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There’s Going To Be Some Form Of Payback For All The Cheap Money

A weekend topic starting withe the Washington Post. “When the Federal Reserve raised interest rates yet again this week, the central bank’s case for how it would tackle inflation without causing a recession boiled down to: It’s unclear. What are the odds of avoiding a downturn? ‘Hard to say,’ conceded Chair Jerome H. Powell. How high will interest rates go? ‘Very uncertain.’ In an hour-long news conference on Wednesday, Powell said ‘don’t know’ four times. ‘Economists, generally, are being humbled by the experience of the past year,’ said Karen Dynan, a former chief economist at the Treasury Department who is now at Harvard University. ‘And I think the Fed is also realizing that they don’t have as good a grasp on what’s likely to happen as they might have thought earlier.'”

From Market Watch. “In August 2020, as the nation was emerging from COVID-19 lockdowns, Jay Powell’s Federal Reserve announced a monumental shift. For more than a year prior to the pandemic, the Fed had been working on a new policy framework and the pandemic wasn’t about to stop the U.S. central bank from implementing what it had been putting together. ‘The economy is always evolving,’ Powell said. The Fed interest-rate committee’s ‘strategy for achieving its goals must adapt to meet the new challenges that arise.'”

“Powell was not referring to the extraordinary economic events associated with the early days of the pandemic. Instead, the policy shift had been designed for a world of low inflation, a reality that had dragged on for some two decades. ‘The framework document came after 20 years of it being very difficult to get inflation to 2%. And so, unfortunately, the framework assumed that type of environment was going to persist,’ said former Boston Fed president Eric Rosengren, in an interview.”

From Fox 5. “‘In the last 12 weeks alone, mortgage rates have soared more than two percentage points, cutting significantly into homebuyer purchasing power and likely causing shoppers to revisit their budgets,’ said Danielle Hale, chief economist at Realtor.com. In the current rate environment, buyers of a median-priced home would have to pay nearly $1,000 more on their monthly mortgage payment than if they had bought the same house last year. ‘In order for this year’s buyer to have the same monthly payment as last year, given a 7% interest rate, the median home price would have to decline by 45% to about $235,000,’ said George Ratiu, a senior economist at Realtor.com.”

The Richmond Times Dispatch in Virginia. “Agent Ashley Rolfe said this is part of the market prices going back to their normal levels with the rise in mortgage rates tied to the Federal Reserve’s increasing interest rates. ‘If you have a low rate, you’re going to have high prices. If you have high rates, the prices are going to go back down,’ Rolfe said. ‘It levels itself off.'”

The Salt Lake Tribune in Utah. “Prices on a median-priced single-family home in Salt Lake County have plunged by almost $50,000 in three months. Even so, sales are down sharply across the Wasatch Front because interest rates keep ticking up. ‘Housing is the sacrificial lamb of the Fed right now,’ said Dejan Eskic, chief economist for the Salt Lake Board of Realtors, noting that average payments have grown by 55% in a year. ‘If you’re a financially able buyer,’ Eskic said, ‘you have a lot of opportunity right now. You have bargaining power, and you have a lot to choose from.'”

“Galloping prices in Salt Lake County since April 2020 appear to have peaked in the second quarter of this year, at $637,000, and have since nudged down 7% in just three months, to $590,000. Job losses are starting to show up in Utah’s residential real estate, mortgage and title sectors, and ‘the days of easy sales,’ a spokesperson for the Board of Realtors said, ‘are pretty much over.'”

WRAL in North Carolina. “Across the Triangle, the median sale price of property listed on the Triangle Multiple Listing Service that closed in October 2022 was $392,000, the preliminary data shows. That’s the lowest median sale price recorded in any month since February 2022, and a drop of nearly $30,000 in sale price from the prior high of $421,757 recorded in June 2022. Across the entire Triangle, homebuyers are paying 99% of the original list price to buy the property, whereas a year ago, homebuyers were paying, on average, 101.8% of the asking price.”

“‘2021 was really an anomaly,’ said Tony Fink, a licensed real estate agent. For buyers, the most important question is a personal one, said Fink: ‘Can you afford to buy a home?'”

The Nevada Current. “Housing prices are tumbling in Nevada, but with interest rates on a fixed loan at 7%, qualifying for a mortgage, even at lower prices, is a challenge for first-time buyers who often lack the income for the larger payment. Lee Barrett, incoming president of Las Vegas Realtors, calls it a ‘perfect storm.’ But not one that can’t be navigated. ‘I think it’s a natural flow of the market. Everything that goes up has to make an adjustment.'”

“The median price of a single family home was $450,000 in Southern Nevada for September, down more than 6% since peaking at $482,000 in May. Median values in the Reno/Sparks area peaked at $615,000 in May, and fell to $535,000 in September.”

KTVQ in Montana. “With winter approaching, the housing market in Gallatin County seems to be cooling down. Broker Jackie Wickens said even though the prices seem high, things are actually starting to settle. ‘Interest rates are rising and with the pandemic kind of mellowing out, we’re starting to see prices come down,’ said Wickens.”

From KDVR TV. “The housing market in Colorado has been responding to interest rates. Homes are staying on the market later, buyers are paying less than the asking price, and the median value continues to fall. According to the Denver Metro Association of Realtors, the median sales price for a single-family detached home was $622,490 in October. This is down from $630,000 from September. Sales prices have declined every month since April when they reached a record median price of $680,000.”

