A Ponzi-Style Inverted Pyramid Of Indebtedness Now Threatened With A Tsunami Of Bankruptcies, Deflation, And Oversupply In Everything
A report from WDSU in Louisiana. “According to the New Orleans Metropolitan Association of Realtors, houses are sitting on the market longer and sales are down 24 percent compared to this time last year. Real estate broker Samantha Bush has been in the industry for more than 15 years. She says this is the first time it’s been this slow because of insurance. ‘It has slowed down tremendously. I have never seen it this slow before,’ said Bush.”
The Real Deal. “A year after completing Villa Valencia in Coral Gables, Location Ventures failed to secure a final certificate of occupancy for the 13-story boutique condominium. And since last month, 10 contractors, including project manager Winmar Construction, have filed 23 construction liens totaling nearly $7 million against the building’s development entity, records show. It’s the latest batch of trouble for the beleaguered Coral Gables-based development firm previously led by Rishi Kapoor, a once rising star in South Florida’s real estate scene who’s now a target of local and federal investigations examining his management of Location Ventures.”
“Coral Gables Commissioner Ariel Fernandez told The Real Deal he received calls from Villa Valencia unit owners who are concerned the building still doesn’t have a final certificate of occupancy. ‘It’s really an unfortunate situation,’ Fernandez said. ‘The developer is nowhere in sight to take care of this. It puts the city in a tough spot to get this done.'”
The Wall Street Journal. “A penthouse at One57 on New York’s Billionaires’ Row has gone into contract after seeing its price slashed to $34 million, about $13 million less than its 2015 sale price, according to listings website StreetEasy. The deal, which hasn’t yet closed, is evidence of how much One57’s fortunes have fallen since 2011, when it set record prices for the city and drew billionaire buyers including hedge-fund titan Bill Ackman and tech entrepreneur Michael Dell.”
“When the unit traded in 2015, it sold for $47.37 million to a company tied to Chinese conglomerate HNA, records show. It was one of several units linked to HNA in the building. When it subsequently sold again in 2020, with HNA facing financial difficulties, the price was just $28 million, records show. This time, the 88th-floor condo unit was listed for $45 million in June 2022, but saw its price lowered several times, according to StreetEasy. Once one of the most aggressively acquisitive companies in China, HNA was effectively taken over by the Hainan provincial government after mounting debts forced it to abandon its global ambitions. Another company tied to HNA took a loss when it sold a unit at One57 in 2021 for $31.9 million to ‘Shark Tank’ star Robert Herjavec, six years after buying it for $47.37 million.”
The New York Post on California. “The sold-out planned ‘doom loop’ tour of drug-infested San Francisco was canceled, and community leaders tried to hold a ‘positive walk’ instead — only to still stroll past addicts getting high and homeless camps. Curious tourists and locals had shelled out $30 a pop on Eventbrite for a weekend tour promising an up-close-and-personal experience with San Francisco, ‘the model of urban decay’ — complete with walks past its ‘open-air drug markets and vacant office and retail spaces.’ But the tour’s guide, only listed as ‘SF Anonymous Insider,’ failed to show at Saturday’s event, claiming he was afraid to carry it out because of all the controversy around it.”
“Dany Vallerand said she initially wanted to take the advertised ‘doom loop’ tour because she usually didn’t feel comfortable going through the area on her own. She noted the economic downtown of San Francisco has affected many residents such as herself, as flagship businesses have left the area and property value going down. Vallerand said she recently sold her condo $150,000 below her asking price. ‘It is very hard to see it happening here,’ she said.”
Bisnow Washington DC. “Bethesda-based development firm Washington Property Co. has defaulted on its loan tied to a 14-story Silver Spring office building, the latest in a series of distressed situations in the region’s office market. The developer failed to pay off its $35M loan on the building ahead of a July 11 maturity date, and the CMBS loan was then transferred to special servicing and a letter of default sent to the borrower, according to servicer commentary reported by financial research firm Morningstar Credit. The loan is backed by the 242K SF Silver Spring Plaza office building at 8757 Georgia Ave., which was built in 1971. The building is operating at 73% occupancy, while cash flow has fallen ‘well short’ of underwriting levels, according to Morningstar Credit Head of CRE Analytics David Putro.”
“Adding to the concern, the special servicer’s report says the building’s largest tenant, Social & Scientific Systems, a subsidiary of DLH Holdings Corp., has ‘gone dark,’ meaning it has ceased operations in the building despite continuing to pay its rent. S3 occupies 67K SF, or 27.56% of the building’s leasable area, and has a lease through 2031. Regardless of the largest tenant, the building’s overall occupancy level would have been enough to impede refinancing even in a normal lending environment, Putro said. ‘With cash flow at this level for several years, reported occupancy at 73% and an additional 28% that has gone dark, this loan had little chance of refinancing,’ Putro told Bisnow.”
The Toronto Star in Canada. “Cracks are starting to show in Toronto’s preconstruction housing market, as financial pressures not only stall future projects but some industry experts are also seeing an uptick in purchasers putting their properties up for sale, with the most distressed cases coming from buyers of lowrise and freehold homes in the suburbs. They warn it could be just the beginning, as preconstruction homebuyers who put down a deposit during the pandemic find their full payment coming due in a drastically changed economic and interest rate climate. ‘The assignment market is becoming a hope and a prayer for people who are in desperate states,’ said real estate lawyer Mark Morris. ‘If you don’t have the ability to close you will sell at any price.'”
From ABC News. “Australians are defaulting on their home loans at growing rates as the number of borrowers at risk of mortgage stress peaks at levels not seen since 2008, when the global financial crisis hit. This year, hundreds of thousands of households have rolled off historically low interest rates fixed during the pandemic and another 450,000 home loans will expire next year. Cody Briggs and his partner Monique McHale started building their dream home in Perth’s south-eastern suburbs in 2020. But construction delays, cost blowouts and the tight rental market forced the couple to buy another home before Monique gave birth to their first child. The couple are now spending 70 per cent of their income on their home loans, and Monique hasn’t been able to work while caring for their son.”
“‘I am pretty stressed, I try not to think about it,’ he said. ‘It’s better to be ignorant than face the reality that we might not make the next progress payment, we might end up having to sell this home.'”
