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A Vicious Cycle Of Panic Selling And A Collapse In Price

It’s Friday desk clearing time for this blogger. “National Association of REALTORS Chief Economist Lawrence Yun: ‘Oh, well, the refinancing chance may be over because rates will only go higher from this point. The mortgage rates were essentially at 3% last year. It’s already at 4% or slightly above. And I think that’s a healthy development because we had this intense housing shortage leading to just where people are just waiving appraisals, waiving home inspection, which sometimes people feel very uncomfortable about.’ RACHELLE AKUFFO: ‘And we certainly are seeing a little bit of buyer’s remorse, so we’ll have to be following that story.'”

“LAUREN MORGAN: ‘The day we moved in, our air conditioner broke. And so that was, like, the first instance of is this a mistake?’ That’s Lauren Morgan. She’s 30. And she and her husband are the proud new home owners of a quaint home in Norwood, Mass., 30 minutes south of downtown Boston. Like many millennials, they moved in June of 2021. And… MORGAN: ‘Every time something does come up, I say to my husband, like, maybe we should be renting. Like, if only we were still renting, then the landlord could deal with this.'”

“According to a Hippo Insurance report, 68 percent of buyers in 2021 paid above asking price. Kevin Kieffer, a Realtor with Compass’ EastBayPro Team in the San Francisco Bay area, calls this behavior ‘panic buying.’ In the current market, he says, it can be easy for prospective homeowners to get in over their heads. Buyer’s remorse: What regrets do new homeowners have?”

“‘There are a lot of people who are buying homes for the first time, and they just don’t realize the volume of things you need to do to maintain a house,’ says Steve Wilson, senior underwriting manager at Hippo. ‘People are having remorse around the upkeep of the home, and how failure to do that maintenance can lead to a costly issue.'”

“The 22News I-Team visited a home in Holland that was recently sold. Shannon Boyce was the attorney broker for the listing. They got an offer, but during an inspection, they found out that the foundation contained pyrrhotite. ‘It was devastating,’ Boyce explained. ‘He went from top value offers to now, we did a very drastic drop in price. When you have a certain number in your head, and then reality strikes and that number is now down, it hurts.'”

“There’s a new buzzword in New Zealand’s housing market — FOOP, the fear of overpaying. ‘There is now a fear of overpaying among buyers,’ said Jen Baird, chief executive at the Real Estate Institute of New Zealand. ‘As a shift of sentiment sets in and buyers are less willing, or unable, to pay the prices we saw toward the end of 2021, pressure will come on vendors to adjust their expectations to meet the market.'”

“The proportion of home-loan applications being converted into actual loans fell to just 33% in January from 39% in November, according to data from Auckland-based credit bureau Centrix. ‘People who were getting credit prior to December the first weren’t getting it after December the first,’ said Centrix Chief Executive Keith McLaughlin. He couldn’t recall the rate being as low as this, and ‘I’ve only been in the industry about 50 years,’ he said.”

“After rising a whopping 22 per cent in 2021 – the strongest annual growth since 1989 – Australia’s house price boom is fast running out of steam. One of the key drivers behind the slowing house price momentum is rising mortgage rates. If the discount variable mortgage rate was to rise by 2.15 per cent to 5.60 per cent, as predicted by the market, then mortgage repayments would lift by 29 per cent from their current level. This would see monthly mortgage repayments on the median priced Australian home rise from $2599 in February 2022 to $3344 – an increase of $744.”

“For the median Sydney buyer, median monthly repayments would rise by a whopping $1141, whereas they would rise by $818 in Melbourne. The impact would be even more severe for the circa $500 billion worth of fixed rate mortgages due to expire over the next two years, most of which were originated at rates under 2.5 per cent. Those borrowers are facing more than a doubling of mortgage rates when it comes time to refinance. A 29 per cent increase in monthly mortgage repayments would lift Australia’s Debt Servicing Ratio – defined as the percentage of household disposable income going towards principal and interest debt repayments – to its highest level since the Global Financial Crisis in 2008.”

