thehousingbubble@gmail.com
Blog

A Ponzi-Like Scheme In Which Investors Were Taken For A Ride

It’s Friday desk clearing time for this blogger. “The stratospheric housing market may be returning to earth. Through the first eight months of the year, 28,306 homes were listed for sale in Greater Columbus, up 13.5% from the same period in 2020. ‘Even with record sales last month, the number of homes still available for sale was 24.4 percent higher than last year, providing buyers with even more selection,’ said Columbus Realtors President Michael Jones.”

“The week after Labor Day, something happened that caught realtors off guard. There were over 300 new Boston listings in MLS in the days after the holiday, practically unheard of in these times. In Jamaica Plain, over 25 new condo listings popped up in a couple days. Could Boston’s painfully hot real estate market finally be pivoting in favor of buyers? According to the Massachusetts Association of REALTORS’ August 2021 report, median home sales prices are dropping, but are still higher than last year at the same time.”

“According to RE/MAX of Southeastern Michigan in Troy, for the first time since February, the month-over-month sales price decreased in metro Detroit, down to $281,425 in August from $288,725 in July. ‘Buyers aren’t as quick to put in an offer, and sellers are finding their home may be on the market for a few weeks before they get an offer. This is still a market that favors sellers, but it isn’t the frenzy we saw in early spring,’ said Jeanette Schneider, president of RE/MAX of Southeastern Michigan.”

“‘If things are staying on the market a little longer, versus staying for a couple of days, then it might be time for [buyers] to get back in the market,’ says Terri Robinson, a real estate agent with Re/Max Distinctive in Ashburn, Virginia. Recently, the inspector tells her that the demand for walk-and-talks has gone away, and buyers are back to getting full-fledged inspections that take a few hours. ‘It indicates that sellers are more amenable now to a buyer coming in and asking for a home inspection, so that’s good news for buyers,’ Robinson says.”

“‘Kelly Clarkson has hauled in $8.24 million for her Encino farmhouse. It chalks up as a slight loss for the singer, who paid $8.5 million for the property in 2018. She’s been shopping the home around since last year and most recently listed it for $9 million.”

“A big project that would have brought several hundred affordable homes to an up-and-coming downtown San Jose neighborhood has lurched into a default on its loan. The development, if built as proposed as a co-living project, would total 803 units and sprout at 199 Bassett St. in downtown San Jose’s emerging North San Pedro district. Now, the prospect of foreclosure has jolted the project, which is delinquent on a large loan the property was provided in 2019, according to documents filed with the Santa Clara County Recorder’s Office on June 21. But the project has tumbled into delinquency on one of its mortgages.”

“A Shoreline multifamily development site at 18110 Midvale Ave. N. has sold for $6.5 million, according to King County records. The seller was the court-appointed receiver for Northlake Capital & Development, which acquired the property in 2019 for $2.1 million, then later was foreclosed by its lender. With Studio Meng Strazzara, Northlake had a five-story, 210-unit apartment project planned.”

“Taylor Bend, an apartment complex that primarily houses University of Mississippi students, filed for Chapter 11 bankruptcy, leaving current residents in limbo. Nelson Partners owns 20 student housing complexes across the country with residents complaining of similar issues. Reviews for The Alpine Flats apartment complex located near Utah State University revealed that residents did not have internet access or hot water for weeks at a time and maintenance requests almost never got completed.”

“According to a May 18, 2021, New York Times report, Nelson Partners has been accused of running a ‘ponzi-like scheme’ with the Skyloft Austin Student Housing complex, one in which investors were impressed by a shiny high-rise. Investors told The New York Times they were ‘taken for a ride by a group of professional real estate investors who raised tens of millions of dollars from people like them to finance the purchase of the student dorm.’ The investors told The New York Times that they don’t know where the money went or who owns the building today.”

