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There’s A Lot Of People That Have A Lot Invested And They’re Going Bankrupt

A report from Bloomberg. “Eighteen months ago, homes in the booming suburbs north of Nashville wouldn’t even stay on the market for a day, said Don Hackford, a real estate agent in Hendersonville, Tennessee. Nowadays, a developer client recently pulled two homes off the market after getting some low-ball offers. ‘Everything has kind of stagnated, and it’s frustrating for Realtors, because it’s like we’re being shut out,’ Hackford said. ‘There’s no work.’ The number of active single-family home listings in the Punta Gorda area has doubled to 2,143 over the past year. Meantime, the median sale price of a single-family home fell by almost $30,000 to $351,000 in April from a year ago, said Leanne Walker, president of Realtors of Punta Gorda-Port Charlotte-North Port-DeSoto Inc. ‘It has gotten very flat,’ Walker said. ‘It has become very much a buyer’s market. Lots of price reductions happening.'”

KENS San Antonio in Texas. “One study found what was once a seller’s market, isn’t the case now. Part of the reason the tide is starting to turn is because there is slightly larger inventory of homes. Brian Mylar, a realtor with Coldwell Banker Deanne Harper Realtors told KENS 5, ‘You’d like to say it is a sellers market, but there still isn’t enough houses out there to meet the demand, but it’s really not because buyers have a lot of leverage in this situation because the interest rates are a little higher than people would like them right now.'”

“When it comes to buyers, Mylar has this advice: ‘You can dream all you want, but if you don’t have the pre-approval for financing to buy a house, you can’t do anything. Second of all, I guess is be patient and negotiate, because the longer a house has been on the market, the more the seller is going to negotiate with you and drop that price, maybe give you some concessions.’ And when it comes to selling, ‘There aren’t the multiple offer situations. Houses are staying on the market longer. So just be patient. Make sure your house is in great shape. Make sure you market it well. It will sell, but it’s taking a little longer,’ said Mylar.”

Hawaii Real Estate Dreams. “Now each owner wants as much as possible for their condo when the time comes to sell. No one blames them, but when you get no offers the market is telling you something about your pricing or your condo or both. Personally I think it is also now much more about the carrying costs since they are much higher than they used to be. So prices have to drop to make the buyer’s initial investment work for them. Buyers will look at the fees, property taxes, and insurance to tell them if the asking price makes sense for them. Vacation rentals have had a rough month here. The governor signed the bill to make it possible for all counties to change the existing vacation rental zoning without agreement from anyone… sigh. This will create all kinds of issues.”

CBS Sacramento. “With California’s housing needs already sky-high, one Stanislaus County city is facing challenges when trying to build more homes. A 40-home neighborhood in Ceres has sat empty and abandoned for almost two years now. The developer that started pulled out about a month ago, but one city councilwoman, Rosalinda Vierra, in charge of the district said there hasn’t been activity on the lot for over a year. ‘We need to do something and get someone to finish the homes or redo the homes that have been vacant for three years,’ Vierra said. She said the Tuscany Village housing development on Whitmore Avenue is an eyesore.”

“‘It’s coming down to the funding,’ she said. ‘The bank pulled the loans so the developer wasn’t able to retrieve the loans.’ That developer, CBS13 learned, is CEC Homes. Vierra said that CEC Homes slowly moved away from the project about a year ago before completely abandoning it. ‘The builder lost construction and the contractor lost, so that’s when we started seeing squatters and other activities,’ she said. She said homeless people took advantage by breaking in and living inside the homes. Empty shampoo bottles and clothes are still there from their stay. Copper wire was stripped from homes and water heaters installed by the developer were gone. Options for the village are running short. Without an investor, the 40 lots sit empty, and the ones with homes are unfinished.”

The Orange County Register in California. “The former Pacific Life office tower at 45 Enterprise in Aliso Viejo recently sold for $44.2 million, nearly half its listing price of 2023. Not long after it laid off 300 workers, many of them in Orange County, the insurance giant vacated the building, consolidating to its cantilevered, 1970s-era Newport Beach headquarters in the Fashion Island loop. The company listed the Aliso Viejo property in mid-2023 for $80 million, the Orange County Business Journal reported at the time.”

From Bisnow. “After eclipsing office during the pandemic, the once-booming lab real estate market is falling back to Earth. As recent reports and data show, life sciences space is now showing many similarities to other struggling real estate sectors. ‘I think this could be the most challenging Boston life sciences market in quite some time,’ said JLL Executive Managing Director Chad Urie, who focuses on lab real estate. ‘It’s just a completely overbuilt situation.'”

From Fortune. “The rise of private credit over the past decade has been nothing short of monumental. But JPMorgan Chase CEO Jamie Dimon warned this week that parts of the burgeoning sector have some of the same problems that the mortgage market had prior to the Great Recession of 2008, including questionable credit ratings from ratings agencies. ‘I’ve seen a couple of these deals that were rated by a ratings agency, and I have to confess it shocked me what they got rated,’ he said at a conference, per Bloomberg. ‘It reminds me a little bit of mortgages.’ Dimon was left wondering what happens ‘if a little old lady finds out that she can’t get her money back. When the sh**t hits the fan—and it will one day, we don’t know when—there will be a lot of stranded borrowers,’ he added.”

CBC News in Canada. “Gary Busch says the Epic Alliance business model smelled like fraud from the start. Today, people who lost their life savings when the Saskatoon real estate investment company collapsed in 2022 are still wondering whether Busch was right. Busch is the broker-owner of Century 21 Fusion in Saskatoon. The veteran Realtor became suspicious of Epic’s practices in June 2020. ‘There’s a company and they’re buying 20 to 30 houses a month, and these prices are being inflated,’ he said in an interview. ‘And I don’t know what’s going on for sure, but I think there could be some mortgage fraud, or there’s some manipulation of facts here. We’re not Toronto. We’re not going up 50 per cent in a year. That does not happen here, so it was very out of character that these houses were suddenly worth $50,000 more … it just didn’t feel right, didn’t look right.'”