“Investors in China’s $870 billion of offshore bonds are facing up to the realities of being last in line as borrowers struggle to pay during an unprecedented wave of distress that’s sent defaults to a record. Already behind their onshore peers in the pecking order, hurdles faced by dollar-note holders in their efforts to claw back money are growing. They include backroom deals that give priority to undisclosed private lenders, unfavorable extensions and payment delays — all underscoring poor governance at debtors and the diminished power of creditors.”

“The new reality comes in the wake of China’s property-market collapse. ‘Companies have investors by the throat because on one hand they have no money and in some cases no willingness to pay, while on the other hand they know that investors cannot stomach a full default,’ said Raymond Chia, head of credit research for Asia ex-Japan at Schroder Investment Management. Some of the pain for offshore bondholders may be self-inflicted, said Chia. After earning billions of dollars trading Chinese high-yield bonds over the years, investors continued to bet on them even as they saw ‘structures become looser and looser — especially since 2016 with lots of covenant relaxation,’ he said. Bloomberg Intelligence estimates that funds around the world have increased their exposure by about $4 billion since the crisis started, with U.S.-based giant BlackRock Inc. leading the charge.”

“‘Companies haven’t been transparent about their private debt and upcoming payments, but the market’s also been rife with rumors supposedly linked to short-selling,’ said Anthony Leung, head of fixed income at Metropoly Capital HK Ltd. ‘The lack of transparency has led to a vicious cycle of panic selling and a collapse in the price of securities, which closes refinancing channels.'”

“This is the best time to buy properties. As I can see, [with the] lowering price of the condominiums and properties, like in BGC (Bonifacio Global City), you can get 30 percent to 40 percent off. That never really happened [in] the last 14 years,’ Michael Christian Tee Rosanes, an expert in real estate, said. He said a condominium is good to buy because the price is 30 percent to 50 percent discounted. In comparison, before Covid-19 pandemic hit, condo prices were at a rate between P300,000 to P350,000 per sqm.”

“In terms of real estates, the top 10 companies, such as Megaworld, Federal Land, Ayala Land, Rockwell and DMCI, would be safer choices because of their financial stability. ‘Or, on the other way around, find a secondary market or individual owner who need cash or foreclosed properties in the bank or by individual,’ Rosanes said.”

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This Post Has 90 Comments

  2. The China article is an eye opener. They’ve gone full fook the gringo over there.

    ‘He went from top value offers to now, we did a very drastic drop in price. When you have a certain number in your head, and then reality strikes and that number is now down, it hurts’

    That’s some red hotcakes right there.

    1. How many lefties will be pulling “Made in China” items off the shelves if their beloved CCP invades Taiwan?

    2. Where’s AlbuquerqueDan when you need someone to offer a ray of hope for Chinese bond investors to get their money back?

  3. ‘applications being converted into actual loans fell to just 33% in January from 39% in November, according to data from Auckland-based credit bureau Centrix. ‘People who were getting credit prior to December the first weren’t getting it after December the first’

    Nothing about the shortages they used to repeat every day. Not days on market or pent up demand. Cut the loan gravy, get yer crater. It’s the same anywhere on the planet.

    1. Yep, I wish I could hit the ‘like’ button on that comment. All of this was started by almost free loans. Prices shot up, now people can’t afford to move if they sell, because housing prices went up, so did loans. So it creates the ‘shortage’ and we have seen this cycle before.

      1. From the looks of the chart on the front page of today’s dead tree edition of THE WALL STREET JOURNAL, the average rate on a 30-year mortgage increased from around 2.65% at the start of 2021 to a current level of 4.16%. If my maths are correct, the payment that would have financed $1 million at the old mortgage rate would only fund $828K at the new rate — a 17% loss of purchase budget.

        And this is in the Fed’s pregame warmup.

    2. My company is asking to come back to office. There are many, who bought houses in suburb. not sure how this will pan out in coming months.

        1. In Bayarea, many bought houses outside the transportation limits. To come back to SF or near work, it’s going to take 2 plus hrs one way.

