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It’s Clear Investors Are Rushing For The Exits

A report from Honolulu Civil Beat. “When the Peninsula at Hawaii Kai condo community got news of its insurance bill for 2024, the condo owners were in for an unpleasant surprise. The association’s premium was going up almost tenfold, to $3.3 million from less than $400,000, said Kris Hanselman, an owner in the community. That would mean an increase of thousands of dollars per year, or hundreds a month, for owners, depending on the square footage of their homes, Hanselman said. It’s an unexpected cost-of-living increase that could prove too much for some families, she said. ‘That amount of money will be very hard to manage for some people,’ she said. Unfortunately for the approximately 400,000 people living in condominiums in Hawaii, the Peninsula’s experience is hardly alone.”

The Des Moines Register in Iowa. “After years of waiting, Vadim Shapiro finally got his new roof. He got a large bill, too. Shapiro, 57, said he asked his insurer for a replacement three years ago, after a hailstorm swept through his Clive neighborhood. He said a contractor believed the storm damaged his home enough to justify a new roof. A year later, in April 2022, he filed a second claim after a thunderstorm struck the neighborhood. He said wind stripped some shingles off the roof. Pekin agreed to pay. But due to a provision in Shapiro’s policy, the company would pay him only what Pekin believed his previous, 21-year-old roof was worth: $9,600. The cost for a new roof, according to Shapiro? $25,000. For two years, he said, he saved money until he could afford the $15,000 gap between Pekin’s payment and the roof’s cost. ‘Something’s better than nothing,’ he said.”

“In February, Fannie Mae and Freddie Mac representatives issued bulletins stating they require insurance policies to cover homes at ‘replacement cost value.’ In other words, policies that don’t pay the full cost for new roofs don’t comply with Fannie and Freddie’s regulations. Clifford Rossi, a University of Maryland business professor and former Freddie Mac risk management director, predicted property insurance problems like slimmed-down roof coverage will upend the home-lending market for the next decade. Banks and Wall Street investors, who buy Fannie Mae and Freddie Mac’s mortgage-backed securities and keep the country’s home-lending system flowing, say they need to know properties will be intact if homeowners default, said he worries the recent announcement will upset investors. If insurers don’t cover the full replacement costs of roofs and customers can’t pay for new ones, those investments would deteriorate. ‘Both (Fannie and Freddie) are scared to death about the fact that there isn’t a viable solution in the marketplace for homeowners insurance,’ Rossi said.”

Business Insider. “More than a year after the downfall of Silicon Valley Bank, higher interest rates are still putting pressure on the US banking system. According to the Federal Deposit Insurance Corporation’s first quarter report, the US banking system is sitting on a collective $517 billion in unrealized losses and has 63 ‘problem banks.’ Those losses have been sparked primarily by a surge in interest rates over the past two years, which have driven down the price of fixed-income securities held by banks. ‘Higher unrealized losses on residential mortgage-backed securities, resulting from higher mortgage rates in the first quarter, drove the overall increase,’ the FDIC said. ‘This is the ninth straight quarter of unusually high unrealized losses since the Federal Reserve began to raise interest rates in the first quarter 2022.'”

The New York Post on California. “Jim Carrey has hacked the price of his long-time Los Angeles estate once again. The actor, 62, initially listed his sprawling 10,954-square-foot Brentwood mansion for a hefty $28.9 million in February 2023. But the lavish pad has failed to find a buyer, prompting Carrey to repeatedly slash the price. The first cut came two months later, dropping to $27 million. By October 2023, he’d trimmed it down again to $24 million. Now, Carrey has dropped the asking price even further, settling at $21.9 million — a staggering $7 million reduction. The relentless price cuts highlight the brutal reality facing California’s luxury real estate market ever since the controversial Los Angeles mansion tax kicked in. Nearby cities haven’t been immune but are faring better. Beverly Hills saw a 24% dip in single-family sales, Santa Monica dropped 29% and Malibu declined 28%.”

“Now, Carrey finds himself the latest victim of this mansion tax mess. ‘In California, the real estate market is experiencing a dry spell. These multi-million dollar properties, if initially priced too high, can linger on the market for an extended period,’ a Los Angeles-based broker previously told The Post.”

The Mercury News in California. “A huge Sunnyvale tech campus has been bought for roughly $100 million in a deal that shows interest in Silicon Valley real estate — yet also underscores the Bay Area office market’s feeble state. The seven-building tech complex in Sunnyvale was bought for $100.8 million by an affiliate linked to Tidewater Capital. The purchase also is a reminder that the Bay Area office market totters at the edge of an economic abyss of plunging values, faltering rents, rising foreclosures, sky-high interest rates, and tough financing markets. In 2019, the seven-building campus was bought for $188 million. At the time, the property’s price was seen as evidence of the bustling state of Silicon Valley’s office market.”