“The hundreds of homes Epic bought for investors — and was supposed to manage for them — were turned back to the investors in 2022 when it folded. Lena Jerabek is a British Columbia investor who also wants answers. ‘I would like to know where the money went,’ she said. ‘There are people that lost their life savings, their retirement. I spoke to a lot of them. I spent hours on the phone with people and investors across Canada.’ Jerabek and her husband loaned Epic Alliance $280,000 in 2021 to buy a home in the Meadowgreen neighbourhood in Saskatoon. The idea was to renovate the property and then sell it for a profit. The home was eventually appraised at $255,000. Jerabek said the couple is in the final stages of selling the house, ‘and I will take a loss.'”

The Globe and Mail in Canada. “In the past, it was marijuana grow operations that posed a costly nuisance for landlords. Today, it’s people who are willing to flout the law to make easy cash on a site like Airbnb, willing to risk the consequences of fines – if they face any consequences at all. ‘Unfortunately, I think there’s a huge group that are [saying], ‘just giving me the slap on the wrist. I’ll make my money and I’ll pay my fine.’ It’s the cost of doing business, of [saying] ‘I’m going to go bump the rules and I know all the ways around it, and there’s so much protection for tenants that I’m going to use it now to my benefit,’ says Mark Teasdale, chief operations officer for Vancouver property management company Unique Real Estate Accommodations.”

“Mr. Teasdale, who is also a computer programmer, did his own data search and found 213 cases of Airbnb listings in Vancouver that do not have a valid licence with the city. He says that is a conservative figure. He is also aware that there are desperate owners who’ve been hit hard by the change in rules – people who’d invested in properties who can no longer count on short-term rental incomes that had been thousands of dollars a month. Properties that might have brought in $8,000 a month as short-term rentals may only get $3,000 a month on long-term rental contracts. ‘There’s a lot of people that have a lot invested and they’re going bankrupt. And they’re just saying, ‘Screw it. I’m going to continue doing it the way I am.’”

Domain News in Australia. “As many as one in 30 households have fallen behind on their mortgage repayments in a string of western Sydney suburbs and the Illawarra. Some 3.53 per cent of home loans in Abbotsbury in Sydney’s south-west are at least 30 days in arrears, Moody’s Ratings warns, as owners are hard hit by higher interest rates and the rising cost of living. Mortgage broker Rob Lees is seeing households under pressure cut their discretionary spending to manage their mortgage repayments. He referred one couple to their bank’s hardship arrangements even though both were working. They had savings to draw on, but their funds had almost run out. ‘People that took out very big loans when rates were very low, it tends to be if people have million-dollar type loans even with two incomes that tends to be the people who are saying they’re struggling,’ Lees said.”

Radio New Zealand. “Extra work – and fewer sales – may be prompting some real estate sales people to leave the industry. Brooke Gibson has been a real estate salesperson for 18 months. It has been a tougher market than in years prior and she says salespeople are having to work harder. ‘To be honest, it’s a buyer’s market. We are having more problems with finding buyers.’ In late 2020, at the busiest time of the market, more than 10,000 houses changed hands in a single month. That number was 5559 in April – or about one sale for every three licensed industry participants. Meanwhile, the national median sale price has dropped from $925,000 in November 2021 to $790,000 last month.”

“Gibson has not seen salespeople in her office leave yet but is aware of some in other firms who are taking on full-time jobs and just “moonlighting” in real estate. ‘I don’t think we’ve seen the worst of it yet,’ Gibson said. ‘You do what you do to get through. Tough times make strong people and we’ll see the good ones hang around. It’s been so easy for so long there are people who probably shouldn’t be here.'”

From Biz Community. “‘In South Africa, we can expect our own election to put the property market into a temporary holding pattern, dragging on the subtle buyer’s market we have been experiencing’ says Renier Kriek, managing director at Sentinel Homes. ‘If you want to buy, buy now and don’t be put off by sentiment-driven hesitance that currently prevails in the market election sentiment,’ advises Kriek. ‘In the South African property property market, due to structural factors, what goes down must eventually come up.'”

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This Post Has 83 Comments

  1. HBB warning to readers: bloomberg is globalist scum media that peddles conspiracy theories, election lies and mis, mal and dis-informations.

  2. ‘one Stanislaus County city is facing challenges when trying to build more homes. A 40-home neighborhood in Ceres has sat empty and abandoned for almost two years now. The developer that started pulled out about a month ago, but one city councilwoman, Rosalinda Vierra, in charge of the district said there hasn’t been activity on the lot for over a year. ‘We need to do something and get someone to finish the homes or redo the homes that have been vacant for three years,’ Vierra said. She said the Tuscany Village housing development on Whitmore Avenue is an eyesore’

    Are we there yet? I’ve never heard of this sh$thole.

    1. “I’ve never heard of this sh$thole.”

      If your Modesto shack is foreclosed Ceres is the next step down.

  4. ‘some of the same problems that the mortgage market had prior to the Great Recession of 2008, including questionable credit ratings from ratings agencies. ‘I’ve seen a couple of these deals that were rated by a ratings agency, and I have to confess it shocked me what they got rated,’ he said at a conference, per Bloomberg. ‘It reminds me a little bit of mortgages.’ Dimon was left wondering what happens ‘if a little old lady finds out that she can’t get her money back’

    Senator running deer heap angry Jamie.

    1. Somehow Senator Running Deer’s bloviating for the cameras never turns into actual reforms or accountability for financial sector malefactors.

