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It’s Just Another Reason For Them To Panic

A report from Yahoo Finance. “The last bastion of the housing market faltered last month. Sales of newly built homes decreased 8.7% to a seasonally adjusted rate of 675,000 units last month from the revised July rate of 739,000, according to the Census Bureau. The decrease in activity reverses much of the good fortunes homebuilders enjoyed this year and underscores how even higher mortgage rates are blunting all corners of the housing market — despite attractive incentives. Elevated rates have also been hammering the resale market, with sales of previously owned homes sliding to the lowest level for the month of August since 2010, National Association of Realtors chief economist Lawrence Yun said on a press call. The pace, which was down 15.3% year over year, was also the third slowest of the current housing cycle. ‘A majority of builders are using incentives, including trimming prices and offering financing assistance,’ said Keith Gumbinger, vice president of HSH.com ahead of the report. ‘We’ll learn how successful those incentives were in getting buyers to sign the dotted line.'”

CBS 5 on Arizona. “Since 2018, home prices in Flagstaff have almost doubled, but for the first time since then, prices have dropped slightly and remained steady, and interest rates might be to blame for both. Kelly Broaddus has been working in real estate for 25 years. She said low interest rates post-pandemic spiked housing costs. ‘Once COVID hit, and interest rates went down to try to stimulate the economy, things just went bonkers,’ she said. Now, the high interest rates have helped the housing market stabilize a little, but they’re not the solution. ‘They really didn’t come down too much there,’ Broaddus said. ‘It just made the the market a little bit more sluggish, just a little slower you know. But I think sellers are still really reluctant to admit that maybe they need to lower their prices.'”

The Chaffee County Times. “For anyone looking to buy a home, Julie Kersting, Broker at First Colorado Land Office suggests having a conversation with their lender to see what costs are looking like. ‘It’s important to work with a lender and have a relationship with a local real estate broker so that when the opportunity presents itself, the client is ready to make a knowledgeable decision quickly,’ Kersting said. With the rates as high as they are, most sellers aren’t getting multiple offers on their listings. This may make them more likely to sell with fewer showings and often at or below the list price.”

The Wall Street Journal. “Rising interest rates are hitting Americans’ finances. Daniel Waddell started looking for a home in St. Paul, Minn., in January. Mortgage rates kept ticking up during his search. He eventually bought a three-bedroom, one-bathroom home this spring after offering over the asking price. His mortgage rate is about 6.5%. Waddell and his wife are deferring other purchases because of the $2,600 monthly mortgage payment. The 25-year-old consultant would like to replace the car he has been driving since the start of college, but he now plans to put off that purchase as long as he can. Even so, Waddell said he is glad they got the house. Otherwise, he and his wife might have given up. ‘Rates are obscenely high and it doesn’t seem like they’re going down anytime soon,’ he said.”

Community Impact on Texas. “Median home prices in Leander and Liberty Hill were down year over year in August, homes lingered on the market longer and fewer were sold compared to last year, according to the Austin Board of Realtors. Year-over-year median home prices in both cities dropped with a nearly 9% drop in Liberty Hill’s 78642 ZIP code and a 16% drop in Leander’s 78641 ZIP code. Despite the price drop, fewer homes were sold compared to last year. Additionally, homes sat on the market longer this August compared to last. Homes in the 78642 ZIP code stayed on the market more than twice as many days as last year.”

WWBT on Virginia. “Richmond City Council unanimously approved an ordinance concerning short-term rentals on Monday night. Officials hope the new ordinance will alleviate the current housing crisis, but some people say it could hurt them financially. ‘This is my livelihood and it’s the livelihood of a lot of short-term rental hosts in the city of Richmond. 90% of Airbnb hosts that host in the city of Richmond will lose their opportunity to host … if you can’t have unhosted stays,’ said Terricinia St. Clair, an Airbnb superhost ambassador and a co-host in the Southside of Richmond.”

Bisnow New York. “An eight-story, 92-unit luxury condo property spanning a full Hell’s Kitchen block is heading to a foreclosure auction, the latest sign of difficulties for Xin Development Group International. The property’s retail anchor tenant is big-box retailer Target, but that doesn’t seem to be enough to keep it afloat. Mezzanine lenders have filed to foreclose on Xin Development’s Bloom on Forty Fifth, with an auction set for Oct. 11, according to a public notice. Selling units in the building or refinancing will be almost impossible amid a foreclosure suit, said Adelaide Polsinelli, a broker and vice chair at Compass. ‘Those developers developed at the height of the market. If they didn’t sell out, chances are they’re in trouble,’ she said. ‘Their debt may be coming due. And then what?'”

“Not helping matters for Xin Development is that New York City’s luxury condo market has been stagnant over the past few months, Compass broker Vickey Barron said. ‘The world is nervous in general. So many people have analysis paralysis in a healthy market,’ she said. ‘When you have a market with uncertainties and people nervous about what’s happening globally, in real estate it’s just another reason for them to panic.'”

The Mercury News in California. “The owner of a prominent, empty office building in Mountain View has tumbled into default on their loan, fresh evidence that financial woes have widened for the Bay Area’s wobbly commercial real estate market. The office building is located at 590 East Middlefield Road at the corner of Logue Avenue, according to documents filed on Sept. 21 with the Santa Clara County Recorder’s Office. The property owner group that defaulted on the loan is SHP Middlefield, an LLC affiliated with Sand Hill Property Co., one of the Bay Area’s most successful and active developers. ‘There are many nice buildings like ours sitting vacant. It is high quality. But now this whole area is dead. There is no tenant activity.'”

