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If The Price Isn’t Compelling, The Home Is Not Selling

A report from the Union Tribune in California. “San Diego County’s home price has now dropped five months in a row. The median home price was $775,000 in October, said CoreLogic on Tuesday. It reached an all-time high of $850,000 in May. Jan Ryan, an RE/MAX agent based in Ramona, said she typically has four to six homes in escrow at any given time. Now she has none. Ryan said she is seeing many potential buyers struggling financially with higher interest rates, and many sellers are having a hard time accepting that sales prices are lower now.”

“Here’s how the San Diego County price changed by home type in October: Resale single-family home: Median of $842,000, with 1,392 sales. It is down from a peak of $950,000 in April. Newly built: Median of $840,000, with 203 sales. This figure combines single-family homes, townhouses and condos. Down from the peak of $890,500 in August. Almost all of Southern California saw price drops from September to October. Riverside County had the biggest drop, down 2.7 percent for a median of $545,000.”

The Daily Democrat in California. “Buying a home in Woodland is becoming less attainable for young adults and other prospective owners as mortgage rates rise to their highest level in decades. Ryan Lundquist, who runs a Sacramento appraisal blog, agrees that Woodland is much more affordable than Davis. The median home price in Woodland is around $570,000. That same-sized median-priced house in Davis is around $890,000, according to Realtor.com.”

“Lundquist said the market started to see a drastic change this past spring. ‘Honeymoon market – that ended in April,’ Lundquist said. ‘We are in a different arena right now where prices have been going down. The market is starting to lose steam in a lot of places in the Sacramento region…It was almost like when mortgage rates went below 3%. It was like a steroid for the market. Buyer demand went crazy.'”

News 12 in Arizona. “The Valley’s new home market is changing. Builders are offering up big incentives to get inventory into the hands of buyers.This is all happening when not too long ago buyers were competing with multiple offers. Goodyear’s Estrella community is one in the Valley filled with new houses and deals. NFM lending’s Ryan Sandell added new builds are a good buy because they understand the current market and they’re traditionally quicker to react than resale properties. So, as new home prices are dropping, incentives are being offered for sales. The lender said now is the time for buyers to go in with a plan and execute it.”

“‘You can ask for things and that’s the beauty of it,’ Sandell said. ‘I think we lost that. We became order takers on the new home sales or retail side or even lending. Now we get to go have fun with our jobs and negotiate and do what’s best for people.'”

The Dallas Business Journal. “New home prices dropped slightly in DFW North Texas builders offered more discounts and other buyer incentives, said Ben Caballero, CEO of HomesUSA.com. Selling pressure on DFW builders increased in October as inventory last month rose for the sixth straight month, with local Multiple Listing Services data showing active listings in October totaling 6,770 homes vs. 6,249 for September. ‘As inventory goes up and the pace of new home sales continue to slow, Dallas area builders are seeing a more normal real estate market – quite a change from August 2021 when new homes were flying off the shelves,’ Caballero said.”

“Average new home prices were lower in all four of Texas’ largest housing markets. The pace of new home sales slowed in October in DFW, with the three-month moving average for time on market last month increasing to 57.7 days versus 50.3 days in September. DFW pending new home sales reported to the MLS increased last month. In October, the three-month average of pending new home sales in Dallas-Fort Worth was 1,769 compared to 1,659 in September.”

From WTOP News. “The D.C.-area housing market has been slowing since summer, and the drop-off in activity in October was a wake-up call for sellers. There aren’t many buyers right now. ‘The slowdown for the Washington, D.C.-area housing market in October was dramatic. We saw a year-over-year decline in sales activity that was a bigger drop than we saw back when the pandemic hit. Back then, we saw sales grind to a halt, but the decline we saw in October was even more dramatic than that,’ said listing service Bright MLS Chief Economist Lisa Sturtevant.”

From Inside NOVA. “Sellers who found buyers for their homes in October across Northern Virginia received, on average, less than full asking price, confirming that the market is shifting if not entirely to buyers, then a certain way in their direction. For most of the pandemic era, when the local homes market titled heavily in favor of sellers, homes would sell for higher than listing price. But in October, with the exception of Falls Church, that was not true: The average sales price in Alexandria represented 98.53 percent of listing price, down from 99.48 a year before. In Arlington, the rate of 96.98 percent was down from 97.8 percent.”

“In Fairfax County, the rate of 97.95 percent was down from 99.42 percent. In Loudoun County, the rate of 98.14 percent was down from 100.17 percent. In Prince William County, the rate of 98.15 percent was down from 100.17 percent.”

Bisnow New York. “New projects in New York City are stalling as developers struggle to stitch together deals, experts said onstage at a Bisnow event this week. Sellers hoping they can wait out market volatility might find their properties are worth less than in previous years, according to Fairstead Managing Director David Murstein. ‘Appraisals right now are still looking back into a period of time where markets were strong,’ he said. ‘But once more distressed or realistic trades start happening, you’re going to see appraised values come down, loans come down … it’s going to make it hard to refinance.'”

From Bloomberg. “The Federal Reserve isn’t the only one tightening credit. Commercial banks are too. The proportion of US banks tightening terms on loans for medium and large businesses and for commercial real estate rose last quarter to levels usually seen during recessions, according to a Fed survey of lending officers. Lending standards for credit cards and other consumer loans also became more restrictive, as the Fed raised interest rates and the economic outlook darkened.”

