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Owners Were Ready To Sell And Cut Their Losses

A weekend topic starting with the Laguna Beach Independent in California. “A court-appointed receiver reported Friday that debts are racking up at real estate developer Mohammad Honarkar’s portfolio of 18 hospitality and event properties in Laguna Beach, according to court records. Honarkar’s properties, with the exception of Hotel Laguna, have been under the control of court-appointed receivership overseen by San Diego-based receiver Douglas P. Wilson since mid-January. Among the issues Wilson has confronted is a six-figure sum owed to the city of Laguna Beach.”

“The Holiday Inn at 696 S. Coast Hwy., 14 West, The Retreat at 729 Ocean Front, and a collection of short-term rental properties on Sleepy Hollow Lane collectively owe $650,000 in unpaid transient occupancy taxes, penalties, and interest to Laguna Beach.”

The New York Post. “In a surprise happy ending to the city’s most convoluted luxury-hotel saga, the Times Square Edition will reopen on June 1 – even as its skyscraper home races toward foreclosure. The hotel is the largest portion of 701 Seventh Ave., a 42-story, mixed-use building which chief lender Natixis is attempting to seize from defaulted landlord Maefield Development. Until the limbo ends, 701 Seventh Ave. is still owned by Maefield, led by Mark Siffin, which defaulted on a $600 million Natixis mortgage nearly two years ago. The loan was part of a much larger debt package involving Maefield, several partners, and principal and mezzanine lenders that could total as much as nearly $2 billion, sources said.”

The Real Deal on New York. “As the dust settles on the pandemic’s devastation of retail, smaller business owners are seizing on the market’s weakness. Stacey Fraser, the owner of childrens’ clothing store Pink Chicken, shuttered her four stores last spring, but managed to stay afloat thanks to a Paycheck Protection Program loan, the New York Times reported. By fall, dead storefronts lined Bleecker Street, but spelled potential for the entrepreneur.”

“She snapped up two commercial spaces along the Greenwich Village corridor, one two doors down from famed Magnolia Bakery with an asking rent about half of what it would have been in 2016, Douglas Elliman’s Louis Puopolo told the Times.”

From Bisnow New York. “When it comes to the return to the office, uncertainty still looms across most markets. In places like New York City, landlords are still reporting occupancy levels in buildings at less than 15%. ‘Now a lot of people are using the hybrid model as a way to recruit talent … and office landlords are mired in an existential crisis, no one knows how this is going to play out longer-term in office demand and office space usage,’ said Bisnow Atlanta reporter Jarred Schenke, who has been reporting this week on various workplaces’ approaches to having their workers return.”

From Inside Nova in Virginia. “Arlington apartment rents continue to battle back from the beating they took last year. But Arlington still has a hole to dig out of. Its median rents remain down 5.2 percent from pre-pandemic levels, the eighth largest drop among the 100 largest localities. Consider the case of San Francisco, just about the priciest rental market in the nation and one that saw a 26-percent decline from pre-pandemic levels at the depths of the economic freefall last year.”

“Others that still have deep holes to emerge from: Oakland (down 13 percent), New York (off 12 percent), Seattle (down 11 percent) and San Jose (off 9 percent). The District of Columbia still has a shortfall of 9 percent, as well.”

The Cleveland Business Journal in Ohio. “Reserve Square — downtown Cleveland’s largest mixed-use property — has been having trouble making its mortgage payments because of the Covid-19 pandemic. Since April 2020, the dual, 23-floor apartment complex has been making smaller mortgage payments under a forbearance plan approved by the Federal Home Loan Mortgage Corp., better known as Fannie Mae, said Doug Price, CEO of K&D Group, the Willoughby, Ohio-based owner and manager of Reserve Square.”

“The pandemic hit in March 2020. ‘So overnight, we lost 20% of our business,’ Price said.”

From Bloomberg on Nevada. “A loan tied to a beleaguered mall outside of Las Vegas realised a loss of 120 per cent after the shopping centre sold for about the same price as a condo. The loan, which had a current balance of US$62.2 million, was completely written down after the Prizm Outlets were liquidated for just over US$400,000, according to Bank of America Corp (BOA). When accounting for US$11.5 million in fees and reimbursements owed to the master servicer for advances made, the total realised loss came out to US$74 million.”

