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Many Owners Are Open To Taking A Loss To Sell As Soon As Possible

A report from the Review Journal. “Homebuilder confidence dropped again this month as buyers hit the brakes in Southern Nevada and around the country. In another sign of a ‘weakening market,’ 24 percent of builders reported cutting their home prices, up from 19 percent last month, said the association’s chairman, Jerry Konter. ‘In this soft market, more than half of the builders in our survey reported using incentives to bolster sales,’ including free amenities and price reductions, added association chief economist Robert Dietz. Homebuilders logged 434 net sales — newly signed purchase contracts minus cancellations — in Southern Nevada in July, down 61.5 percent from the same month last year, according to Las Vegas-based Home Builders Research.”

The Real Deal. “As the real estate market softens, Opendoor’s bottom line appears to be following suit. The iBuying giant is for the first time selling homes at a loss. Analyst Mike DelPrete said in a research note it’s the result of a fast-changing market, cooled by rising mortgage rates and stock market uncertainty. A Bloomberg analysis of Yipitdata says that as a result, the company lost money on 42 percent of its sales in August.”

“DelPrete said he doesn’t know why the company would try to accelerate sales when they’re losing money on those sales, but said it could hint at an even slower winter. It’s also lowering its initial asking prices, as well as the prices of homes already on the market. ‘The first hypothesis is they wanted to book as much revenue as possible in the third quarter,’ he said. ‘The second would be they think things are going to get worse — better to lose a little money now than a lot of money later.'”

From KOMU 8 News in Missouri. “After what broker Dana Wildhaber called an ‘unprecedented’ year of housing prices and offers out on the table, he said things finally seem to be cooling off. ‘I sense that the craziness is over,’ Wildhaber said. ‘Six, seven, eight offers, we’re not really seeing that anymore, and for a long time we were seeing that on every other transaction, I mean it was just crazy.’ KOMU 8 News received the most recent data looking at the market from the Jefferson City Board of REALTORS. As of August, median sales prices across the board’s jurisdiction in Cole, Callaway, Moniteau and Osage Counties had increased to $210,850 in 2022 from $165,000 in 2020.”

The Post and Courier. “The nine-month slide in home sales across South Carolina from rising lending rates has slowed the rapid pace of price increases and slightly boosted inventory amid emerging signs that sellers may no longer be driving the market. ‘We are seeing a turn from a seller’s market to a buyer’s market,’ said Cindy Creamer, president of the Columbia-based S.C. Realtors Association and an agent on Hilton Head Island. ‘Houses are on the market longer, and we are seeing price reductions.'”

From WVEC TV. “Virginia Beach senior mortgage banker Robby Dobrinski said he’s noticing a shift. ‘You’re not seeing a lot of people guaranteeing over asking price as you saw much before unless it’s in a really desirable area with the best school districts,’ Dobrinsky explained. He added that he’s seen a lot of price reductions.”

The Sun Sentinel in Florida. “With the frenzied housing market coming to an end, some sellers are considering putting their homes up for rent instead. ‘We are seeing that more now. Sellers are saying ‘I want my price, but I need to move so I will take a tenant if I can’t sell it,’ said Patty DaSilva, real estate broker with Green Realty Properties in Cooper City. For sellers who feel that they missed the peak of the market, trying to wait out the current slow down probably isn’t the best idea. Experts say that it’s likely that prices will level off and the market will regain more balance, so the chances of another sharp uptick in prices probably won’t happen.”

“‘It could take more than 5 years for them to reach their current values again, so unless they plan on keeping their property for longer than 5 years, we’re advising sellers to sell now,’ said Brian Pearl, principal agent with the Pearl Antonucci Group in Boca Raton. Agents are seeing more price reductions as sellers who had tried match prices of six months ago are having to recalibrate.”

From Mansion Global. “After Mark and Melissa Reichert moved from California to Dallas, the couple put their home in the Los Angeles suburbs up for sale this summer. Yet even after they cut the asking price by $10,000, there was hardly any interest. Instead, they decided to rent out the house. Their monthly payout now covers their ownership costs. ‘There’s just not serious buyers out there,’ he said. In Southern California, 10% of home sellers switched their listings from for-sale to for-rent due to higher mortgage rates, and 9% in Texas did so, according to the survey.”

“‘People are hearing that rents are going up, so they’re saying, ‘Well if I can’t sell it for what I want, I’ll just rent it, because I’ll get a really good rent,’ said Anthony Lamacchia, who owns a Waltham, Mass.-based real-estate brokerage.”

The San Mateo Business Journal. “Median single-family residential home prices rose 2.5% to $1.85 million from July to August, according to San Mateo County Association of Realtors, which experts suggest it’s becoming a balanced market. August’s numbers mirror the median prices from a year ago at $1.85 million. It marks a 8% decrease from April of this year when prices reached an all time high of $2.25 million, according to SAMCAR data. Compass Real Estate agent Charles Gillooley Jr., who focuses on San Carlos among other areas, believes the combination of high interest rates and volatility in the stock market has led home buyers to be more deliberate. It seems the market has corrected itself and potential home buyers may be waiting out the market more than they have in previous years, he said.”

“‘It’s like hey, nothing is moving quickly, I got time to look at the other 10 houses on my list and then decide,’ said Gillooley Jr. ‘At one point, there were between 25 and 35 houses on the market in San Carlos and over a third of them had taken price reductions.’ Compass Real Estate agent Raziel Ungar, who focuses on Burlingame among other areas, said that prices are still down from a few months ago so for his clients who are selling their homes that it comes down to having open conversations. ‘If they are hoping to have their home sold for the highest possible price, we just need to be very realistic and put out a fair price.'”

The Express News in Texas. “San Antonio families facing foreclosure are finding it more difficult to sell their homes as a market that was red-hot during the coronavirus pandemic shows signs of slowing down. There were 373 foreclosure postings in Bexar County in August, up nearly 43 percent from July, according to McKinney-based firm Foreclosure Listing Service. That volume is approaching pre-pandemic levels; there were 390 postings in August 2019.”

“Curtis Roddy, chief operating officer at Foreclosure Listing Service, attributes the increase to eviction moratoriums ending and a housing market that is becoming less frenzied. ‘It’s not as easy to sell your house,’ Roddy said. ‘People are less desperate to buy a house.'”

“At Texas RioGrande Legal Aid, a nonprofit that provides free legal services, lawyer Molly Rogers said anecdotally she has seen an increase in people seeking foreclosure assistance. ‘The economic strain that came with the pandemic is catching up with a lot of people who managed to keep their head above water for the last two and a half years,’ she said. ‘Now things are coming to a head, and there’s fewer of those programs available.'”

From DS News. “On Monday, the 2022 Five Star Conference continued with a full line-up. ‘Foreclosure starts are beginning to spike,’ noted Daren Blomquist VP at Auction.com. ‘We are also not seeing many institutional investors in the distressed sales space right now.’ ‘I think [unemployment] the elephant-in-the-room as this economy cools,’ said Kevin Osuna, EVP of Mortgage Servicing for Rushmore Management Services, LLC. ‘Where does unemployment go? What are your solutions to address that now that the option of forbearance has already been used.'”

