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When The Bids Were Over It Was, Congratulations, You Are Now Essentially The Biggest Loser

A report from CNBC. “Diana Olick: Mortgage rates moved higher again last week, pushing buyers back to the sidelines just as the spring housing market is supposed to be heating up. Applications to refinance a home loan fell 6% for the week and were 74% lower year over year. Lower rates to start the year caused a brief surge in homebuying, but mortgage demand from homebuyers would seem to indicate a very slow spring is ahead. Correction: Lower rates to start the year caused a brief surge in homebuying, but mortgage demand from homebuyers would seem to indicate a very slow spring is ahead. An earlier version misstated the timing.”

Axios on Michigan. “Home sale prices in metro Detroit are continuing their downward trajectory from the second half of last year into 2023.Our region’s median home sales price was $150,500 in January, down nearly 8% from last year and 7% from December, according to an analysis of Redfin data.”

WFAE on North Carolina. “So here’s a rarity in recent years. Home sale prices are falling in some counties around Charlotte. And that’s causing some real estate agents to get creative in order to finalize deals.We turn now to Tony Mecia of the Charlotte Ledger Business Newsletter: ‘Here in the Charlotte region, we’ve become accustomed to having housing prices just go up, up, up, as though it’s unending and it’s always going to be that way. But if you look at the numbers from the local Realtor association, they show that in some Charlotte area counties that year-over-year, the median sales prices of houses is dropping. In Lincoln County in January, the median sales prices were down 6% from a year earlier. And in Cleveland County, they were down 9%. And in each of those counties, it was the third straight month of year-over-year declines.”

The Salt Lake Tribune in Utah. “Home sales along the Wasatch Front have fallen further this year. After peaking at about $650,000 in May, the median single-family home price in Utah’s most populous county reached $533,500 in January, down 9% from a year before. Other prices have started to drop significantly as well, according to new data.”

Community Impact on Texas. “For the month of January, the median home price in Southwest Austin was $537,450, down from $587,100 in January 2022. Southwest Austin is not alone with this downward trend, as median home prices throughout Austin decreased 6.3% to $450,000 in January 2023. This is the largest drop since July 2011, according to the ABoR report. While prices are dropping, inventory is going up in the area, according to the report.”

The San Francisco Chronicle in California. “Laid-off workers may need to sell their properties, either to relocate or because they can’t afford their homes. If this happens, it increases the supply of for-sale homes, which pushes down prices. Some workers may even sell their homes at a discount, which can further depress values in an area. ‘In markets where these mass layoffs happen, it’s not surprising to see home values drop,’ says David Bitton, a real estate investor and co-founder of property management platform DoorLoop. ‘In fact, Silicon Valley home prices have already dropped by at least 7% as of the fourth quarter of 2022.'”

The Orange County Register. “California home prices are falling faster off their peaks than elsewhere in the nation. San Diego: Down 1.3% for the month and 11.1% off May 2022’s peak – the No. 3 drop – but up 44% over three years. This isn’t just a California price drop as all 20 U.S. cities had one-month declines for the fifth consecutive month. The Case-Shiller composite’s recent universal drops are a rarity. Before this slump, all 20 cities had suffered one-month drops just 13 times since 2000. All but one of those across-the-board drops came in two, six-month streaks amid the Great Recession, with 20-city dips ending in February 2008 and February 2009.”

“Seattle: Down 1.8% for the month and 15.1% off May 2022’s peak – the No. 2 drop – but up 38% over three years. Phoenix: Down 1.9% for the month and 9.4% off June 2022’s peak – the No. 4 drop – but up 56% over three years. Las Vegas: Down 1.8% for the month and 8.8% off July 2022’s peak – the No. 5 drop – but up 40% over three years. Denver: Down 1.3% for the month and 8.7% off May 2022’s peak – the No. 6 drop – but up 36% over three years. Portland: Down 1.9% for the month and 7.9% off May 2022’s peak – the No. 8 drop – but up 31% over three years. Dallas: Down 1.1% for the month and 7.6% off June 2022’s peak – the No. 9 drop – but up 47% over three years. Boston: Down 0.9% for the month and 5.5% off June 2022’s peak – the No. 10 drop – but up 33% over three years. Minneapolis: Down 1.2% for the month and 4.7% off June 2022’s peak – the No. 11 drop – but up 26% over three years. Detroit: Down 1.1% for the month and 4.3% off June 2022’s peak – the No. 12 drop – but up 31% over three years. Washington: Down 0.4% for the month and 4.3% off May 2022’s peak – the No. 13 drop – but up 27% over three years. Charlotte: Down 1% for the month and 4.1% off July 2022’s peak – the No. 14 drop – but up 50% over three years. Tampa: Down 0.9% for the month and 4% off July 2022’s peak – the No. 15 drop – but up 63% over three years.”

KTVU in California. “Alameda County’s eviction ban was under debate Tuesday at the board of supervisors meeting with rental housing providers calling for an end to the moratorium. For hours, rental property owners shared their stories of frustration and opposition to the ongoing emergency ordinance that they say has ruined their livelihoods. ‘I’m only owed $15,000, but I’m going to lose my house as a result of the moratorium,’ said Oakland property owner Hannah Kirk, a single mom.”

“Gov. Gavin Newsom marked the end of the coronavirus state of emergency Tuesday. As written, Alameda County’s moratorium is supposed to end 60 days later. ‘End it now,’ Emeryville property owner Deborah Johnson said. ‘Enough is enough. We’re all going to be homeless soon.'”

Bisnow New York. “Another would-be buyer of the HSBC Tower has failed to close on the deal after it could not secure acquisition financing, making it the latest casualty in the tough capital markets environment. It is the second time in two years a deal to sell the 30-story building, which has long served as HSBC’s U.S. headquarters, has fallen apart. For the last 12 months, deals have been stalled and in some cases called off, brokers say, as a sense of uncertainty has spread across the market.”