From Reuters. “U.S. hotel owners could see greater pressure on their ability to service the loans backing their properties, as a decline in leisure stays coupled with rising costs are expected to pinch their profits. According to a Moody’s report, nine of the 19 commercial mortgage-backed security (CMBS) loans that liquidated in the second quarter of 2023 were hotel loans that initially defaulted in 2020, selling at a loss after the borrowers failed to work out a solution to avoid default. Perhaps the hardest-hit in this category are hotels along the coast of Florida. ‘It would not be a surprise if every hotel owner on Miami Beach is facing not just an increase in hurricane, flood and wind storm insurance premiums, but at a multiple of 2-3x,’ said Eric Goldberg, co-chair of the real estate law practice at Olshan Frome Wolosky.”

Blog TO in Canada. “Condo construction feels never-ending in Toronto, where developers continue to jam shiny skyscrapers into new parts of the downtown core. With so many cranes constantly erecting new buildings on demanding deadlines, it often seems like many modern builds are finished as quickly and as cheaply as possible for maximum profit, which has led to issues like falling glass, flooding, paper-thin walls, elevator snafus, inferior insulation, and worse. Glass-walled buildings notorious for shoddy fabrication and ongoing problems also tend to become prime spots for short-term rentals, turning them into ghost hotels and making matters for actual residents even worse.”

“One popular Reddit thread from this week exemplifies this perfectly with a photo of the crumbling brick exterior of the brand new XO Condos at King and Dufferin, with the original poster joking about the low standard of new construction in the city. ‘I live nearby and watching this building go up has been baffling. The developer seems to have cheaped out on every aspect: facade, entrance, trees, internal fit out,’ one local commented. ‘If you want a real laugh, take a look at the renderings. The entire community has been conned and the developers will walk away with a big bag of cash either way.'”

The I in the UK. “A mother-of-two said she ‘felt sick’ when she found out her mortgage repayments will jump from £1,700 to £2,600 a month at the end of her current deal. Hannah Hardman, who works in tech, and her husband bought their four-bedroom detached home in Kent in 2019 on a five-year fixed rate mortgage of 2.35 per cent. With the uncertainty over the Bank of England base rate decisions and their current mortgage deal coming to an end, the Hardmans made the choice to take up a fixed two-year deal at a rate of 5.72 per cent on the advice of their mortgage broker. Ms Hardman, 33, said she felt ‘shellshocked’ by the news of the increase which is set to kick in in February.”

“‘We’re going to be moved on to a 5.72 per cent rate which just makes me feel sick,’ Ms Hardman said. ‘The monthly repayments go from just over £1,700 to over £2,600.’ Ms Hardman, who already works condensed hours and relies on her children’s grandparents to lower childcare costs, said the significant rise in mortgage payments will put more demands on her and her husband’s finances. ‘It puts a lot of pressure on me and my husband professionally to advance in our careers and try and perform at work to try and secure pay rises that will enable us to just be able to maintain. I think we’re just having to be really mindful of needs versus wants.'”

From ABC News. “Home buyers reeling from the collapse of multiple builders in South Australia say they did everything they could, as the state government runs a campaign encouraging consumers to ‘do their homework’ before signing a contract. The government’s consumer awareness campaign follows the collapse of four building companies in recent months. While many South Australians affected by builder collapses can access a $150,000 insurance payout, home buyer Geoff Browne cannot because, as he later discovered, the mandatory building indemnity insurance was not taken out.”

“He said he and his wife felt that they had done everything they could when researching their house and land package, including engaging a real estate consultant. Mr Browne said by the time red flags were starting to appear, it was too late. ‘We’d spent a lot of money by that point and we went, ‘Well do we continue or do we try and get out of this and risk losing everything we’d put into it’, which was quite a large sum of money,’ he said.”

The New Zealand Herald. “Two recent cases involving leaky homes revealed that the housing market can be fraught for prospective home buyers. The first case involved an 81-year-old businessman who, with his wife, doctored a Land Information Memorandum (LIM) report so they could sell their leaky home at full market price. In another case, two realtors waited until the sale of a house was finalised before disclosing a building report that showed areas of the property had moisture readings nearly eight times the normal range. NZ Herald senior reporter Lane Nichols has reported on real estate disputes for a number of years, and tells The Front Page podcast families who fall victim to wrongdoing can be left tens of thousands of dollars out of pocket.”

“In the recent matter involving the doctored LIM report, Nichols says the buyers purchased the home only to discover years later that the actual LIM report held by Auckland Council referenced ‘major moisture-related cladding defects.’ Four years later, at a time when the market was running hot and property prices were rising fast, the couple sold the property at a loss of $25,000 – but this does not take into account how much they lost in potential capital gains over that period (one estimate suggested the loss was as high as $290,000).”

From Bloomberg. “Hui Ka Yan, the billionaire chairman of beleaguered property developer China Evergrande Group, has been placed under police control, according to people with knowledge of the matter. The move is the latest sign that the saga at the world’s most indebted developer has entered a new phase involving the criminal justice system, after authorities earlier this month detained some staff at its wealth management unit and two former executives were also reportedly held. ‘It is too early to say Evergrande will end up in liquidation, but such risk is clearly rising,’ said Gary Ng, senior economist at Natixis Asia. ‘For the government, it shows no single developer is too big to fail in China.'”

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Prices Went Up Too Fast

A report from ABC News. "Wesley and Kimberly Robinson, both elementary school teachers, started building…

This Post Has 86 Comments

  1. ‘Elevated rates have also been hammering the resale market, with sales of previously owned homes sliding to the lowest level for the month of August since 2010’

    Wa happened to my red hotcakes Larry?

  3. ‘This is my livelihood and it’s the livelihood of a lot of short-term rental hosts in the city of Richmond’

    Get up off yer knees and stop begging Terricinia.

    2. This is a problem with the government’s money bazooka: when so much money is sloshing around far too many people can “earn a livelihood” that involves doing no real work.

  5. She said low interest rates post-pandemic spiked housing costs.

    Low interest rates? You mean rates artificially suppressed by the Keynesian fraudsters at the Fed who bought up both ends of the yield curve with trillions of Yellen Bux created out of thin air. This cheap money is going to come at a terrible cost when the Fed’s asset bubbles & Ponzi markets implode & cause the next Great Financial Crisis.

