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A Vicious Cycle Where High Discounts Can Result In Massive Losses

A report from Mortgage Professional America. “Potential home buyers are being edged out of the house market because of high property prices, mortgage brokers have told MPA. Figures show that new home sales fell to the lowest level in more than a year, down by 19.4% compared to June 2020. Sales were also down by 6.6% in comparison to May. Paul Kwon, president at EA Lending, said he was ‘definitely seeing a slowdown in the supply demand ratios.’ ‘Everybody I’ve talked to – including realtors – are definitely saying that prices have been a little bit out of control.'”

“Phily-based broker Yury Shraybman said the increase in prices was ‘unsustainable’ but did not see that aspect changing any time soon. He said: ‘I think that the increase has been significant. It’s unsustainable. In our area, for example, the prices were increasing about 10% a year. So that’s really high and kind of unheard of, but I don’t believe that prices will go down.'”

From Arlington Now in Virginia. “Hello there — massive uptick in Just Reduced properties! Last week, we had 39 total homes experiencing a price reduction in Arlington County. And, this week, the figure has skyrocketed up to 68. That’s a nearly 75% jump.”

From WRAL in North Carolina. “By the end of the first quarter of 2021, the gap in the median price between new construction homes and existing homes in Durham, for example, had closed dramatically as existing homes increased in price, according to Zonda. According to Gian Hasbrock, a new home consultant for one of the Triangle and nation’s largest builders, experts are continuing to project appreciation in the Triangle, with estimates for year-over-year change falling at about 8% to nearly 12%.  That’s not 20%, but it’s also not 4%.”

“‘If you look at one slice of the data, appreciation has changed from 20 percent to 8 percent,’ said Hasbrock. ‘But looking deeper, it’s a normal reaction to something that was not sustainable, unlike the Great Recession, where the fundamentals were unsound, especially with lending.'”

“In the Triangle, there’s currently a projected 13,000-14,000 total home sites. That means that there’s a lot of ‘lot supply,’ said Hasbrock. But it’s well below what would be needed. Lot supply in a balanced market is typically upwards of 24 months. The result? ‘Pressure on builders not wanting to rush homes to market at pricing that might fool them down the road, because the supply chain is still erratic and unpredictable,’ said Hasbrock.”

The Puget Sound Business Journal in Washington. “Construction of the two-tower Seattle House condominium project near Amazon.com Inc.’s headquarters appears stalled, while two blocks away there are no signs of life in the project sales center, where shelves are empty and pink insulation has been stuffed into some of the interior window frames. Proposed before the Covid-19 pandemic, the 41-story Seattle House with 1,000 residences is the largest condominium development in the city, where sales of new downtown condos have not exactly taken off in most projects.”

“‘We are proceeding with the project but we are not starting presales at this time,’ developer David Ju said. ‘We are currently in the process of defining the timeline for opening the sale center and beginning presale activity.'”

“Construction has wrapped up on on the nearby 41-story Spire tower, where earlier this month the marketing team said 40% of the condos had been spoken for. Earlier this year asking prices were discounted by as much as 10%, with prices now ranging from $485,000 for a one-bedroom on the fourth floor to $4 million for three-bedrooms higher up in the tower.”

The Jewish Voice in New York. “A Manhattan condo board was unsuccessful in its desperate attempts to preserve the value of its property by appealing the court to reverse the devalued sale of a penthouse seized and sold by the federal government. The penthouse condominium apartment at the 23-story Walker Tower in Chelsea was seized by the U.S. Department of Justice in 2016, in a settlement to recover money from a Malaysian money-laundering scheme.”

“‘The board has an ‘obligation to preserve the value of the building,’ said the board’s attorney, David Kettel, in court papers. ‘A sale that is made at less than 40% of market value will also devalue the units owned by other [Walker Tower] residents by tens of millions of dollars,’ Kettel added.”

The Real Deal on California. “Ekkehart Hassels-Weiler had already purchased a bevy of high-priced homes in Los Angeles and New York when he paid $43 million for an enormous Beverly Hills Post Office mansion in September 2019. But despite Hassels-Weiler’s real estate experience and due diligence, the Angelo Drive home’s numerous construction flaws remained hidden until after the closing, according to a lawsuit filed last week.”

“‘The result is a catastrophic failure of the building systems and components,’ the suit alleges. The lawsuit — which is seeking $36 million in damages — is a far cry from the days leading up to the mansion purchase, when Hassels-Weiler married Omar Romero in a ceremony that featured a performance by Boy George, according to Dirt. The couple were likely drawn to some of the eight-bedroom, 11-bathroom property’s key features, which include white marble walls, a 30-foot entryway seven powder rooms, separate staff kitchen and a bocce court.”

From Senior Housing News. “A new firm led by senior living industry veterans, Scarp Ridge Capital Partners, is launching with a $300 million fund targeting value-add, opportunistic and distressed investment opportunities. Scarp Ridge is launching at a time when the senior living market has been dislocated by the Covid-19 pandemic. The average assisted living acquisition price fell 30% in 2020, according to Irving Levin data.”

From Bisnow on Illinois. “Chicago’s downtown office market set another record in Q2, with its vacancy rate hitting 17%, the highest ever recorded and up from 16.2% in Q1. The market seems likely to continue breaking vacancy records for the rest of the year. The upcoming vacancy increases will mostly happen because new office buildings planned before the coronavirus pandemic will soon open.”

“Much of the new vacancy is in Fulton Market. The rate for this submarket, the downtown’s hottest before the pandemic, hit 33.3% in Q2, up from 31.9% in Q1. That’s by far the highest in Chicago, according to Colliers. Developers completed 320 North Sangamon St. in Q2, one of several mostly empty towers to debut this year, adding another 260K SF of vacant space. Six additional buildings totaling 921K SF are under construction. Three of them are scheduled to be complete by the end of this year, contributing 620K SF.”

