bungalow that went for $550,000 as recently as 2011 is on the market for $1,125,000.”

“Every sign points to the kind of frenzy that periodically overtakes Canadian housing. The average price for a Greater Toronto home passed the $1-million threshold for the first time in February. The selling price of a detached house jumped 23 per cent compared with a year earlier, reaching $1,371,791. Nationally, the average home price in February was a record $678,091, up 25 per cent.”

“The mindset that takes hold at times like this is familiar. Seeing prices soaring, buyers rush to get into the market before they miss the boat. Speculators jump in after them, hoping to flip properties and make a few hundred thousand bucks overnight. All this demand pushes prices up even further, which causes more panic buying at stupid prices.”

“The fever rages until something happens to put the fear in buyers. Prices plunge and the opposite mindset sets in: The sky is falling, time to sell, sell, sell. It happens, to various degrees, for every kind of asset, from oil to gold to stocks. Somehow we have managed to convince ourselves that Canadian homes are different. Their prices have risen for so long that it seems they must keep on rising without end.”

“Real estate boosters will tell you that houses are different from other things we invest in. People live in them, you know! You can’t live in your art collection. They will tell you that Canadian homes, in particular, are capable of defying the laws of gravity. The streams of newcomers flooding into the country mean that demand for housing is sure to remain strong, and high demand means high prices.”

“But, in the end, houses and apartments are just a commodity like anything else, subject to the same peaks and valleys in price that come to them all. What goes up must eventually come down. To believe otherwise is to succumb to the very human tendency to think that things will keep on going as they happen to be going at present. They don’t.”

“Both the United States and Britain suffered a collapse in home prices at the end of the 2000s. Toronto’s market crashed at the end of the 1980s (about five minutes after I bought my house there, as it turned out). Don’t ever think ‘it can’t happen here.’ It has and it will.”

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This Post Has 52 Comments

  2. I’ve been doing this for a while and this is one bizarre period.

    ‘‘Local home prices [in Sheyang county] have dropped from 10,000 yuan [per square metre] in 2019 to just about 7,000 yuan now,’ Yuan said. ‘Whether I can start a business, get married, or even have a child is based on the value of our family home. I bet all ordinary Chinese families think the same’

    This isn’t a big deal right? Cuz how many people live there?

    ‘I feel so stressful when seeing how property prices are falling’

    Well it was cheaper than renting Li.

      1. “no Chinese (or any other race ) woman would have given him the time of day had he been a renter.”
        An other reason I rent and drive a 2007 Civic with peeling paint!

        1. “An other reason I rent and drive a 2007 Civic with peeling paint!”

          1984 Toyota Tercel with body rust and faded paint!

  3. ‘He’s also noticing that buyers are beginning to become more selective, which he expects to continue due to the high prices and more homes hitting the market this year. That’s leading to some price reductions’

    DONG! Happens over and over. It’s a good mania article if you can get around the paywall.

  5. ‘Many realtors have dubbed it ‘the COVID market’

    I’ve mentioned that I’m seeing this horse sh$t idea every day. Oh sure, millions out of work. Millions not paying their mortgage. To the moon Alice! The REIC/guberment/central banks cooked this crap up and it will lay at their feet forever.

    ‘the prices of single family homes are rising dramatically all over the province. On the Island of Montreal, they were up 19% last year; in Laval, 20%; and on the north shore 27%’

    How could this possibly be? We slipped into this insanity where these statistics not only don’t scare the sh$t out of regulators, lenders etc, it is actually a rationale for it to never end:

    ‘I don’t see an end to it, I really don’t…There are too many buyers for the properties for me to believe it’s going to end anytime soon’

    1. I recall talking with a UHS in 2006 in Sedona. Signs were already on the wall, but he mentioned, “there are so many buyers!” I replied that’ll be all the more foreclosures. A couple years later I overheard him telling someone, “those prices were an illusion, everybody knew it was going to crash.”

    2. How could this possibly be? We slipped into this insanity where these statistics not only don’t scare the sh$t out of regulators, lenders etc, it is actually a rationale for it to never end

      How is it possible for shacks in agrarian New Zealand to cost one million NZ pesos?

      We live in a rigged world where the PTB pick the winners and the losers. Heaven help you if you are tossed into the loser pile.