  8. A few months after Joe Biden announced his candidacy in 2019, information available to the Committee shows Hunter Biden received two wires from China for $250,000 and $10,000, including from Jonathan Li.

    More alarming, the wires have Joe Biden’s home in Wilmington, DE as the beneficiary address.

    Weeks after those payments were made, Hunter’s lawyer George Mesires said Hunter Biden served with BHR “only as a member of its board of directors,” which was purportedly an “unpaid position.”

    Here is the breakdown of events.

    2009-2017: During his time as Vice President and prior to later payments to Hunter Biden, evidence shows Joe Biden developed a familiar relationship with Jonathan Li. Devon Archer, a Biden business associate, described how Joe Biden met with Jonathan Li for coffee in Beijing, China, had a phone call with him, and wrote college recommendation letters for his children.

    April 25, 2019: Joe Biden announced his candidacy in the 2020 presidential election.

    July 26, 2019: Wang Xin wired $10,000 with Joe Biden’s home listed on the wire.

    August 2, 2019: Jonathan Li wired $250,000 with Joe Biden’s home listed on the wire.

    October 13, 2019: George Mesires, who served as Hunter Biden’s lawyer, stated, in part, that Hunter Biden served with BHR “only as a member of its board of directors,” which was purportedly an “unpaid position.”

    October 22, 2020: During a presidential debate, Joe Biden said, “My son has not made money […] in China.”

    It has your address on the wires, sir…

    https://twitter.com/GOPoversight/status/1706777666102210937

    1. How much paid in bribes and kickbacks so far? $5 million? $10 million? $30+ million that number has been floating around?

  9. Even so, Waddell said he is glad they got the house. Otherwise, he and his wife might have given up.

    I sense that this couple might have a dim perception they made a colossal financial mistake, but lack the intelligence to grasp the full magnitude of the schlonging that’s headed their way.

  10. ear-over-year median home prices in both cities dropped with a nearly 9% drop in Liberty Hill’s 78642 ZIP code and a 16% drop in Leander’s 78641 ZIP code.

    Is that a lot?

  11. Chinese social media censored a top economist for his bearish predictions. He now warns that China’s property crisis will take a decade to fix

    https://www.yahoo.com/finance/news/chinese-social-media-censored-top-195829905.html

    Hong is an outspoken commentator on China’s economy, growing his audience during his tenure as the head of research of BOCOM International, a division of state-owned Bank of Communications.

    Yet Hong’s takes were censored last year amid China’s tough COVID lockdowns in cities like Shanghai. Hong argued that the lockdown, which trapped millions of people to their apartments in a bid to stop an outbreak, would hurt China’s economy and would encourage capital flight.

    Both WeChat—the ubiquitous messaging platform—and Twitter-like Weibo suspended Hong’s accounts in May 2022. Hong soon resigned from BOCOM, which the company said was for personal reasons.

    When Hong got a new gig at Grow International a few months later, he warned that those working at state-owned brokerages were starting to face restrictions about what they could say. “Even if you don’t speak the truth, market prices will tell the truth,” he told Reuters at the time.

    Hong’s suspension was an early indicator of Beijing’s censorship of bad economic news. This year, regulators are asking analysts and economists to stop using negative language to describe China’s economy—think “subdued inflation” rather than deflation—and the statistics bureau has stopped releasing some indicators like consumer confidence and youth unemployment.

    China’s economic recovery has stagnated. Retail sales and manufacturing have grown at lower-than-expected rates for much of the year, and foreign trade has plunged. Still, Chinese economic data beat forecasts last month, suggesting that government support measures may finally be having an effect.

  12. 90% of Airbnb hosts that host in the city of Richmond will lose their opportunity to host … if you can’t have unhosted stays,’ said Terricinia St. Clair, an Airbnb superhost ambassador and a co-host in the Southside of Richmond.”

    Die, speculator scum.

  14. Looting in Philadelphia last night.

    Juveniles, youths, students, spring breakers, aspiring rappers, turning his life arounds, et cetera.

      1. Reporter to white woman: “What do you make of this looting?”

        White woman: “It looked like everyone was being arrested, but then they let everyone go, so I don’t know…” [airhead smile*]

        * I’m still going to vote democrat.

  15. Philly is having more peaceful like protests, that end up somehow emptying out nearby stores….ought to be a lot of cheaper real estate there ,soon,,,,,,,are my glasses fogged , or do all the running looters , look the same , like bros ????

  16. CBS 5 on Arizona. “Since 2018, home prices in Flagstaff have almost doubled, but for the first time since then, prices have dropped slightly and remained steady, and interest rates might be to blame for both.”

    “But I think sellers are still really reluctant to admit that maybe they need to lower their prices.’”

    – House prices are “sticky to the downside,” because of the second sentence in the article excerpt, above.

    – Price follows volume, and sales volumes are falling, for both existing and now new houses. The effectiveness of the current builder incentives is waining. Existing house sellers have none of that so only their stubbornness to lowering prices is holding things up for now.

    – The collapse of Housing Bubble 2.0 will take time. The bursting stonk market bubble and the likely coming deep recession will accelerate the trend. Think rising unemployment. Probably the unwinding of the STR/AirB&B bubble will also be a significant factor this time as well. Subprime is also there this time as shown by many ridiculous DTIs and LTVs for buyers (debt donkeys) that shouldn’t have qualified for the loan in a normal world. 🤡 🌎. This same sound lending ethic is rampant in the auto sector. I’m sure it’s fine. Whistling past the graveyard.

    – Houses are unaffordable for most regular shelter buyers now. You can’t get blood from a turnip! Thanks government (including the Fed). Sarcasm intended. They own this.

