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The More Likely Source Of Risk Comes Down To Leverage, As It So Often Does

A report from TNN on Oklahoma. “Lawton real estate agent John Naberhaus said he’s been selling homes for 31 years and never seen a market quite like this one. ‘What’s interesting is that used to a $300,000 house in our market was kind of the exception,’ he said, ‘and they were harder to sell and today they are a hot commodity.'”

“But it’s not just in southwest Oklahoma. ‘We’re hearing it as a national trend throughout the U.S.,’ he said. ‘Lawton typically doesn’t follow the national trend. We’re typically more dependent on what’s happening say at Fort Sill, but right now we’re certainly following that national trend where houses are hot.'”

From Bloomberg. “Joaquin Villanueva, an airport janitor who owns a three-unit rental house in East Boston, had to take out a home-equity loan just to pay the bills. One tenant, eight months behind on rent, vanished one night in March. An unemployed restaurant dish washer in another unit owes $5,000. ‘I don’t want to lose my house so I’m doing whatever I have to do,’ said the El Salvadoran immigrant who wipes the floors at nearby Logan International Airport. ‘I’m not rich like a Donald Trump.'”

“Brandon McCall had to put his student loans in forbearance and cut back on groceries and other expenses after his condo tenant in Los Angeles fell behind on the $2,050-a-month rent. Now he’s pinning his hopes on the government. The tenant applied for rental assistance in early April, shortly after the city’s relief program began. But as of late last week, there was no answer. ‘I lose money every month,’ McCall said. ‘And I can’t even buy a place to live in myself.'”

From Boston Agent Magazine in Massachusetts. “Boston condo sales jumped to their highest first-quarter total in 16 years, according to a recent Douglas Elliman Downtown Boston market report. The average square foot of a sale declined for the fourth straight quarter to 1,132 square feet, 9.1% below the same period last year. The median sales price fell 16.6% below last year’s record of $1.01 million, the fourth consecutive quarterly decline. Listing inventory rose 44.9% year over year.”

The Real Deal. “Churchill Real Estate is known in New York City for betting on distress. Over the past few years, the firm has snapped up troubled loans from overeager or desperate developers that have ended up in hot water. But the firm is increasingly targeting a more secure product: single-family home loans. And recently, it took a big step in that direction thanks to a direct equity investment from Redwood Trust, a publicly traded REIT that focuses on lending in that sector.”

“Churchill co-founder Sorabh Maheshwari declined to disclose the amount of the investment. But he said the deal will provide the firm with the funds it needs to expand into new markets such as South Florida, California and possibly Texas. Churchill execs said they are seeing opportunities in ‘rescue financing’ for nearly completed projects through a preferred equity injection in order to get the development over the finish line.”

“‘Pretty much every sector in the New York City market is in distress, so the opportunities have been plentiful,’ co-founder Justin Ehrlich said in a recent interview with The Real Deal.”

From Bisnow New York. “After years of sliding valuations and multiple auctions, the Gallivant Times Square Hotel has sold for a fraction of its previous value. Special servicer LNR Partners sold the ground lease of the 334-room hotel at 234 West 48th St. to an LLC controlled by Mehran Kohansieh for $4M. CMBS tracking firm Trepp’s remittance data suggests the liquidation proceeds for LNR were $2.5M. That sum ‘was completely eaten away by expenses,’ Trepp wrote in a report Tuesday, which noted the hotel was appraised at $126M at securitization in 2006.”

“‘Due to the continued underperformance of this property and current environment for hotels, Moody’s expects a significant loss from this loan,’ Moody’s analysts wrote last month when the hotel was under contract.”

From Yahoo UK Finance. “Rooms for rent in west London were among areas that dragged down the average rental price in the UK in the first quarter of 2021. The London postcodes where room rents have reduced the most include SW1 (Westminster/Belgravia/Pimlico) -25%, W1 (West End/Soho) -23% and W8 (Holland Park) -21%. SpareRoom’s index found that out of the UK’s 50 largest towns and cities, London has experienced the biggest drop in demand v supply, down 23% year-on-year. In particular, east-central London has suffered the sharpest fall, down by almost half (-42%), followed by the South East (-40%) and West Central London (-40%).”

