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Markets Are Suffering From A Glut Of Eager Sellers Despite Plummeting Sales

A report from Community Impact in Texas. “Even as Southwest Austin remains among the most desirable and pricier areas of the metro to buy or rent, local data points to the housing market settling down after a recent burst of activity. After seeing record-setting home pricing and sales activity that peaked throughout the last two years, year-over-year sales figures in 2023 have fallen every month in South Austin and Dripping Springs. At the same time, homes are staying on the market for amounts of time not seen in years, local and federal data shows. ‘We are still in the phase of leveling,’ real estate agent Olivia Barnard said. ‘We’re still seeing price reductions on some homes where sellers and agents alike are kind of finding, ‘What is the real value?’”

KTVZ in Oregon. “The July report from Redmond’s Beacon Appraisal group said Bend’s single-family home median sales price in July rose by $15,000 to a record $800,000, a milestone that’s nearly $40,000 more than the peak a year ago. Appraiser Donnie Montagner noted that nearly a third of last month’s 141 Bend home sales were for $1 million or higher. There’s still a two-month supply of homes on the market overall, but Montagner noted an increase in some price ranges – as the $1.6 million to $1.8 million category is nearly a five-month supply and above $1.8 million is nearly a six-month supply. Redmond also rose to a milestone, with a median home sales price of $500,000, though that’s still $42,000 lower than last summer’s record level.”

WPDE in South Carolina. “Insurance prices have skyrocketed for many across the Palmetto State, especially along the Coastal Grand Strand. Tuesday, hundreds of concerned homeowners came out to a town hall hosted by state leaders, with the hope that they can help find solutions to the increasing insurance rates. Many residents who spoke tonight say their insurance has gone up at least 100%. One resident said their neighborhood HOA insurance fee went up 4 times more than what they budgeted, and they only got a 48-hour notice. ‘If you make $100,000 a year, imagine that 60-70,000 of that goes strictly to insurance. That’s the situation we’re in now,’ Denise O’Wesney Richardson, President of the neighborhood HOA, said. ‘What are you gonna do when people can’t pay? What are you gonna do when they have to walk out and you get foreclosures? This is going to be a ghost town,’ one Horry County resident said.”

The Real Deal on New York. “The road to selling Louise Blouin’s Southampton estate has been marked by close calls. Last spring, the Canadian art magazine publisher narrowly avoided foreclosure by sticking 366 Gin Lane, one of the compound’s two waterfront homes, into bankruptcy court just two days ahead of a scheduled auction. Now the second mansion is also bankruptcy-bound, as Blouin continues her attempts to refinance and find a buyer for the four-acre property. For the whole estate, known as La Dune, she is asking $150 million.”

“The renovations to 366 Gin Lane are what led to the estate’s financial woes. Blouin took out a $26 million mortgage to upgrade the residence in 2018, but didn’t keep up with the payments, triggering foreclosure proceedings from the lender, JGB Management. By May 2022, the loan balance had grown to $40 million. Blouin will likely need an eye-popping sale to erase the mortgage debt, but $150 million is a hefty ask. Blouin now resides primarily in Europe. In 2016, she was named in the Panama Papers, which identified a trove of wealthy people concealing funds in offshore accounts.”

The Coloradoan. “Concrete pillars, some five stories tall, and weeds that tower over most people are all that occupy the site of a stalled five-story student-oriented apartment complex at 255 Johnson Drive next to Spring Creek in Midtown Fort Collins. Work on the project ceased in March 2022, and the developer, Valeo Groupe Americas, has been looking for a buyer since, said Craig Frickey, Fort Collins’ interim planning manager. ‘Valeo has a number of projects that stalled in the wake of the pandemic, and they’re trying to sell all of those projects as a portfolio.'”

“In addition to the Fort Collins site, the Charlotte, North Carolina, company has ceased construction on five other projects across the country, according to a source previously involved with the project, who spoke to the Coloradoan on the condition of anonymity.”

The San Francisco Chronicle in California. “The saga of WeWork, the co-working space company that has become synonymous with the highs and lows of 2010s startup culture, may be creeping toward its final chapter. In a Tuesday press release, the 13-year-old company wrote that ‘substantial doubt exists’ about its ability to stay in business. Once valued by investors at $47 billion, WeWork flamed out in a 2019 attempt to go public and, though still a major commercial real estate holder, has never turned a profit. Shares of the company’s stock dropped about two-fifths in value after the announcement and were trading on Wednesday at 13 cents a share — a market cap of around $270 million.”

“A WeWork collapse would be another blow for San Francisco’s commercial real estate market. The company’s website lists 21 office spaces in the Bay Area, including three floors in Salesforce Tower and co-working locations in several other downtown buildings. WeWork had over $13 billion in long-term lease obligations at the end of June, the firm said in a filing with the Securities and Exchange Commission on Tuesday. WeWork, founded in 2010, became the standard-bearing example of corporate hubris and shoddy investment scrutiny when its 2019 IPO attempt resulted in a slashed valuation, an ousted co-founder and a torrent of stories about mismanagement. In 2021, the company went public through a SPAC.”