“Goldman Sachs and Hines originally attempted to sell the property for $143 million, 24% below the 2019 price. The final price of $100.8 million was a jaw-dropping 46% below the property’s purchase value just five years ago. This example of weak values for office properties and other commercial real estate is hardly unique in the Bay Area. In San Francisco, some big office buildings are selling at steep discounts of as much as 90% compared with their prior values. Foreclosures haunt other office buildings. Some hotels, including one on famed Nob Hill, have been returned to their lenders.”

The Austin Monitor in Texas. “A recent audit by the Office of the City Auditor looking at the possibilities for converting vacant office spaces into housing stock has found the practice known as adaptive reuse is likely a poor fit for office buildings mostly constructed in the last 10 to 20 years. Research into the financial and other considerations involved in adaptive reuse found it can be preferable to demolishing an aged project, but the resulting units typically need to fetch luxury market prices to justify the redevelopment costs.”

“‘For Austin, we do not think it is a very good fit,’ said Hannah Rangel, DAA’s vice president of built environment. ‘The downtown core has a very young building stock. Our downtown has doubled in the past decade. When we were talking about some of those vacancies in office buildings, these are big new towers that still have a lot of debt and equity attached to them and business plans and pro formas and also will probably have floor plates that are not really appropriate for conversion.'”

New Jersey Biz. “A panel convened by NJBIZ featuring four industry leaders – all with unique perspectives – explained how businesses can navigate a complex economic time in banking and finance. ‘The market is coming out of a long period of low interest rates, and it needs to adjust to the new reality,’ Ran Eliasaf, founder and managing partner, Northwind Group explained. ‘Initially, the predictions were that we’re going to see a faster reduction in rates. That’s not happening. You can see it in the curve right now. And what that means is that cap rates and valuations have to adjust – and they will. It already started happening on commercial real estate; definitely happened in office where we see now new valuations coming in much lower than they were three-four years ago. It’s going to happen also in multifamily – it has to. There has to be a correction.'”

“‘We are seeing a lot of transactions that need more time to stabilize, and the equity needs to write a check to right-size the loan – and that’s happening,’ said Eliasaf. ‘We’re still seeing a lot of loans that are being extended with current lenders – banks and non-banks alike, mortgage rates, etc. – that are giving more time. Some people like to call it ‘pretend and extend.’ It’s a reality. I think many loans are getting extended now with hopes for a better rate and a better environment in the future.'”

The Vancouver Sun in Canada. “A Vancouver developer has had all four of its residential projects ordered put up for sale so it can repay lenders after running into delays and financial trouble. Align Properties’ projects were being developed as residential condo towers in the West End and the Cambie Street corridor, and its latest, a low-rise, market-rental development, is also on the city’s west side. Align Properties, formerly known as Vivagrand Development Corp., describes itself as being part of the Xiangli Group, a real estate developer in Guangzhou, China. Align was developing two six-storey rental buildings with 120 units on four parcels of land on Baillie Street, near Oakridge Centre.”

“This week, a half-finished townhome project with 17 units on Park Drive in Marpole owned by Centred Developments was placed into receivership. In February, a high-rise condo project in Coquitlam by the same company was ordered for sale after foreclosure proceedings.”

The Toronto Star in Canada. “Anxious observers of Toronto real estate are hoping a possible interest rate cut Wednesday morning can revive the comatose market. While would-be buyers believe something has got to give, it likely won’t be the listing prices, says John Pasalis, president of Realosophy, a Toronto brokerage. Despite a glut of active listings on the market — particularly for condominiums, Pasalis expects prices to remain stable. At the end of May, Greater Toronto had the highest number of condo units for sale for any month in recent history with 8,183 apartment units on the market. The last highest number of active condo listings was 7,600 in October 2020.”

“While it’s clear investors are ‘rushing for the exits,’ Pasalis says they’re being patient. ‘When owners get anxious, they fire sale their unit,’ Pasalis said. ‘But they’re not panicked. It’s not like they’re selling at any cost. Most investors have a lot of equity. It doesn’t look like there’s a lot of distress.'”

From CTV News. “Homeowners riding the wave of low-cost mortgages are set to come crashing into a reality of higher rates as millions of terms come due for renewal over the next few years in Canada. The Canada Mortgage and Housing Corporation (CMHC) reports roughly 2.2 million mortgages will come up for renewal in 2024 and 2025, while a Royal LePage report(opens in a new tab) released in Oct. 2023 indicates 3.4 million Canadians have a mortgage set to renew by March 2025.”