“‘There’s a real distinction between a hotel deal and an office deal right now,’ KKR Managing Director for Real Estate Paul Fine said a Bisnow event. ‘I don’t know that any of us have ever seen an asset class become effectively un-investable overnight.'”

The Ottawa Citizen in Canada. “Rising interest rates, stingy banks, a buyers’ market and an imminent overhaul of Ontario’s house sale regulations have Ottawa’s Unreserved putting a hold on its house auction sales. Launched in July 2021 during the peak of the heated pandemic housing market, Unreserved sought to shake up the real estate industry by taking advantage of an exemption to the usual closed bidding process that was traditionally only used for bankruptcy auctions. A year ago, founder and CEO Ryan O’Connor forecast Unreserved would have 160 employees by the end of 2022 and boasted he was ‘building the future of real estate.’ That prediction didn’t foresee the sharp downturn in the housing market in which January sale prices were 30 per cent lower than a year before.”

“Some homes sold for $100,000 or more over asking price, as frenetic buyers outbid competitors without any idea of what others were offering. ‘When the bids were over it was, ‘Congratulations. You are now essentially the biggest loser,’ O’Connor said.”

The Sydney Morning Herald in Australia. “More than 1500 NSW home owners have lodged objections to property valuations conducted months ago that do not account for recent price falls and could inflate land tax bills and council rates. Some owners believe the valuations, taken from July 1 last year, are too high, given home values in some neighbourhoods have plunged by as much as 20 per cent. Sydney’s median house value has dropped 12.3 per cent to a median $1.2 million from June last year to January, CoreLogic data shows. Unit values fell 7.8 per cent to a median of about $769,000 in that time.”

“Some of the biggest falls in value were on the northern beaches, such as a 20.6 per cent drop in the Manly statistical region and a 17 per cent fall in the Pittwater region. Real Estate Institute of NSW chief executive Tim McKibbin has spoken to home owners who are concerned about the rise in valuations. McKibbin said investors were already selling, and some were looking to invest elsewhere as the cost of land tax rises. ‘The valuations that have been made are certainly going to be higher than they were and, as a consequence, subject to council and government making an allowance for the increase in the land value, they will be paying more in rates too,’ he said.

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This Post Has 93 Comments

  1. 𝗘𝗹𝗸 𝗚𝗿𝗼𝘃𝗲, 𝗖𝗔 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟭𝟴% 𝗔𝘀 𝗦𝗮𝗰𝗿𝗮𝗺𝗲𝗻𝘁𝗼 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗠𝗮𝗿𝗸𝗲𝘁 𝗧𝘂𝗿𝗻𝘀 𝗚𝗿𝗲𝗲𝗻 𝗢𝗻 𝗦𝗼𝗮𝗿𝗶𝗻𝗴 𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗟𝗼𝗮𝗻 𝗟𝗼𝘀𝘀𝗲𝘀

    https://www.movoto.com/ca/95624/market-trends/

    𝘈𝘴 𝘰𝘯𝘦 𝘚𝘢𝘤𝘳𝘢𝘮𝘦𝘯𝘵𝘰 𝘢𝘳𝘦𝘢 𝘣𝘳𝘰𝘬𝘦𝘳 𝘦𝘹𝘱𝘭𝘢𝘪𝘯𝘦𝘥, “𝘙𝘦𝘯𝘵𝘢𝘭 𝘳𝘢𝘵𝘦𝘴 𝘢𝘳𝘦 𝘧𝘢𝘭𝘭𝘪𝘯𝘨 𝘧𝘢𝘴𝘵𝘦𝘳 𝘵𝘩𝘢𝘯 𝘩𝘰𝘶𝘴𝘪𝘯𝘨 𝘱𝘳𝘪𝘤𝘦𝘴.”

    1. 84 months?

      You gotta pump those numbers up, those are rookie numbers in this racket.

  3. ‘There’s a real distinction between a hotel deal and an office deal right now…I don’t know that any of us have ever seen an asset class become effectively un-investable overnight’

    Killing off yer own cities might have been a bad idea, as I mentioned at the time.

  4. ‘San Diego: Down 1.3% for the month and 11.1% off May 2022’s peak – the No. 3 drop – but up 44% over three years’

    CS is ancient history, so it’s worser. All these sh$tholes with whopping CCP virus booms are sitting on a giant air pocket. Enjoy the bust boys and girls.

    1. “…the No. 3 drop – but up 44% over three years’”

      That is slight consolation for anyone who bought last spring.

      “…sitting on a giant air pocket.”

      And a very leaky one!

  5. ‘End it now,’ Emeryville property owner Deborah Johnson said. ‘Enough is enough. We’re all going to be homeless soon’

    Debbie, when yer pushing yer shopping cart around town, looking into car windows fer something to steal, try and keep yer urine off the lamp posts.

    1. “Supervisors heard the pleas and recognized the struggles of the small-time landlords.”

      Small-time landlords splash in the icy waters of property tax liens while the elected top hats in lifeboats lament.

  6. Rob Ockey, president of the Salt Lake Board of Realtors and a broker with Presidio Real Estate in Pleasant Grove, said demand remains strong for homes. “The limiting factor,” he said, “is higher interest rates.”

    New numbers reveal the burst of homebuying that started in March 2020 with COVID-19’s onset and extended until May 2022 effectively pushed up home prices in Salt Lake County by nearly 60% — after almost a decade of steady gains.

    “That,” Ockey said, “is not normal in any way whatsoever.”

    I keep hearing the UHS say stuff like this. If it wasn’t normal Rob, was it Abbie Normal? Cuz it looks like it was a massive bubble ‘after almost a decade of steady gains.’

    1. ‘…demand remains strong for homes. “The limiting factor,” he said, “is higher interest rates.”’

