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The Runaway Prices Have Come To An End

A report from Candy‘s Dirt in Dallas. “We have luxury homes sitting on the market at 400 and 500 days. We have millions of dollars in price reductions on some of these. It’s time to make some decisions and face reality. Sure, some deals have fallen through. Sellers are difficult and overvalue their homes. However, none of that excuses bad photography or lack of staging expertise. I know we are in Texas, but the deer mounts need to go.”

The Sequim Gazette in Washington. “For the second year in a row, the Sequim area toppled its highest average and median home sale prices. According to Team McAleer at RE/MAX Prime, average home sale prices in the Sequim School District boundaries jumped more than $100,000 from $448,140 in 2020 to $548,480 in 2021. At one point last summer asking prices were even higher, with McAleer reporting the average asking price at about $661,000 and the median price at $575,000.”

“‘Prices rose significantly in the second half of the year, but not as drastically as they rose in the first half,’ Brody Broker Team Keller Williams Realty wrote, adding that he believes the market may be at or close to its peak.”

From CNN Business. “If you’re one of many would-be homebuyers who got shut out of the real estate market last year, you might be hoping for better luck in 2022. The good news is that you probably won’t see the jaw-dropping jumps in home prices seen last year. ‘That kind of price increase was a shock. ‘Unprecedented’ is not strong enough. It was nuts,’ said Skylar Olsen, principal economist at Tomo Networks, a buyer-focused mortgage and home-purchasing platform.”

“Olsen said she’s fearful the pressure and fatigue will lead buyers to make rash decisions they may regret. ‘I’m so worried that people will buy out of desperation to finally win a bid and not buy at a price they can afford sustainably,’ she said.”

From Rolling Out on Georgia. “Atlanta real estate agent Eric Hill has been sentenced for his participation in a mortgage fraud scheme that netted more than $21 million in fraudulent mortgage loans. Many of the fraudulent loans were insured by the Federal Housing Administration (FHA), resulting in over $850,000 in claims being paid for mortgages that have defaulted. Hill also engaged in a scheme to defraud his employer, a national real estate developer, out of over $480,000 in real estate commissions.”

The Marin Independent Journal in California. “The fallout of a massive fraud scheme by Marin investment managers has resulted in a $436.5 million sale of North Bay properties. The sale involved 60 sites formerly controlled by Professional Financial Investors Inc. and its associated fund. The principal, Ken Casey of Novato, died in 2020.”

“The properties, amounting to more than 1.4 million square feet, were sold off last month in federal bankruptcy court. They properties range from 3,500 square feet to 85,000 square feet, including 935 residences and approximately 680,000 square feet of commercial space. ‘It’s one of the biggest portfolio sales in our county’s history,’ said Haden Ongaro, executive vice president with the Newmark Knight Frank real estate firm.”

“Wallach pleaded guilty to federal fraud charges in 2020. He admitted to being aware that the companies had ceased to be profitable, but continued to obtain properties and assure investors of their financial stability. The companies took on new investors whose payments were used to pay interest to existing investors.”

The Daily News in California. “A nightmare scenario looms for condo buyers applying for certain types of federally-backed mortgages. If you are selling or are looking to buy an attached condominium in a community with five or more attached units, conventional financing from mortgage giants Fannie Mae and Freddie Mac may soon become elusive. Beginning Jan. 1 for Fannie and starting Feb. 28 for Freddie, the mortgage giants are putting the screws to a required HOA questionnaire.”

“‘Yes, lenders are declining projects even for a simple special assessment for repairs now. Things are just trickling in right now because the guidance started January 1,’ said one condo project approval expert, who asked to remain unnamed because he’s not the media spokesman for his company. ‘Soon enough we’ll see the effects hit all the condo market.'”