“Efforts are underway to secure local and state approval to finish up some long neglected construction of homes near the lower mountain of the private ski resort run by Hermitage Members Club Inc. ‘In essence, it’s completing the project that was partially done when the mountain went under,’ Ham Hodgman of Steven & Associates, representing the club, told the Wilmington Development Review Board at a hearing. Permits for construction on Stag’s Leap Lane timed out when the club went bankrupt under prior ownership, requiring the new owners to go through the process again. Hodgman said two of the eight six-bedroom houses were built to completion and one of the houses had a foundation built.”

“The condo board at 432 Park Avenue, the supertall Manhattan tower that is one of the most expensive addresses in the world, is suing the developers for $125 million in damages, citing multiple floods, faulty elevators, ‘intolerable’ noise caused by building sway, and an electrical explosion in June – the second in three years – that knocked out power to residents, according to a lawsuit filed on Thursday.”

“Built in 2015 with a projected sellout value of $3.1 billion, the pencil-like tower marked a pinnacle in luxury condominium development in the city – much of it geared toward part-time residents and investors who hid their identities behind shell companies. Noise complaints related to the quality of construction were frequent. The suit claims that even Richard Ressler, a founder of CIM Group and a unit owner, once said the sound and vibration issues were ‘intolerable,’ and made it difficult to sleep during inclement weather. Another resident said the trash chute ‘sounds like a bomb’ when garbage is tossed.”

“Robbie Williams and his American wife have cut the asking price of their English country estate. Now available for $9.2 million, Compton Bassett House, named for the nearby village in Wiltshire, was purchased by Williams in 2009 for about $11 million. It’s been on and off the market since 2010 at various prices; if sold at the current asking price, Williams stands to lose about $2 million.”

“‘Recent crackdowns have proven that few sectors are safe from Beijing’s control,’ says the FT’s Lex column. ‘No industry looks as vulnerable as Macau’s gambling market.’ Deflating Hong Kong’s real-estate bubble won’t just mean squeezing the tycoons – it will also require a big shake up in tax policy, adds Jacky Wong in The Wall Street Journal. The territory earns twice as much from land sales as income tax, which is partly why tax rates have stayed so low until now. ‘Hong Kong’s housing market has produced immense wealth for some… Leaner times could be ahead.'”

“The unfinished buildings, which formed a complex called Sunshine City II, had stood empty since 2013 after one developer ran out of money and another found defects in the construction work. ‘This urban scar that stood for nearly 10 years has at last taken a key step toward restoration,’ said an article in the official Kunming Daily after the demolition. Such ‘urban scars’ are common all over China, where Evergrande – the world’s most heavily indebted property company – is suffering a liquidity crunch that could prove terminal.”

“Evergrande, for all of the high drama of its meltdown, is merely the symptom of a much bigger problem. China’s vast real estate sector, which contributes 29 per cent of the country’s gross domestic product, is so overbuilt that it threatens to relinquish its longstanding role as a prime driver of Chinese economic growth and, instead, become a drag on it.”

“There is enough empty property in China to house more than 90 million people, says Logan Wright, a Hong Kong-based director at Rhodium Group, a consultancy. To put that into perspective: there are 5 G7 countries – France, Germany, Italy, the UK and Canada – who could fit their entire populations into those empty Chinese apartments with room to spare.”

“‘We estimate existing but unsold housing inventory is in the range of 3 billion square metres, which is enough to house 30 million families, conservatively,’ Wright says, explaining his calculations. The average size of a household in China is just over three people, giving enough space for over 90 million people.”

“Evergrande is proving to be the first big victim. As the company falters, its undoing raises a fundamental question for the world’s second-largest economy: has China’s property-driven growth model – the global economy’s most powerful locomotive – run out of road? Yes, says Leland Miller, chief executive of China Beige Book, a consultancy that analyses the economy through proprietary data. ‘There is a recognition that the old build, build, build playbook does not work any more and that it is actually getting dangerous. The leadership now appears to be thinking that it can’t wait any longer to change the growth model,’ Miller says.”

Related Posts

Price Drops Galore

https://www.youtube.com/watch?v=D3olOinKIRc https://www.youtube.com/watch?v=VTUzxtU-XiM

This Post Has 55 Comments

  1. ‘has China’s property-driven growth model – the global economy’s most powerful locomotive – run out of road?’

