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It’s A Stink Bid – They Are Trying To Steal The Place

A report from the New York Post. “‘Don’t panic,’ said Jacob Channel, a senior economist at LendingTree. ‘What you absolutely shouldn’t do in a period like this is panic and think the sky is falling. If you do that, you’re more likely to make risky decisions like panic-selling all of your stocks or rushing into a bad real estate deal.'”

From Axios. “After getting laid offfrom her job at mortgage provider Better.com in March, Charmaine Steele interviewed at eight other mortgage companies. Each one subsequently announced layoffs of their own, she tells Axios. At least one has gone out of business. It was a grim job search, says the 30-year-old Steele, who lives in Charlotte, North Carolina. ‘Nobody was hiring anybody.’ On Tuesday, real estate brokerage Compass announced the second round of layoffs. Just the day before, Opendoor — which is in the business of buying and flipping houses — announced it lost money on 42% of its transactions in August.”

“Steele says she was earning around six figures at Better.com, her first job at a lender after working as a real estate agent. She’s now working in the small business lending space, making 50% less.”

From Bisnow. “Duke Realty is set to be acquired by Prologis in a $25.6B megadeal, but when the Indianapolis-based real estate investment trust’s board voted to be sold to its West Coast competitor, its CEO said it was one of his lowest moments. ‘Worst [expletive] day of my life,’ Duke CEO Jim Connor told the Indianapolis Business Journal about informing his staff that the company was being sold, adding that it was the right business decision. ‘I was standing there, with a 50-year anniversary banner across the front of the building at my back, talking to our team — people that I’ve known for [decades] and people that had built this company and done all the incredible heavy lifting,’ Connor said. ‘I had to stand up and tell them that the decision had been made and that it was going to happen.'”

Fox 7 Austin in Texas. “‘We haven’t seen this much inventory since 2012,’ said Ryan Rodenbeck. ‘I think that we’re going to see a return to a normal market in spring, and what I mean by that is, a real normal market where we don’t have sellers that are putting properties on the market and getting 50 offers,’ he said. ‘I would say that this is no time to be panicking.'”

The News Tribune in Washington. “The days of Tacoma being among the hottest real estate markets in the nation are now a distant memory. Redfin listed Tacoma as among the top markets cooling the fastest in the nation. ‘Seattle’s housing market is slowing faster than any other housing market in the country amid rising mortgage rates, inflation, a slowing stock market and broad economic uncertainty,’ Redfin reported. After Seattle, Las Vegas came in second, followed by San Jose, San Diego, Sacramento, Denver, Phoenix, Oakland, North Port (Florida) and Tacoma.”

WSMV Nashville in Tennessee. “‘The tough part now is that buyers are going to be paying more for their homes, but I don’t think we’re going to see the bidding wars like we’ve been seeing multiple offers, homes have been staying on the market longer. They’re not being seen or shown as quickly as they were in the past,’ said Debbie Hovsepian, a realtor with Parkwood Brentwood Realty. Hovsepian shared a recent example of how interest rates impacted a client looking to purchase a home. ‘The rates were lower when we made the offer, and the seller did not respond in time, and we had to rewrite the offer. This time we rewrote the offer considerably less than what we came in at in the first place—that’s to fill in the gap.'”

Hawaii News Now. “The rise in interest rates is just one of the forces on Hawaii’s real estate market. More home sellers are cutting their asking price. ‘If they don’t get an offer soon, they’re going to drop their price because they realize, ok, the Federal Reserve just made it even more expensive to buy my property,’ said Bryn Kaufman, principal broker at Oahu Real Estate. The site said the number of sellers who reduced their price went up from 234 in February to nearly 600 in August.”

From Consumer Affairs. “Whether you’re buying or renting a single-family home, prices are retreating from their historic highs. Alex Platt, principal agent with part of Compass Real Estate in Boca Raton, Fla., has seen activity slow in the upscale coastal market, halfway between Miami and Palm Beach. ‘Six months to a year ago, it was on fire,’ Pratt told ConsumerAffairs. ‘There was no inventory, everything was selling off-market, there would be bidding wars. It’s not like that anymore, those days are gone. The banks have gotten smart, they know houses have value and they aren’t just giving them away,’ he said. ‘Now, banks would happily take the home in a foreclosure because the value is higher than what people owe on it.'”

KPHO Phoenix in Arizona. “Dean Wegner is a Scottsdale mortgage broker with Guardian Mortgage and been in the lending business for more than two decades. Wegner says Maricopa County is no longer a seller’s market like it was. ‘Back then we saw sellers were bullies. You had two weeks to buy the house and it was non-refundable,’ Wegner said. ‘Guess what? Now they’re flexible. They’re not getting a lot of showings.’ With interest rates now around 6%, Dean says buyers are no longer bidding over the asking price. In fact, since June he says the average selling price in Maricopa County has dropped 12%.”

KRON in California. “Home sales are currently down 29% compared to the same time last year. Bay Area home prices have also dropped and are down 4.2% year-over-year. Tim Yee, the president for RE/MAX Gold Bay Area says, ‘As schools open and life returns to ‘normal,’ it seems that the previously overheated real estate market is also returning to a state of normalcy.'”

CBS Los Angeles in California. “Real estate agent David Smith said he’s had to make price adjustments on his listing in Woodland Hills after 65 days on the market. He added that sellers have to manage their pricing expectations while buyers are in the driver’s seat, essentially making it a buyer’s market now. ‘I don’t know how much further they can actually fall from where they are right now but I think it will stay low for some time,’ he said.”

The Globe and Mail in Canada. “In the slouching Toronto-area real estate market, figuring out which seller is motivated to sell at a discount is a game patient buyers are prepared to play. One of the tactics is the deployment of a lowball offer. ‘I’m the only game in own if you want a 30-footer in Bedford Park. They’re not going to give away the house,’ broker Andre Kutyan says. ‘Before a seller drops their pants significantly, they’re going to see what happens in the market.'”

“That same day, a first-time buyer submitted a lowball offer for a condo near Avenue Road and St. Clair Avenue West with an asking price of $2.849-million. The purchaser had backing from the ‘bank of mom and dad,’ he says. ‘It’s a stink bid – they are trying to steal the place.’ The two sides could not come to an agreement and the buyer disappeared.”

South China Morning Post. “Chinese property developers Excellence Group and China SCE Group Holdings are set to issue bonds indirectly backed by the government, amid the gloom that continues to shroud the sector. More time and help is needed for developers to have a positive cash flow, said Bruce Pang, head of research, Greater China, at JLL. ‘Yuan bond issuances are a good way considering that they cannot raise more in offshore markets.'”

Reuters on Hong Kong. “When Stephanie Cheung bought a small, two-bedroom apartment for HK$7.7 million ($981,041) as an investment in April 2021, she booked a 6% gain by the summer as Hong Kong’s property market boomed to historical highs. The price surge was driven in part by optimism that Hong Kong’s borders would reopen after some of the world’s most stringent COVID-19 measures over the past two-and-a half years. Today, none of that has materialized.”