          1. I knew a guy who was commuting from Los Banos in the Central Valley to HP in Palo Alto, CA daily via Hwy 152. WTF?

  4. Globalist Quislings are going all-out to inculcate anti-white hatred & self-loathing in their “education” (indoctrination) systems.

    New Zealand Prime Minister Jacinda Ardern introduces new history curriculum for students

    https://www.news.com.au/world/pacific/new-zealand-prime-minister-jacinda-ardern-introduces-new-history-curriculum-for-students/news-story/340a11cedff989aa00dce8b0147f91a0

    New Zealand Prime Minister Jacinda Ardern has been met with divided opinions after introducing a new history curriculum for students focusing on the relationship between colonials and the Maori population.

    The curriculum will zero-in on three major points, including the recognition that Maori history is the “foundational and continuous history of Aotearoa New Zealand” and that “colonisation and settlement have been central to Aotearoa New Zealand’s histories for the past 200 years”.

    2. Perhaps Ardern should resign as PM, and the party can appoint a Maori as the new PM.

      Like that will ever happen.

      1. Everybody’s equal, so her color and gender should not matter. And boys should be able to compete with girls. No more color or gender, it’s a free for all.

  5. ‘The day we moved in, our air conditioner broke. And so that was, like, the first instance of is this a mistake?’

    It was cheaper than renting Lauren.

    1. “The day we moved in, our air conditioner broke.”

      And there’s no fixing that R22 system as it has been superseded by the R410A system, which is actually more energy efficient.

  7. “LAUREN MORGAN: ‘The day we moved in, our air conditioner broke. And so that was, like, the first instance of is this a mistake?’ That’s Lauren Morgan. She’s 30.

    God must love stupid people, he makes so many of them. Maybe it’s divine providence for Mr. Banker to rule the world after all, given the abundance of dummies therein.

      3. I have a sister in her late 50s, social media whore, who talks like that. I can barely stand talking to her.

    3. “Every time something does come up, I say to my husband, like, maybe we should be renting. Like, if only we were still renting, then the landlord could deal with this.’”

      like, the only reason my wife, like, keeps me around is I’m like, very handy with my . . . wrench.

      like

  8. MORGAN: ‘Every time something does come up, I say to my husband, like, maybe we should be renting. Like, if only we were still renting, then the landlord could deal with this.’”

    Like, please don’t breed or vote, Lauren.

  9. When you have a certain number in your head, and then reality strikes and that number is now down, it hurts.’”

    Cry me a river, greedhead.

    1. Exactly. I’d like to see this clown driving a busted up, rusted 1986 Honda, living in a Section 8 ghetto apartment after all is said and done.

  10. “Investors in China’s $870 billion of offshore bonds are facing up to the realities of being last in line as borrowers struggle to pay during an unprecedented wave of distress that’s sent defaults to a record.

    Must.not.laugh.

  11. They include backroom deals that give priority to undisclosed private lenders, unfavorable extensions and payment delays — all underscoring poor governance at debtors and the diminished power of creditors.”

    Inconceivable! ABQ Dan assured us the CCP cadres were the very models of Confucian moral rectitude & rule of law when it came to gringos investing in their beloved, thriving Motherland.

  12. That never really happened [in] the last 14 years,’ Michael Christian Tee Rosanes, an expert in real estate, said.

    Gee, what’s happened over the last 14 years? Oh, right: never-ending Fed “emergency measures” and pumping trillions in “stimulus” Yellen Bux funny money into the financial system. Gosh, whoever could’ve imagined this would fuel debt-based speculative bubbles, or that (gasp!) those asset bubbles could end badly?

      1. From the 2005 NY TIMES article:

        “Housing prices have climbed far faster than overall inflation and far faster than household incomes for the last five years, partly in response to the Fed’s policy of keeping interest rates low but also because of speculative behavior that is increasingly reminiscent of the frenzy over technology stocks just before the market bubble collapsed in 2000.”

        History doesn’t exactly repeat itself, but it rhymes.

        1. “History doesn’t exactly repeat itself, but it rhymes.”

