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An Image Of Cheerful Helpers Letting You Stay In Debt Indefinitely

A weekend topic starting with WFTS in Florida. “The current market has made it hard to predict how much a house would sell for, which is causing Zillow to lose money. The company currently owns at least 100 homes in the greater Tampa Bay area, that it’s now trying to sell…quickly. ‘People start calling realtors saying ‘Hey, I want to buy a Zillow home I hear they got to sell them so I’m gonna offer them a low-ball offer.’ That’s just not realistic in my opinion. Houses will be sold. They’ll be absorbed in the market,’ said Stephen McWilliam, founder of Florida State Realty Group.”

“Experts say this type of operation only benefits people looking to sell their house quickly and they encourage those who have a little more time, to seek out a realtor who knows your local housing market. ‘It’s been a success for decades and it will be successful for decades into the future in my opinion,’ said McWilliam.”

From WFTS 9 in Florida. “The yellow five-bedroom house on East Harding Street sits empty and unassuming, attracting little attention in the middle of Orlando’s Hourglass District. For months, though, this home has been the talk of the neighborhood. A sign outside the front door offers the first clue. ‘Owned by Zillow,’ it reads. No one is interested in the home. In fact, the East Harding Street house signifies the collapse of the budding real estate empire.”

“The East Harding Street home was originally listed by its owner for $285,000, neighbor John Miller recalled. The chatter in his community began after the Zillow sign appeared at the end of the driveway. The website listed the price of the sale: $445,000, 56% above the asking price. Miller remembered crews coming in to touch up the paint and replace a few ceiling fans after the sale went through, but nothing major. Then, Zillow relisted the house for $510,000. ‘It’s also kind of disgusting,’ Miller said. ‘For them to buy a property at the price that they did and not really do anything in the way to increase the value of the home, and then list it for that price.'”

“The process worked, though, because of the market frenzy. With homes getting 10 or more offers on their first day and prices increasing 12% annually, the company could afford to pay, knowing it would make it back and push nearby comparisons higher. Until it didn’t.”

“‘They projected that the market would keep going up at the rate that it’s been going up for the last 12 months,’ said real estate agent Ray Lopez. ‘Zillow kept paying top dollar over asking. So, they ended up getting these houses, trying to put them back on the market. They couldn’t sell them at anything close to what they bought them for.'”

From The Real Deal. “Everyone seems to be betting the house on a new home these days. Multibillion-dollar private equity firms. Joe Schmo house-flippers. Even savvy tech firms. Everyone except Ivy Zelman, that is. The analyst who called the top of the housing market in 2005 is once again waving a red flag. It’s beyond contrarian: She’s pretty much in a category of one.”

“‘The perception that housing is drastically undersupplied and that a strong demographic picture lies ahead is creating a false sense of security,’ according to a report by Zelman’s firm. ‘By our math, both single-family and multi-family production are already ahead of normalized demand and estimates of a housing deficit are grossly exaggerated.'”

“Homebuilders, the National Association of Realtors and Freddie Mac are pushing a now-familiar narrative that soaring demand for scarce housing is driving up prices. The problem is on the other side of the equation, says Zelman — it’s impossible to determine real demand because of all the new players. Private-equity firms are acquiring, and sometimes building, properties as rental homes. iBuyers like Zillow and Opendoor use algorithm-driven purchases to quickly buy homes, although Zillow’s flawed methodology led it to overpay in Phoenix by as much as $65,000.”

“Prices can only rise so far before potential homeowners simply can’t come up with the cash. Zelman said she recently spoke to a homebuilder in Boise, Idaho who is producing 2,000 homes a year. The builder said home prices are reaching unsustainable levels. ‘They said it was like a light switch, like the market just literally turned off,’ said Zelman.”

“Combine this with the near-certainty of rising mortgage rates and homeownership becomes even more unaffordable. Most homeowners are locked in at a rate below 4 percent because of record low interest rates by the Federal Reserve and billions of dollars in purchases of mortgage backed securities. ‘Rates matter,’ said Zelman. ‘We think the market has been juiced.'”

From News.com.au. “The outlook for first home buyers is looking ‘pretty bleak’ and much will depend on how Australia handles its border re-opening. Property prices in Australia have already grown by about 21 per cent this year. This has led to ‘stupid’ prices being paid for some properties, with many home buyers now faced with huge mortgages that will take decades to pay off. ‘A lot depends on immigration levels and how quickly they come back but the big factor driving prices — interest rates — has done its dash and is probably over,’ said AMP Capital chief economist Shane Oliver.”