South China Morning Post. “China Evergrande Group plunged in Hong Kong when trading resumed after a 17-month trading suspension, lopping off US$2.4 billion from its market value as investors rushed for the exit amid a debt restructuring by the world’s most indebted property developer. Evergrande’s shares tumbled 87 per cent to 22 HK cents as soon as trading commenced, versus the pre-suspension price of HK$1.65 on March 21 last year. The slump erased HK$18.9 billion (US$2.4 billion) from its capitalisation. Its new auditor Prism Hong Kong and Shanghai also said that it was unable to obtain sufficient evidence to prove Evergrande’s ability to continue as a going concern, as the forecast was based on certain assumptions ‘that involve significant uncertainties.'”
The Telegraph. “It is not just growing superpower rivalry, or China’s malign influence on Western jobs and capabilities, we need to be concerned about. It is also Chinese triumphalism. That sense of Chinese superiority can be dated to the financial crisis 15 years ago, when Wang Qishan, then China’s finance minister, remarked to his opposite number in the US, Hank Paulson: ‘You were my teacher. But now I am in my teacher’s domain, and look at your system, Hank. We aren’t sure we should be learning from you any more.’ Mr Wang’s wonderfully understated observation soon transmogrified under President Xi Jinping into – and here I’m offering a caricature – ‘definitely not learning from you any more, because our system of governance and economic management is self-evidently far superior to yours.'”
“During the early days of the pandemic, this became an almost unchallenged narrative, with China setting the template for how governments should respond in the face of a potentially deadly contagion. We all followed China’s lead, with the positions of teacher and pupil unambiguously reversed. China became the gold standard in how to deal with a pandemic; a combination of extreme lockdown – tailor-made for autocratic government, but anathema to freedom-loving democracy – and mass testing proved highly effective in containing the disease, and was soon being trumpeted by President Xi as more evidence of Chinese pre-eminence.”
“Here in Britain we seem to have had the worst of all possible worlds; at vast economic and social cost, we were eventually persuaded to follow China into government imposed lockdown, but to arguably little effect.
As it turned out, the nation was hopelessly unprepared for a threat of this magnitude; the medical establishment was all over the place on decisively gripping the situation. Much the same was true of the rest of the democratised world. Other than South Korea and Taiwan, more or less everyone seems to have got it badly wrong.”
“Yet in terms of the monetary cost, Britain seemed to come out of it worst of all. If Xi had concocted a dastardly plan to bring down the West, he could scarcely have dreamt up anything quite as effective. Lockdown was pure poison for our largely service based advanced economies. Yet the tables soon turned, and in the event, closing down the economy to fight Covid has proved just as economically disastrous for China as it was to America and Europe, and the way things look right now, possibly more so.”
“As in the West, the induced sleep of lockdown has acted as a petri-dish for all the economy’s underlying weaknesses. When finally forced by growing popular unrest to abandon the zero-Covid policy, China failed to come bouncing back as expected, and is now threatened with a tsunami of bankruptcies, deflation, and as demand plummets, oversupply in everything from housing to car production. Like all such growth spurts, it was built on a Ponzi-style inverted pyramid of rising indebtedness. Now that the credit bubble is bursting, you wonder for how much longer the charade can be kept going by merely applying more of the same. Some may say good; China is finally getting its comeuppance.”
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‘she recently sold her condo $150,000 below her asking price’
Just like that Dany, you gave it away.
$150,000 below her asking price is still waaaay too high
‘he received calls from Villa Valencia unit owners who are concerned the building still doesn’t have a final certificate of occupancy….‘The developer is nowhere in sight’
Did you tell them they’re fooked Ariel?
CHINA HAS LANDED ON MARS AND WAS ABLE TO PAY A MARTIAN TO FILM THEIR LANDING IN REAL TIME
https://www.bitchute.com/video/fn7YWpdRuZVa/
28 seconds.
‘The couple are now spending 70 per cent of their income on their home loans’
More sound lending!
‘started building their dream home in Perth’s south-eastern suburbs in 2020. But construction delays, cost blowouts and the tight rental market forced the couple to buy another home before Monique gave birth to their first child. The couple are now spending 70 per cent of their income on their home loans ‘I am pretty stressed, I try not to think about it,’ he said. ‘It’s better to be ignorant than face the reality that we might not make the next progress payment, we might end up having to sell this home’
Cody, can we talk? You got one shack and an unfinished shack and two loans. Eating is out of the question from here on out.
‘They warn it could be just the beginning, as preconstruction homebuyers who put down a deposit during the pandemic find their full payment coming due in a drastically changed economic and interest rate climate’
‘The assignment market is becoming a hope and a prayer for people who are in desperate states…If you don’t have the ability to close you will sell at any price’
These were my winnahs! Mark, wa happened?
“how governments should respond in the face of a potentially deadly contagion”
By implementing the greatest wealth transfer from the poor and middle class to billionaires?
Sounds about right.
https://voxday.net/wp-content/uploads/2023/08/image-32.png
+ a million. We need neck-tie parties.
Why would the government lie to us? They want what best for us and really do care about us. /s
‘During the early days of the pandemic, this became an almost unchallenged narrative, with China setting the template for how governments should respond in the face of a potentially deadly contagion. We all followed China’s lead’
It was only unchallenged in the globalist scum media and guberments. And who ‘gollowed China’s lead in the US? Why the same murdering rat bashtard Fuci, who we now know spent million$ of our money to climb through Chinese caves, get viruses and genetically modify them to make them deadlier.
https://thuletide.wordpress.com/2021/08/06/operation-lockstep/
The “scenario” titled Operation Lockstep (page 18 of the paper) describes the COVID plandemic down to the letter: A virus emerges from China and rapidly spreads around the world, destroying the economies of the West. However, China’s economy was saved due to the country’s “quick imposition and enforcement of mandatory quarantine for all citizens, as well as its instant and near-hermetic sealing off of all borders.” The various governments of the world use the virus as an excuse to advance technocratic surveillance, implementing various transhumanist and bio-technologies, such as digital identities and vaccine passports. In this “scenario,” the masses blindly welcome the tyranny with open arms, abandoning all of their sovereignty and freedoms. Sound familiar?