From Bloomberg. “Upstart Holdings Inc.’s breakneck rally is losing momentum after the lending platform that uses artificial intelligence provided a disappointing outlook. Shares dropped 34% on Wednesday, the worst tumble since May 2022, after its third-quarter revenue forecast fell short of consensus estimates. The stock’s recent weakness has sawed off more than half of a 2023 rally that at one point reached 445%. ‘I think some of the air is popping out of that balloon today,’ said Dan Dolev, analyst at Mizuho Securities. ‘Outside of the disappointing 3Q guide for top-line, the quarter was actually pretty strong,’ BTIG’s Lance Jessurun, who holds the lone buy rating on the stock, said. ‘Obviously expectations were ridiculously high.'”

The Barrie Advance. “The Bank of Canada recently hiked its overnight lending rate to five per cent, which represents a significant bump from the 0.25 Canadians saw just over a year and a half ago. This has left many Canadian mortgage holders, including those in Barrie and Simcoe County, facing impending crisis, or worse. This includes Cora Cook, a Barrie-area esthetician who has been forced to put her family’s dream home up for sale after their mortgage payments ballooned from $2,850 to $6,200 since moving into their Springwater home in January 2022.”

“‘To have to leave the home that we spent so much blood, sweat, and tears into building — everything was custom-built for our family here — and to now give that up, it definitely feels hard. But now, looking at rentals, we’re looking at rentals for $4,000 a month,’ she told Simcoe.com. Cook says, even with her business and a husband working two construction jobs, they’ve been forced to sell their furniture and hold garage sales on a regular basis to settle their monthly mortgage bill.”

“‘It’s not like we’re struggling for work or anything. We make good money. We have good jobs, but it’s just, we want to be able to live our lives and not be putting every dollar toward a mortgage,’ she said. While Cook and her family haven’t turned to the food bank yet, she says she can understand reports of families making $100,000 or more making use of the social service.”

The Telegraph. “Britain’s housing market is in its worst state since the financial crisis, the Royal Institution of Chartered Surveyors (Rics) has said, as high property prices and mortgage rates trigger a slump in sales. House price falls in July were more widespread than at any point since 2009, according to Rics’ UK residential market survey of estate agents. At the same time, the net balance of agents reporting a downturn in agreed sales has more than quadrupled since May. The slump in house sales recorded in July was comparable to that seen during 2007, Rics said.”

“Robert Cooney, of Robert Cooney estate agents in Taunton, said: ‘Price reductions are now required to effect traction on most properties.’ William Delaney, of Coopers of London estate agents, said that even offers ‘way below the asking price’ were in some cases being accepted. The South East, Yorkshire and the Humber and the East Midlands will see the biggest price falls in the next three months, agents warned. Scotland, where the SNP has introduced caps on rent rises, saw the most widespread falls in the number of available rental properties. Grant Robertson, of Allied Surveyors Scotland, blamed Nicola Sturgeon’s ‘relentless attack on the private rental sector.'”

Daily Mail Australia.”The director of a plumbing company that went into liquidation owing over $12million had been paying himself a six-figure salary in the months before the collapse. C & S Plumbing Pty Ltd, in Benalla in Victoria’s northeast, collapsed on March 27 with $0.0 in its bank account and owing $12.2million to over 100 creditors. Simon Nelson from BPS Recovery and Reconstruction has been appointed as liquidator of the business, which also has an office in Melbourne. Documents filed with ASIC by the liquidator includes allegations that the sole director of C & S Plumbing, Shane Arnold, was paying himself a six-figure salary in the months leading up to the company’s collapse. The report states that from November, Mr Arnold ‘began to receive significantly increased wages’ before the company went into liquidation in March.”

“In giving reasons for the collapse of his business, Mr Arnold said he was owed $1million from a builder who reportedly refused to pay for work. When the liquidator intervened there were $0.00 left the company’s bank accounts. The company had just $61 in its bank account at the time it went under, and owes a whopping $22million to creditors, according to documents lodged with the corporate watchdog. ‘I have not recovered any funds from the company’s bank accounts,’ Mr Nelson wrote in documents submitted to ASIC.”

From Vietnam News. “The condotel market remains in a slump due to excess inventory and industry insiders warn it will not recover at least until 2025. Despite recent positive news about government regulations granting land ownership titles to condotels, only 122 units were sold in the second quarter of 2023. According to a report by DKRA Group’s research department, the inventory of unsold units topped 42,300 as of June, far exceeding the combined inventory of beach shophouses and resort villas. Developers are struggling to sell them and bearing the financial costs of bank loans taken to develop these projects, it said.”

“Trang Bui, chief executive officer of Cushman and Wakefield Vietnam, attributed the challenges faced by the market to multiple factors, including the pandemic’s impact and economic pressures. ‘It is still too early to expect a market recovery for condotels,’ said Bui. Vo Hong Thang, director of the consulting and project development division at DKRA Group, said a boom in the condotel segment in recent years has led to an oversupply. The lack of specific regulations and standards for condotels and the failure of developers to fulfil profit commitments significantly eroded investor trust, he said. The high prices make for unattractive returns on investments, he added. ‘Investors will need 40 to 50 years to recover their investment, making it an unsustainable option.’ According to the Vietnam Real Estate Association, there are around 240 tourism property projects with around 114,000 condotels worth an estimated 297 trillion dong.”

From Barron‘s. “Haixiong Lu, a Shanghai-based rental agent who manages more than 100 residential units, said China’s troubled real-estate market hasn’t only failed to rebound, it has worsened. ‘Often rentals do better when home purchases are down,’ he told Barron’s. ‘But renters I’ve talked to are opting to move back in with their parents or are cramming roommates in one small apartment.’ At a time when most observers predicted a post-Covid economic rebound would be humming along, another source of distress for officials and investors is the massive property market, which is back in trouble after a first-quarter flicker that things might be stabilizing.”

