thehousingbubble@gmail.com
Blog

Prices Are Falling As A Direct Result Of Sky-High Supply Paired With Comparatively Low Demand

It’s Friday desk clearing time for this blogger. “When Nancy Lam upgraded in January to a home closer to her child’s school in the San Francisco Bay Area, she thought she had plenty of time to list her old house. ‘Six months ago, people were buying homes over-ask and with no appraisal,’ said Ms. Lam’s real-estate agent, Herman Chan of Golden Gate Sotheby’s International Realty. ‘They didn’t even bat an eyelash. Now, it’s like crickets.’ After listing it for $3.95 million in May, they realized they may have miscalculated. After weeks on the market, the house hadn’t been scooped up like they expected. There were no reasonable offers, and no bidding wars. Now, four months and two significant price cuts later, the property is still lingering on the market, asking $3.49 million. ‘It’s crazy,’ she said. ‘We never expected for this to still be on the market. It really caught us by surprise.'”

“The single-family median home price in August was $601,000. That’s down 7.5% from when they peaked at $650,000 in May, according to the Salt Lake Board of Realtors. ‘The bidding wars are over,’ said Steve Perry, president of the Salt Lake Board of Realtors. ‘Offers above asking price and waiving of appraisals have ended. Home buyers have more choices and options when purchasing a house.'”

“The gap in inventory gave sellers almost complete control over the housing market for years, says Bic DeCaro, an agent in Great Falls: ‘Almost overnight, that just stopped when mortgage rates went up. It went from multiple offers to a few offers to often just one.’ ‘As soon as the market shifted, buyers began to get really picky about the condition of a home,’ says Melinda Estridge, an agent in Bethesda. ‘Now that rates are higher, a lot of buyers had to lower their price range a little bit, and that makes them more concerned that they get the best value they can.'”

“The housing market in southwest Florida is starting to cool off. ‘We’ve gone from 400 homes last year to about 1,400 now,’ said Adrian Waring, a local realtor. ‘We’re still seeing price reductions. About 13% had a price reduction last week.'”

“Kathleen O’Toole, a Kennebunk-based realtor is seeing slow changes in the market. Many sellers are still listing their homes at peak-pandemic prices, which is no longer feasible, she said, so price adjustments are more common. ‘Interest rates will continue to force the hand of sellers to lower the prices and be more realistic,’ she said. She’s also noticed more homes listed as ‘back on the market,’ which she attributes to the mortgage rate hikes.”

“The period of the nonstop record-breaking growth of home prices is over—and it’s time for sellers to accept that reality. The average listing price of homes in Phoenix has gone down by 19% in the last year, said Bob Nathan, a broker in North Scottsdale. Four months ago, there were only 3,500 homes available in Maricopa County—America’s fifth largest county, with a population of over 4.5 million. As of this week, there were nearly 20,000 homes for sale. ‘The market is becoming more normal,’ Mr. Nathan said. For sellers in Phoenix and markets like it, that means becoming ‘more realistic’ about pricing expectations.”

“‘If you’re looking at the price per square foot for March or April, that number is going to be far higher than you’re going to be able to achieve for your house at this point,’ said Katie Glaser, an agent with Smith & Associates in Tampa, Florida, which saw its share of homes with a price drop increase to 52.1% in July 2022 from 28.6% in July 2021. Liza Hogan, a broker with Douglas Elliman in Denver, said that sellers who haven’t been able to get a satisfactory offer within 20 days should consider a price reduction. ‘If you don’t get full price over the first few days, then you’re not getting it,’ Ms. Hogan said.”

“‘A lot of sellers are wanting to look backward,’ said Tim Nelson, an agent with Willis Allen in La Jolla, California, an affluent town outside of San Diego, where two-thirds of closings in the last 30 days have sold at a discount from the original list price. ‘They want to think that their values are consistent with the market of three to six months ago, and we try to advise them that that ship has sailed,’ he said.”

“Last month in King County, pending sales were down about 27% compared with the same time last year. Although King County’s $899,999 median home price was still up from 2021, it dropped nearly 10% from May to August. With fewer buyers competing for every home, houses are sitting on the market longer.Sellers are dropping prices and chipping in on closing costs. Buyers are able to hold on to their right to an inspection and other contingencies. With interest rates still ticking up, even those who can qualify for a loan may not be comfortable with the price. ‘Just because you can afford a $4,500 payment,’ said Sally Li, a broker with Beacon Hill Realty, ‘doesn’t mean you really need to go there.'”

“Taylor Walick leads the nearly 27,000-member MetroTex Association of Realtors and says it’s still a good time to sell homes because current buys are serious. ‘What we’re seeing from our sellers is that there may be a bit of inflated confidence there,’ he said. ‘We are seeing a lot of price deductions.'”

“Steve and Sylvia El-Helou built their house in Stoney Point in 2015, but now the couple want to liquidate that house and two other properties in Chatham-Kent, take their two daughters, and hit the road in an RV. The spacious house has been on the market for a month. The price has been reduced from $1.2 million to $1.1 million and not a soul has come to see it. ‘Personally, I just thought with the market the way things were going that it would sell fairly quickly,’ said Sylvia. The family needs to sell the house and two other properties to finance the odyssey. ‘This has been the biggest thorn or hurdle that we have to cross,’ said Steve.”

“At the peak of the house selling boom in March the average selling price in the Windsor Essex area was $723,739. It was down to $520,634 last month, according to the Windsor Essex County Association of Realtors. ‘My kids are all grown up now so me and my wife don’t need a house with all this room and we just want to downsize, but we can’t go anywhere,’ said Mario Tersigni, who says they have dropped the asking price from $499,000 to $399,000.”