“‘The tightening in standards by senior loan officers goes part-and-parcel with significantly higher rates and a shrinking balance sheet by the Fed,’ said Joseph Lavorgna, chief US economist for SMBC Nikko Securities America Inc. ‘They’re basically self-reinforcing.'”

From DS News. “As the housing market downshifts, sellers will need to adjust to three emerging distressed disposition trends going into 2023. This trend is already emerging in the second half of 2022 as buyers at foreclosure auction bid more conservatively to hedge against slowing home price appreciation and even a possible home price correction in some local markets.”

“The foreclosure sales rate, which represents the percentage of foreclosure auctions that result in a sale to a third-party buyer, dropped just below 50% in the third quarter of 2022—the lowest level since Q2 2020. That’s according to data from the Auction.com marketplace, which accounts for close to half of all foreclosure sales nationwide. the retail housing market is now quickly cooling in response to skyrocketing mortgage rates, causing distressed property buyers to recalibrate their calculations for maximum bid at foreclosure auction. ‘You have to be careful about fixing and flipping that you’re not catching a falling knife,’ said Paul Lizell, a Florida-based real estate investor and coach who purchases distressed properties from Auction.com.”

“‘It was different the last several years because you’re in a rising market … that makes it a little easier because you’re buying off today’s numbers,’ said Atlanta-area investor Tony Tritt, who contends that some bandwagon investors of the last few years have been overpaying for homes purchased at foreclosure auction. ‘(Now,) I give myself some room in case it goes down.'”

“Public record data from ATTOM Data Solutions shows investors purchasing 10-plus properties a year accounted for 9% of purchases at foreclosure sale in the first nine months of 2022, down from 12% in 2021 to a new record low since 2000, the earliest year data is available. By comparison, 52% of foreclosure auction sales went to these buyers at the peak of the last foreclosure crisis, in 2009.”

The Globe and Mail in Canada. “6845 19th Sideroad, Schomberg, Ont. Asking price: $2,648,000 (September, 2022). Selling price: $2.5-million (October, 2022). While this five-bedroom house roughly 60 kilometres north of Toronto was primed and staged for guests, agent Andrew Ipekian spread the word that it was coming to market. Though the sellers asked for $2.648-million, they accepted a $2.5-million offer after about two weeks. ‘There were several homes , including one across the street that’s been for sale for almost a year,’ Mr. Ipekian said. ‘If the price isn’t compelling, the home is not selling. So you want to make sure you’re pricing correctly.'”

From Devon Live. “Property prices across the UK are predicted to plummet in the coming months, as the buying bubble looks to burst. Housing experts say soaring mortgage rates are likely to push house prices down over the next 12 months, causing a significant slump in the market. Gavin Brazg, Founder of PropCast said: ‘Although a lot of Devon is still in a sellers’ market, we are seeing big drops in demand, pushing those locations further towards a buyers’ market. More properties are also coming to market.'”

“Devon estate agent, Alex Coates agreed there was evidence of a slowdown in the local housing market. He said: ‘There is no doubt that the number of transactions has dropped off, but this isn’t because Devon is becoming less appealing. Buyers flocked to Devon during the pandemic, especially second home owners and young families looking to relocate, causing a bidding frenzy for about two years.’ He added: ‘We always knew this level of activity wasn’t going to be sustainable.'”

From Domain News. “It’s an ill wind, as they say, and while some property owners have been hit hard by the slump in the value of their homes this year, buyers can rejoice at picking out homes in suburbs that are more affordable now than they were in 2017. And they suddenly have plenty of choice. The latest Domain House Price Report shows that there are no fewer than 138 suburbs around Australia where home prices are cheaper than they were five years ago, mostly units but a few houses.”

“Top of the list are apartments in Sydney’s bijou beachside suburb of Little Bay, 14 kilometres south-east of the CBD, where prices have tumbled 25.3 per cent from a median of $1,091,000 to just $815,000. Other Sydney suburbs which have recorded large drops in unit prices since 2017 are Blacktown in the west (down 18.3 per cent), Glebe in the inner west (down 18.1 per cent) and Eastwood on the upper north shore (down 17.3 per cent).”

“The next worst-hit suburb after Little Bay, however, is Perth’s inner-south-eastern suburb of Victoria Park, on the Swan River. There, the median unit price has dropped by 23.2 per cent in the last five years, down from $410,000 to $315,000. Other West Australian suburbs with the biggest unit price drops since 2017 are Maylands in the north (down 21.8 per cent) and Mount Lawley in the city (down 19.5 per cent).In Victoria, a suburb that has become more affordable now than five years ago is Melbourne’s Essendon North, 10 kilometres north-west of the CBD, with a 17.9 per cent fall from $472,600 to $388,000.”

“That means apartment buyers can find good value there, said Walshe & Whitelock agent Joe Pollina. ‘Units are cheaper now as they’re very hard to move in the north these days,’ he said. ‘There’s a bit of an oversupply of units there as a lot of car yards in Essendon North are being snapped up and being converted into apartments, especially along Keilor Road.'”