From Business in Vancouver in Canada. “Vancouver-based developer Bosa has switched a new Calgary luxury condo tower to rentals in mid-construction, an apparent nervy move in a city with rising vacancies rates, flatlining rental rates and falling per-door prices for apartment buildings. According to CMHC, the rental vacancy rate in downtown Calgary, at 8%, is the highest in a city where the vacancy rate has remained unchanged from a year ago around 6.6%.”

“Calgary’s rental vacancy rate has nearly doubled since 2019, which Michael Mak, senior economics analyst for CMHC, said was driven by the pandemic and a struggling economy, with high unemployment leading to out-migration and little in-migration from other provinces or countries. Downtown demand has been hampered by the record-high office vacancy rate in the core, at around 29%.”

“In the first half of 2021, 26 Calgary rental apartment buildings sold, compared to 14 at the same time last year, but the average per-door price fell to $145,000, down from$178,000 in 2020, according to the Network, a real estate research firm. Urban Analytics confirmed that Arris is the first concrete high-rise in downtown Calgary to convert entirely to rental. It may not be the last, based on what is happening in the city’s glutted downtown condo sector. As of June there were 1,017 condos for sale on the downtown market – accounting for 55% all condos listed for sale in the entire Calgary region.”

The South China Morning Post. “Home prices in Shenzhen, mainland China’s most expensive residential property market, have finally declined, falling by as much as 15 per cent, after about 300 rounds of cooling measures were introduced across the country in the first six months of the year. Towards the end of June, the average price of a second-hand home stood at 61,500 yuan (US$9,488) per square metre, or about 15 per cent below a peak of 72,436 yuan per square metre recorded in January this year, according to E-House China R&D Institute.”

“Also as part of the latest tranche of cooling measures, parents who had bought homes in good school districts, for eye-watering prices in some subdistricts of Beijing’s Xicheng district, were informed by local education officials that their children would be admitted to schools in other neighbourhoods in Xicheng. Market observers said that such a change to school admissions could cause home prices, not only in Beijing, but across the country, to cool quite drastically.”

“Homeowners were also more open to negotiations now if the buyers’ interest was genuine. ‘Earlier, it was difficult to make appointments with these owners. After all, without the possibility of securing a seat in a nearby primary school, these homes are not worth much,’ said Brian Feng, an agent in Shanghai’s Huangpu district, which is home to some top schools.”

The Financial Express in India. “‘Offload, offload, offload – get rid of your inventories’ – This was the advice last year from Hardeep Singh Puri, the Housing and Urban Affairs Minister, for the Indian real estate developers. This recommendation came close on the heels of a similar statement made by Piyush Goyal, the Minister of Commerce and Industry, as the lockdowns had pushed the realty sector’s recovery from a multiyear slump back to the starting line.”

“The choices available to developers, according to Mr. Goyal, were simple: sell off their high-priced inventories at lower prevailing rates or default on loan repayments as there is lack of liquidity in the market. This Catch-22 situation forms the crux of the burden that inventory overhangs pose for the real estate sector in India – weighed down by Rs 3.7 lakh crore worth of unsold housing units in just the top 7 cities.”

“However, selling off unsold units will not be as quick a solution as these statements will have you believe. Property consultant Jones Lang LaSalle (JLL) has reported that the unsold inventory in India will take around 3.3 years to sell, especially with the demand shock that resulted from pandemic-related complications.”

“This brings us to one of the primary challenges faced by developers: the older their inventory gets, the longer it takes to liquidate. This creates a vicious cycle where, if developers choose to wait for a buyer who is willing to pay a property’s true worth, they face the risk of further depreciation in its value. At the same time, offering potential homebuyers high discounts to make the sale can result in massive losses for developers.”

From Interest New Zealand. “There has been a surge in the number of Auckland apartments with remediation issues coming up for sale at auction recently, and there’s both good and bad news for their owners. The good news is that, perhaps surprisingly, there’s good demand for these types of apartments, resulting in competitive bidding at auction. The bad news is that they are selling for hugely discounted prices.”

“Of course they are buying at savagely discounted prices. Rating valuations for Auckland properties haven’t been updated since 2017, but most of the remediation apartments selling at auction have been going for around half to a third of their 2017 rating valuations, some for less.”

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This Post Has 136 Comments

  1. ‘But looking deeper, it’s a normal reaction to something that was not sustainable, unlike the Great Recession, where the fundamentals were unsound, especially with lending’

    Jeebus, if their mouth is moving they’re lying.

    1. Well after all… he’s a “new home consultant”. I guess the graft and crime associated with the word Realtor forced a rebadge of the same boatload of lies.

      But think about this…. when lies and misrepresentation is the very foundation you built upon, how do you stop? You can’t. You have to keep lying.

      1. “But think about this…. when lies and misrepresentation is the very foundation you built upon, how do you stop? You can’t. You have to keep lying.”

        Okay, I thought about this and concluded that the easiest path to riches is by lying; The better the lies and the better the lyers the smoother the path.

        Lies do not work on the well informed but they do work on the uninformed and they work VERY well on the misinformed.

        So, why is that? Perhaps Mark Twain can supply the answer:

        “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

        2. Mr. Banker, I was just reading some of the pronouncements of one of the cardinals of your profession, Alan Greenspan, longtime chairman of the Fed. For a long time, he was a huge proponent of market “self-regulation”, during a period which saw the dismantling of Glass-Steagall and the shedding of regulation by the financial sector. He later admitted his error, when being questioned before Congress in 2008, as trillions were being doled out to the financial sector (again, and it goes on till this day).