“The inadequate policies and industry troubles appear to be moving jitters from smaller players to bigger developers, and thus from smaller to larger cities. One trickle-down effect from this trend is that ‘secondary markets are suffering from a glut of eager sellers despite plummeting sales,’ Nomura analysts wrote in a recent note. Official surveys show ongoing pessimism among homeowners and prospective buyers about the near-term prospects of their properties—resulting in a confidence trap.”

“‘We shouldn’t be surprised that measure after measure to stabilize and revive the property market has failed. In a highly speculative market, what drives buying is mainly expectations of continued price appreciation,’ economist Michael Pettis told Barron’s. ‘I just don’t see a recovery anytime soon given how pessimistic potential home buyers seem to be about future prices.'”

“Lu, the residential rental agent, said that prepandemic, one loft apartment in a charming traditional-style Shanghai compound for 9,500 yuan ($1,300) a month would be rented within days. ‘I’ve dropped the price down to 7,000 yuan and this year it sat idle for nearly a month,’ he said.”

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Everything Is Falling

A report from KRDO in Colorado. "According to a broker associate at Re/Max of Pueblo…

This Post Has 117 Comments

  1. ‘It’s not like we’re struggling for work or anything. We make good money. We have good jobs, but it’s just, we want to be able to live our lives and not be putting every dollar toward a mortgage,’ she said. While Cook and her family haven’t turned to the food bank yet, she says she can understand reports of families making $100,000 or more making use of the social service’

    Ah-HA Cora, you are still eating!

    1. A beautician who owes a million on her special shack, took CERB money she wasn’t eligible for and is saying rent in Barrie is $4K.

      Go for the $2K rental. You don’t have any furniture anyway.

  3. ‘Valeo has a number of projects that stalled in the wake of the pandemic, and they’re trying to sell all of those projects as a portfolio.’ In addition to the Fort Collins site, the Charlotte, North Carolina, company has ceased construction on five other projects across the country’

    Recession proof!

    1. They are probably planning on making a million heritage Canadians homeless to make room for the newcomers.

  5. ‘The saga of WeWork, the co-working space company that has become synonymous with the highs and lows of 2010s startup culture, may be creeping toward its final chapter…WeWork, founded in 2010, became the standard-bearing example of corporate hubris and shoddy investment scrutiny’

    I asked at the time, was this golden bloom of money losing unicorns a by product of the largest money creation in human history? Looks like it.

    They’re renting fooking desks!

      1. I was very surprised to see the WeWork zombie recently in the news, as I thought it had long ago crawled off to die in some corner?!

        I guess it just needs a final Fatality Move from Marchone to “FINISH HIM!”

    2. WeWork was always zombie-level dicey. But in March 2020, they sent their own employees to work from home during the pandemic. DUH.
      They should have seen the writing on the wall and closed up the shop then and there.

      1. in March 2020

        Those were the hysterical “two weeks to flatten the curve” days. There wasn’t a lot of rational thought going on.

    3. WeWork was not even a new concept. One of my customers back in the late 90’s was Vantage Office Space.

      Exact same model.

      1. But if you can just manipulate the language.

        “We are still in the phase of leveling,’ real estate agent Olivia Barnard said”

    2. New York Post (8/10/2023):

      “The White House is finally dispatching one of President *’s top aides to the Big Apple for a sit-down with Mayor Eric Adams that is set for Thursday morning, The Post has learned.

      The meeting between Hizzoner and Tom Perez, the director of intergovernmental affairs at the White House, is scheduled to take place at City Hall, according to two sources familiar with the matter.

      The expected tête-à-tête will unfold just hours after Adams warned the projected price tag to house and provide social services for the asylum seekers could hit $12 billion — and that another 60,000 could join the roughly 100,000 who have journeyed to the five boroughs so far.

      “We are past our breaking point,” Adams told New Yorkers in a dire address from City Hall’s historic rotunda on Wednesday, unveiling the shocking new tallies. “New Yorkers’ compassion may be limitless, but our resources are not.

      He added: “And our partners at the state and federal levels know this.”

      https://nypost.com/2023/08/10/biden-finally-sending-top-aide-to-meet-with-mayor-adams-in-nyc-as-migrant-crisis-price-tag-hits-12b-sources/

      $12 billion is that a lot?

      100,000 in NYC now, and another 60,000 arriving soon. Sounds like the Great Replacement.

  7. ‘If you make $100,000 a year, imagine that 60-70,000 of that goes strictly to insurance. That’s the situation we’re in now,’ Denise O’Wesney Richardson, President of the neighborhood HOA, said.

    Gosh, I hope that doesn’t have an adverse impact on shack valuations.

    1. I’ve usually been risk averse when it comes to real estate, so I’ve never filed an insurance claim. Buying near a cliff or on a strand would never occur to me.

      1. The town I went to school in had a river and a nice flat flood plain along it. It was never more than woods and hay fields until this bubble. Now it’s full of expensive houses. Building there never occurred to anyone for hundreds of years.

        1. The 50+ year old houses in my area never, ever flood. The newer houses were built in all of the flood plains. I smell brown envelopes from developers to the land use and development dept. of the local counties.

