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Dear Real Estate Professional, You’ve Been Forced To Transition From Abundance To Scarcity

A report from 425 Business in Washington. “Snohomish County saw its median sales price settle at $645,000 last month, down 6.1 percent from a year ago, and also down from December, when the median was $679,000. Looking at single-family homes only, the median sales price last month was $781,098 in King County, up 0.8 percent from a year ago and down from $825,000 in December. On the county’s Eastside, the median was $1.32 million, down 12.9 percent from a year ago.”

The Bend Bulletin in Oregon. “‘Things have cooled off,’ said Danielle Snow, John L. Scott Real Estate principal broker. ‘The amount of time on the market is more normal.’ Snow said that buyers should still make offers even if they’re not close to the asking price. In Sunriver the median price of a single-family home was $930,000 in January, compared to $1.1 million in December. In La Pine, the median price of a single family home in January was $380,000, about $10,000 less than what it was the month before, according to the report. And in Sisters, the median single-family home price was $555,000 in January, compared to $650,000 in December.”

Hawaii News Now. “Good news for prospective Oahu homeowners: The median price of a single-family home dipped below $1 million for the first time since the summer of 2021. The median price for a single-family home on Oahu is $985,500, which fell by 6% from January 2022. The median price for condos also fell from last year, but by 4%, to $490,000. Experts say buyer competition continues to soften from the peak in 2021. ‘After 12 months of declining sales, we’re seeing more of the effects of the slowing market on median home prices,’ said Chief Operating Officer for Locations Chad Takesue. Single-family home sales were down by 52% from January 2022, while condo sales declined by 50%.”

Candy’s Dirt in Texas. “Dear real estate professional, I see you. The battles you’ve fought in the last six months have been real. You’ve been forced to transition from abundance to scarcity, but so far you’ve survived. I’m here to tell you again that the game is going to change. The hard times are going to end. However, there are forces at work against you, some quite distant. Learn about them, be aware, but don’t give up. Hope is around the corner.”

“The interwoven nature of the world causes us to be subject to the whims of powers that rarely even consider us. Take for example today’s problem — the Bank of England is raising mortgage rates on Texas home buyers. You read that correctly, the Bank of England as well as the European Central Bank believe the risk of over-raising their rates is far smaller than the risk of allowing inflation to continue at current levels. The first problem is that markets are begging the Fed and central banks for a pivot, believing inflation has been defeated. In essence, these economic superpowers are nuking our markets based on data we released, which they don’t understand, and our shoppers are paying the price.”

The Real Deal on New York. “Hawkins Way Capital’s purchase of a shuttered Marriott on Manhattan’s East Side came at a heavy discount from what the property last sold for, newly filed city records reveal. The Beverly Hills-based firm teamed with Värde Partners to acquire the former New York Marriott East Side hotel at 525 Lexington Avenue from German investment firm Deka Immobilien. City records filed Monday show that the firms paid $153.4 million for the 655-key property — a little more than half the $270 million Deka paid for it in 2015. The deal comes a year after Hawkins Way and Värde snapped up the former Midtown DoubleTree at 569 Lexington Avenue for $146 million. That deal also represented a staggering loss; seller RLJ Lodging Trust paid over $330 million for it in 2010.”

From Moneywise. “The white-collar recession is well underway. After nearly a decade of six-figure salaries, cushy jobs and extravagant office perks, Silicon Valley firms are finally cutting back. Nearly 90,000 tech workers were laid off in 2022 alone. This year isn’t off to a great start either. Things aren’t much better for those who have (so far) escaped the layoffs. Countless tech firms, private and public, have watched their valuation tumble over the past 12 months. And now, the Financial Times reports that a number of panicked laid-off workers are ‘flooding secondary markets’ with their shares of their former companies. Which means those valuations are likely to plunge even further.”

Colorado Public Radio. “Free rent on the 16th Street Mall in downtown Denver sounds like a pretty good deal. But some businesses are finding that there are catches — namely crime and a lack of security along the mall. That’s led downtown boosters to make changes to a program that offers businesses rent-free space. The program is an effort to breathe life into areas of the city that are struggling with a glut of empty storefronts. Tae and Roderick O’Dorisio were part of the first phase. Their online business took off during the pandemic. Tea with Tae sells tea in a subscription service format. And they were excited to have a real storefront for the first time.”

“There were daily incidents with people experiencing homelessness, in particular with people using drugs, Roderick said. ‘They’re being aggressive either with our customers or employees … making a ruckus and causing people to feel uncomfortable inside the space,’ he said. Then, in November, their best employee quit after two shootings happened outside the store just hours before it opened.”