“‘I kind of had a bit of that gut wrenching feeling,’ said Tom McCormick, a homeowner and budding real estate investor in Windsor, upon realizing his interest rate was likely to double. McCormick bought his first home in 2020 and converted the single-family house into a duplex. ‘It was pretty rough,’ said McCormick, recounting the renovations he undertook. McCormick secured a mortgage with an interest rate less than 2 per cent. When he renews this fall, he is likely looking at a much higher rate. And that could add as much as another $1,500 to his monthly payment, by his own calculation. In his situation, that is likely to trickle down to his tenants. ‘I’ll probably only raise about a hundred dollars or so, just to make sure it takes care of all the utilities,’ said McCormick.”

“For mortgage brokers like Sasha Syed of Mortgage Suite in Windsor, those in line for a renewal need to start mortgage shopping six months to a year out from their renewal date to secure the best mortgage product. For those unable to qualify for a traditional mortgage through a bank or credit union, private lenders fill the gap – often at a higher cost tied to higher risk. Syed points to this cohort of mortgage holders as a group in need of careful financial scrutiny. ‘A lot of stuff I’ve seen is people calling in that they need to get out of a private mortgage,’ said Syed.”

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This Post Has 78 Comments

  1. ‘This week, a half-finished townhome project with 17 units on Park Drive in Marpole owned by Centred Developments was placed into receivership

    Are we there yet?

  2. ‘We are seeing a lot of transactions that need more time to stabilize, and the equity needs to write a check to right-size the loan – and that’s happening,’ said Eliasaf. ‘We’re still seeing a lot of loans that are being extended with current lenders – banks and non-banks alike, mortgage rates, etc. – that are giving more time. Some people like to call it ‘pretend and extend.’ It’s a reality. I think many loans are getting extended now with hopes for a better rate and a better environment in the future’

    Date that rate Ran.

  3. “At the end of May, Greater Toronto had the highest number of condo units for sale for any month in recent history with 8,183 apartment units on the market. The last highest number of active condo listings was 7,600 in October 2020.”

    Post-pandemic thaw underway?

    1. California exodus continues, southeastern states as primary destinations
      By Social Links forBethany Blankley
      Published June 4, 2024, 4:11 p.m. ET
      (The Center Square) – As the California exodus continues, a new migration trend is occurring, with southeastern and Appalachian states taking the top spots as inbound migration destinations, according to new reports.

      According to a new Consumer Affairs 2024 Migration Trends report, “California’s mass exodus continues to ensue,” with the South and Southeast region of the country being the “hottest regions for people moving.”
      …
      https://nypost.com/2024/06/04/real-estate/california-exodus-continues-southeastern-states-as-primary-destinations/

      1. we don’t need or care for CA refugees ….The halfbacks are bad enough, Yanks that move to Florida , realize no one likes them , then move halfway back , to Ga, SC , and NC……we dislike ’em too…

        1. We even have the “Coward from Broward” ,hiding out in the western NC hills with his 100K florida Pension ….RRRRRRRRRRRRR

        2. The halfbacks are bad enough, Yanks that move to Florida , realize no one likes them

          Sometimes it saddens me how unfriendly certain regions are in the USA.

          1. Fl comments mirror Hawaiians, Italians, Mexican resorts, Cruise Ships, Mustang Ranch, etc: “Just spend your tourist currency as fast as possible . . . then GO HOME! “

        4. Sincere question — what would a halfbacker have to do to be liked? Or do the Southerners simply want to remain relatively rural and uncrowded regardless of politics? Can’t say I blame them. Crowded road, too many new restaurants…

          1. I wonder what people in Orlando thought when the construction of Walt Disney World was announced?

          2. I wonder what people in Orlando thought when the construction of Walt Disney World was announced?

            Speaking as a native Floridian (78 years, third generation Floridian), the general feeling was fear that taxes were going up for everyone, not just those who would profit. Our small central Florida town liked things just the way they were. Of course, politician’s and developers salivated.

          4. Sincere question — what would a halfbacker have to do to be liked?

            Maybe take some time and talk to the locals and get to know them and try to learn from them. Don’t just immediately judge people and assume you know better than they do. That’d probably help.

          5. A halfback usually talks in a very loud voice, in Church ,on the street, in store, anywhere….And the subject is always his or herself, how smart they are…
            And have absolutly no normal conversation skills at all…..A Southerner will start a conversation , with a slight nod of the chin in deference, even to a complete stranger, like “Good Morning “,or “How you doing today” etc. and then branch out slowlike ,if need be ….in a reasonable tone of voice,not that halfback constant shout ..
            And the halfback, usually has lost money, while in Florida, so he or she is cheap, beyond belief…..