        2. I have 18 acres near a river, but it’s on top of a hill. There’s a flood plain below on the other side of the river, but it’s a ranch. When stuff finally calms down, I’ll build my home

    2. “Conway, SC.”

      Hmmm… looking at Google Maps… Conway itself looks like an established town on stable terrain, ~15 miles inland from Myrtle Beach. But those 15 miles in between are almost ALL wetlands and wildlife refuges and swampy golf, you know, the stuff that’s supposed to slow down hurricanes. The new houses, post-2000, are on the edges of those wetlands. I can see why insurers are antsy over it.

  8. ‘After seeing record-setting home pricing and sales activity that peaked throughout the last two years, year-over-year sales figures in 2023 have fallen every month in South Austin and Dripping Springs. At the same time, homes are staying on the market for amounts of time not seen in years’

    There’s a graphic at the link saying YOY down 115k pesos.

  10. ‘even offers ‘way below the asking price’ were in some cases being accepted’

    That’s the spirit Bill, keep up the good work! Lowball!!

  11. In 2016, she was named in the Panama Papers, which identified a trove of wealthy people concealing funds in offshore accounts.”

    Not a single one of those wealthy tax dodgers had the IRS go after them, but the reporter who exposed the story was murdered.

    2. I wonder if Miz Louise was editing “Canadian Art Media” in the same way that Epstein was managing a hedge fund. 🙄

    1. well where i voted there was no lines out the door and around the corner. just the usual20-30 in line, there were NO voting places that extended past the normal 8pm, no state had to wait to count the votes because people were waiting in line 2 hours to vote…….just a basic observation that 81 million votes were susphish……

  13. Blouin will likely need an eye-popping sale to erase the mortgage debt, but $150 million is a hefty ask.

    The delusion is strong in this one. Bargaining phase?

  15. Housing.

    Denver7 — Parents call on Denver mayor to remove homeless encampment before school starts (8/9/2023):

    “At Broadway and Bayaud, the sidewalk on the southwest corner of the intersection is nearly impassable because of this growing homeless encampment. It’s a growing frustration for parents as the new school year approaches.

    “This is the Bayaud bike path,” said Dawn McNulty, who has a student attending Denver South High School this year. “This is the connection between the Baker historic neighborhood and our community schools.”

    McNulty and other parents say this is how their kids get from Baker across a busy Broadway to South High, and the encampment is a direct violation of the city’s own commitment to the Safe Routes to Schools program.

    “This is a dangerous encampment. It is drug addiction, it is distribution, it is violence. You can talk to some of the business owners just across the street and they’ll tell you all about the violence and vandalism.”

    “We should be able to walk on our sidewalks safely,” McNulty said. “And our children should have Safe Routes to School free of illicit drug use and meth addiction. If our children and the youth of Denver are not prioritized, I’m not sure how we as parents can continue to raise our children in this city.”

    https://www.denver7.com/news/local-news/parents-call-on-denver-mayor-to-remove-homeless-encampment-before-school-starts

    The City of Denver was not responsible for the 2020 stolen election, but Denver did in fact vote for everything going wrong in this article.

    They voted themselves into the Doom Loop.

  16. ‘The director of a plumbing company that went into liquidation owing over $12million had been paying himself a six-figure salary in the months before the collapse’

    I’ve seen company owners do this. Give themselves a yuuge raise when it was clear they were going down.

    ‘When the liquidator intervened there were $0.00 left the company’s bank accounts. The company had just $61 in its bank account at the time it went under’

    Alright Shane, where did the 61 pesos go?

    1. I’ve seen company owners do this. Give themselves a yuuge raise when it was clear they were going down.
      Just like people who max out their credit cards and then go BK.
      Of course, I understand you have to be a little bit careful when maxing out your cards or you could be required to pay it back in BK court

      1. i know it used to be 90 day look back to see if you bought any expensive items like a computer, furniture, rims for the car now i think its at least 6 months, but when can they do if you max out your card buying food?

  17. ‘only 122 units were sold in the second quarter of 2023. According to a report by DKRA Group’s research department, the inventory of unsold units topped 42,300 as of June’

    I don’t have a calculator handy, how many months of inventory is that? I’m sure it’s still a sellers market.

      1. I’m sorry, I mistook the 122 units as monthly, not quarterly, sales. It’s 115 years worth of inventory. I don’t know about you, but I’m always shopping stale listings from 1910.

  18. ‘At a time when most observers predicted a post-Covid economic rebound would be humming along’

    Why did the globalist scum media jump on that bandwagon? Did they talk to any of the millions upon millions of people that were brutalized for years by pooh bear? And it accomplished nothing.

    Oh sure, let’s get back to work peasants, bloomberg says it’s go time!

    ‘We shouldn’t be surprised that measure after measure to stabilize and revive the property market has failed. In a highly speculative market, what drives buying is mainly expectations of continued price appreciation’

    Pretty much the definition of a bubble Mike.

  19. “The stock’s recent weakness has sawed off more than half of a 2023 rally that at one point reached 445%. ‘I think some of the air is popping out of that balloon today,’ said Dan Dolev, analyst at Mizuho Securities.”

    I thought AI was read hotcakes and was going to power the New Age eCONomy.

    Whuh happened!?

