thehousingbubble@gmail.com
Blog

More And More Sellers Are Accepting The Realities Of The Current Market

A report from Sarasota Magazine in Florida. “Not only did Manatee County see the first year-over-year increase in sales since February 2022, but the area also had the first year-over-year decrease in median prices since February 2019. At the end of the month, in the North Port-Sarasota-Bradenton MSA, there were 5,541 active listings, an almost 250 percent increase from the same time last year. ‘Half of sellers think we’re still in the high market we recently saw. But that started to shift around last April so they’re still aiming too high and not selling,’ says Marlin Yoder, a local realtor with Harry E. Robbins Associates. ‘The transactions that are happening are being negotiated down.'”

“As for factors contributing to increased inventory, Yoder is also seeing pandemic-induced investments take a pivot. ‘A lot of people bought short-term rentals in 2021 after the pandemic due to a boom in the tourism industry because people could suddenly travel and work remotely. But it was a bit of a fad and many were managed half-heartedly and they’re not making money and being offloaded now,’ he adds.”

From WTOP News. “Second home sales surged during the first year of the pandemic, peaking in August 2020, up 89%from pre-pandemic levels. Maryland and Delaware beach communities became among the most-frenzied for vacation home buyers. Second home sales have now dropped 52% since that peak, according to March data from Redfin, compared to a 13% decline for primary homes. Many second home buyers also took advantage of those low rates to purchase a second home as an investment and put it in short-term vacation rental programs when they weren’t using them. A separate report by listing service Bright MLS suggests second home and short-term vacation homeowners are looking to get out of those investments.”

“In the Mid-Atlantic, one in six sales in March was a rental or investment property, led by 21.4% in Delaware and 19.1% of sales in Maryland, both of which have popular beach communities. ‘This pattern suggests that people who purchased second homes of investment homes during the pandemic — particularly in coastal markets — might be looking to offload them as we head into the summer months,’ Bright MLS said.”

The Scottsdale Progress in Arizona. “Did the Super Bowl take the bloom off short-term rentals’ rose? Valley housing market analyst The Cromford Report thinks it might – and maybe ought to. The report said that while short-term rental landlords were looking forward to cashing in big time on out-of-state traffic to the big game, they scored no touchdown. ‘Many owners were disappointed with their receipts from the Super Bowl,’ the Cromford Report said. ‘We seem to have an excess of short-term rental supply which means owners are having to compete with each other on price for short-term tenants. As we head into the low season for holiday rentals, we may see some get sold off.'”

KSNV in Nevada. “The Oakland A’s announcement to come to Las Vegas has many excited for the endless opportunities it could bring the economy. However, short-term rental operators are concerned they might be left out as they await licenses to legal operators in Clark County, as County Commissioners work out an application process to license short-term rentals still illegal in Unincorporated Clark County. ‘Our politicians need to allow everyone else to enjoy themselves. Right now, everything that happens is only for the benefit of the resort hotels; what about the rest of the community? They also need to make extra money,’ said Jacqueline Flores, of The Greater Las Vegas Short-Term Rental Association.”

Hawaii Real Estate Dreams. “The end of the quarter saw Kona having its highest closing total for March since September, very good news. But you can tell by the graph that we are off to a slow start for the year. We are down to 184 sold properties for the first quarter compared to 290 last year, or 36%. But wait! That was the good news, we are down 58% from 2021 sales. Vacation rental supply on the Big Island has increased 33% from 2022… that is huge! The demand only went up 14% resulting in a 65.7% occupancy, down 11% from 2022, with an average daily rate of $249. February hotel occupancy dropped 5% to 77% from 2019 levels. But the room rates are up a whopping 52% from 2019 so that has to have something to do with it, I would think. Occupancy at its heart is pricing. Nightly rates for Kona went up 75% since 2019, or roughly $100 a night. In that same timeframe, occupancy dropped 22% to 63.3%… yikes! I believe there is a direct correlation.”

The Wall Street Journal. “It is bad news for the banks, pension funds and asset managers that are among the biggest lenders to and owners of commercial buildings, which means they could face losses for years to come. Commercial mortgages account for around 38% of the median U.S. bank’s loan holdings, according to KBW Research. North American public pension funds on average hold around 9% of their assets in real estate, according to Preqin. ‘You literally have trillions of dollars of investment that are suddenly just massively impaired,’ said Dan Zwirn, chief executive of rena Investors, a New York-based asset manager and real-estate investor.”

The Associated Press. “Housing developers are converting empty office towers into housing as part of an effort to revive struggling downtown business districts that emptied during the pandemic. Conversion projects are underway in New York, Washington, Pittsburgh, and Dallas. There also can be environmental issues, said Anoop Davé, the CEO of Victrix, a real estate investment management development company specializing in converting mostly vacant office buildings into residential buildings and hotels. ‘A lot of these buildings could have asbestos or something like that. That is not necessarily a deal killer, but sometimes the cost or remediating is so large that even if you are given it for zero, it doesn’t work.'”

