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The Era Of Blind Property Worship Is Nearing An End

It’s Friday desk clearing time for this blogger. “The number of single-family home sales has declined for three consecutive months. Tim Warren, CEO of The Warren Group, said the single’ biggest reason for the slide is that the typical price of a home in Massachusetts has climbed ‘too high and too fast.'”

“In the Portland area, the median sale price for houses and condos in September was $510,000, a decrease of $15,000, or 2.9%, from $525,000 in August. ‘August was likely the peak for the year based on the statistics of the past,’ said broker Dustin Millert in Lake Oswego.”

“In Palm Beach County, the median price for a condominium or townhouse jumped 6% to $246,500 after dipping almost 2.5% in August. The median price for a single-family home fell 2% to $469,900. That represents two straight months of decline after hitting an all-time high in July of $500,000. September’s decrease means home prices have fallen more than 6% in 60 days.”

“Continuing a trend in the real estate market coming out of red-hot summer pricing, the median price for all homes in Northwest Austin dropped for the third straight month. In Northwest Austin, the median price of all properties—including single-family homes, townhouses and condominiums—fell to $535,000. That is the lowest recorded price for homes in Northwest Austin since March. September was the third straight month where home prices overall have declined across Northwest Austin.”

“Although home sales are not at the record highs anymore, the median price in the Central Valley continued at $450,000 from August to September. Fresno-based realtor Vasili Sotiropulos told The Sun that the slight decrease in sales is a notable difference from the summer months when homes were selling within a few days significantly over asking price. ‘It’s still a seller’s market. So even if we’ve slowed a bit, yeah it’s a little bit better time to buy, a little less competitive – don’t get it mistaken with this is some kind of crash.'”

“All types of housing in San Diego experienced growth this year. The median for a resale single-family house was $831,250, down from a peak of $840,000 in July. Ventura County’s price was down 2.1 percent for a median of $725,000; Orange County was down 1.1 percent for a median of $890,000; and San Bernardino County was down 0.4 percent for a median of $463,000. Agent Jan Ryan said that even with rising prices and lower inventory, buyers are getting pickier than they were earlier this year when it seemed like anything would sell. ‘You can’t take pictures with your cellphone, not make the bed and then price it high and expect it to sell,’ she said.”

“A friend of mine who is a noted home appraiser in the Raleigh-Durham area told me recently that for the first time this year, a home was sold close to the price of his appraisal. 13 years ago, Congress enacted measures that offered appraisers independence and prohibited mortgage bankers from working with appraisers to match a price. That hurt the borrowers as home values went under water, and foreclosures skyrocketed to record levels.”

“Chances are that the rules requiring the separation of mortgage bankers and appraisers may prevent the same level of housing market disaster this time around — although the securitization market may only be weeks away from facing a frenzied environment full of winners and losers.”

“DeNardo Capital Management’s hail-mary attempt to save its Westchester County luxury condo development from foreclosure has fallen short of the goal line. Lenders Specialty Credit Holdings and Zee Bridge Capital were the winning bidders for the more than 250,000-square-foot site in a UCC foreclosure sale, according to a filing in Westchester County Bankruptcy Court.”

“Trinity Place Holdings is racing to close an inventory loan for its trophy Financial District condo tower before forbearance agreements with its lenders expire. Sources familiar with the project said the developer is set to close this week on a loan from an undisclosed lender that would refinance existing debt on the 40-story condo at 77 Greenwich Street, but the scramble underscores problems that have been brewing at the project for years.”

“In the latest twist on ‘The Twists’ — a stalled pair of luxury condo towers over the High Line Park — a foreclosure auction later this month might not come anywhere near resolving the complicated saga, sources told The Post. The towers’ unfinished appearance has puzzled High Line strollers since construction came to a halt in late 2019. Despite the looming foreclosure auction– which is not a court action, but a public offering — sources said that the impenetrable tangle of claims involving The Xi might take much longer to resolve.”

“Companies that worked on the project are seething over the veil of intrigue. One subcontractor told The Post, ‘We have no idea when or if the project will proceed. Nobody will talk to us.’ Although the property might appeal to developers and investors in a rebounding condo market, ‘This situation is not for the faint of heart,’ a financial source said. ‘It has more moving parts than an octopus. It’s like a giant squid with a million tentacles of claims and complications. Resolving the debt has to come first before any construction can resume,’ the source added.”