          I guess he could have done a full Baghdad Bob, but that would have simply added a delusionally comedic facet to his already destroyed reputation (among the general public at least – following the money, he’s probably been the most lucrative thing for Mr. Bankers in human history, so his reputation in the financial sector must be very hallowed indeed).

      1. A humorous snip from the article …

        “The absolute nature of most real estate transactions — and the high commissions involved — often leads to a close at all costs’ sales mentality that can easily cross the line into, well, asshole behavior.”

  2. ‘The result is a catastrophic failure of the building systems and components’

    Well, it was cheaper than renting Ekkehart.

    1. seems everybody who is somebody has a hyphenated last name. ok, count me in.

      aqius sans-lucre. my nom de plume.

      (sorry, geordi laforge, ol chap. you’re just not hitting all the proper keys. my vote goes to robin roberts.)

  3. “The Moment Wall Street Has Been Waiting For: Retail Is All In”

    https://charleshughsmith.blogspot.com/2021/07/the-moment-wall-street-has-been-waiting.html

    (snip snip snip)

    “The ideal bagholder is one who adds more on every downturn (buy the dip) and who refuses to sell (diamond hands), holding on for the inevitable Fed-fueled rally to new highs.”

    “Old hands on Wall Street have been wary of being bearish for one reason, and no, it’s not the Federal Reserve: the old hands have been waiting for retail–the individual investor– to go all-in stocks. After 13 long years, this moment has finally arrived: retail is all in.

    “If you doubt this, just look at record highs in investor sentiment, margin debt and the Buffett Indicator (see chart below). Current valuations are so extreme that the previous extreme in the 2000 dot-com bubble now looks modest in comparison.”

    Click on the link to read more.

    1. “Buffett Indicator”

      Does that even mean anything in this new era of meme stonks and cryptocurrencies?

  4. ‘The average assisted living acquisition price fell 30% in 2020’

    How do those 5% cap rates look now?

    1. “As one Raleigh broker explained, “There are serious quality of life issues here and sellers know it and want out now.””

      I guarantee, no broker ever said that. We need names.

  6. Note this big “cooling” happened with interest rates going up much. This is pure mania psychology playing out.

    1. I’m expecting the Fed to wait for the big cooling to morph into a deep dive into the frozen lake before they move much on interest rates or reduced asset purchases, to make sure nobody concludes they precipitated the crash.

      Other than turning up the dial on Quantitative Easing to a higher burn rate, it seems like they are running low on stimulus ammunition anyway.

      1. I was wondering what the opinions on “is the Fed out of ammo” were from the Google. I came across this: https://onlinelibrary.wiley.com/doi/full/10.1111/ecaf.12444

        “Abstract
        Many authorities claim that central banks ‘have run out of ammunition’, either because the central bank rate has dropped close to the zero lower bound or because of Keynes’s liquidity trap. I argue first, that indefinitely large increases in the quantity of money remain possible even with the central bank rate close to zero, and, second, that increases in the quantity of money raise all asset prices, including the prices of quoted equities, not just bond prices. Bonds are an unimportant asset class in modern capitalist economies, relative to corporate equity and real estate. Meanwhile increases in equity prices always boost aggregate demand and output.”

        I think this assumes a disappearance of inflation. Powell in his press conference the other day said the current situation is high unemployment and high inflation, and that wasn’t common or expected, so it’s trickier to plan for (some more info on Powell’s opinion, and the Fed position on, MBS and Treasury purchases here).

        1. central banks ‘have run out of ammunition’

          As long as they fund Federal deficits (and even the interest), the limit is the fall of the central government. It looks like that is the goal.

    2. What are these rounds of cooling measures and how do you do 300 of them in six months? Raise interest rates 0.01 point every 12 hours?

    3. “Note this big “cooling” happened with interest rates going up much. This is pure mania psychology playing out.”

      +1

      – We’re both running out of runway and “greater fools.” Even those fools duped by the Fed can no longer afford the astronomical prices, even with zero down, appraisal fraud, relaxed lending standards (aka sub prime 2.0), etc., etc.

      – BTW, those astronomical prices are also courtesy of the Fed. The inflation is “transitory,” that is until the housing bubble bursts and then we get deflation, just like last time. As you once said, QE is ultimately deflationary. The problem this time is that it’s “The Everything Bubble.” Stonks, bonds, houses; you name it. Multiple asset bubbles all at the same time, which will likely all burst around the same time as well.

      – Historical reference: John Law and the Mississippi Bubble. Lots of similarities there, and oh, that didn’t end well either. There are no historical cases of an asset bubble popping that ended well, but surely, “this time is different.”

      “I can calculate the motion of heavenly bodies, but not the madness of people.” – Isaac Newton

      2. “BTW, those astronomical prices are also courtesy of the Fed.”

        It is amazing to me how many local housing market commentators can overlook this most basic point. So many articles start out by claiming that what the local market needs to bring down prices is more units, completely missing that the crazy runup in prices over the pandemic is demand, not supply, driven and national or even international in scope.

        1. not supply, driven

          I don’t see any new houses being built. No new hotels. Obsolete industrial conversion to “Luxury” is long gone.

          2. I don’t see any new houses being built.

            I see more new housing developments than I did in 2005.

          3. I see more new housing developments than I did in 2005.

            There was a lot more construction last time in my little burg than during this bubble. Also, last time prices here didn’t go up very much, unlike during bubble 2.0, when prices here easily doubled, if not more.

  7. There is a lesson to be learned here somewhere …

    “Hear no evil, see no evil: How Credit Suisse ignored Archegos warnings | Reuters”

    https://www.reuters.com/article/credit-suisse-results-archegos/hear-no-evil-see-no-evil-how-credit-suisse-ignored-archegos-warnings-idUSL8N2P53T1

    (snip)

    “Weeks before Archegos collapsed, Credit Suisse received what would turn out to be one of its final warnings from a junior analyst about the hedge fund’s impending disaster. Just as with earlier red flags, stretching back years, it was ignored.”

