• Category Archives Real Estate
  • Spot The Outlier – Seattle Home Prices Go Vertical As Laundered Chinese Money Flows In

    Last summer we declared that “China’s favorite offshore money laundering hub is officially no longer accepting its money” after the city of Vancouver slapped a 15% tax on foreign real estate buyers. The tax was intended to curb a massive real estate bubble which had resulted from an influx of Chinese money over the preceding years. The move seemingly worked as it resulted in a staggering and immediate 96% drop in foreign buyers (see: Foreign Buying Plummets In Vancouver: Sales To Foreigners Crash 96%).

    This post was published at Zero Hedge on Jul 26, 2017.

  • Why work with a Qualified Realtor for the Best Real Estate Services?

    Are you buying or selling your home in Vancouver? Maybe you want to be part of one of the most vibrant property markets in the world today? If you are interested in the city’s real estate, it is advisable to work with an established realtor to get the best returns. While there is a lot of information available about this market, you still need professional assistance to make the most informed decision. For instance, do you know whether it is a buyer’s market or a seller’s market?
    Whenever you are investing in a property market, it makes a lot of sense to use a local realtor who has the prerequisite expertise and resources to guide you through the process. These experts know the pulse of the property market in the city and will advise you accordingly. While you might be in a rush to buy or sell, it pays to get real estate services from a reliable realtor.
    Professional Real Estate Services
    Why invest in these professionals when you can go ahead and sell or buy on your own? Truth be told, closing even a presumably simple deal in the real estate market can take months if not longer. If you are planning to sell your home fast, for instance, you might be forced to do it at a loss if you are not willing to use a realtor.

    This post was published at ZenTrader on July 21, 2017.

  • Is Canada Really “In Serious Trouble”: Goldman Responds

    One week after we channeled Deutsche Bank’s Torsten Slok, who two years ago warned that “Canada is in serious trouble“, a warning which was especially resonant after last week’s rate hike by the Bank of Canada – the first since 2010 – which we argued threatens to burst Canada’s gargantuan housing bubble…

    This post was published at Zero Hedge on Jul 19, 2017.

  • Global Stocks Hit Record High, Set For Longest Winning Streak Since 2015

    In what has been a less exciting session than the previous two, the euro retraced some recent gains as traders grew concerned they may have overestimated the ECB’s hawkish bias ahead of Thursday’s rate decision; in turn the dollar edged higher after the collapse of the GOP healthcare bill sent it to the lowest since September on Tuesday.
    Not even Citi could infuse any excitement in the overnight session, which its called “Purgatorial”:
    Markets are more or less flat so far today as we face a temporary dearth of data and speakers. USD remains weak, but there has been no real excuse to continue selling yet. The ECB and the BoJ are both up tomorrow and any potential moves may be linked to pre-positioning/squaring rather than anything that today may offer us…
    There is little of note this afternoon that could tickle the fancy of even the most excitable FX watcher – We are staring into the abyss… and DoE inventories are staring right back. As oil is flat so far today, that print could provoke a small twitch. Elsewhere, we get US housing starts and Canadian manufacturing shipments…
    In Dante’s inferno, Purgatorio immediately precedes Paradiso. Fingers’ firmly crossed.

    This post was published at Zero Hedge on Jul 19, 2017.

  • A Decade of Fallacy

    Ten years ago yesterday, Bear Stearns sent a letter to shareholders of two specific hedge funds that it sponsored. Whenever anyone brings up the name now, you immediately know where this is going. That wasn’t the case in 2007, however. Whatever the world may think of Bear in hindsight, a decade ago it was a highly reputable firm.
    These two particular hedge funds had earlier that year caused a rumble throughout the shadow system. On July 17, 2007, the bank finally declared them all but worthless, total wipeouts. In the mainstream, nobody could quite figure out why apart from invoking the generic idea of subprime mortgages. Everyone knew, or claimed afterward to know, that they were risky, but pinpointing the exact point of failure proved incredibly difficult. Something, something, CDS.
    I wrote on August 1, 2007:
    The strategy for the hedge funds, in simple terms, was to invest in senior tranches backed by subprime mortgages, hedged by puts against an ABX index. Information on the exact nature of the investments is still hard to come by under the veil of hedge fund secrecy but it looks to be that 90% of the investments were senior or better, meaning that 90% of the assets were AAA rated…

    This post was published at Wall Street Examiner on July 18, 2017.