“The price of Cheung’s 450 square foot flat has dropped 6%, and the rental income of HK$16,300 is no longer enough to cover mortgage repayments after monthly interest increased by HK$2,400 a few months ago. ‘I made the purchase hoping to reserve capital, but now I just wanted to use the shortest time and the smallest loss to sell this apartment,’ said Cheung, 40, who lives in a bigger rented apartment with her family.”

“Cheung is now set to book an even bigger loss, after some banks on Thursday raised their interest rate by 12.5 basis points, the first rise in four years. Cheung’s is not an isolated case as rising mortgage costs and a bleak economic outlook have deepened pessimism among homeowners. Property agents said prices had dropped more than 7% so far this year to levels not seen since the third quarter of 2018. ‘The gains over the past four years have been wiped out in four months,’ said realtor Hong Kong Property Services chief operations officer Dave Ma.”

“Many sellers are those leaving Hong Kong for good or residents forced to cash in to help struggling businesses. Developers are also cutting prices, with some selling new projects at discounts of up to 20%. Momo Chan, 35, a civil servant who bought a home last April before getting married, also said reopening borders is crucial to support the housing market. ‘I had expected interest rates to rise and the market would not keep going up, but I thought it would be stable, not a big fall like this in the last few months,’ Chan said.”

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This Post Has 133 Comments

  1. Ben, we probably shouldn’t overlook the possibility that what we’re seeing here is a bursting housing bubble.

  2. ‘I was standing there, with a 50-year anniversary banner across the front of the building at my back, talking to our team — people that I’ve known for [decades] and people that had built this company and done all the incredible heavy lifting…I had to stand up and tell them that the decision had been made and that it was going to happen’

    How much money did you stuff in yer pockets Jim?

    2. I was thinking the exact same thing. “I had to tell them that I am now a billionaire, and they are now unemployed, and thanks for all that heavy lifting boys! Now if you’ll excuse me, I’m off to my yacht with my trophy wife.”

      1. “…I’m off to my yacht with my trophy wife….”

        And don’t bother sending me your usual Christmas card, because I won’t be responding to them (the increase in the price of postage, ya’ know).

        Besides, all you ‘heavy lifters’ are just a bunch of suckers, me and my [trophy] wife could care less about you.

        Have seen this exact same scenario played out in real time at a different company. Only difference was that the trophy wife wasn’t that much of a trophy.

  3. “‘Don’t panic,’ said Jacob Channel, a senior economist at LendingTree. ‘What you absolutely shouldn’t do in a period like this is panic and think the sky is falling. If you do that, you’re more likely to make risky decisions like panic-selling all of your stocks or rushing into a bad real estate deal.’”

    Remember, Jacob: He who panics first, panics best.

    1. The fact that almost no one is panicking is what’s worrying. World should be on fire. I think once the mass layoffs–outside of the mortgage world start happening, we’ll see some panic.

      1. WSJ (no link): Meta Quietly Reduces Staff in Cost-Cutting Push
        Facebook parent is looking to reduce costs by at least 10%, people familiar with the plans said, while Google has required some employees to apply for new jobs

        1. I’m sure Meta has plenty of unprofitable business units from where to cut people. I’ll bet it’s the same at Google.

  4. ‘I made the purchase hoping to reserve capital, but now I just wanted to use the shortest time and the smallest loss to sell this apartment’

    denial
    anger
    bargaining <- Steph, you are here.

    2. ‘I had expected interest rates to rise and the market would not keep going up, but I thought it would be stable, not a big fall like this in the last few months’

      Momo is stuck in the first stage, denial.

      1. ‘I thought it would be stable, not a big fall like this in the last few months’

        The most expensive residential real estate on the planet. How many have we seen roll over in the ‘last few months’? It was different this time.

  5. “Steele says she was earning around six figures at Better.com, her first job at a lender after working as a real estate agent. She’s now working in the small business lending space, making 50% less.”

    Somebody please hand me the world’s smallest violin.

  6. ‘The days of Tacoma being among the hottest real estate markets in the nation are now a distant memory’

    I love a good distant memory in the mornin’.

  8. Seattle’s housing market is slowing faster than any other housing market in the country amid rising mortgage rates, inflation, a slowing stock market and broad economic uncertainty,’ Redfin reported.

    No mention, naturally, of the role played by Democrat-Bolshevik malgoverance and everything that goes with that.

  9. ‘Yuan bond issuances are a good way considering that they cannot raise more in offshore markets’

    Bruce, are you saying that if you don’t pay yer bills, people won’t loan you more money?

    1. ‘I don’t know how much further they can actually fall from where they are right now but I think it will stay low for some time,’ he said.”

      How much farther? Probably a lot. The band is just tuning up for Real Estate Limbo – how low can you go?

  10. ‘I think that we’re going to see a return to a normal market in spring, and what I mean by that is, a real normal market where we don’t have sellers that are putting properties on the market and getting 50 offers,’ he said. ‘I would say that this is no time to be panicking.’”

    Whistling past the graveyard isn’t going to avert what’s coming, Ryan.

  11. “‘The tough part now is that buyers are going to be paying more for their homes, but I don’t think we’re going to see the bidding wars like we’ve been seeing multiple offers, homes have been staying on the market longer.

    When are these mythical credit-worthy buyers going to show up, Debbie? All I see are lookey-loos rubbing their hands with glee at the prospect of the bottom dropping out of the housing bubble.

  12. “Steele says she was earning around six figures at Better.com, her first job at a lender after working as a real estate agent. She’s now working in the small business lending space, making 50% less.”

    Woman….. if you think yer worth 6 figures or 50% of that, you’ve got rocks in yer head.

    Axtell, UT Housing Prices Crater 23% YOY As Utah Housing Market Careens Off A Cliff

    https://www.movoto.com/axtell-ut/market-trends/

    1. “…making 50% less.”

      FWIW, I’ve been there, got the tee shirt.

      Back in my high rise window cleaning days, there was an insurance crisis in California as the country struggled with “deep pockets liability” lawsuits. The contractor’s insurance became so expensive that building maintenance firms cut back from four cleanings per year down to twice a year, i.e., half the annual square footage of glass cleaned meant suddenly there were too many window cleaners. Desperate, they all started under-bidding each other while insurance costs had quadrupled! Phuc that, game over!!

  13. This time we rewrote the offer considerably less than what we came in at in the first place—that’s to fill in the gap.’”

    Gosh, Debbie, but if the market’s in an accelerating downward trajectory, why would anyone submit an offer now instead of letting the carnage play out?

  14. ‘Now, banks would happily take the home in a foreclosure because the value is higher than what people owe on it.’”

    Sometimes it’s hard to tell if realtors are lying, or are merely delusional.