    (snip)

    “The Swiss bank suffered by far the most of all peers from financing the fund’s risky market bets, after its bankers won the upper hand over ‘junior’ risk controllers, overriding safety limits and leverage controls, and leaving it unguarded when disaster struck.”

    (snip)

    “Despite long-running discussions about Archegos, by far its largest hedge-fund client, Credit Suisse’s top management were apparently unaware, with the group’s chief risk officer and investment bank chief recalling hearing of it first on the eve of its collapse.

    “’There were numerous warning signals,’ the report said. ‘Yet the business … failed to heed these signs.'”

    (snip)

    “’No one at CS … appeared to fully appreciate the serious risks,’ the report said. ‘These risks were not hidden. They were in plain sight. When CS finally took steps … the actions … (were) too little, and too late.’”

    1. “Hear no evil, see no evil: How Credit Suisse ignored Archegos warnings | Reuters”

      mr b, i propose an update to the venerable 3 monkeys by adding a bag o’ money passed between them

      oh wait, also add purple hair. to get by the wokesters

    2. Very interesting read.

      Just gotta’ love stories like these.

      Archegos admitted to Credit Suisse that it had run short of liquidity. That evening, the bank’s investment bank chief and group risk officer, both of whom have since left, were informed.

      Betcha those genius ‘investment bank chief and group risk officer’ got a nice golden parachute payout. Probably out sailing on their yachts right now, sipping beer and reminiscing about the good ‘ol days.

  8. A crisis is a terrible thing to waste …

    U.S. economy contracted 19.2% during COVID-19 pandemic recession | Reuters
    https://www.reuters.com/article/usa-economy-recession/u-s-economy-contracted-19-2-during-covid-19-pandemic-recession-idUSL1N2P21JC

    First, the crisis …

    “WASHINGTON (Reuters) – The U.S. economy contracted at a record average annualized rate of 19.2% from its peak in the fourth quarter of 2019 through the second quarter of 2020, government data showed on Thursday, confirming that the COVID-19 recession was the worst ever.”

    The worst recession ever. What is one to do? Here is an answer …

    “The pace of recovery from the pandemic downturn, the deepest going back to 1947, was equally stunning. The Commerce Department’s Bureau of Economic Analysis said gross domestic product rebounded at a historic average rate of 18.3% between the second and fourth quarter of 2020.

    “Mandatory shutdowns of nonessential businesses in March last year to slow the first wave of coronavirus infections left the economy reeling, throwing a record 22.362 million people out of work. The government provided nearly $6 trillion in pandemic relief, while the Federal Reserve slashed its benchmark overnight interest rate to near zero and is pumping money into the economy through monthly bond purchases.”

    (snip)

    “Massive fiscal stimulus, the Fed’s ultra-easy monetary policy and vaccinations against COVID-19 have allowed economic activity to resume, with GDP pulling above its pre-pandemic level in the second quarter. The government also said the economy shrank 3.4% in 2020, instead of 3.5% as previously estimated. That was still the biggest drop in GDP since 1946.”

    2. Just saw this on CNN’s Business page:

      Corporate America to workers: Get vaccinated or get out

      A needle in every arm. Even though it appears that the mRNA vaccines wear off after only 6 months and actually leave you more susceptible to variants. Remember when saying that boosters would be required was conspiracy theory?

      So, how long until they pin us down and forcefully inject us?

      1. how long until they pin us down and forcefully inject us?

        Consider that this is a control training exercise. Forcing the injection is counter productive. It provokes rebellion. Coercion, encouragement, penalty and reward, step by step is a better way to train people to stop resisting commands.

        Disclaimer: I used to teach AKC obedience classes.

        1. Positive reinforcement is the foundation of applied behavioral analysis (ABA). Basically, it’s dog training for autistic children.

        2. Coercion, encouragement, penalty and reward, step by step is a better way to train people to stop resisting commands.

          Makes sense. I read that at some vaxx sites here in the Centennial State, they are handing out $100 gift cards to those who get vaxxed. I’m gonna guess that those sites are not in Cherry Creek or Highlands Ranch.

          1. If you show up with a vax card from months ago, do you get the $100 anyway? And are they upping the reward as time goes on, as more incentive for the more hesitant? I could see people holding out until the end just to get some better schwag.

          2. I wonder how often it’s safe to get a vaccine. It could become like donating plasma for extra cash.

          4. “His presentation instead focused on four vaccines that the company is moving through the first phase of clinical trials: two target strains of influenza, a third is for Zika virus, and the fourth remains a secret.” Secret?! 🤔

          5. Dr. Malone tweeted that STATNEWS article after I posted it here and his tweet was removed within 15 minutes.

      2. We should remember at times like this we vastly outnumber them and we’re armed to the teeth.

        2. My comment about being pinned down was rhetorical. It won’t come to that. But they keep beating the drum and 50,000 a week are still showing up for the jab here in the state. And I’ll bet that when workers get a letter from their illustrious CEO telling them that unless they get vaxxed they’ll be fired that many will fold and get the kill shot.

          1. “…unless they get vaxxed they’ll be fired…”

            It’d make a great argument for permanent unemployment, so some lawyer will run it up the flagpole.

      3. Remember when saying that boosters would be required was conspiracy theory?

        It’s about 6 months between conspiracy theory and conspiracy fact these days.

        1. Your already denied work, being able to engage in a lot of activities if you not vaccinated. Some hospitals are requiring proof of getting vaccinated to get medical services- I know because that was required of a friend of mine to get a minor medical procedure not related to Covid.
          Is anybody in doubt that your put in a prison of great limitation on activities if you don’t comply with the forced jabs. And they are doing this when they have enough evidence of unacceptable adverse reactions to the jabs, and failure of the effectiveness of the jabs. All this while fake news is censoring any counter facts to take jab for its safe and effective . Not what I would call informed consent . All this force when there is a med alternative that is highly successful in treating Covid , with the meds being cheap, they are suppressing. And how dare they want to vaccinate the low risk younger people and children so they will have to take booster after booster.