“‘When she came in and opened the shop up, one of our giant bay windows was completely cracked, like about to burst and shatter because of the bullet hole at the bottom of it,’ Roderick said. It was one thing after another. ‘Somebody defecated all over the store,’ Tae said. Aside from the security problems, the store wasn’t really making money. Black Friday, the biggest shopping day of the year, was a bust. They closed the store in December — a couple of months before the deal on free rent expired. ‘We’re definitely going to do it [again]. Just not there,’ Roderick said.”

Castanet in Canada. “January is normally a slow real estate month, and this year was no exception. The slowdown, combined with rising interest rates, resulted in benchmark prices falling throughout the Central and North Okanagan in most housing categories. According to Association of Interior Realtors statistics released Monday, there were 552 residential unit sales last month across the region, which includes the entire Okanagan, and the Kamloops Kootenay and South Peace River regions. That was nearly half the number of sales from last January.”

“The benchmark price of a single-family home in the Central Okanagan fell below the $1 million mark for the third time in the last five months, checking in at $976,800. That marks the lowest the price has been since October 2021. Central Okanagan’s condominium benchmark price dropped 2% to $492,000 from December. The benchmark prices of single-family homes and townhouses in the North Okanagan both dropped significantly in January, down 2.9% and 4.1%, respectively, from December.”

From CBC News. “Several Canadian cities are facing high office vacancy rates. The idea of turning empty offices into housing is very trendy. There’s even government funding for renovating offices into residential use. How much do conversions reduce the glut of office space, and create meaningful housing stock? Conversion costs often just don’t add up to make housing a viable option, said Raymond Wong, a vice president with Toronto-based Altus Group, a commercial real estate advisory and data company. ‘If you go through all those variables with space layout, the building itself and the anticipated cost, it might be easier to demolish it and start from scratch,’ he said.”

From ABC News. “Late last November, Reserve Bank governor Philip Lowe was forced into a humiliating public apology. After almost two years of assuring Australians that interest rates were unlikely to rise above zero until 2024, the RBA boss — having by then elivered seven consecutive rate hikes — had little option but to confront the growing tide of public anger head on. ‘I’m sorry that people listened to what we’ve said and acted upon that and now find themselves in a position they don’t want to be in,’ he told a Senate Estimates Committee.”

“Particularly worrying, however, was the finding that 15 per cent of all homeowners would see their spare cash flow turn negative. In other words, they wouldn’t be earning enough money to cover the mortgage, let alone buy food. Here is the graph. It’s not easy to decipher but in many ways it tells a far bleaker story than even the RBA would have us believe.”

“Head further to the left though, and the bars show borrowers who would drop between 20 per cent and 100 per cent of their spare cash. And the grey bar on the left represents those who would be well and truly under water. Obviously though, the closer you get to the grey bar, the more difficult it is to survive. So, unless they have large savings buffers, many of those too are likely to either default, be forced to sell their homes or try to come to some sort of arrangement with their bank.”

Business Insider. “The IMF said in a report on China’s economy that the country’s property crisis remains ‘unresolved.’ Despite China’s efforts to reassure investors about the health of its property sector, more than half of 60 mainland China-listed developers are likely to post losses for 2022, per Bloomberg calculations which used public data. And on top of that, investment into China’s property fell 10% in 2022 from a year ago, according to official data released on January 17.”

“‘The real problem is that many developers simply do not generate positive cash flow and that the funding model of unfettered pre-sale receipts is broken,’ Andrew Lawrence, TS Lombard’s Asia property analyst, wrote in a January 12 note seen by Insider.”

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This Post Has 109 Comments

  1. ‘On the county’s Eastside, the median was $1.32 million, down 12.9 percent from a year ago’

    Which wipes out the entire 2022 cray cray. Probably looking at 30% down, maybe more from the peak. Same with these little sh$tholes in Oregon.

    ‘Good news for prospective Oahu homeowners: The median price of a single-family home dipped below $1 million for the first time since the summer of 2021…Experts say buyer competition continues to soften from the peak in 2021’

    I wasn’t aware Oahu peaked in 2021. Some places are different. New Zealand and Australia also peaked in late 2021, cuz that’s the first places central banks broke it off in their a$$.

  2. ‘acquire the former New York Marriott East Side hotel at 525 Lexington Avenue from German investment firm Deka Immobilien. City records filed Monday show that the firms paid $153.4 million for the 655-key property — a little more than half the $270 million Deka paid for it in 2015. The deal comes a year after Hawkins Way and Värde snapped up the former Midtown DoubleTree at 569 Lexington Avenue for $146 million. That deal also represented a staggering loss; seller RLJ Lodging Trust paid over $330 million for it in 2010’

    Wa happened to frozen soup line Larry who was going to become the hotel king of NYC? Got sick of eating his crowz? They had too many hotels in 2015 and kept building more – all luxury of course.

  3. ‘The real problem is that many developers simply do not generate positive cash flow and that the funding model of unfettered pre-sale receipts is broken’

    Interesting Andy, what is this ‘positive cash flow’ you speak of? Does it involve self driving flying taxis? BTW that ‘model’ was a ponzi scheme.