  5. ‘Everything has kind of stagnated, and it’s frustrating for Realtors, because it’s like we’re being shut out,’ Hackford said. ‘There’s no work.’

    Get a real job, parasites.

  6. The governor signed the bill to make it possible for all counties to change the existing vacation rental zoning without agreement from anyone… sigh. This will create all kinds of issues.”

    This will be a long-overdue first step for residential property owners to reclaim their neighborhoods from the STR speculator scum.

    1. In context, the implication was opposite — imposition of STR in neighborhoods.
      Dictator much?
      No one needs to approve?
      Representative democracy?

      1. The governor signed a bill passed by the legislature (i.e. people’s representatives). Not a dictatorial act.

  7. Today, people who lost their life savings when the Saskatoon real estate investment company collapsed in 2022 are still wondering whether Busch was right.

    Every time housing speculator scum get defrauded due to their own greed, an angel gets its wings.

  8. ‘There’s a lot of people that have a lot invested and they’re going bankrupt. And they’re just saying, ‘Screw it. I’m going to continue doing it the way I am.’”

    Die, speculator scum. Neighbors need to be vigilant in reporting illegal STR operations to authorities, then holding their feet to the fire to make these hotels in residential areas financially nonviable for the housing speculator scum.

  9. The Wall Street Journal is a Murdoch owned, controlled opposition, globalist rag.

    Wall Street Journal — Mass Deportation Would Be a Disaster (5/28/2024):

    “But the issue won’t go away, and the recent surge in illegal crossings at the southern border has moved the issue to the center of the 2024 presidential contest. A Wall Street Journal poll conducted in March found that, in seven swing states, immigration ranked as one of voters’ top two concerns. Americans are right to be worried, and it’s wrong to defend mass violations of U.S. law, but the unfortunate reality is that there’s no easy fix.

    One important aspect of immigration is its effect on demographics. For a population to replace itself, according to demographers, women must have an average of 2.1 children each. The U.S. has fallen below replacement rate in most years since the 1970s. The Centers for Disease Control and Prevention reported in April that the fertility rate in 2023 was 1.62, the lowest on record. The fertility rate is falling in other countries as well, both in advanced and in developing economies.

    A low fertility rate means fewer young adults entering the workforce to replace retirees, leading to labor shortages—unless immigration makes up the difference. In a recent analysis published in these pages, TrendMacro CEO Donald Luskin estimated that foreign-born people represent 80% of the adult-population increase in the U.S. since July 2022 and account for 71% of the 2.5 million new jobs. Without these workers, he estimated, the economy would have grown “less than a third as much as it actually has.”

    Economy > the sovereignty of the nation, got it, WSJ.

    “These economic considerations haven’t changed the minds of most Americans, who see firsthand the pressure that new immigrants put on housing markets, public schools and local public services.”

    https://archive.ph/mYG5S

    That last quoted paragraph is a reluctant admission.

    Paul Krugman weeping at the thought of having to pay living wages to his maid and cook and butler 🙁

  11. Something strange is going on in Europe’s power markets: Prices keep dropping below zero. Solar parks on Spanish plains and wind turbines above Norwegian fjords were so productive in May that a record share of clean electricity flooded the grid. At times, supply vastly exceeded demand, and producers needed to do something with all that energy.

    For more than a million consumers, that meant getting free electricity to heat their homes or charge their vehicles. While good for them, the phenomenon is happening so frequently it’s raising concerns among investors about how much more renewable power they can build into an $800 billion market before returns start to suffer.

    There was a twelvefold increase in the occurrence of negative wholesale prices last year, according to the European Union market monitor known as ACER. An agency report from March called it “an explosion,” with the highest number of instances in the Nordic region.

    Germany, Europe’s biggest power market, had about 300 hours with prices below zero last year. That may double in 2024, according to energy analytics firm EnAppSys Ltd. In the UK, the number of negative hours will grow fivefold by 2027 to surpass 1,000, industry consultant Modo Energy said.

    So what’s the solution for producers and investors? The obvious one is to build more batteries — ranging from freezer-sized installations at someone’s home to rows of freight containers in a field. They would store the excess electricity for distribution at times when the wind isn’t blowing or the sun isn’t shining.

    The phenomenon is spreading quickly outside Europe, as well.

    In Australia, prices across the National Electricity Market fell below zero a record 14% of the time last year, according to BloombergNEF. That percentage has increased steadily since 2018, and capacity issues are projected to worsen with the continued building of new renewable sources and the uptake of rooftop solar.

    Parts of California saw prices fall deeper into negative territory amid a burst of new solar projects and low gas prices. Through April, there were 592 hours during which electricity cleared below zero — already more than last year’s total.

    “When you get negative prices, you charge your car to the max, heat the house 1-2C extra as well as ramp up the water heater,” said user Kim Poulsen, who lives north of Gothenburg, Sweden.

    The growth in subzero prices won’t tail off until the mid-2030s, said Ed Porter, a Modo Energy director. That’s when Europe’s energy storage systems should be big enough to absorb the excess and make a meaningful impact on prices.

    https://finance.yahoo.com/news/bursts-free-power-raise-red-070001073.html

      1. Norway is 92% hydro, which means that it is at most 8% wind. Colorado is 20% wind, and electric rates keep rising. Free electricity? Dream on.

      1. I don’t understand their nuclear fears. The German engineers could certainly come up with some better nuclear plant designs than what the French are using.

      2. This while Germany is shutting down factories and restarting coal fired plants?
        Something doesn’t smell right with this story. Maybe, although IMHO unlikely, there is excess power when neither heating nor cooling is needed. However, solar doesn’t work very well in the winter in England so when you really need the power to stay warm it “ain’t” there. Fossil fuels need to there.