“That’s the largest loss – both in terms of dollar amount and as a percent of the original loan balance – for a commercial mortgage backed conduit loan since the 2008 financial crisis, BOA analysts Alan Todd, Mao Ding and Graham Voss wrote. It’s vindication for traders who bet against retail using the so-called CMBX 6, a commercial real estate credit derivatives index with heavy exposure to shopping centres and malls. This is the first payout to those who shorted the index, including billionaire investor Carl Icahn.”

“‘We believe these mortgages will have the same disastrous fate as mortgage-backed securities had in the 2008 debacle,’ Mr Icahn said in an interview. The Prizm Outlets had been valued as high as US$28.2 million less than a year ago, and US$125 million in 2012 when the loans were bundled into a commercial mortgage-backed security.”

From Reuters on the UK. “Britain’s retail sector will endure a ‘tsunami of closures’ if the government does not extend a moratorium on aggressive debt enforcement, industry lobby group the British Retail Consortium (BRC), said on Sunday. Many UK retailers deemed ‘non essential’ had to close their stores during multiple COVID-19 lockdowns over the last 15 months, accruing total rent debt of 2.9 billion pounds ($4.1 billion), the BRC said. The pandemic has hammered the sector and industry data shows one in seven shops already lie empty.”

From CBC News in Canada. “As office tower vacancies in downtown Calgary exceed 30 per cent and the resulting hole in municipal tax revenues increases along with it, the city has formally outlined its vision for renewal and revitalization in the core. It’s a complex gamble. As the city works to iron out the details of the funding, it’s worth asking who owns Calgary’s downtown and why public dollars should be used to incentivize a change in corporate business plans? To what end?”

“Trent Edwards, the chief operating officer of Brookfield Residential in Alberta and co-chair of Calgary Economic Development’s Real Estate Sector Advisory Committee (RESAC), which advised the city, refers to it as a three-legged stool. ‘So one is fill. Two is convert or adapt to other uses — whether that’s a university, student housing, museum, you name it, assisted living, affordable living. And then the third piece is demolition,’ he said.”

“The day council approved the downtown plan and initial spending of $200 million to kickstart it, Scott Hutcheson, the executive chair of Aspen Properties, told councillors that downtown was a ‘no fly zone’ for that previously mentioned institutional capital. ‘The pension funds, and the large real estate investors in that community that has typically owned the assets in the downtown, is neither interested in investing in our city core with new equity, nor is new debt available to our market.'”

The Globe and Mail in Canada. “Breather Products Inc., a Montreal startup that raised more than US$150-million to build a global flexible workspace operator, is selling most of its assets for US$3-million to Industrious National Management Co., a co-working company backed by real estate giant CBRE. Demand for short-term rentals, accounting for half of Breather’s business, vanished and occupancy dropped to 25 per cent by last fall. Breather tried to delay or renegotiate lease payments, but several landlords sued its U.S. subsidiary for non-payment in obligations. Other flexible workspace providers were hit just as hard. CEO Bryan Murphy told The Globe last fall that leasing its own spaces ‘doesn’t make sense and, to be frank, I’m not sure it ever made sense.'”

“Breather briefly hired investment bank Moelis & Co. to pursue a financing or sale, but buyers balked at its lease commitments. Breather last fall abandoned hundreds of leases as its subsidiaries in the United States and Britain filed for insolvency to wind up operations and repay creditors in those markets. After furloughing most of its 120 employees early in the pandemic, it made those cuts permanent. Meanwhile, Mr. Murphy directed engineering and product teams to expand its platform to handle third-party listings. The hope was to rapidly sign up landlords to use the platform and revive the business.”

“But by then, Breather’s owners were ready to sell and cut their losses. They realized it would be too complicated to bring in another private financier and restructure the equity ownership, and knew they were unlikely to ever make the kinds of returns from the investment they’d once envisaged. Breather fielded three bids, each at a fraction of its one-time peak value.”

From Vietnam Plus. “The General Department of Taxation under the Ministry of Finance (MoF) is studying a proposal on increasing the threshold of taxable revenue for individual landlords renting out houses. For nearly half a year, Nguyen Thi Lan Huong, an owner of an apartment in Hanoi, has been unable to find tenants even though she has slashed rent by nearly 50 percent due to the COVID-19 pandemic. ‘If the tax rate is high, the rental price will also be pushed up, making leasing more difficult. I hope there is a reasonable tax rate to harmonise the lessor and the lessee,’ Huong told VTV.”