“Economist James Laurenceson, the director of the Australia-China Relations Institute at UTS, told the ABC that Beijing will be focused on two objectives to contain the crisis. ‘Shoring up social stability, such as by protecting the thousands of households that have put down cash for yet to be completed apartments,’ he said. ‘Second, limiting contagion so that an Evergrande default doesn’t spiral out of control to become a much bigger property bust and debt crisis. But beyond these constraints, all indications are that Beijing is going to allow Evergrande and its investors to incur serious losses.'”

“‘Earlier this year, fearing a situation similar to what we are seeing now, we began selling out our dollar bond exposure to Evergrande… Our assumption has been vindicated. Offshore creditors have the least protection in the event of liquidation of Evergrande, and we assume bondholders will recover about 10% of their total dues,’ said a portfolio manager at a global fund. On Oct. 18, Fitch and Moody’s Investors Service cut the credit outlook or ratings of 18 Chinese developers. According to some analysts, the large-scale downgrades could mean that the era of blind property worship, as a means of stable investment, is nearing an end in China.”

“‘As China is lowering the reliance of property and trying to let the air out of the housing bubble and deleverage, we will see defaults for sure and some developers may go bankrupt,’ said Li Yujia, senior economist with the Real Estate Assessment and Development Research Centre, a research arm of Shenzhen’s government.”

This Post Has 110 Comments
  1. ‘the typical price of a home in Massachusetts has climbed ‘too high and too fast’

    I thought that was crazy talk Tim.

        1. Epstein reportedly had the warped idea of using the ranch for inseminating women with his sperm with the aim of creating a ‘master race’.

          That’s quite an idea being blue eyed diaspora himself.

        2. This is all symptomatic of the same disease and rot which is afflicting our society – a large group of billionaire oligarchs and globalist sh!tbags have their hooks in every nook and cranny of society. They have become too rich and powerful, and the masses have no say or control anymore.

      1. More Bitchute links, please.

        And the more we promote them here, the more traffic leaves YouTube and moves to Bitchute.

        Capitalism isn’t that complicated, reward the business model that is giving you something you want. And punish the (almost always) globalist sham businesses and corporations that love censorship and adhering to China Communist Party type narratives.

  2. ‘September’s decrease means home prices have fallen more than 6% in 60 days’

    ‘fell to $535,000. That is the lowest recorded price for homes in Northwest Austin since March. September was the third straight month where home prices overall have declined’

    Good thing everybody put 20% down. Just a few days ago, UHS said Austin’s lowest price since July. Now March.

    Oh dear…

  3. ‘the rules requiring the separation of mortgage bankers and appraisers may prevent the same level of housing market disaster this time around — although the securitization market may only be weeks away from facing a frenzied environment full of winners and losers’

    Oh that, MBS are still the name of the game. Senator running dear didn’t change that a bit, did she? So what happens when you got no skin in the game? Look at what the Chinese are doing to the US $ bondholders.

  4. ‘we assume bondholders will recover about 10% of their total dues’

    You know what they say about assumptions. I find this whole thing amusing. Tell us REIC globalist scum media, just how did you think this was going to pan out? Entire cities of crumbling towers no one will ever live it are worth trillion$ of pesos? In what fantasy world is that?

    Fact is it was always going to end this way. Same with yer San Diegos and yer Austins and Palm Beach county. All bubbles make you poor and then they pop.

  5. ‘Although home sales are not at the record highs anymore, the median price in the Central Valley continued at $450,000 from August to September. ‘So even if we’ve slowed a bit, yeah it’s a little bit better time to buy, a little less competitive – don’t get it mistaken with this is some kind of crash’

    Here at the HBB, I got no crystal ball. But I can tell you Fresno is going to crash. How do I know this? Cuz $450,000 for a shack out there is bat sh$t crazy, that’s why.

  6. Rampant vibrancy and “random” street attacks can’t be good for NYC skybox valuations.

    EXCLUSIVE: Horrific moment woman is yanked to the ground by her HAIR in random street attack in New York as serious assaults spike across the Big Apple

    Sickening video footage shows the moment a woman was yanked to the ground by her hair in an unprovoked daylight attack while strolling through Manhattan.