    This is their big plan, the scum globalists. Housing is a commodity. And it was a dead end all along.

    ‘there are 5 G7 countries – France, Germany, Italy, the UK and Canada – who could fit their entire populations into those empty Chinese apartments with room to spare’

    Wa happened to my shortage planet earth?

    1. If only we could deport all 66 million Biden voters to their true ideological homeland in the PRC. Let them live under the system they voted for.

    2. The Chinese population is not growing and is projected to shrink in the next 30 years.

      Who is going to live in all these excess houses/apartments?

      Hint: China doesn’t have an open southern border.

  2. ‘The suit claims that even Richard Ressler, a founder of CIM Group and a unit owner, once said the sound and vibration issues were ‘intolerable,’ and made it difficult to sleep during inclement weather’

    Even DICK is perturbed and missing his beauty sleep? You weren’t supposed to sleep there Dick. It was a safe deposit box in da sky! Notice how these media neeever mention that load of hooey.

    1. *** “The condo board at 432 Park Avenue, the supertall Manhattan tower that is one of the most expensive addresses in the world, is suing the developers for $125 million in damages, citing multiple floods, faulty elevators, ‘intolerable’ noise caused by building sway, and an electrical explosion in June – the second in three years – that knocked out power to residents, according to a lawsuit filed on Thursday.”

      geez, what an expensive headache! so glad all I have to worry about in my circa 1972 shack is aluminum wiring & asbestos ceilings.

      might die in an electrical fire or long term cancer but by god I can sleep at night for less than a 100 gazillion dollars.

      for awhile at least.

      if the neighbors dog would just simma’ down. . .

  3. ‘In essence, it’s completing the project that was partially done when the mountain went under’

    But it’s on Stags Leap Ham? How can they resist such a colorful name? Ham also mentions the previous loanowners just walked away.

  4. ‘they were ‘taken for a ride by a group of professional real estate investors who raised tens of millions of dollars from people like them to finance the purchase of the student dorm.’ The investors told The New York Times that they don’t know where the money went or who owns the building today’

    HBB readers know what a first class debacle student housing has been for years. Even as the huge complexes were going under in 2015-16, “foreign investors” were lining up billion$ in sweet equity. Of course con-men saw them coming.

    1. “…HBB readers know what a first class debacle student housing has been for years….”

      ‘Luxury’ student housing, WeWork, Evergrande, the list goes on.

      Yet, no mention from the REIConplex, and barely a mention in the MSM.

  5. ‘Kelly Clarkson has hauled in $8.24 million for her Encino farmhouse. It chalks up as a slight loss for the singer, who paid $8.5 million for the property in 2018’

    A couple of things: eat yer crowz Thornberg. And how do these endless a$$poundings and foreclosures spell red hotcakes California?

    Pardon me, three things:

    FJB

    1. Joe Biden is a pedophile sexual predator who can’t stop groping kids.

      80 million votes for that? Seriously?

      2. Multiple sources are reporting that the audit in Maricopa County AZ widened Biden’s win by 360 votes. (let the mocking begin) Was this an audit of the counting machines or the mail-in ballots?

          1. Pedo Joe the child sniffer and groper didn’t win anything.

            The 2020 election was stolen, and the globalists who stole it need some nooses around their necks, because the penalty for treason is DEATH ☠

          3. My recall ballot is still MIA despite being hand-delivered to a polling station and dropped in a special yellow bag alongside my husband’s counted ballot.

        2. Statement by Donald J. Trump, 45th President of the United States of America

          The Fake News is lying about the Arizona audit report! The leaked report conclusively shows there were enough fraudulent votes, mystery votes, and fake votes to change the outcome of the election 4 or 5 times over. The number includes 23,344 mail-in ballots, despite the person no longer living at that address. Phantom voters! The official canvass does not even match who voted, off by 11,592—more than the entire Presidential Election margin. Voters who voted in multiple counties totaled 10,342, and 2,382 ballots came from people who no longer lived in Maricopa County. There were also 2,592 “more duplicate ballots than original ballots.” Just those fraudulent ballots alone total 50,252, and is fraud many more times than the so-called margin of “victory,” which was only 10,457. In addition, election data appears to have been intentionally deleted, and ballot images were “corrupt or missing.” This is not even the whole state of Arizona, but only Maricopa County. It would only get worse!