From Market Watch. “‘2020, 2021 were the highest volume years ever,’ Mike Fratantoni, chief economist at the Mortgage Bankers Association, told MarketWatch. ‘During the pandemic, lenders really struggled to hire to fill their openings … we were hearing about seven figure sign-on bonuses for high producing officers.’ But after rates went up and business dried up, capacity needed to be reduced ‘to right-size the whole industry,’ Fratantoni added. Others say the drop in activity was something of a wake up call for the industry. ‘The economy hasn’t fallen apart,’ Melissa Cohn, regional vice president at William Raveis Mortgage, told MarketWatch. ‘It’s just that the mortgage business was too big.'”

From CTV News. “To curb soaring inflation, the Bank of Canada has been raising interest rates over the spring and summer to slow demand. University of Winnipeg Economist Phil Cyrenne says that could lead to job losses in some industries. ‘I think a recession is almost inevitable,’ said Cyrenne. The economist said a recession could impact sectors like home construction and auto sales, because higher interest rates will push some away from borrowing money for large purchases. ‘Which then reduces the amount of sales and the amount of expected business for these companies and that’s why as we go into a recession you might also see layoffs,’ said Cyrenne.”

“As she walks through the aisles at the supermarket, Susan Meged says the price of produce and other groceries is hard not to notice. Caught between inflation and a potential recession, Meged said she is locked into her mortgage rate. But she worries about people she knows who are struggling to keep up with their home payments. ‘They work overtime whenever they can get it, lots of overtime, but I feel bad for them because they have to be with their families,’ said Meged.”

From CBC News in Canada. “Plans to create a 31-unit housing complex at the former Summerset Manor site in Summerside, P.E.I., have been put on hold by the province. Despite the 31-unit project not going ahead for the time being, Barb Ramsay, councillor for Summerside-North said she’s talked with Housing Minister Matt MacKay frequently about housing needs in Summerside. ‘If you’re not getting any bidders on the tenders, it’s almost impossible,’ she said.”

The South China Morning Post. “Hong Kong homebuyers with tight budgets may be able to take advantage of a downturn to find bargains. Many owners are open to taking a loss to sell as soon as possible. At Cetus Square Mile in Tai Kok Tsui, for example, a flat measuring 417 sq ft changed hands at HK$7.91 million (US$1 million) in mid-September, according to Century 21 Home Fantasy, a loss of about 30 per cent from HK$11.07 million paid for it in 2018.”

“The ratio of second-hand housing deals that yield capital gains has fallen by 6.8 percentage points from the end of last year to 89.4 per cent in August, the biggest drop since the financial tsunami in 2008, according to Ricacorp Properties. This means one in 10 sellers incurred a loss. Ricacorp expects the metric to dip further to 88 per cent this month. In Taikoo Shing, representing the mid-price market, prices are down 17.3 per cent from the peak in June 2019 to HK$18,700 per square foot this month, according to Cushman. Some estates in Yuen Long, Tuen Mun and Tsuen Wan, such as Tsuen Wan Centre, have seen per-square-foot prices fall below HK$10,000, an unusually low benchmark, according to Century 21 Group.”

From Bloomberg. “From a start guarding trains full of metal from thieves on freezing winter nights, He Jinbi built a copper trading house so powerful that it handles one of every four tons imported into China. Now Maike is suffering a liquidity crisis, and He’s empire is under threat. The ripple effects could be felt across the world: the company handles a million tons a year — a quarter of China’s refined copper imports — making it the largest player in the most important global trade route for the metal, and a major trader on the London Metal Exchange.”

“He has been a poster child for China’s commodity-fueled boom over two decades — making a fortune from its ravenous demand for raw materials and then plunging it into the red-hot property market. Much as his rise was a microcosm of China’s economic boom, his current woes may mark a turning point for commodity markets: the end of an era in which Chinese demand could only go up.”

“‘For many years, traders like Maike have been quite important in the importation of copper into China — they’ve bought very consistently to keep the flow of financing going,’ said Simon Collins, the former head of metals trading at Trafigura Group. ‘With the property market like it is, I think the music could be stopping.”

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This Post Has 156 Comments

  1. Yet even after they cut the asking price by $10,000, there was hardly any interest. Instead, they decided to rent out the house. Their monthly payout now covers their ownership costs. ‘There’s just not serious buyers out there’

    UHS said you can always sell Mark? Were they a lion?

    1. Article says house is in Los Angeles suburbs, so it’s 700k to 1 mil plus. A 10,000 dollar cut is a joke. peanuts. Seriously. “didn’t create any interest”. Cuz it’s a rounding error. So they are going rent it as the house slowly gets used up by the renters (if good ones, destroyed if bad ones) and expect to get same money 5 years from now. (and money is worth less). These people are not geniuses.

  2. ‘Many owners are open to taking a loss to sell as soon as possible’

    This is cuz Hong Kong has seen this movie 10 times or more.

    1. Amazing that there can be a bubble in a city that is under imminent threat of losing its last freedoms to the CCP.

      1. Not everyone wants to move to kanada. Compared to many $shitholes in USa that have seen the bubble, HK doesn’t surprise me at all.

      2. Amazing that there can be a bubble in a city that is under imminent threat of losing its last freedoms to the CCP.

        Um…have you checked how many bubbles the U.S. still has under the Biden regime and the various Democrat-Bolshevik state and municipal governments?

        1. I am aware. But the level of repression in the uS isn’t even close to China’s. You can still liquidate your assets, take your money and leave the US.

  3. ‘What are your solutions to address that now that the option of forbearance has already been used?’

    Oh that!

  4. ‘San Antonio families facing foreclosure are finding it more difficult to sell their homes as a market that was red-hot during the coronavirus pandemic shows signs of slowing down. There were 373 foreclosure postings in Bexar County in August, up nearly 43 percent from July’

    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. We haven’t heard much yet about how well government subsidized mortgage lending has held up in the face of the Fed’s rate hike campaign. That chapter of this epic saga lies in store for next year or later.

  6. another resident said. “I want them to come to America and be embraced. They all want to work and … I want their journey to have a happy ending.”

    Just not on my island.

    JOHN BINDER
    19 Sep 2022

    Martha’s Vineyard residents are proclaiming that they have been “enriched” by 50 illegal aliens who arrived on two flights sent by Florida Gov. Ron DeSantis (R) and were swiftly deported to a military base less than 48 hours after arriving.

    (photo will give you a virtue signaling chuckle)

    https://www.breitbart.com/politics/2022/09/19/marthas-vineyard-residents-proclaim-they-enriched-us-after-illegal-aliens-deported-military-base/

  8. Back to the stripper pole you go:

    “The way this business works is that sometimes, too much capacity is put into the system, and that’s exactly what happened in 2020 and 2021,” Jay Farner, CEO of Rocket Companies, a Detroit-based group that is one of the nation’s largest mortgage lenders, told MarketWatch.

    “It can be painful … some companies are closing their doors, others are shutting down divisions of their companies. Others are doing layoffs,” Farner added. “Unfortunately, that’s part of the process — that capacity comes out.”

    https://www.marketwatch.com/story/some-companies-are-closing-their-doors-others-are-shutting-down-divisions-rocket-ceos-plans-to-navigate-the-dramatic-decline-in-mortgages-11663614619

  9. “…Real Deal … As the real estate market softens, Opendoor’s bottom line appears to be following suit. The iBuying giant is for the first time selling homes at a loss….”