    1. Or just plain dumb…. and if that’s the case, which I believe it is, think about how dumb borrowers are.

      1. But they have a “license” and took a test!

        My SIL claims to have received a college degree…….

        From Bumble Bee College of Beauty. 😂😂

    3. I agree, that line stuck out to me too. How does that make any sense? Why would you let a home go to foreclosure that’s worth more than what you owe on it sell it and walk away everyone happy. You would only let it go if you were underwater. I swear realtors believe their own BS.

  15. ‘It’s a stink bid – they are trying to steal the place.’ The two sides could not come to an agreement and the buyer disappeared.”

    Not to worry, greedhead sellers. You just sit tight. Your listing is special, by gum. Shirley there’ll be another cash buyer coming along any day now, eager to fund your retirement.

  16. ‘The gains over the past four years have been wiped out in four months,’ said realtor Hong Kong Property Services chief operations officer Dave Ma.”

    It was only Yellen Bux.

  17. Take a look at the Home Ownership Affordability Monitor (HOAM), produced by the Atlanta Fed.

    https://www.atlantafed.org/center-for-housing-and-policy/data-and-tools/home-ownership-affordability-monitor.aspx

    — The HOAM affordability index is at the lowest point (67.5) that it has ever been, since 2006.
    — The previous low was 71.5 in July, 2006, during the last housing bubble.
    — The data shown here is through June, 2022, and last updated on August 11, 2022
    — The Affordability Index began a steep plunge in January, 2021, the same time the Biden administration came into office.

  20. Yup, let’s keep those borders wide open.

    Members of alleged South American crime syndicate arrested in Forest Hills burglary

    https://www.wkrn.com/news/local-news/members-of-alleged-south-american-crime-syndicate-arrested-in-forest-hills-burglary/

    NASHVILLE, Tenn. (WKRN) — Four men are in the Metro Jail this evening charged with aggravated burglary.

    Metro and Brentwood Police busted the quartet after catching them red-handed breaking into a multi-million dollar Forest Hills home.

    The crime is part of a recent trend where South American nationals infiltrate a community for the expressed purpose of burglarizing upscale homes.

    The four men, who refused to talk to police are identified as, Danhrl Pelegrani, 36, Juan Gutierrez, 32, Lucas Oros Valderrnto, 31, and Cesar Hedando Cortez Villa, 23.

  21. “House Judiciary Committee Democrats voted to support NON-CITIZENS the right to vote in our elections.

    They want open elections to match their open borders.”

    https://www.thegatewaypundit.com/2022/09/cant-win-dont-cheat-house-democrats-vote-give-aliens-right-vote-unanimous-vote/

    The Salty Cracker commented on a recent stream that the only thing Democrat Party cared about the 50+ dead illegals in a truck in Texas earlier this year was 50+ lost voters.

    “They’re not sending their best”

  22. Re: What you absolutely shouldn’t do in a period like this is panic

    Yes, frenzy buying was just great, it is panic selling which is the absolute no-no . . .

  23. Linked from Revolver News.

    “This week, the forces of technocratic tyranny gathered in New York City and held separate, but ideologically aligned events under the banner of “Climate Week.”

    These conferences were held on the sidelines of the annual U.N. General Assembly (UNGA) meetings, in which heads of state and other top foreign officials were conveniently scheduled to be present in the city.

    Virtually every cantillionaire cleanup hitter within the legacy financial and political systems was present in NYC this week, and they all regurgitated similar talking points.

    For the World Economic Forum, this week featured their Sustainable Development Impact Meetings. The World Economic Forum confab hosted 8 panels, all of which were related to the “climate crisis.”

    The Clinton Foundation reopened the family laundromat that is the Clinton Global Initiative, launching the first gathering under its umbrella since 2016. The Clinton events also focused on the importance of “climate change,” along with the implementation (by way of force, if necessary) of ESG finance.

    For The Gates Foundation, it was “Goalkeepers 2022.” Bill Gates and the gang discussed “an ambitious blueprint for reimagining a better future for all by 2030,” demanding both governmental and private implementation of the climate agenda. EU President Ursula von der Leyen received the foundation’s “Global Goalkeeper award.”

    It doesn’t seem much of a coincidence that all of the events highlighted the so-called climate emergency as the top policy item on the agenda. The global ruling class clearly believes there is not much juice to squeeze out of COVID Mania, which, as The Dossier readers know all too well, brought in the fastest roll up of power in human history.

    Perhaps this is what Joe Biden meant to convey when he said on 60 Minutes that “the pandemic is over.” The polling is pretty clear in demonstrating that nobody is particularly alarmed about COVID-19 anymore. So it’s time for the power grabbers to move on to the next manufactured crisis.”

    https://dossier.substack.com/p/new-branding-global-ruling-class

    Remember, you will never be seen as anything more than cattle to these sociopaths.

    Your existence is only tolerated as long as you continue to generate tax revenue to finance the destruction of the country your ancestors founded. Beyond that, you’re all just useless eaters.

  25. I was back in my old stomping ground (westside of LA) over the weekend. Open house signs everywhere. One had open houses on Saturday and Sunday. I happened to drive by it on both days, and aside from the relitter standing in the window, I didn’t see a single person either time. I also passed by Bel Air (Bellagio Road). Four open house signs leading into a community with $15 million+++ houses. Houston, we have a problem.

  26. A reader sent these in:

    The Kobeissi Letter

    You cannot make this up…One year ago the Fed said inflation would be 2.0% today. Today, the Fed said inflation won’t hit 2.0% until 2025. Get ready…

    https://twitter.com/KobeissiLetter/status/1572650223041740800

    Lisa Abramowicz

    Deutsche Bank now forecasts a deeper recession for Europe next year. “We are revising the euro area GDP forecast for 2023 from -0.3% to -2.2%:” DB analysts in a note today

    https://twitter.com/lisaabramowicz1/status/1572517071480819713

    This Dot Plot update is massive. 12 out of 19 FOMC members expect Fed Funds between 4.50% and 5.0% by the END of 2023. Fed pivot my a*s.

    https://twitter.com/MacroAlf/status/1572650292176457728

    The Kobeissi Letter

    Things the Fed said one year ago:

    1. Rates will remain lower for longer

    2. Unlikely to raise rates until 2024

    3. We believe a recession is unlikely

    4. Inflation is transitory and not a problem

    5. Inflation should fall to 2% in 2022

    Has there ever been a more wrong Fed?

    https://twitter.com/KobeissiLetter/status/1572572645149003781

    Elizabeth Warren

    Chair Powell just announced another extreme interest rate hike while forecasting higher unemployment. I’ve been warning that Chair Powell’s Fed would throw millions of Americans out of work — and I fear he’s already on the path to doing so.

    https://twitter.com/SenWarren/status/1572659264560435201

    This is crazy: If you secured a 30-year fixed mortgage on a $600,000 home at a 2.6% interest rate in 2021, you have the same monthly mortgage payment as someone that just bought a $392,000 home at today’s 6.2% interest rate.

    https://twitter.com/BackpackerFI/status/1572681112450744328

    Lucky Lopez

    10 Months ago I talked about Auto Loans Originated in 2020-22 are seeing recored high defalt rates & was going to lead Major issues for the Auto Lending sector people ask for proof well here you go

    https://twitter.com/AutomotiveLife1/status/1572731679164465152

    1. ’12 out of 19 FOMC members expect Fed Funds between 4.50% and 5.0% by the END of 2023′

      Wa happened to my pivot?