“Jordan Woods, a federal government contractor, moved to an apartment in downtown Washington in 2019. Then the pandemic came and downtown became ‘like a moonscape’ for more than a year. ‘And even before the pandemic it was still missing basic stuff like playgrounds and dog parks and a normal non-Whole Foods grocery store that I could walk to,’ Mr. Woods said. ‘I wouldn’t say I regret it, but if I was considering the same move right now, I’m not sure I would do it.'”

The New York Post. “Struggling Silicon Valley startups reportedly face a potential bloodbath this year as cash runs low and wary tech investors flee a major downturn in the sector. Conditions in the tech sector have gotten so rough that many embattled startups will likely be forced to raise funds from outside investors at a lower valuation – known as a ‘down round’ – or risk running out of money entirely, industry experts told Bloomberg in a dire report published Monday. ‘We haven’t had a compression in values like this in more than 20 years. It’s an absolute bloodbath,’ Cameron Lester, global co-head of technology media and telecom investment banking at Jefferies, told the outlet.”

“‘We’re actually in one of the worst times in recent memory in venture activity,’ AngelList CEO Avlok Kohli told Bloomberg. ‘It’s the lowest activity we’ve seen and the lowest positive activity we’ve seen.'”

Palo Alto Online in California. “Midpeninsula Realtors are navigating the spring real estate season with no shortage of challenges. This season’s housing outlook is accompanied by higher Well-priced, well-presented properties are selling,’ said Brian Chancellor, a Palo Alto Realtor at Christie’s International Real Estate Sereno. ‘This market was so strong for so long, some agents have not seen some of the conditions we have now. I do think more and more sellers are accepting the realities of the current market … and it’s an up and down market.interest rates, economic uncertainties, large-scale tech industry layoffs and very tight housing inventories.'”

“Despite higher interest rates, tech lay-offs and other economic challenges, Denise Welsh, a Los Altos Realtor at Compass Real Estate, predicts a ‘good market overall’ this spring. ‘But, no one should expect it to be like 2021’ said Welsh, noting that year’s pandemic-fueled frenetic housing market. ‘That was an anomaly.'”

The Globe and Mail. “Canadian mortgage insurers are guaranteeing billions of dollars’ worth of loans for which borrowers increasingly owe more than the value of their property. Financial disclosures from Canada’s three major mortgage insurers show that the drop in home prices over the past year has chipped away at the equity in homeowners’ properties. The more a homeowner owes relative to the property value, the more it pushes up a key lending metric called the loan-to-value (LTV) ratio. Now, insurers are reporting that a growing share of their individual mortgage borrowers have an LTV ratio above that threshold. In some cases, borrowers have mortgages that are bigger than the updated value of their property, or an LTV ratio greater than 100 per cent.”

“Disclosures from Canada Guaranty Mortgage Insurance Co. show its proportion of loans with an estimated LTV ratio above 100 per cent increased by more than six times to nearly $4-billion in the fourth quarter of last year. That represented 5 per cent of its outstanding insured mortgages for individuals, according to Canada Guaranty’s quarterly portfolio metrics. That is up from $532-million, or 0.74 per cent of its outstanding insured mortgages in the fourth quarter of 2021, according to the disclosures. The country’s other two insurers, Sagen MI Canada Inc. and Canada Mortgage and Housing Corp., also reported that the proportion of loans with the highest LTVs doubled in 2022.”

“The interest rates have risen so quickly that borrowers have found themselves in a position in which their monthly payment does not cover the entire interest portion of their loan. The unpaid interest is then added to the principal, and the borrower’s original loan amount increases. That also has contributed to the higher LTVs.”

The Independent. “Nicolas Cage has defended his many straight-to-VOD films, explaining why he accepted the roles, stating: ‘I was over-invested in real estate. The real estate market crashed, and I couldn’t get out in time.’ The actor, who reportedly blew his $150m (£120m) fortune on real estate, previously said the money earnt from the straight-to-VOD roles also helped him keep his mother out of a mental institution.'”

Related Posts
This Post Has 73 Comments

  1. ‘You literally have trillions of dollars of investment that are suddenly just massively impaired’

    I said at the time these guvnahs and mayors were shooting themselves in the fook. Well now you gotta big bloody hole in the fook and yer crying. Good luck undoing that a$$hats.

    1. “During previous downturns, fundamental trends usually worked in property owners’ favor once the economy showed signs of rebounding. Increasingly white-collar workers crowded into cities, filling office towers and ensuring a reliable stream of customers at shops and restaurants.”

      The author of this piece, Konrad, forgot to mention the filthy drug addled homeless population plaguing most of the country’s metro downtowns. So far, all the city mayors have done is talk about it, and that’s under duress such as questioned during public meetings. Vehicle prowls and retail theft are the other immediate issues that need to be resolved before investment returns to a city’s core.

  2. ‘In some cases, borrowers have mortgages that are bigger than the updated value of their property, or an LTV ratio greater than 100 per cent’

    That’s some sound lending right there.