    “….that as a result, the company lost money on 42 percent of its sales in August…”

    “…DelPrete said he doesn’t know why the company would try to accelerate sales when they’re losing money on those sales…”

    No worries. They [Opendoor] will make it up on volume.

    What a gang of geniuses.

    It’s going to be fun when they lose money on 100% of sales.

    Is that the point at which the Opendoor BOD receives ‘Thank you’ notes from its shareholders?

    1. ‘first time selling homes at a loss’

      I don’t think this is true, not strictly from the shack flipping department.

  10. 13 True Facts from the Film ‘My Son Hunter’

    EMMA-JO MORRIS
    20 Sep 2022

    1. Hunter Biden took $5 million in a deal with his Chinese business associate Patrick Ho — who he referred to as “the f**king spy chief of China” in a recording on his abandoned laptop.

    2. Hunter Biden inked a $1.5 billion deal with a subsidiary of the Bank of China, just 12 days after he visited China with his father, then-Vice President Joe Biden.

    3. Hunter Biden received $3.5 million from Moscow for an unknown reason.

    4. Hunter Biden sat on the board of Ukrainian energy company Burisma, while his then-Vice President father was in charge of U.S. policy toward Ukraine.

    5. Hunter Biden took a salary of $83,000 per month from his seat on the board of Ukrainian Energy Company, Burisma.

    6. Joe Biden threatened to withhold $1 billion from Ukraine to protect Ukrainian energy company Burisma, while Hunter was on the board.

    7. Hunter Biden was gifted a 3 carat, $80,000 diamond by CEFC Chinese Energy Co. partner Ye Jianming.

    8. Hunter Biden partnered with a Chinese Military-linked company.

    9. Hunter Biden referred to Joe Biden using pseudonyms in business communications, for “plausible deniability.”

    10. Hunter Biden invested in Chinese companies producing surveillance technology used on Uyghurs.

    11. Hunter Biden’s laptop is in FBI possession.

    https://www.breitbart.com/

    1. And don’t forget Twitter blocking the New York Post in October 2020 a few weeks before the election.

      That wasn’t enough, so they had to steal the election.

      The 2020 election was stolen.

    2. 7. Hunter Biden was gifted a 3 carat, $80,000 diamond by CEFC Chinese Energy Co. partner Ye Jianming.

      Every year I have to take an online class at work, where I am reminded that I can be fired and even serve jail time if I accept a gift from from a customer or supplier that is worth more than a frisbee.

      2. FedGovs get similar training too. There can’t even be the appearance of a conflict of interest. Plebs hav a limit of something like $20+/year per company, mainly to cover coffee out of politeness. Above a certain level, they’re not allowed to own related stocks or mutual funds that contain the stocks.

        I admit I was rather surprised when Fauci refused to answer questions about panel members at FDA collecting royalties for vaccines (or drugs or whatever). Those panel members shouldn’t be receiving so much as a glass of wine, much less royalties, and it would have been easy for Fauci to cite the applicable clause in the ethics code. WTF is going on?

  11. “DelPrete said he doesn’t know why the company would try to accelerate sales when they’re losing money on those sales, but said it could hint at an even slower winter. … ‘The second would be they think things are going to get worse — better to lose a little money now than a lot of money later.’”

    In a race to the exits, he who exits first loses the least.

    1. With Martha’s Vineyard, Abbot and DeSantis had the element of surprise. That’s gone now. This time, the liberal aid workers will be ready and waiting for this set of migrants, just chomping at the bit to roll out the virtuous blue carpet and show up those Meanie Magas — in front of dozens of news cameras, of course. And obviously Joe himself won’t be anywhere near his beach house.

      If I were Abbot, I would send the plane .. and then send another 6 buses right after that. (Actually I would have sent the buses days ago, timed to arrive 1-2 days after the plane lands. Just pretend the buses are going to DC and keep going. )

      Wouldn’t it be fun if Delaware is well-prepared for, say, 100 migrants. And then after the cameras and virtue signalers leave, have another 300 show up.

  13. Do the financial markets seem unchacteristically volatile for a Fed meeting day? Typically they freeze up, as though under a cruciatus

      1. Right now the 10-year/30-year spread is is about 0.005 (sic). Anyone want to bet it will be negative by COB tomorrow?

        Last year the spread was +0.54.

        “Let’s go Brandon”.

    2. Markets
      CNBC TV
      Watchlist
      LIVE UPDATES
      Updated Tue, Sep 20 2022 10:14 AM EDT
      Dow drops 300 points as Fed two-day policy meeting begins, rates surge
      Samantha Subin
      Jesse Pound

      Stocks slid on Tuesday as the Federal Reserve kicked off its two-day policy meeting and Wall Street looked ahead to another large rate hike due out Wednesday.

      The Dow Jones Industrial Average fell 352 points, or 1.14%. The S&P 500 shed 1.19% and the Nasdaq Composite slid 1.1%.

      The Federal Open Markets Committee begins its September meeting on Tuesday, where central bankers are expected to announce a 0.75 percentage point rate hike on Wednesday. Stocks have tumbled in recent weeks as comments from Fed Chair Jerome Powell and an unexpectedly hot August consumer price index report caused traders to prepare for even higher rates until inflation cools.

      Rates marched higher on Tuesday with the yield on the 2-year Treasury note notching a fresh high dating back to late 2007. The yield on the 10-year Treasury traded at 3.593% — near levels not seen since 2011.
      …
      https://www.cnbc.com/2022/09/19/stock-market-futures-open-to-close-news.html

      1. CNBC
        3 Min Ago
        Broad bond ETFs struggling as yields surge

        The spike in yields could be good news for investors looking to park some cash right now and earn income, but it’s causing a headache for those who already owned bonds.

        Strategas technical and ETF strategist Todd Sohn highlighted in a note to clients that broad bond funds have taken a big hit over the last six weeks, including the iShares Core U.S. Aggregate Bond ETF, which has now fallen more than 14% year to date.

        “With 3Q concluding in a few weeks, there’s likely to be a fair amount of noise at the flows level with rebalancing in force. On that note, we’d argue two of the more important charts for investors and their clients to know are the record drawdowns occurring for Aggregate Bond ETFs (e.g. AGG, BND, IUSB) as well as the -26% drawdown for the $1.2 Bn Risk Parity ETF (RPAR),” Sohn wrote. “Both speak to the challenging market environment across asset classes with bonds recently failing their own version of a ‘re-test’ at their June lows.”

        2. Most Europeans have no clue about whats happening in their own country. However they are pretty convinced $rump was/is the new Hitler.

          1. I’m sure they’ve received their updatesd utility contracts and the latest bill.

            I recall seeing a youtube video last year where working class Parisians were complaining that they couldn’t afford their utility bill. I can only imagine what their bills are like now.

        3. German PPI up 47%
          FORTY SEVEN PERCENT

          in 12 months that’s going to flow thru at the CPI level or more.

          How do you say “viva la revolution” in German?

  15. Las Vegas Market Report | September 2022
    Sep 19, 2022 What is going on in the Las Vegas real estate market as of September, 2022?! We have now seen 3 consecutive months of declining sales, and inventory continues to climb as more opportunity increases for potential buyers. It’s very common now for sellers to give significant price reductions or pay for buyers closing costs making out-of-pocket expenses much more affordable than what it has been in the past couple of years. It is now a great opportunity for buyers who have been sitting on the sidelines to enter the real estate market. There are programs in place right now where you can own a home by paying the same monthly amount or LESS than what you currently are renting with low to no money down.

    https://www.youtube.com/watch?v=_B-KtoaXhOY

    2:16.