The full text of the Operation Lockstep scenario is quoted below the line, but the full PDF is here, if you’d like to read it all.
#DoNotComply
Ever again, with any of it.
I see masks are back at my local supermarket. I am openly laughing at some of these mask nazis.
That article is so bogus, since it never mentioned the silver standard of how to respond:
Sweden.
(Or look at the responses of, say, Florida vs New York).
This is an informative 22 minute video that has some interesting comments:
Watch “9 Signs EVERYONE IS GOING BROKE RIGHT NOW!” on YouTube
https://youtu.be/JXV8pWNB7so?si=LFUeeZeTekOfvIgN
A reader sent these in:
“What will it take for the pitchforks & torches to come out?” I’ve asked this question often as the working/middle classes have suffered a neverending string of injury & injustice The answer is “clearly much more than I thought” But the chart below suggests we’re getting close
https://twitter.com/menlobear/status/1695601516735000777
The Canadian Real Estate Bubble is About to Pop. Canada lost 45,000 construction jobs in July alone … 🚨🚨🚨
https://twitter.com/WallStreetSilv/status/1695331557219664022
🔥 Robert F. Kennedy, Jr Tells a Crowd in Nashville How He Plans to Help Americans Compete Against BlackRock’s Housing Takeover
“I’m going to change the tax code to make it very, very difficult for them to compete with our children. I’m also going to make a 3% mortgage available to Americans, as many as I can, hopefully in the millions.”
https://twitter.com/TheChiefNerd/status/1695488873655148791
Office occupancy in 10 major U.S. cities remains below 50% of pre-covid levels.
https://twitter.com/charliebilello/status/1695783869662871737
“Landlords moved to evict more metro Phoenix renters in July than any month since the Great Recession.”
https://twitter.com/JohnWake/status/1696018528573546787
Today there are three times more zombie companies than during GFC. Sooner or later all of them will need to roll their debt. Spoiler, at current interest rates it will not be pretty.
https://twitter.com/MichaelAArouet/status/1695697530770641175
The primary cause of the housing run up was people buying new homes and keeping their old ones as rentals and/or airbnbs. This is the “housing shortage” It’s actually just a listing shortage. Very temporal phenomenon specific to housing.
https://twitter.com/NipseyHoussle/status/1695914880425959450
You’re going to see these posts daily for the next 24 months. Trust me.
https://twitter.com/NipseyHoussle/status/1695925169372467612
Hearsay here. A former commercial real estate agent in San Francisco mentioned that most of the lenders to commercial real estate in San Francisco are insurance companies and they’re taking huge losses when the former owners walk away. Said St Francis Hotel value down 90%!
https://twitter.com/JohnWake/status/1695826142895444068
This is number ten. I promise as soon as I get some free time I’ll start a thread with all of the new construction fires.
https://twitter.com/CXCarroll/status/1695861423354610023
Phoenix single-family houses at 1.9 months of supply.
– Similar to same weeks in 2017 and 2018.
– A lot more than in 2020 (0.7) and 2021 (0.7)
– A lot less than last year (3.2)
Will increase into January as it does most years.
https://twitter.com/JohnWake/status/1695839091261415622
“SELLER OFFERING 5K for rate buy down or closing costs.”Increasingly, existing home sellers in Dallas are offering incentives to move inventory in a frozen housing market.
https://twitter.com/akm515/status/1695794639817642019
Pivoting from real estate to prostitution was not on my bingo card.
https://twitter.com/mhprvpmvp/status/1695454805542818029
House rents drop in 20pc of all suburbs
https://twitter.com/samstrades/status/1695685736295792943
Federal Reserve Bank of Cleveland President Loretta Mester said under-tightening interest rates would be “a worse mistake” than raising them too much
https://twitter.com/unusual_whales/status/1695556978511110601
Chinese consumer confidence is back to the lockdown level, other than that things are perfectly fine.
https://twitter.com/MichaelAArouet/status/1695694596288700653
SOCIAL MEDIA WILL MAKE YOU BELIEVE THAT THE US DOLLAR IS DYING
BUT IN REALITY THE US DOLLAR’S ROLE IN GLOBAL TRANSACTIONS JUST HIT A NEW ALL TIME HIGH OF 46% JUST LAST MONTH
THE US DOLLAR’S DOMINANCE HAS NEVER BEEN STRONGER
https://twitter.com/gurgavin/status/1695525683651322297
Historically – months inverted has been somewhat accurate as a forecasting tool for how long the recession would be (excluding 1980) – going back to 1969. In just 5 days we will have achieved the 5th longest inversion, historically.
https://twitter.com/DonMiami3/status/1695502614639620531
Signs for the famous End of the Dollar are just everywhere 🙂
https://twitter.com/MichaelAArouet/status/1695683828172390745
JPMorgan’s, $JPM, Jamie Dimon says “I’m sorry” we “banked with Epstein.”
https://twitter.com/unusual_whales/status/1695496580525355216
Many poor people have the misguided notion that they can achieve wealth by stacking cheap rental properties with $200-$300/mo of cash flow. This is the dumbest strategy since MLMs. One roof, sewer line, HVAC can eat years of profits. RE is an investment, not an income replacer
https://twitter.com/ContrarianSaver/status/1695426122148987219
Let’s see how the tech sector jobhunters are doing on Glassdoor…
https://twitter.com/DonMiami3/status/1695514853685821804
Asset prices need to come way down. Or incomes need to go way up. Basic living expenses relative to incomes are insanely out of wack. It will mean revert. Soon.Maybe both. Couple that with the need to raise taxes further because of debt and this is untenable. Asset prices. Down.
https://twitter.com/SixFinance/status/1695578256466956541
But but but my golden handcuffs will keep inventory low forever
https://twitter.com/NipseyHoussle/status/1695516750836613307
Can’t believe people have the nerve to post these emotional videos about how inflation is crushing them..they should be honored that the government forced them to pay higher prices in order to bailout indebted states and underfunded pensions…we are all in this together..