From India Blooms. “Shanghai’s home market might continue to witness the downtrend as a growing number of wealthy owners plan to cash out from their properties and leave mainland China, media reports said. Some 135,400 pre-owned flats were up for sale at the end of October, an increase of 7.8 percent from a month earlier, according to Fangdi.com.cn, the official website of the local housing administration bureau, reports The South China Morning Post.”

“The additional second-hand homes put up for sale have exacerbated bearish sentiment in the city’s property market. Worries have been mounting that a major policy shift after President Xi Jinping secured an unprecedented third term as leader of the world’s second-largest economy would eat into rich people’s nest eggs. Eddy Zhou, a 48-year-old Shanghai resident, told the newspaper he would dump his home worth more than 10 million yuan (US$1.4 million) as his family plans to emigrate to Portugal.”

“‘A downward trend [in home prices] is taking shape and we will have to close deals as early as possible to avoid a further market downturn,’ he said. ‘More middle class people in Shanghai and China will leave the country in the coming years as they are increasingly worried about prospects for the economy.'”

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This Post Has 87 Comments

  1. ‘The slowdown for the Washington, D.C.-area housing market in October was dramatic. We saw a year-over-year decline in sales activity that was a bigger drop than we saw back when the pandemic hit. Back then, we saw sales grind to a halt, but the decline we saw in October was even more dramatic than that’

    Golly Lisa, worser than yer urine soaked mattress days? Sux to be you – and taxpayer, if he ever pulled his head out of his a$$.

  3. From the Woodland, CA piece: “People have begun to call Woodland “Wavis” after many students have resorted to moving to Woodland for cheaper options, according to Fregoso.”

    Davis, CA is home to a UC campus, and their students generally come from well to do families.

    1. I remember we had a housing bubble commenter from Davis years ago, maybe a decade now. I hope things worked out for her.

    2. Davis, CA is home to a UC campus, and their students generally come from well to do families.

      I remember back in the day when the Davis campus was a top choice for UC students from the Bay Area. Berserkly was impossible to get into, and Davis was closish to the Bay Area. I learned that the Bay Aryan kids did NOT want to go to UCLA, UCSD or UC Irvine, UC Santa Barbara or UC Santa Cruz (Uncle Charlie’s Summer Camp).

      1. My oldest went to UC Davis I remember many drives up interstate 5 .
        Woodland is kinda sucky I stayed in hotels there when Davis was all filled up , plenty of homeless but when he moved to Oakland it was WAY worse. Now back in Ventura County working at Amgen so it’s worked out. Oakland actually Emeryville oh no what a mess. Avoid.

        He payed off his student debt now he feels like a sucker with Biden and student loan forgiveness. Oh well

        1. Goodyear’s Estrella community my brother had a house there very remote place I didn’t really like it. He just got his catalytic converted stolen. I like the Chandler area of Phoenix that’s where I lived for awhile.

        2. “He payed off his student debt now he feels like a sucker with Biden and student loan forgiveness.”

          I just read that Biden intends another extension. WTF?

          1. I just read that Biden intends another extension. WTF?

            The rationale is to defer payments until the case reaches the Supremes. I don’t know why he thinks they will rule in his favor.

      2. “I learned that the Bay Aryan kids did NOT want to go to UCLA, UCSD”

        So they’d pass up top tier schools to go to Davis hinterland? Sounds like a typical Bay Area idiot.

      3. I learned that the Bay Aryan kids did NOT want to go to UCLA

        Granted I graduated form UCLA in 1996, but a lot of my friends and classmates were from the Bay Area.

        2. I met a lot of UCSD students who ended going there because they couldn’t get into Davis. I was nonplussed. Where would I rather live, in La Jolla or Davis? What a tough choice!

          2. Keep in mind that this was a loooong time ago. But even back then, UCSD was uber-nerd, so I wouldn’t be surprised if Davis was “inferior” back in the stone age.

  4. ‘But once more distressed or realistic trades start happening, you’re going to see appraised values come down, loans come down … it’s going to make it hard to refinance.’”

    So stop believing the realtor who tells you not to worry about the rate, you can always refinance later when the rates drop. Rates can drop to zero, but if your value drops qualifying for a refi goes bye-bye!

  5. ‘San Diego County’s home price has now dropped five months in a row…Almost all of Southern California saw price drops from September to October’

    I think we know what Thornberg will be dining on tomorrow.

  6. ‘Public record data from ATTOM Data Solutions shows investors purchasing 10-plus properties a year accounted for 9% of purchases at foreclosure sale in the first nine months of 2022, down from 12% in 2021 to a new record low since 2000, the earliest year data is available. By comparison, 52% of foreclosure auction sales went to these buyers at the peak of the last foreclosure crisis, in 2009’

    This is interesting. Auction.com is automated. So they know exactly what’s selling, for how much, and what’s not selling. If the auction guys are stepping back sentiment has changed. There’s nothing like a foreclosure auction to register the market. They start with a reserve number, and if no one raises the paddle that settles the matter right then.

  7. ‘We became order takers on the new home sales or retail side or even lending. Now we get to go have fun with our jobs and negotiate and do what’s best for people’

    As opposed to before when you were shoehorning fools into loans, right Ryan?