          This is a big evil drug pusher wanting profits and control by getting people forced into shot after shot , of a untested new technology, that has already proven to be vile , unsafe, and not effective. Sinister and outrageous.

        2. Israel starts rolling out boosters next week.

          Told a friend over lunch that I wasn’t jabbed. He seemed shocked. I told him that this isn’t the black death.

          1. I saw a tape last night by a women who lives in Israel who was reporting on a bunch of adverse reactions to the jabs, but they are censoring that news.
            CNN talking head actually saying the unvaccinated should be fired, and also be denied food. That is advocating murder of the unvaccinated.
            Let see, Stalin killed what about 20 million by starvation. When you hear talking heads on CNN ,they are basically mouthing the position of people like Klaus Schwab and the group that rigged the election. Klaus Schwab, a couple of weeks ago said in essence that the unvaccinated should be forced to take the vaccine.
            Klaus Schwab acts like he’s the elected leader of US and other Countries. They actually talk like they are saving the World from the vile humans. I’m telling you these are crazy demon people. Unreal

    1. You can always break a lease. Most of the time you’ll have to write a check to cover that you’re underwater.

  14. ‘A sale that is made at less than 40% of market value will also devalue the units owned by other [Walker Tower] residents by tens of millions of dollars,’

    Why would they sell for 40% below market value?

    Now if the current market value happens to be 40% below where Mr. Attorney wishes it were, that is another matter entirely.

    1. “Why would they sell for 40% below market value?”

      Let’s take a look at the article and perhaps we can uncover the reason …

      “The apartment was swiftly sold to Morgan Stanley high-asset wealth manager, Ron Vinder, through an LLC entitled Gotham Tower, for $18.3 million in the fall of 2020.”

      AHA!

      “The condo board, however, demanded that it had the right of first refusal on the property. As per Crain’s, the board argued that its bylaws specify that the board can make an offer on an apartment for sale in the building before anyone else. The board wanted to be the one to purchase the underpriced unit from the government, and then to resell it for a higher price. The board has an ‘obligation to preserve the value of the building,’ said the board’s attorney, David Kettel, in court papers. ‘A sale that is made at less than 40% of market value will also devalue the units owned by other [Walker Tower] residents by tens of millions of dollars,’ Kettel added.

      “The board, however, was too late, …”

      Bummer!

      “… and the sale had already gone through. A panel of federal appellate judges ruled that sale to Vinder was already complete, and could not be undone. The board also tried to get the District Court to stay the sale on the day before it closed, but that too was denied. The panel said that any relief must now be obtained through state court.”

      IOW, they are screwed.

  15. Selling out: America’s local landlords. Moving in: Big investors | Reuters
    https://www.reuters.com/business/finance/selling-out-americas-local-landlords-moving-big-investors-2021-07-29/

    “Summary
    Many local landlords have not been paid for 18 months
    Growing number of owners selling to institutional investors
    As federal eviction ban ends, thousands have already quit
    Changing ownership driving up rents and prices – experts”

    (a snip or two)

    “NEW YORK, July 29 (Reuters) – Beset by COVID-19 and its fallout, local landlords are offloading their properties to cash-rich institutional investors, and America’s real-estate market may never be the same.”

    “Many of America’s landlords have gone a year and a half without being paid by tenants, who’ve been protected by several state and local eviction moratoria as well as an umbrella federal ban enacted 11 months ago.

    “The owners have been waiting for $46 billion to help them survive without that income. The funds were approved by Congress months ago, but bureaucracy creaks; only $3 billion has reached them so far, according to U.S. Treasury Department data.”

    “These bigger players have bulk-bought properties during the pandemic, according to industry data and Reuters interviews with more than three dozen landlords, real estate brokers, landlord associations and property acquisition firms in major cities.

    “Such investors and their advocates say they provide long-term stability to the market at a time of upheaval, and are trying to fill the gap in rental properties needed by Americans as many small landlords are exiting in financial trouble.

    “Yet many housing campaigners say the growing presence of big investors in the market will inevitably mean higher rents and less affordable housing available to the types of tenants whose health and incomes have been hit hardest by the pandemic.”

    “The increasing interest of institutional investors has already helped push up both rents and home prices during the pandemic, according to John Burns, though other factors like lack of inventory and low interest rates have also been drivers.

    “Rents are up 7% nationally from a year ago, according to housing tracker Zillow. Average home prices rose 16.6% in the year ending May, according to the CoreLogic Chase-Shiller index, the highest annual growth since it started in 1987.”

    1. “Selling out: America’s local landlords. Moving in: Big investors”

      Strong hands buying out weak hands must be one of the oldest tales in finance.

    2. Growing number of owners selling to institutional investors

      They talked about this on Beanie Boy last night. You will live in the pod, you will eat the bugs, you will own nothing, and you will be happy.

    1. They’re never going to let it expire. Free rent forever. Landlords are getting taken behind the woodshed.

    2. They’ll kick the can as long as possible to postpone the eventual government-engineered crash.

    3. Calling on Congress and Congress doing it are different things. Good luck getting this through reconciliation.

  17. “Bad men need nothing more to compass their ends than that good men should look on and do nothing.”

    — John Stuart Mill

  18. For how many years can demand continue to be “pulled forward?” This is something I have been hearing for seemingly decades now, yet there’s still future demand available now.