    3. How could this possibly be?

      Not sure what question you’re asking. If you’re asking: how are all these unemployed people buying these houses, the answer is, they aren’t. It’s the people who kept the jobs who are buying the houses. Now, if you’re asking why those employed people are so stupid as to overpay for those houses, I don’t have an answer for that.

      1. “Now, if you’re asking why those employed people are so stupid as to overpay for those houses, I don’t have an answer for that.”

        Try this: No Child Left Behind.

  7. ‘Local home prices [in Sheyang county] have dropped from 10,000 yuan [per square metre] in 2019 to just about 7,000 yuan now’

    So, sinking like a turd in a well – for years.

    ‘As of October, Tianjin property prices had fallen by as much as 21.8 per cent from their peak in March 2017’

    2017? Hmmm, so it’s not all CCP virus red-hotcakes after all. Like San Francisco, Miami, Boston, New York City, etc.

  8. ‘Toronto’s market crashed at the end of the 1980s (about five minutes after I bought my house there)’

    Another oddity is the inaccurate recollection of the media. Vancouver, especially airboxes, crashed hard after a blow off peak in the spring of 2016. Don’t believe me, go back to HBB archives. Remember the repeated stories of Vancouver mansions being rented to students for $15/month?

    Then, shazam! Toronto was the new Vancouver, and started to crash in 2017 in a very similar pattern. And of course there were great a$$ poundings and tales of woe last decade, but Canadians have all but forgot that.

    1. Interesting psychological study in future years. Those most likely to be influenced by parents/friends regarding FOMO – and the ones that have blinders to positive bias in their decision making. And forgotten the pain that others had.

      1. It’s helpful to observe from a distance. And be disconnected from it. I have no interest in Canadia RE. One can see what’s goofy.

        This reminds me of something that happened here around 2005 or 2006. There began to be little conversations in the comments from different parts of the country. At some point New Yorker’s were talking with others in California. A NYer said, “my friends say prices may fall in the bay area, but never in NYC”. The reply was something like, “my bay area friends say the exact same thing in reverse.”

    1. I just read a piece about Amazon delivery vans having a driver facing camera with AI that can sense seat belt use, yawning, etc., so there is indeed a storm coming.

  11. Govt entities are causing the major disruption in the RE market. This along with FOMO sentiment amongst a large segment of the population has manipulated (unintentionally ?) this huge slice of the economy.


    As of August 26, 2020 the Fed’s Balance Sheet is nearly $7 trillion total of which $3.7 trillion are notes or bonds, and nearly $2 trillion in mortgages (Fannie Mae, Freddie Mac, or Ginnie Mae).

    Key Points starting in 2020.
    – The Fed has snapped up $1 trillion of mortgage bonds since March. It bought around $300 billion of the bonds in each of March and April, and since then has been buying about $100 billion a month.
    – The Fed now owns almost a third of bonds backed by home loans in the U.S.
    – Buying the securities has pushed mortgage rates lower, with the average 30-year rate falling to 2.91% as of last week from 3.3% in early February.
    – Morgan Stanley analysts pointed out in late March that the buying was running at eight times the pace seen in prior episodes of Fed purchasing under programs known as quantitative easing.
    – Just before this latest round, principal payments from its mortgage bond holdings had whittled that down to 21%, but it has now increased back to 30%.
    – If the Fed maintains its current buying pace, it will again own 34% of the mortgage universe by year’s end.

    1. “Buying the securities has pushed mortgage rates lower, with the average 30-year rate falling to 2.91% as of last week from 3.3% in early February.”

      Which: 1. Allows dumb-assed pukes to buy houses at higher prices than before using money that they do not have.

      Which: 2. Creates equity wealth that can be cashed out and spent.

      Which means the Fed is indirectly creating prosperity via the modern break-thru method of finalization instead of the old fashioned, old school, obsolete method of wealth creation that involved the (gasp) the expenditure of labor.

      Those old school pukes who rely on such stupid ideas of saving for a purchase are going to be chased out of the bidding and the buying by the no fear folks who will willingly and eagerly borrow their way into wealth.

      Ignorance + borrowed money = Interesting results.