“The undersupply of new dwellings has also been reversed, with an oversupply present in some area that should also help affordability. Prior to the pandemic it was already difficult for young people to get into the market but now they will be taking on even bigger mortgages that will take longer to pay off. ‘It seems grossly unfair that the country has allowed this situation to develop, especially with so much spare land around,’ Mr Oliver said.”

The Geopolitical Monitor. “Much of Western foreign policy and commentary is predicated on the idea that China’s economic, political and diplomatic heft will inevitably continue to increase. An Evergrande-shaped hole, however, could puncture this conventional wisdom. Evergrande’s plight, the result of years of binging on debt and building without considering financial viability, also sheds light on an alternative story of China’s meteoric rise: one built upon an innately broken system, whose problems can no longer be suppressed by a mixture of statist engineering at home and easy money from abroad.”

“Evergrande represents one of many brewing crises of China’s own making, as the country circles closer towards a middle-income trap and further away from a market economy. At home, food and energy prices are rising, squeezing China’s middle class. The looming emergency sparked by the rapid decline of China’s working-age population, thanks to decades of short-sighted policies, can no longer be papered over. The pandemic—and its economic fallout—has amplified these disruptions and laid bare China’s dependency on a globalized system of trade that bodes poorly for its foreign aspirations.”

“Perhaps most seriously, China’s heavy-handed foreign policy and opaque lending practices have undermined its own flagship Belt and Road Initiative (BRI), raising questions whether the worldwide network of infrastructure investment will ever match Beijing’s grandiose ambitions. Djibouti is one of many countries experiencing ‘buyer’s remorse.’ Nestled in the strategic chokepoint between the Red Sea and Gulf of Aden, the tiny country has received little-to-no benefit from the projects which have left it with debts to Beijing equaling some 70% of its GDP.”

“Ironically, it’s China’s own policies which are currently undermining its economic heft and sparking an inflection point. As one analyst warned, the Evergrande crisis ‘is the beginning of the end of China’s growth model as we know it.’ On the outside, China is looking to transform its economy to a global consumer market that rivals the EU and US. The reality, however, may be as hollow as one of Evergrande’s half-finished apartment complexes.”

The Globe and Mail in Canada. “The problem with Financial Literacy Month is that it allows the conversation about smart money habits to be co-opted by the very companies that effectively force us to raise our financial literacy game. Mostly, the big banks. This month, you’ll see them pumping out polls, interviews, videos and other content designed to have their brands and their people associated with empowering Canadians to make smarter money decisions.”

“This mercenary side of Financial Literacy Month helps create a fictional idea of banks and their clients working harmoniously toward the client’s personal success. We should not rule out the possibility of people in banking selling and advising in a way that puts customers first. But the top priority of a bank is to continually increase revenues, profits and dividends paid to shareholders. A proven way to gloss over this reality is to build an image of banks as cheerful helpers.”

“Banks offering budgeting tips distracts us from looking at how they push debt on customers via credit lines and other borrowing products. Banks talking about how to save money distracts from the subatomic interest levels paid on many savings accounts. Banks talking about the dream of home ownership papers over the fact that they will happily mortgage you to the eyelids.”

“Banks assess affordability by comparing your income with your housing costs and total debt. If you come down on the right side of their thresholds, it simply means you are not considered a default risk. In no way is a mortgage thumbs up from your banker an assurance that you can carry a mortgage plus daycare, savings and other expenses of everyday life.”

“Our home equity lines of credit are designed to let you stay in debt indefinitely. Unlike a loan, where each payment covers both interest and repayment of principal, HELOCs allow a minimum payment of interest only each month. Make that interest-only payment regularly and you might carry your HELOC debt right through your working years and into retirement.”

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This Post Has 85 Comments

  1. ‘I hear they got to sell them so I’m gonna offer them a low-ball offer’

    That’s the spirit! Kick em when they’re down.

  2. ‘Zillow kept paying top dollar over asking’

    The winnahs!

    ‘So, they ended up getting these houses, trying to put them back on the market. They couldn’t sell them at anything close to what they bought them for’

    Well this thing unraveled pretty quickly.

    1. It would be so funny if their Zestimate and Zillow buyer program algorithms didn’t account for each other creating an internal positive feedback loop of higher prices. Zillow buys a house 50-100k over market. Ziestimate moves median values for all comps higher. Zillow buyer program sees prices rising, overpays for another property based on the new comps. Zestimate moves comps values higher etc.