    1. “As opposed to before when you were shoehorning fools into loans, right Ryan?”

      Gotta earn that coffee! LOL

  8. ‘active listings in October totaling 6,770 homes vs. 6,249 for September…The pace of new home sales slowed in October in DFW, with the three-month moving average for time on market last month increasing to 57.7 days versus 50.3 days in September. DFW pending new home sales reported to the MLS increased last month. In October, the three-month average of pending new home sales in Dallas-Fort Worth was 1,769 compared to 1,659 in September’

    This is a little confusing. So are they selling 1,769 new shacks in 3 months? Cuz with almost 7,000 new shacks for sale, that a lot more DOM than 57.

  9. ‘It’s an ill wind, as they say, and while some property owners have been hit hard by the slump in the value of their homes this year, buyers can rejoice at picking out homes in suburbs that are more affordable now than they were in 2017. And they suddenly have plenty of choice’

    Domain does this every few months. Day after day it’s to the moon Alice! Then, oh there are areas in Melbourne, Sydney, Victoria and Perth where people have been underwater for 5 years!

  10. A reader sent these in:

    CarDealershipGuy

    Exotic car market is getting decimated right now. 2021 Mercedes G-Wagon with 3,378 miles just sold for $187K at auction. that’s nearly an $80K (or 30%) drop in under 12 months.

    https://twitter.com/GuyDealership/status/1595093193640808450

    Rick Palacios Jr.

    26% cancellation rate for home builders in October. Tomorrow’s new home sales release won’t reflect what’s really happening with dropped contracts.

    https://twitter.com/RickPalaciosJr/status/1595106749421260802

    Rick Palacios Jr.

    Regionally, October home builder cancellation rates were highest in the Southwest at 45% followed by Texas at 39%.

    https://twitter.com/RickPalaciosJr/status/1595109998866337792

    Redfin

    The share of homes with a price drop continued to climb in October amid a cooling housing market. The areas with the largest share of homes with a price drop were Boise, ID (69%), Denver (57%), Indianapolis (55%), and Salt Lake City (55%)

    https://twitter.com/Redfin/status/1595113416020074498

    Nancy Pelosi Stock Tracker ♟

    Sam Bankman-Fried’s parents bought 19 properties worth $121M over the past two years
    $1B of clients funds are still missing at FTX
    $70M was traced to political campaign donations
    $300M was cashed out by Sam himself
    $121M now traced to his parent’s property
    It never ends.

    https://twitter.com/PelosiTracker_/status/1594951709817655296

    Investor buying of homes dropped 30% in the third quarter, hurt by a rise in borrowing rates and high home prices

    https://twitter.com/TaylorAMarr/status/1595073856884150272

    John Wake

    Phoenix houses used to be more affordable than the U.S. average but now Phoenix houses are less affordable than the U.S. average, according to this graphic from the Atlanta Fed. (That’s gotta hurt future econ development.)

    https://twitter.com/JohnWake/status/1595083023631925249

    Danielle DiMartino Booth

    Why was Powell so dismissive of “lag” at his November post-FOMC presser? Perhaps he knows what we’ve written about @Quillintel
    – that the delayed reaction to monetary policy tightening is transmitting at a MUCH quicker pace vs prior cycles w/housing reflecting most.

    https://twitter.com/DiMartinoBooth/status/1594746905183010819

    Most consumer credit data doesn’t even include the BNPL subprime loan brewing monster

    https://twitter.com/texasrunnerDFW/status/1594771744878956550

    Realtors, serious question for you. When you have to announce a huge price reduction aren’t you a little bit embarrassed that you were so off? I just got an email for a $300k reduction and my first thought was “wow she was way off”.

    https://twitter.com/Chris_Smth/status/1595082818958368770

    $ARKK could compound at 10% per year until 2037 and still not get back to Feb 2021 levels.

    https://twitter.com/Keubiko/status/1595198742482788352

    John Wake

    “In other words, the typical home across Canada has declined by $132,900 this year.”
    That seems impossible. But those earlier skyrocketing prices also seemed impossible. We don’t understand the real estate market.

    https://twitter.com/JohnWake/status/1595181284652814338

    Lisa Abramowicz

    Tech layoffs deepen, with HP cutting as many as 6,000 jobs over the next three years.

    https://twitter.com/lisaabramowicz1/status/1595178305103155201

    Luckily all those high tech employees getting laid off don’t own all the luxury housing or else we’d really be in trouble

    https://twitter.com/GRomePow/status/1595178458128125952

    Ryan Lundquist
    @SacAppraiser
    STAT: 72% of Opendoor’s active listings in the Sacramento region are listed below what they paid for the property. This doesn’t account for future price drops needed, real estate fees, repairs, or holding costs. The biggest difference is a property $280,500 below acquisition.

    https://twitter.com/SacAppraiser/status/1595171003746832384

    Isn’t RE an inflation hedge?!! 🤡

    https://twitter.com/chernobelskiy/status/1595170554050269185

    Realtor.com Economics

    Jiayi Xu: rent declined in Riverside, CA (-4.7%), Sacramento, CA (-3.4%), Tampa, FL (-2.5%), and Las Vegas, NV (-2.5%) on a year-over-year basis for a second month.