https://twitter.com/jimiuorio/status/1695419496960262465
Bagholders posting random 700sf fourplezx boxes in the hood and claiming wild numbers in rent are completely and totally full of sh$t. Literally making things up like we all can’t check them…..
https://twitter.com/GRomePow/status/1695415217784569888
IF U.S. incomes spiked 69%, we’d return to pre-pandemic housing affordability levels. IF U.S. home prices fell 41%, we’d return to pre-pandemic affordability. IF mortgage rates fell 4.3 percentage points (from 7.26% to 2.96%), we’d return to pre-pandemic affordability.
https://twitter.com/NewsLambert/status/1691630860854784450
What would you rather?
https://twitter.com/NipseyHoussle/status/1695940402203750690
“Hoomz only go up”
https://twitter.com/NipseyHoussle/status/1695920120609083700
Nordstrom to shutter flagship San Francisco store tomorrow after 3+ decades of operation
https://twitter.com/DonMiami3/status/1695605785944817718
“What happens in Canada in the next 2 years as people’s mortgages roll over and their monthly bills go up by two or three thousand a month?”
What happens when they can’t pay? 🔊 … 🔥🔥🔥
Canadians don’t have 30 year fixed mortgages. Rates are typically adjustable after a few years. This is leading to a massive crisis as already expensive mortgage payments are rising dramatically with higher rates.
https://twitter.com/WallStreetSilv/status/1695957795365847255
This lady is in tears as she is being forced to leave Canada due to the cost of living crisis. 🔊 She has been there for 20+ years and says, “I’m struggling in every area, and everything has gone downhill.” 🚨🚨🚨
The policies of Justin Trudeau are driving housing and food costs to unaffordable levels for many.
https://twitter.com/WallStreetSilv/status/1695825667017879756
‘I’m also going to make a 3% mortgage available to Americans, as many as I can, hopefully in the millions’
Bobby, stop helping.
Right. He sounds like he wants to keep blowing housing bubbles.
Can’t believe people have the nerve to post these emotional videos about how inflation is crushing them
No point in reminding them that they voted for this.
You’re going to see these posts daily for the next 24 months. Trust me.
(emphasis mine)
IF U.S. incomes spiked 69%, we’d return to pre-pandemic housing affordability levels. IF U.S. home prices fell 41%, we’d return to pre-pandemic affordability. IF mortgage rates fell 4.3 percentage points (from 7.26% to 2.96%), we’d return to pre-pandemic affordability
And which one is more likely to happen?!
return to pre-pandemic affordability
Likely, the train will not even slow down at that station.
“But the chart below suggests we’re getting close”
I’ve been listening to financial gurus on YouTube for years now and every. single. bleeding. one. of them has said the same thing: this is “not sustainable,” and here’s a bunch of charts to prove it. At this point it sounds like they’re all crying wolf. And when the wolf finally does show up, it better be damn EPIC to make up for all this hand-wringing.
It’s like fear porn at this point. One thing that has been overlooked by all of these people is how many trillions of dollars they just conjured into existence. It permanently distorted pricing. You can’t go back.
I have started to accept the fact that I will probably never buy a house. Things have been so disconnected from financial realities for so long that I believe they can kick the can and stretch it out longer than I will remain alive.
The chart in that first link shows yet again we were already in a 2005-class bubble *before* the minor respiratory illness insanity.
We probably were. The stock market tried to crash Christmas of 2018, which is when Trump threatened to fire Powell, and pulled his famous pivot move. Since then it’s been wall-to-wall bailouts.
Danielle DiMartino Booth made a good point that in 2008, China practically saved us by absorbing inflation. China can’t save us again.
Like I said, you’re going to need a much larger debt donkey pyramid for the next round.
“But but but my golden handcuffs will keep inventory low forever”
At the link: Income 10-14K per *month* but had poor credit and needed FHA loan with 3.5% down, saved for less than a year. Currently living paycheck to paycheck, high credit balances, little/no savings. Mortgage now exceeds local rent, so they want to sell, but only if they’ll make a profit.
Guaranteed those 2 work for government somehow.
“Our monthly income was anywhere from $10-14K depending on work.”
That’s not gov, at least not FedGov. If there’s one thing about FedGov, it’s that your paycheck does not vary, at all.
“Once one of the most aggressively acquisitive companies in China, HNA was effectively taken over by the Hainan provincial government after mounting debts forced it to abandon its global ambitions.”
So much for the wealthy all-cash Chinese buyers…
All those those on their knees desperately begging for return the of ZIRP have to freak out every time stocks rise as they’re doing this morning.
The Fed could end this ponzi scheme today if they wanted to. Just sell off their balance sheet and let long duration yields rise to 6%. Yield inversion un-inverts, we get a bad recession and asset prices drop. They can lower overnight rates to take pressure off the regional banks. Inflation goes away.
They have something different planned for the working class.
“IF U.S. incomes spiked 69%, we’d return to pre-pandemic housing affordability levels. IF U.S. home prices fell 41%, we’d return to pre-pandemic affordability. IF mortgage rates fell 4.3 percentage points (from 7.26% to 2.96%), we’d return to pre-pandemic affordability.”
Real estate boosters are trying to keep alive the hope of returning to below 3% mortgage rates, even though it never happened before and inflation isn’t cooperating.
69% income gains may happen by 2050 or so…not soon.
The 1990-1996 and 2006-2012 episodes suggest the only way out is through substantially lower home prices, but this also will be very gradual, thanks to all the homeowners who locked in 3% mortgages. The market is in a deep freeze.
The golden handcuff theory doesn’t apply to the millions of investment properties. That dam is about to break.
Got a panicked call from a friend who fully bought into the whole BRRRR model. He’s a $25 per hour UPS driver, his wife a $20 office assistant. He now owns 4 properties. Tried to give him some sound advice two years ago and of course was completely blown off. After all, he was in his way to certain riches. Now he wants my advice. He was working on skinny profit margins as was highlighted in Ben’s “reader” comment. Now 2 of his properties are vacant for only a little more than 45 days and it’s burying him. The area he’s in has dropped close to 10% in pricing. These BRRRR folks all bought these properties with minimal down because each new purchase was financed as “owner occupied” as they moved into each property to rehab. See the problem? They’re screwed, plain and simple. Can’t lower rents without a loss, can’t sell without a loss, can’t just hold he properties without a loss. Multiply this scenario over and over. Then throw in STR’s, REIT’s and the like. There is more investor properties than at any other time, and currently many of them are vacant. This does not end well. So I’m not buying the golden handcuff theory. The inventory will come.