    – This is Housing Bubble 2.0. We’ve all seen the aftermath of Housing Bubble 1.0. This ain’t our first rodeo. Rinse and repeat.

    – My thoughts here. Prove me wrong. 🙃

    1. This will be much worse as CRE is collapsing along with the major blue hives. There’s also a big tech bubble and the banks are in much bigger trouble due to trillions in unrealized losses in government bonds along with the bad loan assets.

  17. REAL ESTATE
    Mortgage demand shrinks as interest rates hit the highest level in nearly 23 years
    PUBLISHED WED, SEP 27 2023 7:00 AM EDT
    Diana Olick

    KEY POINTS

    – The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased last week to 7.41%, from 7.31%.

    – Applications to refinance a home loan fell 1% for the week and were 21% lower than they were one year ago.

    – Applications for a mortgage to purchase a home fell 2% for the week and were 27% lower than the same week one year ago.
    …
    https://www.cnbc.com/2023/09/27/mortgage-demand-shrinks-as-interest-rates-hit-nearly-23-year-high.html

  18. A reader sent these in:

    Lmao. Freeland responded to the nazi allegations by releasing another $20b in Canada Mortgage Bonds. She heard you like inflation, so why not double down while foreign countries increasingly aren’t absorbing bonds from the West. 😂

    https://twitter.com/StephenPunwasi/status/1706863758243471674

    Real Estate Market right now: “The 3 homes traded between boomers were 1% higher price than last year! The market is still hot!”

    https://twitter.com/GRomePow/status/1706778828662858234

    Target announces it’s closing 9 stores across 4 states, including a store in Harlem NYC, 3 in Portland, 3 in San Francisco and 2 in Seattle because of theft and organized crime “threatening the safety of our team and guests, and contributing to unsustainable business performance.”

    https://twitter.com/SaraEisen/status/1706811725142442465

    It now costs 🇺🇸 American families $8,800 more per year to buy the same goods and services as 18 months ago, and the actual amount we get has been quietly reduced as if we didn’t notice.

    https://twitter.com/AaronKlein10x/status/1706810203797373387

    Two couples renting a 4 bedroom house in Ajax for $4,000/month that the owner just closed on at 1.8 million dollars. It appraised at only 1.5 million so a 300k private was needed making the monthly mortgage payment just over 8k per month. It was a pre construction purchase and those now sell for only 1.3-1.4 million. Big win for renters, tough times for owner

    https://twitter.com/CamCassidy/status/1706769308578148595

    Empire Outlets is a mall in Staten Island that cost $350 million to build. The project was completed in 2019. It just sold for only $10 million.

    https://twitter.com/TheWolfofREI/status/1706759199848296845

    Just a reminder, your home that was worth $462,107.54 at 2.7% mortgage rates. Is worth $264,582.61 at 7.6% mortgage rates.

    https://twitter.com/GRomePow/status/1706817477177663909

    Home prices in the US will fall 30%, per Jeremy Grantham.

    https://twitter.com/WinfieldSmart/status/1706670155646853461

    Here comes the real estate gurus going to prison

    https://twitter.com/GRomePow/status/1706814878626025897

    I talked to a loan officer who said that a growing number of homeowners are doing cash-out refinances to pay down their credit card debt. She said it was mostly families with young children struggling with inflation and the cost of childcare.

    https://twitter.com/FairweatherPhD/status/1706768242155323882

    Wow, this is huge. Class action lawsuit for anyone that has sold a home since 2010 for overpaying in commission due to price fixing and the majority of the industry is named.

    https://twitter.com/JonFlynnREstats/status/1706782710184976449

    $JPM re crypto — shutting it down

    https://twitter.com/followtheh/status/1706739121371160906

    BREAKING: A third of Americans earning $150,000 a year or more say they’re living paycheck to paycheck and many rely on credit cards to close the gap, per Moneywise.

    https://twitter.com/unusual_whales/status/1706292719096623171

    Just learned of a big deal from an insider at Lennar. They think tings are going to get bad and are making plans to drop SP in Austin $50k on new homes and do 10 year fixed/30yr am at 4.75% financing for new home buyers! WOW!

    https://twitter.com/jimmydean197/status/1706429914273157266

    *St Louis based Centene Corp to layoff 2,000 employees $CNC

    https://twitter.com/DonMiami3/status/1706740902692106671

    The 10-Year Treasury bond is down 3% this year, on pace for its 3rd consecutive annual decline. With data going back to 1928, that’s never happened before.

    https://twitter.com/charliebilello/status/1706739358605201644

    FED’S KASHKARI: I PUT A 40% PROBABILITY ON A HARD LANDING.

    https://twitter.com/1CoastalJournal/status/1706714796115345772

    Americans outside the wealthiest 20% of the country have run out of extra savings and now have less cash on hand than they did when the pandemic began: Fed study.

    https://twitter.com/lisaabramowicz1/status/1706409728249577983

    FOMO is the primary reason Canadian people bought a house: 🤯

    https://twitter.com/daniel_foch/status/1706710290694308184

    Every housing market shaded “blue” is at an all-time high for local home prices. At least according to the Zillow Home Value Index. Data through August 2023

    https://twitter.com/NewsLambert/status/1706854709582029072

    🚫Portugal is closing the Golden Visa program through the purchase of real estate! The President of the country will sign the new law within the next 8 days and a day after publication it will come into force.

    https://twitter.com/Propriete_Gen/status/1706624591718719893

    “Real estate is a global bubble. It has driven house prices provably to multiples of family income all over the world… It used to be multiples of 3 & a half times family income. London is now 10 times. Toronto is worse. No one can afford to buy a house,” Jeremy Grantham said.

    https://twitter.com/unusual_whales/status/1706667689656135806

    What happens when nobody can afford a house BUT There’s record Multifamily AND Plenty of land to build on still.