    https://twitter.com/RDC_Economics/status/1595122440828465153

    Lance Lambert

    Back in January 2022, Austin home values were up 47% on a year-over-year basis. As of November 2022, Austin home values are up just 2% YoY. Here’s a searchable chart for the nation’s 100 largest markets:

    https://twitter.com/NewsLambert/status/1595162600123543552

    So SBF’s parents – both Stanford law professors with endowed chairs and both specialists in tax law – thought it was just fine for their son’s company to give them a multimillion dollar vacation home in the Bahamas. And all this will go away if they “return the property” to FTX.

    https://twitter.com/EpsilonTheory/status/1595152511975186432

    Uhh sweet

    https://twitter.com/NipseyHoussle/status/1595137914148917248

    1. ‘Sam Bankman-Fried’s parents bought 19 properties worth $121M over the past two years
      $1B of clients funds are still missing at FTX
      $70M was traced to political campaign donations
      $300M was cashed out by Sam himself
      $121M now traced to his parent’s property’

      This is what I mean when I say if you don’t have internal controls, somebody will steal yer money. In this case the CEO.

      1. Are any of these people going to actually go to jail?

        Democrat Party is the party of institutionalized corruption. There are zero consequences for the crime of Democrat Party.

        2. Are any of these people going to actually go to jail?

          The answer is no, because the rule of law has been lost in the USA. They’re just stealing everything now.

    2. Tech layoffs deepen, with HP cutting as many as 6,000 jobs over the next three years.

      FWIW, HP has been steadily shrinking headcount for years. Its inkjet product line, which was once a goldmine, is a shadow of its former glory.

    3. “Luckily all those high tech employees getting laid off don’t own all the luxury housing or else we’d really be in trouble”

      I don’t think anyone is anticipating just how bad the real estate market in California is going to get. Millions have already exited, replaced by migrants and homeless, most of the people I know who haven’t already left want to leave, Silly Con valley is imploding and Hollyweird is wokefying itself to death.

  11. Evidently Lorena Bobbitt’s daughter has been found working as a gas station clerk in Texas.

    Police: Texas Gas Station Clerk Shoots Man Who Broke Jar of Salsa

    KATHERINE HAMILTON
    22 Nov 2022

    Officers discovered that Miranda told the man to leave the store and then they began to argue, “at which point the man broke a jar of salsa before storming outside,” the report states.

    According to Fox News, she allegedly followed the man outside, grabbed a handgun from her car and shot at the man two times. The man’s condition is unclear.

    https://www.breitbart.com/crime/2022/11/22/police-texas-gas-station-clerk-shoots-man-who-broke-jar-salsa/

  13. This is theft from taxpayers.

    “Federal student loan borrowers — and the courts — have more time to figure out what’s going on with debt forgiveness before payments resume. The payment pause has been extended through June 30, 2023.

    In a video posted to Twitter on Tuesday, President Joe Biden emphasized his administration’s efforts to provide relief to borrowers through forgiveness that has been hampered by “Republican special interests and elected officials.”

    https://www.cnbc.com/2022/11/23/student-loan-payment-pause-extended-again-what-borrowers-need-to-know.html

    Pay your debts, deadbeats.

    And FJB.

    2. What I would like to know is when the folks who have student loans who have no payments due to the ongoing no payment extensions.
      If they went to qualify for a mortgage does the student loan lower how much they qualify fir the mortgage or since no payment is due does it even show as a debt?

      1. “…since no payment is due does it even show as a debt?”

        A credit report still indicates their outstanding balance. The gov intervention is currently preventing that debt from growing.

  14. “Ryan said she is seeing many potential buyers struggling financially with higher interest rates, and many sellers are having a hard time accepting that sales prices are lower now.”

    The tsunami tide of liquidity has washed out to sea, leaving behind a horde of naked swimmers on the beach.

  16. This guy needs to be hanging from a rope.

    “Speaking at his final White House press conference before stepping down as Director of the National Institute of Allergy and Infectious Diseases (NIAID), Chief of the NIAID Laboratory of Immunoregulation, and Chief Medical Adviser to President Joe Biden, Fauci sounded the alarm, not only urging testing and vaccination but contending that the “real danger” will be among unvaccinated Americans.

    https://www.breitbart.com/politics/2022/11/23/anthony-fauci-claims-the-real-danger-will-be-among-the-unvaccinated-this-winter/

    COVID “vaccines” are not vaccines they are deadly experimental mRNA poison designed and intended to kill you.

    FJB

      1. Actually I have avoided reading much about it as I am waiting on a WSJ or Economist version once all the details have been sussed out.

        1. Fake money, fake wallets, fake storage, money laundering and Ponzi scheme. Did I miss anything important?

  18. Not sure if you saw that new house sales rose last month – probably some sort of statistical deviation. However, REIC is making a little hay of it – being the only good news other than 30yr are just a little bit below 7%

    Sales of newly built homes rose in October from the prior month, led by sales of higher-priced homes, offering a little relief for a housing market that has been clobbered by the rapid doubling of mortgage rates.

    New-home sales rose 7.5% in October from September to a seasonally adjusted annual rate of 632,000, the Commerce Department said Wednesday. That marked a reversal from the previous month when new-home sales fell about 11% in September from August.