          1. I saw an article that claimed 600 people are still dying of the coof in the US every day, while worldometers shows only about 100. The gist of the article was that while the Winter of Illness and Death Part 2 wasn’t anywhere as bad as they said it would be, that everyone should still get another booster.

          3. Worldometer shows +62 deaths happened yesterday in the US, but only 7 states reported. I guess most states are reporting deaths only weekly now. CDC is reporting ~3450/week, which translates to 493/day.

            Hospitalization data is dropping steadily, and death data lags hospitalization data, so expect the deaths to drop soon too.

          4. death data

            Are you still thinking these numbers represent people who died because of the CCP flu or just maybe had it when they got tested?

          5. I don’t now for sure, Blue. Hospitalizations can be “with” and “for” COVID, but deaths are more likely to be “from” COVID.

        2. I’ve been out robbing birds’ nests on weekends, but am running into stiff competition from starving realtors.

  5. ‘When she came in and opened the shop up, one of our giant bay windows was completely cracked, like about to burst and shatter because of the bullet hole at the bottom of it’

    There goes over a thousands bucks, maybe more.

    ‘It was one thing after another. ‘Somebody defecated all over the store’

    Somebody? OK, show me yer hands. Palms up!

    I said long ago these commies were purposefully destroying the cities. I do hope it’s coming to a head.

    1. I said long ago these commies were purposefully destroying the cities. I do hope it’s coming to a head.

      The Great Reset requires the destruction of the productive economy, along with the moral fabric of society. The Democrat-Bolsheviks are working off the same playbook Lenin’s Reds used in the run-up to the 1917 “Russian” Revolution that created the Soviet Union. It’s worth studying who bankrolled Lenin, Trotsky, etc.

    2. I said long ago these commies were purposefully destroying the cities. I do hope it’s coming to a head.

      Now throw the reparations nonsense on top of everything. Cities across the country are setting up “reparations committees”. They are doing everything they can to start a race war.

        1. How close do you want to be to Dumver? Some say that the western slope is the place to be, but they are hours away from Dumver.

          I would say that the entire Front Range is going to Hades in a handbasket. Sure, Larimer and El Paso counties are better than metro Dumver, but the rot is here too. Car theft used to be fairly rare here in Larimer county, but is more common now.

        2. There are a few mountain towns that are not ski towns, and that do not give off an obvious meth vibe.

          Stay away from Interstates 25 and 70.

    3. Denver District Attorney Beth McCann is a wholy owned subsidiary of globalist George Soros.

      No crime will be prosecuted in Denver, but you will continue paying your property taxes.

      1. “No crime will be prosecuted in Denver, but you will continue paying your property taxes”

        Replace “Denver” with “Sacramento” and you’ll get a similar snapshot of the cities ethos, thanks to perpetually sad-Sac weepy hand-wringing Karen-Kulted-Kuck mayor Steinberg.

        Ya’ vote for Fonzie, but got Henry Winkler.

        oy vey

  6. ‘Central Okanagan’s condominium benchmark price dropped 2% to $492,000 from December. The benchmark prices of single-family homes and townhouses in the North Okanagan both dropped significantly in January, down 2.9% and 4.1%, respectively, from December’

    Huh, K-dn UHS says it’s multiple offers of feeding penguins all over again. Could be a lion.

  7. 𝗙𝗹𝗮𝗴𝘀𝘁𝗮𝗳𝗳, 𝗔𝗭 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟭𝟲% 𝗬𝗢𝗬 𝗔𝘀 𝗣𝗵𝗼𝗲𝗻𝗶𝘅 𝗔𝗿𝗲𝗮 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗗𝗿𝗼𝗽 𝗟𝗶𝗸𝗲 𝗔 𝗥𝗼𝗰𝗸

    https://www.movoto.com/flagstaff-az/market-trends/

    𝘈𝘴 𝘰𝘯𝘦 𝘥𝘦𝘴𝘱𝘦𝘳𝘢𝘵𝘦 𝘴𝘱𝘦𝘤𝘶𝘭𝘢𝘵𝘰𝘳 𝘤𝘰𝘯𝘧𝘪𝘥𝘦𝘥, “𝘐 𝘢𝘮 𝘤𝘰𝘮𝘱𝘭𝘦𝘵𝘦𝘭𝘺 𝘣𝘳𝘰𝘬𝘦 𝘢𝘯𝘥 𝘩𝘢𝘷𝘦 𝘣𝘦𝘦𝘯 𝘴𝘪𝘯𝘤𝘦 𝘐 𝘣𝘰𝘶𝘨𝘩𝘵 𝘵𝘩𝘪𝘴 𝘩𝘰𝘶𝘴𝘦.”