    ‘The interest rates have risen so quickly that borrowers have found themselves in a position in which their monthly payment does not cover the entire interest portion of their loan. The unpaid interest is then added to the principal, and the borrower’s original loan amount increases. That also has contributed to the higher LTVs’

    Note that before the crater negative amortization was forbidden. They just stepped right over that with hardly a mention.

    1. before the crater negative amortization was forbidden

      When you are forced to refi every five years, ugly things can happen. But yeah, canuck lenders are trying to buy time. Soon all lenders around the globe will be trying to buy time.

    2. ‘In some cases, borrowers have mortgages that are bigger than the updated value of their property, or an LTV ratio greater than 100 per cent’

      This about the time wealthy buyers jingle mail their keys.

      1. All of Canada is the equivalent of recourse. They will sue you for the difference (owed – resold for + costs). And it is very hard to get renewed credit until that is paid off.

  3. ‘A lot of these buildings could have asbestos or something like that. That is not necessarily a deal killer, but sometimes the cost or remediating is so large that even if you are given it for zero, it doesn’t work’

    The REIC media is working overtime to assure us this office crater is going to work out. Nope. Even if it was possible (it’s not 90% of the time) who wants to live in these huge sh$tholes?

    1. Even if it was possible (it’s not 90% of the time) who wants to live in these huge sh$tholes?

      I don’t think these office to housing conversions are meant for the gainfully employed. They are going to be the American equivalent of “Council Housing”, housing for the homeless and for other deadbeats, especially since there are huge waiting lists (often years long) for Section 8 vouchers in every city. I also expect the FedGov to provide funding for the removal of asbestos and the overall conversions. Of course, it won’t take long for the new residents to render these structures uninhabitable.

      Of course this means that if you go downtown to catch a show or the symphony, that you will be surrounded in the streets by hoodie wearers who smell like weed, plus meth heads and other denizens of the darkness,

        2. From the Wiki article: “The stairwells and corridors attracted muggers, a situation exacerbated by the skip-stop elevators.”

          I had to look up what a skip-stop elevator was. It’s an elevator that only stops on some of the floors, forcing people to take a few flights of stairs, up or down, to get to their residences. It was supposed to foster interactions and community, or some such touchy-feely nonsense, but all it fostered was muggings and crime, and probably injuries from hauling groceries on the stairs.

          Nowadays, architects are SILL trying to put skip-stop elevators in buildings as a way to force the obese to get some exercise. As if a flight of stairs will be enough to burn off 50+ pounds.

    2. A lot of these buildings could have asbestos or something like that. That is not necessarily a deal killer, but sometimes the cost or remediating is so large that even if you are given it for zero, it doesn’t work

      Ditto for a lot of houses. Free would be too expensive given the problems. But in a speculative mania, that goes out the window.

  4. “‘We’re actually in one of the worst times in recent memory in venture activity,’ AngelList CEO Avlok Kohli told Bloomberg. ‘It’s the lowest activity we’ve seen and the lowest positive activity we’ve seen.’”

    Not to worry, so long as the stock market keeps going up.

    1. LIVE UPDATES
      Updated Tue, Apr 25 2023 9:43 AM EDT
      Stocks fall Tuesday as traders wait to see if Alphabet, Microsoft earnings deliver: Live updates
      Alex Harring
      Hakyung Kim
      RBC’s Brad Erickson previews Big Tech ahead of earnings

      Stocks slipped Tuesday as traders assessed the latest quarterly figures from several major companies, while awaiting reports from key tech names.

      The Dow Jones Industrial Average
      fell 27 points, or 0.1%. The S&P 500 dipped 0.4%, and the Nasdaq Composite slid 0.5%.

      Microsoft and Alphabet are slated to report Tuesday, the first of multiple Big Tech names on the earnings schedule this week. But those stocks could struggle, according to George Ball, chairman of Sanders Morris Harris, who said large-cap tech may not be a market leader in the remainder of the year after its early-2023 rally.’
      …
      https://www.cnbc.com/2023/04/24/stock-market-today-live-updates.html

    2. The Financial Times
      US Treasury bonds
      Fed up with low rates on deposits, US savers snap up government debt
      Retail investors purchase record amounts of Treasury bills at auction while bank deposits drop to near two-year low
      US Treasury building in Washington, DC
      Individuals buying Treasury bills through accounts on the Treasury department’s TreasuryDirect site purchased $48.4bn of the debt auctioned by the US government in March
      Kate Duguid in New York yesterday

      Retail investors are snapping up new US Treasury bills at a record pace, as they broaden their search for higher-yielding alternatives to bank accounts with rock-bottom interest rates.

      Individuals buying Treasury bills through accounts on the Treasury department’s TreasuryDirect site purchased $48.4bn of the debt auctioned by the US government in March, official data shows, with demand continuing apace in early April.