    1. Are we due a stock market crash? Here’s what the charts say
      Are we due a stock market crash? Here’s what the charts say
      Jon Smith takes a visual look at different gauges of sentiment to try and figure out if a stock market crash is indeed on the horizon.
      Jon Smith
      Published 9 August, 1:58 pm BST
      Chalkboard representation of risk versus reward on a pair of scales
      Image source: Getty Images

      I’ve seen some articles recently that put across the potential for a stock market crash coming before the end of the year. Part of the reasoning is linked to a global economic slowdown. Further, the potential bubble in artificial intelligence (AI) stocks could deflate in coming months with the high valuations. When assessing these arguments, here’s what I can glean from the charts.
      …
      https://www.fool.co.uk/2023/08/09/are-we-due-a-stock-market-crash-heres-what-the-charts-say/

      1. “Just what do you think you’re doing, Dave? Dave, I really think I’m entitled to an answer to that question.” 🙂

    3. I thought AI was read hotcakes and was going to power the New Age eCONomy.

      Whuh happened!?

      They printed too much, and it’s still a sloshin’. What is the next phony narrative they’ll gin up after AI?

      2. It was the LK-99 semiconductor in South Korea, but too bad that turned out to be as real as cold fusion

  20. “In 2021, the company went public through a SPAC.”

    Just in time to offload on well funded bagholderz…

    1. CNBC Disruptor 50
      WeWork shares jump more than 13% in public markets debut after SPAC merger
      Published Thu, Oct 21 2021 9:04 AM EDT
      Updated Thu, Oct 21 2021 4:17 PM EDT
      Samantha Subin

      Key Points

      – Shares of WeWork closed up more than 13% Thursday after the company went public through a special purpose acquisition company more than two years after its failed IPO.

      – The office startup halted initial plans for an IPO in 2019 after investors raised concerns over its business model and its founder and then-CEO Adam Neumann.

      – The company was valued at $9 billion earlier this year, a sharp drop from the $47 billion valuation from SoftBank Group in 2019.

      – WeWork execs discuss going public, path to profitability and Adam Neumann

      Shares of WeWork closed up 13.49% on Thursday after the company went public through a special purpose acquisition company more than two years after its failed IPO.

      The office-leasing company scrapped plans for an IPO in 2019 after investors raised concerns over its business model and corporate governance and its founder and then-CEO Adam Neumann.

      Plans for the merger with BowX Acquisition Corp. were first announced in March, in a deal that reportedly valued the company at roughly $9 billion.

      The valuation is a sharp drop from 2019, when WeWork was initially valued at a steep $47 billion by SoftBank Group. Its valuation slowly lowered as news of the company’s finances unraveled and investor demand wained.

      “You’ve said this is a story with drama,” WeWork Executive Chairman Marcelo Claure told CNBC’s “Squawk Box” on Thursday. “Sure, this is a story where a lot of people wrote documentaries that it was the end of WeWork. Well the resistance, the persistence of these people is incredible. This company is here, is stronger than ever, and no doubt that we’re going to be celebrating many more milestones.”
      …
      https://www.cnbc.com/2021/10/21/wework-goes-public-through-spac-.html

  21. Is it a sure thing at this point that mortgage rates are headed lower and US housing prices are rebounding?

    1. Mortgage Demand Falls as US Credit Downgrade, Treasury Yields Push Rates Higher
      FHA loan rates jump to highest levels since 2002
      By Kathleen Marshall
      Published August 09, 2023
      worried looking couple with advisor
      courtneyk / Getty Images

      Mortgage applications declined 3.1% from the previous week as the average interest rate for FHA-backed mortgages increased to 7.02%—the highest in almost 21 years—according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.
      …
      https://www.investopedia.com/mortgage-demand-falls-as-us-credit-downgrade-treasury-yields-push-rates-higher-7574471

    2. Financial Times
      Markets Briefing Markets
      Treasury yields rise as investors assess Fed’s interest rate path
      Weak auction of 30-year bonds weighs on market mood
      A montage of a road sign for Wall Street and a rising chart
      The latest US inflation reading showed prices rose at an annual rate of 3.2% in July
      ennifer Hughes and Harriet Clarfelt in New York and Daria Mosolova in London 7 hours ago

      US government bonds came under pressure and stock markets wavered on Thursday as investors balanced the impact of softer inflation data against a weaker-than-expected 30-year bond auction.

      The US Treasury sold $23bn in long-dated bonds at a high yield of 4.189 per cent, slightly above market levels ahead of the bid deadline. The coupon on the new debt was the highest since June 2011.

      Analysts at Action Economics said the soft pricing wrongfooted markets.

      “Yields have spiked higher, led by the long end in a bear steepening trade,” the added.

      So-called bear steepeners involve long-dated yields rising faster than shorter ones, implying investors are expecting the cost of money to rise in the future.

      The yield on the benchmark 10-year Treasury note rose 0.09 percentage points to 4.1 per cent, reversing declines in the first few hours of the trading session. The two-year yield added 0.04 percentage points to 4.84 per cent. Bond yields rise as their prices fall.

      On Wall Street, the blue-chip S&P 500 closed flat having given up gains of more than 1 per cent early in the session following inflation data. The tech-heavy Nasdaq Composite added 0.1 per cent.

      The moves on Thursday came after the latest US inflation reading showed prices rose at an annual rate of 3.2 per cent in July, marginally below the 3.3 per cent expected. The reading was higher than 3 per cent in the previous month.

      Core inflation, which strips out volatile food and energy prices, came in at 4.7 per cent on Thursday, also slightly below the 4.8 per cent forecast of economists polled by Reuters.
      …

      1. “Yields have spiked higher, led by the long end in a bear steepening trade”

        I keep seeing that term, but honestly have no clue what it signifies.