    2. $4100 to rent 26 ft rental truck to go from Southern California to Fort Worth

      $2000 to rent the other way

      Help me do the math

  6. ‘When owners get anxious, they fire sale their unit,’ Pasalis said. ‘But they’re not panicked. It’s not like they’re selling at any cost. Most investors have a lot of equity. It doesn’t look like there’s a lot of distress.’”

    “Fear has very large eyes.” — Russian proverb

  7. “‘I kind of had a bit of that gut wrenching feeling,’ said Tom McCormick, a homeowner and budding real estate investor in Windsor, upon realizing his interest rate was likely to double.

    Die, speculator scum.

  8. The insurance industry is finally biting back on the hail damage Roof thing…..it’s about time…many years ago , when your roof needed replacement ,you got it done …usually every 15-20 years , because the shingles themselves were rated for 15 years max…
    Somehow , the Insurance companies ,got involved , and guess what , the roofs still are lasting about 15-20 years ,,
    Sure, today’s shingles are rated for 30-40- years ,but shoddy and cheap installers , have them leaking , often fairly soon, I recently saw someone replacing a 3 years old shingle roof.
    Any Roof is only as good as the poorest Installer ,that’s working on lt, and believe me , thoose roofers have some real interesting people working , very mootly……

    1. And some roofs are failing because of use of too small and thin support beams (2×4) and unsupportive beams stretched over a large area of roof causing collapse.

    2. roofing your house used to be somewhat affordable. Sure it was 2 or 3 grand, and it hurt but it wasn’t impossible. Now that every little hail storm generates a “I need a new roof” claim, roof’s cost $25,000 (easily)

      and they strip it fully even when 2 or 3 layers is legal and allowed. And use all this special stuff (instead of just old fashioned tar paper and 3 tab shingles) and yet they get ripped off every 5 years. What’s the point?

      Also you can only put so many nails in decking before it too has to be replaced. (usually 3 or 4 reroof’s). giant scam. It’s not like hail has gotten any worse on average. Yeah some areas get whacked but in general it’s the same on average.

      1. “It’s not like hail has gotten any worse on average.”

        East of the Mississippi river a hail storm can mean serious damage buildings, cars and crops.

        1. We can get some bodacious hail storms on the front range. Some people are now installing 50 year shingles.

    3. “But due to a provision in Shapiro’s policy, the company would pay him only what Pekin believed his previous, 21-year-old roof was worth: $9,600.”

      Does Mr. Shapiro believe if he totaled his 2001 vehicle that his insurance company should hand him over a 2024 vehicle?

    1. “closing costs are so expensive, no one tells you this”

      Imagine, if you will, this giant search engine that goes thru the whole internet and brings back results on how to do things (you tube certified) or information so you could be a well informed consumer.

      nah, too hard, just wing it like it’s 1952.

      sigh.

  10. New York Post (6/4/2024):

    “President Biden’s cognitive decline has become obvious and concerning to several high-ranking congressional lawmakers, according to a bombshell new report — which describes how the 81-year-old commander-in-chief increasingly relies on cheat sheets in meetings and at times has closed his eyes for so long that people wondered if he had drifted off.

    Some of the more than 45 Republican and Democratic lawmakers and staffers interviewed by the Wall Street Journal also described a president who spoke so softly during meetings that participants struggled to understand him.

    Others noted that Biden’s demeanor and grasp of policy details varied by the day and he frequently relied on notes and deferred to aides during conferences.

    “You couldn’t be there and not feel uncomfortable,” one person, who met with the president during critical negotiations over congressional funding for Ukraine aid in January, told the outlet.

    Others in attendance recalled that it took Biden about 10 minutes from when he entered the room to get the meeting started, and when he did, he used note cards to make obvious points that everyone was already in agreement with and participants could barely hear him.

    “Much of the conversation didn’t include him,” the report states, noting that the president asked his staffers to answer some questions posed directly to him.”

    https://nypost.com/2024/06/04/us-news/biden-showing-signs-of-decline-as-pols-aides-detail-81-year-olds-slipping-cognitive-fitness/

    Note that the Post, which is Murdoch owned controlled opposition media, has comments turned off on this article.

    1. Russia Today — Joe Biden’s health is about to be put to a severe test (6/4/2024):

      “With about half a year left until the 2024 US presidential election, the likely contenders, as in 2020, are current US President Joe Biden and the star of the Republican opposition, former president Donald Trump. By November 2024, the combined age of the two candidates will be 159 years, making them the oldest-ever contenders for the highest office in the US, surpassing the record they themselves set during the 2020 presidential race.