    https://twitter.com/NipseyHoussle/status/1706805110255301068

    San Antonio……inventory coming back some, prices dropping.
    I’m not a high volume superstar but usually quite busy and it’s…..slooooooooow. Sellers don’t want to pay 6-7% rate when sitting on 3-4%. Working with a couple military buyers but having to adjust price target down.

    https://twitter.com/TXAggie4Christ/status/1706355689503777038

    Does anyone know how to buy puts on the city of Philadelphia tonight? Asking for a friend.

    https://twitter.com/EnronChairman/status/1706865990510772305

    Aug new home sales fell (likely to trend down w/ permit and construction data) and it’s no wonder why:
    Median sale price $430,300
    Average sale price $514,000 – you need about twice median household income to keep mortgage payments to 25% of take-home pay; unsustainable…

    https://twitter.com/RealEJAntoni/status/1706789420224119019

    1. “Every housing market shaded “blue” is at an all-time high for local home prices. At least according to the Zillow Home Value Index. Data through August 2023”

      Any one who is still using Zillow, or anything like it, for valuation is just a fool. Complete deception and manipulation. Do your own research. It ain’t hard. Look at closed sales, property histories, assessors sites….there’s an abundance of resources. Yes it’s a lot easier to just enter a property address and click, but you’re being lied to.

    2. Target announces it’s closing 9 stores across 4 states, including a store in Harlem NYC, 3 in Portland, 3 in San Francisco and 2 in Seattle because of theft and organized crime “threatening the safety of our team and guests, and contributing to unsustainable business performance.”

      Perhaps the gooberment can replace them with their own stores. They could call them “Bullseye” or better yet “Smash and Grab”

    3. She said it was mostly families with young children struggling with inflation and the cost of childcare.

      Raising kids 20-30 years ago was hard and expensive already. I can’t begin to imagine how much more expensive it is now. Small wonder most young couples I know have no kids.

      1. And they’re refinancing into these 7%+ rates. They’re doing it only because the credit card rates are higher than the mortgage rates. What will happen when they max out their equity? Max out the cards again, I guess. Then what, declare BK?

        2. I remember a lot of Ch 7 bankruptcies back in 2008-2011. My firm just hired a business bankruptcy re-org specialist. I’m one of the bankruptcy specialists at the firm since I had plenty of experience from the GFC. We just landed a big client.

    4. Portugal is closing the Golden Visa program through the purchase of real estate!

      from the link:

      Follow us to learn more about the new Mais Habitação law

      I am not fluent in Portuguese, but I think “Mais Habitação” means “more housing”.

      I’m gonna go out on a limb and guess that housing in Portugal is utterly unaffordable for the locals.

    5. I’m not a high volume superstar but usually quite busy and it’s…..slooooooooow

      You ain’t seen nothing yet.

    6. “I talked to a loan officer who said that a growing number of homeowners are doing cash-out refinances to pay down their credit card debt. She said it was mostly families with young children struggling with inflation and the cost of childcare.”

      Most of these deals will be future foreclosures. That’s the way it worked last time, and this time will be no different. Actually, it’ll be way more accelerated this time. Last time the desperation refi’s weren’t going into rates more than double their current rate like they are now. In most cases folks were refi-ing into lower rates and still lost their homes later on in the last bust. But the really crafty ones were the ones who refinanced, pocketed the cash and never made another payment because they saw the writing on the wall. And I know this because I was in the biz 1998 – 2011.

    7. “It now costs 🇺🇸 American families $8,800 more per year to buy the same goods and services as 18 months ago, and the actual amount we get has been quietly reduced as if we didn’t notice.”

      These are the circumstances that will lead to something like the French Revolution.

      We don’t have a monarchy, but we do have a Parasite Class, and that is who needs to be exterminated.

      Exterminated? This Parasite Class produces nothing of value. Nothing.

      They only extract blood (money) from their host and destroy lives and destroy nations.

      It is their nature, across centuries of history, and across every corner of the globe.

      1. These are the circumstances that will lead to something like the French Revolution.

        I hope not, as I would not like to live in a “Reign of Terror”. Remember that one of the goals of the French Revolution was to de-Christianize France. They had more in common with today’s Left than with the “deplorables”.

  20. “What happens when nobody can afford a house BUT There’s record Multifamily AND Plenty of land to build on still.”

    What happens? That’s easy….prices drop. Don’t over think it.

  22. Plenty of 500k homes in my area renting under $2500, some even under $2000 recently. 20% down on 500k home puts you somewhere in the neighborhood of $3600 PITI. The nice thing about math is it don’t lie.

    1. In medieval times, the folks in charge would have severed your tongue with a dull instrument while chained in the basement of a church for the utterance of such truth.

  23. Accidentally posted this in an older thread:

    Dumver city hall is starting to panic over flood of migrants arriving.

    Texas Gov. Greg Abbott sent more than 10 buses transporting migrants to Denver in the last week, Mayor Mike Johnston said Tuesday morning as he told City Council members that the number of arrivals could reach an all-time high.

    Another four buses from Texas arrived during the day, a city spokesperson confirmed.

    Just wait until 10 buses arrive every day with say 300-400 “Nuevos Americanos”. That could be over 100,000 future doctors and astronauts.

    https://www.msn.com/en-us/news/us/denver-mayor-mike-johnston-warns-migrant-counts-could-eclipse-previous-highs-as-texas-sends-more-buses/ar-AA1hlBpF#image=1

    Here is another gem from the article:

    The renewed migrant surge could deplete the money city leaders have set aside faster than expected, though Johnston voiced optimism Denver could save money if it’s able to line up more shelter space and rely less on hotels.

    The city is now spending about $5,000 per person per month, Johnston said, so Denver is still relying on state and federal assistance — in the form of more than money.

    $60,000 a year per illegal? With even just 10,000 illegals that’s $600M per year. And voters will need to approve any tax increases. Denver’s budget is current $4B.