  16. A reader sent these in:

    Lance Lambert

    #NEW Boise becomes the first major U.S. housing market to post a negative YoY home price reading.

    https://twitter.com/NewsLambert/status/1572044987004760067

    This is the one year % change in the fully financed cost of an average U.S. house with a 30 year mortgage. Going back to 1975: +100%.

    https://twitter.com/SuburbanDrone/status/1572065363491454983

    Excluding the early months of the pandemic, builder confidence falls to the lowest level since 2014. The only component that remains in positive territory (> 50) is current sales conditions. Builders face weaker demand & ongoing supply chain headwinds.

    https://twitter.com/odetakushi/status/1571869354932965376

    1. I can get that people wanted to move to places like Boise to escape from vibrants, but given the lack of jobs it seems that the price asked was out of line. But then again, it was out of line everywhere,..

      1. The flood of printing press money during the pandemic flowed into housing in outlying areas like Boise. The problem wasn’t that asking prices were too high, but rather that investors were falling over one another to place the highest offer in order to claim the prize of paying top dollar for a Boise investment property. 🏆

      2. Boise is a pretty small market (population 235,000). Ton of money flooding in with very little on the market (comparatively) and people with endless funds (either sold their Kali house or investors with “free” money backing them. Prices are going to skyrocket. Think of a short squeeze.

        Phoenix is a much more interesting question. Tons of free money but huge market (population 6 million) They shouldn’t have been able to squeeze that market.

  18. Mortgage rates are rocketing upwards. Better buy today, or you are going to have to pay alot more interest to Mr Banker!

    1. Mortgage Interest Rates Today: September 20, 2022—Mortgage Rates Advance
      Natalie Campisi
      Forbes Advisor Staff
      Rachel Witkowski
      editor
      Updated: Sep 20, 2022, 9:22am

      The current average rate on a 30-year fixed mortgage is 6.39%, compared to 6.16% a week earlier.

      For borrowers who want a shorter mortgage, the average rate on a 15-year fixed mortgage is 5.70%, up 0.29% from the previous week.
      …
      https://www.forbes.com/advisor/mortgages/mortgage-rates-09-20-22/

      1. “The current average rate on a 30-year fixed mortgage is 6.39%, compared to 6.16% a week earlier.”

        It seems like it was just a few days ago when we read that mortgage rates had passed the 6% level. Where will this rate surge top off…7%? 8%?

          1. October 16, 2021

            We’re both getting old. I took out a mortgage in 1978. The house prices were pretty low though!

          2. Yes, but the house prices themselves were concomitantly very low. So the PITI as a ratio of income wasn’t much different than it is today. However, high interest rates are better because

            1. Mortgage interest deduction meant something. You paid a lot of interest but you got a yuuge tax refund which you could apply to the already-low principle. Pretty sweet.
            2. And when rates went down, you could refinance that low principle and pay off much faster.

          3. Back when housing prices were 2x annual median income for a resale and 2.5x for new construction.

            Interestingly enough those long term ratios held up until 1999 or so. Today? Resale housing prices are 5x-6x annual median income.

            Enter: Appraisal fraud, mortgage fraud and subprime mortgages

            Colorado Springs, CO Housing Prices Crater 18% As Subprime Mortgage Implosion Accelerates

            https://www.movoto.com/co/80903/market-trends/

          4. the PITI as a ratio of income wasn’t much different than it is today

            Obviously, you’re just making this up.

            My mortgage payment was $300 (ex taxes and insurance). My salary was $1,400 (not counting my wife’s).

          7. When I bought my house my PI was about 15% of gross pay. Yours was about 21%. As I said, that’s not that far off. And I didn’t buy until much later in life when my income was likely higher. Normalizing for that, PI/income ratio would be even closer.

          8. 21%. As I said, that’s not that far off.

            Your premise is that 20% of gross is the norm now for buying a house on credit.

        1. That’s a great opportunity for eager buyers to set themselves up for household financial distress when rates reset a few years from now.

          IIRC, ARM resets were a big driver of the subprime mortgage collapse in 2007.

          1. They were a big driver of the prime mortgage collapse too. Remember all those high-FICO folks who got an ARM refi on their inflated shack. They spend the cash-out on boobz and toyz but were left with a much bigger loan than their incomes could support.

          2. IIRC, ARM resets were a big driver of the subprime mortgage collapse in 2007.
            Incorrect. Due to cutting of rates by the fed most (excluding pick a pay arms and Interest only arms) ARMS went down in rate. My rate fell from 5.75 in 2004 to 3.25 when it reset in 2009. (5 year arm)

    2. ‘…more to Mr. Banker…”

      But there is a bright side.

      Mr. Banker always gifts any client with a brand new set of kneepads (to be worn at future visits).

  19. More Homes for Sale | Less Showings | Buyer Advantages
    Los Angeles
    Premiered 22 hours ago
    26.6% More Active Listings
    16.8% Less Showings

    Buyers Have More Room for Negotiation
    41% of sellers accepted contingencies
    32% of sellers dropped the price after the appraisal
    29% of sellers paid for repairs after the appraisal
    32% of sellers paid for some of buyer’s closing costs

    https://www.youtube.com/watch?v=EQ0vaJ1_dIQ

    42 seconds.

  21. Overpricing
    Premiered 23 hours ago If you are a buyer, seller or investor looking to purchase or sell real estate in the Tampa Bay, Florida area, this channel is dedicated to you. As the premier real estate adviser for all real estate in the Tampa Bay area, you will find how to sell your home for the most money, how to buy for the lowest price, how to market your home properly, scams you should know about the community information on every subdivision in the Tampa Bay area.

    https://www.youtube.com/watch?v=IhqgBVaeVwg

    1 minute.

    1. “There’s been a final stage misfire…He won’t be able to maintain orbit.”

      And from Brigadier General Wingard Stone, these fateful words:

      “This is General Stone. We have an emergency. Stardust 1 is coming down. Alert the 7th Fleet.”

      Thus, the search and discovery of Captain (later Major) Anthony Nelson occurred, thanks to a “Jeannie” in a bottle.

      From this point on, the world would get to know Cocoa Beach. The pilot for I Dream of Jeannie aired on NBC, and the show would continue for five seasons; Cocoa Beach would be mentioned on the show 81 times (Cocoa Beach: A Television History).

      https://rodea1a.blog/2021/04/05/the-not-so-convenient-i-dream-of-jeannie-cocoa-beach-tour/

  24. With bond yields surging and stocks CR8Ring as the economy slides towards a stagflationary recession, would it be better to HODL stocks, bonds, or cash?

    It’s possible that there’s no place to hide…

    1. The Financial Times
      Markets Briefing Equities
      US Treasury yields rise to highest in over a decade ahead of key Fed meeting
      European stocks decline on recession fears following worst week for global equity markets since June
      Wall Street sign
      The broad S&P 500 index closed 0.69 per cent higher on Monday
      Jaren Kerr in Toronto and Joshua Oliver and Adam Samson in London yesterday

      Yields on US government debt reached the highest levels in over a decade on Monday as investors braced for a third consecutive jumbo 0.75 percentage point rate increase from the Federal Reserve on Wednesday.