  8. A reader sent these in:

    InMortgageFinance

    Fannie Mae, Freddie Mac and Ginnie Mae issued a combined $75.21 billion of single-family MBS last month, down 4.9% from December. Daily trends had hinted January might be a turning point. That wasn’t the case.

    https://twitter.com/IMFpubs/status/1622629440579596288

    That look you give when someone mentions SOFR.. 😉

    https://twitter.com/JackMonero/status/1622629416013643781

    “In January, 7,031 eviction filings were recorded. According to court spokesperson Scott Davis, that number is the largest since September 2008, the time of the last housing crash.”

    https://twitter.com/evictionlab/status/1622626395837853701

    BREAKING: 64% of Americans are living paycheck to paycheck, a near all-time high, per CNBC.

    https://twitter.com/unusual_whales/status/1622578605145604098

    People in the U.S. are now spending 30% of their income on rent, the highest in more than 20 years of Moody’s tracking the data.

    https://twitter.com/unusual_whales/status/1622601657933791233

    In the public sector employees don’t get fired, so a small group of lifers end up with all the power and basically own the agency. Sometimes they end up running it like their personal piggy bank, doling out positions and promotions to their flunkies. It destroys the agency.

    https://twitter.com/FedGuy12/status/1622600228854726656

    Housing ponzi team: “well housing didn’t crash during the pandemic.”
    You’re right! If we have low inflation, $9t in printed money, people paid to not work, Real Estate agents stealing 100s of thousands in PPP and 0% rates. Housing might make it

    https://twitter.com/GRomePow/status/1622299849738846208

    “WHY AREN’T YOUNG PEOPLE GETTING MARRIED AND HAVING KIDS?”
    Hint:

    https://twitter.com/texasrunnerDFW/status/1622606908988219392

    Danielle DiMartino Booth

    “Crypto companies are continuing to shed workers around the world in the aftermath of last year’s bear market, taking job losses in just the first five weeks of the year into the thousands.”

    https://twitter.com/DiMartinoBooth/status/1622565153995718658

    Danielle DiMartino Booth

    Facing plummeting demand for personal computers @Dell
    to eliminate ~6,650 jobs (5% of workforce) becoming the latest tech company to announce it will let thousands of employees go as market conditions “continue to erode with an uncertain future.”

    https://twitter.com/DiMartinoBooth/status/1622564295056793600

    Danielle DiMartino Booth

    “Paradigms change over time. Sometimes those paradigms change violently & sometimes those paradigms change over time because people don’t give up their paradigms easily. And I think we’re going through a period possibly like that again.” -Steve Eisman

    https://twitter.com/DiMartinoBooth/status/1622563106361597958

    If we’re in a recession, why is the bounce in ISM Services new orders the largest ever, barring post-COVID rebound?

    https://twitter.com/INArteCarloDoss/status/1622613262230585345

    The Fed committed a massive policy mistake by not pushing against market pricing cuts that started in q4 2022. While they used all sorts of spurious bullsh$t to dance around their « transitory » disastrous fallacy, they now are the only possible recipient of blame. 1/3

    https://twitter.com/INArteCarloDoss/status/1622581220981854209

    US econ data is reaccelerating, raising risk of reflation and therefore higher for longer. Seeing early signs of repricing, but a lot of people offsides if this trend develops. Not the first one to mention this, but wanted to note for those who are not watching this.

    https://twitter.com/SocratesTrader/status/1622818758258741250

    RBA: WAGE GROWTH IS CONTINUING TO ACCELERATE FROM RECENT LOW LEVELS, AND A FURTHER ACCELERATION IS PROJECTED DUE TO A TIGHT LABOUR MARKET AND INCREASED INFLATION.

    https://twitter.com/financialjuice/status/1622802758553444352

    It’s amazing what people can get used to when forced to endure it long enough. #Vancouver

    https://twitter.com/PaolaQP1231/status/1622098339943645186

    ‘Devastated’ buyer of multiple Mattamy Homes pre-cons is now protesting in front of their head office. Is this a common theme moving forward? Your ‘investment’ goes down so you cause a hissy fit?!? Nobody is ready for what’s to come.

    https://twitter.com/ManyBeenRinsed/status/1622608198703144962

    Two completely unrelated random facts:
    1. The price of housing in Japan hasn’t increased in 25 years.
    2. Tokyo often builds more housing in a year than all of California or England, which have about 3x and 4x its population, respectively.

    https://twitter.com/AlecStapp/status/1622635156396810240

    John Wake

    Fed’s Bostic Says Higher Peak Rate on Table After Jobs Blowout
    Probably means higher and longer for rates, and lower and longer for the current housing recession.