  19. In the past week it seems there is still an insatiable appetite for overpriced stocks and cryptos. One down day and then the DOW rocketed even higher. Crytpos have increased 33% in a matter of a week, coming down a bit off the highs. There is still so much money sloshing around out there it’s incredible.

    1. Must be getting close to time to sell the rally and wait for the next dip to buy.

      Which reminds me: We know a few families who sold their homes earlier this year and are renting until the next crash to get back into home ownership. The last time I recall hearing stories like this was back in 2006.

    2. The stock market is just a grand facade created to separate fools from their money. There is no underlying value if your stock pays no dividend. You are buying a claim on nothing except the hope of a greater fool to pay you more for your worthless claim. It is only useful as a barometer of liquidity. You can match it up to the helicopter drops of the last year and half and see why it keeps going up. Bitcoin seems especially good at telegraphing this. The leaking was accelerating as half the states shut off the unemployment stims. The current increases started right when the latest round of 300 bucks a kid hit the banks. Don’t ‘invest’ for ‘value’. Gamble on the helicopters.

      1. What are lumber futures at more than 50% off telling us? Leading indicator of housing market crater?

        1. 50% off

          If you step back a little, they are not 50% off, they are still high. A speculative moonshot doesn’t establish a sustainable base.

          1. If you step back a little, they are not 50% off, they are still high.

            I beg your pardon, but lumber futures were up to more than $1,700, and are now down around $600. That’s almost 66% off.

          2. I think what Blue means is that lumber prices are still well above the historic average, and are still expensive (hence the “step back” comment).

            But yeah, they are 50%+ off an unrealistic and artificial high that killed demand.

        2. I think the main lesson that lumber futures gave us is that there was never a shortage of trees or capacity to mill them. The speed and scope of the rise and subsequent fall is really interesting for markets they claim are rational. As far as how it affects the housing bubble, if prices are set at the margin then that margin was definitely impacted causing a lot of plans to change. Where does the next credit impulse come from to keep it from imploding? I think the state bailouts maybe have a month or two left to maintain the illusion as they spend their ill gotten gains but it all hits a wall soon without something bigger to fill the void. I feel like we’re in a 747 that has been steadily climbing while the passengers and crew all get drunk in the piano bar not realizing we are about to run out of fuel.

  20. After deep diving into many articles and videos, here are the bullet points of what I’ve surmised.
    It was Fauci’s dream from early in his career to be involved in the creation of a lifesaving vaccine which would save the world from a lethal pathogen. He failed with HIV and saw Covid 19 as his salvation.

    As the years passed, Fauci came to oversee an over 6 billion research budget which he could pay out at his discretion. This has given Fauci immense power over university research departments and pharmaceutical companies. He can also hold and give out portions of patents from any drug discoveries to his minions.

    It is my belief that given the above, Fauci sought to suppress any and all discussions of early treatment of Covid 19 so that his “lifesaving” vaccine could take center stage and he could be looked upon as the savior of the pandemic. And make lots of money for himself and the entities he influenced.

    Furthermore, it is my belief that the Biden people made a deal with Pharma and Fauci that they would get 70% of the American people to take the vaccine by the 4th of July in return for their support. This could explain the non-stop hysterical pushing of the vaccine upon the American people.

    1. This could explain the non-stop hysterical pushing of the vaccine upon the American people.

      At this point, they need everyone jabbed so they can blame a variant rather than antibody-dependent enhancement caused by the genetic juice injections.

      I’ve been watching the AFLDS’ White Coat Summit. We’ve had 4x the number of deaths per million than the rest of the world.

      1. AFLDS’ White Coat Summit

        The shots dysregulate the immune system, including cells that keep cancer in check. One physician has seen a 10-20x increase in uterine cancer in the last 6 months.

      2. 4x the number of deaths per million

        Where are you getting your data? According to Worldometer, in deaths/million, the US is ranked 21st. The leader is Peru, with 3x the deaths/million of the US.

        1. According to Worldometer

          Oxy, Worldometer does not even track deaths from vaccination. They only track deaths by motorcycle & etc. with coincidental PCR positive.

        3. AFAIK, the manufacturers blew up their control/placebo groups by offering them the jabs after EUAs. The unvaxxed are the control group now. 🤦‍♀️

      3. they need everyone jabbed so they can blame a variant rather than

        I’m confused, could you expand?

          3. “what” do they want to blame a variant for?

            There’s a simple reason why we haven’t had a coronavirus vaccine until now. Clearly, you haven’t done your research. I’m not spoon-feeding you this one.

          5. Peter Hotez is a vaccine shill pushing The Narrative on MSM these days. Why the difference between what he said then vs. what he says now?

          6. Our World in Data has the same numbers as Worldometer. The guy on the stage at 2:23:25 lied.

            But I thought you were “done” with me?

          7. But I thought you were “done” with me?

            The information was too important not to reshare with other HBBers in case they missed or forgot it from last year.

      4. “genetic juice”

        that’s absolutely brilliant! mind if I steal it?!
        heck, I stole Abbie’s book, the neighbor’s rake, Napster music . . what’s a little plagiarism between posters ?

    2. Imagine if this CCP Flu scamdemic happened in the year 1990.

      No work from home.
      No lockdowns.
      No social media.
      No virtue signals.

      0.002% of the population would have died, and the rest of us would have moved on with our normal lives.

      1. No, I don’t think that 0.002% would of died. In a sane World they would of been given med treatments, not no treatment and put on respirators to die alone without the family even allowed in to advocate for them. See Dr McCullough and others testimony on what they were doing. Plus they were giving 39 thousand dollar bribe per patient to hospitals where people died like that.
        Thank God Doctor groups started fighting back and developing drug treatments in spite of this deliberate suppression of drugs that worked. They are highly effective drugs that can even prevent the need for a hospital visit with a 85% success rate.