The Sydney Morning Herald in Australia. “Tim Lawless, research director at CoreLogic, says additional listings are coming onto the market as sellers seek to take advantage of rising prices. There has also been a significant rise in housing construction activity. Larger cities are still showing a unit ‘supply overhang,’ he says. That is occurring at a time when demand from population growth has recently turned negative, which could progressively create an imbalance between demand and supply, he says. ‘There are early signs the exuberance in the housing market may be peaking,’ Lawless says.”

From Newshub New Zealand. “An investment expert has warned the property market is starting to look ‘shakier’ than it has been, with the ‘ghost of Muldoon’ waiting to pop the bubble. ‘At a recent event in Auckland, I remonstrated that house prices could slide,’ editor of financial site Wealth Morning, Simon Angelo, wrote. It may not seem possible, but it is. You could have felt the perspiration dampen the room… the mood began to darken.'”

“Angelo says the Kiwi property market right now is remarkably similar to how it was in the early 1970s, huge gains ‘based on high net migration and shortages of builders and materials.’ House prices spiked about 75 percent between 1971 and 1974 before ending the decade pretty much where they started, Angelo said. Sir Robert Muldoon’s government, elected in 1975, oversaw a massive slide in values. ‘Muldoon’s government became alarmed then, as [Jacinda] Ardern’s one seems to be now. Planning controls were loosened to allow more flats to be built in cities.'”

“There are also similarities with New York in the 1920s, he said, with an economic boom fuelled by low interest rates and money printing following a pandemic. ‘Then came the unravelling.'”

“Angelo doesn’t see us building too many homes. ‘The more likely source of risk here comes down to leverage. As it so often does,’ he wrote. ‘It would appear the most significant risk to New Zealand property is the re-pricing or restricting of lending. Interest deductibility rules have already re-priced loans to property investors. But the greater risk is the introduction of [debt-to-income ratios] and inflation,’ and interest rates ending their record-low run.”

“‘I do not see New Zealand out-building its supply gap any time soon. But I do see a lot more activity than before coupled with a twisted greed and fear gap, a debt bomb, and growing regulation. In this regard, the ghost of Muldoon could well come to sit in auction rooms across Auckland. Especially for investor-focused residential properties.'”

“Finance Minister Grant Robertson has asked the Reserve Bank to look into debt-to-income lending restrictions to stop investors getting extremely leveraged.”

The New York Post. “Is this the creepiest place on Earth? Hundreds of Disney-like castles built for wealthy Gulf investors are now sitting empty. Located in Turkey, the abandoned village first began construction in 2014, and was initially designed as a luxury community for foreign buyers. But hit by a devastating economic downturn in Turkey, the once-grand plan crumbled, leaving the mini chateaus hollow.”

“Buyers snapped up more than 350 of the houses, which are priced between $370,000 and $500,000, depending on location, Sarot Group’s CEO, Mezher Yerdelen told the Times. Of the more than 732 villas, about 350 were sold to Arab investors. By 2018, half the buildings were underway until Turkey’s economy took a major hit and many of the sales fell through. ‘Our sales dried up,’ Mezher Yerdelen added. Some customers canceled their agreements, some stopped their payments.”

“Today, the village remains idle, with no plumbing, heating or any sign of human life.”

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This Post Has 88 Comments

  1. ‘What’s interesting is that used to a $300,000 house in our market was kind of the exception…and they were harder to sell and today they are a hot commodity’

    Occasionally, I include a bit of the daily red hotcakes the media spews out. This one stood out. Because either this guy is a lion, or the insanity going on is a lot worse than imagined.