      You have to wonder how much the fake Zestimates that were created to protect the value of their inventory drove up prices all across the county. Every time they overpaid for a house, they had to raise the Zestimate on all the comps in the neighborhood.

        1. No danger of that.

          The magical money-driven perpetual motion machine runs until the never-ending supply of fools run out of their access to money.

      2. When I was a kid, one of our neighbors was an MIT professor and one day he showed up at our house with a pile of that old style computer paper telling my dad that his genius colleagues at MIT had worked out how to predict the stock market. My dad was impressed and invested some money using their predictions and lost most of it. Here we are all these years later and people still trust the infallible algorithm scam.

  3. ‘She’s pretty much in a category of one’

    I’ve consistently said there’s no shortage. There never was and never will be. She thinks the only problem is Phoenix and Dallas or something. Has she not seen the percentage increases all these little burgs across the US?

    ‘she recently spoke to a homebuilder in Boise, Idaho who is producing 2,000 homes a year. The builder said home prices are reaching unsustainable levels. ‘They said it was like a light switch, like the market just literally turned off’

    How can you have a shortage when one company can build 2,000 shacks a year? When have the shackbuilders ever stopped before it was too late? Who the fook wants to live in a sh$thole like Boise?

    1. “They said it was like a light switch, like the market just literally turned off.”

      On Wednesday, the fed announced tapering of their purchases of $80B/month of Treasury notes and $40B/month of mortgage backed securities, so the likely outcome will be higher interest rates and falling prices of real estate. How long before they reverse course?

    2. The shortage myth was trotted out in the last bubble also. I remember the RE shills saying there was no more land to build in San Diego county in 2005-6.

      1. RE shills saying there was no more land to build in San Diego county in 2005-6.
        Ditto for Dade County and Broward County FL. in 2005-2006
        NO land left to build.

  4. ‘Banks assess affordability by comparing your income with your housing costs and total debt. If you come down on the right side of their thresholds, it simply means you are not considered a default risk’

    Let’s revisit this article:

    March 26, 2020

    “As America heads into a deep recession, the $11 trillion residential-mortgage market is in crisis. Investors who buy home loans packaged into bonds are dumping even those with federal backing because of panic that millions might not make their payments. Yet one risky sector had started to show cracks long before the coronavirus pandemic sparked the worst financial meltdown in 12 years: the federal government’s largest affordable-housing program, whose lenient terms are geared toward marginal borrowers.”

    “As real estate prices soared in recent years, working-class adults everywhere have increasingly relied on mortgages backed by the Federal Housing Administration — and U.S. taxpayers. Since 2007, the FHA’s portfolio has tripled in value to more than $1.2 trillion, almost 11% of the market. While private lenders make these loans, they are packaged into Ginnie Mae bonds, common in mutual funds and pensions.”

    “Before Covid-19 started roiling China, a November FHA report found that 27% of borrowers last year spent more than half their incomes on debt, a level it describes as ‘unprecedented.’ The share of FHA loans souring in their first six months has doubled over the last three years to almost 1%.”

    “Not long ago, Alex Castillo drove his shiny black Infiniti SUV through an office park north of the San Antonio airport, along a busy seven-mile stretch of highway that loan officers call ‘Mortgage Row’ because of its abundance of small independent mortgage companies that dominate FHA lending. Castillo, who has the words ‘The Dream Starts Here’ stitched into his jacket, works for Pennsylvania-based American Residential Lending. Oddly, amid the pandemic, his business is booming. His customers locked in FHA mortgages after interest rates plunged this month — adding to federally backed mortgage debt.”

    “‘If the government tells me you’re good enough to get a loan, I have to trust and believe in the government,’ Castillo said. ‘Then we just hope and pray that the client doesn’t get foreclosed on.’”

    “In downtown San Antonio, scores of investors stood on a parched lawn beside the city’s historic granite-and-red-sandstone courthouse. It was the first Tuesday of February, the day of the foreclosure auction. Matt Badders, a San Antonio lawyer who represents lenders, auctioned off two houses. The failed mortgages remind him of the run-up to the financial crisis 12 years ago, when lending to customers with spotty credit nearly brought down the world’s financial system. ‘We’re almost back to 2007, when mortgage originators are waking people up on park benches, saying sign here,’ Badders said.”