          2. The article I saw was posted on Marketwatch, but it was a story released by the Associated Press. AP slants so much they fell over, but other services are picking up the story.

            Right now there’s some fighting over who’s going to oversee the local counting of ballots in the next elections. I think that’s going to make a real difference in 2022. Never again to be thwarted by pizza boxes.

    3. Kelly Clarkson has that kind of money? No wonder this country is fooked. Wrong priorities all around.

      1. People you’ve never heard of in the entertainment biz have that kind of money. People who voice cartoons have that kind of money.

  6. Realtors are liars. If they show up in your neighborhood, chase them out on horseback while whipping them with the reins.

  7. Our national descent into Venezuela del Norte just accelerated thanks to supply chain breakdowns caused by the Biden regime’s insistence on paying millions of workers to sit at home and firing those who refuse to take the experimental “vaccine.” Forward, Soviet!

    ‘It’s a perfect storm’: Costco limits purchases of toilet rolls, cleaning products and water as supply chain crunch and inflationary pressures hit America

    https://www.dailymail.co.uk/news/article-10024959/Costco-limits-purchases-toilet-rolls-cleaning-products-water-supply-chain-woes.html

  8. Communism doesn’t work.

    “‘We estimate existing but unsold housing inventory is in the range of 3 billion square metres, which is enough to house 30 million families, conservatively,’ Wright says, explaining his calculations. The average size of a household in China is just over three people, giving enough space for over 90 million people.”

  9. Oh dear. China’s purge of the limp-wristed from its entertainment industry must be causing internal pearl-clutching among the CCP overseas arm known as the Democratic Party. Manliness is nowhere to be found among the pathetic excuses for males who vote D, except in the nasty, bitter, high-testosterone she-creatures who dominate this criminal enterprise masquerading as a political party.

    China Wants ‘Sissy Idols’ and ‘Effeminate Men’ Scrubbed From Entertainment Industry

    https://variety.com/2021/global/asia/china-cissy-idols-effeminate-men-entertainment-industry-1235055304/

    The Chinese government’s crackdown on the tech and entertainment sectors has now turned to “sissy idols,” “effeminate men” and all things “overly entertaining.”

    The measures were sketched out in an eight-point plan on Thursday by the National Radio and Television Administration. It called for “further regulation of arts and entertainment shows and related personnel.”

    1. Wikipedia:

      “Baizuo (Chinese: 白左; pinyin: báizuǒ, Mandarin pronunciation: [pǎi.tswò]; literally White Left)[1][2] is a Chinese neologism and political epithet used to refer to Western leftist ideologies primarily espoused by white leftists.[3] The term baizuo is related to the term shèngmǔ (simplified Chinese: 圣母; traditional Chinese: 聖母; pinyin: shèngmǔ; literally “Blessed Mother”) or shèngmǔbiǎo (simplified Chinese: 圣母婊; traditional Chinese: 聖母婊; pinyin: shèngmǔbiǎo; literally “Blessed Mother of Bitch”), a sarcastic reference to those whose political opinions are perceived as being guided by emotions or a hypocritical show of selflessness and empathy.[4][5]”

  11. Zillow is getting its a&& handed to them in the Phoenix area. If a company like Zillow can’t figure out house flipping then I wonder what all these small-time investors are going to do? Hmmm?

    1. Shillow’s average loss per flip is something like $60,000. I’ve heard they’re going to make it up on volume.

    1. How are the prices of imaginary, decentralized, counterfeit money holding up to the Chinese government’s crackdown?

      2. The Financial Times
        Cryptocurrencies
        China expands crackdown by declaring all crypto activities ‘illegal’
        Country’s central bank seeks to stop residents trading on overseas exchanges
        Workers at a cryptocurrency farm in Dujiangyan, in China’s southwestern Sichuan province. Despite government crackdowns, the country remains an important global crypto market
        Eleanor Olcott and Eva Szalay yesterday

        China has expanded its crackdown on cryptocurrencies by declaring that all activities related to digital coins are “illegal”.