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This Post Has 100 Comments

  2. ‘We believe these mortgages will have the same disastrous fate as mortgage-backed securities had in the 2008 debacle’

    One might read a million times “lending is rock solid, unlike yadda…” They never stopped securitizing mortgages. Essentially severing the loan from those who made it. Why is that?

    1. The U.S. is very much like Japan, where the idea of “losing face” by defaulting on your financial obligations would be considered an unthinkable shame and disgrace. Hence debtors will go to whatever lengths necessary to honor their financial commitments.

      Oh, wait….

    2. The loans are not only securitized, but they are federally guaranteed, and are purchased by the Fed in large quantities.

      It appears somewhat like a recipe for hardwiring a flow of funds into the housing market in order to centrally maintain floors on the levels of prices and purchase activity.

      And since the funding source is the independent Fed, no federal tax dollars or fiscal appropriations are required to keep the money flowing into housing.

      1. U.S. housing prices are reportedly rising at the fastest pace since they did just before the 2007-2009 meteor crater experience. So it seems like the Fed’s housing price put is having its intended effect.

        1. Have affordable housing advocates figured out yet that policies designed to make housing prices increase have the unfortunate consequence of making them less affordable?

          1. Reboot-Live
            May 25, 2021 10:59 AM
            Updated 5 days ago
            White House says rising home prices are a concern
            By Nandita Bose, Trevor Hunnicutt
            White House Press Secretary Jen Psaki speaks to reporters at the White House in Washington, U.S., May 25, 2021.
            REUTERS/Kevin Lamarque

            WASHINGTON (Reuters) – The Biden administration is monitoring rising U.S. home prices, which it is concerned are increasingly making housing unaffordable, a White House spokeswoman said on Tuesday.     

            “The increase in housing prices we’ve seen does raise concerns for us about housing affordability and access to the housing market,” White House press secretary Jen Psaki told reporters.

            “We recognize there is a need for new housing supply, particularly on the affordable end of the market.”
            …

        2. The Economist
          Hot properties
          What America’s hot housing market means for consumer prices
          A bounceback in rents would have a big effect on inflation statistics
          Finance & economics
          May 29th 2021 edition
          May 24th 2021

          THE AMERICAN economy last year may have suffered its deepest downturn since the Depression, but you would not know it from house prices. The Case-Shiller national house-price index is rising at an annual rate of 13%, its fastest for more than 15 years (see chart). Lower interest rates have encouraged people to take out bigger mortgages, and trillions of dollars of fiscal stimulus have let people spend more on housing.

          Yet as prices have breezed ahead, rental growth, which usually follows suit, has sharply slowed. And whether rents catch up or not matters, because they play an outsize role in America’s consumer-price inflation statistics. In a recent note analysts at Goldman Sachs, a bank, ranked housing costs among their three main “upside” risks to inflation, together with wages and inflation expectations. Alan Detmeister of UBS, another bank, went further, arguing that “it is only a small exaggeration to say that there is no single variable on which global financial markets depend more this year than US rents.” The behaviour of rental inflation could influence the Federal Reserve’s decision to withdraw its support for the economy—which would in turn affect everything from the strength of America’s recovery to the valuations of an array of assets.
          …

          2. Big article today in the San Diego paper about iBuyers taking over Oceanside. Basically private equity is pooling money to buy residential real estate as its got great returns on investment. Oceanside home owners in the article are in shock to see what these companies are paying their neighbors for their homes.

      2. Not to mention the fact that the FED can just hide away all the defaults on their balance sheet.

        1. ‘Zillow resells to itself. We discuss it here.’
          My apologies. Maybe i missed something, as i do read Ben every day. Enlighten me por favor.

  3. ‘As office tower vacancies in downtown Calgary exceed 30 per cent…’And then the third piece is demolition’

    When the SHTF in 2014, there were millions of SF of office underway in downtown Calgary. What did they say at the time? “Oh it’ll bounce back, let’s finish em!”

    Worser.

  4. ‘She snapped up two commercial spaces along the Greenwich Village corridor, one two doors down from famed Magnolia Bakery with an asking rent about half of what it would have been in 2016’

    That’s the spirit!

    ‘A loan tied to a beleaguered mall outside of Las Vegas realised a loss of 120 per cent after the shopping centre sold for about the same price as a condo’

    Don’t give it away.

    1. Okay, so my Common Core maff skills aren’t all that, but isn’t it only possible to lose 100% in such a transaction?

      1. Depends on what you are counting. With leverage, it is easy enough to lose more than 100% of what you’ve invested.

        1. Wa? You mean to tell me negative gearing is a thing?! Gosh, that could leave a mark.

      3. only possible to lose 100%

        It would be clear if one read the blog post above. Just sayin.