      The yield on 10-year US government debt, a benchmark for global borrowing costs, pushed above 3.5 per cent for the first time since April 2011 as investors sold the bonds. The yield on the two-year Treasury note rose to a 15-year high of 3.94 per cent. While the two-year yield tracks interest rate expectations particularly closely, the entire spectrum of yields has rocketed higher as expectations for a longer period of high borrowing costs have set in.
      …

      1. With US inflation running over 8%, it’s hard to get excited about Treasurys paying under 4%. It’s better than cash, unless rates go higher, which would make the resale value of Treasurys decrease further.

        1. Instead of buying 2 year treasuries, get 6 month instead and just let them mature. It could well be that the longer bonds will unconverted by then.

    2. Yahoo Finance
      Stock market news live updates: Stocks sink, Treasury yields surge as Fed meeting gets underway
      Alexandra Semenova
      Tue, September 20, 2022 at 6:33 AM·3 min read

      U.S. stocks barreled lower Tuesday as investors prepared for Federal Reserve officials to deliver another jumbo rate hike in their fight against persistent inflation.

      The benchmark S&P 500 slid 1.2% early into trading, while the Dow Jones Industrial Average tumbled by roughly the same percentage, or nearly 400 points. The technology-heavy Nasdaq Composite erased about 0.9%.

      As Wall Street awaits the meeting outcome, the benchmark U.S. 10-year Treasury remains well above 3.5%, its highest level since 2011, while the 2-year Treasury note is racing toward 4%.

      The policy-setting Federal Open Market Committee kicks off its September meeting today and is expected to deal a third-straight 75-basis-point increase to its benchmark interest rate at the conclusion of discussions Wednesday. After officials convene, investors will tune in for a speech by Fed Chair Jerome Powell for further clues around the pace and magnitude of future hikes.

      “A third ‘unusually large’ hike would be a reversal from the plan Chair Powell laid out in July to slow the pace of tightening, despite little surprise on net in the data,” economists at Goldman Sachs led by Jan Hatzius wrote in a note.

      “We see several reasons for the change in plan: the equity market threatened to undo some of the tightening in financial conditions that the Fed had engineered, labor market strength reduced fears of overtightening at this stage, Fed officials now appear to want somewhat quicker and more consistent progress toward reversing overheating, and some might have reevaluated the short-term neutral rate.”
      …
      https://finance.yahoo.com/news/stock-market-news-live-updates-september-20-2022-112319691.html

    3. It’s possible that there’s no place to hide…

      Curiously, even PMs have been sliding since the inflation monster began to roar.

      Silver is $19 now. Was $26 in March. Will we start flipping cars to each other?

      1. Will we start flipping cars to each other?

        I actually saw that in Mexico in the 1970’s and 80’s. People would get a car, drive it a few months, then flip it and buy something else, or pocket the profit take the bus. It was weird. I knew people who went through as many as 3 cars a year. This was mostly with lower end models: VW bugs and Golfs, Nissan Tsuru (Sentra), Renault R5’s, etc.

      3. even PMs have been sliding since the inflation monster began

        It’s important to know that Inflation is not higher prices, it’s expansion of the money supply. The inflation came first, but is now rolling over. The money supply is shrinking for the first time since whenever. Speculators will have to liquidate real assets to cover their dodgy leveraged bets.

        1. True. November will determine if the age multitrillion deficits continues or not. It’s true that the Fed is taking cash out of circulation, so it will be interesting to see where this ends.

      4. “…Will we start flipping cars to each other?…”

        Why stop with cars?

        Let’s all start flipping groceries, gasoline, hardware and PVC pipe.

        If we are going 3rd world, might as well go all in.

        Don’t cry for me Argentina!

  25. Business
    ‘Buyers are taking their time’: San Diego home price drops for third month
    A home for sale in Chula Vista.
    A six-bedroom townhouse listed for $850,000 in the Otay Ranch neighborhood of Chula Vista in mid-September. The price has been reduced by $25,000 since it went on the market in mid-August.
    (Phillip Molnar/The San Diego Union-Tribune)
    Higher interest rates and consumer sentiment are slowing the formerly red hot housing market.
    By Phillip Molnar
    Sept. 20, 2022 5:30 AM PT

    San Diego County’s median home price fell for a third month in August, down 6 percent from its peak in the spring.

    The median was $799,000, said CoreLogic/DQNews on Tuesday. It reached an all-time high of $850,000 in May, but the market — in San Diego and the rest of the nation — has slowed as mortgage rates continue to rise. The median combines all single-family, condo and townhouse sales.
    …
    https://www.sandiegouniontribune.com/business/story/2022-09-20/san-diego-home-price-drops-for-third-month

    1. “San Diego County’s median home price fell for a third month in August, down 6 percent from its peak in the spring.”

      How many consecutive months of price declines are necessary to call it a crash?

      And by the way, the decline in San Diego median price over three months occurred at an annualized rate of 1-(799/850)^4 = 21.9 percent.

      Also, 21.9 percent of $850,000 is $186,000. That’s a lot of money to lose over a year’s time, in case prices continue their recent rate of decline.

      1. There’s a significant number of 5-bed luxury townhomes in the MD/VA burbs. They are only as wide as a two-car garage and a front door, but they are three floors and they go back a l-o-o-o-o-n-g way. They probably couldn’t build these in California because Cali is earthquake prone, and doesn’t have as many basements.

        Here’s an example. The last pictures show the side view so you see how deep they go:

        https://www.zillow.com/homedetails/8137-Westside-Blvd-Fulton-MD-20759/119110425_zpid/

    1. The Financial Times
      Federal Reserve
      Jay Powell says Fed will ‘keep at it’ in hawkish inflation speech
      Chair of US central bank uses Jackson Hole address to warn of ‘sustained period’ of lower growth
      Jay Powell with colleagues Lael Brainard and John Williams at the Jackson Hole economic symposium
      Jay Powell with colleagues Lael Brainard and John Williams at the Jackson Hole economic symposium
      Colby Smith in Jackson Hole, Wyoming and Eric Platt in New York August 26 2022

      Jay Powell declared the Federal Reserve “must keep at it until the job is done” as he used a speech at Jackson Hole to deliver his most hawkish message to date on the US central bank’s determination to tame surging inflation by raising interest rates.

      In a hotly anticipated address, the Fed chair said successfully reducing inflation would probably result in lower economic growth for “a sustained period”. To do that, interest rates would need to stay at a level that restrains growth “for some time”, he warned.

      The US stock market slid sharply after Powell spoke, with the benchmark S&P 500 index falling 3.4 per cent, while the tech-heavy Nasdaq Composite tumbled 3.9 per cent. It was the biggest one-day decline for both indices since mid-June.
      …

    2. We must keep at it until the job is done”

      Paul Volcker’s rate hikes were like financial chemotherapy, effective, but damn near killed the economic patient!