Southern California Newsgroup. “‘Crash, correction or chill’ looks at economic and real estate trends that offer hints about how deep housing’s troubles may be. None of the 50 states have been a home-price loser in the past 24 quarters – that’s six years! Source: My trusty spreadsheet reviewed year-over-year home-price changes for each state as tracked by the Federal Housing Finance Agency’s quarterly indexes that go back 46 years. Historically speaking, this recent loss-free pricing streak  for U.S. housing markets tops the 23-quarter streak that ended in 2006 – just before the bubble burst into the Great Recession.”

“The current no-loss streak seems in jeopardy as mortgage rates soar, purchasing wanes and recession fears grow. And California has a habit of being ahead of real estate’s curves – up or down. Between 1976 and 1999 there were only five quarters in which no state had a 12-month price loss. Since then, there have been 53 – wrapped around a market housing crash. Is this gap in a curious yardstick of housing tranquility simply a random pattern? Could this switch in volatility be the result of big-picture changes from housing’s economic standing to demographic swings to manipulation by policymakers? Or has housing’s well-known habit of being a boom-or-bust asset only gotten wilder?”

From Bloomberg. “As the Federal Reserve ramped up its hawkish policy guidance this week on still-raging inflation, the once-booming Faang megapcaps lost a further $568 billion in market value, bringing the cohort’s total capitalization to the lowest since mid-2020. With rising interest rates spurring an abrupt end to the leadership of Big Tech, the largest technology companies are wielding less and less power over broader indexes, as former high-fliers like Meta Platforms Inc. and Amazon.com Inc. crash anew in the latest wave of selling.”

“These trends have only intensified lately with American heavyweights like Amazon, Alphabet and Microsoft posting disappointing earnings — a big turnaround compared to the unbridled tech optimism of the low-rate era. ‘The single dimension that was driving those names to excess returns — that model is somewhat broken,’ said Phayre at Abrdn. ‘Come 2021, 2022 there’s a realization there’s going to be some form of payback for all the cheap money.'”

Global News in Canada. “Realtors in the Hamilton-Burlington area say October home sales are supporting ‘more balanced’ market conditions with sales below the 10-year average and new listings at levels higher than last year. Home sales continued to plunge in October, falling 40.8 per cent from the year before with new listings up 13 per cent from the same month in 2021. Inventory levels have risen from record lows by 192 per cent year over year, placing months of supply to a healthier 3.1 – an increase of 393.3 per cent from last year. ‘There is no question that we have seen a shift from the unsustainable activity that occurred throughout the pandemic as some of the supply challenges have eased,’ said Lou Piriano, president of the RAHB.”

“The average price for a detached home in October was $845,648, down 11 per cent year over year, with Hamilton’s apartment-style dwellings around $478,743. Sales in the city are down an estimated 31 per cent year over year for all property types combined. The lowest average prices continue to be in Hamilton Centre, where a home was around $536,432 at the end of October, down 11.4 per cent year over year.”

From The I in the UK. “People selling their homes should expect to slash their asking price by 10 per cent off as rising mortgage rates make homes unaffordable for many buyers. Luke Gidney, managing director of Leeds-based estate agency HOP, told i:’You need to be really realistic as a seller, if you want to sell your property you need to be realistic and consider a 10 per cent reduction on what you would have done six months ago.'”

“Half a year ago, an average house in Leeds would be put on the market at £250,000 and would be likely to sell for between £270,000 and £280,000. A recent property that was put on the market at £240,000 had to be lowered to £210,000 as an asking price, Mr Gidney said. ‘You have to work really hard to sell something at the minute. The problem we’ve got right now is the interest rates are making these properties unaffordable.’ He said the sentiment among some first-time buyers was ‘why buy now when prices next year might be 10, 20, or 30 per cent lower?’ He added that he knew of multiple buyers dropping out after an agreement because they were rethinking their decision.”

The Guardian on Australia. “Distressed housing listings are on the rise as mortgage holders struggle under the weight of seven consecutive interest rate hikes. The number of homeowners selling properties under distressed conditions has risen by about 15% since interest rates began to increase, SQM Research found, from 5,753 in May to 6,658 in October. At the same time, the housing market is slowing.”

“In the past month alone, distressed listings, where the seller is forced into making a loss or accepting a lower price than they usually would, jumped by 5.7% nationally, with increases of 7.8% in New South Wales and 7.5% in Queensland. The chair of the Property Investors Council of Australia (Pica), Nicola McDougall, said many homebuyers and investors overpaid for properties in boom market conditions last year – believing interest rates would stay low until 2024 – and were now feeling the pinch of spiking mortgages.”

“‘It’s not surprising that we’re starting to see an increase in distressed sales because of the sharp increase in interest rates this year,’ she said. ‘Mortgage repayments have increased so significantly in such a short space of time, which is starting to cause financial harm to many people, and especially those homebuyers who perhaps borrowed too much.'”

“In Sydney, values are down 10.2%, however it’s compared with a 27.7% rise in January. Melbourne values are down 6.4% since February, after rising 17.3%. Affluent inner-city suburbs have been among the worst hit. Sydney buyers agent Paul Mulligan said he’d received reports of declines in returns of up to 25% in both Surry Hills and the Northern Beaches.”