      This raises a question in the American political discussion: How capable are the elderly Trump (77) and Biden (81) of effectively performing the functions of head of state and commander-in-chief? Public attention, in the context of this question, is primarily focused on the incumbent president. Despite Trump being only four years younger than Biden, the Republican shows virtually no signs of aging.

      Memory problems: Biden sometimes publicly forgets details or confuses facts, such as incorrectly remembering dates, events, or mixing up the names of key figures and world leaders. For example, he mistakenly mentioned conversations with leaders who have long since died, such as former German Chancellor Helmut Kohl and former French President François Mitterrand.

      Gaffes: There are instances where Biden confuses names and details in his speeches, for example, mixing up former leaders with current ones or inaccurately recalling historical events.

      Physical awkwardness: It has been noted that Biden occasionally stumbles or loses his balance in public places, although such moments are discussed less frequently than his verbal slip-ups.

      It should be noted that the issue of the main presidential candidates being too old or frail is a novelty in the recent history of the US. Presidential candidates once traditionally publish the results of their health examinations; however, over the last 24 years, no contender for the White House has had their ability to perform their duties put to the same scrutiny as Biden has.”

      https://www.rt.com/news/598735-us-joe-biden-health/

      1. seems the presidents who had the worst diets fare the best~?
        slick willie loved his mcdonalds. trump seems the same.
        mental decline? apparently not so much.

        hmm, interesting.

        of course, genetics & activity factor into the cognizant equation but still . . . gives us fast food generation junkies hope!

      2. Remember the last days of the Soviet Union? Geriatrics barely able to function that were living in the past while feeling free to loot the present? Meanwhile nobody on the ground really believed in anything anymore, just followed along with their head down. Good thing nothing like that could happen here.

    2. I guess they are holding the stronger meds in reserve for when Biden needs to appear publicly.

        1. My guess is that it’s his chief of staff. I don’t even remember the guy’s name. He’s probably taking orders from the CIA or something. And surely there area couple lawyers writing up all these executive orders.

          A lot of people think it’s Obama, but I doubt it. Obama’s been pretty lazy for an ex-President. Surely he’s not the one preparing the cheat sheet and pasting in little pictures of the journalists.

      1. Looks like climate change arrived about a decade too soon wiping out these retirees before their time was up.

    2. Checking google maps… those Shore Acres looks like it was already built on swampland/wetlands. Some people are elevating their homes 16 feet off the ground… that’s 3 stories up..

    3. From article:
      As climate change leads to higher sea levels and more frequent and intense storms, many more neighborhoods in Florida are expected to become vulnerable to flood risk. In Shore Acres, at least 1,200 of the roughly 2,600 homes flooded with Idalia; many flooded again during a storm in December.

      Many areas of St Pete have flooded during heavy rainfall (not high tides) as long as I can remember. I am sure this neighborhood has had flooding problems since the day it was built.
      Massive development in flood prone areas, poor drainage.
      Old adage: buyer beware!

      1. Yahoo has started allowing comments again. Many commenters are blaming it on climate change deniers, especially DeSantis.

        2. I just want to know why the glaciers in North America melted back 10,000 years ago? Cow Farts?

  12. If insurers don’t cover the full replacement costs of roofs and customers can’t pay for new ones, those investments would deteriorate. ‘Both (Fannie and Freddie) are scared to death about the fact that there isn’t a viable solution in the marketplace for homeowners insurance,’ Rossi said.”

    If lending were only going towards people who are capable of accruing savings on a monthly basis sustained over several years, this would not be an issue.

    But what, something like a quarter or more of Americans cannot find $400 under their mattress.

    1. If insurers don’t cover the full replacement costs of roofs

      This is common in regions with higher probabilities of hail or wind damage, with multi thousand dollar deductibles.

      1. I have also seen policies that depreciate the roof, and once it is 15-20 years old there is no coverage whatsoever.

        1. We had been patching our cheap 3tab asphalt roof for nearly 10-yrs before a strong windstorm tore away about 1/3 of it. The insurance broker for our area told me the 3tab asphalt roof is a 20-yr design life, and we were on the 23rd year. 🙂 The new roof is a 30-yr, 110-mph composite design, and it’s a darker color to encourage a warmer attic since we’re up north.

      2. You can buy replacement value coverage rider. Basically it ignores the depreciation. (so if your 20 year roof is 8 years old, normally you would get 12/20th of the amount (minus deductible) ) but if you have replacement cost coverage, it pays whatever it costs. IT’S WELL WORTH HAVING. It’s not outrageous.