        1. Trade
          Bonds Fixed Income
          Bear Steepener Definition and Overview With Example
          By James Chen
          Updated April 26, 2022
          Reviewed by Cierra Murry
          Fact checked by Marcus Reeves

          What Is a Bear Steepener?

          A bear steepener is the widening of the yield curve caused by long-term interest rates increasing at a faster rate than short-term rates. A bear steepener is usually suggestive of rising inflationary expectations–or a widespread rise in prices throughout the economy. The rise in inflation can lead to the Federal Reserve increasing interest rates to slow prices from rising too rapidly. Investors, in turn, sell their existing fixed-rate long-term bonds since those yields will be less attractive in a rising-rate environment. The result is a bear steepener because investors sell long-term bonds in favor of shorter maturities as they wait for the rate hikes to finish before buying long-term bonds again.
          …
          https://www.investopedia.com/terms/b/bearsteepener.asp

          1. “…investors sell long-term bonds in favor of shorter maturities as they wait for the rate hikes to finish before buying long-term bonds again.”

            Sounds like a good recipe for a crash!

          2. “A bear steepener is usually suggestive of rising inflationary expectations–or a widespread rise in prices throughout the economy. The rise in inflation can lead to the Federal Reserve increasing interest rates to slow prices from rising too rapidly. ”

            Translation: Look out below, housing and stock market investors!

        2. “The coupon on the new debt was the highest since June 2011.”

          2011, in turn, was towards the tail end of a multiyear CR8R event in housing.

          By contrast, we currently are right at the beginning of one!

  23. the Canadians are way overpriced on about everything, mostly houses, somethings got to give, and soon , and their government, the one that can and will freeze your bank accounts at will, will have to do something foolish to try and save them

  24. Good morning HBB! Long time reader, infrequent poster. I’ve been reading HBB off and on since close to its inception and was here for the bubble of the early 2000’s, the crash of 2008-2012 and the real estate insanity that continues to this day. I’ve been here to remember many of the old posters and trolls (GetStucco/Professor Bear, Craven Moorehead, LV Landlord, Gekko, Paladin/Jingle Mail, Oly Gal (RIP), aNYCdj, Etc. )

    Anyway, in my travels around the web, I was amused to see a really old post from HBB recycled as copypasta. I think this must have first appeared here around 2005 or so, because I remember reading it at near the top of the market. screencapped from 4chan’s /biz/ board a few days ago:
    https://imgur.com/a/TmHRr7I
    lol

    2. Glad to see another old-timer still with us. That gem started on the old fvckedcompany message board (the 4chan of its day) as sarcasm aimed at the permabulls.

      1. When I left Celsius I was thinking that F’d company would have been the perfect place to trash talk the company. Fitting that the CEO was recently arrested.

        Unserious people.

    3. “…a really old post from HBB recycled as copypasta…”

      It was clearly dripping with sarcasm. Thanks for the upload!

  25. South Carolina…Tuesday, hundreds of concerned homeowners came out to a town hall hosted by state leaders, with the hope that they can help find solutions to the increasing insurance rates.
    …
    My sister was at this meeting. Her HOA has tripled since she bought her condo 2 years ago (which is west of the intercoastal, not oceanfront). From $600 then to a proposed $1800 now due to insurance increases. Lots of condos in that complex up for sale right now, trying to escape before the increase goes into effect I guess. Good luck with that.

    1. Those HOA increases are the jabs and body blows warming them up for the “special assessment” haymaker. The people who buy condos are the YOLO crowd. You would have to put a gun to my head to make me do it.

    2. My sister was at this meeting. Her HOA has tripled since she bought her condo 2 years ago (which is west of the intercoastal, not oceanfront). From $600 then to a proposed $1800

      Annual, quarterly or monthly?

  26. Man killed in FBI raid after alleged threats against Biden, other officials

    By Ben Brasch
    Updated August 9, 2023 at 6:06 p.m. EDT

    Agents were serving an arrest warrant on Craig D. Robertson following his alleged online threats against Biden, according to a 30-page felony complaint signed by a judge Tuesday.

    Biden was expected to visit Salt Lake City, less than an hour’s drive north of Provo, on Wednesday night as part of a Western tour to promote his economic and climate agenda. White House officials, when asked about the report, referred all questions to the FBI.

    According to the complaint, Robertson posted on Monday: “I HEAR BIDEN IS COMING TO UTAH. DIGGING OUT MY OLD GHILLE SUIT AND CLEANING THE DUST OFF THE M24 SNIPER RIFLE.”

    https://www.washingtonpost.com/national-security/2023/08/09/fbi-raid-killed-man-biden-threats/

  27. Purchased by some Tampa investors in 2021 for 35K. Currently listed for 250K. The house has been nicely remodeled, just way over-priced for a 66 year old wood frame house in that area. I’m certain that the listing agent doesn’t take her kids trick-or-treating in that neighborhood. Lots of poverty, crime, drugs, neighborhood blight, and industrial businesses.

    https://www.zillow.com/homedetails/331-Pinestead-Rd-Pensacola-FL-32503/44651489_zpid/

    Sale Date Value
    10/28/2021 $35,000
    10/19/2020 $20,000
    08/04/2017 $28,000
    07/30/2014 $10,000
    Source: https://escpa.org/CAMA/Detail_a.aspx?s=271S303101009033

    1. There’s a truck graveyard across the street. But hey, I guess we’re supposed to “be able to do what we want on our own property.”