“The German property market has been growing without interruptions since 2009; however, according to Hamburg-based Gewos Institute for Urban, Regional, and Housing Research, this period of rapid growth could end. Meanwhile, Welt’s Holger Zschaepitz proclaimed the German housing boom is over, showing a chart of Germany’s major real estate lender, Hypoport group, shares plummeting 34% after they suspended their full-year forecast. ‘This chart highlights that the housing boom in Germany is over. The real estate lender Hypoport shares plunged as much as 34%, the most ever, after the group suspended its forecast for the full year, saying residential mortgage finance customers are holding back on property purchases.'”

“New Zealand property prices have dropped for a fifth consecutive month, newly-released figures from Trade Me suggest. The figures show the national average asking price saw another drop in August – falling 1 percent to $899,200. New Zealand’s average asking price hadn’t been below $900,000 since October 2021. ‘Prices are falling as a direct result of sky-high supply paired with comparatively low demand, taking the pressure off buyers and forcing sellers to lower their price expectations,’ Trade Me Property sales director Gavin Lloyd said.”

“Trade Me data also showed Wellington, Nelson/Tasman, Taranaki and West Coast were the regions that saw the largest monthly decreases in average asking prices. Additionally, the data showed the number of properties for sale across the country had soared year-on-year by 76 percent. The Trade Me data showed the average asking price in Wellington was $875,700, down nearly 4 percent in a month. Supply in the region was up 98 percent year-on-year. In Wellington City specifically, its average asking price fell to $1.003 million, Trade Me said. That was a month-on-month drop of 4 percent.”

Related Posts
This Post Has 128 Comments

  1. ‘We’ve gone from 400 homes last year to about 1,400 now…We’re still seeing price reductions. About 13% had a price reduction last week’

    The site says this is Cape Coral.

  2. Thankfully, Colorado Springs is different from other housing markets, because everyone wants to live here and we have a limitless supply of California equity locusts to prop up shack prices. So what we are experiencing is just a gully and shack prices will soon resume their upward march. My realtor, who is an expert on the local housing market, assures me of this and I trust explicitly in her research. I love being in such good hands.

    2. Colorado Springs is one of those places with limited press coverage. The Gazette keeps the lid on bad news with paywalls, etc. Yer bubbly days are numbered out there too. Who knew that $700,000 was a sh$tload of money?

      1. Only 22% of residents can afford a median-priced house here. But as the economy recovers under Biden’s wise stewardship and “Build Back Better” delivers the promised benefits, we should see a rising tide of prosperity that will enable the proles to finance insanely overpriced shacks.

    3. The California locusts really are spreading all over …..we marvel at the ones that make it all the way to SC , they’ve got a sickness , and don’t realize it …

      1. Any California libtards attempting to ooze into the red states should be branded on the forehead with a hammer and sickle, then escorted to the nearest Democrat-Bolshevik malgoverned state and dumped there with warnings of worse if they attempt to re-infest any red areas.

        1. I have a co-worker Bostoner here in Tallahassee lamenting about our lack of culture and supposed racism.

          She bought a house in a 99% white neighborhood.

          At least she’s vaxxed and boosted so I won’t have to hear her for long.

    4. My family is in Colorado Springs also.

      My son hopes for a return to normal soon.
      ie A list price that is negotiated down to market value.
      He had been seeing bidding wars over ask that have exceeded list price by 20-30%. That is not normal.

  3. ‘The period of the nonstop record-breaking growth of home prices is over—and it’s time for sellers to accept that reality. The average listing price of homes in Phoenix has gone down by 19% in the last year, said Bob Nathan, a broker in North Scottsdale. Four months ago, there were only 3,500 homes available in Maricopa County—America’s fifth largest county, with a population of over 4.5 million. As of this week, there were nearly 20,000 homes for sale’

    You Phoenix guys are like Laurel and Hardy. You convinced yerself trees could grow to the sky without risk – again. Now yer all fooked.

    1. Oh, but at least Twitch banned that russian meaney who was streaming his stove burning 24/7. That will show ’em

    2. $177 is 17% of $1000. I don’t know about you guys, but I only spent about $500-600 last year to heat my place in chilly Colorado.

        1. 3000 + 1000 basement.

          My shanty is allegedly a “Green Built” shack, which means it has more insulation than is required by code. NatGas here is currently just under $1 a therm.

          1. Similar cost here, similar climate. 1700 ft2 with “to code” insulation. House is insulated from the basement.

            You are doing well. Some houses your size spend your budget in a month. I could be frugal if heat gets expensive as every room is zoned, but I haven’t fussed about it yet.

  5. ‘Almost overnight, that just stopped when mortgage rates went up. It went from multiple offers to a few offers to often just one’

    Was it like someone switched off a light Bic? Were there neeked swimmers?

  6. ‘It’s crazy,’ she said. ‘We never expected for this to still be on the market. It really caught us by surprise.’”

    Get to sawin’ and slashin’ like you mean it, greedhead.

  7. ‘A lot of sellers are wanting to look backward,’ said Tim Nelson, an agent with Willis Allen in La Jolla, California, an affluent town outside of San Diego, where two-thirds of closings in the last 30 days have sold at a discount from the original list price. ‘They want to think that their values are consistent with the market of three to six months ago, and we try to advise them that that ship has sailed’

    Where did the ship go Tim? Let’s ask Thornberg:

    via GIPHY

  8. The price has been reduced from $1.2 million to $1.1 million and not a soul has come to see it.

    I’d like to think that the souls of all those dear departed Yellen Bux at least gave a wave as they passed by en route to debauched currency heaven.

  9. ‘Liza Hogan, a broker with Douglas Elliman in Denver, said that sellers who haven’t been able to get a satisfactory offer within 20 days should consider a price reduction. ‘If you don’t get full price over the first few days, then you’re not getting it’

    The REIC is carefully avoiding the issue of ‘6 months supply is a balanced market.’ No it’s not, not anymore. Oh but plenty of greedy fools went along with yer shenanigans. Now explain to them why they are fooked.