    “At the auction, the crowd bid on 338 homes, a third with FHA mortgages, according to Roddy’s Foreclosure Listing Service. One house had dual master bedrooms, a game room and granite kitchen counters. It sold for $202,000 — $52,000 less than the homeowner borrowed only two years ago. The taxpayer-backed FHA insurance fund will take a loss.”

    “Dave Stevens, FHA commissioner under President Barack Obama and former chief executive officer of the Mortgage Bankers Association, said a recession will expose hidden risks in home lending. ‘This should be an alarm bell to policymakers,’ Stevens said. ‘Sometimes you get blinded by a good economy and suddenly look at it and see a bubble of defaults coming.’”

    “The federal government has decided it doesn’t want to pursue — and has asked a judge to dismiss — a lawsuit against Utah-based Academy Mortgage Corp. The judge refused. The suit claims the company’s staff would repeatedly feed information into an automated federal underwriting system, manipulating it until the computer gave the green light. ‘Decline is a curse word,’ Plaintiff Gwen Thrower, a former underwriter, quoted a manager as saying. ‘We don’t use it.’”

    http://housingbubble.blog/?p=3070

    1. ‘If the government tells me you’re good enough to get a loan, I have to trust and believe in the government’

      This is the only standard. And guberments screw up everything they touch. In K-da and Australia, the shack market is the only game in town.

  5. The coordinated smear campaign against Aaron Rodgers sure happened fast. An excerpt from The Guardian (11/6/2021):

    “The Green Bay star once vied for the status of the NFL’s most well-liked player. After Friday’s bizarre interview about his vaccine status, it’s safe to assume those days are behind him”

    Real Journalists, know that *YOUR* days are behind you, because we are done with your lies. Your revenue is dropping, nobody is watching or listening to or reading anything you say.

    “I realize I’m in the crosshairs of the woke mob right now,” Rodgers said. “So, before my final nail gets put in my cancel culture casket, I think I would like to set the record straight on so many of the blatant lies that are out there about myself.”

    “At the time the big three [vaccines] was what they were going to do, and if you weren’t in the vaccinated category, you were in a different category which involved some draconian measures and protocols you’d have to adhere to, which were in my opinion not based on science, were more based in a shame-based environment to get as many guys to get vaccinated as possible, so the league looks better to the rest of the world. That was the focus of these protocols”

    “the media and the pro-vaxers are just keeping this propaganda narrative going that unvaccinated people are the most dangerous people in society.”

    “That is what the media has been trying to do,” he continued, “they’re trying to shame and out and cancel all of us not vaccinated people, call us selfish. I mean, that’s the propaganda line, too, that you’re selfish for making a decision that’s in the best interest of your body.”

    “That this is a pandemic of the unvaccinated is a total lie”

    A total lie.

    P.S. Let’s Go Brandon!

      1. Go read some blue checkmark Twitter about Rodgers if you feel like throwing up inside of your mouth.

        President Donald J. Trump was, in fact, correct, when he said that “the media is the enemy of the American people.”

    2. From the New York Times:

      “Unvaccinated N.F.L. players are subject to more stringent requirements, inside and outside team facilities. They are not supposed to leave hotels when on the road for games; they must work out individually in the weight room, and they cannot use the sauna or eat with teammates. Rodgers said he was also forced to wear a yellow wristband to identify his status.”

      A *yellow* wristband? Why does that sound so familiar?

      Globalists gonna globe.

  6. ‘Zelman, whose firm was acquired by Walker & Dunlop this year, has long used earnings calls to press bullish homebuilders on their rosy expectations.’

    “Which Kool-aid are you drinking?” Zelman, then at Credit Suisse, asked Toll Brothers CEO Bob Toll on the fourth quarter 2006 conference call after he touted pending sales.’

  7. ‘Djibouti is one of many countries experiencing ‘buyer’s remorse.’ Nestled in the strategic chokepoint between the Red Sea and Gulf of Aden, the tiny country has received little-to-no benefit from the projects which have left it with debts to Beijing equaling some 70% of its GDP’

    Good luck squeezing blood out of a sh$thole, pooh bear.

    1. It’s not about extracting money, it’s about control.

      The term “strategic checkpoint” has great meaning as it is used here.

      If the country possessing this strategic checkpoint becomes your country’s debt-slave then your country gets to control this strategic checkpoint.

      1. Here is an informative read and a snip …

        Confessions of an Economic Hit Man – Wikipedia
        https://en.m.wikipedia.org/wiki/Confessions_of_an_Economic_Hit_Man

        Economic hit men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from the World Bank, the U.S. Agency for International Development (USAID), and other foreign “aid” organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet’s natural resources. Their tools included fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalization.