    2. Before any of this nonsense, a $250,000 house was way too expensive for most people. Now, $600,000 houses are considered “starter homes” by the media and the dumbed-down borrowers.

  2. ‘Now he’s pinning his hopes on the government’

    Get up off yer knees Brandon.

    ‘But as of late last week, there was no answer. ‘I lose money every month’

    Now that’s some red hotcakes right there!

  3. ‘an airport janitor who owns a three-unit rental house in East Boston, had to take out a home-equity loan just to pay the bills’

    So how did a floor wiper get a loan for a 3 unit shack in Boston? Bloomberg didn’t go there.

    2. So how did a floor wiper get a loan for a 3 unit shack in Boston? Bloomberg didn’t go there.

      Some years ago I flew into Logan and rode a shuttle to the rental car lot. The shuttle driver, a LatAm immigrant, wouldn’t shut up about his properties.

    3. That blew my mind too. Things are blowing up for the janitor now but he’s still done better than I ever did in three decades of being on the wrong end of housing cycles.

  4. ‘$4M. CMBS tracking firm Trepp’s remittance data suggests the liquidation proceeds for LNR were $2.5M. That sum ‘was completely eaten away by expenses,’ Trepp wrote in a report Tuesday, which noted the hotel was appraised at $126M at securitization in 2006’

    So they ended up with nothing after expenses. What happened to sword catching Larry? Has his frozen soup line thawed out?

    ‘Due to the continued underperformance of this property and current environment for hotels, Moody’s expects a significant loss from this loan’

    Good old Moody’s. Predicting an a$$ pounding that already happened.

  5. ‘the firm is increasingly targeting a more secure product: single-family home loans…he said the deal will provide the firm with the funds it needs to expand into new markets such as South Florida, California and possibly Texas’

    Oh dear, that doesn’t fit the narrative…

  7. ‘Finance Minister Grant Robertson has asked the Reserve Bank to look into debt-to-income lending restrictions to stop investors getting extremely leveraged’

    Barn door. They’re at what, 10 times income down there? And like Brandon, they’re losing money every day.

    1. They’re at what, 10 times income down there?

      And their economy is based on agriculture. If it’s technology of any sort, it’s imported. I don’t think they manufacture anything there. I read that 1/4 of their college grads leave the country, due to lack of opportunities.

      1. Life has a 100% mortality rate.

        This whole scamdemic has been nothing more than a massive virtue signal, erected on the foundation of white liberal privilege.

    2. The gov has two ways to lift federal mask mandates.
      1. Wait for a certain amount of the population, for example, 75% to be vaxxed, and then assume herd immunity and lift all mandates.
      2. Set a certain date, for example, 6 weeks after vaccines are available on a walk-in basis. Assume anyone not vaxxed at that time are refusers, lift all mandates, and achieve herd immunity after a final wave as the refusers are infected and recover.

      The Freedom choice is Door #2, but it seems the gov is choosing Door #1, because medical tyranny is more fun that way. They’re relying on peer pressure: “Yeah, we’d love to get rid of the masks, but we’re all waiting around for YOU to get vaxxed.”

      I poked online. Maryland is at about 45% vaxxed at least one dose. Although we aren’t quite at the walk-in stage for a shot, many vax appointments are going unfilled, even for J&J. Are we starting to hit resistance around 45%? That seems low. It’s more like we’re hitting apathy — people who aren’t against vax but can’t seem to get to a clinic. I think it will take at least a month to find and vax them. After that I think we’ll hit resistance. Yesterday I heard some snippet that we might not get to that magic 60-70% figure until we vax all the 12-16-year-olds before school in the fall. [on side note, Pfizer made sure that they were the first to get 12-16 vax approved. Money grubbing…]

        1. Until all the world’s minorities are vaxxed I will refuse mine. My white privilege has gone far enough. This is how I give back. They can have my vax. Like Jesus giving his body. For others. Amen

        2. Tucker: “We know the vaccine works. We know that anyone who wants a vaccine in this country can get one. They’ve told us those two things again and again, and most of us are willing to believe that they’re true. But if they are true, why wear masks? Anyone who’d afraid of getting COVID can get a vaccine. And then everyone else can return to normal life, including those who don’t want to get the vaccine. The people who want it can get it and they’ll be protected. And that should be the end.”

