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After A Period When Prices Have Defied Gravity, Sellers May Finally Be Getting A Dose Of Reality

A report from the Wall Street Journal. “Sheila Smith was set to get a mortgage for about $750,000 to buy an investment property in Sedona, Ariz., earlier this year. The lender, a regional bank, offered a starting interest rate of about 5%, well below the going rate. Then, the bank said it was no longer offering the deal. Smith balked at paying more and wound up buying a cheaper home she could afford in cash. Banks are tapping the brakes on big home loans known as jumbo mortgages. ‘The shock wave has psychologically affected bank executives,’ said Chris Abate, chief executive officer of Redwood Trust, a financial firm that buys and sells jumbo mortgages. Before the banks collapsed, most of Redwood Trust’s business involved buying jumbos from independent mortgage brokers and selling them to banks. Now it is the opposite: Dozens of banks are flooding the firm with requests to potentially unload their jumbo loans. Banks will find it harder to make bespoke loans since they have to be standardized to sell to third parties, Abate said.”

“The pullback is forcing many affluent home buyers to reconsider their financing options, or even what properties they buy. Smith, the Sedona buyer, said the cheaper house she bought needs some work, so she is planning to fix it up before renting it out. To get the cash to buy it, she drew on a line of credit against her home in Boise, Idaho, where she is a real-estate agent.”

The Aspen Daily News in Colorado. “What can we expect from the Aspen-Snowmass real estate market in the remainder of this year? During the first seven months of 2023, we’ve seen an increase in inventory leading to some softening in prices. On the local level, the word on the street from restaurant, hotel and retail employees is the local economy is significantly slower this summer then the past three summers. One local bartender commented that ‘it feels like 2019.’ As the available inventory of properties for sale is on the increase, sellers are likely to face increasing competition from other sellers. In this kind of environment, we’re likely to see asking prices decline and a softening of actual sale prices. Year-to-date, the median and average single-family home sale prices are off 17.6% and 22.4% respectively, while condo median and average sale prices are off 9.5% and 9.3%.”

The Tribune. “A summer of depressed sales and low inventory continued its hold over San Luis Obispo County’s housing market in July, as well as the rest of California. Countywide, median home price declined somewhat, falling 4% from last July. Some of the biggest losses came in Atascadero, which experienced a 14.7% reduction in median price year-over-year, dropping to $704,000. In San Luis Obispo, the median home price fell by 12.5% year-over-year to $1.03 million; in Morro Bay, prices fell 11.9% to $945,000 and in Paso Robles, prices declined 10.2% year-over-year to $715,000, the report found. Cambria’s median price fell 7.9% year-over-year to $960,000, Los Osos’ median price hit $783,000 after falling 5.2% and Grover Beach’s median price fell 2.7% to $750,000 in July.”

Bisnow Los Angeles in California. “Hotel sales in Los Angeles County declined nearly 53% in the first half of 2023 compared to the same time last year, according to a report this week from Atlas Hospitality Group. Only 17 hotels in LA County traded hands in the first half of this year, down from 36 sales last year. The county’s largest transaction was the $760M foreclosure sale of the Fairmont Century Plaza Hotel, although the full price tag included the hotel, retail space and some of the condos in the Century City property. Interest rates are hammering transaction volumes, and buyers and sellers are far apart on offers, Atlas Hospitality Group President Alan Reay said. Even when both parties can agree on a price, often those properties aren’t getting appraised and financed.”

“‘We have, on the national scale, what’s happened with interest rates,’ Reay said. ‘You can then apply what the city of Los Angeles has done as of April 1, and that has completely obliterated the market in terms of selling.’ Eight hotels were foreclosed on across the state in the first half of the year, including the Fairmont Century Plaza in Century City. Reay pointed to the news of Park Hotels & Resorts handing back the keys to two San Francisco hotels it owned rather than continuing to make payments on a $725M securitized loan tied to the hotels. Those hotels were valued at $1.6B when the loan was issued, Reay said. ‘You’re looking at a situation here where [ownership] does not believe that those hotels are worth 50% of what they appraised for,’ Reay said.”

The Real Deal on Texas. “The past few years have been a rollercoaster for Sun Belt multifamily investors, and Shakti C’Ganti’s firm, Ashland Greene, has been one of the fastest-growing shops in the space in that time. After buying its first Dallas Fort-Worth deal in 2018, the company has bought a spate of older, value-add multifamily projects in the Metroplex. Have sellers begun to adjust to the new dynamic, or are they still seeking 2021 prices? ‘The prices that sellers are getting are far below broker guidance, and the sellers are approaching a wall of maturities. We’re in that zone, starting in like October or November, all the way through next year. So I think sellers are going to hold out for as long as humanly possible. A year ago, you had Class A, Class B and Class C properties all trading for 3.5 to 4 caps — there was no distinguishing in pricing. Now you’ve got the Class C deals at almost 7 percent. The Class B’s are in the mid-fives, and then you go down from there to the Class A’s. We’re starting to see a differentiation in pricing, which is what a down market does.'”