      Are there any areas around there that aren’t full of poverty and crime and drugs? Too bad too, because I like those small ish houses.

      1. One look at the neighbor house looming large in the pic – nah, I’m good. Looks like a place where it’s dangerous to be in your own yard after dark.

      2. Sure, there’s plenty of nice houses and neighborhoods in the Pensacola area. These days, I think the crime and drugs are everywhere, just perhaps “higher-class” crime and drugs. Similar to some properties on Pennsylvania Ave in Washington, DC.

    1. 7,400 square foot lot. No thanks. If it was on 5 acres I’d give them $25,000 for the dirt and utilities (of unknown condition).

      1. That’s confusing, is that two structures on the one lot? One is kind of intact. But what happened to the other one? The front half is rotted away, but it doesn’t look like a fire since there’s still a (bad) roof. IMO both are tear-downs — I’m a big fan of tearing things down.

        Is this another poverty/drugs neighborhood?

        1. “I’m a big fan of tearing things down”

          Do you want to come help me this weekend? I haven’t worked on it in almost a month now, been taking a victory lap since we got the chimney down. There are only two more rooms sitting on slab and the garage left to finish above ground demo.

        2. Yep – poverty, drugs, crimes, homeless. Also, just a few blocks from the county mental health and substance abuse facility. Additionally, conveniently located close to the county jail. I believe there are 3 separate very small lots. two of which have structures that are tear downs.

  29. So some thoughts. I’m currently in Northern Nevada (Reno, Carson Valley, Tahoe). Almost everything that is currently pending shows “contingent”. My assumption is these “contingent” on the buyer selling their current home. A lot of the deals here recently have been cash from California, which comes from the sale of an overpriced Cali home. I know there’s not a lot of purchase money lending going down here now. Got friends in the biz. People who need a loan just can’t afford to buy here with median household incomes at 70k and entry level homes at 550K. Am I wrong in these assumptions about the contingencies?

  30. Are you interested in buying a home? If so, you should be aware that your rival how-much-a-month buyers are largely clueless regarding financial matters.

    1. Many Americans Remain Misinformed About Interest Rates, Home Prices
      in Affordability, Daily Dose, Featured, Market Studies, Market Trends, Migration, News, Real Estate, REO
      22 hours ago

      According to a new study from Real Estate Witch, Americans remain exceedingly misinformed about home prices—as 73% don’t think homes are affordable right now, yet 60% actually underestimate the median home sale price.

      Just 1 in 7 Americans—an estimated 14%—know the current median home price falls between $400,000 and $499,000. Some 23% believe the median home costs between $200,000 and $299,999, while another 23% think it costs between $300,000 and $399,999.

      Despite underestimating current home prices, 76% of non-homeowners are concerned about rising home prices.

      New research showed that just 12% of Americans know the current interest rate for a 30-year mortgage sits around 7%. Roughly 43% believe the rate is higher, with 1 in 4—or 26%—believing it exceeds 10%.

      Although a third of non-homeowners (31%) say they’re knowledgeable about the home-buying process and 43% say they’re knowledgeable about mortgages, 62% wrongly think it’s required to put down 20% on a home. In fact, 21% believe buyers need to put down more than 20%.

      Homebuyers are required to pay private mortgage insurance (PMI) if they don’t put 20% down. However, 85% of Americans don’t know what PMI is—including 83% of current homeowners.

      Data found about one-third of Americans (32%) say a credit score of at least 700 is necessary to purchase a home. In reality, homebuyers can qualify for a conventional loan with a score of 620.
      …
      https://dsnews.com/news/08-09-2023/many-americans-clueless

      1. According to a new study from Real Estate Witch, Americans remain exceedingly misinformed about home prices—as 73% don’t think homes are affordable right now, yet 60% actually underestimate the median home sale price.

        The Forecast Home builders billboard said “Homes in the low $100,000”. I saw that sign many times driving down the 14 freeway in the Antelope Valley (I would drive out most weekends to fly gliders). I did a quick calculation in my head and came to the, “Homes can’t any cheaper that this” conclusion and went to the sales office. There were only five homes for sale and I even qualified for a CHFA which paid for the down payment. Buying my house was easier than buying a car. But like I’ve said before, in 2000 you couldn’t give a house away in L.A. County. I still don’t know how they made a profit on a house costly $132.000. The construction quality has been excellent–nothing has broken down or required any maintenance, even the A/C keeps the place cool when it’s 110 outside.

        A couple of years later, the same sign said “Homes from the low $200,000”. Then a couple of years later, “Homes from the low $300,000”. And instead of a 5 homes being built, they built over 500 in and around me on land that had been empty since the dawn of time.

        And then the crash.

      2. Many Americans Remain Misinformed About Interest Rates, Home Prices

        Shear ’em, shave ’em, skin ’em, then render ’em. First you dumb them down, then you prosper.

        If you want to see the aforementioned crowd, just go to online car and truck forums. Harryhowmuchamonth lives there.

        1. Misinformed, or just too stupid too learn from history? I lean toward the latter, as I’ve seen these same dolts volt and procreate. Idiocracy in the making now, let alone in 500 years.