    https://twitter.com/JohnWake/status/1622751927955251201

    Quick summary of the Fed Senior Loan Officer survey just released. The question on banks expectations going forward: “Banks, on balance, reported expecting lending standards to tighten, demand to weaken, and loan quality to deteriorate across all loan types.” 1/5

    https://twitter.com/SpreadThread1/status/1622676725552320539

    The is starting to feel like a pyramid scheme
    Quote Tweet
    “Introducing Airbnb‑friendly apartments. Rent a place to live. Airbnb it part-time.”
    https://airbnb.com/airbnb-friendly

    https://twitter.com/GRomePow/status/1622773160863989761

    Every recession starts with historically low unemployment…… during bubbles and booms employment is always low. Then pop! #Powell. Does anyone really think this wasn’t a housing bubble?

    https://twitter.com/ssun5555/status/1622791260460163072

    CarDealershipGuy

    Sales manager told customer he got approved at 8% APR. Customer got up and left pissed off. 🤷‍♂️ Lots of people are still not in touch with reality of the current lending market.

    https://twitter.com/GuyDealership/status/1622693927877767168

    “You don’t have a recession when you have the lowest unemployment rate in 53 years.” – Janet Yellen
    100% false.

    https://twitter.com/michaellebowitz/status/1622685218200059904

    Janet Yellen:
    “You don’t have a recession with the unemployment rate at a 53 year low”.
    https://yahoo.com/finance/news/yellen-dont-recession-u-unemployment-132432963.html
    How about 53 years ago?
    How about three years ago?
    Can’t remember? Shouldn’t be in office.

    https://twitter.com/SuburbanDrone/status/1622654443308085249

    Bostic: Fed could move back to 50 bp hikes if it needed to

    https://twitter.com/INArteCarloDoss/status/1622699575193600005

    1. It’s amazing what people can get used to when forced to endure it long enough. #Vancouver

      Mass homelessness. Yet another piece of the puzzle to collapse the West so it can be reformed into a bright shiny utopia what the globalists want.

    2. “Fannie Mae, Freddie Mac and Ginnie Mae issued a combined $75.21 billion of single-family MBS last month, down 4.9% from December.”

      A one month decline of 4.9% occurs at an annualized rate of decline of
      1 – (1-0.049)^12 = 45.3%.

    3. The 7000 evictions in January referenced above is just for Phoenix/Maricopa County. Here is a little more context from the article:

      “In January, 7,031 eviction filings were recorded. According to court spokesperson Scott Davis, that number is the largest since September 2008, the time of the last housing crash. However, U.S. Census data shows a 31% increase in the county’s housing units. Approximately 500,000 households were added between 2010 and 2020. This number is also about 13% higher than in January 2019. “I think it is safe to say that landlords are not only back to normal but surpassing normal,” Davis said.”

      I’m sure it’s fine, in fact, now would be a good time for them to buy. Right?

    1. Where did Naugahyde come from?

      In 1914, Naugahyde was invented in Naugatuck, Connecticut

      Accordind to Don Imus on his AM radio show in New York in the 70s they had large herds of Naugas (a small 2 or 3 foot high animal that resembled the American Buffalo) roaming the fields of Naugatuck, Connecticut.

        1. “although although”

          I must have been thinking about those rides cause I haven’t burned one in 35 years.

    2. How ‘modern-day slavery’ in the Congo powers the rechargeable battery economy

      February 1, 202312:38 PM ET
      TERRY GROSS

      “We shouldn’t be transitioning to the use of electric vehicles at the cost of the people and environment of one of the most downtrodden and impoverished corners of the world,” he says. “The bottom of the supply chain, where almost all the world’s cobalt is coming from, is a horror show.”

      https://www.npr.org/sections/goatsandsoda/2023/02/01/1152893248/red-cobalt-congo-drc-mining-siddharth-kara

      1. I think the whole point of EV’s is to eventually make cars unattainable for the middle class. Cars will become a niche product for the upper middle class+. The supply of EV’s will always be constrained, so the prices will escalate. I wouldn’t be surprised if the average price rises to six figures.

        The market will find a way to extend the lifespan of existing ICE vehicles, but it will eventually reach the point of diminishing returns.

        Bottom line: they don’t want you to have a car. Cars will be for the people who matter.

  10. WASHINGTON — The throngs of remote workers who flocked to rural communities throughout the pandemic have begun to thin as employers push a return to offices. But for many of the towns remote workers descended on, the housing crisis they fueled has remained.

    My brother who works at NBCi the big sports complex in Stamford CT said people are coming in but it seems like they are interested in socializing I haven’t seen you for 6 months how are the wife and kids…

    https://www.yahoo.com/finance/news/remote-workers-left-housing-havoc-140000036.html

  12. Does a home becoming more costly or even impossible to insure result in it becoming more valuable, because only wealthy all-cash buyers could afford to live there? This explanation might earn points on a relitter exam, but it would get zero points on an economics exam.

    Eliminating potential buyers so that only wealthy all-cash buyers can afford to buy will not make wealthy buyers willing to pay more than if they had to outbid Joe Sixpack, with his federally insured, low down payment, million dollar mortgage loan. Taking Joe Sixpack out of the potential buyer pool reduces demand, and lower demand reduces the market price.