      I don’t think he understands demand, at least the way economists define it. A desire to buy a home if your budget won’t allow it doesn’t cut it.

      1. I don’t think he understands demand, at least the way economists define it. A desire to buy a home if your budget won’t allow it doesn’t cut it.

        Exactly. Everybody would love to have a brand new Ferrari. Few can afford it. That’s not demand.

  7. ‘Diana Olick: Mortgage rates moved higher again last week, pushing buyers back to the sidelines just as the spring housing market is supposed to be heating up. Applications to refinance a home loan fell 6% for the week and were 74% lower year over year. Lower rates to start the year caused a brief surge in homebuying, but mortgage demand from homebuyers would seem to indicate a very slow spring is ahead. Correction: Lower rates to start the year caused a brief surge in homebuying, but mortgage demand from homebuyers would seem to indicate a very slow spring is ahead. An earlier version misstated the timing’

    He he…

    1. who are these 26% that are refinancing a home load? Unless they needed to roll up other debt into a ???

      Applications to refinance a home loan fell 6% for the week and were 74% lower year over year.

  8. how long will it take Tampa to get back to a proper baseline with 6% mortgage rates? Maybe 3 years?

    Tampa: Down 0.9% for the month and 4% off July 2022’s peak – the No. 15 drop – but up 63% over three years.”

    1. “how long”

      As long as it takes to get from current prices to $50 a square foot adusted downward for condition and depreciation.

      Boise, ID Housing Prices Crater 18% YOY

  9. From Twitter – not yet on the wsj or bloomberg. But if true, Blackstone is signaling trouble with one of their CMBS’s. Wow! They have Trillions under management – so, unless they are playing games and forcing the bond buyers to eat some of the loss.

    After limiting investors’ redemptions from their flagship real estate fund, Blackstone just defaulted on a $562 million bond backed by offices and stores…

    …that it couldn’t sell at decent prices in time.

    The real estate market does not work at 7% mortgage rates, full stop.

    1. The people that run Blackstone would rob their own grandmothers (and probably have) if there was money to be swindled. I expect to see lots of rude awakenings on that front as this bust gains momentum.

    2. The real estate market works just fine at 7%. BUT NOT AT THESE PRICES.

      What is that popping sound I hear? is that bubbles popping?

  10. A reader sent these in:

    THIS is what killed TINA. 2023 is a whole different ballgame. You can now get paid a material rate of return to sit in short-term safety & wait for better values
    Quote Tweet
    Feb 28
    Dear Equities,
    $1M in T-Bills, Interest Paid
    February
    2023: $51K
    2022: $6k
    Best regards, Cash

    https://twitter.com/menlobear/status/1630619726723571714

    Feel bad for the younger generations and the high the cost of living they’re being forced to endure as a result of inflation. He can thank the central banks and their insane low rates policies. Great rant by this kid.

    https://twitter.com/StealthQE4/status/1630370194961956864

    CarDealershipGuy

    $5K for a car that’s been on the road since the Chicago Bulls went 72-10 😩 inflations wild

    https://twitter.com/GuyDealership/status/1630628797849452555

    Am I the only one who lost interest in listening to Fed talking heads…they been behind events for too long now…time to change the whole cast…

    https://twitter.com/INArteCarloDoss/status/1630991892153356298

    Since January, China has been pushing to export inflation, on top of the commodity piece of the price structure. Across sectors. Between push and push-backs these price hikes have been delayed but the push is getting more aggressive with growth pick-up.

    https://twitter.com/INArteCarloDoss/status/1630936055498125313

    UK is such a shit show rn. Running inflation measures are really bleak but economy is in such a bad spot that Bailey is left with only one option: dovish talk. Last year’s scars run deep

    https://twitter.com/INArteCarloDoss/status/1630880731911036932

    One basic variable was unambiguously pointing to accelerating inflation: expanding budget deficits across the board + China monetary easing. Anyone who went out with a disinflation narrative in Q4 is just a discardable imbecile. Sometimes it’s not harder than that.

    https://twitter.com/INArteCarloDoss/status/1630878442622164992

    Would you believe that most economists and sell-side bullsh$ters still have a 2%-3% inflation forecast for end 2023? Without knowing anything about the economy and whiteout having any maths skills, would you think this stands any chance of being on right side?

    https://twitter.com/INArteCarloDoss/status/1631041670157352969

    The Kobeissi Letter

    This is incredible:
    Market futures now see FOUR rate hikes as the BASE CASE!
    There is currently a 40% chance rates rise to 5.75% by July.
    There is now a 13% chance of rates rising to 6% or higher.
    Just 1 month ago, odds of rates rising above 5.50% were at ZERO!
    Buckle up.

    https://twitter.com/KobeissiLetter/status/1630959916541198336

    The Kobeissi Letter

    Since February 1st:
    1. Markets added 75 bps in rate hike expectations
    2. Odds of 50 bps rate hike in March up 30%
    3. CPI, PPI and PCE inflation above expectations
    4. PCE inflation up for 1st time since Oct. 2022
    5. Unemployment rate lowest in 50 years
    How can the Fed pivot?

    https://twitter.com/KobeissiLetter/status/1631005974185082921

    The Kobeissi Letter

    SUMMARY OF FED’S KASHKARI REMARKS (3/1/23):
    1. Inflation to 2%, even if it takes a recession
    2. Concerning that hikes haven’t lowered inflation
    3. “Open minded” about 25 or 50 bps hike in March
    4. Rather raise rates too high than keep too low
    5. Balance sheet still too large

    https://twitter.com/KobeissiLetter/status/1630941919147696128

    The Kobeissi Letter

    KASHKARI: “The risk of under-tightening is far worse than the risk of over-tightening.”
    In other words, the Fed would rather raise rates too high than keep them too low.
    Are rates going to 6%+?