  10. “New Zealand property prices have dropped for a fifth consecutive month, newly-released figures from Trade Me suggest. The figures show the national average asking price saw another drop in August – falling 1 percent to $899,200.

    How’s that horse-faced globalist Quisling working out for ya, Kiwi FBs?

  12. Go get a real job Matthew.

    “Denver realtor Matthew Leprino insists that “the sky isn’t falling.” He sees the median-price decline as “rather routine” when viewed from a seasonal perspective, and says that the 4.6 percent annual price increase is more sustainable than the 15.9 percent hike from 2020 to 2021, which he likens to “gunning your engine after a red light only to see that there’s another signal ahead.”

    https://www.westword.com/news/denver-home-bidding-wars-are-officially-over-for-now-15008428

    1. If you’re gunning your engine in Denver, it’s to get away from the Youth for Biden out to victimize a certain “random” demographic.

    1. Activists suing DeSantis over Martha’s Vineyard flights received over $1.3M from George Soros network

      Published September 21, 2022 3:11pm EDT

      Lawyers for Civil Rights, a nonprofit immigrant advocacy group, filed the lawsuit on behalf of Alianza Americas, according to a press release Tuesday that described the latter group as “a network of migrant-led organizations supporting immigrants across the United States.”

      Alianza Americas has received a total of $1,383,947 from George Soros’ Open Society Foundations between 2016 and 2020, OSF’s records show.

      The grants came from three of his nonprofits: Open Society Institute, Open Society Policy Center and Foundation to Promote Open Society.

      https://www.foxnews.com/politics/activists-suing-desantis-marthas-vineyard-flights-received-1-3m-george-soros-network

      1. Soros does not appreciate those who would call attention to our open borders and globalist efforts to make the children of heritage Americans strangers in a strange land.

      2. “Open Society Institute, Open Society Policy Center and Foundation to Promote Open Society.”

        Ah, three organizations founded by a Nazi collaborator.

    2. The sub-Reddit /r/AntiWork made itself private and accessible only to registered users after it got some unwanted media attention.

      These social dregs all think they’re gonna be the Big Cheese in an office making Really Important Decisions in their Marxist utopia, when in reality they’ll be outside digging with a pick and a shovel, and when their body is too broken down to continue doing that, they’ll be shot in the back of the head and dumped in a mass grave.

      Useful idiots.

          1. I cannot speak for him but I disagreed with every comment I read. They all were antithetical to my opinions and viewpoints, in fact the moderator specifically states that NO OPPOSING viewpoints of those expressed are allowed.

          2. in fact the moderator specifically states that NO OPPOSING viewpoints of those expressed are allowed

            You’re imagining things. Ben staunchly believes in the freedom of speech. Many of us are here because of that. We get enough controlled narrative and censorship everywhere else.

          3. They all were antithetical to my opinions and viewpoints

            Our society has a real problem with that these days. Perhaps consider someone else’s viewpoint and what knowledge and/or experience s/he may have that you don’t.

  17. Associated Press propaganda and lies.

    Over 4 Million Americans Roll Up Sleeves For Omicron-Targeted COVID Boosters (9/23/2022):

    “Health experts said it is too early to predict whether demand would match up with the 171 million doses of the new boosters the U.S. ordered for the fall.”

    https://www.huffpost.com/entry/covid-boosters-uptake-us_n_632d719ee4b087fae6feaac9

    They want to kill 171 million people, is that a lot?

    The *eight* mice that this newest flavor of mRNA poison were tested on could not be reached for comment, because they all died 🙁

    2. 4 days ago

      Myocarditis caused by Covid vaccine led to Dunedin man’s death – coroner

      By Maddy Lloyd, 1News Reporter
      Tue, Sep 20

      A coroner has found a 26-year-old Dunedin man died of myocarditis, due to vaccination with the Pfizer Covid-19 vaccine.

      Rory Nairn died at his home in November last year after receiving his first dose of the vaccine.

      He had experienced myocarditis-like symptoms for nearly a fortnight following his jab, which he received on November 5.

      https://www.1news.co.nz/2022/09/20/myocarditis-caused-by-covid-vaccine-led-to-dunedin-mans-death-coroner/

  18. A reader sent these in:

    Leverage + speculative investments…

    “Take out HELOCs today and buy as much Bitcoin as possible” – Nov 4, 2021

    Bitcoin price: ~$61,000

    https://twitter.com/mortimer_1/status/1572944615401226241

    Nearly a quarter of homes for sales had a price drop in August — a record share since 2012!

    https://twitter.com/GregDaco/status/1572444070328565762

    Danielle DiMartino Booth

    As @SoberLook Lev Borodovsky correctly observes, home prices are falling “rapidly.”

    https://twitter.com/DiMartinoBooth/status/1572892460648656896

    Rick Palacios Jr.

    Lennar and KB Home just announced walking away from 19,000 lots combined in their most recent quarter (10,000 for $LEN and 9,000 for $KBH). This trend came through clearly in our land survey, where 21% of land brokers noted land buyers dropping some deals.

    https://twitter.com/RickPalaciosJr/status/1573001628734885888

    Good luck buying a home

    https://twitter.com/DonMiami3/status/1572963780987953152

    Global Central Bank Update:
    -Switzerland: 75 bps hike to 0.50%
    -Taiwan: 12.5 bps hike to 1.625%
    -Norway: 50 bps hike to 2.25%
    -UK: 50 bps hike to 2.25%
    -Saudi: 75 bps hike to 3.75%
    -Indonesia: 50 bps hike to 4.25%
    -Philippines: 50 bps hike to 4.25%
    -Turkey: 100 bps cut to 12.0%

    https://twitter.com/charliebilello/status/1572937913142214656

    The decline in new single family homes sold is the fastest since… 1980…

    The buyers are gone and the music has stopped…

    https://twitter.com/WallStreetSilv/status/1572858242878816258

    The pace of Fed rate hikes is the fastest in the last 40 years…

    This is the cost of overstimulating during Covid and then being asleep at the wheel for a whole year, while churning out nonsense about inflation being transitory…

    https://twitter.com/WallStreetSilv/status/1572903542175588352

    Y’all thought you locked in a low rate but you actually just locked in a high price 😂

    https://twitter.com/NipseyHoussle/status/1572668509502509058

    You literally can’t make this shit up

    https://twitter.com/GRomePow/status/1572754173871157255

    Yo…. Who wants to tell me what happens when u see a 50% decline in your business?