    1. Where will US home prices drop in 2023? And where will home prices get even more expensive?
      Climate change has a role to play.
      David Chang
      The Motley Fool
      Published 5 a.m. Eastern Time
      February 7, 2023

      While it doesn’t influence our opinions of products, we may receive compensation from partners whose offers appear here. We’re on your side, always.
      …
      Places that will see prices go up

      Climate-risky areas like the hills of California and oceanfront property in Florida will see prices continue to go up primarily due to high insurance costs. According to Redfin’s data, disaster insurance premium rates will continue to rise, offsetting any price declines in these areas. Insurance premiums in Florida increased by 33% last year, and are expected to go up even more due to Hurricane Ian, the deadliest hurricane to strike the state of Florida since 1935. The hurricane was also the costliest in Florida’s history, causing $113 billion in damages.

      Many insurers have stopped issuing policies on high-fire-risk homes in California. This means that the only insurance companies homeowners in these areas have to access are two to three times more expensive. Even FEMA flood insurance premiums have gone up. With disaster insurance required for a mortgage in these high-risk areas, the majority of those who can afford these types of homes are the wealthy all-cash buyers.

      Purchasing a home is the most expensive purchase many people will ever make in their lives. When taking into consideration the total expenses of homeownership, make sure you take into account insurance, property taxes, and maintenance fees before you pull the trigger on buying a home. The dramatic increase of insurance premiums will offset any home price decreases seen in some areas. Buying a home should be based on your personal financial situation and it is important to budget all the costs you can expect to incur.

      We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
      …
      https://www.usatoday.com/story/money/2023/02/07/home-prices-real-estate-market-housing/69874407007/

      1. If you click on the link, you will see the original section heading was “Prices that will see prices go up,” which makes no sense, just like the ensuing explanation.

        I changed the first “Prices” to “Places” in my post, to match the opinion the nonsensical relitter logic was trying to support.

      2. It seems like the writer made a fundamental error, which was to comfuse the purchase price of a home, or what the buyer pays the seller for the privilege of ownership, with ownership costs, which include interest payments and insurance.

        Assuming other things equal, higher ownership costs reduce market prices.

        1. “Assuming other things equal, higher ownership costs reduce market prices.“

          Exactly, Professor Bear. High interest rates, increased insurance and property taxes, all affect total cost of home “ownership” — which in turn impacts how much the purchase price will be.

          3. “Hasn’t had a price reduction since it listed at $2.42M on 12/6/2022.”

            Eventually they may realize they are riding a falling knife down and decide to cut their losses by lowering their asking price to market value. According to Zillow, our landlord’s place lost $19,000 in value over the most recent month. And we live just a couple of miles west of Poway.

        2. Assuming other things equal, higher ownership costs reduce market prices.

          Except that all other things aren’t equal.
          IF wealthy people bought houses in cash just to hoard them and keep them empty, and IF all the Joe Sixpacks lived in vans by the river, your pure economics argument might work.

          However, even rich people only need one house (maybe two), and everybody else needs a house. What will really happen is that wealthy people will buy the house cash, pay the high ownership costs, and pass the cost down to Joe Sixpack who rents that house. Gov will just print more stimmie dollars to help pay the costs. The supply/demand equation for housing has a lot more terms in it than the equation for widgets.

          1. “Except that all other things aren’t equal.”

            You misconstrued my point in too many ways to remedy.

            But hopefully my take home message sank in that driving away prospective buyers by making mandatory disaster insurance more expensive or unavailable can only make home prices go lower.

          2. “What will really happen is that wealthy people will buy the house cash, pay the high ownership costs, and pass the cost down to Joe Sixpack who rents that house.’

            Joe Sixpack can’t afford to rent a million dollar house in Coastal Cali. And those who can afford to rent them aren’t paying their landlord’s ownership costs when prices are dropping at a 10%+ rate. It’s very expensive to catch a falling knife, which is why the Motley Fool peops are trying to convince greater fools that prices will rise in disaster prone areas which are too costly to insure.

    1. My maternal grandfather was Marine Corps DI. His birth name was Shirley but everyone called him John.

  14. I have no idea if it is willful ignorance, irrational exuberance, or not wanting to accept reality…but here in Western Washington, specifically the suburbs of Seattle, no one believes housing will come down in a significant way. Even with all of the layoffs at Meta, Amazon, Microsoft, and Google (with more to come) the prevailing thought in this area is that there are too many high paying tech jobs for the market to fall….Seattle and surrounding areas are too desirable…there’s not enough housing inventory. You name it, you’ll hear it from hair dressers to mortgage brokers – Seattle is too big to fail.