    Still, new-home-sales figures can be volatile and are often revised, and the sales in October fell 5.8% from a year earlier. That marked the eighth straight month of year-over-year decline in sales. The sales data don’t capture cancellations, which have risen in recent months. Builders have also slowed construction

    3. I just received an email from RiteAid indicating that Pfizer has another new vaccine out to deal with the latest variants.

      “Click here to schedule an appointment”

        1. I received my original two COVID shots from our county health department and three boosters from RiteAid. Maybe they’re surprised that I’m still here?

          1. They’ve got you addicted. Pretty soon, you’ll be contacting them first. “Hey, can I get another jab?” “Buddy, slow your roll, you’ve already had 8 this week.”

  20. Happy Thanksgiving! A big shout-out to Ben and the rest of the HBB bloggers! Too bad we missed out on all of that housing FOMO stuff! I was so looking forward to overpaying for a depreciating asset with high carrying costs…

    Let’s see, Thanksgiving, Christmas, Easter; all Christian-based holidays. Oh my! Somehow we’ve morphed into a post-Christian nation when I wasn’t looking! Not sure to whom the atheists are giving thanks to tomorrow? 🙂

    This recent post sums up the current situation to me. 2023 should be one for the record books, and I’m not meaning in a good way either.

    —————-

    https://zensecondlife.blogspot.com/2022/11/all-one-ponzi-scheme.html
    ZEN SECOND LIFE
    Life outside the corporate Matrix
    Tuesday, November 22, 2022

    ALL ONE PONZI SCHEME

    “The era of financialization began with the U.S. abandoning the Bretton-Woods Gold exchange standard in 1971. It was a constraint on unlimited U.S. borrowing, so it had to go. In the event, the U.S. dollar became the world’s first fiat reserve currency. Now, decades later we learn that nothing could be more lethal than an unlimited credit card collateralized by “free trade”, in the hands of a generation that inherited the greatest economy in history. There goes the industrial sector and the middle class.”

    “What we got in return was secular deflation. Meaning that global supply far exceeds demand. Yes, even now. What passes for inflation now is end of cycle Ponzi inflation already imploding in broad daylight.”

    “Today’s inflation is the very definition of transitory – nevertheless it has been inadvertently conflated as the 1970s horror show “Return Of The Middle Class”. Leading to what I call the Volcker gambit – raising rates at the fastest pace in history in the midst of a record global asset bubble collapse. Without question, the dumbest economic event we’ve witnessed in our lifetimes.”

    —————-

    God bless America, and may America bless God!

    “if my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then I will hear from heaven, and I will forgive their sin and will heal their land.” – 2 Chronicles 7:14

        1. It certainly fits the Narrative that the family is an anachronism best consigned to the dustbin of history. Mom and Dad are idiots, until you need a favor, of course.

  24. Is your FUD holding you back from buying the dip in cryptocurrency?

    I don’t understand the calls for regulation in the wake of the FTX collapse. As evidenced by the rising stock market in the wake of the FTX implosion, cryptocurrency losses were contained to crypto investors. The free market performed exactly as God intended it to perform. There is no need for costly and disruptive regulation that would most likely only serve to increase systemic risk, financial fragility and exposure risk to costly bailouts in the non-crypto economy.

    Leave cryptorisk in the cryptoverse, and stay away from my wallet.

    1. Crypto needs less regulation, not more
      by Thomas L. Hogan, opinion contributor – 11/21/22 1:00 PM ET
      The FTX logo and mobile app adverts are displayed on screens
      Getty Images
      In this photo illustration the FTX logo and mobile app adverts are displayed on screens on November 10, 2022 in London, England.

      Recent weeks have witnessed another disaster for the cryptocurrency industry. FTX, one of the largest crypto exchanges, failed. The price of bitcoin, the largest cryptocurrency, fell by more than 20 percent. Industry-wide exposure to FTX is still unknown, with the solvency of several companies still in question.

      Crypto critics, including Securities and Exchange Commission (SEC) Chair Gary Gensler, have used this event as a call for greater regulation. However, traditional regulations may actually worsen financial risk in the crypto industry. Decentralized blockchain technology provides better solutions for protecting consumers and reducing financial risk.

      This year has seen a series of failures of high-profile crypto companies. The $25 billion crypto lender Celsius failed and has been accused of misrepresenting its risk exposure. Three Arrows Capital (3AC), the $10 billion hedge fund, was based out of Singapore but filed for bankruptcy in New York. Now, FTX adds another major collapse, which appears might be from fraudulent and illegal activities.

      As many within the industry have noted, however, these failures were all of traditional financial companies operating in the crypto space. They were not decentralized exchanges or protocols. Their failures came from problems common to many traditional financial companies: illiquidity, insolvency, and in some cases perhaps outright fraud.

      Decentralized blockchain technology can limit or eliminate these risks in simple and transparent ways. Every transaction on the blockchain is publicly viewable. Access to funds can be restricted to authorized parties. Requirements such as minimum levels of liquidity and collateral can be programmed into the code of the protocol to limit or eliminate financial risk.
      …
      https://thehill.com/opinion/finance/3744748-crypto-needs-less-regulation-not-more/

    2. Congressmembers Tried to Stop the SEC’s Inquiry Into FTX

      The ‘Blockchain Eight’ wrote a bipartisan letter in March attempting to chill the SEC’s information requests to crypto firms. FTX was one of those firms.

      by David Dayen
      November 23, 2022

      Rep. Tom Emmer (R-MN), chairman of the National Republican Congressional Committee, makes his way to the House Republicans’ candidate forum in the Capitol Visitor Center on November 14, 2022.