    https://twitter.com/KobeissiLetter/status/1630939082200166401

    The Kobeissi Letter

    JUST IN: Mortgage demand declined 5.7% last week to a fresh 28-year low.
    Overall mortgage demand is now down 44% since one year ago.
    The average interest rate on a 30-year mortgage is now 6.7%, highest since November 2022.
    Interest rates are saying inflation is here to stay.

    https://twitter.com/KobeissiLetter/status/1630925401806581766

    The Kobeissi Letter

    The average home price in the US has declined for 6 straight months.
    This is the first 6th straight monthly decline since 2011.
    Further, home prices fell 4.9% from June to Dec 2022.
    By comparison, home prices fell 5.8% from June to Dec 2008.
    Did the housing bubble just burst?

    https://twitter.com/KobeissiLetter/status/1630725551915671552

    Two Office Landlords Defaulting May Be Just the Beginning

    https://twitter.com/MO_Quant/status/1631034788332150784

    Aspen is 48% vacant for the week starting March 19 with the best snow in decades.

    https://twitter.com/Stimpyz1/status/1630938625335767041

    Just texted my sister who does short term rental management in Telluride. Apparently they are down 20% through January.

    https://twitter.com/SactoGeoff/status/1630981703421530113

    “40 years of falling rates were the engine of financialism – optimizing the real economy around leveraged finance and asset prices. Without the ever-falling rates, financialism is over. The next 40 years can’t be like the last 40. Investors are yet to see it.”

    https://twitter.com/Stimpyz1/status/1630950610748198913

    Lance Lambert

    Looks like the Federal Reserve accidentally hit “Ctrl + Alt + Delete” on the U.S. housing market

    https://twitter.com/NewsLambert/status/1631038128377978880

    My, how the tables have turned

    https://twitter.com/texasrunnerDFW/status/1631047310615429121

    1. He can thank the central banks and their insane low rates policies.

      Jerome Powell and his buddies should be in prison for what they did.

      1. Prison is too good for them. The historical penalties for debasement of the currency were usually more draconian.

    2. Sorry, poors, but Portland voted for this.

      Maybe try yer luck in Greater Idaho.

    3. This is kind of a big deal. I wonder how many Sears and Kmarts are still sitting abandoned there. I’m sure the dipsh!ts in Portland think this represents progress but it actually represents a serious acceleration of their decline. It’s hard to fathom this level of mismanagement from the lofty heights they were at not so long ago.

      In other news there is a video on Bend out where a reporter went to the homeless shelter in December and met a previous mayor (during the 80s) who was living there. He died in January after getting frost bite on a toe, having it removed, and then stroking out from alcohol withdrawal. Oregon is swirling the drain apparently.

  14. A report from CNBC. “Diana Olick: Correction: Lower rates to start the year caused a brief surge in homebuying, but mortgage demand from homebuyers would seem to indicate a very slow spring is ahead. An earlier version misstated the timing.”

    —

    – The earlier surge in house buying appears to be the “Return to Normal” phase of general behavior of asset bubbles. This is “I think the worst is over” phase, where knife catchers jump in, in my view.

    – Good luck with that.

    Reference:
    “Understanding Economic Bubbles”
    Author: Álvaro Jiménez Jiménez Tutor: Jordi Caballé Vilella1
    Programa Universitat-Empresa
    2011
    p.18, Figure 1.9. Bubble Phases

    —

    The Orange County Register. “The Case-Shiller composite’s recent universal drops are a rarity. Before this slump, all 20 cities had suffered one-month drops just 13 times since 2000. All but one of those across-the-board drops came in two, six-month streaks amid the Great Recession, with 20-city dips ending in February 2008 and February 2009.”

    —

    – The Case-Shiller Housing Index is the most lagging indicator for U.S. housing there is to my knowledge, but it does – over time – track the rise and fall of Housing Bubble 1.0 (up to 2006 peak) and Housing Bubble 2.0 (currently bursting).

    From Investopedia:
    Understanding the Case-Shiller Housing Index

    “Each month’s index data reflects transactions for three months, so that the Case-Shiller indexes for June, published at the end of August, reflect transaction prices in April, May, and June, for example.”

    —

    – The U.S. and developed world economy was based on cheap credit and stimulus (aka “money printing”), but then the inevitable inflation dragon reared its ugly head. The Fed and other central banks knew the risks and yet went full speed ahead and stimulated the hell out of the economy anyway.

    – The 10 year. U.S. Treas. – important for U.S. mortgage rates – just touched 4%.
    – U.S. mortgage rates as of today are just a hair under 7% again.
    – House price appreciation was driven by low rates and easy $ policies. Those days are gone. No amount of Realtor-speak will change that.
    – The U.S. and global economies can’t handle the truth of higher rates and tighter $.
    – There will be pain. The Fed wants a recession to reduce the inflation that they caused. So far, they’re only raising FFR, but haven’t significantly reduced their balance sh*t (BS) of U.S. Treas. + MBS. Either they raise rates above CPI, and/or sell off the BS, inflation won’t get back to their “2%” target. I think they want 3-4% inflation for a while, based on what they’re doing and not on what they’re saying. Not speaking truth about their actual objectives, in my view.
    – Enjoyed the boom? Now enjoy the bust.

    2. it does – over time – track the rise and fall of Housing Bubble

      I believe it misses one of the striking features of the Housing Bubble, which is the rise in house size as the speculative mania grew. C-S is “same house” comparisons.

  15. Almost 1,000% increase | California wildfires cause housing insurance prices to spike
    ABC10
    Mar 1, 2023

    Some California residents are being dropped from their housing insurers all together, while many residents say they can barely afford current payments.

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

    3:24.

    1. Almost 1,000% increase | California wildfires cause housing insurance prices to spike
      ABC10

      – I hear that FL house insurance has also become very expensive after hurricanes Nicole and Ian last year. Maybe risk is actually getting repriced? Maybe there’s going to be some realistic costs for living in hazard areas instead of being shifted to U.S. taxpayers? Maybe?