  27. The Financial Times
    Central banks
    End of sub-zero: Europe ditches negative rates as inflation surges
    Critics insist policy damaged bloc’s lenders while some central bankers say it boosted loan growth
    The ECB building in Frankfurt
    The ECB’s last rate cut to minus 0.5% in 2019 proved highly controversial in savings-obsessed Germany
    Martin Arnold in Frankfurt and Kana Inagaki in Tokyo yesterday

    The era of negative interest rates in Europe is set to end this week when Switzerland’s central bankers leave Japan as the sole proponent of one of the most controversial economic experiments of recent times.

    Surging inflation has led monetary policymakers to raise rates above zero and ditch a policy that — by paying borrowers and penalising savers — turned the principles of finance on their head.

    The Swiss National Bank, which for years used the policy to counter the threat of falling prices, is expected to raise its benchmark policy rate by as much as a percentage point from its current level of minus 0.25 per cent on Thursday after inflation climbed to a 30-year high in August.

    Watched with fascination by economists and consumers when it was introduced by Sweden’s Riksbank in 2009, the policy ultimately fell short of hopes that it would quickly vanquish the threat of deflation and revive growth.

    “It has not proven to be the holy grail that we were looking for,” said Katharina Utermöhl, senior European economist at German insurer Allianz.
    …

      1. It turns out that the central banking alchemists have not discovered the secret of how to transmute base substances into gold.

        Bummer!

  28. Is it a great idea to tap into your home equity when interest rates are rocketing up past 6% and home prices are sliding?

    Call me skeptical if you want, but I think this is a bad idea.

    1. lendingtree.com
      Americans Are Urged to Access Their Home Equity Before It’s Too Late

      Home Prices Are Falling — Don’t Wait to Tap Into Your Home’s Equity

      1. Home Prices Are Falling — Don’t Wait to Tap Into Your Home’s Equity

        Your house too can be underwater!

      2. “Home Prices Are Falling — Don’t Wait to Tap Into Your Home’s Equity”

        Too late. 87% of all housing in the US is already securitized, liened or otherwise encumbered. Theres nothing left to tap.

        Golden, CO Housing Prices Crater 17% YOY As Soaring Housing Inventory Blankets Denver Area

        https://www.movoto.com/golden-co/market-trends/

    2. No, it’s not a great idea. And the 83% drop in re-fis proves that everyone else thinks it’s not a great idea either. The only people doing refis are the ones who actually need the cash-out.

    3. I can think of two good reasons to open a HELOC

      1. You have a lot of equity (a lot 50 to 75% or even 100%) and want to create a cash cushion. People don’t lose their houses because they don’t have assets, they lose them because they don’t have cash.

      2. You’re going to lose it anyway so you might as well go big and screw the banks out of every penny. jingle mail………………

      1. “1. You have a lot of equity (a lot 50 to 75% or even 100%) and want to create a cash cushion. People don’t lose their houses because they don’t have assets, they lose them because they don’t have cash.”

        The Debt Donkey Method….. A line of credit isn’t a savings account. But this is how the majority of borrowers made their mortgage payments over the last 7 years. See the BofA report showing this.

        Works great with appraisal fraud there to make it possible… Now theres nothing left but the crying.

        San Jose, CA Housing Prices Crater 21% As Rental Rates Plummet And Vacancies Soar Across Bay Area

        https://www.movoto.com/ca/95122/market-trends/

  29. Finance Housing
    The home price correction is spreading—this interactive map shows if your local housing market is impacted
    Zillow: Home values fell in these 117 markets between May 2022 and August 2022.
    BY Lance Lambert
    September 20, 2022 4:49 AM EDT
    …
    fortune.com/2022/09/20/home-price-correction-spreads-this-interactive-map-shows-if-your-local-housing-market-is-impacted

    2. Now that housing prices are falling in many markets that were red hot during the pandemic, are investors going to exit, or will they HODL their falling knives in the hopes that the Fed will soon resume Quantitative Easing targeted on driving up home prices?

      1. Finance Housing
        Investors—including Wall Street—helped to drive up home prices during the Pandemic Housing Boom. Here’s the proof
        The data is in: It’s now abundantly clear that investors did indeed help to both accelerate the housing boom and drive up U.S. home prices.
        BY Lance Lambert
        June 26, 2022 2:07 PM EDT

        Text messages. Mailers. Cold calls. Over the past two years, homeowners have been bombarded with inquiries from investors who want to know one thing: Are they open to selling their property?

        Since the onset of the Pandemic Housing Boom, investors have flooded the U.S. housing market. There are small players like mom-and-pop landlords and Airbnb hosts who are adding to their property portfolios. Home flippers returned with vengeance. There’s also the Wall Street types like Blackstone and iBuyer players like Opendoor Technologies that are gobbling up homes. The combination of low mortgage rates, easy access to capital, and record home appreciation was all too enticing for investors to pass up on.

        However, even as investors piled into the housing market, many real estate insiders over the past two years hesitated to attribute much, if any, of the boom to investors. In their view, numerous factors drove the housing frenzy. Historically low mortgage rates, spurred by the Federal Reserve’s response to the COVID-19 recession, attracted all types of buyers. That included white-collar professionals who saw their jobs transition to remote during the pandemic and were eager to ditch apartments in places like San Francisco and Boston for homes in markets like Boise and Tampa. The pandemic also coincided with the five-year window (between 2019 and 2023) when millennials born during the generation’s five largest birth years (between 1989 and 1993) would hit the peak first-time homebuying age of 30. That elevated demand simply overwhelmed the supply side: Housing inventory, which was already trending downward before the pandemic struck, fell to a 40-year low during the boom.

        But that hesitation to name investors as one of the pillars of the Pandemic Housing Boom is no longer necessary. It’s now abundantly clear that investors did indeed help accelerate the housing boom and drive up U.S. home prices. At least that’s what Fortune concluded after looking over recent data published by Redfin, Freddie Mac, and the Harvard Joint Center for Housing Studies.

        In the first quarter of 2022, investors made up a record 28% of single-family home sales, according to a report published last week by the Harvard Joint Center for Housing Studies. That’s up from 19% in the first quarter of 2021. It’s also far above the 16% that investors made up of single-family home sales between 2017 and 2019. (To conduct the analysis, the Harvard researchers analyzed home sale data collected by CoreLogic.)

        The investor bull rush into the housing market was the most pronounced in fast-growing markets in the U.S. South and West, according to the Harvard researchers. That finding is backed up by a separate Redfin analysis, which looked at all home sales (unlike Harvard’s single-family homes analysis). In the first quarter of 2022, investors made up a staggering 33.1% of home sales in Atlanta. Not far behind was Jacksonville (32.3%), Charlotte (32.3%), Phoenix (29.0%), and Miami (28.2%). Those same markets are also among the nation’s most “overvalued” housing markets that are at risk of seeing a home price decline, according to Moody’s Analytics.
        …
        https://fortune.com/2022/06/26/housing-market-and-home-price-boom-made-bigger-by-investors-and-wall-street

        1. “That elevated demand simply overwhelmed the supply side: Housing inventory, which was already trending downward before the pandemic struck, fell to a 40-year low during the boom.”

          It seems like the perceived shortage was mainly due to investors snapping up anything that came on the market, to capture their slice of the Quantitative Easing-fueled boom.

          Now that Quantitative Tightening is underway, could a reversal of the effect result in a glut of homes on the market?