  12. It was supposed to do the heavy lifting for Canada’s greenhouse gas emissions targets.

    And it was supposed to remain a major part of Prime Minister Justin Trudeau’s legacy, both at home and abroad — part of an urgent global push to fight climate change.

    But instead of fulfilling those Liberal hopes, carbon pricing has become a significant political liability.

    Did the Liberals drop the ball?

    Or was the policy always destined for failure?

    Research suggests the Liberals may be fighting a losing battle, and some experts are urging policymakers to look for alternative policies to lower emissions, warning the threat of climate change is too dire to delay action.

    “It’s very hard to find places with high, economy-wide carbon prices that have not generated significant political backlash,” said Matto Mildenberger, an assistant professor of political science at the University of California Santa Barbara. “That leads political scientists like myself to have real reservations about how viable carbon pricing is as a short-term strategy to confront the climate crisis.”

    But as the Conservatives maintain a double-digit lead in public opinion polls, carbon pricing’s future is in serious doubt.

    “Canadians feel the pain of Justin Trudeau’s punishing carbon tax every day when they buy food, pump gas and heat their homes and don’t need the opinions of pointy-headed ‘experts’ and radical Liberal politicians to know they are far worse off,” Sebastian Skamski, a spokesman for Poilievre, said in a statement.

    https://www.msn.com/en-ca/news/canada/is-carbon-pricing-a-politically-feasible-climate-policy-research-says-maybe-not/ar-BB1nr1B0

  13. Justin Trudeau’s woke tyranny offers a warning of Britain under Starmer

    Justin Trudeau, the prime minister of Canada, wants to make the world a better place. The former high school teacher is a real Good Guy, calls himself a “social activist”, and speaks with perky gentility; he is famous for politeness. His virtuous impulses have been visible everywhere from his big-hearted approach to refugees (a policy of welcoming tens of thousands of unvetted immigrants per year from countries with documented connections to terrorism) to his zest for apologising to the point of nationally-enforced self-flagellation for Canada’s racist past, especially its treatment of indigenous Canadians.

    So far, so par for the contemporary progressive course, whether that’s Trudeau’s Liberals, the new guard of the American Democrats or Britain’s Labour Party, which was ruined under Corbyn. Indeed, reading about the mounting pile of horrors in Canada under the cherubic Trudeau, it is hard not to see a similar fate looming for Britain under Sir Keir Starmer. Unlike Trudeau, Starmer’s animating force is a bit opaque; he’s less of a die-hard activist than Trudeau, but his record of flip flopping, and being jerked around by the truly terrifying elements of his party, suggests he could unwittingly lead us towards a hell under, if not of, his making. Just like Trudeau has done in Canada.

    Canada, once a pleasant backwater largely beneath international notice, has become a useful warning to countries poised to elect leftists in the present era of mass migration, gender madness and the obsession with race. Under Trudeau’s woke watch, Canada has begun to economically founder under the extreme shock of the 1.3 million migrants given permanent status in Canada since 2016. In his haste to condemn xenophobia by adopting an extremely liberal approach to migration, but with no regard for skills or management, Trudeau has caused overcrowding of healthcare and public facilities, soaring cost of services and above all soaring housing costs in certain areas. The former is widely agreed to have contributed to the country’s highest rate of inflation in 18 years.

    Socially and culturally, the results of the country’s Liberal leadership have been dire. This former paradise of snow and woods has become something of a dystopia in which – under its new Gender Identity Bill C-16, using the “wrong” pronoun could, some argue, constitute a crime. This means men can call themselves women and everyone has to agree or they could face jail.

    Meanwhile, the opioid crisis has intensified, institutional wokeness has reached new extremes, and euthanasia and cannabis have both been legalised. In a desire to be that Good Guy, and to please his hard leftist party, Trudeau appears to a great many people to have utterly destroyed Canada.

    The road to hell is certainly paved with good intentions. I listened to Trudeau expound on his policies and beliefs in a lengthy interview on a podcast recently. He sounded pretty good to me. Switched on, intelligent, in pursuit of happiness for all. Except that’s not how contemporary leftist politics unfolds; Trudeau’s desire to reform has translated to destruction of what was good and its replacement with fear and violence. Monstrous elements in once moderate left-wing parties now run the show; Canada’s and, I fear, soon ours.

    Regardless of his good intentions, Starmer wobbles over whether to pacify the grim reapers of his party – the Israel-hating brigade, the woke maniacs, the Green fanatics, the Remain obsessives. In doing so, he is already giving them the whip hand, and once he’s elected, the results could be truly terrifying.

    https://www.yahoo.com/news/justin-trudeau-woke-tyranny-offers-180000798.html

    2. The Brits are going to put this commie into 10 Downing St. Britain is already a sh!thole dystopia under the Tories. It’s going to become a nightmare under Labour.

    3. “by adopting an extremely liberal approach to migration, but with no regard for skills or management, Trudeau has caused overcrowding of healthcare and public facilities, soaring cost of services and above all soaring housing costs in certain areas.”

      Can you say Cloward–Piven strategy? Sure you can. I knew you could.

      3. This not liberal, it is lawless. Tyrannical anarchy and destruction is not liberal. The choice of words of MSM is total brainwashing.

        1. No, this particular description is accurate. It is liberal politics that is making this possible there and here in the US also. Call it like it is.