    https://twitter.com/ssun5555/status/1572758657837703168

    The bear market in stocks likely won’t end until the housing bear market ends, and that’s just getting started.

    https://twitter.com/leadlagreport/status/1572759351391293440

    CarDealershipGuy

    Bro we just had a 4% decline in August and now another 2.3% in FIFTEEN DAYS ?!?

    https://twitter.com/GuyDealership/status/1572745676567744512

    If you believe the Fed today: Variable rate mortgages will be higher than they are right now, for the next 2.5 years.

    https://twitter.com/jesse_kleine/status/1572671553543995392

    The Kobeissi Letter

    The Fed on inflation:

    1. Inflation is transitory

    2. Inflation will fall to 2.0% by Jan. 2022

    3. Inflation will fall to 2.5% by Dec. 2022

    4. Inflation will fall to 4.3% by Dec. 2022

    5. NOW: Inflation will fall to 5.4% by Dec. 2022

    Has the Fed ever been more wrong than this?

    https://twitter.com/KobeissiLetter/status/1572704723647569920

    Basically, you don’t have inflation coming down to 2% even by 2025, yet you have rate cuts on the dot plot before then.

    BOOM! She likely will not be invited back.

    https://twitter.com/RudyHavenstein/status/1572660465016229889

    Occupy The Fed Movement

    People who paid the pandemic premium on housing — caused largely by the Fed’s illicit MBS purchases — will soon know how it feels to be trapped underwater on their mortgages and only able to sell for losses on their down payments. Spoiler alert: It doesn’t feel very good.

    https://twitter.com/OccupytheFeds/status/1572778783471730689

    Existing home sales fell for the 7th consecutive month, down 20% over the last year and at their lowest levels since May 2020. Following same pattern as the last housing bubble: Affordability collapses -> Sales plummet -> Prices decline.

    https://twitter.com/charliebilello/status/1572642291235393547

    2. Y’all thought you locked in a low rate but you actually just locked in a high price 😂

      And property taxes on that high price!

    3. Yo…. Who wants to tell me what happens when u see a 50% decline in your business?

      Reply to: KB Home with a good quarter but 9 month cancellation rate at 35% v 9% last year. Much more negative in the press release than Lennar. Orders expected to decline 50% next quarter.

    4. If you believe the Fed today: Variable rate mortgages will be higher than they are right now, for the next 2.5 years.

      So much for “date the rate.”

  20. How to Get Top Dollar in Softening Phoenix Housing Market
    Sep 22, 2022 As a seller in today’s real estate market, what if you could save the buyers hundreds of dollars in their monthly mortgage payment without drastically cutting your profits?

    In this video we’re showing you how to:
    *Stand out to buyers without slashing your profits
    *Create a win-win scenario where buyers get the lowest mortgage payment and you keep more of your equity

    https://www.youtube.com/watch?v=4K6OHzKe0VI

    3:35.

  22. SAN DIEGO
    Seeing a lot of homes with price reductions? Here’s why:
    Sep 22, 2022 If you’ve been watching the housing market in the second half of 2022 (or just browsing Zillow when you can’t sleep), you may have noticed that a lot of the homes currently for sale have underwent price reductions recently. There’s a simple explanation for this and luckily, it’s not bad news for Buyers or Sellers.

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

    1 minute.

    1. The Financial Times
      Markets Briefing Gilts
      Stocks and oil tumble at end of turbulent week for global markets
      Barrage of central bank rate increases has spooked investors
      New York Stock Exchange
      Wall Street’s S&P 500 slipped 1.7 per cent after the New York opening bell, putting the broad gauge on course for a fourth consecutive daily decline
      Harriet Clarfelt and Chris Flood in London 2 hours ago

      Stocks tumbled at the end of a tumultuous week, while oil prices reached levels last seen before Russia’s invasion of Ukraine, as fears over the health of the global economy rippled through financial markets.

      Wall Street’s S&P 500 dropped 1.7 per cent after the New York opening bell, putting the broad gauge on course for a fourth consecutive daily fall. In Europe, the Stoxx 600 lost 2.2 per cent — taking the regional index’s decline since its January high to more than 20 per cent, marking a shift into a technical “bear market”.

      Those moves came days after the US Federal Reserve fired the starting gun on another round of interest rate rises by other major central banks, lifting borrowing costs by 0.75 percentage points for the third time in a row to take its target range to 3 to 3.25 per cent.

      A day later, the Bank of England joined the tightening trend — jacking up rates by 0.5 percentage points to 2.25 per cent, while the Swiss National Bank took its lending rate into positive territory for the first time since 2015, at 0.5 per cent.

      Concerns have intensified in recent months that authorities will turn the screws on monetary policy to such an extent that they squash demand, exacerbating an economic slowdown. Those worries have spurred volatile trading this week, with sharp swings in stock prices and bond yields.

      Rising US interest rates and the looming threat of a recession in the world’s largest economy prompted Wall Street bank Goldman Sachs to cut its year-end forecast for the S&P 500 index to 3,600. This would imply a decline of around 4 per cent from Thursday’s closing level.

      David Kostin, an equity strategist at Goldman, said that a majority of the bank’s clients had adopted the view that a “hard landing” was inevitable for the US economy and investors’ focus was on the timing, magnitude and duration of a potential recession.