    2. Other than, “All you can eat,” the next most comforting phrase to a Californian is, “We’re all in this together!”

      1. ** Other than, “All you can eat,” the next most comforting phrase to a Californian is, “We’re all in this together!”

        Don’t forget “Like everyone else . . (insert bad news)”

        Most overused excuse for failure. ‘Cause, ya know, misery loves company so if we all whine together no one gets blamed.

        ‘Scuse me now, got some more pots & pans to deliver to some SF Bay Area landlords who finally grew a spine.

    3. It sure sux to be a California homeowner living in a firezone that home insurers have abandoned, because the risk of a total loss is too high.

      1. “a California homeowner living in a firezone”

        i.e. about half of the state as far as insurers go.

    4. When I bought my house in SoCal in 2010 there were only two options for fire insurance, although the one I chose was pretty inexpensive and was a reputable company. When I sold my house the new owner could only get insurance through the FAIR plan. And from what I’ve heard you can get kicked off the FAIR plan for very minor things.

  16. “Diana Olick: Mortgage rates moved higher again last week, pushing buyers back to the sidelines just as the spring housing market is supposed to be heating up.”

    With the 10-year Treasury yield kissing 4%, I don’t expect rates will go down much this week.

    1. Updated Thu, Mar 2 2023 9:44 AM EST
      S&P 500 slides Thursday as rates march higher; Dow rises on Salesforce gain: Live updates
      Tanaya Macheel
      Samantha Subin

      The S&P 500 slid Thursday as traders fretted over a continued rise in interest rates.

      The broad market index fell 0.5%, while the Nasdaq Composite dropped 0.8%. The Dow Jones Industrial Average bucked the trend, eking out a 53-point gain as Salesforce shares popped on a strong quarter and forward guidance.

      “The market’s reacting to stronger economic data, and data that is not confirming the correction in inflation,” said Gibson Smith, chief investment officer at Smith Capital Investors. “It’s glaringly clear for equities that we could be an environment where growth is not coming in as high as we would like, and inflation is not coming down as fast as we would like, so the higher rates are starting to split the equity market.”

      Rates pressed higher Thursday, with the benchmark 10-year note yield trading above 4%. The 2-year note yield reached levels not seen in more than a decade.

      A surge in labor costs and a pullback in jobless claims reported early Thursday point to the likelihood that the Fed will raise its benchmark interest rate another 0.25 percentage point later this month.
      …

    2. The Financial Times
      US Treasury bonds
      Deluge of inflation data pushes US borrowing costs to 2007 levels
      Yield on two-year Treasury note hovers nears 5% as investors brace for further Fed rate rises
      The US Federal Reserve building in Washington
      Futures markets show the US Federal Reserve’s main policy rate peaking at 5.45% in September
      Kate Duguid in New York and Tommy Stubbington in London an hour ago

      An avalanche of hot inflation data over the past month has lifted US borrowing costs to the highest point in a decade and a half, intensifying debate over how much further interest rates must rise to rein in soaring consumer prices.

      The yield on the two-year Treasury note hit 4.94 per cent on Thursday, a level last reached in 2007 before the global financial crisis. Yields on 10-year and 30-year Treasuries this week broke through 4 per cent for the first time since November.

      The moves follow weeks of unrelenting data showing inflation in the US running hotter than economists had expected, putting pressure on the Federal Reserve to redouble efforts to tamp down growth by raising interest rates.

      “I don’t recall this dramatic of a reassessment of economic conditions in such a short time period, with the exception of major shocks like Covid-19 and the collapse of Lehman Brothers,” said Rick Rieder, global chief investment officer for fixed income at BlackRock, the asset manager.

      He added: “I would never have thought you would have seen this kind of re-acceleration in inflation.”

      The latest in the string of hot inflation data was a report released on Thursday that showed unit labour costs — the average cost of labour per unit of output — rose 3.2 per cent on an annualised basis in the last quarter, revised up from a previous estimate of 1.1 per cent.

      Last week came an acceleration in the Fed’s preferred gauge of inflation, the personal consumption expenditures price index, to 0.6 per cent month on month in January from 0.2 per cent in December. Early in February, the US reported that consumer price index in January had cooled less than economists had forecast.

      The initial trigger for the bond sell-off was a US jobs report on February 3 that said more than half a million workers had been hired in January, nearly three times what economists had expected. Taken together, the economic data has dashed hopes the Fed will soon be able to pause interest rate increases.
      …

      1. “I would never have thought you would have seen this kind of re-acceleration in inflation.”

        Apparently the man is completely ignorant of the 1970s inflationary episode.

        1. Economy Monetary Policy
          How the Great Inflation of the 1970s Happened
          By Leslie Kramer
          Updated May 26, 2022
          Reviewed by Michael J Boyle
          Fact checked by Amanda Bellucco-Chatham

          It’s the 1970s. The stock market is a mess. It has lost nearly 50% of its value over a 20-month period. For close to a decade few people want anything to do with stocks. Economic growth is weak, which results in rising unemployment that eventually reaches double digits.

          The easy money policies of the American central bank were meant to generate full employment by the early 1970s. Unfortunately, they also resulted in high inflation.

          Under different leadership, the Federal Reserve System would later reverse its policies, raising interest rates to some 20%. This level was once considered usurious. For interest-sensitive industries, such as housing and automotive, rising interest rates can cause a calamity, with many people priced out of new homes and cars.

          The Great Inflation of the 1970s

          Overall, the macroeconomic event referred to as the Great Inflation lasted from 1965 to 1982. This is the story of the painful period in the 1970s, which began in late 1972 and continued until the early 1980s. In his book, ‘Stocks for the Long Run: A Guide for Long-Term Growth’, Wharton professor Jeremy Siegel called this time “the greatest failure of American macroeconomic policy in the postwar period.”

