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How Many Times Have We All Heard The Word Unsustainable?

A report from Mansion Global. “Austin, Texas has cooled faster than any other major U.S. metro over the past year, according to the report. The city’s median price plummeted 13% year over year in February. Austin leads a trend where migration boomtowns during the pandemic—often smaller, more affordable tertiary cities—are seeing their fortunes reverse. After Austin, home-buyer demand has dropped off most steeply in Seattle. Pending home sales there fell 40% in February compared to a year ago. Seattle was followed by Phoenix and Tacoma, Washington, as the third- and fourth-fastest cooling housing markets, respectively. Denver rounded out the top-5 list.”

“Phoenix and Las Vegas, where prices soared amid in-migration, are now seeing the proportion of sellers offering price cuts grow the fastest, according to Redfin. Indeed, negotiability seems to be one way to pull house hunters off the sidelines, agents said in the report. ‘Overpriced listings are the ones sitting on the market,’ said San Jose Redfin agent Laxmi Penupothula.”

The Houston Chronicle in Texas. “Wade Bowlin, who has more than 30 years of commercial real estate experience, says a market slowdown is the perfect time to ponder the firm’s future. Q: Houston has excess office space, particularly in older properties as tenants seek new buildings. Is there consensus on what should be done with this excess space?”

“A: There’s likely going to be some 35 million to 40 million square feet of office space over the next decade that will be obsolete and that will never be leased again. I think everyone is trying to figure out what will be done with that. Is it going to be used for document storage? If they ever legalize marijuana would it be used to grow it — or with what they’re doing with UV lights, will it be used to grow tomatoes and potatoes? There’s going to be a lot of adaptive reuse and conversions into apartments.”

The Union Tribune in California. “Downtown San Diego is about to get a lot more residents. There are roughly 1,500 new apartments set to open this year throughout East Village, Little Italy and other parts of downtown. After two slow years, San Diego’s downtown didn’t see a ton of new residential units, but major projects that have been in the works are finally opening — all within months of each other. It isn’t just downtown seeing a lot of activity. There are around 4,700 new units across San Diego County — about the same as last year — spread throughout the region to the Midway District, Oceanside, Chula Vista, North Park, Point Loma, National City and others.”

“The biggest project to open downtown this year will be Simone, with 395 apartments and one of the tallest buildings in the area at 455 feet. Its website calls it Little Italy’s most anticipated new address — technically, it is a block outside of the neighborhood on Union Street — and seems to be aiming for affluent renters based on its promotional materials, featuring a scantly clad woman coming out of a pool with a designer watch and sunglasses and fancy cocktails.”

From CNBC. “The rental market has seemingly flipped: After prices surged throughout 2021 and most of 2022, they’ve declined almost as quickly for five of the last six months, a new rent report reveals. Oklahoma City had the most dramatic decline, with year-over-year rent prices dropping by 15.71% in February. Prices there fell 8% between January and February of this year. The biggest factor in recent rent price declines is a glut of new rental units in 2023, ‘the largest in 50 years,’ says Thomas LaSalvia, director of economic research at Moody’s Analytics. ‘This is very much a supply and demand story where demand is easing a little bit and supply growth is picking up.'”

The New York Post. “After nearly two years on the market and a $1.5 million price cut, David Duchovny is finally parting ways with his beloved Central Park West apartment. ‘The X-Files’ star purchased his longtime co-op in the Ardsley building in 2012 for $6.25 million. But he sold it this past week for $5.65 million — a $600,000 loss, records show.”

The Aspen Times in Colorado. “An open house I hosted in the midvalley last week was far from a barn-burner. Ideally, you hope for a revolving door of buyers and agents over a two-hour period rather than the trickle of visits I got that day. The low turnout wasn’t unexpected. But this open house was different. This time … the seller was me. Me and my wife, to be exact. Something was off as I put the sign in my yard and unlocked the door — an unexpected lack of confidence, an uncertainly had crept in. What if no one shows up? Will they don’t like it? Am I priced right? What happens if it doesn’t sell? Like others these days, I recalled we were at the mercy of a new, uncertain market in an environment very different than 12 months ago.”