        They knew they couldn’t get EUA on vaccines if they had effective drugs.
        Seriously , I have never seen such deliberate evil and murder for the agenda of Big Pharmacy for the solution of new technology untested vaccines.

    4. IIUC, one of the objectives of gain-of-function research is to investigate how viruses infect humans, which would also provide insight into how to design vaccines. Fauxi said (or emailed?) that he thought GoF research was “worth the risk.” Yes, to him, it would be.

      1. Wait a second oxide, no excuse to create a bio weapon disease, that would not naturally developed in nature, so you can create a vaccine to combat it.
        Look at how evil Big Pharmacy Medicine has become that they are creating disease, so they can make money and bring on medical tyranny. The evidence shows they planned the whole Panademic ahead of time.
        Oxide you just can’t perceive how evil these bastards are.

        1. they planned the whole Panademic ahead of time.

          It is possible that a pandemic response was pre planned and that an unexpected opportunity presented to trigger the response.

          1. At this point, we don’t know if it was deliberate or accidental. What we do know is that gain of function research is dangerous and unethical for this very reason.

        2. Oxide you just can’t perceive how evil these bastards are.

          False. According to HBB, not only can I conceive how evil they are, I myself am evil and I’m one of them.

    5. Nice summary Interested Observer, of the motives of that nut Dr Fauci, same conclusion I came to about that creep.
      Interesting how you have a body of old corrupt nuts in power positions right now.

      Dr Fauci
      Biden
      Klaus Schwab
      Soros
      Gates
      Pelosi
      Schumer
      Diane Finestein

      High percentage of Congress and Senate are over the hill and have been career politicians.

      No doubt that term limits would of solved part of the problem of Government being corrupted . But maybe they should have age limits of forced retirement at 70.
      And like I have commented on before, you get a strange kind of corruption from old corrupt nuts that never got what they wanted like Joe Biden
      Biden wanted to become President early on in his career as a Senator. He failed twice because he’s a dumb ass and corrupt as can be. He wasn’t qualified mentally to run for President and he’s a treasonous puppet.
      Pelosi is another nut that finally made her way to be the first women Speaker of House, who is just a power hungry corrupt nuts selling out the Country.

      And of course all the money powers wanted the most corrupt and treasonous and dumb ass people they could find to put in puppet positions.

      And when you watch Soros and Klaus Schwab talk , they are two old frustrated Nazi mentality weirdo , that want some bizarre world.
      Gates is 64, but no question he’s into depopulation, and mass vaccination and has corrected Government and institutions by his wealth, as Soros has been doing.

      People like Fauci are dangerous people because they have some kind of character flaw that allows them to harm people for their perverse goals.

      1. Don’t forget the young ‘uns. Zuckerberg and Dorsey, are the next generation of this BS. Bezos too.

      2. the only way the world truly gets out of this is to go back to standard, old fashioned morality (internal), and ethics (external).

        civics must be taught again and it wouldn’t hurt to pledge allegiance in schools again either.

          1. Instead of the pledge, they would do better to sing everything from Schoolhouse Rock. At least they’d learn the Preamble to the Constitution and How a Bill Becomes a Law.

  21. some fascinating stories: In 1862 Union soldier Samuel Decker was reloading his gun when it misfired and blew off half of both his arms. By 1865 he had designed and overseen the building of a set of state-of-the-art prosthetic limbs “hitherto unrivaled for ingenuity and utility.” With his new arms, he was able to feed and clothe himself as well as perform even more challenging tasks such as picking up objects as small as a pin and regaining the ability to write. In 1867 he was invited to the Army Medical Museum where he sat for photos so that he and his invention could be documented.

    https://www.facebook.com/Horrible-World-History-102625011162093/

  22. Sales are all coming back to pandemic levels. I’m starting to see more and more listings around my area (Milpitas/San Jose). Listings are staying longer too. I will do some more research on Zillow this Friday. I took screenshot of inventory and listings for several cities on Feb 2021. Will check on that and compare it to now.

  23. Comedian Adam Carolla ‘blacklisted’ by Hollywood says it’s a ‘small price to pay’ for free speech | Fox Business

    https://www.foxbusiness.com/entertainment/comedian-adam-carolla-blacklisted-by-hollywood-says-its-a-small-price-to-pay-for-free-speech

    “Comedian and actor Adam Carolla says he won’t be starring in sitcoms anytime soon after facing calls to be canceled over jokes and creative content, causing him to be ‘blacklisted’ by Hollywood.

    “‘Well, I don’t get a lot of Hollywood roles, I don’t get my documentaries into Sundance… but it’s kind of a small price to pay to say what I want to say,’ Carolla told FOX Business’ Stuart Varney.

    “Carolla joins the growing list of comedians who are speaking out against cancel culture, including Tim Allen, who tweeted over the weekend: ‘Wonder if government agents will be policing comedy from the back of the house.’

    “The podcast and radio host also slammed actors and California politicians as ‘cowards’ for being privy to cancel culture.

    “‘Actors are cowards. They play heroes, but they’re cowards and they’re soft and they’re weak and they go along with anything,’ Carolla argued.

    “‘They all live under the rule of Gavin Newsom,’ he continued. ‘He’s ruining most of our lives.’

    “Carolla also pointed out that Reed Hastings, the CEO of Netflix, donated $3 million to stop the recall of the California governor.

    “‘If you’re an actor and you live in California, they won’t say anything, they’re cowards. They want money,’ Carolla claimed.

    “In his profession, Carolla said on ‘Varney & Co.’ Thursday, it’s important to stay true to who you are and what you believe.

    “‘I’m a comedian. I have to say what I want to say. Otherwise I should go back to swinging a hammer,’ Carolla explained.

    “Carolla also said he doesn’t take harsh treatment from critics personally.

    “‘They know I won’t apologize,’ Carolla admitted. ‘I told them I won’t apologize a long time ago and they basically leave me alone.’