          The Great Inflation was blamed on oil prices, currency speculators, greedy businessmen, and avaricious union leaders. However, it is clear that monetary policies that financed massive budget deficits and were supported by political leaders were the cause.

          This mess was proof of what Milton Friedman wrote about in his book, ‘Money Mischief: Episodes in Monetary History’: “Inflation is always and everywhere a monetary phenomenon.”

          The Great Inflation and the recession that followed ruined many businesses and hurt countless individuals. Interestingly, John Connally, the Nixon-installed Treasury Secretary with no formal economics training, later declared personal bankruptcy.
          …

          1. “For interest-sensitive industries, such as housing and automotive, rising interest rates can cause a calamity, with many people priced out of new homes and cars.”

            A kernel of truth.

  17. I was thinking about how small groups obtained such power that they have created the dsyfuctional fraud for the majority.
    Its almost as if the anarchy group of burn the whole system down teamed up with the .ooo1% rich Corporations , Banks, Rich Elites, Big Pharmacy, etc in a power grab to take over by burn the system down and replace with One World Order, , Corporate Stakeholder Monopoly rule. .
    It’s all designed to take over the majority ,forced enslavement, preaching Marxist equity, when these groups are thieves, , lo and parasitesersters

  18. Sorry, I pressed button before I finished.
    But Im saying the Rich and the poor have been the biggest beneficiaries of looting the tax system , and leaching off the productive majority.
    Now this all out power grab to promote the false narratives that whites are the problem and burn down the current structures and the Rich/ Poor take over.
    Than ad all the Climate change and Pandemic false narratives to destroy a sustainable earth, its a fraud of epic nature to defeat the productive majority.
    Just saying.

    2. This is why the *ONLY* response to any future lockdown, for any reason, must be mass violence.

      The United States is the last (mostly) free country in the world.

      There can be no compromise with these Marxist globalists. None. Never. The only option is their complete and total extermination.

      Extermination? Yes, extermination, because Marxist globalists are irredeemable, they are the enemy of all humanity.

      1. The problem is 196 Countries , including Biden, plan on signing a final Treaty with the World Health Origination , that they get to dictate the response to the next panademic.
        The WHO can supersede all rights and Constitutional protections of these Countries by the Treaty Agreement.
        The WHO amendments say things like they don’t recognize human rights, and free speech and what they consider disinformation can be obstructed under panademic conditions declared. . .
        The WHO hold right to send in foreign troops to enforce dictates not complied with.The WHO could mandate lockdowns, masks, mandated vaccines, fines, penalties, and even prison for the non compliance, curfews, marshal law etc..
        The World Health Organization, (WHO)is a corrupt puppet for WEF, China and Bill Gates is biggest donor.
        Tedros, who is head of WHO is a known Commie thug who isn’t even a medical Doctor.
        So, Joe Biden thinks he can sneak around and give up all US Citizens rights by Executive order by Treaty to third party
        WHO, without Congress/Senate approval .

        JoBiden is trying to override US Constitution and amendments by TREATY
        DC crook politicians aren’t doing ,anything ain it.

        .

  19. Why does Joe Biden snicker at kids who died from fentanyl poisoning?

    Because he is senile?
    Because he is a Democrat?
    Because he has no Soul?

    ‘How dare you!’ Mother who lost both her sons to fentanyl poisoning says she’s ‘shocked’ at ‘despicable’ Biden for LAUGHING at the claim his policies are to blame for their deaths and demands an apology

    https://www.dailymail.co.uk/news/article-11812189/Mother-slams-despicable-Biden-laughing-sons-fentanyl-deaths.html

  20. $309,900 3 bd 2ba 1,535 sqft
    Price cut: $20K (2/28)
    1806 Club Ave, Kingman, AZ 86401

    https://www.zillow.com/homedetails/1806-Club-Ave-Kingman-AZ-86401/2061625077_zpid/

    Date Event Price
    2/28/2023 Price change $309,900 (-6.1%) $202/sqft

    1/31/2023 Price change $329,900 (-5.5%) $215/sqft

    12/30/2022 Price change $349,000 (-2.8%) $227/sqft

    9/21/2022 Price change $359,000 (-7.7%) $234/sqft

    9/9/2022 Listed for sale $389,000 $253/sqft

    This is a brand new shack.

    1. I drove south through Kingman on my way to work/live in Sierra Vista, but blinked and missed it.

      I imagine inventory is going to exploded there the next few years since it’s stuck between the 2 bubble city poster-children of Vegas and Phoenix.

    2. That’s a nice rock by the door, I wonder what that appraises for? I feel like they skimped on it a bit tho. Do you think the builder had a conversation about it? Was it a few rocks at first and then how about one big rock… and then no just one kind of skimpy rock is enough. Is there a focus group on this sort of thing in AZ?

      1. It looks like a fake plastic rock used to cover up irrigation/hose stuff etc. Focus on where the rock meets the gravel.

        1. Wow 300k and you can’t even get a real landscape rock. Half the house is probably fake.

  21. Does this blog exist in an alternate universe? I keep seeing evidence posted here on a daily basis, some by myself, of ongoing double-digit US housing price declines. Yet the MSM annointed experts keep offering their repeated assurances that this time is different, and US housing price declines will be minuscule…a mere flesh wound.

    I wonder who will prove correct, when viewed through the lens of history?

    1. Real Estate
      Housing prices continue downward trend, particularly in Seattle area
      Feb. 28, 2023 at 6:59 am Updated Feb. 28, 2023 at 12:34 pm
      Houses in Seattle’s Capitol Hill neighborhood (in the foreground) are covered in snow in November. (Daniel Kim / The Seattle Times)
      By Prashant Gopal
      Bloomberg

      Home prices in the U.S. declined for a sixth straight month, sending a key index of values down 2.7% from its peak in June.