        1. Another snip …

          Basically his story is true.… What John’s book says is, there was a conspiracy to put all these countries on the hook, and that happened. Whether or not it was some sinister plot or not is up to interpretation, but many of these countries are still over the barrel and have never been able to repay the loans.

      2. That’s good cuz their money has gone bye bye. China is done and they did it to themselves. Every day some company you never heard of blows up several billion pesos. Remember when the “experts” would tell us CCP will never let a company default?

        1. Again, in this case, it is not about money, it’s about control. China wasn’t in it for the money they were in it for control.

  9. ‘People start calling realtors saying ‘Hey, I want to buy a Zillow home I hear they got to sell them so I’m gonna offer them a low-ball offer.’

    Remember, knife catchers: it’s the second mouse that gets the cheese.

      1. Anyone who buys a house now, even at a discount, is an idiot. The real carnage hasn’t even begun to play out in the housing market.

  10. ‘It’s also kind of disgusting,’ Miller said. ‘For them to buy a property at the price that they did and not really do anything in the way to increase the value of the home, and then list it for that price.’”

    What’s really disgusting is that the Keynesian fraudsters at the Fed are still spending $40B a month to buy up mortgage-backed securities from their bankster pals, at the peak of Housing Bubble 2.0.

    2. The increase in auto loan debt is more surprising than the increase in student loan debt. Cars haven’t skyrocketed in price as much as tuition, have they?

      1. Used car prices are at premium levels and interest rates for them are more than double that available to the new car buyers with good credit histories.

  12. “Build Back Broke” just passed with the help of 13 treasonous RINOs. The Republican base needs to Cantor these globalist salad-tossers in their next primary.

    ‘We’ve just taken a monumental step forward as a nation’: Joe Biden celebrates passage of his $1.2T bipartisan infrastructure bill ahead of a vote on Build Back Better before Thanksgiving: Six Squad members are the only Democrats to oppose it

    https://www.dailymail.co.uk/news/article-10170873/Pelosi-launches-desperate-bid-pass-Bidens-1-2T-infrastructure-bill-tonight.html

    President Biden said the country ‘took a monumental step forward’ after the House passed the $1.2 trillion bipartisan infrastructure bill with a vote of 228 to 206 on Friday night.

    The vote late on Friday night is a substantial triumph for Biden’s Democrats, who have bickered for months over the ambitious spending bills that make up the bulk of his domestic agenda.

    1. This wasn’t the Build Back Broke bill. This was the infrastructure bill that passed the Senate weeks ago. The BBB bill is the $3.4T–> down to –>$1.7(?)T bill that has all the junk in it. The BBB bill might pass the house, but it won’t get past Manchin and Sinema in the Senate.

      The Dems are taking a victory lap, but it’s a lame one.

      1. This was the infrastructure bill

        Ironically, nearly half of it is usual stuff that they always appropriate. Do the get bragging rights for pretending to go deeper in the hole than they are? What a dysfunctional bunch.

  13. “Experts say this type of operation only benefits people looking to sell their house quickly and they encourage those who have a little more time, to seek out a realtor who knows your local housing market. ‘It’s been a success for decades and it will be successful for decades into the future in my opinion,’ said McWilliam.”

    Now that Zillow’s stupidity premium has left the market, buyers are going to either have to list their homes for a lot less than the Zestimate or else become extremely patient in waiting for a buyer with a bucket of money and a box of stupid.

  14. It’s kinda awkward for globalist Quislings counting on the usual fawning obsequiousness from Real Journalists to get hit with truth darts instead.

    Joe Rogan attacks Jacinda Ardern, after anti-vaxxers ambush her press conference

    https://www.news.com.au/world/coronavirus/global/joe-rogan-attacks-jacinda-ardern-after-antivaxxers-ambush-her-press-conference/news-story/466cae7a00a2ef5da2189449c92b5842

    The NZ PM was forced to end a press conference after it was ambushed by anti-vaxxers. Rogan says this was proof politicians had “too much power”.

  15. “The process worked, though, because of the market frenzy. With homes getting 10 or more offers on their first day and prices increasing 12% annually, the company could afford to pay, knowing it would make it back and push nearby comparisons higher. Until it didn’t.”

    Is it too early to start soliciting designs for memorials to all those trillions of Yellen bux that are going to be ascending to debauched currency heaven after the Fed’s Everything Bubble bursts?