    “The comedian sees cancel culture coming to an eventual end, but it’ll take a collective effort.

    “‘The only end is people standing up and ignoring it or pushing back, then it’ll go away immediately,’ Carolla predicted. ‘But as long as we listen to these idiots and apologize to them, then it’s never going to go away.'”

  24. If you remember they got a Panademic declared based on projections. They projected that 2.5 million in the US were going to die of Covid, which turned out to be totally false.
    They used a bogus PCR test to register cases of Covid, which one was revoked last week but a total of 22 months of fraud was allowed on Dec 31, z2021 when they can’t use the bogus test anymore.
    They bribed and extorted the hospitals and Drs/ nurses to lable all deaths Covid to up the cases.
    They had 24/7 false narrative news fear mongering while censoring any counter data.
    They suppressed medications that worked, causing thousands to die, so they could get EUA on vaccines, and so vaccines would be the only solution to the crisis.
    They locked downed and masked US Citizens when the evidence shows that lockdowns and masks aren’t effective. They still are using these tactics.
    They destroyed small business while billions were filtered to the Big Monopolies.They fatten the pockets of Big Business with Covid relief packages, as well as States.
    They rigged the election by using Covid to pull off the election fraud.
    Fauci funded gain of function research in the very lab in China that Covid originated from. Than again maybe nothing was ever leaked and the Panademic was all contrived.
    They have never shown proof of the isolated Covid virus , and they used computers to fill in sequences they never had.
    There was a cover up of Fauci involvement with China lab, and .months of false narrative that virus evolved naturally and was novel.
    In spite of Panademic only being a threat to a small fraction of the Population, they are forcing unsafe vaccines that would require numerous shots.
    They did not inform the public of risks of vaccine or that they would need repeated jabs, and they were fraudulent in claiming they were safe and effective and that they have no idea about short or long term effects.
    There is a concerted effort to downplay the adverse reactions to the vaccine, that any sane regulatory body would of pulled them from the market by now.
    No medical Justification to vaccinate the younger people, or make them wear masks for hours and hours.
    So, every step of the way this Panademic has been a epic fraud in every way with reckless disregard for all levels of harm and what I call murder.

  25. The globalists’ plan to bankrupt 8 million independent landlords and snap up their rental properties on the cheap gets its first serious check as a Federal court that amazingly decided to uphold the Constitution rules that the CDC’s eviction ban is unconstitutional. Time to GTFO, deadbeats…sorry, Comrade Biden, but the freeloading couldn’t go on forever.

    Nationwide eviction ban will expire this Saturday after Biden Administration LOSES fight with Supreme Court

    https://www.dailymail.co.uk/news/article-9840157/Biden-allow-eviction-moratorium-expire-Saturday.html

    The Biden administration announced Thursday it will allow a nationwide ban on evictions to expire Saturday, arguing that its hands are tied after the Supreme Court signaled it would only be extended until the end of the month.

    The White House said President Joe Biden would have liked to extend the federal eviction moratorium due to spread of the highly contagious delta variant.

    1. They want to extend it because Delta Delta Delta. Nope sorry, we have a vaccine for that now, and breakthrough cases are like a cold. Go the F back to work. Don’t want the vaccine? Then get Delta and get it over with, and then go the F back to work. No more coddling.

      1. I could build a compelling circumstantial case of the virus being release deliberately. There is no other conclusion to draw, based on the entirety of evidence and acts . While the smoking gun of the deliberate release of virus, verses accident might never be obtainable , a overwhelming circumstantial case of acts and evidence points to deliberate release. Its also possible that the whole Panademic was faked or they would not have to have fake tests denied med treatment, bribes to lable all deaths Covid , and censored news to promote one narrative.
        Everything they did in response to the Panademic was not a normal intelligent follow the Science response. They did a trial run of a Covid type Panademic in Oct of 2019 , and surprise surprise it happened two months later.
        They contrived computer projections that 2.5 million would die from Covid in US , which would even be more lethal than the Spanish flu, 100 years ago. Just like all the other fake new narratives they promoted 24/7 , while dispute was censored, its a military weapon .
        It was deliberate,, no question in my mind.

    2. Biden is not over-lording a fief. Private property rights constitute some of the oldest principals in this country. A private property owner cannot be forced to quarter soldiers (or deadbeats).

    3. The sob stories are popping up already. But aren’t these people the ones who refuse to go back to work because unemployment pays more? If that is the case, why were they not paying the rent? A: Because they didn’t have to pay it. Did they save the rent money? Of course not.

  27. Four Members Of Congress Accused Of “Trespassing” While Trying To Inspect Prison Where Jan. 6th Defendants Are Held

    by Kelen McBreen
    July 29th 2021, 2:27 pm

    Four GOP lawmakers were accused of “trespassing” at a Washington DC prison when they tried to check on the conditions of January 6th defendants being held there.

    Security guards at the DC Department of Corrections told the congressional members they could not enter the facility and locked them out of the building entirely.

    Footage posted by Florida Rep. Matt Gaetz shows an attorney was even barred from seeing his client inside the federal prison.

    Georgia Rep. Marjorie Taylor Greene (MTG) can be heard saying, “They don’t want us to know what’s happening inside.”

    https://www.infowars.com/posts/four-members-of-congress-accused-of-trespassing-while-trying-to-inspect-prison-where-jan-6th-defendants-are-held/

    1. I’m working on a new tune. Delta Dawn by Tanya Tucker. It’s gonna be a beaut…. a real beaut.🤣👍

  29. “It’s unsustainable. In our area, for example, the prices were increasing about 10% a year. So that’s really high and kind of unheard of, but I don’t believe that prices will go down.”

    Said the aszclown who makes a living selling houses (fleecing people).

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