  12. The Federalist (3/18/2021):

    “Oregon state health officials unveiled a new proposal in January which seeks to make temporary mask mandates permanent.

    The current order, passed in November by the state’s workplace safety department, which requires all employers to implement state-imposed guidelines for social distancing and mask compliance, is set to expire on May 4. Oregon health bureaucrats are now seeking to make the rules permanent.

    “Although the rule must be adopted as a permanent rule, its purpose is to address the COVID-19 pandemic,” the proposal reads. “Oregon [Occupational Safety and Health] intends to repeal the rule when it is no longer necessary to address the pandemic.”

    No threshold for what constitutes when the mandate is “no longer necessary” however, is offered in the proposal.

    https://thefederalist.com/2021/03/18/oregon-health-officials-propose-making-mask-mandates-permanent/

    Looking at the Portland mugshots on Andy Ngo’s Twitter, maybe this isn’t such a bad thing.

      1. Some recent local news regarding the mandate for wearing a bacteria laden face diaper:

        “The state’s mask order could be eased starting on April 4 for counties in level green and blue.

        Counties in level green would have a mask order in schools, among congregate care visitors and other high risk settings. Those at level blue and above would have an indoor mask order for 10 or more unrelated people mixing indoors in public settings.”

        https://coloradosun.com/2021/03/19/colorado-dial-system-3/

        Denver will be dead last in the state for lifting this. Masks have become a religion there. And I don’t mean some passive religion, it’s Spanish Inquisition level Kool Aid in Denver. People will be wearing masks while driving alone there in the year 2030.

        1. And a new image file for the Lockdown Lovers:

          https://i.redd.it/tywwrz1b94o61.jpg

          Note that the “NPC Wojak” meme was so offensive that Twitter had to ban it. An NPC in gaming is a non-player character, that when in human form is a being incapable of having inner dialogue, or of recognizing cognitive dissonance, etc.

          NPC’s are basically all of blue checkmark Twitter and all of Reddit. The only exercise they ever get is from hitting the downvote button on content that contradicts their programming.

    2. I had to read the proposal. They know that deaths will drop precipitously about 5 weeks from now. They know that 75% of the adult public will be vaccinated (or catch the virus and recover) by early summer. Instead of postponing the date from May 4 until, say, August 4, they are saying “permanent until we decide to appeal it.” Why? There is definitely something going on here. Even I’m losing patience.

      1. OK, had to add this in from another news article: “Although the rule must be adopted as a permanent rule because the law does not allow a temporary rule to be extended…”

        In other words, don’t fret. It doesn’t sound like a control issue at all. Sounds like OSHA would have extended the expiration if they could have, but legally they can’t. So they have to do permanent–>repeal. I’m reserving judgment until July 4. That’s when I expect everyone to have gotten a shot + 3 weeks to build immunity. Deaths will be near 0 by then, and cases will be dropping precipitously. Then we’ll see.

        1. Deaths will be near 0 by then, and cases will be dropping precipitously. Then we’ll see.
          I too think that is what will happen. Continuing mutations of the virus will most likely cause sporadic spikes in the disease & death toll, accompanied by hysterical eruptions in the US media.

      2. They know that deaths will drop precipitously about 5 weeks from now.

        Then why bother with mandates? Why not just ask people to wear them for a few more weeks? I’m sure most would.

        1. Why not just ask people to wear them for a few more weeks

          A year after 15 days to flatten the curve. These “experts” lack authority and credibility.

          1. So I’m reading the latest issue of Men’s Health, and there’s a question: “When will it be safe to see live sports again?” Answer [paraphrase from some doc in NYC]: At 70% of the population being vaccinated, limited capacity (25%) for indoor events ought to be safe. But it won’t really be safe until herd immunity, late 2021 or well into 2022. For outdoor events, it’s safe now with masks and social distancing.
            ————-

            2022? Yeah, that’s not gonna happen. I think what will happen is there will be an initial burst of vaccinations, and then by late summer the vaccinated majority is going take off their masks and say “Eff it I’m done; if you’re not vaxxed by now you’re on your own, cuz I’m not staying inside waiting around for you.” At least, this is what I’m planning to do.