The Globe and Mail in Canada. “Ask a home buyer what they dread the most and the answer may very well be a bidding war. What they might not know is that right now the vast majority of home sales employing the offer day strategy – a day the seller sets aside to consider any bids on the property – result in no offers and no sales. The percentage of all homes listed for sale that sold on an offer day is somewhere around 7 per cent in the largest real estate board in the country, the Toronto Regional Real Estate Board. That figure may come as a surprise to buyers, but perhaps it will surprise sellers more because according to Ben Amir – CEO and founder of TopHouse – his data suggests 53 per cent of listings posted in July with offer dates generated no bids at all.”

“‘It’s been up and down over the last 26 years, but there’s definitely less of an appetite to fight … these interest rates are affecting buyers,’ Audrey Azad, a salesperson with Re/Max Hallmark Estate Group Realty. Ms. Azad said that there are still some areas that see bidding wars, while previously hot zones have gone cold. ‘It’s very location specific: When I list something that’s spectacular, or rare, it’s business as usual,’ she said. ‘Then there’s Woodbine-Danforth: there are five new-builds in there and no matter what anybody does, they still get no offers.'”

“So sellers have to be choosy about seeking out bidders, while for buyers there are upsides to an increase in failed offer days. ‘The best time to buy is in a down market,’ said Ms. Azad, particularly for move-up buyers. ‘If you can afford it, you’re going to find yourself with a much bigger house: In 2022, you got a pea-size house for $2-million. Now you can get a proper house in a good neighbourhood.'”

Daily Mail in the UK. “Sellers appear to be finally accepting their home might be worse less than it was this time last year, before interest rate rocketed. After a period when asking prices have defied gravity, it suggests that sellers may finally be getting a dose of reality and beginning to accept that their home’s value may need to fall in order to sell in today’s market. Henry Pryor, a professional buying agent and property expert says he expects prices to fall further from where they are now. ‘Eventually gravity will have it’s way,’ says Pryor, ‘average asking prices have risen by 19 per cent since 2020 but the impact of higher interest rates is starting to chip away at sale prices and so sellers and their estate agents must follow suit. Three quarters of properties are selling below the original asking price today. Proof that you can ask what you want but that buyers aren’t as optimistic as sellers any more.'”

From Extra. “House prices in the capital are starting to fall sharply, with average costs in affluent Dublin 4 down almost €150,000 in a year, new official figures show. In Dublin city, house prices are down 3.8%, the steepest price fall in the country, while in Dún Laoghaire-Rathdown prices fell 2.5%, the second steepest price drop. The falling prices are because of rising interest rates, banks’ tougher lending rules and worries over job losses, according to David Hall, of the Irish Mortgage Holders Organisation. ‘With interest rate rises, access to credit is harder, also a bit of uncertainty in some job areas as well, we’ve seen some job losses, so I think a combination of all three are going to lead to prices dropping,’ he said.”

“In Ireland’s most expensive district, Dublin 4, the average price last June was €1,006,000 but that has dropped to €857,000 – a fall of almost €150,000 in just 12 months. While in Dublin 6, the capital’s second most expensive district, average prices were down from €1,025,000 to €698,000, a massive drop of €327,000.”

From Reuters. “The downturn in Germany’s residential construction sector intensified in July, according to a survey published on Monday. While the percentage of construction companies complaining about cancelled orders eased somewhat in July to 18.9%, that was still well above the long-term average of 3.1%. Many companies are getting by on order backlogs, Ifo said, but its survey showed 10.5% of companies in the sector reporting financial difficulties – double the figure a year prior. Data released last week showed a 27% fall in building permits for apartments in Germany in the first half of 2023. ‘A storm is brewing. Following many years of expansion, now higher interest rates and the drastic rise in construction costs are choking off new business,’ said Klaus Wohlrabe, Ifo’s head of surveys.”

7 News in Australia. “A Perth couple’s retirement dreams are in ruins after their home builder went bust. Making matters worse for Tina Hoyland and Steven Radley, they have missed out on crucial insurance money by a matter of weeks. Their Mount Hawthorn home has been under construction for more than three years, with work slowing to a crawl before their builder City Residence collapsed in July. ‘We’ve been suffering for over 40 months to get this house to where it is,’ Hoyland said. ‘It’s still not finished, and now we’re in a state where we can’t really afford to finish it.’ Hoyland said the couple was losing hope. ‘We just wanted a nice house to retire to. At this stage, we’re thinking it’s probably gone,’ she said.”

From Vietnam.net. “Nguyễn Văn Ngọc, a 50-year-old investor from the northern province of Bắc Giang, has been struggling to sell a shophouse in Hà Nội’s Hà Đông District for over a year. Due to low rental income and high monthly loan payments, he is under immense financial pressure. Despite offering a 20 per cent discount on the purchase price of VNĐ23 billion at the end of 2021, he has not been able to attract any potential buyers. In recent years, investing in shophouses has been a popular trend in cities like Hà Nội and HCM City. Many investors saw it as a lucrative opportunity to make a profit by buying a shophouse and reselling it at a higher price.”