        The People’s Bank of China and other government agencies targeted overseas cryptocurrency exchanges specifically on Friday, declaring that it was illegal for them to provide online services to residents in China.

        The move was an apparent bid to close a loophole that remained after the PBoC, China’s central bank, in May banned domestic financial institutions from providing cryptocurrency transaction services.
        …

    1. The 2020 election was stolen.

      This isn’t Facebook, this isn’t Twitter, this isn’t Reddit, and this isn’t YouTube. Globalist pigs can not censor us from discussing how the 2020 election was stolen, by globalists, and they can’t stop us from discussing what the legal consequences for these globalists will be, which in the case of a treason conviction, will be the death penalty.

      Globalists, the Day Of The Rope is coming, soon…

      1. You know, a knife at 3AM in their bedroom works too. Any local official who is guilty should be “tragically killed” during a home invasion.

    1. What are your cousin’s thoughts on fecal transplants? I’ve come across it as a treatment for autism. I personally smell something funny.

    1. There is a rumor making the rounds in Oz, that they are bringing in Americans to perform the jack booted thug duties. I’m sure it’s false, but it says something about the Aussie state of mind.

  18. From: https://www.bloomberg.com/news/articles/2021-09-24/fed-economist-bemoans-criminally-oppressive-social-order

    ————————————–
    “A senior Federal Reserve economist has slammed the profession for relying on propositions “that ‘everyone knows’ to be true, but that are actually arrant nonsense,” including the role of inflation expectations.

    In a discussion paper posted on the Fed Board’s website Friday, Jeremy Rudd argued that ideas including using aggregate production functions to provide a good way to characterize the economy’s supply side don’t have “any sort of empirical foundation.”

    He noted it was a source of concern if “dubious but widely held theories” led to consequential policy decisions, adding in a footnote: “I leave aside the deeper concern that the primary role of mainstream economics in our society is to provide an apologetics for a criminally oppressive, unsustainable, and unjust social order.”

    Rudd, who received his Ph.D in economics from Princeton, is a senior adviser at the Fed Board’s research and statistics division. He has served at the U.S. central bank since 1999.”
    ————————————–

    2nd and 3rd order effects are irrelevant. That trickle down gonna get to us some time I’m sure. In the mean time though, check out the markets, and how rich some folks are getting. Doing God’s work.

  20. Nuclear bombs are to destructive , so the new warfare is bio weapons . Kill off populations without destroying the infrastructure.

    First target is the 65 plus people. Set up a global vaccine system of Medical Tyranny where any group can be eliminated , lockdowned, or targeted for injections.

    Problem is the playing with fire bio weapon could make mankind extinct, in the mutations it creates .
    Mass vaccination over a small risk Pandemic was never justified. Its insurance that the Covid won’t die out and will be a long term plague on people.
    What ever happen to vaccines getting rid of disease, verses vaccines making diseases worse.
    If you actually had a novel virus or bacteria that was killing of 30 % of the population , even under those circumstances mass vaccination could create a much more deadly stain.
    So, as the real Scientist and Drs were saying from day one, mass vaccination was not called for, especially when they had drugs that treated the virus. And the expiermental nature of the gene altering injections, was a outrageous assault on populations and entirely not justified.
    And now this attempt to cover up the adverse reactions from the jabs , and now inefficiency of the jabs , and blame unvaccinated for a expierment gone bad is a fraud of pre medicated murder if they continue .
    Yesterday the Scientist and Drs from 35 Nations held a press conference calling to stop the Covid injections based on their findings. Here in US the censorship of that news is evident.
    Instead they are speeding up boosters for 65 plus and going after even younger children on the original jabs.
    Say no to mass murder by the Biden Administration.

Comments are closed.