  14. This is kinda weird. It’s a Chinese guberment site with a 4 minute video on Florida condo crater:

    In the aftermath of the tragic collapse of a high-rise condominium complex in South Florida three years ago, new regulations were enacted to ensure the safety of residents living in other aging condo buildings. Now, a so-called ‘condo crisis’ is gripping Florida, as many owners find themselves caught in a financial storm due to the hefty costs of mandated repairs and updates. CGTN’s Nitza Soledad Perez reports.

    https://america.cgtn.com/2024/06/01/owners-struggle-to-pay-for-new-safety-requirements-in-florida

  15. To find the value of the house before the bubble, we can use the formula:

    It is NOT a buyers market! Eventhough the Nashville house has decreased 30K to $351,000 it is still waaay to high:

    Original Value = Current Value / (1 + Appreciation Rate)
    Given: Current Value = $351,000 Appreciation Rate = 117.4% = 1.174
    Original Value = $351,000 / (1 + 1.174) Original Value ≈ $160,000

    So, the house was worth approximately $160,000 before the bubble.
    The housing bubble burst in 2007, but we’ll consider the period around 2003 as the starting point. According to the California Real Estate Market snippet, home values in California rose by 40.6% in the last 5 years (2019-2024). This indicates a steady growth in home prices over the past two decades.

    To estimate the increase in real estate prices since 2003, we can use the median home price data. In 2003, the median home price in California was around $340,000 (according to Zillow). Fast-forward to 2024, the median home price is approximately $739,000 (as mentioned in the California Real Estate Market snippet).

    Calculation:

    Start with the 2003 median home price: $340,000
    Calculate the increase: $739,000 (2024) – $340,000 (2003) = $399,000
    Calculate the percentage increase: ($399,000 / $340,000) x 100% ≈ 117.4%

    Conclusion:

    Real estate prices have increased by approximately 117.4% from around 2003 to 2024. This significant growth indicates a substantial appreciation in property values over the past two decades.

    1. “To find the value of the house before the bubble…”

      house value = 20% down + 2.5 x gross income

      * True then, true today!

      1. Depending on if you can find a job. My high tech career evaporated to H1-B foreign workers and offshoring. From then on my salary did not increase but decreased if I could find a job at all. I finally gave up as there is real age discrimination and now of course everything is woke.

        The only way I can get out of an apartment is if the housing prices decrease and of course the apartment prices increased dramatically at the same time.

        1. My high tech career evaporated to H1-B foreign workers and offshoring.

          Now now, the official story is you and all other Americans were just too stupid to learn skills and earn certifications.

          /sarcasm

  16. The 2000s United States housing bubble was a complex phenomenon with multiple factors contributing to its development. While it is difficult to attribute the bubble solely to one individual or entity, President George W. Bush’s policies and actions played a significant role in its creation.

    Tax Policy

    Bush’s 2001 and 2003 tax cuts, particularly the reduction of the top marginal tax rate from 39.6% to 35%, increased disposable income and encouraged consumer spending, including on housing. This, in turn, fueled demand for housing and drove up prices.

    Low Interest Rates

    The Federal Reserve, led by Chairman Alan Greenspan, kept interest rates low from 2001 to 2004 to stimulate the economy. Low interest rates made it easier for people to borrow money to purchase homes, further increasing demand and driving up prices.

    Deregulation

    The Gramm-Leach-Bliley Act of 1999 repealed parts of the Glass-Steagall Act of 1933, allowing commercial banks to engage in investment activities. This deregulation led to the creation of complex financial instruments, such as subprime mortgages, which were packaged and sold as securities.

    Subprime Lending

    The proliferation of subprime lending, which allowed borrowers with poor credit to obtain mortgages, contributed to the bubble. Many of these mortgages were packaged and sold as securities, spreading the risk throughout the financial system.

    Government Policies

    The Bush administration’s policies, such as the American Dream Down Payment Initiative (2003) and the Federal Housing Administration’s (FHA) increase in loan limits (2004), aimed to increase homeownership rates and make housing more affordable. While these policies had good intentions, they inadvertently encouraged speculation and fueled the bubble.

    Timeline

    The housing bubble began to form in the early 2000s, with prices rising steadily until 2006. The bubble burst in 2007-2008, leading to a global financial crisis.

    Key Events

    2001: Bush signs the Economic Growth and Tax Relief Reconciliation Act, which reduces the top marginal tax rate.
    2003: The American Dream Down Payment Initiative is launched to increase homeownership rates.
    2004: The Federal Reserve raises interest rates, but they remain low by historical standards.
    2004: The FHA increases loan limits to make housing more affordable.
    2006: Housing prices peak and begin to decline.
    2007-2008: The housing bubble bursts, leading to a global financial crisis.

    In summary, while President Bush’s policies and actions contributed to the 2000s United States housing bubble, it was a complex phenomenon with multiple factors at play. The combination of tax cuts, low interest rates, deregulation, subprime lending, and government policies created an environment that encouraged speculation and fueled the bubble.

    1. Nice synopsis. And thank you for being careful to say that Gramm-Leach-Bliley only repealed *parts* of Glass-Steagall. So many people have carelessly claimed online that “Glass-Steagall was repealed”, when actually it was only the curbs on speculation that were removed.

      The Glass-Steagall Act created the FDIC, so if it had been repealed in its entirety, we would no longer have that agency purporting to backstop bank deposits. This would probably be a good thing for the economy, as it would force depositors to keep a much closer watch on banks’ lending practices.

    2. “2007-2008: The housing bubble bursts, leading to a global financial crisis.”

      2009-2012 and beyond: A floor is put in under crashing prices by allowing “victims” of robo signing to live in “their houses” for years without making any payments before foreclosing and allowing the massive number of foreclosures to be trickled out slowly over a number of years.

  17. A reader sent these in:

    In my neighborhood – highest RE inventory in the last 4 years but prices are the highest I’ve seen to date – sellers will throw up their place for a month and just delist. (Cheapest listing 700 which means $6k/mo all in). Doesn’t pencil for an HHI <225k.

    Have seen a few price cuts but not enough to get people dropping $1.4 mm.

    https://x.com/DonMiami3/status/1796955571867795679

    Canada Pension Plan Investment Board recently sold its stake in a Manhattan office building for $7M after acquiring it for $57M in 2012.