      Citi’s asset allocation team said the Fed had “all but promised a US recession” and investors should not pin any hopes on a “Santa Claus” rally for the stock market at the end of the year.
      …

    2. Stock market news live updates: Stocks crater, oil plunges as Fed, growth fears intensify
      Alexandra Semenova
      Fri, September 23, 2022 at 6:35 AM·2 min read
      In this article:

      U.S. stocks slid Friday morning as fears of aggressive Federal Reserve policy had equity markets pace towards a big weekly loss and Treasury yields continue a perilous climb to fresh highs.

      The benchmark S&P 500 tumbled 1.6% early into the session. The Dow Jones Industrial Average plunged nearly 400 points, or 1.3% to a near two-year low, falling below the 30,000 level for the first time since June. The technology-heavy Nasdaq Composite off by 1.7%.

      Meanwhile, the 10-year U.S. Treasury note spiked above 3.7%, hitting the highest level since 2010. The U.S. dollar index reached a fresh two-decade high. And in commodity markets, crude oil fell, with West Texas Intermediate (WTI) futures plunging 4.4% to $79.85 per barrel and Brent crude oil down 3.7% at $87.05 per barrel.
      …
      https://finance.yahoo.com/news/stock-market-news-live-updates-september-23-2022-105526854.html

      1. Assuming my husband doesn’t have any issues with his job would could pay that crap shack off in 10 years.

  26. Does it seem like the Goldilocks period that has prevailed since 1982 of falling interest rates and rising asset prices is currently undergoing a once-in-a-generation reset, similar to the 1979-1982 period?

    That’s how it seems to me, especially in light of Powell’s frequent references to Paul Volcker’s book.

    1. Markets
      DOW -1.91%
      S&P 500 -2.09%
      NASDAQ -2.07%

      Fear & Greed Index
      Jay Powell just went full Volcker
      Analysis by Allison Morrow, CNN Business
      Published 6:51 PM EDT, Wed September 21, 2022
      What the Fed Chair’s warning about economic ‘pain’ means for Americans
      Crypto is collapsing. Mortgage rates are soaring. Here’s what it all means

      New York CNN Business —

      Earlier this year, the idea of the Fed raising rates by three-quarters of percentage point wasn’t on the menu. But in just a few months, that sizable jump has become the norm, and it’s almost certainly sealed Jay Powell’s status as the Paul Volcker of the 2020s.

      Here’s the deal: The Federal Reserve made history today, approving its third consecutive 75-basis-point interest rate hike. Once again, the Fed is trying to wring inflation out of the economy by using the most powerful and broad lever it has — controlling how much it costs for businesses and people to borrow money.

      The benchmark lending rate is now the highest it has been since the global financial crisis of 2008, my colleague Nicole Goodkind reports.

      So, here’s what you need to know:

      – The 75-basis-point move was widely expected.

      – But markets slumped anyway because of a shift in the so-called dot plot, which indicated that the next two Fed meetings will include yet another 75-point hike and then a 50-point hike. That’s 25 basis points more than Wall Street was counting on, and investors are a delicate bunch who tend to have a conniption when caught off guard.

      – All three major US equities indexes slipped right after the Fed announcement. Then attempted a rally. Then fell again. It was a wild afternoon.

      – What’s it all mean for us regular people? Sorry to say, but the “pain” the Fed chief keeps warning about is mostly pain for lower and middle class people, who are more likely to be laid off, see their hours or wages cut, and have trouble paying credit card debt as rates go up. Mortgage rates, which are already more than double where they were a year ago, will also keep rising.

      One of Powell’s biggest critics, Senator Elizabeth Warren, was quick to fire off a tweet decrying the “extreme” hike, which the Fed itself expects will push unemployment up to 4.4% from 3.7% currently — amounting to more than 1 million jobs.
      …
      https://www.cnn.com/2022/09/21/business/nightcap-fed-powell-volcker-inflation/index.html

      1. He’s got a looong way to go to become the Paul Volcker of the 2020’s. For a while in 1982 the 2-year Treasury note was yielding 17%.

    2. September 23, 2022 5:58 AM PDT
      Last Updated an hour ago
      Bond sell-off worst since 1949, Bank of America says
      Reuters
      2 minute read
      A Bank of America logo is pictured in the Manhattan borough of New York City, New York, U.S., January 30, 2019. REUTERS/Carlo Allegri

      LONDON, Sept 23 (Reuters) – Global government bond losses are on course for the worst year since 1949 and investor sentiment has plummeted to its lowest since the financial crisis, BofA Global Research said in a note on Friday.
      …
      https://www.reuters.com/markets/europe/global-markets-flows-urgent-2022-09-23/

  29. Nobody is dying from COVID. They’re all dying from the mRNA poison injections.

    The Atlantic — The ‘End’ of COVID Is Still Far Worse Than We Imagined (9/22/2022):

    https://archive.ph/FH1RV

    No article excerpt needed. It’s all the same propaganda and lies you would expect from globalist scum media like The Atlantic.

  30. “the house hadn’t been scooped up like they expected. There were no reasonable offers…..” No reasonable offers? My ass “Nancy”. I bet you got a few fair market offers, you just don’t realize it… The equity in your house is as made up as your American name “Nancy”

  31. Replacement theory is not a theory, here globalist scum media The Guardian advocates for the replacement and eventually, the extermination of whitey.

    The US’s ‘immigration crisis’ is admitting too few immigrants, not too many (9/23/2022):

    “Contrary to our national myth of being a welcoming nation, the US currently lags well behind Australia, Canada and other countries in the share of its population that are immigrants. Under our proposal, the US would admit 75 million immigrants over the next decade, which would double the foreign-born population from 15% to over 30%, giving it the largest share of any developed nation. Admitting 7.5 million people a year would be a dramatic increase compared with recent history”

    https://www.theguardian.com/commentisfree/2022/sep/23/the-uss-immigration-crisis-is-admitting-too-few-immigrants-not-too-many

    Globalists gonna globe.