“‘I am hearing from sellers and agents that they are selling off investment properties in some areas where the return is useless,’ he said. ‘Most sellers are lots of mum and dad investors that make up the proportion of the average. People that have holiday rentals in coastal areas are also selling up.’ At the same time, just 59.8% of auctions held across capital cities in the week ending 30 October were successful, compared with 76.8% this time last year.”

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This Post Has 93 Comments

  1. ‘Powell was not referring to the extraordinary economic events associated with the early days of the pandemic. Instead, the policy shift had been designed for a world of low inflation, a reality that had dragged on for some two decades. ‘The framework document came after 20 years of it being very difficult to get inflation to 2%. And so, unfortunately, the framework assumed that type of environment was going to persist’

    Yes, the geniuses at the central bank thought they had ‘conquered inflation’, but it was globalism sending jobs to China that were at work. Now China is collapsing, globalism is on the way out and Jerry is the one swimming neeked.

    2. The Financial Times
      Hedge funds
      Hedge fund Elliott warns of more pain to come after 2022 market rout
      Prominent asset manager says ‘hyperinflation’ could spark one of the worst crises since the second world war
      Paul Singer, founder of Elliott, speaks in an interview
      Elliott Management, founded by Paul Singer, pictured, laid much of the blame for the looming crisis on central bank policymakers, which it said had been ‘dishonest’ about the causes of high inflation
      © Misha Friedman/Bloomberg
      Laurence Fletcher in London November 2 2022

      The world is on the road to “hyperinflation” and could be heading towards its worst financial crisis since the second world war, according to Elliott Management, one of the world’s biggest and most influential hedge funds.

      The Florida-based firm, which was founded by billionaire Paul Singer and manages about $56bn in assets, has warned its clients of an “extremely challenging” situation for the global economy and for financial markets where investors will find it difficult to make money.

      An “extraordinary” set of financial extremes that come as the era of cheap money draws to a close “[has] made possible a set of outcomes that would be at or beyond the boundaries of the entire post-WWII period”, it wrote in the letter, which was seen by the Financial Times.

      “Investors should not assume they have ‘seen everything’” just because they have experienced financial crises such as the 1970s bear market and oil price shock, the 1987 market crash, the dotcom bust or the 2008 financial crisis, it added.
      …
      The group’s warning comes during a dismal year for markets, in which global equities have shed $28tn in value, according to Bloomberg data, and bonds have also tumbled, leaving investors with few places to seek shelter.

      The fund manager laid much of the blame for the looming crisis on central bank policymakers, which it said had been “dishonest” about the causes of high inflation by blaming it on supply chain bottlenecks in the wake of the pandemic, rather than on ultra-loose monetary policy put in place at the height of the coronavirus crisis in 2020.

      The world is “on the path to hyperinflation”, it said, which could lead to “global societal collapse and civil or international strife”. While such an outcome is not certain, this is currently the direction that the world was headed, it added.

      Its warnings come as investors try to assess the economic damage likely to be felt from a rapid series of large interest rate increases in the US and elsewhere, as central bankers race to try to curb soaring inflation.

      The S&P has dropped 20 per cent since its peak at the start of this year, while the Nasdaq is down by one-third since its high a year ago.

      However, Elliott said markets had not fallen far enough, given the many risks present, and warned of a further reversal of the so-called “everything rally” seen near the top of the bull market of recent years, as sky-high investor exuberance lifted all manner of risky assets.

      There are so many “frightening and seriously negative possibilities” that it is hard not to think that “a seriously adverse unwind of the everything bubble” is coming, it said.
      …

  2. ‘Housing is the sacrificial lamb of the Fed right now’…noting that average payments have grown by 55% in a year. ‘If you’re a financially able buyer,’ Eskic said, ‘you have a lot of opportunity right now. You have bargaining power, and you have a lot to choose from’

    This Dejan guy was a one note ‘shortage’ fool until now.

  3. ‘the sentiment among some first-time buyers was ‘why buy now when prices next year might be 10, 20, or 30 per cent lower?’

    That’s the spirit!

  5. ‘Between 1976 and 1999 there were only five quarters in which no state had a 12-month price loss. Since then, there have been 53 – wrapped around a market housing crash’

    Wa? Shack prices only go up?

    ‘Is this gap in a curious yardstick of housing tranquility simply a random pattern? Could this switch in volatility be the result of big-picture changes from housing’s economic standing to demographic swings to manipulation by policymakers? Or has housing’s well-known habit of being a boom-or-bust asset only gotten wilder?’

    What Mr. Lansner omits is that prior to the mid 70’s, the price of shacks was roughly the same, from my hometown in Texas to Palo Alto. There should be no boom bust in shacks. The idea of lending at sub-4% seems pretty stupid with prices dropping double digits on 2 million peso mortgages.

    1. It’s a rare moment these points get discussed with any clarity in spite of the fact Lasner is likely another bonafide fraudster.

      The math, all the math shows housing prices(and all items) track wages, better known as inflation(<—-oh noes! more foot stamping!). Lasners questionable snapshot stat is simply a point anchored in time and space inside of dynamic market forces in the best case….. a rigged, fraud-riddled, price fixing market in reality.