    2. tourism is going to be a fraction of what it would be in 2016, which accounts for a large part of her business, same with local traffic. so its not really a great deal when all is said and done.

  5. Speaking of New York City…

    New York Post — Washington Square Park ‘drug den’ horrifies Greenwich Village neighbors (5/29/2021):

    “A lawless, drug-infested Washington Square Park is horrifying even famously free-spirited Greenwich Village residents.

    Washington Square Park’s northwest corner was overtaken in recent months by a crack-and-heroin-filled “drug den,” while boisterous, booze-soaked raves around the central fountain have kept neighbors up until the wee hours and left the historic green space trashed each morning.

    “The zombies are now near the fountain, as well as next to the chess [southwest] corner. They’ve simply moved up about 200 meters from the now shuttered end of the park,” one angry neighbor emailed The Post on Wednesday. “I think all hell is going to break loose.”

    Best line from the whole article:

    “Drug enforcement across the city has all but disappeared during the de Blasio administration.”

    https://nypost.com/2021/05/29/washington-square-park-drug-den-horrifies-greenwich-village/

    You’re getting exactly what you voted for. This is the “fundamental transformation” that you were promised.

    1. I love when little Jimmy has to push the crack pipes off the sea saw. Gives him a strong love of liberalism at work

    2. They’ve simply moved up about 200 meters from the now shuttered end of the park,” one angry neighbor emailed The Post on Wednesday. “I think all hell is going to break loose.”

      Ah, that’s adorable…blustering libtards writing sternly worded letters to a globalist propaganda flagship. All hell won’t break loose because libtards always want someone else to fight their battles for them, but cops in departments where diversity has long trumped merit aren’t about to risk their lives or careers protecting progressives from the consequences of their own votes.

        1. A “lava of fire”? Sounds like Gaia is displeased. Let her handle this. Genuflect before your icons of St. Floyd of Fentanyl and St. Greta and beg for their divine intercession, NYC libtards.

          2. Ever since our NEA indoctrination mills switched from teaching English to “Language Arts,” most of the special snowflakes seem incapable of proper grammar, style, or usage, not to mention basic literacy or stringing together a proper sentence.

  7. When the authorities mention the color of the vehicle involved but not that of the suspects, you can rest assured this was gang violence, not “gun violence.” Needless to say this “concert” wasn’t for polka fans.

    At least 20 people shot, 2 killed outside Northwest Miami-Dade concert

    https://www.local10.com/news/local/2021/05/30/at-least-20-people-shot-2-killed-at-northwest-miami-dade-concert/

    MIAMI-DADE COUNTY, Fla. – Miami Dade police are investigating a deadly mass shooting that left more than 20 people injured in what detectives described as a “targeted act of violence.”

    Authorities said two people have died as a result of their injuries.

    “This is a despicable act of gun violence,” said Miami-Dade Police Director Freddy Ramirez. “A cowardly act.”

      1. Let’s not jump to conclusions, amigo. This could’ve been an outbreak of sectarian strife between rival Amish and Mennonite congregations. Or since the media calls it “gun violence,” it’s entirely possible that firearms are of their own volition rising up and randomly spraying gunfire at gatherings characterized by…multicultural vibrancy.

        1. Race can only be mentioned in MSM articles covering such events if the perpetrators were not black. If “black” is mentioned, it can only be in context of the NPR sanitized version: “unarmed black man”.

          1. Black must always be an uppercase B. Your social credit score is on review for downgrade.

        2. Or maybe it’s turf warfare between the Missionaries of Charity and the Sisters of Loreto.

          “No one disses Mother Teresa, no one!”

          1. I hear that the Pastafarians are at it again. That Alfredo sect never really got along with the Marinara sect.

          2. There will be hell to pay if the Sisters of (No) Mercy show up. I know this from personal experience.

            Oxide, lol, Pastafarians

  8. Had Google Maps opened up the aperture of their sky cam a bit, they would’ve caught messages mowed into numerous neighboring lawns stating “Realtors are liars.”

    ‘B***h!’ Google Maps picks up VERY rude message mowed into Salt Lake City lawn that’s pointing at neighbor’s home

    https://www.dailymail.co.uk/news/article-9632977/B-h-Google-Maps-picks-rude-message-etched-earth-Salt-Lake-City.html

    A neighborly quarrel reached stratospheric heights after Google Earth captured images showing someone had mowed the word ‘bitch’ into the lawns of a house in Salt Lake City, along with an arrow pointing at a neighboring property.