    The incident took place on East 1st Street between Bowery and Second Avenue in the Noho section of Manhattan.

  7. Too bad the decline hit at the same time as the seasonal cycle hit; makes it too easy for MSM to dismiss. On the other hand, things could be fun in the spring if the numbers decline from the winter.

    I hate my compulsion to watch this daily, wish I could forget about it for awhile to skip forward. Like watching water boil. It was like this, too, during the last crash. You saw some sideways for a little bit.

    1. Oh please let it happen fast. I want to see massive suffering. I’ve had it with this country and all the election stealing, FOMOing, and smug “I got mines”. Let it burn.

    1. I see California as a a nightmarish dystopia that is best avoided. You’d have to be crazy to vacation there.

        1. Oakland has been flat out dangerous A F for the last 50+ years. I shudder to think of it now. If you are white and go walking around in certain areas, you will be murdered quickly.

          1. Retired Black police chief just got shot 6x in a daylight robbery at a gas station in Oakland. He shot one of the robbers dead .
            All on video .

    2. Target reached out to the media and said that they aren’t closing the Target on Mission Street, but they are closing the Target on Bush street because of “underperforming sales.”

      The article shows a pic of containers of Tide Pods behind lock and key. I guess Pods are still being used as currency for drugs.

  8. $495,000 4 bd 2 ba 2,074 sqft

    Price cut: $24.9K (10/21)
    4347 Gemstone Ave, Kingman, AZ 86401

    10/21/2021 Listed for sale $495,000 (-4.8%) $239/sqft

    10/5/2021 Pending sale $519,900 $251/sqft

    9/10/2021 Listed for sale $519,900 (+14%) $251/sqft

    6/29/2021 Sold $455,950 (+1%) $220/sqft

    5/26/2021 Listing removed $451,500 $218/sqft

    5/10/2021 Listed for sale $451,500 (-42.2%) $218/sqft

    12/31/2020 Sold $780,500 $376/sqft

    This price history is a bit confusing as UHS says this is new construction. Maybe FB is flipping or has flipped and took a major a$$ pounding, I don’t know. But a 780k shack in Kingman is – again – bat sh$t crazy.

    1. I wouldn’t want to live in Kingman for free. If somebody gave me a house free and clear under the condition I’d have to live in it, I would decline. Kingman is a DUMP.

    2. My only guess is that there’s a typo and somebody bought the empty lot (with utilities) for $78K, not $780K. Lot prices in the development are pretty variable so I don’t have evidence to support.

      I see this isn’t far from that “Golden Valley” thing where there’s nothing to do but meth. Seriously, this entire area makes no sense to me whatsoever.

      1. You should search “Slab City” and hit “videos” if you want to see the absolute aszhole of the earth. It’s like a post-apocalyptic wasteland of meth heads and lives of desperation. This country is fawked.

  9. – Could it be that shack prices are just too darned high? No one could’ve seen this coming. /s But, data. Rinse and repeat.

    – These 10 yr. charts make it pretty clear what’s going to happen next.





    – If those charts weren’t enough, then here’s a 50 yr. chart. Yikes! Realtors will soon need to find a new day job. Those Beemer payments aren’t going to make themselves! This will only be compounded by the ensuing stock market crash as well; yet another asset class that just might have a valuation problem. The Fed: “Doing the most harm since 1913.”

    “No warning can save people determined to grow suddenly rich” – Lord Overstone

    “Double, double, toil and trouble; Fire burn, and cauldron bubble!” – William Shakespeare, Macbeth


    1. “Anybody still think there is a plan to go back to normal?”

      – 1984 wasn’t supposed to be a “how to” manual.