      Lasner and the the fraudsters that keep this shitcart from going off the rails know that the world is full of people who barely understand the basics.. and for them those basics are merely disconnected pieces having no definitive form, clear meaning or relation to each other.

      1. “…the world is full of people who barely understand the basics…”

        I try to do what I can to help them out.

        Like yesterday, when I ran into an old acquaintance, a woman who bought an overpriced shack with her then-husband when we first moved to SoCal, circa 2005. They were both full-time workers (health care and law enforcement), but the house purchase cost them so much that they had no money left over to buy a stove or home furnishings. Seems the marriage didn’t survive the Great Recession, either.

        When I asked her how she was doing yesterday, she said she was thinking about getting into real estate investing. I kindly suggested she wait around six years, which is the usual time it takes for housing prices to bottom out once they start to crash, based on recent previous episodes (e.g., 1990-1996, 2006-2012). I also suggested that she should try to buy low and sell high.

    2. We went off the gold standard in the early 70’s which is when the currency became untethered fiat. This accounts for the bigger swings. However, there was still a credit cycle before that and that cycle is driven by population trends. In the US the population is generally expanding at a quantifiable rate. However, it is going to fluctuate depending on where you live. At just a 5% growth rate your population will double in about 14 years. So in the space of a typical cycle you would need approx. twice as much of everything. This sets off a boom which turns into a bust. As that bust matures the population growth continues and the failures are absorbed which lays the foundation for the next boom. The FED is just riding it and their bankster cronies are making mad stacks on it. Of course some areas have population decline so they don’t participate for most of the boom but they still join in the mania phase and suffer even more in the bust. This cycle will most likely continue until war or famine stops it.

      Once you see it, you can see the growth rings of every city through he architecture of the cycles. Cities like Phoenix want to double again. Vegas wants to double too. LA wants to double as well but it is currently at war with itself and can’t decide what it wants so price goes way up and people leave which is the only way to keep some sort of balance. It is all very cringey but it pays to get in sync with the cycle. The flood gates of population expansion are currently 100% open and Mr. Banker is already working on special programs for them to compete against you on your next home purchase. The trough of this bust will be one of the best buying opportunities of a lifetime.

        1. True and before that we still had booms and busts around the credit cycle. Housing went into manias on a number of occasions. There was the notorious FL real estate bubble of the 1920’s and one of the most important land bubbles in American history in the early 1700’s, John Law’s Mississippi Land Company that is credited with being our first bubble. We are still playing the same game just a different era.

  6. Alex Thomas
    ·
    Nov 3
    #Memphis flipper: “Up until 3 months ago, I would receive offers from investors paying cash. Now, I seem to almost always receive offers from investors getting package loans and putting 20% down, which of course is nowhere near as desirable as a quick cash closing.”
    Alex Thomas
    @housing_alex
    ·
    Nov 3
    #Nashville flipper: “Sales are slowing every month and prices are under pressure. We expect this to continue and maybe get worse.”
    Alex Thomas
    @housing_alex
    ·
    Nov 3
    #Orlando flipper: “We are now focusing on buying and holding in high-demand areas.”
    Alex Thomas
    @housing_alex
    ·
    Nov 3
    #Phoenix flipper: “Prices are declining and inventory is soaring. We’re looking to buy, rehab, and rent instead of flipping.”
    Alex Thomas
    @housing_alex
    ·
    Nov 3
    #Richmond flipper: “It isn’t worth flipping right now unless you buy at a steep discount to offset declining values. Will look to re-enter the market in 2023 after pricing has hopefully stabilized and more inventory is available for purchase at better prices.”
    Alex Thomas
    @housing_alex
    ·
    Nov 3
    #RiversideSanBernadino flipper: “We are selling homes at prices about -5% to -10% lower than we would have in the spring of this year.”
    Alex Thomas
    @housing_alex
    ·
    Nov 3
    #Sacramento flipper: “It’s time to buy and hold. Sellers in this market are in a need-to-sell situation.”
    Alex Thomas
    @housing_alex
    ·
    Nov 3
    #SanAntonio flipper: “The cost of borrowing, holding, and financing long-term rentals has tightened a lot, so after-repair value (ARV) has to be high for deals to make sense.”
    Alex Thomas
    @housing_alex
    ·
    Nov 3
    #SanDiego flipper: “Homeowners are more willing to negotiate now and are discounting sale prices drastically to account for a market that is continuing to decline.”
    Alex Thomas
    @housing_alex
    ·
    Nov 3
    #SanFrancisco flipper: “Home prices are dropping. Unless the flip is a slam dunk, we have to be cautious on the purchase.”
    Alex Thomas
    @housing_alex
    ·
    Nov 3
    #Tacoma flipper: “We are waiting for things to stabilize and will proceed from there. Interest rates are not helping.”
    Alex Thomas
    @housing_alex
    ·
    Nov 3
    #Tampa flipper: “The pressure is to the downside and sold comp data is becoming less useful. Prices are declining up to -1% per month. Lenders and other wholesalers should do more work on analyzing recent data. Data from 6 months ago is dangerous for a house flipper.”

    https://twitter.com/housing_alex/status/1588227769825116161

    1. ‘Prices are declining and inventory is soaring. We’re looking to buy, rehab, and rent instead of flipping’

      Rents, like prices, are sinking like a turd in a well in Phoenix.