          This sounds suspiciously like what I’ve been saying. Either get the jab or risk getting COVID, take your pick. But I am DONE coddling these leaches.

          4. Leeches would be better for the environment than the feminine hygiene products many women are having to consume following the jabs.

      2. Door number 2 isn’t freedom because,

        If you were in a free world you would have a free Press ,not where censorship of information makes you a victim of a agenda. Fraudsters not following the Science , with a agenda of using Medical fraud to control populations with this fake Pandemic.

        This fraudulent Pandemic was planned way ahead of time as the evidence shows. The timing of it to affect the 2020 rigged election is obvious.

        Fraud on a massive scale is not the door of freedom. All of Society is the victim of a insurrection by forces that corrupted Government.

        1. Door #2 is free-er. True freedom would have doubled or tripled the deaths. I don’t believe the pandemic was planned, but the response was planned for sure. And they probably modified their plans to fit the virus we got — for all we know, Tedros delayed declaring pandemic for that crucial month in exchange for getting $$ and BJs from Klaus Schwab.

    3. Everybody knows it’s over, and we are done with your medical tyranny.

      Check this headline out:

      Pacific Northwest faces shutdowns amid rising virus cases

      Now they are about to impose new restrctions again as infections and hospitalizations rise to alarming levels.

    1. In my neck of the woods in HB a few (2 or 3?) very large and expensive homes caught fire during the last 9 months. Interesting…

      1. large and expensive homes caught fire And so very few of them have built-in fire suppression systems

  10. I am a Biden voter.

    I escaped marxism in my sh!thole country, came to America and I am doing everything I can to turn America into the sh!thole I left.

    “said the El Salvadoran immigrant who wipes the floors at nearby Logan International Airport. ‘I’m not rich like a Donald Trump.’”

    1. And yet they never shut up about “my cown-try” and how much better it is there, despite living in the US for decades.

      My biz partner and I were talking to some customers (years ago) and they mentioned they were flying down to the Dominican Republic to visit relatives. My partner said “when you’re down there say hello to my car” at which they burst out laughing. Funny because it’s true and all that.

  11. It ain’t coming back either.

    “‘Pretty much every sector in the New York City market is in distress, so the opportunities have been plentiful,’ co-founder Justin Ehrlich said in a recent interview with The Real Deal.”

  14. I’m seeing homeless in some towns I never have before. They are literally living in fields and such. It’s very sad. Yes some have mental issues. But not all. My town has tried to help a few times and this one man doesn’t want help. He isn’t causing problems.

    1. great find.

      1. take a look at cash out refi on page 10 –
      2. look at mortgage affordability on page 21 – nothing looks out of whack – so must be somewhat deceptive mortgage practices that is causing the problem

    2. I saw youtube video on KENSINGTON AVE PHILADELPHIA.

      that would have been heartbreaking even 5 years ago, but it’s a common place. thank you, yellowstain & co.

    2. In case cryptocurrencies didn’t seem like a dumb idea before, this story should remove all doubt.

      However someone must be making bank on the Dogecoin price movements!

      1. Apr 28, 2021,
        08:20pm EDT|752 views
        ‘The Dogefather’ Elon Musk And Billionaire Investor Mark Cuban Help Dogecoin Leave Bitcoin And Ethereum In The Dust With 20% Price Rally
        Billy Bambrough
        Contributor
        Crypto & Blockchain
        I write about how bitcoin, crypto and blockchain can change the world.

        Dogecoin, the “joke” bitcoin rival based on the Shiba Inu doge meme, is once again the day’s best performing major cryptocurrency—with a 20% rally that left bitcoin and ethereum in the dust.