    1. Deepak Bhargava and Rich Stolz

      Are either of these clowns offering to welcome a single random “migrant” into their homes, their beds and at their dining tables? I suspect they think my house and pantry are here just for them to distribute to their amusement.

      And no, Martha’s Vineyard didn’t welcome the “migrants”. They expelled them.

      1. And no, Martha’s Vineyard didn’t welcome the “migrants”. They expelled them.’

        First they took selfies with them

  33. Stock markets down 2% – basically because Goldman slashed target to S&P 500 down to 3600 – but in the fine print mention getting to 3100. Oh well …

    Maybe CA will be sending out more stimulus checks (even to undocumenteds again)

    (Bloomberg) — Goldman Sachs Group Inc. slashed its year-end target for the S&P 500 Index to 3,600 from 4,300, arguing that a dramatic shift in the outlook for interest rates moving higher will weigh on valuations for US equities.

    The higher interest-rate scenario in Goldman’s valuation model supports a price-earnings multiple of 15 times, compared with 18 times previously, strategists including David J. Kostin wrote in a note on Thursday. “Our economists now forecast the FOMC will raise the policy rate by 75 basis points in November, 50 basis point in December, and 25 basis points in February for a peak funds rate of 4.5%-4.75%.”

    Goldman said the risks to its latest forecast are still skewed to the downside because of the rising odds of recession — a scenario that would reduce corporate earnings, widen the yield gap and push the US equity benchmark to a trough of 3,150. Federal Reserve Chair Jerome Powell has signaled that he would risk a recession to fight inflation, spurring fears that central banks may derail global growth.

    2. Goldman predicted stocks would go down by 2% by year-end. Mr Market has other ideas, as it’s already down by more than that just today.

  36. Re-post from a few days ago.

    Washington Post — Trump’s ‘big lie’ fueled a new generation of social media influencers (9/20/2022):

    “The 2020 election and its turbulent aftermath fueled a powerful generation of online influencers, a Washington Post data analysis has found, producing sky-high follower counts for an array of conservatives who echoed Trump’s false claims of election fraud, known as the “big lie.” Some doubled or tripled their audiences on Twitter, while others saw even larger gains — catapulting, like Becker, from relative obscurity to online fame.

    These accounts amassed followers despite vows by Big Tech companies to police election disinformation, The Post found. And they have gone on to use their powerful megaphones to shape the national debate on other subjects, injecting fresh waves of distortion into such culture-war topics as transgender rights and critical race theory.

    “Once they’ve gained a level of influence, they can continue to leverage that influence going forward,” said Kate Starbird, a leading expert on disinformation at the University of Washington. “Manipulation becomes embedded in the network.”

    The list of 77 was drawn from research by disinformation experts at Stanford, Harvard and Cornell universities, as well as the University of Washington. While the details of their methodologies differed, the researchers all culled Twitter for posts that spread misperceptions about the election and then determined which accounts had racked up the most retweets, spreading the “big lie” most widely.

    The list includes many well-known figures, such as Trump himself, his sons Eric and Donald Jr., Trump adviser Stephen K. Bannon and others close to the administration. It includes Trump allies who gained fame specifically for their false claims of voter fraud, such as attorneys L. Lin Wood and Sidney Powell, and prominent media figures such as Fox News’s Sean Hannity, Jim Hoft of Gateway Pundit and Josh Caplan of Breitbart News.”

    https://archive.ph/U0qxi

    A good list of sources and platforms for getting information off of the globalist scum media plantation.

  38. California to ban sales of new natgas furnaces and water heaters starting 2020. Again, it was CARB, a bureaucracy, who decided to phase them out.

    Anyway, will the gooberment be telling residents to not run their electric heaters at night when it’s cold, because of an electricity shortage?

    As the rolling blackouts become more and more common, will the Calexodus increase? Better leave now before they get that huge exit tax into place. I won’t even set foot there, I’m sure that even if you just visit for a vacation, they will try to tax your income.

    2. starting 2020.

      Pretty sure you meant 2030.

      When will California ban electricity that’s not made from electricity?

        1. As 2030 approaches I expect there will be a deluge of new furnace installations.

          Keeping old furnaces up and running past their “best used by date” could become a in demand specialty. The challenge, as it seems with everything today, will be in procuring parts, like heat exchange units.

          2. “…Keeping old furnaces up and running past their “best used by date” …”

            Furnaces are pretty low tech and have been around in various incarnations for a 100 years.

            Entry point to manufacture replacement parts, control electronics, or even complete units may well morph into the underground economy, just like meth labs.

      2. “…When will California ban electricity that’s not made from electricity?…”

        Maybe just ban electricity (except for the elites, of course).

        Just like North Korea.

    3. CA runs on bubble bucks. If there is one state that stands out as the most in need of bubble money it is CA. The smart money has been steadily leaving for years and the replacement theory now has foreign born at 27% in CA.

      Let’s fill the place with a bunch of competing cultures, remove the bubble bucks, and then turn the lights off. This is their big plan. Winning? I’m sure it will be fine.

      1. Let’s fill the place with a bunch of competing cultures, remove the bubble bucks, and then turn the lights off.

        The Yugoslavia Plan. And from an outsider’s perspective there is no discernable difference between a Serb or a Croatian, they’re all Slavs. Now try that with groups of people who are utterly different from each other. The Mexicans are already in the process of running blacks out of the state.

      2. We know lots of families who cashed out their bubble bucks in 2020-2021 and left the state for cheaper living costs. And very few people we know left in 2022, especially once it became very difficult to sell at last year’s prices.