      Meanwhile, executives at brokerages say retail investors have also stepped up buying of Treasury bills in the secondary market, particularly since a number of regional bank failures in March prompted savers to look again at where they were stashing their money.
      …

    3. Not to worry, so long as the stock market keeps going up.

      They printed a new floor under stock prices.

    4. Fast Money
      ‘Easy money is behind us, the hard money is now,’ Stifel’s chief strategist warns
      Published Tue, Apr 25 2023 8:29 PM EDT
      Updated 4 Hours Ago
      Bree Doyle

      According to Stifel’s Barry Bannister, the market is on a road to nowhere for almost the next decade.

      “Easy money is behind us, the hard money is now,” the firm’s chief equity strategist told CNBC’s “Fast Money” this week.

      Bannister has seen this flat-range trading climate before.

      “They tend to be slightly more inflationary,” he said “They tend to feature a weaker dollar. They tend to have a compression of P/E ratios. The price earnings multiple comes down.”

      Bannister believes the S&P 500 will be trading at 2021 levels in 2031. On 2021′s final trading day, it was 4,766.18. On Tuesday, the S&P closed at 4,071.

      “When you look at it, the price earnings multiple from December 2021 is going to come down by about half,” he said “The earnings should just about more than double, so you’ll end up with a flat market.”
      …
      https://www.cnbc.com/2023/04/25/easy-money-is-behind-us-the-hard-money-is-now-stifels-warns.html

    1. Markets
      Social media raises bank run risk, fueled Silicon Valley Bank’s collapse, paper says
      Published Mon, Apr 24 2023 10:45 AM EDT
      Tanaya Macheel
      People line up outside of a Silicon Valley Bank office on March 13, 2023 in Santa Clara, California.
      People line up outside of a Silicon Valley Bank office on March 13, 2023 in Santa Clara, California.
      Justin Sullivan | Getty Images

      After the sudden end of Silicon Valley Bank in March, market participants were quick to point out the role social media played in the velocity of its failure.

      Now, about six weeks later, a working paper co-authored by a group of university professors digs deeper into the cause and effect of social media in the case of SVB, arguing that greater exposure to social media amplifies bank run risk and warning that other banks could face similar risks.

      “Communication and coordination pose a risk to banks, especially when many of the deposits in the bank are uninsured,” the academic paper says. “The amplification of bank run risk via Twitter conversations is a unique opportunity to observe communication and coordination that shapes a critically important economic outcome − distress in banks.”

      Furthermore, “given the increasingly pervasive nature of social communication on and off Twitter, we do not expect this risk to go away, but rather, it is likely to influence other outcomes, as well.”
      …
      https://www.cnbc.com/2023/04/24/social-media-raises-bank-run-risk-fueled-svbs-collapse-paper-says.html

      1. “University Professors comment on the banking situation”

        oh yeah, of course. why not? a bunch of academics proffer their collective “wisdom” on the profit-driven real world & by god I’m supposed to be;
        * reassured?
        * impressed?
        * informed?

        why, sure, sure, all these hypocritical liberal govt hating but gladly govt paycheck accepting “experts” inspire one to read their stupid drivel. give me an ‘effin break!

        everyone’s got an expert opinion until they get punched in the paycheck.

        * credit to Iron Mike T.

      2. “arguing that greater exposure to social media amplifies bank run risk”

        Awww, poor babies, you mean you can’t manipulate the public from your smoke-filled back rooms anymore?

    3. Also from Twitter:
      ——————-
      YouTube has threatened to ban us if we don’t affirm gender ideology. They want me to either surrender my principles or become irrelevant.

      So starting today, every episode of this show will be posted on
      @Twitter, which is now the most powerful free speech platform in the world.
      ——————
      https://twitter.com/MattWalshShow/status/1650603708252831745

      We’ll disagree on this, but if YouTube brings down the hammer, Elon Musk’s white-knighting Twitter might be all we have left. Yeah yeah there’s Rumble, but they just don’t have the reach or reputation.

    1. Finance
      First Republic Lost $100 Billion in Deposits in Banking Panic
      Bank says it will cut head count by as much as 25%, slash executive pay as it restructures balance sheet
      By Rachel Louise Ensign
      Updated April 25, 2023 6:02 am ET
      First Republic’s profit fell 33% in the first quarter.
      Photo: Thalia Juarez for The Wall Street Journal

      Customers pulled about $100 billion in deposits out of First Republic Bank (FRC -26.95% decrease; red down pointing triangle) last month, when a pair of bank failures shook Americans’ faith in regional lenders.

      The bank’s first-quarter earnings report Monday detailed its precarious financial situation following the massive withdrawals.
      …
      https://www.wsj.com/articles/first-republic-lost-100-billion-in-deposits-in-banking-panic-7e1bd86c

    2. The Financial Times
      First Republic
      Sharp sell-off in First Republic shares causes alarm in Washington
      Government officials and regulators scramble to come up with plan to stabilise ailing lender
      A sign for a First Republic bank in Manhattan
      First Republic’s shares fell a day after it reported quarterly earnings
      James Fontanella-Khan, Colby Smith, Stephen Gandel and Brooke Masters in New York 58 minutes ago

      Shares of First Republic continued to plunge on Tuesday as regulators in Washington and financiers on Wall Street scrambled to come up with a plan to stabilise the ailing bank.