      1. 40 years of subsidized rates and people though it was for real and would continue? 🤣

        Double digit rates on the horizon…. it will take a while to get there but we’ll get there…… and your gonna like it.;)

        1. “Double digit rates on the horizon…. it will take a while to get there but we’ll get there…… and your gonna like it.;)“

          – It used to be that FFR had to be greater than the (CPI) inflation rate to kill it. Today that would kill the economy (I.e. depression).
          – The Fed is screwed, and because they set the price of money (interest rates), we’re also screwed. Wile E. Coyote, Super Genius!
          – I think they’re trying for a mild recession, but that’s delusional thinking IMHO, since there are now multiple asset bubbles, aka ‘The Everything Bubble’ aka The Central Bank Bubble.
          – Remember who owns this when the SHTF…

          1. It’s time to take the medicine… Alternately, you like the ride on the way there but don’t want to do the back haul? Tough luck.

            Maybe after all this is over and the 8 of 10 donkeycarts on the road end up wrecked in the culvert, people will wake up and say… hey… why do we need the Frauderal Reserve?

            Question- Hows that House Retirement Plan working out?

          2. They have been kicking the can since at least 1998 and a massive flood/cover up since 08, what do they expect to happen? it to be a light non-issue? The big stuff hasn’t even started to break yet. Dow 10k, mortgage rates 8-10% this would be NORMAL. Bubbles always over compensate. It’s going to be way worse.

    2. “This is crazy: If you secured a 30-year fixed mortgage on a $600,000 home at a 2.6% interest rate in 2021, you have the same monthly mortgage payment as someone that just bought a $392,000 home at today’s 6.2% interest rate.”

      Gee, I wonder what that means for that $600,000 house?

  27. Company meeting for 15 minutes big boss talked about macroeconomics and how they don’t want to let anyone go… don’t want to means wut ?

    Tech company hardware

    1. “…don’t want to means wut ?”

      Probably shouldn’t buy that Chevrolet Silverado 3500 High Country w/ Technology Package.

      1. And just because people have a 2,8% mortgage doesn’t mean they can afford the monthly nut. Eventually, their hand will be forced.

      1. and always take the first buyout/layoff offer. They never get better as time goes on

        So true!! And there isn’t the flood of job seekers that happens later on.

    1. Without cash out refis, the Denver consumer economy is dead.

      “This sucker could go down” — George W. Bush

  29. – From MND: Avg. U.S. 30 yr. fixed rate mortgage = 6.36%.
    – Is that a lot? We’ll, it is compared to just last year when the Fed was spending $Ts of monopoly $ on MBS for ‘the wealth effect’ (bubble). Gosh! This must be the anti-wealth effect. Apparently the transitory inflation from all the $ printing is actually a thing now.
    – I’m sure this is fine.

  31. ‘What you absolutely shouldn’t do in a period like this is panic and think the sky is falling. If you do that, you’re more likely to make risky decisions like panic-selling all of your stocks or rushing into a bad real estate deal.’

    I agree with the implication, which is that neither housing nor stocks are anywhere near the capitulation phase at this point.

  32. More signs of cooling Denver metro housing market as Federal Reserve raises interest rates again
    Denver7 – The Denver Channel
    Sep 21, 2022 Previous rate hikes this year have already impacted Colorado’s housing market, with the 30-year fixed rate mortgage surpassing 6% for the first time since 2008. Home sellers and real estate agents have told Denver7 the impact to buying power has caused the state’s white hot market of recent years to cool.

    https://www.youtube.com/watch?v=xCpPBfo4RtM

    3:31.

    1. The only thing “white hot” about Denver is the meth and fentanyl being smoked off of tin foil in public, with zero consequences from the police.

  33. Miami Dade Housing Market Aug 2022
    Ines Garcia-Arcaya
    Sep 21, 2022 Miami Dade Housing Market, August 2022.

    Are you wondering how the real estate market in Miami-Dade County will fare as of August 2022? As always, be mindful that data, including all price points, may not reflect the reality of every product.

    The market for a single family home priced at 4 million dollars may perform completely differently than the market for a house priced at six hundred thousand dollars, so you must look at the micro-market in which the property is located It is not a secret that the market has shifted.

    What happened in the last two years had to end at some point. Right now, we are experiencing some sluggishness due to the fear created around the economy. Many listings have experienced price reductions, but most of them were overpriced to begin with.

    When we analyze data based on comparisons, we must be very careful. That is why, to be fair, I will contrast the results of August 2022 with August 2019 instead of the typical year-over-year comparison. I will share with you the highlights that show that compared with 2019, the year before COVID and when mortgage rates were 3.62%, our market in 2022 doesn’t look as bad as the headlines show.

    As a side note, historically, the long time average for the 30 year mortgage rate has been very close to 8%, so it is not really fair to compare the five or six percent rates with the historically low 2%, since that was free money. As per world data, from 1960 to 2021, the average inflation rate was 3.8% per year.

    When we have less than six months of inventory based on closed sales, we are considered to be in a seller’s market, and this is still happening in Miami-Dade, both in condos and single-family homes. When we are in a seller’s market like the one we are in now, property prices are not expected to drop.

    In Miami-Dade County, there will be 58% fewer condos available for sale in 2022 than in 2019, with 4.3 months of inventory based on closed sales. In the single-family home market, we have 38% fewer homes available for sale than what we had in 2019, 3.7 months of inventory based on closed sales. These low inventories show a very tight seller’s market. When you have little inventory, it also impacts the number of closed sales due to the lack of product to sell.

    We must keep an eye on the market to determine where it is heading. No one has a crystal ball, and if you see the projections from different sources, they all vary and even contradict each other. And, of course, the media is having a blast with the headlines. This reminds me very much of the hurricane path models.

    https://www.youtube.com/watch?v=L-Sm0bgZOnU

    3:22.

    1. Economic hurricane path models? How about the gaping interest rate differential that is opening up between various central banks? Europe is falling way behind right when they are going to need lots and lots of money to keep the lights on. There may come a day soon when plywood box prices are the last thing on people’s minds. I find it interesting how quickly the last few years of orthodoxy is being thrown out the window.

  34. LOCAL SAN DIEGO MARKET UPDATE
    Sep 22, 2022 So, what’s happening here in our local San Diego market? Everyone wants to know. Are we seeing a housing bubble, should I still consider buying, is it still a sellers’ market? It can be so confusing, the state of the world, and what the best choice to make is for your family. I totally understand, I’ve been an agent for over 38 years, and I can help you navigate this market.