  16. “‘Rates matter,’ said Zelman. ‘We think the market has been juiced.’”

    Yes they have. And the wild card is whether the central bankers can keep them pinned to the mat at historically low levels indefinitely, or if not, when they will return to normalcy.

  18. Eat a bag of d*cks, NASCAR globalist fluffers. NASCAR fans have given a collective middle finger to tyranny and electoral fraud – God bless them for being true Americans.

    NASCAR denounces ‘Let’s go, Brandon’ conservative rally cry

    AVONDALE, Ariz. (AP) — NASCAR denounced its association with the “Let’s go, Brandon” political cry being used across the country as an insult directed at President Joe Biden. Steve Phelps, NASCAR’s president, said Friday the top motorsports series in the United States does not want to be associated with politics “on the left or the right.”

    1. This is a #Seethe narrative.

      Huffington Post — Rep. Lauren Boebert Takes The ‘Brandon’ Thing To Dumb New Level In Trump Meeting (11/5/2021):

      https://archive.ph/fEkBH

      Archive website link provided because we do not give clicks or revenue to globalists.

      P.S. Let’s Go Brandon!

  19. The analyst who called the top of the housing market in 2005 is once again waving a red flag. It’s beyond contrarian: She’s pretty much in a category of one.”

    Props to Ivy, but she’s hardly in a category of one. Ben & the cohort of regulars over at the HBB have been waving the red flag for years.

    1. In the article Bill Gates saying they need a new way to make vaccines that stops transmission altogether is the new way of description of vaccines.
      So, current vaccines don’t stop transmission, don’t stop getting the disease, but according to Bill Gates Science should up their game and make vaccines that stop transmission. Isn’t it just suffice to say that the vaccines don’t work , and the risk of injury doesn’t warrant the benefit of junk ineffective dangerous vaccines.
      In other words the new definition of vaccines is they don’t do shit, but take them anyway , and maybe Science might get one that works some day.
      No, A number of traditional vaccines apparently stop transmission or getting the disease.
      Every time these vile people like Bill Gates talks he reveals the scams.

  21. “But the top priority of a bank is to continually increase revenues, profits and dividends paid to shareholders. A proven way to gloss over this reality is to build an image of banks as cheerful helpers.”

    cheerful helpers!? like little elves merrily shuffling paperwork for santa!?
    err, the image I have in MY mind is Mr Banker aka Sam Kinison screaming “work harder. work Faster. FASTER. FASTERRRR YOU IGNORANT PUKES. AGGH AGHH. AGGHHHHHHHH !! “

    2. “like little elves merrily shuffling paperwork for santa!?”

      The corrected spelling is satan.

  24. From The Real Deal. “Everyone seems to be betting the house on a new home these days. Multibillion-dollar private equity firms. Joe Schmo house-flippers. Even savvy tech firms. Everyone except Ivy Zelman, that is.”

    https://therealdeal.com/2021/11/05/strong-housing-demand-a-mirage-says-analyst-who-called-previous-crash/
    Strong housing demand a mirage, says analyst who called previous crash
    Zelman, who called the market top in 2005, said there is no supply deficit and home prices could fall
    New York /
    November 05, 2021 03:10 PM
    By Keith Larsen

    – Excellent article! Thanks for posting! A rare voice of sanity in the wilderness of otherwise insane markets (including housing).

    – Snippets/excerpts from the article, in (3) categories:

    1) Demographics + HH Formation –

    “Her firm’s report makes the case that U.S. population [growth] and household growth [household formation] will ultimately determine housing demand.”

    “Population growth — the crucial underpinning of future housing demand — is on a troubled trajectory,” the report said.
    The U.S. population has grown just 7.4 percent growth in the past decade, the second-slowest rate on record, the report says. Household growth [formation] in the country was the slowest in history at 8.7 percent. Birth rates are declining. And Zelman estimated that more 20- to 39-year-olds lived with their parents or grandparents in 2020 than in 2010.“

    2) New supply is going to speculators vs. traditional shelter-buyers. Existing supply is being held off the market by other speculators, since they’re expecting that “prices only go up.” This is the case in most all OECD countries thanks to the nearly free cost of money (i.e. ZIRP or near-ZIRP interest rates) from the nefarious Fed and other Central Banks goosing the market. See (3), below. The financialization of the global housing market (and the world) continues apace. –

    “Adding to the supply issue is the expansion of the “build-to rent” home communities.”