      The California-based lender’s stock price, which is down by more than 93 per cent this year, fell by a further 49.4 per cent, a day after it revealed its customers had withdrawn $100bn of deposits during last month’s turmoil.

      First Republic on Monday said it was pursuing “strategic options”, but multiple people briefed on the situation said it was struggling to come up with a viable solution, such as a sale of all or part of the bank.

      The people said the bank was in touch with the US government, which is on high alert following the failure of Silicon Valley Bank and Signature Bank last month.

      They said the leading options are for some of the large US banks that recently deposited $30bn into First Republic to rescue the lender, or for the Federal Deposit Insurance Corporation to take control of the institution and offer a government guarantee for all deposits, as it did with SVB.

      A person close to First Republic said the bank would welcome the government “convening the relevant parties to come up with a solution”.
      …

  8. The new fixed rate

    Put simply, the more you earn the more you pay for recurring charges (not related to energy usage):

    Households with annual income from $28,000 – $69,000 would pay $20 a month in Southern California Edison territory, $34 a month in SDG&E territory, and $30 a month in PG&E territory.
    Households earning $69,000 – $180,000 would pay $51 a month in Edison and PG&E territories, and $73 a month in SDG&E territory.
    Those with incomes above $180,000 would pay $85 a month in Edison territory, $128 a month in SDG&E territory and $92 a month in PG&E territory.

    2. Wait a minute.

      I am supposed to reveal to Edison my AGI?

      How would it be possible to even begin to verify such numbers?

      And, of course, such information would be guarded with ‘upmost security consistent with our core values’.

      Just thinking about the endless ways such a ‘system’ could be gamed.

      What a complete crock.

      1. I am supposed to reveal to Edison my AGI?

        Perhaps the California Franchise Tax Board could share that info with them?

        Anyway, for the very wealthy this fee is just a nuisance. For the middle class it’s another nail in the coffin. And it won’t be the last one. I could see income based surcharges popping up everywhere: water bill, car registration, state college tuition, airport fees, etc.

        1. “…I could see income based surcharges popping up everywhere: water bill, car registration, state college tuition, airport fees, etc….”

          Couldn’t agree more.

          No stone left unturned to destroy the middle class.

        2. Didn’t they just do this for mortgages? Higher FICOs will pay higher interest rates to bail out the deadbeats.
          —
          On a similar note, here’s a snippet from the head of the Bank of International Settlements, who are developing a CBDC:

          “Policy reforms should also prevent disintermediation: the danger that money will be held in large amounts in CBDC wallets, rather than as deposits in commercial banks, making it unavailable for lending (such as mortgages) and other productive purposes.” (–Agustin Carstairs)

          Translation: Regular Joe will not be allowed to hide his personal money in the mattress (i.e. the CBDC wallet). Instead, we’re going to force him to keep it digitally in the bank account where we can tax it, or just straight up rob it and give it to “productive purposes,” such as handouts to deadbeats.

          1. Agustin Carstairs

            I think you meant Agustin Carstens, a Mexican central banker and globalist.

          2. “…where we can tax it, or just straight up rob it and give it to “productive purposes,” such as handouts to deadbeats….

            Additional Translation: We are all equal, just some are more equal than others.

        3. “…I could see income based surcharges popping up everywhere: water bill, car registration, state college tuition, airport fees, etc….”

          Exactly. I’ve posted this sentiment on other social media. Whether it’s student loan forgiveness, utility fees, or something else, it’s death by a thousand cuts to the middle class, as subsidizing or providing “free money” permeates our society.

  9. Is it a good look for ultra liberal California to partner on real estate investments with eviction happy landlord Blackstone?

    1. The Wall Street Journal
      Record High Manhattan Apartment Rents May Not Save Blackstone From Default
      Cash flow from the properties isn’t enough to cover cost of all the debt, report says
      By Will ParkerFollow
      April 25, 2023 8:00 am ET
      Blackstone is in danger of defaulting on a $270 million loan backed by 11 apartment buildings in New York’s most expensive borough.
      PHOTO: MICHAEL NAGLE/BLOOMBERG NEWS

      Apartment rents in Manhattan are soaring to new highs this year, even as rents plateau or fall in most of the rest of the country. Blackstone Inc. risks losing a portfolio of Manhattan apartments anyway.

      The real-estate and private-equity firm is in danger of defaulting on a $270 million loan backed by 11 apartment buildings in New York’s most expensive borough. Cash flow from the properties isn’t enough to cover the cost of all the debt, according to a report from Moody’s Investors Service.
      …

      1. ‘Cash flow from the properties isn’t enough to cover the cost of all the debt’

        They’ve been criticized. If you look moody, lots of CRE loans don’t cover debt.