    First off, according to real estate experts and advisors, anytime you have inventory levels that are at 6 months of inventory or below, that we are in a seller’s market. It’s all about supply and demand, and when there is a limited supply like there is right now, then the prices go up. However, week over week, the inventory of new homes coming on the market is increasing, shifting the supply to its highest level we’ve seen, for the past few years.

    The average time to sell is still only 17 days, and on average homes are selling just a bit below list price. Now this is not what we saw over the past year, where we saw homes flying off the shelf and selling for significantly more than list price, but that wasn’t normal. Recent adjustments are normalizing the market. So here in greater San Diego, the inventory is climbing and so are interest rates. That may make some buyers weary, but it also is giving many more buyers opportunities that they did not have over the past few years. Also, they are not having to pay 25 or 50 thousand, or more, over the full list price, in order to beat out other buyers, like we saw happen, time and again, during the prior market. And as the data shows, buyers are still buying. It can be scary understanding how to navigate this market, so call the experts.

    https://www.youtube.com/watch?v=GlVu9-A0kng

    1:42.

  35. A church in Texas has quietly removed a self-described “Goth” drag performer with a criminal conviction from what has been advertised as a family drag bingo event.

    The First Christian Church, part of the Disciples of Christ denomination, openly supports LGBT people. In a flier, the church had advertised drag queen Tisha Flowers would be one of two performers at the sold-out event.

    Flowers is a stage name for Jaysen Kettl, who portrays himself as a Goth drag queen, whose social media accounts include macabre content.

    Area parents discovered that Kettl was convicted of being involved in a school shooting plot in 2004, after the news appeared in a Current Revolt article on Substack.

    Images of Kettl that can be found online include one of him dressed in drag holding a red skull with pentagram earrings and another on Tik Tok where he is wearing a T-shirt with a Baphomet image surrounded by a pentagram.

    An Instagram post depicts a skull and devil image announcing a Happy Death Day show. The info spread quickly among parent groups.

    https://www.theepochtimes.com/texas-church-bingo-event-drops-drag-queen-involved-in-school-shooting-plot_4743018.html

  37. The programmer tenant next door had to move back to the west side having lost his WFH status. The latest renters had a crisis yesterday. The skinny elderly mom is maybe 90-lbs, soaking wet. The crazy daughter is a 300-lb plus Karen who can sometimes be heard screaming at the top of her lungs. I guess mom lost a wrestling match, and dad came back home along with an ambulance and two police cars. They had Karen zipp tied to a stokes litter before shoving her into the ambulance. Guess they need to increase the medication.

    1. really not a bad segment from CNBC Diane Olick – apparently, she can be good sometimes.

      Scary that median home price as a % of income is now close to 600%. Also interesting that median home prices used to track income — and changes with the housing boom / crisis in 2005-08.

  39. $144,999 2 bd 1 ba 720 sqft
    5647 S Pearl St, Fort Mohave, AZ 86426

    https://www.zillow.com/homedetails/5647-S-Pearl-St-Fort-Mohave-AZ-86426/8363756_zpid/

    Date Event Price
    9/21/2022 Price change $144,999 (-3.3%) $201/sqft

    8/4/2022 Price change $149,999 (-6.3%) $208/sqft

    6/23/2022 Listed for sale $159,999 (+196.3%) $222/sqft

    8/12/2014 Listing removed $550

    3/8/2014 Listed for rent $550

    4/19/2012 Listing removed $550

    3/28/2012 Price change $550 (-4.3%)

    3/17/2012 Listed for rent $575

    8/1/2003 Sold $54,000 $75/sqft

    Take a look at this beauty. Fort Mohave always seemed kinda depressing to me. It’s a step down from Bullhead City, which is on the national register of sh$tholes. 200 pesos a square foot!

    1. LOL @ “National Register of Sh$tholes.” Maybe you should create that and make an index model from it. Take 5-10 of the worst sh$tholes and make a graph like Shiller. People could track the NRS Index to make informed buying decisions. You could battle Catturd for a his disinformation ranking.

      Frankly, I was expecting the inside of that house to look a lot worse. At least they cleaned the rugs before they attempt to break it off in ya.

  40. Joe Biden says…

    “The MAGA Republicans represent an extremism that threatens the very foundations of our republic,”

    then some lunatic Liberal runs down an 18 year old conservative kid and kills him, go figure.

    Man admits to killing 18-year-old after political dispute, court docs allege

    Published: Sep. 22, 2022 at 6:16 AM EDT

    MCHENRY, N.D. (KVLY/Gray News) – A North Dakota man is facing multiple charges after a hit-and-run that killed an 18-year-old man. The suspect reportedly told deputies he hit the man with his car because the two had a political argument.

    Foster County deputies were called to a hit-and-run that happened in an alleyway in McHenry, North Dakota. The crash killed an 18-year-old man from Grace City, identified as Cayler Ellingson on GoFundMe.

    Court documents say 41-year-old Shannon Brandt called 911 at 2:35 a.m. Sunday to report that he had hit a pedestrian because he was threatening him. Brandt told State Radio that the pedestrian was part of a Republican extremist group and that he was afraid they were “coming to get him.”

    After visiting the crash site, deputies went to Brandt’s house in Glenfield, about 12 minutes from the scene, KVLY reports.

    Brandt allegedly admitted to deputies he had consumed alcohol before the incident and stated he hit Ellingson with his car because he had a political argument with him. Brandt also allegedly admitted that he initially left the crash scene, returned to call 911, then left again before deputies could arrive.

    Court documents said just before the crash, Ellingson called his mom and asked if they knew who Brandt was. She said yes and told her son she was on her way to pick him up.

    A short time later, court documents say Ellingson called his mom again to say that “he” or “they” were chasing him. It was after that second call that the 18-year-old could not be reached again.

    Ellingson was later pronounced dead at the hospital.

    Brandt has been charged with criminal vehicular homicide and driving while intoxicated. Court records show a judge set bail at $50,000.

    https://www.wsaz.com/2022/09/22/man-admits-killing-18-year-old-after-political-dispute-court-docs-allege/

    2. Brandt has been charged with criminal vehicular homicide and driving while intoxicated. Court records show a judge set bail at $50,000.

      I have the sinking feeling that he will be declared temporarily insane and released without any charges.

  41. ‘Before a seller drops their pants significantly, they’re going to see what happens in the market.’…..Stink Bid. Drops pants?? This is the level of professionalism we expect from used house salesmen.

    2. LIVE UPDATES
      Updated Thu, Sep 22 2022 1:16 PM EDT
      S&P 500 falls to the lowest since July as investors fear the Fed pushing economy into a recession
      Samantha Subin
      Sarah Min
      Markets will face recession ‘decision time’ once it hits prior lows, says SoFi’s Liz Young

      Stocks slipped on Thursday after the Federal Reserve delivered another aggressive rate hike, boosting fears that the central bank will push the economy into a recession as it battles to curb rising inflation.