    4. “…Anyway, will the gooberment be telling residents to not run their electric heaters at night when it’s cold, because of an electricity shortage?…”

      As a California resident, we have all got to look at the bright side: This isn’t North Korea. Oh wait a minute. Is the next step to tell everyone to forage for small rodents and edibles in your back yard? (Assuming that your backyard isn’t ‘liberated’ to build cardboard shelters for the homeless.)

      1. “…small rodents and edibles in your back yard?”

        Bug harvesting has a very small carbon footprint.

        “(Assuming that your backyard isn’t ‘liberated’ to build cardboard shelters for the homeless.)”

        Coming soon to a private hotel near you…

  41. “No Longer Employed”: Administrator At $60K Per Year NYC School Out After Project Veritas Exposé

    https://www.zerohedge.com/political/no-longer-employed-administrator-60k-year-nyc-school-out-after-project-veritas-expose

    An administrator at a private $60,000-a-year New York City school located in the city’s Upper West Side is “no longer employed” just under a month after Project Veritas published a video of her admitting to “promoting an agenda” in the classroom.

    It is unclear whether her departure was voluntary or if she was fired.

    Undercover news organization Project Veritas had on Sept. 1 published footage of Norris talking about how she and other teachers were working together to promote political agendas and left-wing ideology in the classroom.

    At the time, Norris was Trinity School’s director of student activities.

    “There’s always groups of teachers who want to do these [activist] things but the administration just wouldn’t let us,” Norris is seen in a video dated June 12, 2022 telling an undercover journalist. “So, we’ve been just sneaking things in [through] the cracks.”

    She was also captured on video complaining about “white boys” who don’t align with her worldview.

    “Unfortunately, it’s the white boys who feel very entitled to express their opposite opinions and just push back. There’s a huge contingent of them that are just horrible,” she told the undercover journalist.

    “We need to find some, like, Dexter, sort of like a vigilante, taking people out. You know the show ‘Dexter?’ … We just need some vigilante Dexters. Like, ‘Here’s your community of targets,’” she also said.

    Norris had been placed on paid leave on Sept. 2 following publication of the Project Veritas video.

    John Allman, the head of Trinity School, and David Perez, the president of the Board of Trustees, told parents in the Sept. 21 letter that the school has “retained independent counsel to investigate the matter” and that the probe into comments made by Norris is underway.

    1. Bottom line: only a limited number of electric cars can be produced. All part of the “you will own nothing” line of the Great Reset. Cars will only be for “the people who matter”.

  45. If Fed officials are opining that home prices are unaffordable for mom and pop buyers, is it safe to assume that they will try to remedy the situation?

    If so, real estate investors may want to stand back and stand buy until affordability is restored. Don’t fight the Fed!

    1. US home prices could plunge 20% by next summer as a housing recession kicks in, a top economist says
      Theron Mohamed
      Sep 23, 2022, 5:51 AM
      Download the app
      housing bubble burst
      The US housing market is in a recession, one leading economist says.
      – The US housing market is in a recession, Pantheon Macroeconomics’ Ian Shepherdson said.
      – House prices are down about 5% since May, and may slump another 20% by mid-2023, the economist said.
      – Federal Reserve officials have indicated they want a correction in the housing market.
      …
      markets.businessinsider.com/news/stocks/housing-market-recession-crash-home-prices-inflation-federal-reserve-pantheon-2022-9

  46. How are luxury home sales holding up against the Fed’s rate hikes? Presumably higher rates don’t hurt luxury home sales, as wealthy people pay cash and don’t need to borrow money to finance a purchase.

    1. Business
      High-end real estate slumps; San Diego luxury home sales plummet
      Beachfront homes in Del Mar
      Luxury home sales are down across the nation, and in San Diego. Pictured: Beachfront homes in Del Mar in January 2020.
      (John Gibbins/The San Diego Union-Tribune)
      San Diego is among the markets showing the biggest slowdown.
      By Phillip Molnar
      Sept. 22, 2022 3:32 PM PT

      San Diego luxury home sales are down by more than half as the high-end market sees its biggest drop in at least a decade.

      Out of the 50 most-populated metro areas, San Diego had the fourth highest drop in luxury sales from June to August, said a report from Redfin released Thursday. The number of sales was down 55.3 percent from the same time last year.
      …
      https://www.sandiegouniontribune.com/business/story/2022-09-22/high-end-real-estate-slumps-san-diego-luxury-home-sales-plummet

    2. 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.
      …
      https://therealdeal.com/2022/09/22/luxury-housing-market-took-its-biggest-dive-in-10-years/

    1. The Financial Times
      Markets Briefing Equities
      Global stocks fall for second straight week as central banks raise rates
      Oil prices decline to levels seen before Russia’s invasion of Ukraine
      The New York Stock Exchange
      The benchmark S&P 500 index finished the week down 4.6 per cent
      Jaren Kerr in Toronto, Harriet Clarfelt and Chris Flood in London, Nicholas Megaw in New York and Colby Smith in Washington yesterday

      Global stocks have sold off for a second straight week, weighed down by concerns over higher interest rates and the health of the economy, while oil prices declined to levels last traded before Russia’s invasion of Ukraine.

      The FTSE All-World index of global stocks fell 2.1 per cent on Friday, bringing its loss over the week to 5 per cent, the worst since June.

      Wall Street’s benchmark S&P 500 stock index finished the week down 4.6 per cent, while the tech-dominated Nasdaq Composite shed 4.16 per cent. Europe’s Stoxx 600 registered a daily loss of 2.3 per cent on Friday to officially enter “bear market” territory — typically defined as having declined 20 per cent or more from a recent peak.

      The moves came at the end of a tumultuous week dominated by hawkish central bank updates as policymakers try to stamp out soaring inflation.

      The US Federal Reserve led the charge on Wednesday, extending its most aggressive campaign to tighten monetary policy since 1981 with a third consecutive 0.75 percentage point interest rate increase while signalling further rises in the coming months.