    2. The University Of California Bails Out Eviction-Happy Private Equity
      Apr 24, 2023 •
      Matthew Cunningham-Cook
      The school pumped billions into a Blackstone real estate fund eager to evict tenants and jack up student rents in the midst of a major housing crisis.
      The University Of California Bails Out Eviction-Happy Private Equity
      Blackstone UC Investment (AP Photo/Mark Lennihan)

      As the world’s largest private equity firm faces potential losses from a cloudy real estate market, its executives blocked jittery investors from withdrawing their money from one of its real estate funds, while insisting that rent increases and evictions will bolster returns.

      Now, the Blackstone Group’s real estate investment trust has received a multibillion-dollar bailout from a source whose employees and students are already suffering through the housing crisis: California’s public university system.
      …
      https://www.levernews.com/the-university-of-california-bails-out-eviction-happy-private-equity/

      1. “The investment rewards the financial firm only a few years after the company and its executives spent $5.6 million to kill California ballot initiatives that would have expanded rent control in the state.”

        Making money the old fashioned way!

    3. Markets
      DOW 33,530.83 -1.02%
      S&P 500 4,071.63 -1.58%
      NASDAQ 11,799.16 -1.98%

      Fear & Greed Index
      Blackstone is the latest victim of the weakening commercial real estate market
      By Nicole Goodkind, CNN
      Updated 8:36 PM EDT, Thu April 20, 2023

      New York CNN —

      The ongoing commercial real estate slowdown has a new victim: Blackstone, the largest owner of commercial real estate globally. The company saw its distributable earnings — the profit distributed to shareholders after expenses — plunge 36% since last year. That’s raising eyebrows on Wall Street as investors assess the fallout from last month’s regional banking crisis.

      Blackrock’s decline was driven by an easing of value in its real estate investments. The company’s real estate segment’s distributable earnings fell 58% since last year. Profits from sales fell 54% to $4.4 billion, down from $9.5 billion last year, for the amount of total commercial real estate assets sold. But that number is a reflection of fewer assets sold, not necessarily of lower prices, a spokesperson for Blackstone told CNN.

      After decades of thriving growth bolstered by low interest rates and easy credit, the $20 trillion commercial real estate industry has seemingly hit a wall. Office and retail property valuations have been falling since the pandemic brought about lower occupancy rates and changes in where people work and how they shop. The Federal Reserve’s efforts to fight inflation by raising interest rates have also hurt the credit-dependent industry.

      Recent banking stress has added to those woes. Lending to commercial real estate developers and managers largely comes from small and midsize banks, where the pressure on liquidity has been most severe. About 80% of all bank loans for commercial properties come from regional banks, according to Goldman Sachs economists.

      Recently, short-sellers have stepped up their bets against commercial landlords, indicating that they think the market will continue to fall as regional banks limit access to credit. Real estate is the most shorted industry globally and the third most in the United States, according to S&P Global.
      …
      https://www.cnn.com/2023/04/20/investing/blackstone-earnings-cre/index.html

  10. “up 89%from pre-pandemic levels. Maryland and Delaware beach communities became among the most-frenzied for vacation home buyers. Second home sales have now dropped 52% since that peak, ”

    So second-home mortgages are still a little higher than pre-pandemic levels. I’m guessing that’s the baby boomer crowd getting out of DC and to a vacation atmosphere. I might do that myself, but that’s 10 years away.

  11. ‘Our politicians need to allow everyone else to enjoy themselves. Right now, everything that happens is only for the benefit of the resort hotels; what about the rest of the community? They also need to make extra money,’ said Jacqueline Flores, of The Greater Las Vegas Short-Term Rental Association.”

    Janet dear, I certainly hope you get fooked hard with your STR’s.

    1. Cut from the article:

      “I was over-invested in real estate. It wasn’t because I spent $80 on an octopus. The real estate market crashed, and I couldn’t get out in time,” he said.

      So, Nick Cage was day trading private islands and castles in Europe?

      It just never ends.

        1. Nick acknowledged that his debt was his fault and actually worked a JOB to pay it off. He didn’t whine for bailouts or handouts. These days that’s worth caring about.

          2. He made some real stinkers of the years, too.

            Willy’s Wonderland is a real gem for anyone who hasn’t seen it.

  14. Good Lord, you will be punished if you don’t confirm our narratives, because the ministry of truth says 2+2 = 5 or,
    A boy is a girl, transgenders are the soul of the nation, useless poison vaccines are good, only bugs are good to eat, carbons are bad, whites and Conservatives and Christians and anti vaxxers are domestic terrorist, Parents have no rights, Climate Change is justification for tyranny and genocide, free speech is hate speech, war is good, trust the science,fake food is good,
    humans are useless eaters, owning nothing you be happy, whatever they at the Ministry of Truth say………..George Orwell …. his Book 1984 was a warning.

    I have never seen such 1984 type nonsense
    in my life ….like now.

    1. A Barbie doll with Down syndrome is joining Mattel’s lineup as the toy company aims to let more children “see themselves in Barbie.”