    1. “could be over 100,000 future doctors and astronauts”

      Go to the Home Depot on Santa Fe near Alameda and you’ll find plenty of them to hire for slave wages and no OSHA regulations.

      Some of them look like minors, as in barely a day over 15 or 16.

      Mayor Johnston doesn’t care. Scumbag contractors are hiring children who are in the country illegally, in the City of Denver, every single day

      1. Mayor Johnston doesn’t care. Scumbag contractors are hiring children who are in the country illegally, in the City of Denver, every single day

        It’s cuz those lazy Americans won’t do the jobs! /sarc

  26. ‘one of the Bay Area’s most successful and active developers’

    Behold:

    ‘There are many nice buildings like ours sitting vacant. It is high quality. But now this whole area is dead. There is no tenant activity’

    If it’s high quality, you probably borrowed a sh$tload of money.

  27. ‘who already works condensed hours and relies on her children’s grandparents to lower childcare costs, said the significant rise in mortgage payments will put more demands on her and her husband’s finances. ‘It puts a lot of pressure on me and my husband professionally to advance in our careers and try and perform at work to try and secure pay rises that will enable us to just be able to maintain. I think we’re just having to be really mindful of needs versus wants’

    You Hannah, are a winnah!

  28. ‘He said he and his wife felt that they had done everything they could when researching their house and land package, including engaging a real estate consultant’

    I know Geoff, you could have gone out for a fine meal with the missus many times for that consultant fee.

    ‘by the time red flags were starting to appear, it was too late. ‘We’d spent a lot of money by that point and we went, ‘Well do we continue or do we try and get out of this and risk losing everything we’d put into it’, which was quite a large sum of money’

    It sounds like Geoff, at that critical fork in the road of yer destiny, it didn’t matter which way you went cuz you were fooked.

  29. ‘For the government, it shows no single developer is too big to fail in China’

    It is different this time.

    1. Multiculturalism is a virulent cancer when the migrants are under no obligation to adapt to their hosts’ country laws, mores, etc., and are allowed to practice their former toxic culture, religion, etc.

    2. Funny thing, she doesn’t look British to me. In fact, it seems like fewer and fewer gooberment bigwigs in the UK are heritage Brits.

  31. Does it seem like all joy left Wall Street with the inception of the Fed’s “higher for longer” PR campaign?

    1. Financial Times
      US Treasury bonds
      Fed’s ‘higher for longer’ message hits US stocks and bonds
      Treasuries and Wall Street shares on course for worst month of 2023
      Wall Street’s benchmark S&P 500 stock index has fallen more than 5 per cent in September
      Wall Street’s benchmark S&P 500 stock index has fallen more than 5% in September
      Kate Duguid and Nicholas Megaw in New York and Harriet Clarfelt in London 5 hours ago

      US stocks and government bonds are on course for their worst month of the year as investors respond to the Federal Reserve’s message that interest rates are set to stay higher for longer than previously thought.

      Wall Street’s benchmark S&P 500 stock index has fallen more than 5 per cent in September — dragging it towards its first quarterly loss in 12 months.

      A retreat in the US bond market also accelerated last week after the Fed signalled it would cut rates much more slowly next year and in 2025 than investors had been pricing in.

      The yield on 10-year Treasuries, which rises when prices fall, on Wednesday hit its highest level since 2007 and is on track for the biggest monthly jump in a year.

      “The penny [is] dropping that actually higher for longer means higher for longer,” said Mark Dowding, chief investment officer at RBC BlueBay Fixed Income. “That realisation is the thing that’s been hurting sentiment.”

      At the beginning of the month, traders in the futures market were betting that interest rates would be about 4.2 per cent by the end of 2024. Now they are betting on rates of 4.8 per cent by that time.

      “The market has been consistently wrong about Fed policy this year,” said Kevin Gordon, senior investment strategist at Charles Schwab. “For a good chunk of the year the market expectation was it would be cutting aggressively this year . . . now there’s an embrace of ‘maybe [the Fed] actually means it’.”

      Expectations of a prolonged period of high rates have hit equities because of the impact of higher bond yields on investors’ quest for returns, as well as the potential effect on the real economy.

      The S&P is still up 11 per cent this year, but has been propped up by a small number of heavily weighted tech stocks that surged earlier in the year fuelled by enthusiasm about artificial intelligence. The equal-weighted version of the index this week fell back into negative territory for the year.
      …

      2. Wait until CPI comes in hot later this fall and they hike again, and then the dot plot shows no rate cuts until 2025. And then CPI comes in even hotter before the following meeting and they have to hike again with the “higher for even longer” message, and the dot plot moves further away in diamagnetic fashion.

    2. Macro Matters
      Harsh reality of ‘higher-for-longer’ rates looms over US stocks
      By Lewis Krauskopf, David Randall and Carolina Mandl
      September 26, 2023 10:10 PM PDT
      Updated 18 hours ago
      The U.S. Federal Reserve building in Washington, D.C.

      NEW YORK, Sept 27 (Reuters) – As the Federal Reserve’s hawkish stance boosts Treasury yields and slams stocks, some investors are preparing for more pain ahead.

      For most of the year, equity investors brushed off a rise in Treasury yields as a by-product of better-than-expected economic growth, despite worries that yields could eventually weigh on stocks if they rose too high.

      Those concerns may be taking on fresh urgency after the Fed last week forecast it would leave rates elevated for longer than many investors were expecting.

      Following a 1.5% tumble on Tuesday, the S&P 500 (.SPX) is now down more than 7% from its July highs, stung by sharp declines in shares of some of this year’s biggest winners — including Apple (AAPL.O), Amazon.com (AMZN.O) and Nvidia (NVDA.O). At the same time, yields on the U.S. benchmark 10-year Treasury stand near a 16-year peak at 4.55%.

      With policymakers projecting rates will remain around current levels until the end of 2024, some investors say more volatility could be in store. Higher yields on Treasuries – which are sensitive to interest rate expectations and seen as risk free because they are backed by the U.S. government – offer investment competition to stocks while raising the cost of borrowing for corporations and households.