    An eagle-eyed internet user spotted the image and posted it to Reddit with the caption: ‘I don’t think the neighbors get along very well.’

  10. The “show me the money demands” backed by threats of rioting and looting are only going to get more strident from here. Prepare accordingly.

    Hundreds of Black Gun Owners Are Marching on ‘Black Wall Street’ This Weekend

    https://www.vice.com/en/article/pkbadk/hundreds-of-black-gun-owners-are-marching-on-black-wall-street-this-weekend

    Hundreds of armed Black gun owners and Second Amendment advocates are planning to march on “Black Wall Street” in Tulsa, Oklahoma, this weekend to pay homage to the lives lost in the Tulsa Race Massacre and advocate for more Black gun ownership in the U.S.

    Nearly a century after the violence that destroyed an affluent neighborhood in Tulsa known as Black Wall Street and left as many as 300 Black Americansdead, a collection of gun rights groups organized the peaceful event for Saturday, the anniversary of the 1921 massacre. After a year of international protests against racism and police brutality, the men and women will continue the fight for racial justice, which includes being able to arm and protect themselves without consequences, the same way white Americans can.

  12. Saw this propaganda piece run last week on one of our local “News” morning broadcasts and thought to myself…

    Ready? 1 – 2 – 3 – PANIC!!

    Election conspiracies live on with audit by Arizona GOP

    By: JONATHAN J. COOPER and BOB CHRISTIE, Associated Press
    Posted at 1:36 PM, Apr 25, 2021 and last updated 1:35 PM, Apr 25, 2021

    PHOENIX (AP) — Months after former President Donald Trump’s election defeat, legislative Republicans in Arizona are challenging the outcome as they embark on an unprecedented effort to audit the results in the state’s most populous county.

    The state Senate used its subpoena power to take possession of all 2.1 million ballots in Maricopa County and the machines that counted them, along with computer hard drives full of data. They’ve handed the materials over to Cyber Ninjas, a Florida-based consultancy with no election experience run by a man who has shared unfounded conspiracy theories claiming the official 2020 presidential election results are illegitimate.

    Arizona GOP

    Months after former President Donald Trump’s election defeat, legislative Republicans in Arizona are challenging the outcome as they embark on an unprecedented effort to audit the results in the state’s most populous county.
    By: JONATHAN J. COOPER and BOB CHRISTIE, Associated PressPosted at 1:36 PM, Apr 25, 2021 and last updated 1:35 PM, Apr 25, 2021
    PHOENIX (AP) — Months after former President Donald Trump’s election defeat, legislative Republicans in Arizona are challenging the outcome as they embark on an unprecedented effort to audit the results in the state’s most populous county.

    The state Senate used its subpoena power to take possession of all 2.1 million ballots in Maricopa County and the machines that counted them, along with computer hard drives full of data. They’ve handed the materials over to Cyber Ninjas, a Florida-based consultancy with no election experience run by a man who has shared unfounded conspiracy theories claiming the official 2020 presidential election results are illegitimate.

    The process is alarming election professionals who fear the auditors are not up to the complex task and will severely undermine faith in democracy.

    “I think the activities that are taking place here are reckless and they in no way, shape or form resemble an audit,” said Jennifer Morrell, a partner at Elections Group, a consulting firm advising state and local election officials, which has not worked in Arizona.

    https://www.wptv.com/news/national/election-conspiracies-live-on-with-audit-by-arizona-gop

    Voting Machines in Arizona Recount Should Be Replaced …
    https://www.nytimes.com/2021/05/20/us/politics/arizona-recount-voting-machines.html – Cached – Similar pages
    20 May 2021 ..

    Arizona secretary of state says Maricopa County should …
    https://www.washingtonpost.com/politics/arizona-audit-voting-equipment/2021/05/20/a8370368-b9a4-11eb-a5fe-bb49dc89a248_story.html – 366k – Cached – Similar pages

    20 May 2021 … The state’s top elections official wrote in a letter that the county’s voting machines are no longer considered secure after they were turned over …

    1. The process is alarming election professionals who fear the auditors are not up to the complex task and will severely undermine faith in democracy.