      1. ‘Prices are declining and inventory is soaring. We’re looking to buy, rehab, and rent instead of flipping’

        These knife-catchers are addicted gamblers.

    2. “#Sacramento flipper: “It’s time to buy and hold. Sellers in this market are in a need-to-sell situation.”

      Unbelievable. Sacramento, like Vegas, was ground zero in the last bust. Won’t be any different this time. Buy and hold?!! What the what?!!

  7. ‘In order for this year’s buyer to have the same monthly payment as last year, given a 7% interest rate, the median home price would have to decline by 45% to about $235,000′

    Is that a lot George? Behold the danger of letting people borrow to the max.

  8. ‘Median values in the Reno/Sparks area peaked at $615,000 in May, and fell to $535,000 in September’

    Good thing everybody put 20% down.

    1. Gee, that was a quick blow-off of $80k in equity. It’s almost like somebody could lose $200k in a little more than a year or something….

    2. I know, it’s crazy here. Suspect that cockroaches fleeing Cali has a lot to do with this. IMO, this place is a total s-hole.

      1. From FDNY’s Instagram post: The cause of the fire is a lithium ion battery connected to a micro mobility device.

  13. The 2020 election was stolen.

    Joe Biden has ZERO legitimate authority to govern anything, and more importantly, Attorney General Merrick Garland has ZERO authority to prosecute anything.

    Delegitimize them. Sow the seeds of doubt. Increase public distrust. Always name the NAMES.

    Southern Poverty Law Center and Anti Defamation League are domestic terrorist organizations, who are anti American, and whose stated mission is the extermination of whitey.

    Name them. Never be afraid to name these globalists.

    1. Citizen! Our beloved USSR showed the way when it came to weaponizing the psychiatric “profession” against political dissidents, er, I mean, the incurably mentally ill. Our CCP-contracted psychiatric advisors confirm that your stubborn propagation of The Big Lie (any deviation from globalist dogma is, ipso facto, a falsehood) has resulted in a diagnosis of Oppositional Defiant Personality Disorder, which can only be treated at a specialized DNC-licensed mental institution. As soon as we import enough Democrat-on-Arrival Central American voters to gain our long-sought permanent Democrat Supermajority, a Black Maria transport will be dispatched to your house for your involuntary detention to have your mental illness treated. Forward, Soviet!

  14. “I think it’s a natural flow of the market. Everything that goes up has to make an adjustment.’”

    Heaven forbid they actually use the word “down”. So when a realtor uses the word “adjustment” looked to get hosed big time!

  15. A reader sent these in:

    Sobering from the RBA today: ‘there has been a pick-up in recent home buyers contacting community service providers’ ‘Affected households were said to have reduced their consumption of fuel.. food, and in some cases sought financing to cover their expenses.’ Debt for basics

    https://twitter.com/DaveTaylorNews/status/1588404207190581248

    Australians own 3.25m investment properties out of 10.9m total dwellings. One wonders what level of losses would make a proportion of them rethink their investments in property. In Japan and the U.S eventually losses and poor prospects saw property investing lose its lustre.

    https://twitter.com/AvidCommentator/status/1588427420222500864

    Lisa Abramowicz

    Traders are now pricing in about a 5% Fed funds rate for all of next year.

    https://twitter.com/lisaabramowicz1/status/1588483261596057600

    I’m guessing Australia must be the only country to ever have housing price moves put into hourly terms 😂

    https://twitter.com/AvidCommentator/status/1588640091085631488

    In June 2013, 68% of Aussie property investors were negatively geared (aka losing money in cashflow terms). Investors own 30% of Aussie housing stock. As far as I’m aware this factors presence to this degree is unprecedented in the history of housing crashes.

    https://twitter.com/AvidCommentator/status/1588703919378948097

    Narrative: “The Fed will pivot, they dont want to cause a recession”

    Fed: ‘Undertightening would be worse than overtightening’
    ECB: “Mild recession not enough to kill inflation”
    BoE: ‘We just raised by 0.75% into what could be the longest recession in 100 years’

    https://twitter.com/AvidCommentator/status/1588781906593984514

    Wen AirBNB zero

    https://twitter.com/DonMiami3/status/1588888573524070400

    The Kobeissi Letter

    Developments this week:
    1. Fed said interest rates have more room to rise
    2. Housing prices falling at fastest pace since 2011
    3. Widespread tech layoffs began
    4. Wells Fargo mortgage business down 90%
    5. Credit card debt hit all time high

    Recession is an understatement.

    https://twitter.com/KobeissiLetter/status/1588927872181317632

    Fed MBS holdings fell by $4 million (with an ‘m’) last week, and remain at $2.678523 trillion (with a ‘t’.) In 2008 the @federalreserve owned zero (with a ‘z’.)

    https://twitter.com/RudyHavenstein/status/1588306806102982656

    Lance Lambert

    Dallas inventory continues to rise. On a year-over-year basis, Dallas-Fort Worth-Arlington, TX inventory is up 110%.

    https://twitter.com/NewsLambert/status/1588975453263405057

    Remember when they said this ? 🤡 “we are not even thinking about thinking about raising rates until 2023.” Don’t believe anything they say has long term meaning.

    https://twitter.com/WallStreetSilv/status/1588871249526128640

    1. Traders are now pricing in about a 5% Fed funds rate for all of next year.

      Looking at that chart, it’s forecasting a rate cut by June 2023. It is non-stop wishful thinking by this pivot crowd who are getting their financial clocks cleaned on the daily.