      Prices nationally fell 0.3% in December from the month before, according to seasonally adjusted data from S&P CoreLogic Case-Shiller.

      Seattle and San Francisco clocked another month among the fastest-cooling housing markets.

      Seattle-area home prices dipped 1.8% from November to December, the seventh consecutive month of decline. Seattle-area prices were also down 1.8% compared to December 2021, the region’s first year-over-year price drop since 2019, according to the index.
      …
      https://www.seattletimes.com/business/real-estate/housing-prices-continue-downward-trend-particularly-in-seattle-area/

      1. “Seattle-area home prices dipped 1.8% from November to December, the seventh consecutive month of decline.”

        A one month decline of 1.8% occurs at an annualized rate of 1-(1-0.018)^12 = 19.6%. Plus, as Ben is wont to point out, the S&P CoreLogic Case-Shiller index reflects last year’s rate of price decline. There is a good chance that the rate of price decline in many markets will accelerate in the coming months as interest rates don’t decline and inventories swell, conferring market power to buyers.

        1. Business
          ‘Rapid reversal of price growth’: San Diego home prices declining more quickly than other cities
          Hillside of homes above Morena Boulevard
          San Diego has nearly erased annual home price gains. Pictured: A hillside of homes above Morena Boulevard in San Diego in late February.
          (Hayne Palmour IV/For The San Diego Union-Tribune)
          By Phillip Molnar
          March 1, 2023 5:15 AM PT

          San Diego was one of the hottest home markets in the nation throughout the pandemic. Not anymore.

          America’s Finest City saw its annual price gain drop to 1.6 percent in December, said the S&P Case-Shiller Indices released Tuesday. That’s down from a 30 percent rise in March.

          San Diego was among the top three fastest appreciating markets in the 20-city index for nearly two years of the pandemic. Now it is in the bottom four with Portland, up 1.1 percent in a year; Seattle, down 1.8 percent; and San Francisco, down 4.2 percent.

          Miami was the top market, with prices growing 15.9 percent in a year. It was followed by Tampa, up 13.9 percent, and Atlanta, up 10.4 percent.

          CoreLogic chief economist Selma Hepp wrote that the West and Mountain West are seeing prices drop the quickest, but all markets are affected by rising interest rates.

          “The rapid reversal of price growth is evident across markets,” she wrote.

          The interest rate for a 30-year, fixed-rate mortgage hit a low of 6.27 percent in December, said Freddie Mac, down from a high of 7.08 percent in November. However, rates were on the rise this week, around 6.78 percent Tuesday morning, said Mortgage News Daily.

          Zillow senior economist Nicole Bachaud wrote that January saw an increase in buyers to the market as rates fell, but the recent rise in rates didn’t bode well for the market.

          “As rates are right back up in February,” she wrote, “it’s likely that any momentum in this market will be short-lived and affordability challenges will remain key to the direction and speed the market moves in the coming months.”

          The Case-Shiller Indices are delayed by several months, so more recent sales data shows San Diego County home prices have continued to drop. The indices track repeat sales of identical single-family houses — and are seasonally adjusted — as they turn over through the years. The resale single-family home price was $825,000 in December. By January, it was down to $820,000.

          The fastest appreciating markets are still less expensive than San Diego, said the Redfin Data Center. The single-family median sale price in December was $530,000 in Miami, $386,000 in Tampa and $450,000 and Atlanta.

          Yet price declines throughout the nation show every market is, more or less, in the same boat. The S&P Case-Shiller Indices 20-city index showed home prices were up 4.67 percent annually, down from a high of 21.2 percent in April.

          San Diego has a long way to go to get anywhere near price drops in The Great Recession. Prices declined 26.6 percent in a year in October 2008.
          …
          https://www.sandiegouniontribune.com/business/story/2023-03-01/san-diego-home-prices-dropping-faster-than-other-cities

      2. Capitol Hill is a real shithole. That’s where they had the CHAZ (Capitol Hill Autonomous Zone), where suddenly anarchy was the flavor of the day and no cops were allowed. It turned into an open air drug market and center for depravity until somebody was gunned down and the cops finally moved in and shut her down. You’d have to be mentally ill to buy a house there.

    2. Yahoo
      Bloomberg
      US Home Prices Fall From Year Ago in First Since 2012, Redfin Says
      Prashant Gopal
      Thu, March 2, 2023 at 9:41 AM PST·1 min read

      (Bloomberg) — US home prices hit a turning point last month, dropping from a year ago for the first time since 2012, according to Redfin Corp.

      In the four weeks through Feb. 26, the median price for a typical home was $350,246, down 0.6% from the same period a year earlier, the brokerage said Thursday.

      The surge in borrowing costs last year slammed the brakes on the housing market, sidelining buyers and slowing sales. While price declines could bring some slight relief to consumers, higher mortgage rates are squeezing affordability and a lack of homes for sale could limit how far prices will fall.

      “Prices falling from a year ago is a milestone because it hasn’t happened since the housing market was recovering from the 2008 subprime mortgage crisis,” said Taylor Marr, Redfin’s deputy chief economist. “Prices will probably decline a bit more in the coming months, but first-time buyers hoping to score a major deal this year are likely out of luck.”

      Buyers are still getting squeezed. Mortgage rates are nearly double what they were at the same time last year. One measure, by Mortgage News Daily, showed the average for a fixed-rate, 30-year loan above 7%.
      …
      https://finance.yahoo.com/news/us-home-prices-fall-ago-174156366.html

    3. Home prices will fall this year but then enter a growth period like the one that started in the late 1980s, Zillow survey shows
      Filip De Mott
      Thu, March 2, 2023 at 8:55 AM PST·2 min read
      In this article:
      Home with “for sale by owner” sign.
      If you’re not in a rush for housing, it’s probably better to improve your credit instead of getting a subprime loan.
      Frederic J. Brown/AFP/Getty Images

      US home prices will fall 1.6% in 2023, then rise by an average yearly rate of 3.5% through 2027, a Zillow survey said.