“However, the reality has been harsh for many, as they struggle to find tenants and face financial losses. Another investor in Hà Nội, who asked to be unnamed, in early 2022 purchased a shophouse located in the eastern part of Hà Nội for VNĐ17 billion, hoping to resell it at a higher price. However, the property has remained vacant for a year despite its location in a densely populated residential area. The investor is now willing to sell at a loss of 30 per cent, but still hasn’t found a buyer. The situation is similar in areas like Tố Hữu Street in Hà Đông District and Nguyễn Văn Huyên Street in Cầu Giấy District, where numerous shophouse owners are struggling to find tenants.”

From Deutsche Welle. “Over the previous two decades, as the Chinese population grew more wealthy, an unprecedented construction boom caused a quadrupling in real estate prices. Hundreds of millions of people bet that property speculation would be safer for their savings than the country’s volatile stock markets. But after years of high growth, the government’s new debt curbs caused property sales and prices to plummet, hitting one developer, China Evergrande, particularly hard. ‘When the China Evergrande crisis unfolded, people feared that others would follow, but certainly not Country Garden. It was much less leveraged than Evergrande,’ Alicia Garcia-Herrero, chief economist for Asia Pacific at the French investment bank NATIXIS, told DW. ‘Without a continual increase in prices, the whole real estate model is unsustainable and even a company like Country Garden can’t make it.'”

“Beijing is keen to avoid a glut of unfinished homes, particularly in smaller cities, where Country Garden has been most active in construction and has an estimated one million outstanding homes. While the firm promised the masses the chance to achieve ‘five-star living,’ many are about to watch as their dreams go up in smoke.”

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This Post Has 120 Comments

  1. ‘handing back the keys to two San Francisco hotels it owned rather than continuing to make payments on a $725M securitized loan tied to the hotels. Those hotels were valued at $1.6B when the loan was issued, Reay said. ‘You’re looking at a situation here where [ownership] does not believe that those hotels are worth 50% of what they appraised for’

    It’s still sound lending Alan.

    2. Just read that IKEA is planning on opening a store in downtown San Francisco.

      We’ll see if it actually happens. They also announced years ago, with big fanfare, that they were going to open a store on metro Denver’s north side. It never happened.

      1. I bet they could do a great deal on a tiny home. Make them sidewalk ready and they wont be able to keep up with demand.

        1. I bet they could do a great deal on a tiny home. Make them sidewalk ready and they wont be able to keep up with demand.
          Make them out of cardboard and transportable in a shopping cart–they’ll sell out in an hour! I was actually planning a visit to Ikea today…

      2. Ikea just announced that they will be opening three new IKEA stores in the DC area, but they won’t be the usual grab-and-go warehouse. No Swedish meatballs or lingonberry juice either. It will only be the showroom part with a focus on the design studios. You lookie-loo and then you order the stuff for delivery. Maybe that’s what they would put in downtown SF.

        There wouldn’t be that much in the store to loot, not even cash. I suppose the looter gangs could take the computer monitors at the designer stations, but I dunno, that doesn’t seem to be their style.

        1. I suppose the looter gangs could take the computer monitors at the designer stations,

          No, the looters will steal the fake computer monitors on the display furniture. TVs will be taken as well. They’ll leave the fake dinnerware and cutlery since they don’t eat with utensils.

  2. ‘The prices that sellers are getting are far below broker guidance, and the sellers are approaching a wall of maturities…A year ago, you had Class A, Class B and Class C properties all trading for 3.5 to 4 caps — there was no distinguishing in pricing. Now you’ve got the Class C deals at almost 7 percent’

    Behold, the cap rate magic pixie dust works in reverse too!

    1. When the cap rate goes below 5%, you know it’s bubble territory and time to sell everything to the FOMO suckers.

  3. ‘Sheila Smith was set to get a mortgage for about $750,000 to buy an investment property in Sedona, Ariz., earlier this year. The lender, a regional bank, offered a starting interest rate of about 5%, well below the going rate. Then, the bank said it was no longer offering the deal. Smith balked at paying more and wound up buying a cheaper home she could afford in cash’

    ‘Smith, the Sedona buyer, said the cheaper house she bought needs some work, so she is planning to fix it up before renting it out. To get the cash to buy it, she drew on a line of credit against her home in Boise, Idaho, where she is a real-estate agent’

    I’d bet 5 pesos she’s going for STR. Either way she’s fooked.

    1. “To get the cash to buy it, she drew on a line of credit against her home in Boise, Idaho, where she is a real-estate agent.”

      That kinda says it all.

        1. You’re alive!! You went quiet yesterday and we all feared the worst…

          Any damage? The msm reporting has been crap.

          1. Any damage?

            Some toppled Shasta Daisies. Possibly some powdery mildew on the tomatillo plants.

          2. damage

            So I took the kid out for our usual drive this afternoon. Streets are littered with dead foliage from all the trees. The palm tree nursery looks like a swamp. Numerous other points along our drive had been flooded but were fine today.

        1. Are HELOCs adjustable? Sincere question.
          If so, yikes. These folks will be fooked like the fooked folks in K-da.

          1. Yes, they’re usually adjustable. Normally fixed rates are only available fixed term, single funding second mortgages.

    3. I guess she’s doesn’t understand.. spreading the risk! You work in a industry that you are going all in, crazy. She will under risk diversification in the near future…..but such a difficult way to learn!