          1. The Financial Times
            Federal Reserve
            Fed’s faster ‘quantitative tightening’ adds to strain on bond market
            Accelerated balance sheet reduction threatens to intensify already fragile trading conditions
            Federal Reserve chair Jay Powell
            Federal Reserve chair Jay Powell after the central bank’s May meeting: ‘I would stress how uncertain the effect is of shrinking the balance sheet’
            Ethan Wu and Kate Duguid in New York September 13 2022

            The Federal Reserve’s more rapid exit from crisis-era policies is set to place the $24tn US government bond market under extra strain, heightening concerns about the bedrock of the global financial system.

            The ease with which traders can get deals done in the Treasury market has declined to the lowest levels since the early days of the pandemic in March 2020, according to a Bloomberg index. Gaps between prices where traders buy and sell have yawned wider and huge moves in price, on a scale unthinkable even a year ago, have become commonplace.

            The Fed is this month accelerating the pace of winding down the nearly $9tn balance sheet it built up for more than a decade in an effort to cushion the economy from shocks. It aims to shrink the total by $95bn a month — double the August pace.

            As a result, “we could have a problem of liquidity stress in the banking system,” said New York University economist Viral Acharya. “And whenever banks are stressed, it usually spreads over to non-banks and Treasury markets and other [funding] markets.”
            …

          2. At a rate of $95 billion a month, how many years would it take to erase $9 trillion?

            9000/(12*95) = almost 8 years

  31. The Wall Street Journal
    22 min ago
    Stocks Drop, Yields Rise Ahead of Fed Decision
    By Eric Wallerstein

    Major U.S. stock indexes fell on Tuesday while bond yields rose to multiyear highs.

    The benchmark S&P 500 slid 1.1%, while the blue-chip Dow industrials dropped 1%, or about 312 points. The tech-heavy Nasdaq composite shed about 1%.

    Each of the S&P 500’s 11 sectors were lower on the day.

    The Federal Reserve is poised to lift its key policy rate at a 0.75 percentage point clip for the third consecutive time on Wednesday. Ahead of the meeting, treasurys hit new multiyear highs.

    The 10-year U.S. Treasury yield rose to 3.571% from 3.489% on Monday, its highest closing level since April 2011. The two-year yield, closely tied to monetary policy expectations, edged higher to 3.962% from 3.946%, the loftiest since October 2007.
    …

  32. (uh, do you think this announcement may, in itself, result in a massive shortage of fuel?)

    “Majority Of Hungarian Gas Stations To Run Dry Next Week”

    https://www.zerohedge.com/markets/majority-hungarian-gas-stations-run-dry-next-week

    (snip)

    Hungarian gas and oil giant MOL will only be able to deliver a quarter of the needed fuel from 19 September, Hungarian media reported.

    According to Daily News Hungary. Szeretlekmagyarorszag.hu acquired a letter in which MOL informed its partners that they could only deliver 25% of the contracted fuel amount. The cited reason for shortfall is “to maintain the predictability of fuel orders and the supply in Hungary, MOL explaned. The oil and gas giant’s announcement concerns gasoline and diesel deliveries, too.”

    Similar to other European countries, the Hungarian government decided to maintain price caps on fuel and essential foodstuffs until the end of this year. Regarding the possible fuel shortage, Gergely Gulyás, the prime minister’s chief of staff, said on yesterday’s government info that “there might be problems at the petrol stations.” However, they trust in the sustainability of their decisions. Gulyás added that people could thank MOL that the government can maintain the fuel price cap scheme. As a result, gasoline and diesel prices will remain at HUF 480 per litre (EUR 1.19/l) in Hungary until 31 December. Of course, the trade off is that soon there will be no gasoline and diesel.

    MOL announced today that their refinery in Százhalombatta is operating again at full capacity because it successfully finished the scheduled maintenance work. The second maintenance phase will begin on 9 October, they added. But that will be a smaller-scale project affecting only the diesel-producing facilities. After finishing the procedure, it might take some time to ramp up diesel production. However, according to the Hungarian press, “fortunately demand decreases in autumn and winter, mitigating fuel shortage.”

    We doubt that this year demand will be falling any time soon. In fact, with shortages looming, prepare for just the opposite.

    1. Price caps always end the same: in shortages. I’ll bet people are hoarding, in possibly hazardous ways.

  33. (surprise!, surprise!, surprise!!)

    “Europe’s Economy And Living Standards Are Plummeting”

    https://orientalreview.org/2022/09/19/europes-economy-and-living-standards-are-plummeting/

    The ill-considered sanctions against Russia have exposed the most acute problems of Europe which is rapidly losing its economic power. A tremendous amount of businesses are on the verge of bankruptcy. A flood of migrants from Africa, the Middle East and Ukraine requires more and more budget spending. Funds are also being used to support the Kiev regime. As a result, Europe’s economies are deteriorating and living standards are plummeting.

    Enterprises are on the verge of closing
    In Britain 60% of enterprises are on the verge of closing due to higher electricity prices. This is reported by the analytical group Make UK, representing the interests of British industry. 13% of British factories have reduced working hours and 7% are temporarily closing down. Electricity bills have risen by more than 100% compared to last year.

    In Germany, according to the Leibniz Institute for Economic Research, the number of firms and individuals went bankrupt in August alone rose 26% compared to the same period last year. The figure was significantly higher than German analysts had forecast. According to experts, during the autumn the number of bankruptcies will only increase. This is connected with the increase of the cost of production processes, in particular with the rise in prices for energy.

    German Chancellor Olaf Scholz acknowledged that many Germans have faced with rising prices for fuel and food. Most countries in Europe were in a similar situation. But the authorities are sacrificing the quality of people’s lives in order to continue to exert pressure on Russia.

    The crisis is just ahead
    At the same time, many experts believe the stopping of Nord Stream will cause Europe’s worst energy crisis in decades.

    This circumstance has already caused a sharp rise of prices of energy resources on the European market. As a result, energy bills of European households have increased. According to Goldman Sachs’ analysts, its cumulative cost will peak in early 2023, increasing by 2 trillion euros. It has also led to a record depreciation of the European currency over the past 20 years.

    The increased cost of gas, heat and electricity has an adverse effect on the living standard of the people. But an even more dangerous problem is the falling liquidity of European products produced at the new cost of energy. European products are becoming uncompetitive on the world market: their price is much higher because of the cost of electricity and gas.

    Attempts by EU leaders to introduce a price cap on energy from Russia have completely failed.

    “Europe reaps what it sows”
    European countries are themselves to blame for the problems they face this coming winter because of reduced gas supplies from Russia, Turkish President Recep Tayyip Erdogan said. According to him, “Europe reaps what it sows”, while Turkey “has no problems with gas supplies”.

    The crisis in Europe is a result of political mistake. On one hand, sanctions against Russia, are favorable only to the U.S. And on the other, the imposition of the post-hydrocarbon economy on Europeans has shown its insolvency.

    As a result, energy prices in Asia and Latin America today are much lower. And so are the wages of production workers. In other words, European products are totally uncompetitive. And we see a decrease in the liquidity of those products on the market. As a consequence, the European economy begins to plunge into recession. In particular, Christian Sewing, Director General of Deutsche Bank, said on September 7 that Germany is no longer able to avoid recession. Already at the moment it is buying significantly less raw materials from major suppliers such as Brazil, Argentina and the U.S.