Rent the properties out and collect the payments. Don’t pay the lenders. It will take 6-18 months to foreclose. From FB’s to FL’s
I hinted at that. And last time around it took a lot longer than that for lenders to act. And as far as that goes, why don’t we all stop paying….all at once and on everything! Wouldn’t that be the ultimate middle class revolt. (I wish I could say sarcasm off)
“why don’t we all stop paying….all at once and on everything!”
Problem is tenants have already figured this out. If he gets one of those he’s hosed.
“And as far as that goes, why don’t we all stop paying….all at once and on everything!”
That’s probably what’s ahead for the student loan payments, and sleepy Joe will likely cheer ’em on too.
“each new purchase was financed as “owner occupied” as they moved into each property to rehab.”
More sound lending and further proof we learned nothing from the last bubble (if anything, negative learning took place).
Well, when everyone who screwed the pooch gets bailed out from banks to hedgies to speculators to developers, homeowners, etc, plenty of learning takes place.
Everyone learned that there are no consequences.
And thus we arrive here.
As this blog has been helping us to appreciate for some time now it’s the same sh*t, different wrapper.
I’m praying you are correct. It doesn’t seem like Zillow’s insane optimism of future housing price increases could survive a mass investor exodus.
Oh c’mon now P-Bear! We don’t need no prayers! Just a whole lotta popcorn. 🍿
this also will be very gradual, thanks to all the homeowners who locked in 3% mortgages
Prices will be set by those who are forced to sell (divorce, death, job loss). What people “need” to get for their house won’t drive any market for more than a few seconds.
Wifey and I recently toured a decent house in a great neighborhood. The asking price was 700k which is absurd. The house isn’t perfect — whoever renovated the kitchen can’t cook and the master bathroom is a clownshow.
Price has dropped down to about 670k. I still won’t buy it at that.
But the house is clearly empty, so the owners live elsewhere but are on the hook for taxes and energy.
If I ever buy, I will be cautious for a house that was left vacant. My apartment lease requires me to keep the heat above 65F
during winter to prevent damage.
above 65F
I wonder why. Mold? I live up north and set all my thermostats to 45 if I’m going away in cold weather.
Have you seen affordable or senior housing, they are Small 400-600 sq ft. its for old/ poor people who have nothing, but a tiny kitchen table , love seat a double bed 1 dresser and very few closets, maybe a tv and 1 laptop. but if you are active and need a little space it becomes like a NYC apartment.in Oregon Oh yes the will never ever publish a floor plan
—————————-
From yesterday ……….Commissioner David Oser, who represents Clatsop County on the housing authority’s board. ‘And yet, it’s like, when you offer it, it’s hard to find anyone to take you up on it. There’s obviously some kind of disconnect here.’”
My first apartment, in grad school, was 545 square feet. It had a small living area, a galley kitchen (but room for all the appliances), a small dining area, a short hallway to a 12×12 bedroom, a full 5×8 bath, and a closet with room for a stackable washer/dryer. This is MORE than adequate for a single person, and plenty adequate for a couple, and it’s also fine for a single mother with one child. You just have to give up your STUFF.
The town where my teardown is requires 850SF of living space for single family new construction, but they do grant variances is you wish to build smaller. Which I might do, I don’t need to heat and cool all that space. My garage / workshop could end up being bigger than the house itself.
My 540 sq ft was an apartment, 20 units to a building, garden style. Someday I might live that way again.
Minimum SF for single-family detached housing is a huge bone of contention in the tiny house community. It’s clear that municipalities require houses to be a minimum size to place a floor under property taxes. I suspect also that small low-price houses bring in low-income buyers and renters, and towns don’t want the drama and damage that comes with.
A similar issue is ADUs (accessory dwelling units), i.e., the granny flat in the back yard. AARP is looking into this.
They want to paint ADUs as a godsend for dutiful daughter to be only a few steps away from Mom. But wait until Mom dies or the main house is sold. Then you get squatters and renters and AirBnB, yikes.
American homes are shrinking, but it isn’t making houses any more affordable
Jordan Pandy Aug 28, 2023, 6:45 AM ET
New-unit sizes for homes have decreased 13% nationally since 2015, according to the Census Bureau.
Yet, the cost per square foot has markedly accelerated over the same period, data from John Burns Research and Consulting shows.
Builders are reducing square footage by deducting extra bedrooms and bathrooms.
…
https://www.businessinsider.com/housing-market-trends-analysis-us-homes-smaller-prices-still-high-2023-8
Walking that sh*t down.
Property price
Date Event Price Price/Sqft Source
08/17/2023 Price Changed $259,400 $158 Tallahassee
08/05/2023 Price Changed $274,400 $167 Tallahassee
07/27/2023 Price Changed $284,400 $173 Tallahassee
07/07/2023 Price Changed $289,400 $176 Tallahassee
06/29/2023 Price Changed $294,900 $180 Tallahassee
06/19/2023 Price Changed $299,900 $183 Tallahassee
06/13/2023 Price Changed $314,900 $192 Tallahassee
06/04/2023 Listed $324,900 $212 Tallahassee
A house I’m looking at went from $517K to $440K in one big swoop.
Another one took two big cuts. From $535K to $499K to $475K.
Both are still overpriced compared to 2020-2021.
Snit is about to hit the fan this fall/winter.
Watch the number when it sells too. All the sold numbers are coming in below final list price even after the price cuts in my area.
And those 5k price cuts are ridiculous. Any realtor that suggests or let’s you do that in a declining market is worthless. Minimum cut should be 10%. Had the first cut been to 280k they might have sold it. But even better is an opening list price 5% under most recent comp, even 10%. Those are the only ones going pending in my hood. You find a realtor who shoots you this reality keep them. You might just sell your house.
“We all followed Chinas lead. ”
Watching China was the very reason I came to the conclusion that Covid was fake.