      The market “is recalibrating what is the right valuation for equities in a 5% interest rate world,” said Jake Schurmeier, a portfolio manager at Harbor Capital Advisors. “Investors are asking, ‘Why do I need to (take) equity risk when I get more returns than that just by holding a Treasury bill?’”

      If history is any indication, higher rates are a less favorable environment for equity investors. An analysis by AQR Capital Management going back to 1990 showed U.S. equities returned an average of 5.4% over cash when rates were above their median level – as they are now – compared with a return of 11.5% when interest rates were below their median.

      “Stock markets are just plain expensive,” said Dan Villalon, principal and global co-head of portfolio solutions at AQR Capital Management, who believes rates will be higher over the next five to 10 years than in the previous decade, impacting returns.

      AQR’s analysis showed that trend-following hedge funds tend to outperform when rates are elevated, as they hold large cash positions that benefit from higher rates.

      The equity risk premium, which compares the attractiveness of stocks over risk-free government bonds, has been shrinking for most of 2023 and was last around its lowest levels in about 14 years, according to Keith Lerner, co-chief investment officer at Truist Advisory Services.

      The current ERP level has historically translated to just a 1.3% average 12-month excess return of the S&P 500 over the 10-year Treasury, according to Lerner.

      The 10-year Treasury yield up to 4.5% “changes the narrative for stocks,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management, who is holding a higher-than-normal cash position.

      “Investors are going to be even more worried that we could enter into a recession as the cost of borrowing is increasing and corporate margins will be squeezed,” he said.

      Analysts at BofA Global Research argue that equities – specifically, the tech-heavy Nasdaq 100, which has soared 33% in 2023 in part due to excitement over advances in artificial intelligence – have until recently ignored the risk of rising rates.
      Advertisement · Scroll to continue

      “Sentiment could be turning, however. The Nasdaq has started to move inversely with real rates again,” the bank’s analysts wrote. “If this continues, the risk is that equities have a long way to go to price-in rate sensitivity again, hence more downside.”

      Schurmeier, of Harbor Capital, said he’s been increasing his exposure to long-duration bonds and value stocks in anticipation that a period of high rates will weigh on growth stocks, as occurred in the mid-2000s following the bursting of the tech bubble.

      Of course, plenty of investors believe the Fed will cut rates as soon as economic growth starts to wobble. Futures tied to the Fed’s key policy rate show investors pricing in the first rate cut in July 2024.

      “We don’t believe that ‘higher for longer’ will prove true,” said Eric Kuby, chief investment officer at North Star Investment Management Corp.
      …
      https://www.reuters.com/markets/us/harsh-reality-higher-for-longer-rates-looms-over-us-stocks-2023-09-27/

      1. “History has not dealt kindly with the aftermath of protracted periods of low risk premiums.”

        — Sir Alan Greenspan

  33. Former J6 Federal Prosecutor Arrested in Road Rage Stabbing in Tampa; Led Prosecution of “Lectern Guy”

    By Kristinn Taylor Sep. 27, 2023 1:20 pm

    Former federal prosecutor Patrick Scruggs, who led the January 6 prosecution of Adam Johnson, aka “Lectern Guy” for being seen carrying then Speaker Nancy Pelosi’s lectern through the Capitol Rotunda on January 6, 2021, was arrested at the scene of a road rage incident for allegedly stabbing an incapacitated driver on a bridge in Tampa, according to the Florida Highway Patrol.

    Scruggs pulled over, got out and walked up to the driver of the vehicle that hit his car. According to the Highway Patrol, Scruggs broke a window and started stabbing the 35-year-old man with a pocketknife.

    https://www.thegatewaypundit.com/2023/09/former-j6-federal-prosecutor-arrested-road-rage-stabbing/

    1. Advertisement
      Evergrande: China property giant suspends shares amid reports of detained leaders
      Published 2 hours ago
      An Evergrande property in WuhanImage source, Getty Images
      Image caption,
      Media reports say several executives, including the company’s chairman, have been detained by Chinese authorities
      By Mariko Oi
      Business reporter

      Shares in crisis-hit Chinese property giant Evergrande have been suspended in Hong Kong amid reports its chairman has been placed under police surveillance.

      It follows reports earlier this week that other current and former executives had also been detained.

      Thursday’s market statement did not give a reason for the trading halt.

      But it marks another low for the heavily indebted property giant which defaulted in 2021, triggering China’s current real estate market crisis.

      In August, the firm filed for bankruptcy in New York, in a bid to protect its US assets as it worked on a multi-billion dollar deal with creditors.
      …
      https://www.bbc.com/news/business-66932548

    2. Evergrande: China property giant suspends shares amid reports of detained leaders
      Published 2 hours ago
      An Evergrande property in WuhanImage source, Getty Images
      Image caption,
      Media reports say several executives, including the company’s chairman, have been detained by Chinese authorities
      By Mariko Oi
      Business reporter

      Shares in crisis-hit Chinese property giant Evergrande have been suspended in Hong Kong amid reports its chairman has been placed under police surveillance.

      It follows reports earlier this week that other current and former executives had also been detained.

      Thursday’s market statement did not give a reason for the trading halt.

      But it marks another low for the heavily indebted property giant which defaulted in 2021, triggering China’s current real estate market crisis.

      In August, the firm filed for bankruptcy in New York, in a bid to protect its US assets as it worked on a multi-billion dollar deal with creditors.
      …
      https://www.bbc.com/news/business-66932548

    3. Financial Times
      Opinion Lex
      China property: accelerating meltdown threatens other markets
      Nervousness over the risk of contagion could spread into commodities
      Country Garden headquarters in Foshan, China
      The market fears a default by Country Garden, previously one of China’s safest large developers
      September 25 2023

      The floorboards are giving way underneath the Chinese property companies. On Monday, share prices throughout the sector fell by the most this year. Evergrande dropped 21 per cent after it scrapped key creditor meetings at the last minute.