  15. I’m sure we will talk about this tomorrow but….. Breaking news
    In summary ,in Sudan terrorist broke into a bio lab and took dangerous pathogens, the WHO is alert to situation , evacuations have been called for.
    Im sure more will come out tomorrow.
    First thoughts are that Bill Gates said about a year ago that terrorist could release bio weapons in airports.
    Next thought is the election is coming , time for mail in ballots pursuant lockdowns to rig it so Biden wins.
    Third thought, they really think we are dumb.

    1. All I’ve EVER heard about Sudan is civil war, groups of guys riding the back of Jeeps waving guns, women carrying jars of water on their heads, starving babies, etc. One wonders how they have stable electricity and running water. How in the heck did they get a bio lab?

      1. Oxide,
        Actually , I have been expecting something along these lines. . If this doesnt work Im sure they will have another plan …
        In my view they have to have another global Panademic so WHO can exercise the huge powers that 196 Countries gave to WHO by Treaty for the next Panademic.

    1. The Financial Times
      Markets Briefing Equities
      US stocks retreat as First Republic reignites bank worries
      Treasuries rally while benchmark S&P 500 notches largest daily drop in a month
      A montage of a road sign for Wall Street and a chart
      The S&P 500 lost 1.6% on Tuesday, its biggest daily decline in more than a month, while the Nasdaq Composite slid 2%, its biggest drop in almost two months
      Harriet Clarfelt and Jaren Kerr in New York and George Steer and Daria Mosolova in London 5 hours ago

      US stocks sank and government bonds rallied sharply on Tuesday, as a steep sell-off in First Republic shares reignited fears over the health of the banking sector.

      Wall Street’s benchmark S&P 500 lost 1.6 per cent on Tuesday, its biggest daily decline in more than a month, while the technology-heavy Nasdaq Composite slid 2 per cent, its biggest drop in almost two months. First Republic was by far the biggest decliner, losing just under 50 per cent of its market value in the session.

      The drop in First Republic’s share price came a day after it revealed that customers had withdrawn $100bn of deposits during last month’s turmoil. The tumble in its share price took the California-based lender’s overall decline this year to more than 90 per cent.

      Sam Stovall, chief investment strategist at CFRA Research, said investors are worried about the possibility of further stress in the regional banking sector.

      “I think that in general investors believe [First Republic] is an isolated event, but at the same time, the minute they say that, they’re then looking over their shoulder to make sure that no other bank is sneaking up on them. It’s like the cockroach theory: if you see one, you’re going to see more than one.”
      …

      1. “Wall Street’s benchmark S&P 500 lost 1.6 per cent on Tuesday, its biggest daily decline in more than a month, while the technology-heavy Nasdaq Composite slid 2 per cent, its biggest drop in almost two months.”

        Not to worry! ‘Tis a mere flesh wound. The US economy is booming, with no sign of recession or stock market capitulation in sight.

    2. Yahoo
      Credit Suisse reported its last-ever quarterly results—and it’s still leaking money
      Ananya Bhattacharya
      Mon, April 24, 2023 at 2:45 AM PDT·4 min read
      In this article:
      Bank-in-distress.

      Credit Suisse is still bleeding—even after its rival UBS promised to buy it out.

      Late in March, after the Swiss government intervened, UBS agreed to pay $3.2 billion to buy the ailing Credit Suisse. But as its latest results showed, that wasn’t soon enough for Credit Suisse to record one last quarterly run from hell.
      …
      https://finance.yahoo.com/news/credit-suisse-reported-last-ever-094500524.html

  18. US lawmakers used privileged information to cash in on latest round of bank bailouts
    Barry Grey
    11 April 2023

    A common feature of the pervasive corruption of capitalist politics and politicians in America is the practice of using privileged information to make stock trades, particularly in the midst of the recurring crises that beset Wall Street. In such matters, as in passing laws to ban strikes by rail workers and impose contracts rejected by the workers, bipartisanship prevails.

    Last month’s government bailout of rich depositors at Silicon Valley Bank and Signature Bank, the second and third biggest bank failures in US history, is no exception.

    On Monday, the Wall Street Journal, citing recent legally required disclosures, reported that three House members, two Republicans and one Democrat, two of whom were directly involved in secret bailout talks, made substantial trades in bank stocks in the initial days of the crisis. According to the Journal’s own investigation, New York Republican Rep. Nicole Malliotakis and Oregon Democratic Rep. Earl Blumenauer made trades that marked “the latest instance of congressional stock trading intersecting with official business.”

    Malliotakis bought stock in New York Community Bankcorp (NYCB) on March 17, two days before the Federal Deposit Insurance Corp. announced that Flagstar Bank, a subsidiary of NYCB, would take on Signature’s deposits. Signature, headquartered in New York City, had been placed in receivership by New York regulators on March 12.

    Just days before she bought the stock, Malliotakis issued a statement (March 13) on her Twitter account in which she boasted of working closely with federal and state officials to address the failure of Signature.