Firstly, that original footage where Chinese people were dropping in the streets, while lock down measures were shown , looked fake.
Than the absurd footage of a lone young Doctor trying to get the word out that he was dealing with a novel virus, than he dies.
Extreme lockdowns and masks were shown from China. Than as the Covid spread world wide at record speed, China went back into production mode, in spite of it being ground zero for Covid, without their major population centers being affected.
So, the focus shifted from China in the Media, once the China model of lockdowns and masks were adopted.
Than fast forward 21/2 years later, after the Covid stalled in China, yet was wildfire in the rest of World, China introduces extreme lockdowns in their major cities.
So, somehow the virus stalled for 21/2 years in major cities in China only to emerge .
Also, China had one of the lowest rates of alledged deaths from Covid, in spite of its 1.4 billion population. China didnt vaccine its population with the Western Vaccine either. But, now extremely delayed a zero Covid policy emerged with China locking down major Cities, a good 21/2 years after the ground zero footage from China.
The fact that the Chinese people eventually rebelled against the belated zero Covid policy resulted in the Media focus being taken off China again.
So, the take away from the real events that happened is that China was the model for the biggest fake out in history.
The WHO adopted this fake out as the model for Global response to Covid, as did the CDC, and other US health agencies, with US adding the expiermental vaccine as the US response to Covid.
So, China had better results not using the Western Vaccine, but that part is left out of the news, or the China extreme lockdown zero Covid policy, where the Covid somehow stalled for 21/2 years from hitting high population cities in China. This is in spite of China being ground zero for the alledged virus.
You also get evidence that the alledged Covid was circulating long before China was acting like it was hiding a outbreak.
The controlled and censored Media doesnt want anything but the narrative of the moment, designed to get compliance by the public, never mind the whole story.
And Scientists who were censored, testified to the fact that the movement of this virus defied anything possible.
And, the PCR testing fraud that claimed that symptom less people were transmitting the virus , was a fraud.
Why wouldn’t a new novel virus bio-weapon hit children and people under 65. Its because you can’t get children to fake that they are sick when they aren’t. You can only claim they are symptom less carriers, transmitting the virus to granny.
This is the premise of false testing to justify mass vaccination of all age groups.
What a incredible fake out this alledged Covid was . I don’t know what people were getting, that they claimed was Covid, but don’t rule out some delivery of toxins that would produce respiratory symptoms.
And the censorship of cheap meds that cured Covid, was done so vaccines could qualify for emergency use, and expierment vaccines would be the only solution to alledged novel virus Covid.
The regular flu vanished in 2020, and money incentives were given to Medical system to lable everything Covid, and deny patients real cures, for deadly hospital protocols, that are still being practiced today.
And still today any dispute to this very strange Covid story is considered misinformation, as a cover up of vaccine death and injury and died suddenly is denied for get your safe and effective booster.
Now wait for the Climate Change fraud to justify the withdrawal of all that sustains humans for that hoax.
Firstly, that original footage where Chinese people were dropping in the streets
They went all out to sell the notion that Covid was the new black death. And it worked. I have relatives who cowered in fear and would run out to get every booster.
I discussed this with the NPC’s every time. I ask them why people were supposedly dropping dead in the streets in Wuhan, but nowhere else in the world. I get a blank deer in the headlights stare.
For me that footage from China wasn’t very convincing, as well as the young China Dr trying to leak that he was fighting a novel virus.
By two months I was convinced it was some kind of a scam, and my posts at the time on this blog was calling for stopping the lockdowns immediately.
Than I was denied ,as a unvaxxed person, concerts, restaurants, travel, medical services, and at one point they were talking about taking us to prison camps.
So, now Im hearing that major pushback has occurred on them bringing back masks, lockdowns, etc, which is a good sign.
“I was denied ,as a unvaxxed person, concerts, restaurants, travel, medical services, and at one point they were talking about taking us to prison camps”
Never forgive. There will be no “pandemic amnesty” not now, not ever.
And if not forgiving means cutting people out of your life you’ve known for 30+ years, that’s what it’s gonna take.
Another re-post, these survey results were published two years ago this week.
Gallup — American Public Opinion and Vaccination Requirements (9/3/2021):
“Americans’ political identity is strongly related to their opinions about vaccine requirements, echoing similar partisan differences on such issues as vaccination hesitancy, mask requirements and the importance of COVID-19 as the nation’s top problem. Very large majorities of Democrats are in favor of each of the five vaccination requirements tested …
The variation across these party/vaccination status groups is extreme. For example, 96% of vaccinated Democrats favor the requirement for proof of vaccination before flying on an airplane, compared with 12% of unvaccinated Republicans. Ninety-four percent of vaccinated Democrats favor the requirement for attendance at events, compared with 9% of unvaccinated Republicans”
https://news.gallup.com/poll/354506/update-american-public-opinion-vaccination-requirements.aspx
No amnesty, not now, not ever.
China is the model for having 60 million units in ghost cities, should US follow that model also?
US transferred US jobs and manufacturing base to places like China, which was a model of gutting US , making us dependent on China cheap junk, so Globalists could turn US into a unproductive, not competitive, death to the middle class Nation.
This was the Monopoly Model of destruction of US productivity to destroy the USA and prevent upward mobility by the US Citizens and a eventual fall into rich and poor, and no middle class.
Pretty much sums it up.
Exhibit “A”
Walk into any big box home store and practically *everything* is cheap junk made (mostly) in China.
Never, ever buy hardware (bolts, washers, nuts) from these places. You are risking catastrophic failure.
Instead go to McMaster-Carr or Grainger (on line) and pay just a little more for certified made in USA hardware.
A little more? I paid $14 per bolt for some rear control arm bolts because I wanted quality.
“When the unit traded in 2015, it sold for $47.37 million to a company tied to Chinese conglomerate HNA, records show. It was one of several units linked to HNA in the building.”
The pooh bear leg can’t be kicked out from under this sh$t stool of a housing market fast enough or hard enough.
In addition….
The Media wanted us to argue about if Covid was lab released, or naturally came out of a market. This is control of what can be argued. But no, you can never argue that Covid was not a global Panademic, and locking down the globe wasn’t called for.