    Almost a 90% ‘haircut’ – shocking to say the least…

    Address: 10 E 53rd St

    https://x.com/TripleNetInvest/status/1796707908300030229

    Roughly 1 in 4 four single family homes in Fort Worth are owned by an investor, company or corporation.

    https://x.com/dailyjobcuts/status/1796676795263046019

    What’s the strong economy part they talk about? The Chicago pmi was depression level yesterday

    https://x.com/jbulltard1/status/1796943066684637613

    2024 rate cuts secured

    https://x.com/NorthmanTrader/status/1796955932464763367

    What if building an economy around weed, money laundering, and strip mall colleges was a bad idea?

    https://x.com/StephenPunwasi/status/1796601054001496461

    The “worst is behind us in CRE” narrative would appear to be cracking.

    “I think the worst of this is still ahead — there is no easy fix. It’s a first-in-a-generation, if not a lifetime, event.”

    https://x.com/DiMartinoBooth/status/1796612424302211239

    Worth remembering.

    https://x.com/moving_charlie/status/1796844699057103103

    Messed with the bull and got the horns.

    https://x.com/SteveInmanUIC/status/1796786983643095178

    The number of NEW single-family houses for sale has surged to 480,000 in April, the highest since the 2008 Financial Crisis.

    This came after new home sales were down 7.7% year-over-year last month, the largest drop in 13 months.

    Excluding the 2008-2009 housing crisis this is by far the largest supply of new homes in US history.

    Notably, the number of new homes on the market has more than TRIPLED in 12 years.

    Meanwhile, the median price of a new home is at $433,500 and remains near record highs.

    New homes are becoming the only option for buyers.

    https://x.com/KobeissiLetter/status/1796543508892856370

    News told me we were still short millions of homes.

    https://x.com/MacroSpeedEcon/status/1796676329347109053

    1. “Canada Pension Plan Investment Board recently sold its stake in a Manhattan office building for $7M after acquiring it for $57M in 2012.”

      The managers of the pension fund got to get (and got to keep) their hefty fees so it’s all good.

      Q. Whose money was it?

      A. Lol. It wasn’t theirs so who cares?

      1. Trudeau’s hoi polloi are going squeal like trapped feral hogs when their golden years’ promises evaporate into the ether.

    1. Markets
      Sinking Profits Bring Reality Check to AI-Driven Rally in Emerging Market Stocks

      – Almost half of developing-country companies miss estimates

      – Average earnings drop 10% amid sluggish consumer demand

      By Srinivasan Sivabalan and Selcuk Gokoluk
      June 2, 2024 at 5:00 AM PDT

      Just as enthusiasm over artificial intelligence and China’s stimulus fades, a familiar weakness has come back to haunt equity investors in emerging markets: sinking corporate profits.

      With 96% of companies in the MSCI Emerging Markets Index done with their quarterly results, the earnings season is almost over. And the picture isn’t pretty — Almost half of the companies have missed analyst estimates, average profits have slumped 10% compared with the prior-year period and for every dollar of predicted earnings, companies are bringing home only 86 cents. Two years ago an 18% rise in profits helped EM companies smash projections.
      …
      https://www.bloomberg.com/news/articles/2024-06-02/sinking-profits-bring-reality-check-to-ai-driven-rally-in-emerging-market-stocks

    2. Do you expect a Great Muppet Reaping this fall, with bailouts to the 0.1% so they can snap up devalued assets at fire sale prices…like in the aftermath of the Fall 2008 financial collapse?

      1. BofA investment chief reveals his 2nd-half playbook: Buy dips in bonds, and sell stocks after the first rate cut
        Matthew Fox
        Jun 2, 2024, 5:11 AM PDT
        NYSE trader
        Spencer Platt/Getty Images

        – Investors should buy dips in bonds and sell stocks after the Fed’s first interest rate cut, according to Bank of America.

        – The call from Bank of America investment strategist Michael Hartnett is a reversal of his “anything but bonds trade.”

        – The Federal Reserve is expected to cut interest rates in the second half of the year.

        Bank of America investment strategist Michael Hartnett is shaking up his trading playbook for the second half of the year.

        In a note on Friday, Hartnett recommended investors buy dips in bonds and sell stocks after the Federal Reserve makes its first interest rate cut.

        The Fed is largely expected to begin cutting interest rates in the second half of the year, with the first cut most likely occurring at the September FOMC meeting, according to the CME FedWatch Tool.

        Hartnett’s call is a reversal of his “anything but bonds” call, which was based on the idea that AI is taking over the stock market and therefore few other assets were able to grab the attention and money of investors.
        Advertisement

        But after a relatively “benign” April Core PCE report was unable to boost technology stocks on Friday, Hartnett is getting more confident about turning more bullish on bonds.

        “Cyclical always able to trump secular and we say 3Ps of Positioning, Profits, Policy means H2 reversal of ‘ABB’ Anything But Bonds trade,” Hartnett said.

        That means investors should “buy any dip in bond prices,” Hartnett added.

        Here are the three reasons why investors should put their focus on bonds rather than stocks in the second half of 2024, according to Hartnett.