“I’ve helped others navigate these questions and doubts, but now had to ask myself: Am I listening to my own advice? Or have I just been BSing past it all for the sake of a sale? I’ve represented many clients over my career, but ironically never one buying and selling at the same time, which is suddenly what we’re doing. It was just a short year ago that pen houses were almost an afterthought, when just the whisper of a new listing could elicit multiple offers before the sign got hammered in the ground. List it, and they will come with the outcome nearly automatic. But no longer.”

“The interesting dichotomy is sellers are still realizing strong returns, and buyers are beginning to see the reductions they have been waiting for and more room to negotiate. It’s clear the era of easy money is over, and the economy is correcting. But we all knew it was coming. How many times have we all heard the word ‘unsustainable?'”

The Globe and Mail in Canada. “10 Old Mill Terrace, Toronto. Asking price: $2,690,000 (January, 2023). Selling price: $2.5-million (February, 2023). Previous selling price: $2,640,000 (March, 2021). The owner of this five-bedroom house bought it for $2.64-million in 2021, but their plans changed in the following year, so they put it back on the market at a slight markup of $2.69-million in January. One buyer came through with an offer, but at a steep discount – $140,000 less than what the seller had paid.”

“‘[The sellers] realized when they bought it, it was the peak of the market, and the market is off somewhat now, so they were prepared to take a loss,’ said agent Nigel Denham.”

From Bloomberg. “At the heart of Sweden’s woes is a dysfunctional housing market, which has not only cemented social divides, but exacerbated them. The country’s property boom — which saw prices increase by almost 250% in the past 20 years — was fueled by razor-thin borrowing costs and a shortage of rental properties. This lack of housing squeezed poorer families into overcrowded accommodation. And pushed others into buying — the total value of mortgages increased 459% in the two decades up to 2022. Before the latest crisis, household debt, including mortgages and consumer debt, had soared to more than 200% of disposable income, according to the OECD’s latest data from 2021. That is double the level in Germany.”

“Until now these problems had been papered over by cheap money and an ever-growing economy. With both coming to an end the vulnerabilities in the system are being exposed. An over indebted middle class now faces the prospect of not being able to afford to pay their mortgages, much less everyday luxuries. At the same time the number of corporate bankruptcies soared to the highest level in at least a decade in January as construction companies came under pressure.”

“K2A Knaust & Andersson Fastigheter AB, a builder and manager of rental apartments, has lost 70% of its market value since the Riksbank started hiking rates last year. It has postponed almost all of its construction starts due to the market uncertainty. ‘If you’re looking at the situation from a societal perspective, it’s a huge problem,’ Chief Executive Officer Johan Knaust said. ‘There will be a big vacuum in construction.'”

Stuff New Zealand. “Christchurch’s construction industry could be facing a tough year as the recent building boom becomes a thing of the past. With the combination of higher construction prices, rising mortgage interest rates and a cooling housing market dampening demand for new homes, the industry is having to downsize.”

“Christchurch builder Peter de Gouw said he laid off half of his 10 staff four weeks ago. ‘There’s not nothing happening, but there’s very little happening. It seems to be very widespread. We’re pretty quiet.’ De Gouw described the shift as part of the normal construction ‘boom-bust cycle’. He said he expects things to pick up next year, but it was still hard for those who lost work. ‘Construction companies, builders and sub trades are going to find it very, very tough over the coming 12 months, there will be a massive increase in liquidations.'”

From ABC News in Australia. “The Atherton Tablelands was once an agricultural mosaic of corn and sorghum crops intertwined with dairy production and tropical fruits. But now the landscape is awash with green-leafed trees. In fact, hectares upon hectares of avocados. While this impressive expansion provided growers with a premium fruit income, it has in recent years led to an avocado glut hitting the market. Dozens of avocado farms are listed for sale in Mareeba alone with recent low fruit prices the key contributing factor. But the fruit’s price is also the reason many are struggling to sell.”

“‘The lower prices have put people off from buying, avocado farms are not the flavour at the moment,’ says local real estate agent John Falvo. ‘Until the markets change and become more consistent, I think we have challenges trying to sell these properties.'”