      1. “You work in a industry that you are going all in, crazy.”

        Back when I did repossessions, it was the lenders’ employees who were mired in debt, and some of them were getting busted for taking out loans with fake identification.

    4. Pshaw, Ben Jones. The NAR assures us that UHSs are experts on the local area real estate market. Local realtors have access to Suzanne’s proprietary research that the Great Unwashed aren’t privy to – so surely Sheila is levering up on debt in the certain knowledge she’s on that Yellow Brick Road to effortless riches. So all you haters & yer naysaying need to just watch & learn.

    5. “To get the cash to buy it, she drew on a line of credit against her home in Boise, Idaho, where she is a real-estate agent’”

      Every time a realtor goes bust speculating in real estate, an angel gets its wings…

  4. ‘Then there’s Woodbine-Danforth: there are five new-builds in there and no matter what anybody does, they still get no offers’

    WA?

    ‘The best time to buy is in a down market…If you can afford it, you’re going to find yourself with a much bigger house: In 2022, you got a pea-size house for $2-million. Now you can get a proper house in a good neighbourhood’

    That’s the spirit Audrey!

  5. How did you lose yer shack Dave?

    With interest rate rises, access to credit is harder, also a bit of uncertainty in some job areas as well, we’ve seen some job losses, so I think a combination of all three are going to lead to prices dropping.

  6. ‘We’ve been suffering for over 40 months to get this house to where it is,’ Hoyland said. ‘It’s still not finished, and now we’re in a state where we can’t really afford to finish it’

    I bet you’ve been stuffing food in yer pie-hole that whole time Tina. You can’t eat and be a winnah!

    1. Seeing a lot of half finished renovations listed in the areas I watch. All way overpriced and languishing.

  7. ‘Another investor in Hà Nội, who asked to be unnamed, in early 2022 purchased a shophouse located in the eastern part of Hà Nội for VNĐ17 billion, hoping to resell it at a higher price. However, the property has remained vacant for a year despite its location in a densely populated residential area. The investor is now willing to sell at a loss of 30 per cent, but still hasn’t found a buyer’

    Vietnam has a weird market for these shops. I think they might live in the back, not sure, but I’ve posted a$$ poundings around this before.

    1. The investor is now willing to sell at a loss of 30 per cent, but still hasn’t found a buyer’

      Die, speculator scum.

      1. The investor is now willing to sell at a loss of 30 per cent, but still hasn’t found a buyer’

        And when he is finally willing to sell at a loss of 40%, he won’t find a buyer at that price either, as he will have waited too long and will continue to follow the market down.

  8. ‘Without a continual increase in prices, the whole real estate model is unsustainable and even a company like Country Garden can’t make it’

    That’s why you make th big buck Alicia.

    ‘Beijing is keen to avoid a glut of unfinished homes, particularly in smaller cities, where Country Garden has been most active in construction and has an estimated one million outstanding homes. While the firm promised the masses the chance to achieve ‘five-star living,’ many are about to watch as their dreams go up in smoke’

    via GIPHY

    1. One of the best lines in that movie: police- let me see your liscense! Chong- it’s on the bumper man.

  9. Now it is the opposite: Dozens of banks are flooding the firm with requests to potentially unload their jumbo loans. Banks will find it harder to make bespoke loans since they have to be standardized to sell to third parties, Abate said.”

    Long buttered popcorn as I wait for the cascading defaults to take down dozens or hundreds of these greedy, reckless bashturds who were the Fed’s & Uncle Sam’s accomplices in blowing this insane housing bubble.

  10. Smith, the Sedona buyer, said the cheaper house she bought needs some work, so she is planning to fix it up before renting it out.

    It’s going to be glorious when she realizes she’s going to be cash-flow negative since no credit-worthy renter feels the need to subsidize her wrong-way shack speculation.

  11. Year-to-date, the median and average single-family home sale prices are off 17.6% and 22.4% respectively, while condo median and average sale prices are off 9.5% and 9.3%.”

    Fake wealth created by fake FedBux “money” melting away like FB tears in the rain. Cry it out, greedheads.

  12. Some of the biggest losses came in Atascadero, which experienced a 14.7% reduction in median price year-over-year, dropping to $704,000. In San Luis Obispo, the median home price fell by 12.5% year-over-year to $1.03 million; in Morro Bay, prices fell 11.9% to $945,000 and in Paso Robles, prices declined 10.2% year-over-year to $715,000, the report found.

    Is that a lot?

  13. So I think sellers are going to hold out for as long as humanly possible.

    You stick to your guns, greedheads! Shirley a creditworthy mark will shamble into your open house any day now eager to pay your delusional wish price – cuz this listing is special!

  14. So I go to a “Touchy feeley” type of Church ……usually don’t get that involved in the ongoing testifying , but did have a word ,yesterday …..”Hey you’all be careful this week , it’s supposed to be the hottest week of the summer ,coming up”…
    The people working on houses, doing anything outside, have got to be affected by this , ongoing heat wave ,seems like this never ends…..