    “Both last night and this morning I have been meeting with the Federal Reserve, U.S. Department of Treasury, Governor [Kathy] Hochul and New York State Department of Financial Services Superintendent Adrienne Harris to discuss the closure of Signature Bank,” she wrote, adding, “I have been assured all depositors will be made whole through the Deposit Insurance Fund which is made up of contributions from all member banks, not taxpayer funds.”

    Malliotakis bought $1,001 to $15,000 in NYBC stock on March 17. The day after the March 19 announcement that NYBC’s Flagstar subsidiary would acquire Signature’s deposits, NYBC stock rose 32 percent, landing the congresswoman a tidy profit.

    Rep. Malliotakis’s disclosure said the stock purchase was made by her spouse, a common excuse given by politicians who are involved in insider trading. Unfortunately for the congresswoman, she is unmarried. A spokeswoman said that was an error and the report would be updated.
    …
    https://www.wsws.org/en/articles/2023/04/12/ieai-a12.html

  19. Do you feel tempted to buy into SoCal’s housing market dead cat bounce?

    Let near record low sales numbers be a warning to you: The last time sales slowed to a comparable trickle was just before a multiyear price collapse.

    1. BUSINESS
      San Diego home prices are rising again. Up 5% in a month
      The median home price in San Diego County is on the rise again.
      San Diego County had seen prices fall nine months in a row until March. The median for all homes was $790,000.
      BY PHILLIP MOLNAR
      APRIL 25, 2023 5:30 AM PT

      San Diego County’s median home price rose 5.3 percent in March — reversing nine months of declines — to $790,000, according to CoreLogic data released Tuesday. The region’s median, the point at which half the homes sold for more and half for less, is still down 1.3 percent annually.

      Rising mortgage rates had softened the red-hot market in recent months. Yet real estate agents said competition over limited supply, and realization rates weren’t decreasing, pushed buyers to make a move.

      The rise was felt across Southern California, with every county except Riverside seeing price increases. Sales were up in every county after record drops to start the year.

      Samantha O’Brien, a San Diego real estate agent with PorchLight, said there’s been a shift with buyers in recent weeks who are resigned to higher interest rates and willing to duke it out with other buyers for properties. She said the lack of homes for sale is a big driver of rising prices.

      “It’s getting really competitive. It’s because lack of inventory,” O’Brien said. “You can really feel it.”

      There were around 2,915 San Diego County homes listed for sale in March, said the Redfin Data Center, the lowest in 12 months. It was a better situation for buyers this summer when inventory reached nearly 6,000 homes for sale in August.

      O’Brien said she is closing on a 1,056-square-foot single-family home in Spring Valley that had 12 offers after three weeks. She represented the buyer, so is unsure how many were over the $691,000 asking price, but assumes most were.

      The lack of inventory was evident in sales numbers, which are still at historic lows. There were 2,541 home sales in March, down from 3,933 at the same time last year. That was the second-lowest sales for any March in records going back to 1988. The lowest was 2,108 in March 2008 during the Great Recession.
      …

    1. Yahoo
      Business Insider
      WeWork has frittered away $46.7 billion in value as the stock sinks below 50 cents, one of the biggest startup failures of all time, and venture capitalists haven’t learned a thing
      Julie Bort
      Mon, April 24, 2023 at 12:45 PM PDT·3 min read
      In this article:
      Adam Neumann standing on a stage and gesturing in a questioning manner.
      Adam Neumann, the founder and former CEO of WeWork.
      Jackal Pan/Visual China Group via Getty Images

      – WeWork released an embarrassing statement recently about the NYSE threatening to delist its stock.

      – Beyond Softbank, several VCs still had large stakes including Benchmark and Insight Partners.

      – If there are lessons to be learned from WeWork, there’s no indication that VCs have learned them.

      Last week, WeWork was forced to issue an embarrassing press release warning that it was in danger of being delisted from the NYSE because the stock has traded below $1 for so long.

      In 2019, prior to a disastrous attempt to go public that resulted in the exodus of its flamboyant, controversial founder, Adam Neumann, WeWork was valued at $47 billion. As of Monday, with shares trading at $0.47 and a market cap of $345.7 million, the company has lost some $46.7 billion in value over four years — vanishing like a sand sculpture left in the wind.

      In 2021, the company briefly looked like its fortunes could turn around. It was acquired by BowX, a blank-check special-purpose-acquisition company from Vivek Ranadivé, the founder of the software company Tibco who is perhaps better known as a former owner of the Golden State Warriors and, more recently, the Sacramento Kings. WeWork’s valuation at that time was $9 billion, CNBC reported.

      But WeWork crawled into 2023 so loaded with debt that it has yet to find its footing or future. Last month, it struck deals to restructure debt, cutting obligations by about $1.5 billion, and extending the due dates of other notes in an attempt to preserve cash, Reuters reported. This after it closed 40 locations in late 2022.
      …
      https://finance.yahoo.com/news/wework-frittered-away-46-7-194540961.html

Comments are closed.