      More than two-thirds of Republicans polled have stated their belief that Biden owed his “victory” to large-scale electoral fraud. It seems faith in our mobocracy, er, democracy, is already severely undermined.

        1. No doubt. I would never talk to pollsters as I totally distrust them and the MSM. The true figure is probably closer to 90% based on the private comments from friends & acquaintances who I know vote Republican. With our globalist overlords pushing the narrative that anyone who disputes the election results is some kind of domestic terrorist, I’m guessing a lot of self-identified Republicans obfuscated their true feelings on the matter.

        2. probably less than the true

          My own polling indicates it is probably more like 120% of Republicans, as quite a few D voters see through the scam.

        3. Hard to know. Once a demogogue takes over, those who disagree can quickly become the silent majority.

          1. Get lost on your way to HuffPro, Triggley Prof? I don’t know a single Republican who is somehow cowed by Trump’s supposed “demagoguery.” I’m personally not too fond of Trump but supported because the Democratic “alternatives” were too ghastly to even think about supporting. At least in my circles people aren’t shy about voicing their opinions. Most aren’t necessarily convinced that voting fraud took place; they just feel like there were too many irregularities to discount the possibility out of hand, and lean toward believing there was large-scale fraud though we may never know for sure.

    2. undermine faith in democracy.

      Actually, the opposite. It’s never been un-patriotic or un-democratic to hand recount a vote. Never. Obstructing such an audit is.

      Expecting to see some numbers by the end of June.

      1. The Democrats and their globalist puppet masters have turned the truth on its head. Look how they’re fighting tooth and nail against any efforts to require voters to present valid IDs. They completely undermine the integrity of the election process, then deem that anyone who questions the approved Narrative of no irregularities and Biden getting 80 million votes, being the charismatic and relatable fellow that he is, is a domestic terrorist.

        1. Trump is a Wall Street banker’s wet dream. The financial shenanigans on Wall Street are so dreadfully boring compared to Trump’s brand of populism.

      2. It’s never been un-patriotic or un-democratic to hand recount a vote.

        So true. Expect the gaslighting to go into overdrive.

      3. If it were a legitimate audit, I would agree.

        But if it’s a partisan charade with a forgone conclusion, then it seems kind of pointless.

        1. Agree. Right now the integrity of the entire process is suspect. Since we’ve now descended into banana republic status, maybe we could have honest election observers from the Nordic countries monitor our elections.

          1. I’m not sure there are even any uncompromised countries left. Nordics have gone woke. South America wants open borders. Africa belongs to China. Western Europe is in the pockets of Klaus and Angela. Russia? Heh. Australia and India, maybe. My choice would be Poland.

        2. a partisan charade

          A large percentage of the volunteers are Ds. Everything is being done with camera surveillance. The State Legislature ordered the hand recount.

          The media says it is a charade, unpatriotic and everything else they can think of.

          Where is the charade?

  13. People gunning up like crazy is a vote of no confidence in our current political “leadership” and their ability to provide citizen security. Good luck to Comrade Beto and whatever goon hirelings the Democrat-Bolsheviks deploy to implement their globalist bankrollers’ orders to disarm the populace so the “redistribution of the wealth” and suppression of the kulaks can go into high gear.

    An Arms Race in America: Gun Buying Spiked During the Pandemic. It’s Still Up.

    https://dnyuz.com/2021/05/29/an-arms-race-in-america-gun-buying-spiked-during-the-pandemic-its-still-up/

    WASHINGTON — It was another week with another horrific mass shooting. In cities across the country, gun homicides were climbing. Democrats and Republicans argued over the causes. President Biden said enough.

    But beneath the timeworn political cycle on guns in the United States, the country’s appetite for firearms has only been increasing, with more being bought by more Americans than ever before.

  14. More signs of slowing in Orange County. Laguna Niguel just jumped from 170 to 206 listings. Of the 42 most recent offerings only 6 are pending or contingent. 10% of the current listings have price reductions.

    1. That’s awesome! Can’t wait for the sellers to return from their pandemic hideouts and flood the market with new listings that create races to sell among sellers rivaling today’s bid wars among buyers.

      1. I can’t wait for the Fed to lose control of interest rates and then watch helplessly as their asset bubbles and Ponzi markets implode under the weight of cascading defaults and margin calls. And then for millions of FBs to walk away from their underwater shacks and skyboxes.

        1. Based on the MSM accounts I have read, it seems the Fed not only fully controls interest rates at all durations along the yield curve, but further governs the movements of the stars, moon and planets.