          Brilliant. I will be taxing this quote. I’ll give you credit three times and then it’s mine 😏

          1. That one has been around the block here a few times already. Don’t have the attribution…

    2. “an expert in real estate”

      Well in fairness, the article doesn’t say he’s an expert in finance.

  13. He said a condominium is good to buy because the price is 30 percent to 50 percent discounted.

    Wait until all the structural defects in these shoddily-constructed condos start surfacing, requiring never-ending collective levies to remediate. “50% discounted” won’t seem like such a good deal for a money pit.

    1. When your body is in the rubble next to the sunken pool deck, remember that steal of a deal!

  14. “Government spending is . . . reducing the national debt. It is not inflationary.”

    – House Speaker Nancy Pelosi, Friday, March 11

    1. This hard core vodka guzzling, melted-face crypt-keeper is heavily brain damaged from said habit.

  15. “‘…There are a lot of people who are buying homes for the first time, and they just don’t realize the volume of things you need to do to maintain a house…”

    I have literally lost count of the number of times the HBB and its readers have warned about the danger of holding costs.

    There is something about the human condition that short circuits all common sense when they lay their eyes on something really wanted but in reality is impractical/unaffordable.

    Kinda like hooking up with a beautiful women, only to find out [later] that she has a bad case of VD.

    1. I have so much money left after “throwing money away on rent” every month that I don’t know where to throw it.

      1. “I have so much money left after “throwing money away on rent” every month that I don’t know where to throw it.”

        Ditto here. Came close to buying after the 08′ implosion, but have been renting a nice inexpensive rental in a great neighborhood for 22 years. Learned from my Dad to: (1.) Live below your means and save and invest, and, (2.) ALWAYS take emotion out of the equation when making a big money decision. Retired comfortably in 2000.

    2. “…when they lay their eyes on something really wanted but in reality is impractical/unaffordable.”

      Bubble price dynamics have a lot to do with it. Buyers of all stripes, including nonresident investors and financiers, pile into housing when prices are rising rapidly during a tsunami tide of easy money.

      Now that the tsunami tide is washing back out to sea, it will be interesting to take stock of how many FBs get washed away with it.

      1. Fascinating phycology.

        If P. T. Barnum were alive today, I am sure he would be selling R/E

        Come to think of it, P.T. and Lawrence Yun of the NAR have more than a little in common.

      2. I think it’s pretty safe to say when it comes to susceptibility “irrational exuberance” and/or fear induced desperation buying, women take the cake (no offence if you’re female).

        I’m always reminded of something I observed in my younger years. At Gem and Jewelry shows, I’d see vendors standing in their booths with huge wads of cash in their hands acting as if they were counting their “take.” At first I thought it was stupid, until I saw the women flock to that booth like moths to a flame. As more women came to the booth, “collect behavior” took over and the next thing you know, there’s women trying to squeeze in to get a peek at what they’re “missing out on.”

    1. “The rules require lenders to undertake an affordability assessment on all credit applications including home loans, and the result has been a squeeze on credit.”

      It will be a Gestalt shift from “fog-a-mirror” buyers to actually paying PITI, i.e., principal, interest, taxes and insurance.

  17. “They got an offer, but during an inspection, they found out that the foundation contained pyrrhotite. ‘It was devastating,’ Boyce explained. ‘He went from top value offers to now, we did a very drastic drop in price. When you have a certain number in your head, and then reality strikes and that number is now down, it hurts.’”

    “pyrrhotite”

    From the net …

    How do pyrite and pyrrhotite damage building foundations? | American Geosciences Institute
    https://www.americangeosciences.org/critical-issues/faq/how-do-pyrite-and-pyrrhotite-damage-building-foundations

    Read and weep.

    1. Buying or renting anything near water comes with a hidden cost. We had to put all of our printed media, cook books, computer manuals, favorite reading books, etc., into plastic baggies to protect against mold. Same goes for a box of breakfast cereal. Our cars suffered too!