  13. A reader sent these in:

    Now might always be the best time to buy.
    Better buy now before the rates come down and better buy now before the rates hit 10% soon. Doesn’t matter what happens, NOW is the time.

    https://x.com/AustinWhittRE/status/1797393018598674763

    Phoenix Median Price DOWN 5% from 2 Years Ago

    https://x.com/JohnWake/status/1797365063294341360

    Atlanta Fed’s Q2 GDP Estimate is now just 1.8% down from 4.2% a few weeks ago…

    https://x.com/Geiger_Capital/status/1797665076356567259

    You need know nothing about TA to know this is a very gnarly 1 year chart. $LUMBER

    https://x.com/jimmydean197/status/1797763346072260614

    Mortgage asset transactions

    https://x.com/MrAwsumb/status/1797788168361537564

    Fed official flummoxed people would rather experience recession than inflation
    This is hugely important, IMO
    Most sane people realize that recession is part of the natural business cycle. It clears out malinvestment & restores value though price discovery
    But the Fed doesn’t get this (plus has its own agenda) and intrusively intervenes, deforming prices, creating inflation and wealth disparity.
    And they then wonder when the realists don’t feed into their narcissistic “savior”-complex
    It really is true. They just don’t get it. Read Kashkari’s own words here

    https://x.com/menlobear/status/1797830725389140235

    So many PPPools and PPPaddle Boards and PPPorsches were PPPurchased in our area during Covid.

    https://x.com/Brandon5859/status/1797752768528068989

    Imagine you lied and took $20,000 in PPP loans. Now you have to worry about going to prison for the next 10 year as they slowly go after more and more people. LOL

    https://x.com/GRomePow/status/1797731242735218861

    Bloomberg Eco out with a jarring report, saying monthly nonfarm payroll prints likely overstated job growth last year by 730,000

    https://x.com/BobOnMarkets/status/1797970810365493691

    The Bloomberg US Economic Surprise index is about the most negative since 2019. DB’s Jim Reid: Yesterday’s ISM manufacturing report “was definitely one that dampened optimism about the state of the US economy right now. And it follows a run of weaker US data over recent days.”

    https://x.com/lisaabramowicz1/status/1797918666325176414

    You wanna guess why people are pissed at Biden and why consumers are depressed and why data is turning? Coz when you clear out all the intentional noise meant to confuse everyone, people are losing purchasing power.

    If you define a strict necessity basket as food, gas, shelter, utilities, insurance and cloths (hard to argue with these being basic necessities of any employed person), then this basket is up in price by over 20% since Jan 21, outpacing wage gains over same period (ECI is up 15%).

    Clearly, the ECI is a messed-up metric. If you analyze this by categories, there are many categories whose loss of purchasing power is just catastrophic. Worst, for some this loss forms a continuation of a trend that started way before, for some decades ago.

    https://x.com/INArteCarloDoss/status/1797937422111518967

    If NFPs come in soft – the 10Y is likely going into the wood chipper… been talking 10Y almost weekly now, larger shift of a redlined 10y on downside would signal economic issues.

    Volume thus far yet again today completely abysmal across the board.

    https://x.com/DonMiami3/status/1798043521309630841

    Things like this do make me worry about another wave of inflation because their only response to any issue is print money.

    https://x.com/DonMiami3/status/1798002131959710165

    Seen on multiple billboards throughout Cincinnati

    https://x.com/JackFarley96/status/1798001331841724767

    🤦‍♂️Ever-growing rash of fire hydrant thefts in Los Angeles. Golden State Water Company to lock and shield the hydrant’s bolts to prevent theft. Since the beginning of 2023, we’ve had over 300 hydrants stolen

    https://x.com/dailyjobcuts/status/1798032678912160125

    JOLTS today vs JOLTS GFC
    Monetary policy doing its thing…

    https://x.com/DonMiami3/status/1798069994024239567

    Credit Cards 90+ Delinquent…It’s all good, Freddie 2nd liens will help this.

    https://x.com/TheBondFreak/status/1798027920025465053

    📈The second-largest office loan to become delinquent in April 2024 was the $277.1 million Wells Fargo Center floating-rate loan, which switched to nonperforming matured balloon. The collateral is a 1.2 million-sf office in Denver, CO.

    https://x.com/TreppWire/status/1796208197386068446

    Malibu Boats posted a fiscal third-quarter loss as sales of its power boats plunged, in the latest sign that a pandemic-era boom in boating has foundered. The Loudon, Tenn., boatmaker swung to a loss of $67.8 million, or $3.28 a share, from a profit of $53.5 million

    https://x.com/David32375134/status/1794438514714587404

    1999 dotcom bubble was so cute

    https://x.com/MichaelAArouet/status/1797873444295737695

    Florida housing inventory is up 70% year over year

    https://x.com/DonMiami3/status/1798176201238102064

    How does this align with the Florida growth story? Cost of living here is absolutely out of control.