    “By Zelman’s estimates, the announced capital heading into the sector is about $75 billion. Build-to rent firms such as Phoenix-based NexMetro Communities have been betting that while Americans like living in homes, they either can’t afford to buy one or prefer to avoid the work of being a homeowner.”

    “Such firms are competing for the same land as for-sale homebuilders. As a result, land prices have skyrocketed, eroding profit margins, she said.”

    “In order to pencil returns, you have to assume that demand is sustainable and that you have to keep hitting your volume levels that you have been hitting,” said Zelman.

    “Prices can only rise so far before potential homeowners simply can’t come up with the cash.“

    3) Low rates, low down, and other easy $ policies from the Fed and Gov’t. Recall that house price is inversely proportional to interest rates. All that really matters is the monthly “nut” as far a how much a buyer can afford, and how little they can put down. However, ultra-low rates drive up prices into the stratosphere. Plus LTV and DTI matter! (always have). Although no one will say it in the REIC, we still have sub-prime; It didn’t go away after Housing Bubble 1.0, it’s just been rebranded. The Fed is still following their “dual mandate” of boosting housing and stonk prices. This is their “wealth effect,” (wealth for me, but not for thee), which has been debunked by numerous academic studies. BTW, the Fed is now just beginning their policy of tiny tapering only at $15B/mo. out of $120B/mo. of continuing QE. There’s still NO TIGHTENING (i.e.: no increase or planned increase in actual interest rates), even with ginormous Biden-inflation eating up the (real) wages of the 99%. Also, don’t even think that they’re going to “normalize” (i.e. reduce) their balance sheet. They tried that in 2018 and the SHTF in the stonk markets. The Fed is trapped; they’re scared of the Frankenstein’s monster that they’ve created, but asset bubbles always pop, and the bigger the boom, the bigger the bust.

    “Combine this with the near-certainty of rising mortgage rates and homeownership becomes even more unaffordable. Most homeowners are locked in at a rate below 4 percent because of record low interest rates by the Federal Reserve and billions of dollars in purchases of mortgage backed securities.”

    “Rates matter,” said Zelman. “We think the market has been juiced.”

    – I’m sure though that “everything’s fine,” and “it’s different this time.” /s
    – The Everything Bubble continues for now; the mother of all bubbles (MOAB).

    1. Zelman’s article is a convincing encapsulation of many of the themes regularly covered here. She writes with impressive conviction in the face of the REIC propaganda barrage.

    2. “Even savvy tech firms.”

      Is that a reference to those iBuyHouses firms like Zillow, who are currently in the process of getting their asses handed to them?

  25. His handlers filled President Brandon in on what his administration is actually doing, shot him up with whatever wakes his senile old @ss up and sent him out with flip-flops blazing.

    Biden: Families of separated children deserve compensation

    By ZEKE MILLER and COLLEEN LONG
    an hour ago

    WASHINGTON (AP) — President Joe Biden said Saturday that the families of children separated from their parents at the U.S.-Mexico border during the Trump administration should be compensated, as his Department of Justice is in settlement talks with affected families.

    “If, in fact, because of the outrageous behavior of the last administration, you coming across the border, whether it was legally or illegally, and you lost your child — You lost your child. It’s gone — you deserve some kind of compensation, no matter what the circumstance,” Biden said. “What that will be I have no idea. I have no idea.”

    https://apnews.com/article/immigration-joe-biden-lifestyle-mexico-2bdb31fdb7e2f661db482e8c081a0d69

    1. ‘That’s not going to happen’: Biden dismisses reports of payment to migrant families as ‘garbage’

      Maroosha Muzaffar
      Thu, November 4, 2021, 6:40 AM

      On Wednesday, Mr Biden responded to a question about reports that the Biden administration plans to pay $450,000 to $1m to each undocumented immigrant family that was affected by Donald’s Trump’s policies and said that it was “not true.”

      Fox News’ White House correspondent Peter Doocy had asked the president if the plans of payment might “incentivise more people to come over illegally?” and to this, Mr Biden responded: “If you guys keep sending that garbage out. Yeah. But it’s not true.”

      At this point, Mr Doocy asked again: “So it’s a garbage report?”