      The Dow Jones Industrial Average was last down 108 points, or 0.36%. The S&P 500 traded 0.86% lower, and slumped to its lowest level since mid-July. The Nasdaq Composite slid 1.5%.

      Bond yields surged again on Thursday, with the yield on the 10-year and 2-year Treasury notes hitting fresh multiyear highs in response to the Fed’s aggressive stance and central banks around the world implementing sizeable hikes despite the repercussions for the economy.

      Growth-oriented tech stocks and semiconductors took a leg lower amid fears of slowing economic growth. Industrials and consumer discretionary were the worst-performing S&P 500 sectors, losing at least 1% each.

      “The markets feel they have to recalibrate valuations and when that happens, it happens in a linear fashion — shoot first ask questions later,” said Art Hogan, B. Riley Wealth’s chief market strategist.
      …
      https://www.cnbc.com/2022/09/21/stock-market-futures-open-to-close-news.html

    3. Jerome Powell is heading into the ‘danger zone’
      By Julia Horowitz, CNN Business
      Updated 8:22 AM EDT, Thu September 22, 2022

      London (CNN Business)

      When the Federal Reserve started hiking interest rates to combat decades-high inflation, Chair Jerome Powell stressed that the central bank could increase borrowing costs without inflicting too much damage on the economy.

      “We feel the economy is very strong and will be able to withstand tighter monetary policy,” Powell said in March.

      Six months later, Powell is sounding less assured. The Fed announced its third consecutive supersized interest rate hike on Wednesday and indicated that it would continue to be aggressive should inflation remain elevated.

      Slower growth and higher unemployment “are all painful for the public that we serve, but they’re not as painful as failing to restore price stability and having to come back and do it down the road again,” Powell said.

      Breaking it down: The central bank didn’t go as hard as some investors thought it might. Some had been bracing for the first full-point hike in the Fed’s modern history. Yet tucked into the central bank’s projections were signs that it plans to stay tough, even if it means pushing the economy into rocky territory.

      “The Fed has now entered the ‘danger zone’ in terms of the rate shock they are throwing onto the US economy,” said Peter Boockvar, chief investment officer at Bleakley Financial Group.
      …
      https://www.cnn.com/2022/09/22/investing/premarket-stocks-trading/index.html

  43. George Soros bought the District Attorney that won’t prosecute this.

    New York Post — Sex fiend gets ‘sweet’ deal from Manhattan DA Bragg on teen rape charge — then attacks 5 others (9/22/2022):

    “A man accused of raping his teenage relative secured a sweetheart plea deal from Manhattan District Attorney Alvin Bragg — and then went on to allegedly sexually terrorize five people in The Bronx just a month later, The Post has learned.

    Justin Washington, 25, was promised a plum 30-day jail sentence, along with five years of probation, after he agreed in August to plead down to a charge of coercion in his Manhattan rape case.

    But just a week before he was set to be sentenced Wednesday, Washington allegedly went on a sex-crime spree, attacking four women and a man near the homeless shelter where he was living in the Bronx.”

    https://nypost.com/2022/09/22/sex-fiend-gets-sweet-deal-from-manhattan-da-bragg-on-teen-rape-charge-then-attacks-5-others-sources/

    “If I had a son, he’d look like Trayvon”

    1. Meanwhile on the left coast:

      “A Los Angeles tavern owner slammed the city council Thursday for overlooking the crime crisis after a shocking video showed a homeless man throwing a bag of feces at him outside his restaurant.

      Owner of Blue Dog Beer Tavern Paul Scrivano joined “Fox & Friends First” to discuss the incident and why he feels helpless after seeking support from the city.

      “It’s a true feeling of helplessness,” Scrivano told co-host Todd Piro. “It’s not the end of civilization when someone… goes to the bathroom on the street. It’s the end of civilization is when the government looks past that, and when the government says that’s okay.”

      https://nypost.com/2022/09/22/paul-scrivano-calls-out-la-city-councils-feces-attack-response/

      Vote like California, become California.

    2. If the girl had a real father he would realize neither the perpetrator nor Alvin Bragg have a security detail.

  44. Plano, TX Housing Prices Crater 29% YOY As Dallas Area Land And Lot Prices Plunge

    https://www.movoto.com/plano-tx/market-trends/

    As a national land broker explained, “There is a globe full of land were fully 95% of it goes undeveloped. Land is essentially worthless dirt. If you paid more than $500 an acre, you got ripped off.”

  45. $250,000 968 sqft
    1617 Stewart Ave, Las Vegas, NV 89101

    https://www.zillow.com/homedetails/1617-Stewart-Ave-Las-Vegas-NV-89101/7015165_zpid/

    Date Event Price
    9/21/2022 Price change $250,000 (-9.1%) $258/sqft

    8/12/2022 Listed for sale $275,000 $284/sqft

    8/10/2022 Contingent $275,000 $284/sqft

    6/8/2022 Listed for sale $275,000 (+10%) $284/sqft

    1/16/2022 Listing removed $250,000 $258/sqft

    11/17/2021 Listed for sale $250,000 $258/sqft

    11/11/2021 Pending sale $250,000 $258/sqft

    10/7/2021 Listed for sale $250,000 $258/sqft

    9/28/2021 Pending sale $250,000 $258/sqft

    9/8/2021 Listed for sale $250,000 $258/sqft

    9/3/2021 Pending sale $250,000 $258/sqft

    8/18/2021 Price change $250,000 (-9.1%) $258/sqft

    6/18/2021 Listed for sale $275,000 (+83.3%) $284/sqft

    2/5/2018 Sold $150,000 $155/sqft

    12/28/2017 Listed for sale $150,000 (+130.8%) $155/sqft

    11/5/2015 Sold $65,000 $67/sqft

    6/29/2015 Pending sale $65,000 $67/sqft

    6/23/2015 Price change $65,000 (-20.7%) $67/sqft

    6/4/2015 Listed for sale $82,000 (-47.1%) $85/sqft

    7/12/2005 Sold $155,000 (+20.2%) $160/sqft

    3/3/2005 Sold $129,000 (+43.3%) $133/sqft

    7/18/2002 Sold $90,000 $93/sqft

    Maybe they fixed it up? Nah.

    1. “11/5/2015 Sold $65,000 $67/sqft”

      And then, a succession of miracles happened:

      “12/28/2017 Listed for sale $150,000 (+130.8%) $155/sqft

      2/5/2018 Sold $150,000 $155/sqft

      6/18/2021 Listed for sale $275,000 (+83.3%) $284/sqft”

  46. interesting to me … see how this shakes out between now and Jan (after Christmas rush)

    Bitcoin @ $19K
    Lumber @ $360
    —
    – Market rumors of FedEx raising prices for services as part of the earning call today
    – Seattle rumors of Bellevue Porsche and other luxury dealers not buying used cars unless part of a trade in for a new car. They apparently have more offers than they can take.