“Why is this so problematic? The nation has a huge community of really old condos and many of them are backed by Fannie Mae and Freddie Mac mortgages. The U.S. has as many as 156,000 condo associations and cooperatives housing between 27 and 32 million Americans, according to the Community Associations Institute. ‘Seventy percent of all condo loans in the U.S. are Fannie or Freddie (backed),’ said Dawn Bauman, senior vice president of government affairs at CAI. ‘Sixty to 70% of all condo complexes are more than 30 years old.'”

“Fannie Mae has a published list of 82 “unavailable” California condo-projects including the Marina City Club in Marina Del Rey. That a 10-acre complex is one of nearly 1,000 ‘unavailable’ condo projects nationwide. To Fannie Mae, unavailable means a property is ineligible for purchase by the agency.”

The Bergen Report. “One of the most expensive homes in New Jersey has finally sold after years on the market. The 30,000-square-foot Stone Mansion, located on the famous Frick Estate in Alpine, was purchased for $27.5 million. The mansion was completed in 2013 after the previous owner Richard Kurtz purchased part of the 60-acre Frick Estate, which is divided between Alpine and Demarest, for $58 million in 2006.”

The Globe and Mail. “Canada is on the cusp of a series of rapid interest-rate hikes, with the central bank poised to start raising the cost of borrowing as early as next week, beginning a sustained push to bring high inflation back under control. After nearly two years of extraordinarily low interest rates, the Bank of Canada has arrived at a pivot point. ‘The bank basically has a free option [to raise rates next week],’ National Bank rates strategist Taylor Schleich said. ‘The economy is screaming that we need interest-rate normalization, and now the banks and the markets are kind of allowing them to do it. So you may as well take it.'”

“Governor Tiff Macklem has not spoken publicly since mid-December. But he used his last speech to tee up a possible shift in January, noting that inflation was ‘well above our target, and we are not comfortable with where we are’ – strong language for a central banker.”

From Domain News in Australia. “Sydney’s rapidly rising property prices are tipped to slow in 2022, with buyers facing less competition as more homes hit the market. The runaway prices seen on the northern beaches last year have come to an end, according to buyer’s agent Peter Kelaher. He also had his eye on Elanora Heights, Narraweena and Beacon Hill, where he estimated prices had come back about 5 per cent as more homes hit the market late last year – predominantly in the $2 million to $2.2 million range – enabling better buying for house hunters.”

“Closer to the city, Rosebery and Waterloo could represent good buying for those looking for apartments, said Michelle May, of Michelle May Buyers Agents, but warned buyers would need to be selective and do their due diligence checking a building’s strata history. ‘There may be some good opportunities now there is a lot more supply there. I think they will become more desirable with the new train line station and [nearby] Green Square becoming more of a real suburb as opposed to a ghost town with just high rise.'”

From Reuters. “Beaten-down dollar bonds issued by Chinese property developers are enticing domestic and global fund managers, some of whom are even planning to launch new funds targeting bargains as Beijing relents in its concerted drive to clean up the sector. Jupai Holdings Ltd, a Chinese wealth manager, plans to start a fund to bet on such offshore Chinese property bonds. ‘I think roughly half of the developers’ dollar bonds were slaughtered by mistake,’ Jupai Chairman Jianda Ni said. ‘We will spot value in what others dumped as trash.'”

“Roughly half of the dollar bonds issued by Chinese developers trade below 80 cents on the dollar, according to an estimate by Essence Securities last week. Some bonds issued by major developers currently yield more than 60%.”

The South China Morning Post. “Chinese developer Yuzhou Group Holdings warned of certain bond default events, citing the liquidity crisis affecting the company and the wider real estate industry. The Hong Kong-listed company said in an exchange filing on Monday that it will not pay the principal and interest on untendered dollar bonds due on Tuesday, and did not make the payment on another bond tranche due on Sunday. The total principal amount due on the notes was close to US$105 million, it said.”

“‘Having carefully considered its liquidity position in light of the deteriorating real property market and tightening of the onshore supervision of financing activities and cash balances,’ the company opted not to pay back the untendered amount of bonds, Yuzhou said in the filing.”