      “The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power. . . . Power is not a means; it is an end . . . not power over things, but over men. . . . In our world there will be no emotions except fear, rage, triumph, and self-abasement. . . . There will be no loyalty, except loyalty toward the Party. There will be no love, except the love of Big Brother. . . . Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless. If you want a picture of the future, imagine a boot stamping on a human face forever.” – George Orwell, 1984

      “There are two potential violators of man’s rights: the criminals and the government.” – Ayn Rand

      Eagles Lyrics
      “Hotel California”

      There she stood in the doorway
      I heard the mission bell
      And I was thinking to myself
      “This could be Heaven or this could be Hell”
      Then she lit up a candle and she showed me the way
      There were voices down the corridor
      I thought I heard them say

      Welcome to the Hotel California
      Such a lovely place (Such a lovely place)
      Such a lovely face
      Plenty of room at the Hotel California
      Any time of year (Any time of year)
      You can find it here

      Mirrors on the ceiling
      The pink champagne on ice
      And she said “We are all just prisoners here, of our own device”
      And in the master’s chambers
      They gathered for the feast
      They stab it with their steely knives
      But they just can’t kill the beast

      Last thing I remember
      I was running for the door
      I had to find the passage back to the place I was before
      “Relax,” said the night man
      “We are programmed to receive
      You can check-out any time you like
      But you can never leave!”

      1. This is nothing. Snapchat was valued at $120 billions last week? A chat app that business model includes stealing personal data and selling it to the highest bidders. Well, they crashed today and is still losing $175 millions this quarter! ~$90 billions valuation! FTS (F**k this $hit)

    2. There are a lot of woke-ish products that people don’t buy but the companies still don’t go out of business. Woke movies, sports, comics, CNN, all come to mind. The theory is that they don’t need customers because they’re being supported by money from Soros et al. I’m surprised Beyond Meat isn’t on the protected list for zombie support.

      So, how long are they planning to lock up these unvaxxed Aussies for? Weeks? Years? Until they get vaxxed? Until they get COVID?

        1. Any chance I get, I tell people that two things are keeping the US from becoming Australia right now: federalism and the Second Amendment.

          1. Ben, that’s why they really want that currency reset, to shift from dollars to digital CBDCs, FedCoin, SDR, whatever. Right now, in order to truly enforce a law, at the end of the day you basically have to physically show up at someone’s house and either take property or try to arrest the person. Which no one wants to do for fear of being 2nd amendmented, so to speak.

            But if they can control the money supply to be trackable, programmable, and perishable, they can enforce the laws from a distance. The prime example is they can prevent you from getting gas more than, say, 50 miles from your address. Your card simply won’t work.

          2. the money supply to be trackable, programmable, and perishable

            This will only work on scared debt donkeys! LOL.

            My primary ride has a 500 mile range, easily expandable to 1000 miles with Jerry cans I already have. Not that I need to go anywhere, but you never know.

  10. If this is how creepy the Democrat-Bolsheviks & their FBI Chekists are now, imagine what they’ll be like if they ever manage to disarm us.

    WH aided school board group’s ‘domestic terrorism’ letter before Garland sicced FBI on parents

    Top officials of a national school board group talked to the White House days before Attorney General Merrick Garland ordered the FBI to investigate complaints of threats from parents, newly released emails reveal.

    The emails raise serious questions about whether the White House ordered Garland to have the FBI investigate confrontations and other incidents at local school board meetings across the US.


    A reporter for the Associated Press asked Walensky if the Biden Administration is rethinking the definition what it means to be “fully vaccinated” now that booster shots are recommended.

    We may need to update our definition of ‘fully vaccinated’ in the future,” Walensky said during a press briefing on Friday.

    Here we go again. Planted questions from the press to make it look like the culprits didn’t have this already planned. These dog and pony shoes are so transparent at this point. The people are being sheep-dipped to accept the idea that the kielbasa doesn’t work anymore and you need more of what didn’t work the first time. Two weeks to flatten the curve folks, We’re almost there.

    1. After 8 months and the dominance of the Delta variant, all the vaccines seems to work equally well: 70% symptoms, more against hospitalization. That’s better than the flu shot.

      1. more against hospitalization

        A vaccine does not guard against hospitalization, it guards against infection. The daily changing narrative defies logic at every turn.

        1. defies logic at every turn

          Using carefully crafted definitions (e.g., “fully vaccinated” as 14 days after a second dose) and vaccine efficacy calculations.

        2. We can argue over how protective a “vaccine” has to be to be labeled a vaccine, but I don’t think there’s a resolution to that. By this logic, we need to take remove the “vaccine” label from the flu shot.