      1. Yep. Two incidents of major mold damage in the Encinitas house’s kitchen and salt air damage to the cars.

  18. I see what you did there, globalists.

    Ukraine silently implemented the WEF’s ‘Great Reset’ by setting up a Social Credit Application combining Universal Basic Income (UBI), a Digital Identity & a Vaccine Passport all within their Diia app

    https://strangesounds.org/2022/03/ukraine-silently-implemented-the-wefs-great-reset-by-setting-up-a-social-credit-application-combining-universal-basic-income-ubi-a-digital-identity-a-vaccine-passport-all-with.html

    In a logic of digitizing and centralizing everything, the Ukrainian government launched in 2020 an application called Diia which brings together identity card, passport, license, vaccination record, registrations, insurance, health reimbursements, social benefits, and more of millions of Ukraine residents.

  19. Cracks are appearing in the wall of lies around COVID “vaccines.”

    Family of marketing executive, 45, who died of a stroke caused by the AstraZeneca jab say she is ‘dismissed as collateral damage’ as they fight for £120,000 payout

    https://www.dailymail.co.uk/news/article-10627157/Covid-UK-Marketing-executive-45-died-stroke-caused-AstraZeneca-jab.html

    The devastated husband of a marketing executive who died of a stroke caused by the Oxford/AstraZeneca Covid jab has demanded that the Government compensate the nearly 80 families who lost loved ones to vaccine-induced blood clots, following his wife’s inquest.

    Nicola Weideling suffered catastrophic bleeds on her brain after being hospitalised with blood clots caused by the vaccine which she had received 24 days before dying, a coroner has ruled.

  20. I ran across this …

    Are People Buying Real Estate on the Moon: Here’s What You Need To Know
    August 28, 2020

    Article II of the United Nations 1967 Outer Space Treaty, which governs the activities of states in the exploration and use of outer space, including the Moon and other celestial bodies, states that the Moon:

    “…is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.”

    In other words no country can claim ownership of the Moon. But Dennis Hope, a struggling actor who was looking for a new line of work in 1980, read that sentence a little differently.

    According to Hope, the treaty does not bar individuals from claiming sovereignty over the Moon. So, he wrote a polite letter to the United Nations informing them that he owned the Moon and started selling plots of land on it.

    Since 1980 he has sold over 16 billion acres of lunar real estate to over seven million individuals in 197 different countries through his company Lunar Embassy and made millions of dollars. He once sold a country-sized plot of lunar land, 2.66 million acres of lunar land, for $250,000.

    He’s the first extraterrestrial real estate tycoon.

    Who would buy lunar real estate? Three former Presidents of the United States (George H.W. Bush, Jimmy Carter and Ronald Reagan), current president Donald Trump, and numerous celebrities, including Tom Cruise, Tom Hanks, George Lucas (of course!) and Nicole Kidman.

    Is any of this legal? He doesn’t really own the Moon, does he?

    No, he doesn’t, nor does he own Pluto, which he offers in its entirety for an enticing $250,000.

    Professor Anupam Chandler, a law professor at UC Davis who’s just one of many experts to weigh in on Mr. Hope’s business, says that just one of the many reasons Mr. Hope can’t protect the property rights he promises to purchasers is that there’s no governing body to grant the right to a celestial body. No recognized government does that.

    Naturally, Mr. Hope fixed this problem by forming his own government in 2004 complete with a ratified constitution, a congress, a unit of currency, and even a patent office.

    When China’s space program recently announced plans to send a rover to the Moon, Mr. Hope sent them a polite letter granting them permission to explore, but informed them that any permanent settlement would have to be preempted by a lease with the property owner.

    They didn’t get back to him.

    Other Extraterrestrial Land Disputes

    A German man named Martin Juergens claims that the Moon has belonged to his family since 1756, when Frederick the Great presented it to his ancestor Aul Juergens as a symbolic gesture of gratitude.

    In 1997, three men from Yemen sued NASA for landing on Mars without permission. They claimed that they had inherited the planet from their ancestors 3,000 years ago. Their claim was based on the mythologies of the Himyaritic and Sabaean civilizations, which existed between 2000 and 3000 B.C.