          What makes you think the Fed will ever lose control of interest rates?

        2. The FedRes seems quite content to gobble up debt. As long as they are will to do that, I don’t see much changing, except for rising prices.

          The Biden Regime has announced their $6T budget, which I am guessing will entail a $3T deficit, plus whatever further “stimulus bills” they’ll come up with. So far there has been nary a peep from the Fed Res. All I recall is some non voting governor warning of inflation. Sounds to me like “printing presses go brrrrrrrt!” is code green.

        3. why would they walk away? didn’t they learn from last time it will takes years before the sheriff will come to evict you? live rent free for years

  15. Well looky here…is the lumber bubble starting to burst? And if so, is that a leading indicator of a bursting housing bubble?

    This, friends & neighbors, could be shaping up to be an “Oh dear!” moment in time.

    Lumber Gauge Finally Slips in Further Sign Boom May Be Easing

    https://www.bloomberg.com/news/articles/2021-05-28/lumber-gauge-finally-slips-in-further-sign-boom-may-be-easing?sref=ibr3A0ff

    A gauge of lumber prices has dropped from records for the first time in months, adding to signs that a historic rally may be ebbing.

    A benchmark of Western spruce, pine and fir lumber prices declined for the first time in 18 weeks, CIBC analyst Hamir Patel said Friday in a note titled “Lumber Pricing Decline Now Clearly Underway,” citing data from trade publication Random Lengths.

  17. “Oakland (down 13 percent), New York (off 12 percent), Seattle (down 11 percent) and San Jose (off 9 percent). The District of Columbia still has a shortfall of 9 percent, as well.”

    Rental rates and red hot cake starter home prices seem to be diverging, at least according to MSM accounts as of late. Young families are stuck renting forever and owning nothing, while wealthy investors snap up anything that goes for sale in the owned market to hedge against forwardly guided future inflation.

    1. It’s all fun and games until the desperate kids join antifa and come to a neighborhood near you.

    1. This cr@p is happening even in “gun free” London.

      I wonder what it’s like to be an unarmed Bobby, knowing that the bad guys have guns and aren’t afraid to use them.

      1. Multilingual “Gun Free Zone” signs with larger, more visible text would surely fix this epidemic of “gun violence.”

    3. “According to police, the shooting took place after a birthday party for local rapper.”

      Man they should put that advice in fortune cookies…

      The early bird gets the worm, but the second mouse gets the cheese.

      All things are difficult before they are easy.

      He who throws mud loses ground.

      Nothing is so much to be feared as attending a Rapper’s Birthday Party.

  19. Redmond, WA Housing Prices Crater 17% YOY As Double Digit Price Declines Blanket Seattle Area As Inventory Soars

    https://www.movoto.com/redmond-wa/market-trends/

    As a noted economist stated so eloquently, “Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.”

      3. Maybe there is still hope that Washington DC politicians’ long-sought affordable housing goal will be achieved in our time!

        If only the Fed could be persuaded to stand back and stand by while housing prices return to earth from their current stratospheric levels…

        1. If DC politicians wanted affordable housing, they would end the Fed. Right now they won’t even audit this private banking cartel.

          1. Why would they end a private banking cartel that is willing to do their dirtywork for them and whose operation is largely under the radar screen of American votership awareness?

        2. The Fed’s been pushing the envelope. Very Smart People come up with speculative theories backed by equations that vaguely define parts of the economy in one particular context (e.g. Phillips curve). The one thing in common with these theories is that they always benefit Wall Street and the government. The current system has benefited that group significantly. Only when that stops, will it change.

          Going off the gold standard, raising interest rates to crush inflation, runaway deficit spending, QE, QT buying MBS, now MMT is next. They’re going to keep pushing the envelope until something breaks, i.e. the government and Wall Street – the FIRE sector – stop benefiting.

          Now, what I find intriguing is that market was being supercharged with low interest rates and stimulus from a big Fed balance sheet and FOMO before covid. Listings were going down while sales were going up as well as prices were going up.

          Then the Fed supercharged a market that was already overheating (only taking a brief pause to process covid but market psychology was very FOMO) leading to a possibly unexpected situation: prices actually getting beyond what people thought would provide value, possibly popping the “buy at any cost” mentality. That is a bubble-pop thought, once people start considering “is it really worth it?” It’s a very emotion-based calculation but it’s not something you want people thinking. You want them to always think, “it doesn’t matter what you pay for it, it’ll be worth more in the future.”