          However, it does make me wonder… I read somewhere that law offices keep very old dictionaries on hand to check whether a word still means the same thing as it did back when a court made a ruling. If the definitions don’t match, they can’t use the prior case as precedent.

          So, isn’t the current Admin justifying the mandates with very old court cases as precedent? Those old court cases are using the more stringent definition of “vaccine.” If the Admin used the word “vaccine” but changes the definition, then those old court cases might not be applicable. I wonder if the anti-vax lawyers are working on this. Any legal eagles here?

          1. By this logic, we need to take remove the “vaccine” label from the flu shot.

            Fine by me. I had ONE flu shot in my life, and got sick A F.

          2. Take the following words for example:

            Probably a lot of precedents there to be thrown out.

      2. all the vaccines seems to work equally well: 70% symptoms, more against hospitalization

        If that were true, boosters wouldn’t be a thing.

        1. I don’t see where boosters come into this. If all the shots have equal effectiveness only at 70%, then why not try to boost to 90+%, for all of them?

          Some doctors are making a very good point: why label these as “boosters” at all? They are simply still working out the dosage and shots in a series. They did the same for ALL vaccines; it’s just that no one remembers because it was decades ago. E.g., you need three polio shots 2 months apart to get protection against polio (plus a 4th shot). OK, so why is it so different to need two J&J 2 months apart to get protection against COVID? This is SOP for vaccines. You all keep complaining that these shots “don’t work,” but then if they find out that two shots DO work, you complain about needing two shots. There’s no winning.

          1. There’s no winning

            No winning of people’s minds? No actually, not when we’ve been lied to throughout this whole escapade. You parroting the narratives doesn’t change that much.

          2. If all the shots have equal effectiveness only at 70%, then why not try to boost to 90+%, for all of them?

            Let’s shoot them up Justin Trudeau’s asz, k?

          3. They are simply still working out the dosage and shots in a series.

            That’s what clinical trials are for. You’ve been duped. Deal with it and stop spreading lies.

          4. That’s what clinical trials are for

            The measles vaccine had been in full approved use by the general public for over 20 years before they figured out they needed two doses.

      3. Red Cross got another unit of my blood Wednesday morning, got my Pfizer booster Thursday morning and afterword I had a nice road bicycle aerobic workout despite the chilly weather. No issues.

          1. If around. Vioxx anyone?
            As yes, Vioxx, touted as the wonder drug of its time.
            One bad side effect was, if I recall correctly, heart damage. Minor details!

          2. FWIW, my wife has been working in a k12 classroom full of young vaccinated children since they’re not eligible, and she has been wearing an 3M N95 mask beneath a colorful cloth mask since the children returned to school. Neither of us have an interest in sharing the covid19 infection experience. Hence, our vaccination status.

          3. k12 classroom full of young vaccinated children

            With a few minor changes, I think I know what you meant.

            I hope you get your outcome that you’re wishing for.

          4. WTF, I wrote un-vaccinated without the hyphen, and the auto correct removed the “un.”

            Anyway, we’re in Washington state. Many of her-workers just got pushed out the door! No unemployment, incomplete retirement? No thanks!

    1. Later in the thread:

      Yeah, the audio delay is an arifact of Mobizen, the app that I use to do screen captures on my phone.

      He actually did say this today though. Check my sub-tweet for the full quote.

      Full quote:

      “Something like 20 percent or like half of the registered Republicans I am not your president, Donald Trump is still your president. As we Catholics say, ‘Oh my God,'” says Biden, crossing himself.

      1. It’s good the Pederast is paying attention but he’s got his figures wrong as usual. 99% of republicans believe Trump is still President…. because he is.

      2. “Something like 20 percent [of the total population], or like half of the registered Republicans, [believe that] I am not your president; [they think that] Donald Trump is still your president.”

        Oh come on. Either Biden’s speechwriters left out words to deepen the rhetoric, or Biden left out words because he’s a slobbering fogie who belongs in a nursing home eating pudding and watching Matlock. Either way, it’s pretty clear what was meant.