        “Investors very long cash, IG bonds, stocks/tech, some long 2-year UST to play Fed cuts, but no one long 30-year on debt dynamics/concern slowdown = more fiscal excess; lower long yields v obvious ‘pain trade’ in H2,” Hartnett explained in a note from mid-May.
        Profits

        “Credit & stocks reacting bullishly to ‘soft landing’ odds on rise again; but ‘hard landing’ odds too low given stagnation of real retail sales, stalling of global PMI upturn, labor market shift from ‘unambiguously strong’ to ‘ambiguously strong’ to ‘ambiguous’; 30-year Treasury best cyclical hedge for hard landing,” Hartnett said.
        Policy

        “US CPI on course to be 3¾-4½% by Nov US Presidential election; while Fed wants to cut at first opportunity, inflation in ’24 has stopped Fed from cutting, extending tight money policy; and on fiscal policy, true US government spent $6.3tn past 12 months, but 4th year of US presidential cycle always strongest for government spending; investors recognize fiscal stimulus ‘as good as it gets’; at margin monetary easier, fiscal tighter next 12 month,” Hartnett said.
        …
        https://markets.businessinsider.com/news/stocks/how-to-invest-2h24-stock-bond-market-playbook-rate-cut-2024-5

  19. Claudia Sheinbaum’s father was a member of the Mexican Communist Party. The next six years (her presidential term) are going to be interesting.

      1. “This means that while the migrants are not granted or denied asylum — their cases are “terminated without a decision on the merits of their asylum claim” — they are removed from the legal system and no longer required to check in with authorities.”

        “The move allows them to legally, indefinitely roam about the US without fear of deportation, effectively letting them slip through the cracks.”

        1. I pledge allegiance to the flag of the United States of America; and to the Republic for which it stood, one Nation under God, indivisible, with liberty and justice for those who stick with the Leftist narrative.

          1. You forgot to remove “under God”. Leftists want that removed from the pledge.

          2. one Nation with Drag Queen story hour and Cashless bail, indivisible, with liberty and justice for those who stick with the Leftist narrative.

        2. “This means that while the migrants are not granted or denied asylum — their cases are “terminated without a decision on the merits of their asylum claim” — they are removed from the legal system and no longer required to check in with authorities

          So they are left in a kind of limbo. No deportation threat, but also no SSN. And no reentry guarantee should they need to step outside the border.

    2. I read that Sheinbaum’s polling numbers have dropped, but are still above 50%. Xochitl Galvez, who is running on a PRI/PAN/PRD coalition ticket is polling in the mid 30’s and Jorge Maynez is polling in the low teens.

      It does appear that Sheinbaum is going to win. Her promises of even more transfer payments to the poor is what is propelling her victory. These payments are chump change by US standards, but were non existent a couple of decades ago and are funded in part by increased VAT rates (currently 16%) and income tax.

      The private sector is worried, and has been under AMLO as domestic investment has dropped, and is bracing for the worst. It is likely that Sheinbaum will be friendly to foreign investment, especially from the US, but unless she can do something about crime then foreign investment could dry up. I think her current lip service to green energy is to curry favor with US leftists.

      But the lack of law and order is a huge problem. There is a city about a 2 hours drive north of Mexico City called Queretaro. Over the past decade Queretaro drew a lot of multinational investment because it was easier to deal with than Mexico City as it only has 1.5 million people and was considered safe. The multilane highway that connects it with Mexico City is not currently safe, even with the federal police (Guardia Nacional) patrolling it, and semis laden with cargo are frequently hijacked and people in cars are robbed. Organized crime in Queretaro is on the rise.

      It’s going to get worse and as it does the Mexodus will go back into overdrive.

    1. Several cities on the high crime list are where or near where my family or close relatives have lived. It’s not that fun always having to watch your back, but endemic crime does help keep housing costs affordable.

  23. ‘Eighteen months ago, homes in the booming suburbs north of Nashville wouldn’t even stay on the market for a day, said Don Hackford, a real estate agent in Hendersonville, Tennessee. Nowadays, a developer client recently pulled two homes off the market after getting some low-ball offers. ‘Everything has kind of stagnated, and it’s frustrating for Realtors, because it’s like we’re being shut out,’ Hackford said. ‘There’s no work’

    I’m sure you socked away all that easy money Don, and good luck with the job search. I hope no one overpaid in such an environment!

    1. And that’s with Oracle announcing they are moving their HQ to Nashville. That has to be good for at least 2000 six figure relocators. Granted, that isn’t happening overnight.

  24. ‘You’d like to say it is a sellers market, but there still isn’t enough houses out there to meet the demand, but it’s really not because buyers have a lot of leverage in this situation’

    Not supposed to say that Brian.

  25. ‘The former Pacific Life office tower at 45 Enterprise in Aliso Viejo recently sold for $44.2 million, nearly half its listing price of 2023’

    Half? Par la sacredié!

  26. ‘I think this could be the most challenging Boston life sciences market in quite some time’…who focuses on lab real estate. ‘It’s just a completely overbuilt situation’

    We all make mistakes Chad, don’t be so hard on yerself.

  27. ‘The veteran Realtor became suspicious of Epic’s practices in June 2020. ‘There’s a company and they’re buying 20 to 30 houses a month, and these prices are being inflated,’ he said in an interview. ‘And I don’t know what’s going on for sure, but I think there could be some mortgage fraud, or there’s some manipulation of facts here. We’re not Toronto. We’re not going up 50 per cent in a year. That does not happen here, so it was very out of character that these houses were suddenly worth $50,000 more … it just didn’t feel right, didn’t look right’

    Well well, this story is following a predictable path. We’re a couple few years in on this ponzi, and now we hear – mortgage fraud! So we knew the investors got hosed but now that the lenders were deceived?

    Sound lending!

  28. ‘The hundreds of homes Epic bought for investors — and was supposed to manage for them — were turned back to the investors in 2022 when it folded. Lena Jerabek is a British Columbia investor who also wants answers. ‘I would like to know where the money went,’ she said. ‘There are people that lost their life savings, their retirement. I spoke to a lot of them. I spent hours on the phone with people and investors across Canada.’ Jerabek and her husband loaned Epic Alliance $280,000 in 2021 to buy a home in the Meadowgreen neighbourhood in Saskatoon. The idea was to renovate the property and then sell it for a profit. The home was eventually appraised at $255,000. Jerabek said the couple is in the final stages of selling the house, ‘and I will take a loss’

    Lena:

    Ennio Morricone – the ecstasy of gold
    theItalyWiki

    13 years ago

    Ennio Morricone conducting his own composition, “The Ecstasy of Gold” from the film, “The Good, the Bad and the Ugly”.