      1. With a globe full of land where 95% of it goes undeveloped, why would they hold something as worthless as dirt?

        Las Vegas, NV Housing Prices Crater 19% YOY On Triple Digit Inventory Rise

        https://www.movoto.com/nv/89118/market-trends/

        As one renown economist explained, “Rates are headed up up up so don’t fight the Fed my good friends….. Don’t fight the Fed.”

    3. Here we go on FedEx. So probably no inflation and interest rates dont need to rise.

      In issuing its full first quarter results Thursday, the company said that its Express, Ground and Home Delivery rates will increase by an average of 6.9%. Its FedEx Freight rates will increase by an average of 6.9%-7.9%, the company said.

      It also said it believes it will save between $1.5 billion and $1.7 billion by parking planes and reducing flights. The closure of certain locations, the suspension of some Sunday operations, and other expense actions will save FedEx Ground between $350 million and $500 million, according to the company.

      FedEx said it will save an additional $350 million to $500 million by reducing vendor use, deferring projects and closing office locations.

  47. ‘Yuan bond issuances are a good way considering that they cannot raise more in offshore markets.’

    Interesting!

    1. Bitcoin.com
      News
      Economics
      by Terence Zimwara
      2 days ago
      Chinese Currency Breaches 7:1 Exchange Rate Against US Dollar for First Time in Two Years

      The offshore exchange rate of China’s fiat currency versus the U.S. dollar recently breached the 7:1 mark for the first time in over two years, after it touched a new 2022 low of 7.0188 yuan for every dollar on September 15. Similar to other global currencies that have depreciated in 2022, the yuan’s decline is being driven by the strengthening of the U.S. dollar.

      The Yuan’s Depreciation

      The offshore exchange rate of the Chinese currency versus the U.S. dollar breached the seven RMB per every dollar mark after it traded at 7.0188 on September 15, 2022. This is the first time in over two years that the exchange rate of the two currencies has gone past this threshold. However, on the same day, the yuan onshore exchange rate had not breached the 7:1 threshold.

      According to a report in the Economic Times, the yuan’s depreciation against the greenback comes against the backdrop of a strengthening dollar. The currency’s decline also came amidst growing fears that the Chinese economy may be slowing down.

      However, as per the report, the Chinese central bank’s attempts to assist the economy via an interest rate cut in August helped to spark a 3% depreciation of the yuan.
      …

    1. If someone’s Twitter handle displays a Blue Checkmark and a Ukranistan flag this is a dangerous person because NPC’s have no personal dialogue, no sense of agency. Their Reddit “karma score” is their existence, their only purpose.

  50. “Where Have All The Ships Gone? Signs Of A Recession”

    https://www.zerohedge.com/economics/where-have-all-ships-gone-signs-recession

    (snip)

    The images of the west coast ports packed with ships and pictures of them stacked up just offshore have vanished from the evening news. So, where have they gone, and does this mean the supply chain is fixed? It appears that the post-covid shipping glut is over but this does not mean that the supply chain is fixed or there will not be shortages.

    As of Sept. 21, 2021, there were 132 cargo ships at the ports of Los Angeles and Long Beach. Dozens of container ships were anchored or adrift off the coast. As of Aug 30, 2022, that number has dwindled to only 8 ships waiting off Southern California. The end of goods backing up in ports on the west coast is a sign we are moving on. Danielle DiMartino Booth recently stated, “We have never seen the collapse of the magnitude that we are witnessing in imports. That is always a tail-tale sign that you are already looking through the rear-view mirror at recession.”

    In a video released on September 6, 2022, Sal Mercogliano, a maritime historian at Campbell University and former merchant mariner delved into the reduction of ships currently sitting off the west coast. This includes the important Port of Los Angeles and the implications for the flow of cargo and goods as well as freight rates. It now seems that for several reasons, the international supply chain crisis that impacted U.S. logistics firms, retailers, and consumers could continue for a long time.

    Most of the disruption in the flow of goods may be in the rear-view mirror, however, a slew of new economic destabilizing factors are beginning to emerge. These will result in a bumpy ride for consumers going forward. Those issues most on our radar are centered around energy whether it is gas or electricity. Others are being talked about but being largely shrugged off until the shelves are empty or prices go through the roof deal with food.

    It has also become a problem that in the post-covid era many people simply lack the desire to return to work. This is playing havoc within the labor market. It seems sitting on their bottoms at home for a year has become addictive. The reality is employers are now finding they are often having to pay more for less productive workers.This is one of the factors driving inflation.

    Swinging back to the idea ports are no longer backed up, has to do with the flow of goods. First, we had few goods in the pipeline, then more than a lot, and now it has slipped back a bit below normal because many companies had ordered more than they needed when they were unable to get goods. This has resulted in some companies and retailers now finding they are overstocked and up to their ears in inventory. Another problem is much of this inventory does not meet their current needs.

    In short, the supply chain is still messed up but in a different way. Things are not back to normal and the system is not running like a fine-oiled machine. An example of this surfaced this week when Ford warned that it expects to see an extra $1 billion in costs in Q3 due to both “inflation and supply chain issues”. Ford is currently suffering through parts shortages that have affected between 40,000 and 45,000 vehicles.

    According to The Detroit News, The legacy auto manufacturer at the end of the third quarter expects to have a ‘higher-than-planned’ number of vehicles assembled but awaiting parts due to supply shortages. The models affected are primarily “high margin trucks and SUVs.” This means these vehicles haven’t been able to be shipped to dealers. Ford is just one in the long list of companies in this situation and someone will have to pay for what is happening.

    Companies are forced to pass the costs of supply chain problems on to customers, shareholders, or both. We should not be under the illusion things will straighten out anytime soon. The problems we face now have created new problems down the road. We should also add into this the effects of bad weather on crops and livestock as well as prices of energy and oil soaring from war and geopolitical issues. Expect some of these factors to result in additional empty shelves, rising prices, and more shortages for months to come.

  51. ‘It’s a stink bid – they are trying to steal the place.’

    Nobody complained last year when buyers fell all over one another to bid up prices to astronomical heights and reward sellers with ginormous cash windfalls at a bubble top.

    But now that the market has shifted and the pool of buyers willing to pay last year’s prices has disappeared, the few folks in the market who are willing and able to make offers that reflect the steep increase in mortgage rates are accused of trying to steal property.

    There’s some serious bias in this REIC-sponsored narrative.