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This Post Has 92 Comments

  1. ‘Some bonds issued by major developers currently yield more than 60%’

    Ooo, is jerry gonna raise interest rates?

    Another day, another China-ron outfit fooks the gringos. Poof!

      1. Makes me think of scavengers who sift through 3rd world landfills. The Mexicans even have a word for them: pepenador.

  3. ‘I know we are in Texas, but the deer mounts need to go’

    Wa? First it was the cow skulls and now yer ditching the deer mounts?

    1. ‘I know we are in Texas, but the deer mounts need to go’

      Mona Lisa Vito : What are ya gonna hunt?

      Vinny Gambini : I don’t know. He’s got a lot of stuffed heads in his office.

      Mona Lisa Vito : Heads?

      Mona Lisa Vito : What kinda heads?

      Vinny Gambini : I don’t know, he’s got a boar, a bear, a couple of deer.

      https://youtu.be/Da7GSy-6mJY?t=60

    2. Texas is gonna flip. “Beto” almost beat Cruz a few years ago, and that was before this influx of tech people and whatever other sludge is spewing into town. Texas needs to secede or pass a bunch of anti-woke laws and get the liberals out before it’s too late.

      1. We’ll find out in the 2022 Congressional races. It could be that the conservative transplants coming in from CA will outnumber the techs coming in from NY or IL. It could also be that old Texas Dixiecrats accustomed to voting Democrat will finally purple pill and join the ranks of independents/unaffiliated. Cruz isn’t up until 2024.

        As for deer mounts. Meh, at this point I’d rather see a deer mount than a freakin GATHER sign. 🤢 And both are pretty easy to remove. Try multiple rooms full of 1978-era wallpaper.

      2. It’s worth remembering that Ann Richards was once Texas’ governor. While she is long gone, another leftist could win the governorship.

          1. Richards pushed the envelope back then. I still remember her rant on men. Something about them driving away in their Honda Accords.

          2. Maybe I’ll look up that Rant on Men. Was it any different than what today’s thigh-gap-luvvin MGTOWs proudly say about themselves?

          3. Was it any different than …

            Maybe not, but none of our thigh gap loving friends here were ever governor.

  4. ‘I think roughly half of the developers’ dollar bonds were slaughtered by mistake’

    So half were rightly slaughtered? Is that a lot?

  5. ‘Fannie Mae has a published list of 82 “unavailable” California condo-projects including the Marina City Club in Marina Del Rey. That a 10-acre complex is one of nearly 1,000 ‘unavailable’ condo projects nationwide’

    They broke it off in yer a$$. And they’ve done this before. You might think, but they financed a lot of these previously, won’t they take a hit?

    They don’t care. It’s not their money, nobody goes to jail. Behold, yer moral hazard.

    1. IIUC, these aren’t new builds being turned down by Fannie; it’s existing buildings with issues. So whose @$$ got broken off in? I guess it’s the FBs* who already bought/invested into the cr8er building. If Fannie is preventing new buyers, then the FBs have no one to sell to and forget about appreciation.

      ————–
      *foreign buyers?

      1. What’s happened before is this is just the beginning. Next it might be buildings that have a certain percentage of investors. They are looking for reasons to blacklist buildings. This kicked S. Florida’s a$$ last decade.

      2. Maybe I just don’t get young female Gen X thinking but I can’t help wondering why you post FB* then take the time to write it out fully below.

        Are you trying to train us?

        1. FB actually stands for “effed buyer.” HBB adopted the term from the beginning (mid-2000s), mainly to describe buyers who bought too high and went underwater during the housing market crash. Usually applied to single-family housing.

          For existing condo buildings in Miami, many of the buyers were foreign* investors who bought sight unseen, looking for appreciation. Now that Fannie is rejecting loans to buy the neighboring units in those buildings, the foreign investor-buyers aren’t going to see the appreciation they wanted. It’s only a coincidence that foreign buyers and effed buyers both start with FB.