      That’s the same pace that was seen in the relatively stable period from 1987 to 1999.

      Under that scenario, home prices will be up 23% in 2027 from 2021 levels, according to Zillow.

      While US home prices are expected to slide this year, the housing market will rebound and enter a steady cycle of growth, according to economists polled by Zillow.
      …
      https://finance.yahoo.com/news/home-prices-fall-then-enter-165500778.html

  22. MarketWatch.com
    Market Extra
    The secret to stocks’ success so far in 2023? An unexpected $1 trillion liquidity boost by central banks.
    Published: March 2, 2023 at 1:50 p.m. ET
    By Joseph Adinolfi

    Gains for global equities have left many on Wall Street perplexed as stocks — especially high-risk growth names with little or no profits — have rebounded from last year’s punishing selloff, resisting both the pull of more attractive bond yields, and the threat of higher interest rates.

    But some Wall Street analysts say they’ve found an explanation that has little to do with inflation and the state of the global economy.

    The upshot is this: The Federal Reserve, European Central Bank and Bank of England have advertised that they’re trying to drain the ocean of banking-system liquidity, but on a global scale, liquidity has actually increased in recent months. That’s due in part to factors that are outside the control of policy makers.
    …

  23. I live in the suburbs of Portland, Oregon. Saw a shack for sale as a short sale. I have lived in the Portland and Seattle area and I haven’t seen a short sale since 2013. House is in a decent, non-homeless and Antifa controlled neighborhood, the photos make the house look ok, original owner since 1995, etc. as I was telling my wife, bankruptcy happens slowly them suddenly.

    1. A short sale on a house “owned” for almost 30 years. Fake it till you make it, the American way.

    2. a decent, non-homeless and Antifa controlled neighborhood

      Wait, didn’t you mean “non-Antifa controlled?” Because otherwise you have a serious contradiction in your statement.

  24. “America’s Finest City saw its annual price gain drop to 1.6 percent in December, said the S&P Case-Shiller Indices released Tuesday. That’s down from a 30 percent rise in March.”

    The December 2022 Case-Shiller figures actually compare price levels for months before December 2022 to price levels for months before December 2021. Given that it is already March 2023, they are several months out of date, and they compare data after prices started falling to data from before the onset of price declines.

    Despite the data’s obsolescence, the decline in the year-on-year price change documents rapid deceleration which is a characteristic of a bursting bubble.

    1. The Financial Times
      Cryptocurrencies
      Crypto bank Silvergate plunges after warning on ability to survive
      Shares of California-based lender more than halve after it revealed deterioration in capital position
      An FT montage of a Silvergate logo superimposed above US dollar bills
      Many of the world’s top crypto miners, exchanges and custodians used Silvergate to deposit and transfer billions of dollars
      Joshua Franklin in New York and Scott Chipolina in London 2 hours ago

      Shares of crypto-focused bank Silvergate shed more than half their value on Thursday after the lender said it was evaluating its ability to survive as a going concern.

      California-based Silvergate, one of just a few US banks to focus heavily on crypto, has been hit hard by the recent collapse of digital token prices and the implosion of Sam Bankman-Fried’s FTX empire, which was a banking client.

      In a regulatory filing on Wednesday, Silvergate said it would not be able to file its annual report with the Securities and Exchange Commission on time. It said it would miss the March 16 deadline because of a further weakening in its capital position since last month, when it reported dismal fourth-quarter earnings.
      …

    2. The Financial Times
      Stablecoins
      Binance-branded crypto token hit by $6bn outflow after US crackdown
      New York regulatory move accelerates withdrawal from BUSD stablecoin
      Binance chief Changpeng Zhao has said the exchange intends to pull back on potential investments in the US after the SEC launched enforcement actions against crypto companies
      Scott Chipolina in London yesterday

      Investors have pulled more than $6bn out of a Binance-branded digital token in the past month, in a sign that a recent US regulatory crackdown on digital assets is putting pressure on the world’s largest crypto exchange.

      New York’s financial regulator last month halted new issuance of the stablecoin, known as BUSD, citing “several unresolved issues” relating to Binance’s relationship with Paxos, the company responsible for minting the dollar-pegged token.

      Since then holders have rushed to withdraw their cash, causing the BUSD in circulation to fall by more than a third, according to data from blockchain analytics platform Nansen.
      …

  26. https://www.youtube.com/watch?v=GdYAYgbf5Uc

    “Down on the southern border in Yuma, AZ is a surreal and alarming situation taking place. Today we meet up with Sheriff Wilmot who brings us in with full access. There’re over 100 nationalities crossing in Yuma, all orchestrated by the Mexican cartels. No matter where you stand on the border issue, it’s an issue that needs attention since its current state is unsustainable.”

    1. No matter where you stand on the border issue, it’s an issue that needs attention since its current state is unsustainable

      False statement. Democrats love it.

  29. “Laid-off workers may need to sell their properties, either to relocate or because they can’t afford their homes. If this happens, it increases the supply of for-sale homes, which pushes down prices.

    Gosh, I fear this could result in a vicious downward cycle.

  30. For hours, rental property owners shared their stories of frustration and opposition to the ongoing emergency ordinance that they say has ruined their livelihoods. ‘I’m only owed $15,000, but I’m going to lose my house as a result of the moratorium,’ said Oakland property owner Hannah Kirk, a single mom.”

    Landlords, were you somehow unaware that your rental properties were sited in a Democrat-Bolshevik malgoverned state and city where parasitism and freeloading are the supreme virtues, to be enabled and exalted by the State?

    1. To be fair, it was a national moratorium – the largest ever illegal government overreach in history.

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