    https://x.com/DonMiami3/status/1798176885710729657

    I’ve been job hunting for 15 months and I’m getting really scared

    https://x.com/PeterWrangel/status/1798132733199458417

    1. Bloomberg Eco out with a jarring report, saying monthly nonfarm payroll prints likely overstated job growth last year by 730,000

      Which matches the horrible job market

    2. You wanna guess why people are pissed at Biden and why consumers are depressed and why data is turning? Coz when you clear out all the intentional noise meant to confuse everyone, people are losing purchasing power.

      It’s a punch in the gut for most people, something that can sway fence sitters who might have voted for Brandon 4 years ago to vote for the Orange Man.

    3. . The collateral is a 1.2 million-sf office in Denver, CO

      Dumver is in a doom loop and there is nothing city hall can do to save it.

    4. in the latest sign that a pandemic-era boom in boating has foundered

      Next year should be a good time to buy a used boat, as they will be heavily discounted. Though one must remember the adage: two of the happiest days in a boater’s life are the days he bought and sold his boat.

  14. ‘That would mean an increase of thousands of dollars per year, or hundreds a month, for owners, depending on the square footage of their homes, Hanselman said. It’s an unexpected cost-of-living increase that could prove too much for some families, she said. ‘That amount of money will be very hard to manage for some people’

    Nobody said being a winnah! would be easy Kris. No a lot of people said it would be easy, just remembered!

  15. ‘The cost for a new roof, according to Shapiro? $25,000. For two years, he said, he saved money until he could afford the $15,000 gap between Pekin’s payment and the roof’s cost. ‘Something’s better than nothing’

    This article is worth reading in full. Fraud left and right in this racket. And now the GSE’s have another mess on their hands.

  16. ‘US banking system is sitting on a collective $517 billion in unrealized losses and has 63 ‘problem banks.’ Those losses have been sparked primarily by a surge in interest rates over the past two years, which have driven down the price of fixed-income securities held by banks…‘This is the ninth straight quarter of unusually high unrealized losses since the Federal Reserve began to raise interest rates in the first quarter 2022’

    Jerry broke it off in yer a$$ bankers.

  17. ‘In California, the real estate market is experiencing a dry spell. These multi-million dollar properties, if initially priced too high, can linger on the market for an extended period’

    It’s at an all time high broker! Every body is saying it. They can’t all be reading the data wrong.

  18. ‘Goldman Sachs and Hines originally attempted to sell the property for $143 million, 24% below the 2019 price. The final price of $100.8 million was a jaw-dropping 46% below the property’s purchase value just five years ago’

    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.

  19. Getting Out Is Becoming A Nightmare (GTA Condo Real Estate Market Update)
    Team Sessa Real Estate

    34 minutes ago TORONTO

    In this episode we take a look at the current GTA Condo Markets – Toronto, York Region & Peel Region for week ending May 29, 2024. We also discuss the problems we are seeing with what we call the “investor-style condo’s”.

    https://www.youtube.com/watch?v=mPNWF8c7Rjc

    15 minutes. Oh dear…

  20. ‘For Austin, we do not think it is a very good fit…The downtown core has a very young building stock. Our downtown has doubled in the past decade. When we were talking about some of those vacancies in office buildings, these are big new towers that still have a lot of debt and equity attached to them and business plans and pro formas’

    You had yer boom Hannah, enjoy the bust.

  21. ‘While it’s clear investors are ‘rushing for the exits,’ Pasalis says they’re being patient. ‘When owners get anxious, they fire sale their unit,’ Pasalis said. ‘But they’re not panicked. It’s not like they’re selling at any cost. Most investors have a lot of equity. It doesn’t look like there’s a lot of distress’

    John, meet Tom.

    ‘I kind of had a bit of that gut wrenching feeling’…when he renews this fall, he is likely looking at a much higher rate. And that could add as much as another $1,500 to his monthly payment, by his own calculation. In his situation, that is likely to trickle down to his tenants. ‘I’ll probably only raise about a hundred dollars or so, just to make sure it takes care of all the utilities’

    Tom is smart cuz he gets a 1500 K-dn peso a$$ pounding and he’s thinking abut raising the rent 100. Every month.

    1. Yahoo
      Bloomberg
      Rate-Cut Bets Supercharge Longest Bond Winning Streak This Year
      Rate-Cut Bets Supercharge Longest Bond Winning Streak This Year·Bloomberg
      Ruth Carson and Masaki Kondo
      Wed, Jun 5, 2024, 10:33 PM PDT
      2 min read

      (Bloomberg) — Global government bonds posted their longest rising streak since December, as the worldwide pendulum of market consensus swings toward more interest-rate cuts this year.