    Meanwhile, downtown Seattle is still a ghost down, especially in the South Lake Union area where the Amazon campus is located. Lots of plywood over busted out windows, closed restaurants, empty store fronts…and an army of fentynal zombies roaming the streets. If places are open downtown they are minimally staffed and prices at restaurants are through the roof ($25 for a three cheese enchilada plate with rice/beans at the Mexican joint down the street from my office). I honestly doubt there will be a recall to office from any of the tech companies. They are saving too much money consolidating into smaller office lease footprints to bring everyone back. Whatever efficiency gains made via being in the office more will be lost with lease costs and office space maintenance. I see this area being in the first phase of a downward spiral.

    There’s also a ton of inventory still being built in the outskirts – 3000+ sq foot homes popping up all over. Hot money from Chinese buyers seems to be evaporating (although a friend of mine that works for MainVue homes says Asian buyers are their only buyers at the moment, but bidding wars are a thing of the past).

    I’d like to think a market correction is in the works for at least the TriCities areas over in Eastern Washington. That was one area of the country that avoided the madness of the 2002-2008 run up and collapse…but home prices in that area escalated at what I believe is an unsustainable pace from 2019 – 2022. If there is a first domino to fall in Washington, I’m thinking it will start there.

    2. King county SFR median has gone from about 1.05 million to 835k in 8 months. Sounds like a crash is already well underway.

      1. I forgot to add this from what Ben posted above:

        “the median sales price last month was $781,098 in King County”

        So in 9 months the median has gone from 1.05 million to 781k. That’s 26% down in 9 months. No crash? LOL

        1. So in 9 months the median has gone from 1.05 million to 781k. That’s 26% down in 9 months. No crash? LOL

          Right. This commenter is not paying attention at all. Sounds like a housing shill in a way.

    3. $25 for a three cheese enchilada plate with rice/beans at the Mexican joint down the street from my office

      Cactus in SLU? Are you one of my former Amazon coworkers by chance??

    4. “I have no idea if it is willful ignorance, irrational exuberance, or not wanting to accept reality…but here in Western Washington, specifically the suburbs of Seattle, no one believes housing will come down in a significant way.”

      High housing prices are driven by government policy, e.g., guarantees as provided to global investors in fannie and freddie shares, not the tech paychecks.

    5. I honestly doubt there will be a recall to office from any of the tech companies. They are saving too much money consolidating into smaller office lease footprints to bring everyone back.

      You’re right, there won’t be any recall to office. They will be terminated for good.

  15. 𝗡𝗲𝘄 𝗗𝘂𝗿𝗵𝗮𝗺, 𝗡𝗛 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟮𝟵% 𝗬𝗢𝗬 𝗔𝘀 𝗡𝗲𝘄 𝗘𝗻𝗴𝗹𝗮𝗻𝗱 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗠𝗮𝗿𝗸𝗲𝘁 𝗦𝘁𝗮𝗴𝗴𝗲𝗿𝘀 𝗢𝗻 𝗦𝗼𝗮𝗿𝗶𝗻𝗴 𝗜𝗻𝘃𝗲𝗻𝘁𝗼𝗿𝘆

    https://www.movoto.com/new-durham-nh/market-trends/

    𝘈𝘴 𝘰𝘯𝘦 𝘥𝘪𝘴𝘵𝘪𝘯𝘨𝘶𝘪𝘴𝘩𝘦𝘥 𝘦𝘤𝘰𝘯𝘰𝘮𝘪𝘴𝘵 𝘴𝘵𝘢𝘵𝘦𝘥, “𝘛𝘩𝘦 𝘯𝘶𝘮𝘣𝘦𝘳 𝘰𝘯𝘦 𝘤𝘢𝘶𝘴𝘦 𝘰𝘧 𝘱𝘦𝘳𝘴𝘰𝘯𝘢𝘭 𝘣𝘢𝘯𝘬𝘳𝘶𝘱𝘵𝘤𝘺 𝘪𝘯 𝘵𝘩𝘦 𝘜𝘚 𝘪𝘴 𝘵𝘩𝘦 15 𝘢𝘯𝘥 30 𝘺𝘦𝘢𝘳 𝘮𝘰𝘳𝘵𝘨𝘢𝘨𝘦.”

  16. “The first problem is that markets are begging the Fed and central banks for a pivot, believing inflation has been defeated. In essence, these economic superpowers are nuking our markets based on data we released, which they don’t understand, and our shoppers are paying the price.”

    Seems like the relitter tail is trying to wag the central banking dog.