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

    3:45.

        1. That’s quite a cast list, including songwriter Carole King!

          1967 Colgems Records
          Acoustic Guitar: Bill Chadwick
          Bass Guitar: Chip Douglas
          Producer: Chip Douglas
          Backing Vocals: Davy Jones
          Drums, Percussion: Eddie Hoh
          Engineer: Hank Cicalo
          Electric Guitar: Michael Nesmith
          Background Vocals: Michael Nesmith
          Drums, Timpani: Micky Dolenz
          Lead Vocals: Micky Dolenz
          Organ, Piano: Peter Tork
          Writer: Carole King
          Writer: Gerry Goffin

    2. Great song!

      Goodbye Stranger · Supertramp

      “Now some they do and some they don’t
      And some you just can’t tell
      And some they will and some they won’t
      With some it’s just as well”

  30. ‘Unfortunately, I think there’s a huge group that are [saying], ‘just giving me the slap on the wrist. I’ll make my money and I’ll pay my fine.’ It’s the cost of doing business, of [saying] ‘I’m going to go bump the rules and I know all the ways around it, and there’s so much protection for tenants that I’m going to use it now to my benefit’

    Here’s a new angle too. STR crooks are using BC’s lenient tenant eviction proceedings to rent illegally. This is the so-called ‘arbitrage’ where they use rental apartment/condo airboxes for STR.

    ‘people who’d invested in properties who can no longer count on short-term rental incomes that had been thousands of dollars a month. Properties that might have brought in $8,000 a month as short-term rentals may only get $3,000 a month on long-term rental contracts. ‘There’s a lot of people that have a lot invested and they’re going bankrupt. And they’re just saying, ‘Screw it. I’m going to continue doing it the way I am’

    Sound lending! Nobody could have seen this coming.

  31. ‘Mortgage broker Rob Lees is seeing households under pressure cut their discretionary spending to manage their mortgage repayments. He referred one couple to their bank’s hardship arrangements even though both were working. They had savings to draw on, but their funds had almost run out. ‘People that took out very big loans when rates were very low, it tends to be if people have million-dollar type loans even with two incomes that tends to be the people who are saying they’re struggling’

    That may be Rob, but these winnahs! are never going to give it away.

    1. “They had savings to draw on, but their funds had almost run out.”

      There’s no loving for Gandhi.

  32. ‘Gibson has not seen salespeople in her office leave yet but is aware of some in other firms who are taking on full-time jobs and just “moonlighting” in real estate. ‘I don’t think we’ve seen the worst of it yet,’ Gibson said. ‘You do what you do to get through. Tough times make strong people and we’ll see the good ones hang around. It’s been so easy for so long there are people who probably shouldn’t be here’

    That’s the spirit Brooke, when that cubicle dweller files bankruptcy, take her corner unit!

  33. Dave Brubeck Quartet, ‘Jazz Casual’, KQED studio, San Francisco , October 17th, 1961 (colorized)
    ebjazz93

    2 years ago

    The Dave Brubeck Quartet and Ralph J. Gleason

    Take Five 00:00
    Interview with Dave Brubeck 04:57
    It’s a Raggy Waltz 11:12
    Castillian Blues 17:48
    Waltz Limp 24:00
    Blue Rondo a la Turk 26:21

    Dave Brubeck (piano), Paul Desmond,(alto sax), Joe Morello (drums), Gene Wright (bass).

    https://www.youtube.com/watch?v=ZZSxrxN_lh8

    29 minutes.

    1. I remember hearing Take Five when I was a puppy and again from the movie Pleasantville.

  34. REVEALED: Dr. Anthony Fauci confesses he ‘made up’ covid rules including 6 feet social distancing and masking kids

    By JON MICHAEL RAASCH
    PUBLISHED: 10:52 EDT, 2 June 2024 |

    Fauci said he does not know where the six foot social distancing rule came from
    He also said that he was unaware of studies recommending masks for kids
    READ MORE: Republicans demand Dr. Fauci’s private emails and phone records

    Bombshell testimony from Dr. Anthony Fauci reveals he made up the six foot social distancing rule and other measures to ‘protect’ Americans from covid.

    Republicans put out the full transcript of their sit down interview with Fauci from January just days before his highly-anticipated public testimony on Monday.

    They plan to grill him about covid restrictions he put in place, that he admitted didn’t do much to ‘slow the spread’ of the virus.

    https://www.dailymail.co.uk/news/article-13481839/dr-anthony-fauci-social-distancing-masks-prevent-covid.html

    1. FINANCE·HOUSING
      Home prices could start dropping this summer, marking the ‘first domino to fall’ on the way to a weaker economy, strategist says
      BY JASON MA
      June 2, 2024 at 2:44 PM PDT
      Houses falling like dominoes
      “The housing market is really the first domino to fall on what we think is going to be a slower growth story down the road,” said Brian Nick, senior investment strategist at the Macro Institute.
      GETTY IMAGES

      More homes on languishing on the market without any buyers, setting up prices to start falling as soon as this summer, according to Brian Nick, senior investment strategist at Macro Institute.
      …
      https://fortune.com/2024/06/02/housing-market-outlook-home-prices-supply-demand-imbalance-economic-growth-warning/

  36. government meddling in private enterprise.

    “The developer that started pulled out about a month ago, but one city councilwoman, Rosalinda Vierra, in charge of the district said there hasn’t been activity on the lot for over a year. ‘We need to do something and get someone to finish the homes or redo the homes that have been vacant for three years,’ Vierra said.”

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