        1. The globalists and their MSM propagandists must be enraged that with “Let’s Go Brandon” going viral, Les Deplorables have weaponized NBC’s attempt at obfuscation and turned it against the globalist Big Lie that Biden got 81 million votes.

          1. Beanie Boy just did a segment on this topic. Evidently, TPTB have found a disabled veteran as a prop to promote how the Build Back Better BS bill helps veterans. The veteran’s name happens to be Brandon. The theory is that they deliberately chose a Brandon as the prop so that anytime they hear “Let’s go Brandon,” they can twist it to mean people are cheering for the veteran. I don’t know how ANYone would fall for this — except for the history revisionists, that is.

        2. “Either way, it’s pretty clear what was meant.”

          Hillary Clinton’s public sedition was pretty clear too!

  12. The food shortages must be on main stream news. I went to the grocery store and it was twice as busy with people buying 5 or 6 or more of the same items. Charts were packed high. People acting a little frantic.
    I don’t blame them for stocking up under these circumstances. Some talking heads are predicting rationing, so who knows. All I know is everything is falling apart under this Biden Administration , and these bastards don’t seem to care .

    1. “All I know is everything is falling apart under this Biden Administration , and these bastards don’t seem to care.”

      “falling apart” = “resetting”

      “All I know is everything is resetting under this Biden Administration , and these bastards don’t seem to care.”

      Wrong, they care, but not in the way you care.

      Think: A crisis is a terrible thing to waste.

    2. I started stocking up on consumables last week and some food this week. Nothing crazy but I fully expect things to get more expensive and harder to get before the end of the year.

    3. In my area, I don’t see many shortages. Once in a while one shelf will be empty, but it’s not widespread. Prices are higher tho.

        1. This time, yes I’m sure. If house prices are dropping 13%, then there’s clearly no shortage of them either. 😛

  13. #FJB

    Retailers turn to bizarre tactics to cover up empty shelves as US supply chain crisis worsens

    Eerie footage has revealed the increasingly bizarre reality of daily life in the US, as the world’s largest economy is gripped by an growing crisis.

    Retailers in the US are resorting to bizarre methods to conceal increasingly bare shelves brought on by the supply chain crisis.
    Shoppers have flooded social media with images of bare shelves at supermarkets and department stores in recent weeks, as #EmptyShelvesJoe began trending on Twitter.

  14. BREAKING: Israeli physicians, scientists advise FDA of ‘severe concerns’ regarding reliability and legality of official Israeli COVID vaccine data

    “We are aware that the state of Israel is perceived as ‘the world laboratory’ regarding the safety and efficacy of the Pfizer-BioNTech COVID-19 vaccine, as reflected by statements made by Dr. Albert Bourla, Dr. Anthony Fauci, and other senior figures in leading health authorities throughout the world,” the letter reads. “It is therefore our understanding that the data and information coming from Israel play a crucial role in critical decision-making processes in regards to COVID-19 vaccination policies. We thus see it of utmost importance to convey a message of warning and raise our major concerns regarding potential flaws in the reliability of the Israeli data with respect to the Pfizer-BioNTech COVID-19 vaccine, as well as many significant legal and ethical violations that accompany the data collection processes.”

    The letter elaborates: “We believe that the significant failures underlying the Israeli database, which have been brought to our attention by numerous testimonies, impair its reliability and legality to such an extent that it should not be used for making any critical decisions regarding the COVID-19 vaccines.”

    Outline of main failures:
    1. Lack of a Public and Transparent Adverse Events Reporting System
    2. Severe Impairments in Healthcare Professionals’ Adverse Events Reporting System
    3. Data Distortion
    4. Legal and Ethical Violations in Data Collection Processes

  15. “An intended consequence? As many as 25% of homes are now being bought by yield-seeking funds that will rent them. When bonds no longer even keep up with inflation, investors look for other ways to get yield. And residential real estate offers not just yield but depreciation. That would not be possible or even necessary if Treasuries were 2½%.”

    John Mauldin

    1. “And residential real estate offers not just yield but depreciation.”

      Wait… but… ehh… ahem.. well. uhh.

  16. Has the Evergrande story finished blowing over with no economic consequences beyond China, aside from some amazing photos of entire cities filled with empty, newly constructed high rise apartment buildings?