    1. What heat wave? Its summer. At least here in Az. Went to a church w/my wife and MIL last week in California. Every person we were introduced to, when told, ‘they’re from Arizona.’ It was like “OMG what about the heat wave?”
      Answer always the same. Its just a problem because all you refugees from California, have no concept of what a normal summer in the inter mountain west is like. Sad so many people buy into the MSM pap.

      1. Our summer has been mostly cool wit below average temperatures. Have highs in the 70’s forecast for later this week.

        1. Our summer has been mostly cool wit below average temperatures.

          Same here. The sun didn’t come out until July and we have yet to hit triple digits.

      2. It’s been a brutal summer here in North Texas, but nothing we haven’t seen before. The average has been around 105 with the heat index at 115 for the past 6 weeks or so. We did get a nice breather last week when the winds came from the north. It only got up to 90 for a few days and I was ready to get my jacket out. Maybe this will discourage some of the Yankees and Californians.

        1. Our summer was underwhelming in May, June, and the first half of July. Don’t know about Phoenix, but up here it was about 10 degrees below normal. Then we get a two week snap of above average and our mean gurl Guvreness is writing strongly worded letters to the power company, screeching about ‘cooling stations’ and GovCo ‘doing something.’ Que the newly arrived California halfwits wailing about global boiling and viola, an existential crisis.

          Its summer in Arizona. The increased deaths are mostly drug addicted, newly homeless (thanks Clammy Kate). Liberals now crying buckets of snowflake tears. Sheesh, I guess no one told them that smoking rock and screaming at the sun is best done with a hat, in the shade, while staying hydrated.

  15. Many investors saw it as a lucrative opportunity to make a profit by buying a shophouse and reselling it at a higher price.”

    These speculator scum need to become cautionary tales for generations to come.

  16. Hundreds of millions of people bet that property speculation would be safer for their savings than the country’s volatile stock markets.

    Gosh, what happens if all those pauperized “investors” focus their rage on their CCP overlords?

  18. A reader sent these in:

    We were looking for houses in SW Florida last month and about half of the homes we looked at were AirBNB rentals being sold fully furnished. Alot of people want out of that market.

    https://twitter.com/brandenj1972/status/1692974167451111551

    New homes made up 31% of homes for sale in Q2, the highest share of any second quarter on record.

    https://twitter.com/charliebilello/status/1693276714598547675

    The size of the Fed’s balance sheet has increased by more than 1,000% since 2002.

    https://twitter.com/charliebilello/status/1693246508651692134

    How on EARTH can seller leave these photos in public purview and say “no work needs to be done” to a house that appears to need minor gutting and has somehow doubled in value in the space of nine months?

    https://twitter.com/DiMartinoBooth/status/1693326656495075330

    Serious question to any realtors out there. Doesn’t death by 1,000 price cuts do more damage to the home seller?

    https://twitter.com/DiMartinoBooth/status/1693291754336682300

    Landlording is fun! Easy money! Passive income! Rents never come down! CA ‘investor’ buying in Florida in an area where he has probably never even visited. Good times ahead!

    https://twitter.com/TrishaFLsun/status/1692891409890611708

    It gets better! (I might have a spy on that street) The identical home next door, also owned by a real estate agent (more local) has a U-Haul in the driveway. Tenants apparently moving out. Here’s rental price history on that home bought in April ’22. Three tenants in 1 year.

    https://twitter.com/TrishaFLsun/status/1692906959417090179

    Housing inflation via fraudulent PPP loans. In-depth study shows PPP fraud drove home price escalation as zip codes with high levels of fraud saw a 5.7% greater price increase vs. same county zip codes with low fraud.

    https://twitter.com/AntithetosCptl/status/1692983851050488019

    I can’t believe Phoenix home prices are heading back down before making another all time high? Where have I seen this before?

    https://twitter.com/GRomePow/status/1693484489790689368

    People talk about Austin and Vegas but it’s spreading. See Denver:
    “Vacancies in the market are high, currently sitting at 7.8%, and are projected to exceed 9.0% within the next two years due to the hefty development pipeline in 2023.”

    https://twitter.com/NipseyHoussle/status/1693461314042003914

    Over 3yrs ago we started writing about how Beijing was proactively committing to deflating the property bubble. Everyone nodded their heads. Turns out now that some analysts didn’t comprehend what “deflate” would actually mean. Did people think it would be pretty?

    https://twitter.com/ChinaBeigeBook/status/1693383669656822025

    Damn … don’t think I’ve ever seen so many open house signs in all my years in the GTA. What’s gwanin’ here? I come on twitter to see all the hoopla but nobody talking about open houses anymore? 90 days ago it was all about line ups, bully offers, multiples, etc. Hello? 🤔

    https://twitter.com/ManyBeenRinsed/status/1693421161328099596

    I look at rising interest rates, realize all the people who don’t add anything to society will be broke soon and everything feels right with the world.

    https://twitter.com/GRomePow/status/1693413733656330435

    “These super bubbles correct all the way back to trend with much greater and longer pain than average.” –Grantham

    https://twitter.com/BenMillerise/status/1693383047301726382

    Signs the US consumer is struggling more:
    1) Outstanding credit card debt is at a record high of $1.03 trillion
    2) The avg APR on that debt is at a record high of 21%
    3) Credit card delinquencies hit a record high of 7.2% at small banks in Q1
    The lag effect is real…

    https://twitter.com/menlobear/status/1693362745796894923

    And… they’re gone

    https://twitter.com/zerohedge/status/1692500764524986609

    1. “Signs the US consumer is struggling more”

      Must be another one of those “we’re all in this together” kind of things.