  16. OCT 2022 Santa Clara County
    Nov 5, 2022
    OCT 2022 Stats for Single Family Homes in Santa Clara County are here!
    Active homes on market went down 10% from this time last month, with Pending and Sold Sales also down by 16% and 19% respectively. Let’s remember that we are now in a typical cycle where inventory will continue to diminish overall as we head toward the holiday season.

    The Average Days on Market bumped up by another 8%, translating into 2 days more than September, with homes taking an average of 28 days to get into contract in October. It continues to remain a steady trend of buyers purposefully taking their time before deciding to write an offer for a property and get into contract. Buyers are conscientiously watching as rates continue to rise – pushing some buyers out of the market place from hitting their affordability ceiling while other buyers take more time and negotiate with sellers. Motivated sellers have adjusted to the market shift as well.

    This is evidence in the Average Sales Price for SFHs didn’t change remaining steady with last month’s stat – still sitting just UNDER $2ML. The Average Price/SF did go down 4%, now resting at an average of $1,004/SF. Lower inventory is helping to keep sale prices from plummeting, while sellers are finding the sweet spot in their trading range so that buyers will pull the trigger to make an offer on their homes.

    The List to Sold Price Ratio, remained flat with sellers either adjusting their offer prices to reflect the shifted market or becoming more transparent in their initial offer price.
    Months’ Worth of Inventory remains near 1 ½ months and we’ll likely see inventory continue to dimmish as we near Thanksgiving holiday.

    As expected, the FED raised the prime rate by another 3/4 point and interest rates rose in anticipate of this hike. This has translated into interest rates rising by close to half a point from this time last month, with the 30 year Conforming Fixed Mortgage Rate currently resting at 7.20%.
    Economists have begun to see a turning point with inflation beginning to quell and the next FED meeting in December will be telling if they decide to begin easing on the next rate hike. Currently, the hope is to see mortgage rates begin to ease by mid-year next year.

    Buyers, it remains key to stay vigilant and keep your full approvals in place as rates continue to rise. Lenders have strategic loan products to help buyers get into properties with the plan to refinance in a couple years when rates are expected to chill and come down a bit once the dust settles from trying to quell inflation and possible event of a recession.

    https://www.youtube.com/watch?v=aE-0iCeyXWM

    7:17.

  17. The First Amendment is not being interpreted or implemented correctly.

    It does not guarantee the freedom of any religion. It guarantees the freedom to practice any denomination within Christianity, whether Protestant, Roman Catholic, Eastern Orthodox, or even Mormon.

    Weimar America is coming to an end. The election two days from now is both a rejection of Marxist globalism, and an embrace of the path to Christian Nationalist Homeland.

    Christian Nationalist Homeland?

    Yes. No globalists allowed.

    1. “The people who cast the votes decide nothing. The people who count the votes decide everything.” — Joseph Stalin

      1. I am sure they are flying in already. This is just a show for the masses….’see we are protecting the boarders.’

  19. San Jose market slowing down? Don’t worry!
    Theresa Wellman – Realtor,Nov 5, 2022
    #sanjoserealestate market continues to slow for the holiday season. Not to worry… this is very typical for this time of year. This week I take a different look than usual and segment the inventory by price point. How many high-end listings do we have in the Santa Clara County single-family home inventory?

    https://www.youtube.com/watch?v=-ATgfczNv9E

    1:16.

  20. Drop in New Home Sales give Buyers Advantages
    Luis G. Sanchez, Broker, Los Angeles
    Premiered 40 minutes ago
    Sales of newly built homes declined 10.9% September.
    17.6% behind last year’s level
    below pre-pandemic levels.
    cancellations have doubled
    Inventory rose from 8.1 to 9.2 months in September
    Its a buyer’s market
    So Builders are offer buyer Incentives
    Credit to closing costs
    $ for upgrade flooring
    $ for upgrade to restroom / kitchen
    $ for prepaid HOA
    $ for prepaid insurance

    https://www.youtube.com/watch?v=cHzHnVPSS-o

    32 seconds.

    1. Libtards reaping what they voted: NYC edition

      “The people who cast the votes decide nothing. The people who count the votes decide everything.” — Joseph Stalin

    2. It seems like the media has also avoided the “knee-grow” attacks against the “yella-fellas” despite frequent occurrences here and in the U.K. too. Despite what the 5-ft tall east coast effeminate cucks say, it [is] a thing.

      1. I’m astonished that so many Asians continue to pull the D lever despite the state-sponsored vibrancy that’s been unleashed against them.

  22. The deportations will be conducted humanely. Non-Christians and all other globalists will be permitted one carry on size suitcase of personal belongings (excluding currency, jewelery, precious metals) and $1,000 of U.S. currency to start their new lives in any number of welcoming countries in Europe, Middle East, South Asia or East Asia.