      The Bank of England responded to its own inflation crisis by raising rates by a half-point on Thursday to 2.25, but the less-aggressive action it took compared with central bank peers helped undermine sterling. Switzerland’s central bank took a cue from the Fed and opted for the more aggressive 0.75 percentage point option in a move that brought an end to the era of negative rates in Europe.

      Central bankers in Indonesia, the Philippines, Taiwan, South Africa and Norway also followed suit this week, underscoring the enormity of the global pivot towards tighter monetary policy.
      …

    2. The Financial Times
      Opinion The Long View
      Historic sell-off in bonds shows how the investor mood has darkened
      Markets are coming to terms with the scale of central bank tightening of monetary policy
      Katie Martin
      Fed chair Jay Powell has made it clear that further rate rises are coming and that they will involve ‘pain’
      Katie Martin yesterday

      The five stages of grief are denial, anger, bargaining, depression and acceptance. For investors, the five stages of a bear market appear broadly similar.

      Bargaining came over the summer, when investors briefly took seriously the notion that central bankers might be gentle with rate rises, or even reverse them. Now we are stuck somewhere between stages four and five.

      This week has demonstrated, as if it were not already obvious, that declines in asset market valuations are simply not going away. In an extraordinary sweep, central banks from the US to Switzerland embarked on what looked like competitive policy tightening.

      Fred Ducrozet at Pictet Wealth Management totted up the numbers and found that 10 central banks delivered a massive combined total of 6 percentage points of rate rises just this week. Several rises, including the latest from the US, were of some 0.75 percentage points, three times the usual scale of rate moves. As Pimco economist Tiffany Wilding put it, “75 is the new 25”.

      Doing the most damage, for equity investors at least, the US Federal Reserve has turned up the volume on its warnings on just how much further it is prepared to go. No more sugar coating — Fed chair Jay Powell was clear that further rate rises are coming and that they will involve “pain”. He was referring mostly to pain in labour markets but the same is true of your rapidly shrinking equities portfolio.

      Stock markets got the message. The US S&P 500 fell by 1.7 per cent on Wednesday after Powell’s speech, taking losses for the year to more than 20 per cent.

      But still, it looks like investors are clinging on to some key bets. This is getting dicey. As Bank of America notes, the drop in government bonds stemming from sky-high inflation and aggressively hawkish central banks is now in truly historic territory.

      Looking at data stretching as far back as 1790 (not a typo — banks just love super long-term data for moments like these), BofA describes this as the third Great Bond Bear Market. We have seen nothing like it since at least the Marshall Plan in 1949, wrote Michael Hartnett and colleagues at the bank.

      That is striking in itself but it matters well beyond the bond market, because the crash “threatens credit events and the liquidation of the world’s most crowded trades”, they said, including US tech stocks, which of course have an outsized impact on US and global stock market shifts. “True capitulation is when investors sell what they love and own,” they added. This axiom has been worth repeating several times this year, and this week is no exception. Investors still have scope to throw in the towel.
      …

    3. Money
      Is This The Worst Year Ever For Bonds?
      Q.ai – Powering a Personal Wealth Movement
      Contributor
      Making wealth creation easy, accessible and transparent.
      Sep 22, 2022, 09:45am EDT
      Bonds are traditionally seen as a safe investment compared to stocks. But not this year.

      Key takeaways
      – With the fear of a recession, investors are looking for a safe investment with a decent return.
      – But, as bond yields rise, bond prices fall, hurting returns.
      – Since the Fed kept interest rates at such low levels for so long, inflation spiked and interest rates are trying to catch up.

      Historically, fixed-income securities have been a safe investment for investors looking to limit the risk associated with the stock market. You can invest in various durations of bonds and know that while there is a chance you could lose some money, the odds are in your favor.

      That is until 2022 came around. This year could be the worst year in history for bonds. This article will examine why this is and what you can do as an investor to protect yourself.
      …
      https://www.forbes.com/sites/qai/2022/09/22/is-this-the-worst-year-ever-for-bonds/?sh=5ffa20a62b4f

    4. Is Wall Street Actually Taking Over the Housing Market?
      A stoplight with two signs, both of which point toward Wall Street.
      (Source: Unsplash.)

      By now you’re no doubt familiar with some version of the claim that deep-pocketed investors are responsible for the misery facing millions in the U.S. and Canadian housing markets: record-high home prices and rents, and a short supply of available homes. I’m losing count of the people I know who ask me about it, or repeat assertions like these:

      “Wall Street is buying up a ton of homes and driving up prices.”

      “New housing is mostly bought by investors, not regular people.”

      “The reason there aren’t enough homes is all these speculators are hoarding them.”

      Yet there is a ton of confusion out there about this phenomenon: what the statistics you’ve seen really mean, how big a deal this is, and what it means for regular Americans who need housing.

      The truth is, large-scale investors are a potent and destructive force in the housing market, but in specific ways that don’t quite track with the more sensational headlines out there. Is Wall Street the reason you can’t find a home? It might depend a lot on where you live and what you’re in the market for.

      Here’s a demystifier.
      …
      https://www.strongtowns.org/journal/2022/7/27/is-wall-street-actually-taking-over-the-housing-market

      1. The effects of the incipient housing bust on all the investors who piled into residential real estate over the past decade hasn’t even entered the conversation yet. The sad tale of how many people lost their shirts in real estate investing after the Fed decided to slam the brakes on inflation is tomorrow’s news.

        I will mention a personal anecdote: A family we have known for a couple of decades suddenly and somewhat mysteriously pulled up their tent stakes and relocated to a less expensive state earlier this year. Their family business was real estate investing and sales. My impression was that the part of the market they relied on for business completely dried up right under their feet. It was sad to see them go.

        And they aren’t the only family that we know in the real estate business who left California over the past year, after working in the local REIC for over a decade. The canaries in the coal mine have developed breathing difficulties.

Comments are closed.