    1. China’s Economy Faces Yet Another Threat: Falling Prices
      A deepening slowdown in the world’s second-biggest economy has now raised fears of deflation, which could be crippling for heavily indebted China.
      A construction site strewn with building materials and two small red work trucks, and surrounded by unfinished apartment towers.
      A construction site of a residential property development in Nanchang, China, in May.
      Credit…Qilai Shen for The New York Times
      By Keith Bradsher
      Reporting from Beijing
      Published Aug. 9, 2023
      Updated Aug. 10, 2023, 11:35 a.m. ET
      阅读简体中文版閱讀繁體中文版

      The United States has spent much of the past 18 months struggling to control inflation. China is experiencing the opposite problem: People and businesses are not spending, pushing the economy to the verge of a pernicious condition called deflation.

      Consumer prices in China, after barely rising for the previous several months, fell in July for the first time in more than two years, the country’s National Bureau of Statistics announced on Wednesday. For 10 straight months, the wholesale prices generally paid by businesses to factories and other producers have been down from a year earlier. Real estate prices are tumbling.

      Those patterns have amplified concerns about deflation, a potentially crippling pattern of broadly falling prices that tends to also depress the net worth of households — as it did in Japan for years — and make it very hard for borrowers to repay their loans.

      Deflation is particularly serious in a country with very high debt, like China. Overall debt is now larger in China, compared with national economic output, than in the United States.

      The Chinese government has pressured economists inside the country not to mention the possibility of deflation, while publicly denying that deflation poses any risk.

      “Generally speaking, there is no deflation in Chinese society, and there won’t be in the future,” Fu Linghui, a National Bureau of Statistics official, declared at a news briefing on July 17.
      …
      https://www.nytimes.com/2023/08/09/business/china-economy-inflation.html

      1. Did AlbuquerqueDan move to China?

        “Generally speaking, there is no deflation in Chinese society, and there won’t be in the future,”

        1. “Generally speaking, there is no deflation in Chinese society, and there won’t be in the future,”

          Funny how their population will deflate, but somehow their society won’t.

    1. A relative sold their very nice home in Poway just south of the high school for 1.3 million about a year ago. Very nice house on a good size lot. Very livable and attractive home with a practical lap pool. Low maintenance everything. They bought the house new almost 40 years ago. They left to retire in Hawaii, the home state of hubby.

        1. How are they enjoying the fire?
          I don’t know anything about Hawaii or heard of Lahaina–shocked to see so many killed by a wildfire???! I thought that kind of thing only happened in California. I read that Maui County only has 13 fire engines and 2 ladder trucks for 3 islands. And no off road fire trucks so they can only fight fires when they reach roads and populated areas?! The fire knocked out cell, internet and power so nobody could be warned, and they knew that the place was at high risk of this occurring. Talk about incompetence and criminal negligence!
          My relatives live in Oahu–I’m not sure about their son and his family. He works for Ellison’s operation in Oahu. Geography once again doomed this little town. Isolated and with no escape routes because they were blocked by downed power poles and lines. Just like what happened in Paradise, California.

    2. “I don’t know where to start with this overpriced POS“

      If that’s a POS you wouldn’t get the tingles visiting my shack. 🙂

        1. There is lots of dated, dilapidated, vastly overpriced housing in close proximity to this place…such as the shack we rent.

  34. ‘WeWork had over $13 billion in long-term lease obligations at the end of June, the firm said in a filing’

    Is that a lot?

    1. Majority of Americans Believe It’s a Bad Time To Buy a Home, Says Fannie Mae. Here’s Why It May Not Get Better Anytime Soon.
      By Aarthi Swaminathan
      Aug 8, 2023

      With the 30-year in the 7% range and home prices continuing to rise, the typical home buyer is feeling quite miserable about the prospect of buying a home.

      Some 82% of consumers said that it was a “bad time to buy a home” in July, up from 78% in June, according to a survey released Monday by Fannie Mae. Fannie Mae releases the survey as part of its monthly Home Purchase Sentiment Index. The index rose in the latest July report, by 0.8 points to 66.8.

      Consumers cite high home prices and unfavorable mortgage rates, said Doug Duncan, chief economist and senior vice president at Fannie Mae.

      “Further, the share of consumers expecting home prices to continue to rise has also been on a steady climb since March, which may only add to perceptions of unaffordability,” he added.

      Home prices may continue to stay elevated as few homeowners indicated their interest in selling in the survey, Duncan added. About 64% of respondents said it was a good time to sell a home, which was unchanged from the previous month.

      The “good time to sell” component has “not seen much movement” in recent months, he noted, “an indication that the current low levels of existing homes for sale will likely continue to persist in the near term.”
      …
      https://www.realtor.com/news/trends/majority-of-americans-believe-its-a-bad-time-to-buy-a-home-says-fannie-mae-heres-why-it-may-not-get-better-anytime-soon/

  36. The 10 fastest-shrinking US cities and towns
    Noah Sheidlower Aug 5, 2023, 1:10 PM ET
    Jackson, Mississippi Jeremy Woodhouse/Getty Images

    Jackson, Mississippi, led the nation in the rate of population decline from July 2021 to July 2022.

    Many left cities in the Bay Area and Utah, as well as St. Louis and New Orleans.

    San Francisco, which was the fastest-declining city from July 2020 to July 2021, did not make the top 15.
    …
    https://www.businessinsider.com/jackson-mississippi-new-orleans-shrinking-cities-population-decline-2023-8

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