      Minor respiratory illness the gift that just keeps on giving.

    2. “Housing inflation via fraudulent PPP loans. In-depth study shows PPP fraud drove home price escalation as zip codes with high levels of fraud saw a 5.7% greater price increase vs. same county zip codes with low fraud.”

      So if they know which areas saw the most fraud and follow the money to real estate purchases, doses this mean it’s time for govt to start seizing property?

    3. “Serious question to any realtors out there. Doesn’t death by 1,000 price cuts do more damage to the home seller?”

      This I know. In this market it’s 10% price cuts or nothing. And when you go to list your home, find the most recent comp and list 10% under that. Or just realize the slow anguish of chasing the market down. Your choice.

    4. How on EARTH can seller leave these photos in public purview and say “no work needs to be done” to a house that appears to need minor gutting and has somehow doubled in value in the space of nine months?

      Does it include the project Impala in the garage?

  19. “On the local level, the word on the street from restaurant, hotel and retail employees is the local economy is significantly slower this summer then the past three summers. One local bartender commented that ‘it feels like 2019.’

    Hearing this all over the West. Golf resorts, restaurants all way down his summer. Stimmie money is all but gone.

    1. On my recent trip through national parks in US, I heard the same story. I was at a public pool in Moab a few days in a row, and it looked pretty deserted. Barely a few tourists. Also, plenty vacancies everywhere. One pretty luxurious RV site was around 40% empty. And it was in July-August. Most of the parks were somehow busy around noon, but pretty empty early in the morning and late afternoon. Even in Yellowstone I found myself walking alone if it was late in the afternoon/evening.

    2. “…Hurricane Hilary hyped up a bit…”

      FWIW, here in SoCal (Irvine), Hilary had as much effect as someone leaving the sprinklers on too long.

      When you watch to local news and the live shot shows a reporter standing in 6″ of water next to a curb and getting excited about it you know the truth has been stretched just a tad.

      Would of preferred some live shots of wet T-shirts at Hooters, but that’s just me.

      1. News is trying to find some damage to report. A block wall in Palmdale, a couple trees down being reported.
        In my area they were blasting flash flood warnings on phone about every two hours all night long.
        Overall its looks like a nice needed rain for California.Not saying that there wasn’t some flooding spots in Ca, and I suppose being prepared is better than not. But,……

    3. Rained more than I though it would plus a nice earthquake. I am warned to work from home today. I should be retired anyway but someone has to pay for generous public safety pensions in CA especially since everyone is bailing. I guess public safety pensioners don’t bother because CA tax follows their pension where they bail to unlike tech millionaires who move to Tahoe tax free. Housing still seems very high around here and hardly anyone selling.

    4. What in the media isn’t hyped up?! That being said, we got a lot of water in a short amount of time. In August no less.

      1. Redpilled,
        Glad you came out ok, some spots definitely got a lot of rain.
        Im glad overall it wasn’t as bad as it could of been.

        1. Glad you came out ok

          I’m not so sure about that. “Concerned” family members (I’m guessing stepchildren) reached out to our landlord asking if the rental property was okay. The matter of rent came up too. We pay $3,225/mo and Zillow’s Rent Zestimate is $4,995. It sounds like our rent will be going up substantially.

  21. In San Luis Obispo, the median home price fell by 12.5% year-over-year to $1.03 ”

    Retired CA public safety employees if they don’t go to SLO they move to Prescott AZ

    1. “Retired CA public safety employees if they don’t go to SLO they move to Prescott AZ”

      Lompoc, CA near Vandenberg, AFB used to be a popular retirement destination, but it’s too expensive these days.

    1. “Charles Hugh Smith – The borrow more / spend more economy.”

      \\

      How it started:

      https://www.oftwominds.com/blogaug23/bad-feeling8-23.html
      I Have a Very Bad Feeling About This
      Charles Hugh Smith | Of Two Minds Blog
      August 18, 2023

      \\

      How it’s going:

      https://charleshughsmith.blogspot.com/2023/08/no-central-banks-wont-save-us-this-time.html
      Sunday, August 20, 2023
      Charles Hugh Smith | Of Two Minds Blog
      No, Central Banks Won’t Save Us This Time

      “So hey, central bank cheerleaders, lackeys, toadies, apologists, apparatchiks and sycophants: no, the central banks aren’t going to “save” your precious asset bubbles from popping. ”

      \\

      Possible (likely?) end game case study example is Argentina. Unfortunately, I see several parallels here to the U.S. system.

      https://www.dlacalle.com/en/milei-is-not-argentinas-problem-socialism-is/
      Milei Is Not Argentina’s Problem. Socialism Is
      19 August, 2023 Daniel Lacalle

      The Peronist policy of maximum interventionism as well as fiscal and monetary irresponsibility has destroyed Argentina and left the central bank without reserves.