    Gregory W. Nemitz sent NASA an invoice of $20 for parking a spacecraft Asteroid 433 Eros, which he claimed to have ownership of through his company Orbital Development. NASA declined to pay, citing a lack of legal standing.

    Link: https://lakesidetitle.com/2821-2/

    1. I have news for would-be lunar land owners: You can become a pretend lunar landlord without spending a nickel.

    2. “…People Buying Real Estate on the Moon: Here’s What You Need To Know…”

      Mr. Banker: If you can send me one of your clients or two, I will (for $1mm) sell them some wide open ranch land on the moon.

      To sweeten the deal, I will even throw in a NFT of a moon crater.

      Between you and me, I am open to discuss a generous kickback commission schedule. Just keep those clients (aka dumbed down pukes) rollin’ in.

  21. “MORGAN: ‘Every time something does come up, I say to my husband, like, maybe we should be renting. Like, if only we were still renting, then the landlord could deal with this.’”

    God bless our landlord for his humility, diligence, and benevolence.

    1. Imgur is a leftist cesspool
      @NickKao13
      ·
      14h
      Replying to
      @AngelaLMorabito
      I guess she didn’t have the balls to win….

    2. Round of applause for Emma Weyant, the UVA swimmer who placed second in the 500y freestyle tonight, behind Lia Will Thomas

      Always dead name them. Always.

      1. It’s in the same part of the Bible that says don’t f* animals and don’t f* your sister, because it is an abomination.

        “They’re not sending their best”

  24. I am not a big fan of Putin (or any other of our current cast of leaders) but, IMO, a snip of his speech nails it …

    (here is the snip)

    “I want ordinary Western people hear me, too,” Putin said. “You are being persistently told that your current difficulties are the result of Russia’s hostile actions and that you have to pay for the efforts to counter the alleged Russian threat from your own pockets. All of that is a lie.”

    “The truth is that the problems faced by millions of people in the West are the result of many years of actions by the ruling elite of your respective countries, their mistakes, and short-sighted policies and ambitions. This elite is not thinking about how to improve the lives of their citizens in Western countries. They are obsessed with their own self-serving interests and super profits.”

    Or, as George Carlin put it: “It’s a Big Club, and you ain’t in it”.

    Putin Blames Western Ruling Elite For Global Economic Problems – Summit News
    https://summit.news/2022/03/18/putin-blames-western-ruling-elite-for-global-problems/

    1. This elite is not thinking about how to improve the lives of their citizens in Western countries

      It is discouraging how so many are gobbling up the “Russia is the source of all our problems” narrative.

      I saw a little bit of Zelensky’s dancing vide. I didn’t have the stomach to watch the whole thing. This is who the WEF chose to be their Ukrainian puppet. They’re basically giving us the finger. Who will be the first cross dressing western PM/President? It can’t be far off.

    2. “They are obsessed with their own self-serving interests and super profits.”

      You just know there’s money to be had over there if they can afford to put the likes of Hunter Biden on the payroll for $100k/month. It has to be incredible in the Western world.

  25. This is an NPC article targeted at an audience that may be experiencing a Mass Formation Psychosis.

    People Magazine (linked from Yahoo News) — Blood Clots Like Hailey Bieber’s Are Happening in ‘Younger and Younger People’ (3/14/2022):

    https://news.yahoo.com/blood-clots-hailey-biebers-happening-212201214.html

    No article excerpt needed.

    So, like, I’m having these like blood clots. And everybody I know is, like, having all these blood clots too.

    “They’re not sending their best”

    1. I posted that same article a couple days ago, and government oxide told me it was “because birth control pills.”

  29. “Kevin Kieffer, a Realtor with Compass’ EastBayPro Team in the San Francisco Bay area, calls this behavior ‘panic buying.’ In the current market, he says, it can be easy for prospective homeowners to get in over their heads.”

    We sold to one of these panic buyers when moving away from the East Bay in 2004. Had multiple offers and sold within a couple of days. A few years later, our panic buyers doubtless found themselves deeply submerged, unable to sell at a high enough price to cover their mortgage balances.

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