        The dogecoin price shot sharply higher today, stealing the limelight from ethereum, the second-largest cryptocurrency after bitcoin—which notched a fresh all-time high.

        The latest dogecoin price pump comes after Tesla (TSLA -1.5%) chief executive and self-proclaimed “dogefather” Elon Musk hyped up his planned Saturday Night Live debut, set for next weekend, and billionaire investor Mark Cuban told talk show host Ellen DeGeneres dogecoin is “a whole lot better than a lottery ticket.”
        …

        1. Proof that these focks are sick in the head and blinded by greed. What are you offering society when you’re encouraging the young into your reckless pump and dump schemes so you can add a few pennies to your billions?

    1. Democrats checked ever signature and got about 10% throw out too.

      Funny how that is racist with real ballots in an election.

    2. The best solution to all of this would be to expel California from the United States and permanently ban all emigration from California to the United States.

      Take your “Muh World’s Fifth Largest Economy” meme and keep your poverty, your homeless, your illegals, your needle and feces covered sidewalks.

      California is a national embarrassment.

      1. And there’s this national embarrassment, from Crain’s New York:

        ‘State to lift outdoor dining curfew, ban on bar seating’

        Meanwhile other states are even doing this nonsense. How’s that pervert mass murderer guvnah doing?

      2. “expel California from the United States and permanently ban all emigration from California to the United States.”

        Build the Wall!

        1. Today is Wednesday, April 28th and Joe Biden is not the legitimately elected president of the United States.

          This fraud thinks his speech tonight is gonna be some kind of victory lap. You weren’t elected, you didn’t win, and the 2020 election was stolen.

          Wearing a mask on a Zoom call with a dozen other maskless world leaders (see also Tucker piece above) makes you look like a total jack@ss.

          I don’t even know how this fraud can even still be awake at 9pm Eastern to give a speech. I’ve seen what happens with older relatives with dementia at the end of the day, it’s called “sundowning” and it’s not pretty.

          You will never be a real president, and Lord help us all that the cackling witch devil woman won’t either.

          3. I don’t even know how this fraud can even still be awake at 9pm Eastern to give a speech.

            Stimulants

      3. The best solution to all of this would be to expel California from the United States and permanently ban all emigration from California to the United States.

        I wonder how many would stampede out of the Golden State before the door is slammed shut.

  19. Tucker Rips Biden Admin For Putting Political Dissidents On No-Fly List

    by Tom Pappert | National File
    April 28th 2021, 8:19 am

    On [Tuesday’s] broadcast of Tucker Carlson Tonight, the Fox News host referred to Americans being placed on the TSA’s No Fly List by the Biden administration only hours after America First commentator Nick Fuentes revealed that he was added to the list.

    “There are reports tonight that a number of American citizens including Americans who were at the Trump rally in January, the perfectly legal Trump rally in Washington in January, have been placed by this administration on the No Fly List, meaning they cannot fly domestically,” said Carlson, before noting that his team has not been able to independently verify the reports.

    “If it’s true this is a turning point in American history. These are people, again, who have not been charged with crimes,” hammered Carlson. “If they have been prevented from traveling in their own country by the administration because the administration doesn’t like their political views, that is not democracy, that is dictatorship. We ought to find out who is on the No Fly List and why, and we should find out immediately.”

    “And by the way, if they turn out to be members of Black Lives Matter, if Black Lives Matter leaders turn out to be on that list, we’ll be completely against that too.”

    As National File reported earlier today, Fuentes says he discovered he was placed on the No Fly List after he attempted to board two separate flights to attend an event in Florida. The America First show host explained that he was told by two different airlines that the TSA would not allow him to board the plane, and while they would not say that he was added to the No Fly List explicitly, they suggested that he would have to appeal the decision with the TSA.