    And all of the assets confiscated from the deported non-Christians will be used to build churches and cathedrals.

    Weimar America is over.

    This isn’t your country, globalists.

  25. Re: Economists, generally, are being humbled by the experience of the past year

    The correct word is egonomists, actually.

    It is a bunch of egotists who cannot define economy or money, does not know basic arithmetic, science or history, does not possess an iota of common sense, never performs any productive work, could not run a business, cannot predict anything mathematically or logically, does everything by guesswork, prove consistently wrong at every turn and yet have the unashamed arrogance to believe that they can dictate the fortunes of a nation.

    The only solution is for them to resign en masse and return the economy to free market and honest money . . .

  26. “In the current rate environment, buyers of a median-priced home would have to pay nearly $1,000 more on their monthly mortgage payment than if they had bought the same house last year.”

    So far as I am aware, most US workers these days don’t automatically get cost of living adjustments to help them keep up with skyrocketing inflation. Plus there have been a bevy of layoff announcements recently in the tech sector. And risk asset HODLers are still coming to terms with massive negative wealth effects, due to this year’s CR8Ring of prices in the face of rising interest rates. So I am having a hard time understanding where the presumptive extra $1,000 in monthly payment is supposed to originate.

    “‘In order for this year’s buyer to have the same monthly payment as last year, given a 7% interest rate, the median home price would have to decline by 45% to about $235,000,’…”

    It seems like prices are going to have come down a lot, because incomes and household wealth don’t seem about to magically rocket upwards to enable higher monthly payments.

  28. ‘In order for this year’s buyer to have the same monthly payment as last year, given a 7% interest rate, the median home price would have to decline by 45% to about $235,000,’ said George Ratiu, a senior economist at Realtor.com.”

    That’s using yer head Georgie boy!

    1. Investor’s Business Daily
      Stock Market Today
      Dow Jones Futures Loom: Market Rally Faces Fed, Megacaps, Cloud Stocks;
      ED CARSON 11:58 AM ET 11/06/2022

      Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. Even with a solid close in Friday’s whipsaw session, the stock market rally suffered significant damage this past week, with the major indexes tumbling on hawkish comments from Fed chief Jerome Powell.

      The Nasdaq had its worst week since January as megacaps plunged and cloud software crashed.

      Apple (AAPL), Amazon.com (AMZN) and Google parent Alphabet (GOOGL) all lost more than 10% for the week, with Facebook parent Meta Platforms (META), Tesla stock and Microsoft stock not far behind. Google stock, Meta, Amazon.com (AMZN) and Microsoft (MSFT) all hit bear market lows. Apple stock and Tesla (TSLA) did not, but they’re close.

      Meanwhile, Twilio (TWLO) and Atlassian (TEAM) crashed Friday on disappointing results and guidance, losing more than 40% for the week. A slew of other software names tumbled, with or without earnings.

      A market rally trying to fight the Fed with major tech sector plummeting? That’s a tall order. So while there are some stocks and sectors showing strength, investors should be extremely cautious in the current environment.
      …
      https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-market-rally-faces-fed-megacaps-cloud-stocks-what-to-do/

      1. Business bames are all baby speak
        Yahoo. Google. Twitter. Paypal
        Of yesteryear
        International business machines
        Hewlett Packard
        Ford Motor company
        Trans World Airlines
        General Motors
        Motorola

    2. Is $568 billion alot?

      “As the Federal Reserve ramped up its hawkish policy guidance this week on still-raging inflation, the once-booming Faang megapcaps lost a further $568 billion in market value, bringing the cohort’s total capitalization to the lowest since mid-2020.”
      …

  30. TheHill.com
    Finance
    Fed’s latest hike will push up mortgage rates
    by Tobias Burns and Adam Barnes – 11/02/22 5:26 PM ET

    The Federal Reserve’s latest interest rate hike Wednesday of 0.75 percentage points is expected to intensify pressure on the housing market while pushing up mortgage rates that already have reached nearly 20-year highs.

    The interest hike announced Wednesday is the latest effort by the Fed to slow inflation by raising the cost of doing business. The interest rate hikes are also making new mortgages much more expensive, cooling the housing market while potentially raising the cost of rent.

    While announcing the new interest rate hikes on Wednesday, Fed Chairman Jerome Powell said that the economy is still far away from the point at which he expects the price of rent to come down.

    “There will come a point at which rent inflation will start to come down, but that point is well out from where we are now. We’re well aware of that,” Powell said, referring to rent increases as measured by the consumer price index and personal consumption expenditure index.

    The Mortgage Bankers Association (MBA) reacted to the Fed’s announcement by noting that peak mortgage rates have yet to come into view.
    …
    https://thehill.com/policy/finance/3716328-feds-latest-hike-will-push-up-mortgage-rates/

    1. “The average price of a property was down by 0.9% compared with September, to £268,282,…”

      Annualized rate of decline is 1-(1-0.009)^12 = 10.3%.

      Hopefully everyone put 20% down.

    1. “LOL our corrupt DoJ & FBI will get right on that.”

      No time for that they are in the final stages of planning the raid for operation Trump stole the White House cocktail napkins.

    1. Chef Boyardee

      Sean, you’re an idiot. A can of that stuff is nearly $3. It’s got 20c worth of ingredients.