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This Post Has 51 Comments

  1. ‘[The sellers] realized when they bought it, it was the peak of the market, and the market is off somewhat now, so they were prepared to take a loss’

    That’s the spirit sellers, eat yer losses like a man!

  3. ‘it is a block outside of the neighborhood on Union Street — and seems to be aiming for affluent renters based on its promotional materials, featuring a scantly clad woman coming out of a pool with a designer watch and sunglasses and fancy cocktails’

    Klassy with a K.

      2. “…aiming for affluent..”

        When 50%-60% of all US households can’t come up with $1000 cash for an emergency, me wonders where are all these ‘affluent’ renters going to come from and why would they want to live in downtown San Diego? (unless they like going to the SD Zoo a lot, or dressing up as Darth Vader to go to the ComCon conventions)

        1. why would they want to live in downtown San Diego

          Against a backdrop of record high homeless people.

    1. He’s a good boy. I’m surprised the handler didn’t give him a treat. What weirds me out is that they handle his arrival, then leave him adrift departing 🤦🏼‍♀️

  8. A reader sent these is:

    After the Dot Com Bust the NASDAQ experienced many ‘new bull markets’ when the index rallied over 20% from its lows. But it wasn’t until speculative excess was fully flushed out, the Fed began cutting aggressively, and the US was in a recession that we saw the true bottom.

    https://twitter.com/Mayhem4Markets/status/1640357148797304833

    The CRE crisis is beginning to bite: Lloyds is trying to sell a £175m loan secured against 5 Churchill Place (left) owned by Cheung Kei.
    Bloomberg: Cheung Kei has also failed
    to repay a £265.5 million loan from Lloyds secured against 20
    Canada Square which came due in October and is now attempting to
    sell the building.
    Cheung Kei has appointed Jones Lang LaSalle Inc. to find a
    buyer and the broker has set an initial guide price of £250
    million, they added. Cheung Kei bought the property for £410
    million in 2014. I have a feeling they will have to settle for a lot less than £250m.

    https://twitter.com/marcopabst/status/1640314464087031811

    True excess savings are about to be depleted around Q3 but at the same time headline inflation has eased a bit and wages have gone up, so the usual inflation shock (sudden drop in real disposable incomes) got somehow canceled by the savings draw and now you are past that point

    https://twitter.com/INArteCarloDoss/status/1640357831378436096

    Haha looks like stable coins indirectly got FDIC insurance 🤡

    https://twitter.com/FedGuy12/status/1640781220572446721

    Consumer giving recession narrative the middle finger

    https://twitter.com/INArteCarloDoss/status/1640352489194115075

    Silicon Valley Bank resumed trading today 😳

    https://twitter.com/tradingview/status/1640747716799090688

    JUST IN – Jamie Dimon, longtime chief executive of JPMorgan, to be deposed in Jeffrey Epstein lawsuits — FT

    https://twitter.com/disclosetv/status/1640816067189637122

    Coming soon

    https://twitter.com/Mayhem4Markets/status/1640663816651325440

    *SAM BANKMAN-FRIED CHARGED WITH BRIBING CHINESE OFFICIALS
    U.S. ACCUSES BANKMAN-FRIED IN THE NEW BRIBERY CONSPIRACY CHARGE OF DIRECTING THE TRANSFER OF AT LEAST $40 MLN OF CRYPTOCURRENCY TO BENEFIT CHINESE GOVERNMENT OFFICIALS

    https://twitter.com/zerohedge/status/1640708007628619777

    Its never a bribery to tip American politicians
    But the chinese…

    https://twitter.com/cozypront/status/1640709602852364289

    1. “CHARGE OF DIRECTING THE TRANSFER OF AT LEAST $40 MLN OF CRYPTOCURRENCY TO BENEFIT CHINESE GOVERNMENT OFFICIALS”

      Any news on this?

      White House officials met with Sam Bankman-Fried four times this year: report

      By Victor Nava
      December 30, 2022

      Alleged crypto swindler Sam Bankman-Fried reportedly met with President Biden’s aides at least four times this year before he was arrested on fraud charges.