The media wanted us to argue over if it was racist to deny travel from China, or if Trump killed 200 thousand people by his policies, anything but why is the globe locking down and wearing useless masks. The discussion should of went to why do we even think Covid exists, and why would we shut down world and wear useless masks.
Two weeks to flatten the curve was marketed to save the medical system from being overwhelmed by cases. We find out later that medical system was never overwhelmed.
The media defined what the arguments would be, as they moved us into total insanity.
I content that you really can’t release a virus bio-weapon with any assurance it won’t die out, or worse kill off the World.
The only way to pull off a shut down the world Panademic is to fake it, as if its hitting every place equally, requiring a Global response.
And its clear the Globalists want everything to be global and global One World Order, or response, or control.
Its like Climate Change, its a global emergency that the globe must submit to.
But, since climate events only hit certain places globally at certain times, such as droughts or excess rains, they have attack CO2, which is a global gas .
For instance in the 30’s there was a 9 year drought in mid USA. Than it started to rain and they have been ok since than.
So, my point is why do they project 50 years into the future what the state of climate will be, since historical its always changing. And historically global warming periods were considered prosperity periods on earth for humans, so why is this considered doomsday now.
Its the end of the World they say, and we are going to save the World . We are going to save 3 million lives from dying from Covid, and we are only going to kill 30 million and injure 2 billion to do it.
Just saying these fraudsters are skilled at defining what can be argued and distracting from real arguments and issues.
What’s Her Face is BACK! This 2 minute video on masks is hilarious and right on the mark.
https://rumble.com/v3cmdak-the-return-of-the-masquerade.html
is BACK
She had a sad pregnancy loss followed by a harrowing pregnancy.
China’s Real Estate Turns A Giant Zombie: Evergrande’s 400M Hermès Belt Loss. Where’s the Money?
China Observer
20 minutes ago
Recently, China’s troubled property giant, Evergrande Group, which has been mired in a debt crisis since last year, once again drew public attention. On August 17th, Evergrande Group filed for creditor protection in a U.S. Manhattan bankruptcy court, seeking the court’s approval for a 19 billion US dollars debt restructuring.
https://www.youtube.com/watch?v=0GkNZ0VKKic
13:45.
‘When the unit traded in 2015, it sold for $47.37 million to a company tied to Chinese conglomerate HNA, records show. It was one of several units linked to HNA in the building. When it subsequently sold again in 2020, with HNA facing financial difficulties, the price was just $28 million’
The CEO was the guy in a glass elevator pointing to towers saying ‘I want that one, and that one.’ Went to prison in China years ago.
‘I am pretty stressed, I try not to think about it,’ he said. ‘It’s better to be ignorant than face the reality’
You Cody are a certified winnah! No eating though, none of ya.
‘China Evergrande Group plunged in Hong Kong when trading resumed after a 17-month trading suspension, lopping off US$2.4 billion from its market value as investors rushed for the exit amid a debt restructuring by the world’s most indebted property developer. Evergrande’s shares tumbled 87 per cent to 22 HK cents as soon as trading commenced’
It’s like the end of Animal House.
via GIPHY
News
Economy
The New York Fed just reported that credit card, auto loan delinquency rates are now higher than before the pandemic — will things get worse before they get better as student loans come due?
“Americans are beginning to borrow money they can’t afford to pay back.”
Two hands cupped together holding cut up pieces of multiple credit cards
Mayra Beltran/Houston Chronicle via Getty Images
By Bethan Moorcraft
Aug. 25, 2023
Americans are falling behind on their credit card and auto loan payments as the cost of living continues to hit them where it hurts.
The rate of new credit card delinquencies hit 7.2% in the second quarter of 2023, passing pre-COVID levels, according to the New York Fed’s latest quarterly debt report. Meanwhile, the rate of new auto loan delinquencies hit 7.3% in the same period, also above pre-pandemic levels.
“Americans are beginning to borrow money they can’t afford to pay back,” The Kobeissi Letter, a capital markets analysis publication, recently posted on X, formerly known as Twitter.
…
https://moneywise.com/news/economy/ny-fed-reported-credit-card-auto-loan-delinquency-rates-now-higher-than-before-pandemic
“Americans are beginning to borrow money they can’t afford to pay back,”
“… beginning …”
Lol.
The New York Fed just reported that credit card, auto loan delinquency rates are now higher than before the pandemic
Check out this little exercise:
New truck price: $79,999
Down payment: $50,000
Interest rate: 8%
Sales tax: 8%
Loan term: 60 months
Title/registration: $2,000
Monthly payment: $608
More than $600 per month for a new truck with a $50,000 down payment. CLOWN WORLD.
Would probably cost $3k/yr to register it in California.
Add in diesel fuel of $6.50 per gallon and the math on these things makes ZERO sense, yet they’re everywhere. I am absolutely shocked.
Can’t afford a nice house.
Can’t afford a nice pickup.
Maybe can afford a nice bicycle?
The American Dream is a lot smaller.
Maybe can afford a nice bicycle?
Have you priced one lately? 😉
My Brutally Honest Opinion on Canada’s Real Estate Market
OwlMortgage
3 hours ago
In this episode of the Wise Old Owl Show, we address some of the burning questions from our audience regarding the real estate market and economic uncertainties. From ”affordable housing” right down to mass land being left untouched when… WE NEED MORE HOUSES. What is going on Canada?
https://www.youtube.com/watch?v=2rf5hbJSAzg
13:15.
(WARNING: This post is in no way related to housing.)
‘So Unprecedented’: Kevin O’Leary Says Bud Light Is The Gift That Keeps On Giving, Plans To Teach Its 25% Market Share Collapse To College Students
https://finance.yahoo.com/news/unprecedented-kevin-oleary-says-bud-155603390.html
“Beer brands take decades to build and usually are fighting [for] 1% to 2% share per year by spending hundreds of millions of dollars on advertising,” he explained. “This has never happened before. No beer brand has ever lost 25% market share in a matter of hours. It’s so unprecedented that there’s no playbook for this.”
Beer drinkers, by and large, aren’t a fan of trannies. In fact, I don’t know many people in general who are. Trans = severely mentally ill.