          Secondly, if they seized up listings by dropping them so low that even people who wanted to move, with or without existing houses, could not reliably find a place to move which they could afford or find a superior house on which they could win the bidding war at a price they could afford.

          Finally, if lack of listings forces people to get sidelined, even if they could easily get loans, that could break the frenzy mindset too, as they have to sit out for a while and cool down and realize it’s not the end of the world if they don’t buy a house right this instant.

          Did credit availability drop in 2008, driving down sales, or was it purely a market psychology change? Or some combination thereof? Be interesting to find out.

          Anyway, this is all speculative on my part. And I’m usually wrong in my prognostications. In my neck of the woods, it is absolutely still redhot cakes with price increases and dropping inventory. But the Northern Virginia Movoto links were quite surprising. There’s been an exodus from cities but Reston, Herndon, Ashburn, desirable SFH communities farther out from DC, aren’t showing redhot cakes. That’s curious.

          1. “it doesn’t matter what you pay for it, it’ll be worth more in the future.”

            There lies the bedrock logical foundation of Ponzi finance.

          2. “is it really worth it?”

            Though FUD does occasionally creep in, one should never let it overtake FOMO.

  20. Latest from #ClownWorld. I can only imagine the carnage that’s going to ensue when “woke” western militaries find themselves pitted against non-woke adversaries like Russia or China.

    Ministry of Defence’s new £110,000-a-year diversity chief takes aim at armed forces’ ‘sexist’ ranks including rifleman, airshipman and airman

    https://www.dailymail.co.uk/news/article-9634545/Ministry-Defences-new-110-000-year-diversity-chief-takes-aim-armed-forces-sexist-ranks.html

    The Ministry of Defence’s new £110,000-a-year diversity chief is taking aim at ‘sexist’ ranks in the armed forces including rifleman, airshipman and airman.

    Samantha de Forges, who was appointed in the new role in February, is leading a review into military titles which will happen next year.

    1. find themselves pitted against non-woke adversaries like Russia or China

      I doubt it will come to pass, simply because the generals and admirals know what would happen. I don’t envy the people of Taiwan. That said, I don’t expect the PRC to have to invade. At some point they will make Taiwan an offer it can’t refuse.

      It’s one thing to send a carrier group to bully a banana republic, and it’s quite another thing to go against a foe with the capability of sending one of your prized aircraft carriers to Davy Jones’ Locker.

    2. adversaries like Russia or China

      I’m sure you’ve all seen the advertisements for the Russian and Chinese militaries compared to the new US Army cartoon. Along with the “I’m not checking boxes” CIA mom, I can only think that Biden has been paid to throw the match.

    1. Now that cryptocurrency has cratered, is it time to provide financial protection services for those who are at risk of losing money by investing in it?

      1. What would save cryptocurrencies is creating a credible narrative why one cryptocoin is superior to another. Why is Bitcoin worth 30-some thousand dollars each, versus Dogecoin being worth 30-some cents each. Why is coinX-1 superior to coinX-1000.

  22. The Financial Times
    Cryptocurrencies
    US regulators signal bigger role in cryptocurrencies market
    New OCC head says agencies should set a ‘regulatory perimeter’ for digital coins
    Montage of bitcoin and ethereum logos
    US financial regulators must try to figure out exactly what cryptocurrencies are and who has legal authority to do anything about them
    Gary Silverman in New York and James Politi in Washington
    4 hours ago

    US financial authorities are preparing to take a more active role in regulating the $1.5tn cryptocurrency market as concern grows that a lack of proper oversight risks harming savers and investors.

    The new efforts reflect a break with the Trump administration, which in some cases encouraged the use of cryptocurrencies in the financial system. But they could take time to bear fruit as US regulators struggle to determine who has the legal authority to oversee the volatile market.

    In an interview with the Financial Times, Michael Hsu, who was installed this month as acting comptroller of the currency, said he hoped US officials would work together to set a “regulatory perimeter” for cryptocurrencies.
    …

    1. US financial regulators must try to figure out exactly what cryptocurrencies are and who has legal authority to do anything about them

      AFAIK no one is claiming that they are legal tender anywhere in the universe. For all practical purposes they could be baseball cards or beanie babies. As long as there are fools willing to buy them …

      1. I don’t recall anyone suggesting that beanie babies or baseball cards be financially regulated.

        What’s different about cryptocurrencies? Is it that they are misnamed “currencies” that makes them special?

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