      “The peso has lost more than 90% of its value against the US dollar since Alberto Fernández took office, and inflation in Argentina already exceeds 110% annualized, with 39% of the population living in poverty.”

      “Thus, the government promises huge subsidies in a currency that is constantly losing value and presents itself as the solution to the problem created by its own fiscal and monetary policies. Peronism “gives away” money that is printed massively and has no value. The result, eighteen million poor citizens.”

      “Just like Chavismo in Venezuela, the Peronist governments have destroyed the currency and the productive fabric to boost political spending and turn the country into an economic wasteland where the salaries and savings of citizens are confiscated via high direct and indirect taxes as well as the inflationary tax. ”

      \\

      Bonus:

      https://www.zerohedge.com/markets/i-am-become-death-destroyer-barbie-world-says-fed-and-pboc-too
      “I Am Become Death, The Destroyer Of Barbie World” Says The Fed, And The PBOC Too
      by Tyler Durden
      Tuesday, Aug 15, 2023 – 09:54 AM
      By Michael Every of Rabobank

      “Equally, economic theories implemented since the 1980s which made Mr. Market rich have inexorably led us to exploding financial assets today.”

      “If willing, start by recognizing the global economy has vast structural problems related to neoliberal financialisation and asset bubbles replacing physical production from the late 1970s until the Global Financial Crisis in 2008; then idiotic negative-rates-and-austerity can-kicking to bail out the rich; then a Covid lockdown and fiscal surge with no local supply chains; and now rapid rate hikes, which are straining global asset classes. The results have been simply awful.”

      “Yet today the West looks like the Global South too. Its YouTubers, TikTok influencers, and gig jobbers can’t afford to buy or rent a home, marry or have kids, or even eat well or stay warm: they flood into digital pyramid schemes. Governments seem incompetent or powerless. Populism is surging.”

      \\

      “Fiat money eventually always goes back to its intrinsic value – zero.” – Voltaire

      “When you destroy the money, you destroy the glue that holds society together.” – Tony Deden

      “The tendency of an inconvertible paper money is to create fictitious wealth, bubbles, which by their bursting, produce inconvenience.” – Lord Liverpool

      “The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.” – Adam Smith, The Wealth Of Nations, Book IV, Chapter II, p. 456, para. 10.

    1. The same could be said for Twitter. I hate not being able to read replies, but not enough to create an account.

  26. Housing Prices Halved, With Successive Foreclosures; China’s Economy May Take 10 Years to Recover
    China Observer
    Aug 21, 2023
    From an unstable, debt-ridden real estate market to anti-business policies and demographic issues, a series of challenges indicate that the next decade for China will be fraught with difficulties.

    https://www.youtube.com/watch?v=mLe0lyaC6gU

    15 minutes. Lots of FBs.

  27. by Dan Lyman
    August 21st 2023, 11:54 am

    The driver of a truck ran over pedestrians while fleeing a police officer during an illegal ‘street takeover’ in Atlanta, according to reports.

    The shocking incident reportedly unfolded over the weekend in the Midtown neighborhood of Georgia’s capital city.

    A black pickup can be seeing doing doughnuts in the middle of a crowded intersection in broad daylight as participants and bystanders gather around and uninvolved drivers sit in gridlock.

    Suddenly, a Georgia State Patrol car speeds into the melee and the driver of the truck attempts to escape.

    The truck begins to accelerate down a busy street and through a crowd of people running from the scene.

    After the truck strikes multiple pedestrians, the driver slows down, giving the officer an opportunity to execute a PIT maneuver.

    The cop jumps from his vehicle with weapon drawn, climbs on the hood of his patrol car, and drags the suspect out of his side window.

    GrindFace TV (Entertainment)
    @grindfacetv

    Well Damn 😳🤯

    https://twitter.com/grindfacetv/status/1693485979963977916?s=20

    ATL Uncensored
    @ATLUncensored

    GSP stops street takeover in Midtown 🚔🚫🛣

    https://twitter.com/ATLUncensored/status/1693429813615141308?s=20

    2. That pit was totally warranted, well done. If you want to see some really brutal ones, search Arkansas Pit Maneuvers on Youtube. In Arkansas they are allowed to pursue at will and pit at will and most of them are posted online. They routinely kill people with their pits, some of them are sketchy AF. Don’t ever run from the cops in AR.

  28. “Even when both parties can agree on a price, often those properties aren’t getting appraised and financed.”

    Drum roll please…
    Welp that means it’s overpriced.
    Ta-Da!

    1. isn’t it funny.

      The market is two people agreeing on a price. Which means no appraisal is needed. IF of course anyone actually paid cash.

      but noooooooooooo, they wanna use someone else’s money and that person (bank) says whoa……..just wait a minute here, we got risks.

      Imagine how much lower prices would be on everything if it wasn’t all financialized.

  30. “The Class B’s are in the mid-fives”

    Someone needs their head examined if class b is really trading at a 5% cap rate.

    Why take on that level of risk and operational challenges when you can get it better yield than that in 4mo T-bills?