          —————
          *I was originally going to write “Chinese buyers,” but I believe there were many wealthy South Americans who invested in Miami condos too, so I changed it to foreign. So now you’ve been trained. 😘

    1. “The bankruptcy sale disappointed some of the 1,300 investors in the Ponzi scheme, most of whom are Marin residents.”

      Welp, there goes the Grey Poupon!

    3. Unmoved, U.S. District Judge Larry Burns sentenced her to 15 years in federal prison, about four more than prosecutors recommended. It rankled the judge that Champion-Cain’s victims included friends, family, and employees. “This wasn’t just strangers hoping to get rich,” he said, explaining how her “deceit and betrayal” played into his sentencing rationale.

      And almost $400M went poof!

      You have to wonder what goes through a Ponzi schemer’s mind. Do thy really think they can pull it off, that it won’t eventually crash and burn and they won’t be sent to prison?

  8. Half is unrealistic:

    ‘purchased for $27.5 million. The mansion was completed in 2013 after the previous owner Richard Kurtz purchased part of the 60-acre Frick Estate, which is divided between Alpine and Demarest, for $58 million in 2006’

    1. ‘The dow is cratering faster than silver, gold and housing prices. Explains why all the comment sections are dead this morning…. the degenerate gamblers and pimps are busy selling.;)’

      – While I don’t fit in any of those categories, I’m fine, thank you very much. Long Au, Ag. Short stonks, esp. “growth” stonks.

      BTW, the Fed owns this. Idiots. 13 years of easy $ and no one called ‘bubble.’

      ‘The emperor has no clothes,’ nor even a clue.

      BTW, history says war fixes stupid. I hope not, but lots saber-rattling going on. Apparently that inflation thingy from the Fed isn’t going so well…

    2. Bitcoin is trying to recover, but I get the feeling that these are Bitcoin priests trying to lazarus the dead cat. Still no major movement on Tether (and I’m not sure if Tether is the big deal some think it is.)

      There are still lots of calls for a DOW/S&P market crash, but these feel like dips, not the Big One. This sabre-rattling and Fed-waffling has been going on for a while. I think we’d need a more definitive catalyst to precipitate a long-lasting crash.

  10. remember OHbahma gave banks 18 months before the new credit card rules were to be in effect. so bank changed millions of cards to variable rates from fixed. Citibank did it to me, so i canceled my card and they were stuck with me at 6.9% instead of 14% they tried to raise it for no reason and there was no appeals. Never went over never missed a payment, i mostly used it to buy dj equipment and paid it off with gig money

    1. # 3 on the popular comment list but I would have voted it # 1

      Brutus_Bassman

      “Rope!!!! Thick one for this chunky monkey”

      2. More children have died from COVID “vaccines” than have died from COVID.

        A staggering number more.

        Yet zombie/NPC parents will say that it was the right thing to do, and they would do it again. One would think they would be marching with torches and pitchforks; but no. These are the same people who will happily hand their kids over to pedophiles.

          1. And the same people who think that kids should be taken away from vax-refuser parents.

            And handed over to perverts. And many parents know that will happen, so many would fold and get jabbed to keep their kids out of the hands of pederasts and globohomo in general.

  14. Thank you RPRH for posting the link to the “hottest jabs”. I watched the video. But the graph showing the number of events for each batch isn’t legible as to batch numbers. At least in the utube video. Is there some way to view the graph so it is readable?

      1. At least give the ladies credit for being smart enough to convert that NFT “money” into hard assets (mortgage payments on a farm) FAST. Many testosterone-laden manly-men would have doubled down, lost it all, and jumped out the window of their corner office.

    2. On the surface, paying good money for a bitmap seems insane (and it is), but at least you get a picture of something. With crypto you don’t even get that.

      1. Just read that Julien Lennon is selling NFTs of his collection of his father’s Beatle’s mementos. Not actually selling the mementos, but just pictures of them, with the crypto token in them. And suckers are going to pay good money for those bitmaps.