    Or is there a gathering global financial economic storm on the horizon, that nobody could have seen coming?

    I guess only time will tell.

    1. The Wall Street Journal
      Chinese Developer Defaults Pile Up as Evergrande Contagion Spreads
      The problem could worsen as a wave of debt from the beleaguered industry comes due in the coming months
      The Shanghai headquarters of Sinic Holdings. The company was recently downgraded by S&P Global Ratings to a ‘selective default’ rating.
      Photo: alex plavevski/Shutterstock
      By Frances Yoon, Quentin Webb and Elaine Yu
      Oct. 21, 2021 5:34 am ET

      HONG KONG—The pain is spreading in the market for Chinese junk bonds.

      Dollar-bond defaults from Chinese property developers are rising quickly as the country’s housing market slumps, and the problem could worsen as a wave of debt from the beleaguered industry comes due in the coming months.

      Real-estate developers dominate China’s international high-yield bond market, making up about 80% of its total $197 billion of debt outstanding, according to Goldman Sachs.

      The market has already endured its worst selloff in a decade, after property giant China Evergrande Group skipped some interest payments to dollar bondholders in late September, and smaller rival Fantasia Holdings Group Co. surprised investors by defaulting on debt that matured in early October.

      Since then, at least four other Chinese developers have either defaulted or asked investors to wait longer for repayment. A 30-day grace period for Evergrande to pay international bondholders, meanwhile, runs out this weekend, and investors are expecting the company to default on close to $20 billion in outstanding dollar debt.

      The average yield on an ICE BofA index of Chinese high-yield corporate bonds stood at 20.3% Wednesday, after topping 23% last week. At the height of the selloff on Oct. 13, the average price of bonds in the index had plunged 21% in just one month—its worst performance since October 2011.

      “Global investors have been offloading high-yield bonds issued by Chinese developers because of the concerns that they have, rightly, about the future of those companies and their capability to repay debts,” said Jing Sima, China strategist at BCA Research. “The lack of response from Chinese policy makers definitely adds to that concern,” she added.

      While property bond prices have stabilized somewhat in recent days, many remain at distressed levels. The extreme market dislocation raises the risk of a vicious cycle, in which companies can’t refinance coming debts because borrowing costs are too high, leading to more defaults and further hits to investors’ and home buyers’ confidence.

      Some investors say they are now monitoring every pending interest and principal payment in the sector, and asking chief financial officers if their companies will pay back debt as planned. “We now need to track every single coupon and upcoming maturity,” said Jim Veneau, head of fixed income for Asia at AXA Investment Managers.

      On Wednesday evening, Chinese developer Modern Land (China) Co. , which has a $250 million bond coming due on Oct. 25, said it is facing liquidity issues and is looking to hire a financial adviser. It scrapped an earlier plan to delay repaying most of the bond by three months.

      Over the past week, China Properties Group Ltd. defaulted on $226 million in three-year notes that matured on Oct. 15. And on Tuesday, S&P Global Ratings downgraded Sinic Holdings (Group) Co. to a “selective default” rating, after the Shanghai-headquartered company failed to repay $250 million of bonds that came due a day earlier.

      Xinyuan Real Estate Co. , another cash-strapped developer, swapped more than $200 million in dollar bonds that were scheduled to mature on Oct. 15 with debt that matures in two years, in what is known as a distressed debt exchange.

      Developers are skipping debt payments to preserve cash since it will be difficult to refinance upcoming maturities in the international bond markets if yields remain elevated, said Rachana Mehta, co-head of regional fixed income at Maybank Asset Management.

      Investors are also concerned that Evergrande, Fantasia and other cash-strapped Chinese developers would give priority to paying their suppliers and creditors in mainland China, leaving less money for their offshore bondholders.

      The refinancing pressure is likely to intensify, with more than $6 billion of dollar debt maturing in January, according to Goldman Sachs—up from $2.2 billion this month, and less than $2 billion in each of November and December.

      At the same time, contracted sales at many developers have already fallen by more than 20% or 30% on an annual basis, and this slowdown is likely to continue.

      In recent days, Moody’s Investors Service downgraded its speculative-grade ratings on numerous developers and cut its outlook on others to negative. The credit-assessment company said it expects many developers’ contracted sales to fall over the next six to 12 months, due to weaker consumer sentiment amid tight funding conditions.