  31. I won’t hold my breath that Fresno, CA has not reported a sale of a home in the past 6 days. I hope it’s true, but expecting someone F’d the data

  32. Some news articles saying that Democrats are urging Joe Biden to call Climate Change Emergency, that would unleash vast power by Biden, like lockdowns, rationing, all kinds of powers.
    Also, Covid mutation being hyped as call for Covid 2.0 emergency response measures.
    Also , fire map of the world shows earth engulfed in fires, which something doesnt look right about that one. It shows almost all of Africa and South America engulfed in flames.
    This all seems like a movie production of how to scare humans into compliance.
    Based on the objectives the Globalist Cult wants to achieve, these fraudsters are unleashing their “faked narratives”.

    1. Some news articles saying that Democrats are urging Joe Biden to call Climate Change Emergency, that would unleash vast power by Biden, like lockdowns, rationing, all kinds of powers.

      Is that in the Constitution? Maybe I overlooked that Amendment. Even FDR didn’t have that kind of power during WWII. His infamous EO 9066 which removed Japanese Americans from the West Coast had very limited powers. Japanese Americans could leave the area before the evacuation date and Japanese Americans everywhere else in the country weren’t affected at all. Even Japanese Americans who were serving in the Army weren’t affected (like my dad) except that they were transferred out of units on the coast to other stations.

      The Covid-19 restrictions fell into a loop-hole in the laws and many jurisdictions around the country have taken away the ability of governments from taking those kind of measures in the future.

      Good luck to anyone who tries to restrict the use of private vehicles in places like California.

    2. Some news articles saying that Democrats are urging Joe Biden to call Climate Change Emergency

      FWIW, they’ve been saying this for months. They couldn’t declare a national lockdown for covid, even though there was pressure to do that. More likely they will raise more taxes, make energy more expensive and along with it everything else.

      That said, lemmings in other countries will be far more cooperative and will happily accept their lockdowns and 15 minute cities. My UK in laws will be all on board with this. And if you ask them they will tell you they are conservative.

      1. Well, I can’t imagine more lockdowns, for any reason .
        But its the Globalists plan , so do millions have to march in the streets, or what?
        They will probably do it in increments. Biden just shut down the emergency on May 11, 2023, so only three months and back to emergencies again.

  33. ‘The pullback is forcing many affluent home buyers to reconsider their financing options, or even what properties they buy. Smith, the Sedona buyer, said the cheaper house she bought needs some work, so she is planning to fix it up before renting it out’

    Less than 750k in Sedona, it’s a dump.

    1. “Less than 750k in Sedona, it’s a dump.“

      Right. And it should be half that. I live in Sedona and the prices are absolutely ridiculous still. A crappy shack right next to me just sold for nearly $800k. New owners want to start a day care or keep it a STR.

      There’s no way I’m buying in Sedona right now. I’m biding my time.

  34. ‘We’ve been suffering for over 40 months to get this house to where it is,’ Hoyland said. ‘It’s still not finished, and now we’re in a state where we can’t really afford to finish it.’ Hoyland said the couple was losing hope. ‘We just wanted a nice house to retire to. At this stage, we’re thinking it’s probably gone’

    Acceptance <- Tina you are close!

    1. Financial Times
      Markets Briefing Markets
      US Treasury yields hit 16-year high on fears over interest rate outlook
      Investors prepare for Jay Powell’s speech on Friday at the Federal Reserve’s Jackson Hole conference
      A montage of a globe and a chart
      The S&P 500 and Nasdaq moved higher on Monday on Wall Street
      Daria Mosolova in London and Jaren Kerr in New York 6 hours ago

      The sell-off in US government debt continued to hit the world’s largest bond market on Monday, with yields on benchmark Treasuries hitting new 16-year highs as investors come to grips with an economy that refuses to slow.

      The yield on the 10-year note rose as much as 0.1 percentage points to 4.35 per cent, surpassing a previous high in October and sending it to the highest level since November 2007. The yield was still close to that level in late afternoon trading. Bond yields rise when prices fall.

      Investors are increasingly looking towards a high-profile gathering of the world’s central bank chiefs in Wyoming later this week, where policymakers may signal interest rates must stay higher for an extended period to keep inflation moving lower.
      …

    3. Mortgage Rates Now Near 7.5% For No New Reason
      By: Matthew Graham
      Mon, Aug 21 2023, 3:42 PM

      Interest rates are based on trading levels in the bond market. Bond traders began their day looking at significantly weaker levels (i.e. higher yields/rates) versus last Friday, but for no apparent reason. Actually, it would be more fair to say “for no new reason.”

      Reasons for the rising rate momentum are apparent and ongoing. Decades-high inflation required decades-high rates to fix. The higher rates are supposed to be damaging the economy more than they have. Until that damage shows up, rates have a green light to continue higher.

      As more and more market participants abandon their preconceived notions regarding an imminent rate reversal, the upward momentum takes on a certain glacial quality. In other words, it’s self-sustaining, often resulting in days like today where rates look like they’re acting on some obvious catalyst despite the absence of any such news.

      Mortgage rates were already new 7.4% by the end of last week and today’s increases bring the average lender closer to 7.5%. This is the highest since late 2000. Lower rates are still available for certain scenarios and discount points, but many scenarios are also seeing higher rates.
      …
      https://www.mortgagenewsdaily.com/markets/mortgage-rates-08212023

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