    The Economist Intelligence Unit, a British think tank, predicts that GDP growth in 2023 will be: 5.3% in China, 5.1% in India, 1.2% in the United States, 0.3% in France, 0.3% in Brazil. And it will be negative in a number of countries: minus 0.6% in the UK, minus 1% in Germany, and minus 1.3% in Italy.

    Poverty is coming
    The next logical consequence will be mass production closures and rising unemployment. European technology companies are already reducing the number of high-paying engineering positions. In September, German wind turbine manufacturer Siemens Gamesa announced its intention to reduce the number of employees to 1,500 people.

    In turn, rising unemployment will cause a drop in living standards and an additional burden on government budgets, as the fight against poverty requires additional social spending.

    European economies survive through stimulus. But this exacerbates inflation. Dutch Prime Minister Mark Rutte said, “You can’t help everyone, so we in the West will be a bit poorer because of the high inflation, the high energy costs”.

    Migrants are ruinous to the budget
    Meanwhile, the energy crisis and production problems have been exacerbated by migration policies that require additional budgetary injections into the social sphere.

    Migrant influx into European countries over the past two decades has been less than 1 million people a year. But already last year, 1.3 million people entered the countries, and this year, there were already 1.8 million people. We must take into account the fact that some immigrants enter Europe illegally and are not registered. They are primarily residents of Somalia, Nigeria, Gambia, Iran, Pakistan, Mali, Afghanistan, Eritrea and Syria.

    Moreover, more than 10 million people left Ukraine since the end of February. Of these, at least 6 million people remain in European countries, while 3.7 million have already received refugee status. The average cost per such migrant is 7,000 euros per year. Even without Ukrainians, Germany alone spends 25 to 55 billion euros annually on refugee aid.

    The European economy could afford these enormous expenditures before the energy crisis. But now the situation is such that expenditures are only increasing while revenues are falling.

    Following the catastrophic electricity and heating bills, Europe’s population is facing mass unemployment, followed by a decline in social support from the state. These processes inevitably lead to an overall decline in living standards.

    2. Those GDP predictions are ridiculous. The US is going to grow by 1.2%? Be lucky not to fall 5 to 10%

      and Germany could easily fall 20 to 30%.

      The quality of our “experts” is subpar to say the least.

  35. Die, speculator scum.

    Now for the crackdown on second home owners in North Yorkshire: Councillors vote to hike council tax bills for out-of-towners who leave properties empty after similar moves in Wales and Cornwall to make more properties available for locals

    https://www.dailymail.co.uk/news/article-11231959/North-Yorkshire-councillors-vote-hike-council-tax-bills-second-home-owners.html

    Councillors in North Yorkshire have voted to crack down on second home owners who leave their properties empty by doubling council tax bills.

    Those who do not live full-time in the county are set to have a 100 per cent premium on second homes which will be brought in within the next two years.

    The proposals will be considered at a full council meeting in November and, if passed, will see North Yorkshire become one of the first places in the country to adopt the measures.

  40. “‘People are hearing that rents are going up, so they’re saying, ‘Well if I can’t sell it for what I want, I’ll just rent it, because I’ll get a really good rent”

    Are people really so stupid? So they lost in the glut of housing and their solution is to lose in the glut of rentals!

  43. News
    Bay Area & State
    Tech workers at Compass laid off due to housing market slowdown
    Sam Moore, SFGATE
    Sep. 20, 2022
    A sign is posted in front of a home Compass listed for sale in San Francisco.
    Justin Sullivan/Getty Images

    In an effort to cut company costs amid a housing market downturn, the New York-based real estate firm Compass is undergoing a round of layoffs that will primarily affect its technology team.
    …
    https://www.sfgate.com/bayarea/article/compass-real-estate-makes-layoffs-17455289.php

  44. Finance Housing
    We’re entering the next stage of the housing market downturn—3 things to expect heading forward
    The housing market downturn will spread beyond housing.
    BY Lance Lambert
    September 18, 2022 5:46 PM EDT
    …
    https://fortune-com.cdn.ampproject.org/v/s/fortune.com/2022/09/18/housing-market-downturn-moves-into-second-stage-falling-home-prices/amp/?amp_gsa=1&amp_js_v=a9&usqp=mq331AQKKAFQArABIIACAw%3D%3D#amp_tf=From%20%251%24s&aoh=16637290097739&referrer=https%3A%2F%2Fwww.google.com&ampshare=https%3A%2F%2Ffortune.com%2F2022%2F09%2F18%2Fhousing-market-downturn-moves-into-second-stage-falling-home-prices%2F

    1. Better link:

      fortune.com/2022/09/18/housing-market-downturn-moves-into-second-stage-falling-home-prices

  45. Yahoo
    Reuters
    GLOBAL MARKETS-Asian stocks sink, yields rise as markets brace for aggressive Fed
    Kevin Buckland
    Tue, September 20, 2022 at 7:46 PM·3 min read
    In this article:
    By Kevin Buckland

    TOKYO, Sept 21 (Reuters) – Stocks in Asia sank and bond yields were elevated on Wednesday, as investors braced for another aggressive interest rate hike from the U.S. Federal Reserve later in the day.

    Japan’s Nikkei dropped 1.26% and touched a two-week low. Australia’s benchmark share index slid 1.35% and South Korea’s Kospi fell 0.9%.

    Chinese blue chips declined 0.82%, while Hong Kong’s Hang Seng lost 1.26%.
    …
    https://finance.yahoo.com/news/global-markets-asian-stocks-sink-024639887.html

    1. LIVE UPDATES
      Updated Wed, Sep 21 2022 2:48 AM EDT
      Stock futures fall ahead of the Federal Reserve’s expected interest rate hike
      Carmen Reinicke
      I wish the Fed would just hike more and get it over with, says Ed Yardeni

      Stock futures were slightly lower on Wednesday morning as traders look ahead to the upcoming interest rate hike announcement from the Federal Reserve.

      Dow Jones Industrial Average futures fell by 57 points, or 0.19%. S&P 500 and Nasdaq 100 futures climbed 0.21% and 0.22%, respectively.

      Stocks fell Tuesday on the first day of the Federal Open Market Committee’s meeting. The Dow Jones Industrial Average shed 313.45 points, or 1.01%. The S&P 500 and the Nasdaq Composite fell 1.13% and 0.95% respectively.

      Yields also jumped Tuesday. The 2-year U.S. Treasury note yield surged as high as 3.99%, its highest level since 2007. The yield on the 10-year Treasury briefly touched 3.6%, the most since 2011.

      Investors expect that on Wednesday, the central bank will deliver its third consecutive 0.75 percentage point rate hike to tame high inflation. A higher-than-expected consumer price index reading in August and hawkish comments on rate hikes from Fed leaders have weighed on stocks, with more pressure likely ahead as the central bank continues to fight inflation.

      “We’ll never truly know whether the equity market lows are in for the year without successfully testing the June lows,” said John Lynch, chief investment officer at Comerica Wealth Management in a Tuesday note. “To be sure, the recent technical weakness in stock prices must now contend with the resolve of monetary policy makers in their fight against inflation.”

      He added that third-quarter earnings season may also add headwinds for stock prices if they show further margin erosion for U.S. companies.
      …
      https://www.cnbc.com/2022/09/20/stock-market-futures-open-to-close-newshtml.html

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