      The Securities and Exchange Commission was seeking information from collapsed cryptocurrency exchange FTX earlier this year, the Prospect has confirmed, bringing a new perspective to an effort by a bipartisan group of congressmembers to slow down that investigation.

      The March letter from eight House members—four Democrats and four Republicans—questioned the SEC’s authority to make informal inquiries to crypto and blockchain companies, and intimated that the requests violated federal law.

      Rep. Tom Emmer (R-MN), whom the Republican caucus just elected as majority whip, the number three position in the House GOP leadership, led the letter. In a contemporaneous Twitter thread, Emmer wrote: “My office has received numerous tips from crypto and blockchain firms that SEC Chair @GaryGensler’s information reporting ‘requests’ to the crypto community are overburdensome, don’t feel particularly … voluntary … and are stifling innovation.”
      …
      https://prospect.org/power/congressmembers-tried-to-stop-secs-inquiry-into-ftx/

  25. Premium Home
    Markets
    ‘No buyers in sight’: A senior economist says home prices will fall by 25% as supply and demand dynamics in the housing market have created a perfect environment for declines
    William Edwards
    Nov 22, 2022, 8:30 AM

    When Interactive Brokers Senior Economist José Torres said this July that he saw a 2008-sized crash in home prices coming, 30-year fixed mortgage rates were around 5.5% and the June reading of the S&P/Case-Shiller US National Home Price Index had just hit new highs. 

    Soon after, mortgage rates continued their surge this year, rising above 7%
    …
    https://www.businessinsider.com/housing-market-crash-home-price-declines-coming-interactive-brokers-2022-11

    1. Real Estate
      Prices Would Have to Fall 25% for Homes to Be Affordable Again: Study
      By: Pete Grieve
      Published: Oct 24, 2022 5 min read

      It’s unlikely that the cost of purchasing a home will return to a normal level of affordability anytime soon.

      To buy the typical U.S. home at today’s mortgage rates, the median household would need to spend 30.2% of their income on monthly payments, according to a recent report from Zillow, which describes the affordability outlook for mortgages as “bleak.”

      The amount the median household would have to spend on mortgage payments is 7.4 percentage points higher than the average from 2005 to 2021 of 22.8%.

      For affordability to return to the average level from that period, home values would need to fall by 24.7% — assuming mortgage rates are 6.5%.

      A decline that large would be a return to where home values were in fall 2020. It would mean a drop of roughly $88,000 in the value of the typical home, from $358,283 (the typical value in September 2022) down to $269,686, according to Zillow.
      …
      https://money.com/home-prices-need-to-fall-affordable/

    2. I went back to Reddit, where I found the full story for free:

      r/REBubble – ‘No buyers in sight’: A senior economist says home prices will fall by 25% as supply and demand dynamics in the housing market have created a perfect environment for declines

      When Interactive Brokers Senior Economist José Torres said this July that he saw a 2008-sized crash in home prices coming, 30-year fixed mortgage rates were around 5.5% and the June reading of the S&P/Case-Shiller US National Home Price Index had just hit new highs. 

      Soon after, mortgage rates continued their surge this year, rising above 7%. 

      National home prices also officially started to fall.

      Given the shifting data, consensus views on the housing market have generally become more bearish in recent months, swaying toward Torres’ outlook. 

      But falling inflation may again mean a rosier outlook for investors and homeowners.

      The Consumer Price Index cooled in October, with inflation hitting 7.7% year-over-year, down from 8.2% in September and 8.5% in August. Though the Federal Reserve has said they will continue tightening policy in the months ahead (and that they intend to keep it tight once they pause rate hikes) to bring down inflation, the CPI’s downward trend has some anticipating that the central bank will be able to pivot back to dovish policy next year.

      Mortgage rates — like bond yields — have started to fall over the past few weeks, which is good for demand.

      But Torres disagrees with the notion that inflation will continue falling in a rapid manner and that the Fed will be able to pivot. These views are at the crux of his call, which he reiterated this week, that home prices will fall around 25% on the Case-Shiller Index by the second half of 2023.

      Such a decline on a national scale would be similar to the home-price slump seen during the 2008 crisis, when the index fell 27% from its peak in July 2006 through its bottom in February 2012. Case-Shiller data, being an average of the prior three months, lags more than other home price data. But individual cities like Phoenix and San Francisco had it worse during the crisis, with price declines of up to 30%. As of September 2022, the average home price in Phoenix had dropped 10% from June, according to Realtor.com.

      Torres told Insider that he expects the fed funds rate to peak at around 5.38%, whereas the market consensus is 5.13%. He also said inflation will stay high for longer than consensus because of the number of job openings that still exist and the elevated wages that employers will continue to have to pay. If inflation does fall quickly and the Fed pivots to dovish policy, the declines won’t be as big, Torres said. 