          2. But it won’t really be safe until herd immunity There is no expert consensus on the definition of “herd immunity” for the pandemic, nor even on the definition of personal immunity. If “herd immunity” comes to pass, it will only be recognized long after it has happened. Still no explanation exists for just how the <= age 18 demographic has shown so little severe COVID-19 disease and a mortality near zero.

    3. Looking at the Portland mugshots on Andy Ngo’s Twitter, maybe this isn’t such a bad thing.

      Lots of truth to that statement!

  13. when the home has any major flaws, you’re starting to see that buyers are pickier
    Pickier? With a major flaw or flaws? You don’t say!
    If there is a major flaw I am either out the door or expecting a huge discount.

    1. Yeah, the media relies on people having no memory. Remember back in the ebola days? The UHS say, “instead of 10 offers we get maybe 2.” Then they talked about price reductions. Then stubborn sellers who wouldn’t slash prices. So it went across the country. Slowly the YOY median caught up with the pattern. Seattle down 100k, etc.

      1. “Yeah, the media relies on people having no memory.”

        And they are rarely disappointed.

    2. ‘But when the home has any major flaws, you’re starting to see that buyers are pickier than people are realizing.’”

      So that house on Elm with the bad roof, cracked pool, overgrown yard and broken toilets hasn’t gotten an offer yet?

      “If there is a major flaw I am either out the door or expecting a huge discount.”

      I like out the door.

    3. out the door or expecting a huge discount
      Nowhere near the door for this new listing: https://www.realtor.com/realestateandhomes-detail/13215-Valle-Verde-Ter_Poway_CA_92064_M15209-96560

      Not one single interior photo. Asking $1,265,000. Seller has already purchased another home and is in the process of moving. First and last sentences of the description: Excellent rehab/fixer opportunity to own one of the Largest lots (aprox 1.5 acres!) available in the prestigious Green Valley community of Poway! Owner has priced this property below market for a quick sale!

    2. That’s not very nice.

      Just imagine, had George Floyd been allowed to peacefully die of a lethal fentanyl overdose at the time of his arrest, minus the knee on his neck, this discussion wouldn’t even be happening.

    1. “As one SoCal broker said…”

      Reminds me, we haven’t heard from SoCalJim in a while. Anyone remember his website?

  19. I can’t relate to a fake Media that 24/7 tries to cast fake narratives for the purpose of creating division among populations. It’s the creation of a enemy to defeat based on fraud for the purpose of changing the USA into a Nation of controlled and unfree people under the control of Hilter like Dictators.
    They own most the Media , so it’s whatever stupid narrative they want to promote, a invisible enemy like the Covid, or half the Country is bad and needs to be forced into their ugly destructive agendas.
    They are recruiting the brainwashed left to enforce their agendas based on their fraud and suppression of facts. The insanity of saying the White Race is bad and all Western Civilization needs to be toppled in favor of some Communist top down Control, with Medical Tyranny used as another weapon of mass destruction is evident.
    Anything they promote has no basis in truth , and they have shown they are engaged in a power grab of epic proportions to destroy Traditional USA and the Constitutional protections we had.
    And the Covid Scam was a unjustified Medical Fraud to be used for control and harm to people . They aren’t following any Science and it’s all about cramming experimental vaccines down people’s throats by declaring a false Pandemic while the Medical Monopoly loots the tax coffers with no liability on the vaccines.
    They currently have a monopoly on information and the rigged financials systems . Government and Government agencies have been corrupted to assert this power grab based on false premises.
    They have come out in the open now and show the evil insurrection they plan to take over the USA , by any criminal means necessary by Hilter like tactics.
    Look at the Puppet jerks in the White House that are already doing great harm to this Country in just 3 months.
    The USA had been undermined for a long time by these Entities corrupting Government and Government agencies to take over the USA.
    With corrupted Government I n control of the tax coffers there is no end to the looting and bizarre policies for destruction of a free Country they have in store.
    So, the Globalist Monopolies that are the enemy of the people now, that own the news ,are intent on top down control by them.
    The Medical/Pharma Monopoly is causing mass destruction by their Medical Frauds and unjustified declaration of Pandemic that only affected .01% of the population, mostly very old sick people.
    So, I hope when they try to lock down again based on the variant theory, people will finally reject this Medical Fraud that they can’t even prove the original Covid19 , let alone the Mutant Variants under a microscope.

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