      Bankman-Fried took meetings with senior White House advisor Steve Ricchetti on at least three occasions in 2022 and met with the 80-year-old president’s deputy chief of staff Bruce Reed once in the last year, Bloomberg reported on Thursday.

      The disgraced founder of cryptocurrency exchange FTX met with Ricchetti, who serves as a counselor to the president, as recently as Sept. 8, according to Bloomberg.

      Bankman-Fried’s younger brother Gabriel also reportedly participated in a meeting on May 13.

      The report further demonstrates the close political connections Bankman-Fried developed in Washington before his stunning downfall.

      https://nypost.com/2022/12/30/white-house-officials-met-with-sam-bankman-fried-four-times-this-year/

    2. >>“Jamie Dimon, longtime chief executive of JPMorgan, to be deposed in Jeffrey Epstein lawsuits”

      >“The only secure classified document in DC is the Jeffrey Epstein client list.”

      Good one. LOL

  10. “‘The X-Files’ star ”

    And in today’s edition of Man-We’re-Getting-Old, the X-Files premiered almost THIRTY 30 years ago.

  12. I hadn’t looked in a couple of months but SFH seem to have taken a dead cat bounce in 33458.

    The Donkey bench is deep.

    1. Given that interest rates have doubled it is astonishing. What I have noticed in my little burg is that there is very, very little for sale. Just 91 listed on zildow. After the previous crash there were well over 1000 for sale

  19. If you bought a $2.7M house last year at a 2.8% mortgage rate, your payment would have been $12,300.

    At today’s rates, your payment is $17,600. Now, you pay $5,300 more per month, which is $63,600 per year. Over 5 years, that add up to a $318,000 savings. Over 30 years, that is a savings of $1,908,000 … a big deal. That is why many don’t care if they overpaid to get the super low mortgage rate.

    1. Based on my math and at 6.8% interest rate, the price must drop to 1.8M to get the same equivalent monthly payment.

    3. you bought a $2.7M house

      Actually Jimmy, I didn’t. I guess I saved $4.4 million, if not more than I made in my career, likely close. Now I don’t have to work. At all.

    5. Assuming you don’t need to sell that $2.7mm house and can only get $2.0mm and have to come out of pocket the $700K plus commission. Now you lost over $800K. At least you saved some money on lower interest payments lol

  20. 11,841 views Premiered 10 hours ago #bugs #diet #manonthestreet
    The World Economic Forum wants us to eat insects to “reduce climate change.” Aldo goes to Hollywood Boulevard to see if everyday Americans are willing to adopt this bug-based diet to help the environment.

    https://youtu.be/ZPGLdHdY72Q

  21. Can the relitters talk their way out of a dark, deep CR8R?

    My personal recollection is that, “money talks, BS walks,” but I guess time will tell.

    1. The housing market contraction is coming to an end as key activity gauges have ‘turned the corner’
      Filip De Mott
      Mar 29, 2023, 12:03 PM

      – Pending home sales rose for the third month in a row, the National Association of Realtors said.

      – Other gauges of the housing market have shown similar indications of a rebound.

      – “After nearly a year, the housing sector’s contraction is coming to an end,” NAR’s top economist said.
      …
      https://markets.businessinsider.com/news/stocks/housing-rebound-contraction-market-pending-home-sales-nar-mortgage-rates-2023-3

  22. Does it seem as though the economy rests on a knife’s edge between inflation and recession, with both looming on the nearterm time horizon?

    1. Personal Finance
      With 62% of Americans living paycheck to paycheck amid inflation, more people have a side job
      Published Tue, Mar 28 2023 9:19 AM EDT
      Updated Tue, Mar 28 2023 9:47 AM EDT
      Jessica Dickler

      Key Points

      – As the cost of living remains high, 62% of Americans now say they are living paycheck to paycheck, according to a recent report.

      – More people have found a side hustle to help make ends meet, the report said.

      – This is also a good time to make a few key changes to your spending and savings plan, one expert says.
      …
      https://www.cnbc.com/2023/03/28/62percent-of-americans-live-paycheck-to-paycheck-amid-inflation.html

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