      There is still risk of contagion both within China and beyond. That nervousness could spread into commodities. Iron ore prices fell more than 4 per cent on Monday. This comes when seasonal demand from China has historically been strong. China buys about 70 per cent of the world’s seaborne iron ore. Chinese developers have stopped restocking steel.

      Price volatility tells the story. Already the market fears a default by Country Garden. A dollar bond of Country Garden, previously one of the safest large developers, fell below 10 cents on the dollar. China Aoyuan Group’s stock price fell 73 per cent. A court-ordered liquidation of China Oceanwide looms after a Bermuda court issued a winding-up order.

      Any hand-wringing on property has had most of its effect on the shares and bonds of developers. But there are links to other sectors as well, most clearly banks. China Oceanwide is a shareholder in China Minsheng Bank, the largest privately owned lender in China. Minsheng Banking Corp has already filed a lawsuit against Oceanwide Holdings for failing to repay its debts.
      …

    4. Asia · China
      Chinese social media censored a top economist for his bearish predictions. He now warns that China’s property crisis will take a decade to fix
      BYNicholas Gordon
      September 26, 2023 at 12:58 PM PDT
      Hao Hong’s social media accounts were suspended last year following his bearish takes on China’s economy.
      Graham Crouch—Bloomberg via Getty Images

      How long will it take to fix China’s flailing real estate sector? One of the country’s most prominent economists, who was ejected from its social media platforms for his bearish predictions about the economy, thinks it might take 10 years to fix.

      “Fixing the property sector may be a multiyear or even a decade’s work in front of us,” Hong Hao, chief economist for Shanghai-based hedge fund Grow Investment, said on CNBC Tuesday.
      …
      https://fortune.com/2023/09/26/china-economist-hao-hong-real-estate-crisis-decade-to-fix-social-media-censorship/

    5. Evergrande’s market value plummets as debt restructuring meeting delayed
      Investing.com
      Published Sep 26, 2023 08:23AM ET
      Be the first to comment
      Evergrande’s market value plummets as debt restructuring meeting delayed

      Chinese property giant Evergrande’s financial woes intensified on Monday as the company lost 25% of its market value in a single day, following an announcement of a delay in a crucial debt restructuring meeting. This marks a further blow to the beleaguered firm that has seen 87% of its market value wiped out in less than a month.

      Evergrande, which has been grappling with $300 billion in liabilities since 2021, has struggled to find a solution to its financial crisis. The developer had paused trading indefinitely while attempting to devise a resolution. However, following the announcement of a debt restructuring plan, Evergrande relisted on the Hong Kong Stock Exchange on August 28. Since then, shares have plummeted, trading as low as 41 Hong Kong cents on Monday, effectively rendering it a penny stock.

      On the Friday preceding the postponed meeting, Evergrande filed a document with the Hong Kong exchange revealing that its debt restructuring plan needed to be reassessed due to an unsuccessful re-entry into the stock market. The company stated that sales had not met expectations since its March debt restructuring announcement. Consequently, Evergrande considered it necessary to revise the proposed restructuring terms to align with the company’s situation and creditor demands.
      …
      https://m.investing.com/news/stock-market-news/evergrandes-market-value-plummets-as-debt-restructuring-meeting-delayed-93CH-3182948

    1. Asian Markets
      Morning Bid: Doom loop momentum builds
      By Jamie McGeever
      September 27, 2023 2:47 PM PDT
      Updated 10 hours ago
      Commentary
      By Jamie McGeever
      Screens showing the Hang Seng stock index and stock prices are seen outside Exchange Square, in Hong Kong, China, August 18, 2023. REUTERS/Tyrone Siu/File Photo Acquire Licensing Rights

      Sept 28 (Reuters) – A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.

      Sometimes markets get up a head of steam and it becomes very difficult to slow the momentum, far less reverse it.

      There’s a case to make that this is where markets – U.S., Asian and global, across asset classes – find themselves, feeding off each other and accelerating self-fulfilling loops.

      Right now, these are ‘doom’ loops – rising U.S. bond yields, a rampant dollar, higher oil prices, tightening financial conditions, deepening growth fears, decreasing risk appetite and increasingly fragile equity markets.

      Wall Street’s performance on Wednesday illustrated this phenomenon – despite plunging the day before, it barely recovered any ground at all. Asian stocks barely clawed back any of the previous days’ losses either, and world stocks racked up a ninth straight decline.

      These moves are unlikely to provide a springboard for Asian markets on Thursday, and beyond Australian retail sales there is nothing on the economic or policy calendar likely to do so either.

      Recent rebounds in the S&P 500 have been sporadic and limited. The index has risen 0.5% or more only twice this month, and has not posted a gain of 1%. It has fallen at least 0.5% six times, three of those being 1% declines or more.

      Meanwhile, U.S. bond yields, the dollar and oil all rose again on Wednesday, and Treasury yield spreads over other bonds widened. The 10-year U.S.-Chinese spread is now 190 basis points, the widest since 2006, and the 2-year U.S.-Japanese spread is well above 500 bps and pushing dollar/yen closer to the 150.00 level.

      In China, the turmoil, intrigue and uncertainty surrounding Evergrande is deepening, as Bloomberg reported on Wednesday that the company’s chairman had been placed under police surveillance.

      The world’s most indebted developer with more than $300 billion in total liabilities is at the center of an unprecedented liquidity crisis in China’s property sector, which accounts for roughly a quarter of the economy.

      China’s creaking property market is depressing world copper prices – often seen as a bellwether for the global economy – so Evergrande’s debt restructuring has implications far beyond China’s borders.
      …
      https://www.reuters.com/markets/asia/global-markets-view-asia-graphics-pix-2023-09-27/

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