    Fuentes believes he was placed on the No Fly List after he attended the completely peaceful portion of the pro-Trump rally that occurred in Washington, D.C. on January 6. There is no evidence that Fuentes entered the U.S. Capitol building or participated in illegal activities during the ensuing Capitol Hill protests.

      1. Feds Raid Rudy Giuliani’s NYC Apartment in Ukraine Probe

        Published Apr. 28, 2021 12:20PM ET

        According to The New York Times, which first reported the raid, investigators seized Giuliani’s electronic devices and searched both his Madison Avenue apartment and Park Avenue office at about 6 a.m. A law enforcement official confirmed to The Daily Beast that the feds raided Giuliani’s home.

        https://www.thedailybeast.com/feds-raid-rudy-giulianis-manhattan-apartment-in-ukraine-investigation-nyt-reports?source=articles&via=rss

    2. You can thank Jorge Shrub for that.

      Started with brown bearded mooslims, now it’s you.

  20. Emmett, ID House Prices Crash 37% As Boise Housing Market Swirls The Bowl

    movoto dot com/emmett-id/market-trends/

    As one broker lamented, “Our buyers have leveraged to the maximum possible, and now the market is sh itting the bed. Nobody can sell without steep price cuts.”

    1. Is mullet back in vogue?
      If so I guess mortgage rates are going to be higher and higher.

  22. Not content with stealing the election, the globalists and their Democrat-Bolshevik hirelings are moving forward with their creepy Orwellian surveillance state.

    USPS admits it IS spying on Americans: Law enforcement arm is snooping on social media posts and ‘working with other agencies’ in covert operation – but won’t reveal details

    https://www.dailymail.co.uk/news/article-9522303/USPS-admits-spying-Americans-monitoring-social-media-wont-reveal-details.html

  23. I get confused sometimes thinking about what kind of vitamins I should take. Thankfully, Tim Pool is promoting a new vitamin. It’s called BioTRUST™ Keto Elevate™ and it’s really great

    If you’re down on your luck, lost in life, wandering 40 days and nights in the desert, what you need is BioTRUST™ Keto Elevate™

    https://ibb.co/2k7zQyq

    BioTRUST™ Keto Elevate™ is the answer to all of your life’s problems. Listen to Tim Pool, he is the Candyman…

    1. Those aren’t vitamins. It’s powdered MCT oil, which is just a specific type of fatty acid. (Which, btw, causes the runs if you have too much. Fair warning.) MCT oil is found in coconut oil, so just have that instead.

  24. According to Tucker Carlson the only thing the FBI did not take from Rudy Giuliani’s apartment and office today was his copy of Hunter Biden’s laptop which according to Tucker contains among other things, “Kiddy Porn”. He said they picked it up, Giuliani told them it was his copy of Hunter Biden’s laptop and they put it down and continued to seize his electronic devices.

  25. A couple of trillion dollars in stimulus here, a few trillion there, and pretty soon you are talking about real money!

  26. Biden speech correction: I talked to foreign leaders and told them America’s on its back. And they asked but for how long.

    1. Wokeness is a problem and everyone knows it. It’s hard to talk to anybody today . . . who doesn’t say this. But they don’t want to say it out loud.

      — James Carville

  28. Asking price is 300,000 will sell for 310-330,000. I saw this in Phoenix, home was 1395 SQ FT asking price 310,000 and sold for 325,000. A track home build in in the early 1990s in an average neighborhood. The home was a rental, they didn’t even bother to clean it, it was missing light fixtures, fire detectors, mold in the bottom of the walk-in shower, dry rot damage on the exterior and needed new paint inside and out. Backyard had NO landscaping, all dirt, no trees, no plants nothing. Did I mention the A/C Unit was original to the home? I checked. 30 year old a/c unit. That is at least a 6-8 thousand expense waiting to blow up.

    2 years ago same home same sq feet comped on the same street sold for 200,000 that wasn’t a rental and had a new A/C unit.

    But this time it’s different. Were not in a bubble.

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