      The president replied: “Yeah. That’s not going to happen.”

      https://sports.yahoo.com/not-going-happen-biden-dismisses-104014546.html

      1. [WATCH]: WH Confirms Biden Is ‘Perfectly Comfortable’ Paying Illegal Immigrants Separated From Families at U.S. Border

        https://pjmedia.com/news-and-politics/gwendolynsims/2021/11/04/watch-wh-press-secretary-confirms-biden-is-perfectly-comfortable-paying-illegal-immigrants-separated-from-families-at-u-s-border-n1529944

        “The President is perfectly comfortable with the Department of Justice settling with the individuals and families who are currently in litigation with the U.S. government,” Jean-Pierre read from a prepared statement.

        So, not only are the reports true that his administration is planning to give taxpayer money to people who had no legal right to be in the U.S. in the first place, but Biden was either clueless or playing semantics.

    2. The purpose behind this idiotic act is to demoralize the masses. You might be months behind on your mortgage and the bank keeps sending you letters threatening to repossess your car, but you won’t get any help from Uncle Sam, who is threatening to take your job from you shuold you refuse the jab. But invaders will be given six figure sums for no good reason, and won’t be required to get the kill shot.

      1. “The purpose behind this idiotic act is to demoralize the masses.”

        This is working like magic at the voting booth!

        1. Ok, Federal Appeals Court, 5th circuit, just put a STAY on Bidens Vaccine Mandates.

          Don’t know to much more yet.

          3. https://thehill.com/policy/healthcare/580403-appeals-court-stays-biden-vaccine-mandate-for-businesses
            —–
            “The ruling came from the U.S. Court of Appeals for the Fifth Circuit after Texas Attorney General Ken Paxton (R) filed a challenge to the mandate requiring employers with over 100 or more employees to get vaccinated or undergo frequent testing directly with the court.

            The challenge included the states of Louisiana, Mississippi, Utah and South Carolina.

            The appeals court ruled there are “grave statutory and constitutional” with the OSHA rule.

            The Labor Department rule was announced during a surge of the highly contagious delta variant.”
            —–

            That last bit is more BS. The rule was announced right after the Pfizer vaccine was fully approved. Likely had nothing to do with the Delta variant.

            Did anyone else notice that Pfizer announced the results of its COVID pill within a week after the kiddie shot was EUA “approved?” I wonder how long they were sitting on those results.

  26. Who’d have thunk that a senile, deeply unpopular president and woke military getting ready to discharge tens of thousands of the un-vaxxed would ever tempt adversaries to exploit our weaknesses.

    China’s actions show early signs of Taiwan invasion

    https://www.news.com.au/technology/innovation/military/chinas-actions-show-early-signs-of-taiwan-invasion/news-story/fae1fb19b5f1e1128d916cf3c051cf88

    The rumour mill has been in overdrive in China this week with rushed statements and alarming videos adding to the fear over tensions with Taiwan.

    Orders to stockpile food. Armoured vehicles moving through city streets. A warning to reservists warned to prepare. Party players beating the drums of war.

    Little wonder China was awash with rumours about an imminent invasion of Taiwan this week.

  30. In the 80’s Big Pharmacy was getting sued slot for injury from vaccines. So, Big Pharmacy pressured Government to give them Immunity from vaccine death and damage. WORSE GOVERNMENT MISTAKE IN HISTORY.
    This mistake evolved into the massive growth of Big Pharmacy in a vaccine for everything, as well as mandates for children in school.
    Like Bill Gates bragged about, he makes 20 to 1 off vaccines.
    Than Big Pharmacy was allowed tio advertise medicines on TV, etc so being able to influence content of programs was evident.
    You could watch decade by decade how much power and influence Big Pharmacy obtained and their effect on the medical system. Somewhere in that growth of power the FDA and regulatory agencies became corrupted and failed to protect the public , as what is happening now.
    700 thousand deaths a year related to medications and people don’t think this isn’t a problem . Than this roll out of Covid vaccines under EUA, that no amount of evidence of harm or failure of the vaccines is going to get the FDA to take these terrible vaccines off the market.
    Now going after children, who aren’t at risk, is the last draw in the lab rat expierments, based on a contrived Pandemic.
    It was that original evil of giving a private party Big Pharmacy immunity as to what they produced that created the Medical Tyranny and attack on freedoms by this Monopoly called Big Pharmacy.
    So , this evil in conjunction with corrupted government is taking over you rights for anything and they are part of the ONE World Order takeover of US, and other Countries, along with Media Monopoly fraud and censorship of dispute to this Medical Fraud.
    And now you lose your job , or your kid becomes a lab rat, by Government imposed mandates to inject something not proven safe or effective. When you have viable drugs that treat the Covid, its obvious they wanted the vaccine with no liability solution.

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