  17. Poll reveals Republican attitudes to Ukraine ceding territory (2/7/2023):

    “More than 40% of GOP supporters want a swift end to the conflict, even if that means conceding land to Russia …

    In a survey conducted by Gallup, respondents were asked what they would “prefer the US to do in the Russia-Ukraine conflict.” Overall, 31% of respondents said they want Washington “to end the conflict quickly, even if Russia keeps territory.” Meanwhile, 65% believe that the US should “support Ukraine reclaiming territory,” even if it prolongs the hostilities. The results are almost identical to those from a similar poll conducted in August 2022.”

    https://www.rt.com/news/571101-republicans-ukraine-loose-land-poll/

    Do those 65% in support have any sons or grandsons? They should all be in Ukraine now, paying for their own travel and food and weapons and ammo.

    Democrat Party are war criminals, and are stealing from U.S. taxpayers.

    1. The Ukrainian front in the west is collapsing. The Russian forces, a significant portion of which is made up of local militias and mercenaries, and out numbered by a wide margin are grinding down the Ukrainians with endless artillery barrages that the Pentagon told us Russia would never be able to sustain. The tanks NATO is sending are not going to help because the Ukraine is losing that amount of armored vehicles every two to three weeks. NATOs only possible option to shift the balance is full ground support including large numbers of well trained troops. And what would happen after that cannot be predicted. Thank you, John McCain and Lindsey Graham.

      https://www.bitchute.com/video/5MdqKr19CvfX/

      Of all the military quagmires the US has created in my life time this one is by far the most stupendously tragic and idiotic.

      1. I’d be in favor of strapping Coma Joe to the front of one of the tanks, and charging towards the front lines with him at the lead.

  18. If rentals are going strong then why did someone just post a house for sale under market value, cash only, and list that they are trying to sell a 23 home rental portfolio?

    1. Is this just one listing? Could be someone tired of property management and just wants to cash out the portfolio and retire without the hassle. It would make more difference if it happens en masse.

  19. In Sunriver the median price of a single-family home was $930,000 in January, compared to $1.1 million in December.

    That’s still about $6000 a month for P&I. Add insurance, property taxes, HOA fees. etc. and it’s well over $7000 a month, and that doesn’t include maintenance.

  22. Layoffs are accelerating in Bay Area with Zoom, Google, and Paypal. Meta is not done yet as Zuck got $40 billions for buyback but don’t like managers managing managers!

    1. Google is in the process of being seriously disrupted by AI. If they don’t make some rapid changes they will be cratering soon and laying off half their staff. I’m looking forward to watching them burn. Is that wrong?

  25. “warns staff to beware of Project Veritas”

    So if you a short, fat, bald dude in a bar and a hot girl in a short skirt walks up to you and starts asking you questions about how your business operates just assume she works for Project Veritas.

  27. I guess walls only work for the ruling elite.

    JOE BIDEN Published February 6, 2023 2:51pm EST

    Fence built around Capitol ahead of State of Union to protect Congress, despite Dem claim walls ineffective
    Biden will give his State of the Union address at the Capitol Tuesday

    By Aubrie Spady | Fox News

    A fence is being put up around the Capitol building in Washington, D.C., ahead of President Biden’s State of the Union address Tuesday, despite Democrats halting construction of the wall at the southern border.

    The Biden administration and congressional Democrats called the southern border wall costly and ineffective, as well as a sign of xenophobia, and have strongly opposed construction of a barrier to control the influx of illegal migrants pouring into the U.S. from countries like Mexico, Honduras and Guatemala.

    https://www.foxnews.com/politics/fence-built-around-capitol-ahead-state-union-protect-congress-despite-dem-claim-walls-ineffective

  28. Everything is rosy. Pay no attention to the facts. Just another 1300 waiters next month.

    Zoom to lay off 1,300 employees, or about 15% of its workforce.

    No link as it is to CNBS.

  29. Amgen is getting rid of workers today in Thousand oaks.

    All these companies gearing up for the slowdown but what if it doesn’t happen….

    1. All these companies gearing up for the slowdown can potentially make it happen. It’s a dynamic prisoner’s dillemma game.

    2. gearing up for the slowdown

      Get real. It’s in the rearview mirror. Economic metrics are rigged like everything else. I started gardening last May for a reason.

      1. I started gardening last May for a reason.

        How many days of survival provisions did that add to your pantry?

          1. The growing season

            It doesn’t matter, if I preserve some tomatoes and she tries to grow some. Perhaps I should ask what percentage of the monthly groceries was she able to produce. My thought was that it is probably insignificant and only symbolic in terms of increasing survivability in case the “reason” happens. Just asking.

          2. what percentage of the monthly groceries was she able to produce

            I honestly have no idea how much my husband spends on monthly groceries. We have separate finances and he does most of the shopping and cooking. I take care of things like rent, health insurance and the kid.

        2. Perhaps you have a magic garden wand, but for most of us it’s a learning curve. As I said, I just started last May. I’m working on fresh produce at this point. My son consumes a lot of strawberries, blueberries and melon. Between our long growing season, a pop-up greenhouse and indoor grow lights, preserving isn’t exactly a top priority. But thanks for peeing in my soup as I try to be productive and self-sufficient.

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