      A Bloomberg gauge of sovereign bond returns rose for a fifth straight session Wednesday as investors ramped up monetary easing wagers from the US to Australia. A sixth day of gains would mark the best run since November.

      Traders have escalated rate-cut bets in the past week, emboldened by a slew of softer-than-expected US economic data and the Bank of Canada’s decision to ease monetary policy. The enthusiasm for bonds will once again be tested as US non-farm payrolls data on Friday provide fresh clues on whether growth is cooling sufficiently in the world’s largest economy.

      Markets “are at that inflection point now” on demand for bonds, said Stefanie Holtze-Jen, Asia Pacific chief investment officer at the private banking arm of Deutsche Bank AG. “The minute US data shows more of this weakening growth outlook, that conviction will grow bigger.”
      …
      https://finance.yahoo.com/news/rate-cut-bets-supercharge-longest-053304175.html

    2. Economy
      3 signs the US economy is nearing a recession have flashed in the last week, SocGen says
      Jennifer Sor
      Jun 5, 2024, 2:06 PM ET
      stock market crash
      peshkov/Getty Images

      – The economy is flashing fresh warning signs a recession is on its way, according to Societe Generale.

      – The French bank pointed to three worrying data points that have raised red flags in the past week.

      – The firm is sticking to its recession call despite growing optimism over a soft-landing.
      …
      https://www.businessinsider.com/recession-outlook-hard-landing-economy-growth-spending-socgen-albert-edwards-2024-6

    3. MarketWatch
      Home
      Retirement
      Brett Arends’s ROI
      Opinion: You need to prepare your finances for a recession
      Last Updated: June 5, 2024 at 4:39 a.m. ET
      First Published: June 4, 2024 at 5:29 p.m. ET
      By Brett Arends
      Economic signals are flashing amber

      What if the economy’s already in recession, but nobody bothered to tell us yet?

      Tuesday’s bad news on jobs openings is just the latest in the growing and ominous string of bad economic data points. Each of them can be waved away as an outlier — but when they start to add up, it gets harder.

      All of this is a timely reminder to check your finances in case a recession has either arrived or is just about to. That includes making sure you have access to enough emergency funds to carry you through six months, and making sure you aren’t taking on more risk in your retirement portfolio than you really want to.

      The natural human instinct is to ignore this stuff until it’s too late, and then to kick ourselves for not acting sooner. This is suboptimal.

      Tuesday’s figures showed that the number of job openings in the U.S. plunged by nearly 300,000 between March and April.

      “Job openings are volatile month to month, but the trend is unmistakable,” said Bill Adams, chief economist for Comerica Bank. “They’re down 4.1 million from their March 2022 peak, a decline of a third.”

      The Atlanta Federal Reserve’s real-time estimate of U.S. economic activity is also plunging: It just fell by a third, from 2.7% to 1.8%, in a matter of days.

      A month ago, it was at more than 4%.

      The Chicago purchasing managers’ index, another major economic barometer, is now at levels seen during the early-2020 COVID-19 crash, the 2008 global financial crisis and other economic slumps. This reading “has been consistent with recession 100% of the time in the past,” said David Rosenberg, the bearish economist, on X.

      April’s U.S. retail sales were lower than a year earlier once you strip out inflation. Ditto for industrial production. The latest jobs figures were at half of Wall Street’s expectations; probably worse still, the figures tracking underemployment have been deteriorating for a year. And real personal incomes, when you exclude governmental transfers, are now flat.

      Albert Edwards, chief global strategist at Société Générale, has observed that this level of weakness in personal incomes when compared to GDP growth has often presaged a recession.

      None of this means a recession is guaranteed or even imminent. The bond market has been predicting a recession for at least two years. During that time, the yield curve has been inverted — meaning the interest rate on Treasury bills and short-term Treasury bonds has been higher than the rate offered by longer-term bonds. The recession, like Beckett’s Godot, has been a long time coming.

      The danger is that many individual households will be unprepared if or when it comes. That includes holding far too much of our portfolios in stocks, which have been booming, and far too little in bonds, which have been dismal for several years.

      History shows we humans have a terrible tendency to be the most bullish, and to take on the most risk, right at the worst moments. With stocks recently hitting a new peak, it’s little surprise to learn that the most recent survey of global money managers found them at their most bullish since late 2021 — the last peak.
      …
      https://www.marketwatch.com/amp/story/you-need-to-prepare-your-finances-for-a-recession-81eacd0b

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