  37. Warning: This post has absolutely nothing to do with housing (unless your house is located on a beach somewhere).

    “The climate ‘crisis’ isn’t what it used to be”

    https://judithcurry.com/2022/11/02/the-climate-crisis-isnt-what-it-used-to-be/#more-29307

    (snip snip)

    by Judith Curry

    Growing realization by the climate establishment that the threat of future warming has been cut in half over the past 5 years.

    Summary: The climate “catastrophe” isn’t what it used to be. Circa 2013 with publication of the IPCC AR5 Report, RCP8.5 was regarded as the business-as-usual emissions scenario, with expected warming of 4 to 5 oC by 2100. Now there is growing acceptance that RCP8.5 is implausible, and RCP4.5 is arguably the current business-as-usual emissions scenario. Only a few years ago, an emissions trajectory that followed RCP4.5 with 2 to 3 oC warming was regarded as climate policy success. As limiting warming to 2 oC seems to be in reach (now deemed to be the “threshold of catastrophe”),[i] the goal posts were moved in 2018 to reduce the warming target to 1.5 oC. Climate catastrophe rhetoric now seems linked to extreme weather events, most of which are difficult to identify any role for human-caused climate change in increasing either their intensity or frequency.

    The main stream media is currently awash with articles from prominent journalists on how the global warming threat less than we thought. Here are some prominent articles:

    NYTimes David Wallace-Wells: Beyond catastrophe: A new climate reality is coming into view.
    WSJ: Good climate change news is fit to print. Slowly its percolating into the journalistic mind that recent research is upbeat
    NYT Bret Stephens: Yes Greenland’s melting but . . .

    1. “Growing realization by the climate establishment that the threat of future warming has been cut in half over the past 5 years.”

      Up next: Burgeoning fear that we may be at risk of soon entering a new ice age.

      Fire and Ice
      By Robert Frost
      Some say the world will end in fire,
      Some say in ice.
      From what I’ve tasted of desire
      I hold with those who favor fire.
      But if it had to perish twice,
      I think I know enough of hate
      To say that for destruction ice
      Is also great
      And would suffice.

      1. Up next: Burgeoning fear that we may be at risk of soon entering a new ice age.
        No that doom and gloom scenario already happened, in the late 1970’s.
        Were were supposed to be unable to live on the surface of earth by 2020 because it would be too cold to sustain life.
        But I suppose we could go back to it, saying Florida will be covered in glaciers and …..

        1. On the rare occasions when I turn on the TV, there are non stop attacks against the GOP gov candidate: she’s to extreme, wants to ban abortion, etc. This while we are being told that Polis (D) is a shoe in for re-election. The ads don’t give me that impression.

          2. *shoo-in

            Now you made me look at the origin of the term. Came from horse racing. Anyway, I stand corrected.

  39. This is the weekend K-dn UHS show I watch but don’t post on the big show cuz it’s too long. If you got an hour:

    Suing the Inspector – FED hikes Another 75bps
    The Canadian Real Estate Show
    Nov 6, 2022

    Darryl and TK discuss the Canadian Real Estate Market in depth from their own unique perspectives with a particular focus on The Toronto Real estate Market. Today we are lucky to have Gina Athanasiou on the show.

    https://www.youtube.com/watch?v=_MMAwFpZQ-A

    One hour four minutes.

  40. CHARLIE SPIERING
    6 Nov 2022

    President Joe Biden told a climate activist on Sunday he would not allow any new drilling in the United States, just days after he complained that oil companies are not drilling enough.

    “No more drilling. There is no more drilling,” Biden said, speaking to a climate activist as he finished up a rally in New York for Gov. Kathy Hochul (D-NY). “I haven’t formed any new drilling.”

    The activist responded to Biden by noting there is still offshore drilling in the Antarctic and off of the Gulf of Mexico.

    “That was before I was president,” Biden said. “We’re trying to work on that — get that done.”

    Biden’s comment to the climate activist differed from his statements on Wednesday when he blamed oil companies for not drilling enough.

    “We haven’t slowed them down at all. They should be drilling more than they’re doing now,” he said at a rally in New Mexico. “If they were drilling more, we’d have more relief at the pump.”

    Catch Up
    @CatchUpNetwork
    ·
    Biden: “No more drilling. There is no more drilling. I haven’t formed any new drilling.”

    https://twitter.com/CatchUpNetwork/status/1589411228082122753?s=20&t=o7R5tGy9knA7JXDRWWpicA

  41. The Financial Times
    49 minutes ago 23:23
    UK house prices show steepest decline since February 2021
    Valentina Romei in London

    UK house prices fell for a second consecutive month, the sharpest drop in 20 months, as a surge in borrowing costs hit the property market.

    Average house prices slid 0.4 per cent between September and October, the most they have fallen since February 2021 and following a 0.1 per cent decline in September, the mortgage provider Halifax said on Monday.

    The monthly drop took the annual rate to a rise of 8.3 per cent in October, from 9.8 per cent in the previous month and the slowest in a year.

    Kim Kinnaird, director at Halifax Mortgages, said that “there’s no doubt the housing market received a significant shock as a result of the ‘mini’ Budget which saw a sudden acceleration in mortgage rate increases”.
    …

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