I knew an Alice once. He was disturbed. Had the castration and all. I felt compassionate for him.
What I can’t abide is the push for us to step over into their sick world and pretend it’s quite normal and healthy.
The local craft beer is quite good, but has reached $3 a can. Can’t afford that either!
Warren Buffett may be bracing for a recession – and Michael Burry’s latest big short is a ‘good move,’ says top economist Steve Hanke
https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-recession-michael-burry-big-short-steve-hanke-2023-8
Warren Buffett and Michael Burry have rattled financial markets with bearish disclosures this month. Steve Hanke says the Berkshire Hathaway CEO and the investor of “The Big Short” fame are likely preparing for trouble.
Berkshire sold a net $8 billion of stocks and slowed its pace of buybacks last quarter, sparking a 13% rise in its money pile to a near-record $147 billion.
The sprawling conglomerate has now disposed of a net $33 billion of stocks over the past three quarters, fueling a $38 billion increase in its stash of cash, cash equivalents, and Treasury bills during that time.
Buffett’s second-quarter moves “are consistent with the anticipation of a recession and the fact that stocks are currently pricey,” Hanke told Insider.
“It’s also consistent with his long track record of piling up cash in anticipation of storm clouds ahead with the capacity to pounce on bargains once the storm hits,” the professor of applied economics at Johns Hopkins University added.
Hanke is also known for serving as the president of Toronto Trust Argentina when it was the world’s best-performing emerging market mutual fund in 1995.
Buffett prides himself on conserving plenty of cash to ride out tough periods and capitalize on stock-market downturns and economic malaise. For example, he struck deals with Goldman Sachs, General Electric, Harley-Davidson, Mars, and other cash-hungry companies in the depths of the 2008 financial crisis.
As for Burry’s Scion Asset Management, it disclosed put options against S&P 500 and Nasdaq-100 index funds with a notional value of $1.6 billion at the end of June. Placing the bearish wagers would have only cost Burry a fraction of that figure, but they still represent a big bet given the rest of his portfolio was only worth about $111 million at the time.
Burry has been warning of a stock-market crash and recession for a while, and has previously bet against high-flyers such as Elon Musk’s Tesla and Cathie Wood’s Ark Invest.
“It looks to me like Burry has made a good move,” Hanke said about the Scion chief’s latest big short.
The veteran economist and former adviser to President Ronald Reagan recently told Insider that stocks look expensive relative to bonds, and he expected a recession to strike the US economy in the first half of 2024.
You’ve Heard of Quiet Quitting. Now Companies Are Quiet Cutting.
Layoffs are down, but employers are still finding ways to cut jobs
https://www.wsj.com/lifestyle/careers/youve-heard-of-quiet-quitting-now-companies-are-quiet-cutting-ba2c326d?siteid=yhoof2
Aug. 27, 2023 9:00 pm ET
Workers are waking up to emails and team-meeting requests with a jarring message: They aren’t fired, but their jobs are gone.
People on the receiving end of these memos describe running through a range of emotions, from relief that they’re still employed to a sense of dread that their bosses secretly want them to leave. They are also facing a labor market that isn’t as robust as a year ago, leaving many to believe that the best option is to stay put and hunt internally for a better fit.
Adidas, Adobe, IBM and Salesforce, among others, have reassigned employees as part of corporate restructurings. Mentions of reassignment, or similar terms, during company earnings calls more than tripled between last August and this month, according to data from AlphaSense, a financial-research platform.
“Reassigning is definitely a huge part of the dynamic right now,” said Andy Challenger, senior vice president at Challenger, Gray & Christmas, an outplacement firm.
For companies that spent several years—and significant money—to hire top talent, reassigning workers to new roles can be a way to fill jobs vital to future plans while trimming costs associated with old strategies, say human-resources executives.
It can also be a waiting game. Employees to whom it would be costly to pay severance or months of unemployment benefits might decide to leave on their own if they feel stuck in a job they don’t want, executive coaches say.
U.S.-based companies announced 42% fewer job cuts in July than they did in June, Challenger said. July job cuts were also 8% lower than the prior-year period, marking the first time this year that monthly job cuts were lower than in 2022.
(A nation populated with vast numbers of MENSA candidates …)
Personal loans are masking Americans’ credit card problems
https://finance.yahoo.com/news/personal-loans-are-masking-americans-credit-card-problems-140032349.html
Sun, August 27, 2023 at 7:00 AM PDT
Folks who turned to personal loans to manage outstanding balances on credit cards are finding themselves back in card debt months later.
A survey conducted by TransUnion between April 2021 and September 2022 found that borrowers who used a personal loan to consolidate their credit card debt saw their balances decrease by 57% on average, but for many, those balances returned close to their previous levels 18 months later.
Researchers from LendingTree found similar results, with borrowers again starting to pile on credit debt only three months after consolidation.
The data underscores what seems like a growing debt problem for many Americans, as total balances hit all-time highs, interest rates remain north of 20%, and delinquencies start to tick up.
“Though it may be tempting to see that available credit limit, it’s really important to keep that balance low in order to not get yourself further into debt,” Liz Pagel, senior vice president and consumer lending business leader at TransUnion, told Yahoo Finance.
Re: Folks who turned to personal loans to manage outstanding balances on credit cards are finding themselves back in card debt months later.
Isn’t that precisely what the Treasury routinely does every quarter by paying old loans with new ones which it calls Quarterly Refunding?
The simplest solution to all these problems is to let the public follow the government’s example by legalizing counterfeiting for everybody . . .
Does it seem like government intervention to make housing affordable has resulted in a historically inequitable housing market?
FINANCE HOUSING
Welcome to the ‘nepo’ housing market: 40% of homebuyers under 30 get family money to cover their down payment
Redfin chief economist Daryl Fairweather: “It seems like the only way to kind of get your foot in the door to the housing market is to have some help”
BY ALENA BOTROS
August 28, 2023 9:14 PM EDT
…
https://fortune.com/2023/08/28/housing-market-nepotism-homebuying-down-payment-help-from-parents/
FEMA Zone IV – Looks like this morning is your last chance to evade and escape from the gulf coast storm surge. Stay frosty!