        1. Here is an excerpt from one of the articles:

          “So, what will a few thousand dollars give you in this sale? The NFTs are coined with images of the physical items, as well as an accompanying audio clip in which Julian shares a personal memory attached to the item.”

          So it sounds as you’re buying the rights to an IMAGE of the physical item and an audio clip. You don’t even own any piece of the physical item. But look at the headlines:
          ——————-
          “Julian Lennon to sell Beatles memorabilia as NFTs”
          “John Lennon’s Son is Putting Rare Beatles Memorabilia Up For NFT Auction”
          “John Lennon and Beatles History to be Auctioned as NFTs”
          “John Lennon’s son to auction off his personal items as NFTs to …”
          “Baby you’re a rich man if you want to buy Julian Lennon’s Beatles memorabilia as NFTs.”
          “John Lennon and Beatles History to be Auctioned as NFTs — Julian Lennon to Keep the Originals”
          ———–

          The headlines sound as if the items themselves are being auctioned off. Is ANYone going to fall for this?

        1. At least they’re clear that the NFT is an image. It’s not as if you’re going to buy the actual Kurt Cobain (or what’s left of him).

          2. NFT’s are crypto baseball cards.

            That makes stamp collections look good by comparison. How are those doing these days?

      1. At least you got tulip bulb. In the current mania you get a string of bytes you store on a flash drive. In other words, nothing.

        Then again, people are paying real money to buy real estate that doesn’t exist anywhere except in people’s imaginations.

        2. You could have paid a fortune for Beanie Babies in the pre-2007 asset bubble inflation, or purchased them for free later.

          By contrast, what will the today’s Bitcoin bagholders have left after the final collapse?

          1. or you could have bought hundreds or thousands of cd’s at $15 each and now even fiddy cents is too much,

    4. Nothing in the story as to why a “software engineer” and artist could possibly get nearly $40K overdue on a property worth only $300K while only being unemployed for a year.

      This is bullshite from word one.

    2. The Financial Times
      Opinion Unhedged
      Don’t push the panic button
      A stock correction need not turn into a crash
      Robert Armstrong
      © Financial Times
      Robert Armstrong and Ethan Wu 15 hours ago

      This article is an on-site version of our Unhedged newsletter. Sign up here to get the newsletter sent straight to your inbox every weekday

      Good morning. About 15 years ago, when I was a buyside stock analyst, a colleague and I had a meeting with the CFO of a hotel and gaming company based in Las Vegas. The rumblings of a financial crisis were just becoming audible. The first thing the CFO said, after we had made our introductions and sat down, was: “Look, we’re not going bankrupt or anything.” I glanced at my colleague as we both thought: they’re going bankrupt. They didn’t, in the end, but as I remember we did very well on our short position.

      That moment came to mind on Friday, when I received an email blast from the CIO of a broker, with the headline: “The stock market is not crashing.” This led me to think, inevitably, that the stock market was in fact crashing — a thought I had not heretofore entertained.
      …

  20. Looks like the Plunge Protection Team was dusted off and deployed today. We went from a bloodbath to the three indices closing up.

    3. “…from a bloodbath to the three indices closing up…”

      Its baffling. If nothing else, today’s action underscores how these markets are held together with nothing more than scotch tape and bailing wire. That goes for R/E too.

      Toss in an invasion, big earthquake, or major public figure with a heart attack, and that’s all she wrote, at least for this week. Next week, who knows?

  22. Regarding the HBB discussion of YouTube vs BitChute, and the lack of music on BitChute, there are channels out there if you look for them. Another plug for one called “justavoice” that went dormant for a month but has since returned and posted eight songs since yesterday:

    https://www.bitchute.com/channel/justavoice/

  23. “’Roughly half of the dollar bonds issued by Chinese developers trade below 80 cents on the dollar, according to an estimate by Essence Securities last week.'”

    Still about 80 cents too high.

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