      Supply and demand dynamics have created a ‘perfect storm’

      Torres believes supply and demand dynamics have moved in a way that will create significant declines ahead.
      …
      https://www.reddit.com/r/REBubble/comments/z2v8h3/no_buyers_in_sight_a_senior_economist_says_home/

    1. The Financial Times
      Chinese business & finance
      China’s state banks seek to boost property sector with $30bn in credit lines
      Vanke and Midea first to benefit from government support package
      A Vanke construction site in Dalian, China
      Vanke is one of China’s largest developers and one of few to retain an investment-grade rating
      Cheng Leng in Hong Kong and Thomas Hale in Shanghai 16 hours ago

      China’s state-owned banks have launched a concerted effort to strengthen the finances of the country’s struggling property developers, with more than Rmb220bn ($30.7bn) being announced on Wednesday in new credit lines.

      Bank of Communications, China’s sixth-largest bank by assets, was the first to announce support, agreeing a Rmb100bn credit line for Chinese developer Vanke and Rmb20bn for Midea Real Estate, in a clear sign of greater government support for stronger players in the real estate sector.

      BoCom said the loans would support the developers’ needs in “project developments, mortgages, merger and acquisition deals, bond investment, letter of guarantee and supply chain financing”.

      Bank of China, the fourth-biggest bank in China, later announced it would offer another Rmb100bn credit line to Vanke, while the Agricultural Bank of China, the country’s third-largest lender, said it would also offer credit lines to five developers — Vanke, China Overseas Land and Investment, China Resources Land, Longfor and Gemdale — but did not reveal any figures.

      Industrial and Commercial Bank of China, the country’s biggest bank, is also considering a credit line package in the dozens of billions to developers, including Longfor and Country Garden, according to domestic media reports. ICBC did not immediately comment.

      More state bank credit offerings to developers would be announced in the coming days, said one person familiar with the situation, who said the moves were aimed at showing strong state support for easing the liquidity crunch being experienced by developers.

      The state banks’ loans are the first significant offering to developers after regulators decided on a support package last week that was widely interpreted as a turning point for the sector. The 16-point property relief measures were officially published on Wednesday.

      The industry has been plagued by construction delays for more than a year after liquidity issues at Evergrande, the world’s most indebted real estate company, spread across a sector that contributes more than a quarter of the country’s economic activity.

      Support for Vanke, one of China’s largest developers and one of the few to retain an investment-grade rating, indicates the opportunities for survivors in a market where sales are still sinking and projects remain incomplete.

      Vanke’s fate contrasts with that of Evergrande, which defaulted last year along with a host of its peers including Kaisa and Fantasia and struggled to obtain any new financing. The company, which has liabilities of around $300bn, is in the middle of a drawn-out restructuring process and has not provided a clear plan to investors.
      …

    1. DCG’s Barry Silbert reveals crypto firm has $2 billion in debt as he tries to calm investors after FTX
      Published Wed, Nov 23 2022 6:22 PM EST
      Updated Wed, Nov 23 2022 6:24 PM EST
      Ari Levy
      MacKenzie Sigalos

      Key Points
      – In a note to DCG shareholders, Silbert addressed all the “noise” surrounding the company, indicating that most of its entities are “operating as usual.”
      – The trading unit Genesis has encountered problems on the lending side due to “market turmoil,” Silbert wrote.
      – Silbert said the company as a whole is on pace to generate $800 million in revenue this year.
      …
      https://www.cnbc.com/2022/11/23/dcgs-barry-silbert-writes-letter-to-investors-after-ftx-collapse.html

    2. FTX Contagion Revives Dreaded 2022 Crypto Knell – the ‘Withdrawal Halt’
      The downfall of the FTX exchange has caused a domino effect: a growing list of crypto firms, such as BlockFi and Genesis, halting withdrawals. CoinDesk counted 16 of these announcements just this year.
      By Jocelyn Yang
      Access Time Nov 23, 2022 at 12:23 p.m. MST
      Updated Nov 23, 2022 at 3:13 p.m. MST
      CDCROP: Hand up stop no more halt (Nadine Shaabana / Unsplash)

      In the crypto industry in 2022, the phrase “halting withdrawals” is like black smoke billowing out of a building. Damage is certain.

      Technically it means that a crypto exchange or lender has gated customers from being able to get their money or digital tokens back – typically because there’s just not enough assets on hand to meet redemption requests. The likely upshot, though, is that the business is unlikely to recover easily from the destruction. In many cases, a bankruptcy filing is the next step.

      Now, the rapid unraveling of once-billionaire Sam Bankman-Fried’s crypto empire, including the FTX exchange and the crypto trading firm Alameda Research, has unleashed a fresh wave of crypto exchanges and lenders halting customers’ withdrawals over the past few weeks.

      The collateral damage lengthens a list of casualties from the dramatic collapse of the Terra blockchain earlier this year, which accelerated or led directly to the failures of crypto firms including Celsius Network, Babel Finance, Voyager Digital and Three Arrows Capital.

      (CoinDesk counts 16 distinct withdrawal-halt announcements this year; the list is below.)
      …
      https://www.coindesk.com/markets/2022/11/23/ftx-contagion-revives-dreaded-2022-crypto-knell-the-withdrawal-halt/

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