      Many traders and investors are watching what happens with Kaisa Group Holdings Ltd. , which defaulted in 2015. One of its bonds that matures in November 2024 was bid at 30 cents on the dollar Thursday, according to Tradeweb.

      On Monday, Moody’s downgraded Kaisa to B2, saying the company has up to $3.2 billion of offshore debt coming due by the end of next year. The figure includes bonds that become puttable, meaning investors are able to demand the company buys them back before their maturity date.

      …sentiment remains fragile. “Investors are not looking for bargains yet because the selloff has become pretty damaging,” said AXA’s Mr. Veneau. “There’s probably more of a mind-set of assessing the damage.”

      Real estate is a major driver of the Chinese economy and financial distress among developers is likely to add to households’ reluctance to buy property, alongside other concerns such as difficulties obtaining mortgages and doubts that prices will keep rising. Chinese buyers often put large sums of money down upfront for as-yet unfinished projects.

      “The true concern is that this will negatively impact economic growth, as it affects home-buyer appetite to buy homes,” said Tracy Chen, a portfolio manager at Brandywine Global.

      To turn more positive on the sector, Ms. Mehta of Maybank Asset Management said she was waiting for the market for new debt issuance to reopen for developers, or for signs of government support to emerge. These could come at next month’s full gathering, or plenum, of the central committee of China’s Communist Party.

      1. “…she was waiting for the market for new debt issuance to reopen for developers, or for signs of government support to emerge. These could come at next month’s full gathering, or plenum, of the central committee of China’s Communist Party.”

        The Chinese Communist Party is going to ride in on a white horse any day now to bail out the greater fools in the west who loaned the money used to fund empty apartment building construction?

        That reminds me of something my high school tennis coach used to tell our team: ‘You can wish in one hand and sh!t in the other, and see which one fills up faster.’

    2. ‘Ghost towns’: Evergrande crisis shines a light on China’s millions of empty homes
      By Michelle Toh, CNN Business
      Updated 8:01 AM ET, Fri October 15, 2021

      Evergrande’s unraveling is still commanding global attention, but its troubles are part of a much bigger problem.

      For weeks, the ailing Chinese real estate conglomerate has made headlines as investors wait to see what will happen to its enormous mountain of debt. As the slow-moving crisis unfolds, analysts are pointing to a deeper underlying issue: China’s property market is cooling off after years of oversupply.

      The warning signs have been flashing for some time. Prior to Evergrande’s meltdown, tens of millions of apartments were thought to be sitting empty across the country. In recent years, the problem has only gotten worse.

    3. China’s property bubble may be about to burst, and it could cost Australia dearly
      By business editor Ian Verrender
      Posted Sun 5 Sep 2021 at 2:00pm
      Sunday 5 Sep 2021 at 2:00pm
      You view an empty six-lane bridge apart from two pedestrians with high rise buildings rising up behind them.
      China’s property boom has seen high-rise apartments sprout up across the country.
      (AP: Arek Rataj)

      It’s one of Hemingway’s best lines, from The Sun Also Rises.

      “How did you go broke?” Bill asked.

      “Two ways,” said Mike. “Gradually and then suddenly.”

      It is a passage to which Xu Jiayin, founder of China Evergrande, China’s biggest property group and the world’s 122nd largest company by sales, can relate.

      For most of this year, his firm has been floundering, fighting off hordes of angry creditors, defending court actions and desperately trying to secure enough finance to survive. Now the situation has taken a sudden turn for the worse.

      At its peak, three years ago, the Hong Kong-listed China Evergrande was the world’s most valuable real estate group. It’s now better known as the world’s most indebted property developer, owing more than $US300 billion ($403 billion).

      Once a symbol of glittering success in the most exciting property market on the planet, China Evergrande is now tanking, and dragging many of its competitors with it, as global investors and creditors desperately attempt to parachute out of the troubled Chinese property sector.

      1. It’s one of Hemingway’s best lines, from The Sun Also Rises:
        “How did you go broke?” Bill asked.
        “Two ways,” said Mike. “Gradually and then suddenly.”

        Succinct and thorough!

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