  52. God, Family, Nation, Citizens and Bocephus…. please forgive me for maligning this song.

    Hank Williams, Jr. – “A Country Boy Can Survive”

    https://youtu.be/3cQNkIrg-Tk

    The housing man says you’re almost out of time
    And the market its a trickle she’s a-goin’ dry
    The interest is up and the stock market’s down
    And you only get mugged by a realtor clown

    I live in the back of your skull you see
    my posts and the blog and we do it for free
    Housing is a trifle in a full nose dive
    Debtdonkeys will never survive
    DebtDonkeys will never survive

    Santa Paula, CA Housing Prices Crater 21% YOY As Mortgage And Appraisal Fraud Ravages Ventura County

    https://www.movoto.com/santa-paula-ca/market-trends/

  53. “‘Don’t panic,’ said Jacob Channel, a senior economist at LendingTree”

    Said the man locking the burning theatres door from the outside.

  55. Are Uncle Sam’s housing subsidies lining wealthy Wall Street real estate investors’ pockets at the expense of Main Street and minority households?

    1. Opinion: Stop subsidizing Wall Street buying up homes

      Institutional purchases are highly concentrated in areas with minority families, making houses less affordable
      September 19, 2022, 3:43 pm
      By Barry Zigas and Gene Slater

      No serious observer of today’s economy doubts that it is harder and harder for everyday folks to buy a home. This is especially true for first-time homebuyers across the country, in exurbs, Sunbelt suburbs, and neighborhoods in cities large and small.

      This escalating unaffordability affects the long-term opportunities of virtually everyone who doesn’t own a home, and the children of those who do. Some pressures making it so hard for families to buy homes are familiar: increasing household formation, higher interest rates, restrictive local zoning codes, rising building costs.

      But recently a new factor is accelerating the problem — massive purchases of single-family homes by larger investors. In Texas, for example, major institutional investors bought 28% of the single-family homes sold in 2021. Nationally, institutional investors are buying over 13% of homes, and that share is increasing. The share of homes being bought by families has dropped from 83% to 72% in the last three years, while the share by investors owning more than 100 properties has more than doubled.

      More important still, institutional investors are overwhelmingly purchasing entry-level homes, averaging 26% below the median state sales price. This greatly reduces the inventory of the homes that first-time buyers would normally seek.

      Black Knight’s national analysis shows too that institutional purchases are highly concentrated in areas with minority families, limiting their ability to become homeowners. While institutional purchases are only one of the factors (albeit the new one) driving unaffordability nationally, their impact is especially intense in these neighborhoods.

      These investors aren’t paying more for homes than families, but their all-cash, as-is, bulk purchases swoop up much of the inventory out of the hands of aspiring homeowners. Significantly reducing the number of entry-level homes that families are competing to buy inevitably forces them to bid up the share of disposable income they have to pay.

      The impacts are felt by renters as well as potential buyers. With fewer families able to become homeowners, they remain in the rental market instead, pushing up the rents that landlords can charge in general. The largest owner of rental homes raised rents 12% last year and sees the potential to keep boosting rents to a higher percentage of tenants’ disposable income. This cycle feeds itself as families — desperate to escape higher rents — stretch even further to buy the limited inventory of homes available to them.

      This feedback loop explains why surging institutional purchases can’t be dismissed as simply shifting stock from ownership to rental — and thus having no overall impact on affordability, even if they limit opportunities for homeownership. The impact of these purchases on available inventory is what matters.

      Dramatically reducing the relatively small number of units for sale to homebuyers at any one time increases the prices of those that remain. Shifting those homes to rentals has little impact on the nine times greater stock of units available for rent each year. Obstacles to homeownership drive unaffordability for buyers and renters.

      This kind of big money first began washing over the single-family home market more than a decade ago. But that spate of money has now become a flood, and is only expanding as major investors eye rental single-family homes as a hedge against inflation.

      The White House itself in May 2022 highlighted how “Large investor purchases of single-family homes drive up home prices for lower-cost starter homes, making it harder for aspiring first-time and first-generation home buyers, among others, to access wealth-building opportunities from homeownership.”

      This is not just a problem for individual families, including many Black, Hispanic and other families of color. Widespread opportunities for middle-class homeownership has long been foundational to American society, and ownership has been key to the stability of neighborhoods.

      It is natural for investors to want to capitalize on an opportunity. But government subsidies are helping institutional investors beat out aspiring families — making the American Dream less attainable, rather than more.

      Tax policy today enables these investors to deduct the full cost of interest on an unlimited amount of funds they borrow to acquire single family homes. This lowers their funding costs, encourages leveraging private equity with debt and substantially increases such investors’ after-tax rate of return.
      …
      https://www.housingwire.com/articles/opinion-stop-subsidizing-wall-street-buying-up-homes/

  56. Luxury housing market took its biggest dive in 10 years
    Purchases from June to August dropped record 28% YoY
    National
    Sep. 22, 2022 10:00 AM
    By Holden Walter-Warner
    (Photo Illustration by Steven Dilakian for The Real Deal)

    This summer’s luxury market couldn’t resist the shifting tides swaying homebuyers across the board, which landed the category in its biggest drop in recent memory.

    From June to August, luxury home sales declined 28.1 percent year-over-year, the largest fall on record, according to a report from Redfin. The previous largest drop was nearly five percentage points fewer at the start of the pandemic; Redfin’s data stretches back to 2012.

    The housing market is tumbling in general as mortgage rates rise and economic uncertainty roils financial decisions for many. But the drop is most visible in the luxury market, which fell 19.5 percent year-over-year in the same period, also a record for the category.

    Redfin chief economist Daryl Fairweather cited the “sticker shock” felt by high-end homebuyers as mortgage rates rise, adding major money to monthly bills.

    “Luxury goods are often the first thing to get cut when uncertain times force people to reexamine their finances,” Fairweather said in the report.

    California is home to the biggest purchasing drops in the luxury market. In Oakland, high-end sales declined 63.9 percent year-over-year, worst among the 50 most populous metros. San Diego and San Jose also saw drops of more than 55 percent, as did Miami. New York was near the bottom of the spectrum, sporting an 11.8 percent drop.
    …
    https://therealdeal.com/2022/09/22/luxury-housing-market-took-its-biggest-dive-in-10-years/

  57. Money
    Mortgage rates will likely rise after Fed decision, but experts say housing prices will soon drop
    Interest rates are rising again. Here’s what home shoppers should be considering.
    Updated Wed, Sep 21 2022
    Brett Holzhauer

    On Wednesday, the Federal Reserve raised federal interest rates by 75 basis points for the fifth time this year in an effort to quell record-high inflation.

    This comes amid the most recent Consumer Price Index (CPI) report showing inflation increased slightly month-over-month. This sent markets plummeting as investors worry efforts from the central bank aren’t working as planned.

    For home shoppers, this makes buying a home even tougher as interest rates for 30-year fixed-rate mortgages hit levels not seen since the 2008 housing crash, according to the St. Louis Federal Reserve.

    So how should homebuyers approach a housing market with stagnating home prices, yet with interest rates at 15-year highs? Select spoke to two experts about the latest interest rate hike and how consumers, especially homebuyers, should be thinking about it.
    …
    https://www.cnbc.com/select/mortgage-to-rise-after-fed-decision-but-home-prices-will-soon-drop/

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