  • Millennials Could Be Key To Illinois’ Housing Recovery… But They’re Fleeing The State

    Illinois loses more millennial taxpayers and dependents to other states than any state except New York; this means Illinois’ distressed housing market is losing a big contingent of first-time homebuyers.
    Illinois had the nation’s third-highest share of seriously underwater properties as of March 2017, according to a May 2017 report by RealtyTrac. Millennials could be the key to propping up home values: Robust homebuying forces property values up, and millennials were the largest group of homebuyers for each of the past four years, according to NBC News. Unfortunately, Illinois’ millennials are leaving instead of putting down roots.
    A home is underwater when the homeowner owes more to the mortgage lender than the home is worth at current prices. If a home is seriously underwater, the homeowner owes at least 25 percent more on the mortgage than the current value of her home. Any money she’s invested in her home in the form of a down payment and mortgage payments is effectively lost if she goes to sell. She will not get any of that money back unless home values rise.
    No homeowner wants her home to sink beneath the surface. However, an underwater or seriously underwater homeowner won’t really feel the pain unless she wants or needs to sell her property. Then she faces dim prospects:

    This post was published at Zero Hedge on Jul 16, 2017.

  • Can’t Afford A Shanghai Apartment? Try Sleeping In A “Shared Compartment”

    Shanghai’s status as an emerging tech hub is bringing with it problems related to overcrowding experienced by US cities like San Francisco and certain parts of New York City – namely out-of-control rents and home prices.
    But now, the cities’ mid-tier office drones, some of whom may not have enough cash saved to ‘commit’ to an apartment, have a new low-cost housing alternative. They’re called shared compartments, and they’re are popping up in office buildings around Shanghai. Users pay to sleep in the compartments for a set amount of time. They’re given disposable bedding to make sleeping more comfortable, and the compartments are disinfected automatically by ultraviolet light after each use.

    This post was published at Zero Hedge on Jul 16, 2017.

  • The First Horse Out Of A Burning Barn Gets Scorched The Least

    From a Short Seller’s Journal Subscriber: I just read the piece on Denver homes and the idea of taking a lower price. $100,000 less jumped out. We are selling our overpriced turkey in the clouds in a posh area of Nevada where stupid money goes to die.
    Our contract price is $115,000 less than an appraisal done 4 months ago. All the realtors think that prices in the hills will continue upwards. I know better and locales like this are primed for a very ugly drop. That’s our reason for taking $115,000 less than appraisal value
    The first horse out of a burning barn gets scortched the least . Thank you for that tip Worth the price of the newsletter times 10 or 20…

    This post was published at Investment Research Dynamics on July 14, 2017.

  • The “Missing Slide”: JPM Credit Card Charge-Offs Jump To Four Year High

    While JPM was quick to provide all the favorable data in its earnings presentation (and not so favorable when it comes to the sharp drop in its markets sales and trading division) one thing was conspicuously missing: the slide on “Mortgage Banking And Card Services” which has traditionally been part of the bank’s earnings presentation and was certainly featured prominently last quarter.
    Of course, it is possible that JPM simply forgot to include it, or perhaps it did not want to bring attention to a troubling trend: the concerning increase in net credit card charge-offs, which last quarter rose to just shy of $1 billion, and which prompted JPM to report an unexpected increase in credit costs (driven also by JPM’s write-down in its student loan portfolio).

    This post was published at Zero Hedge on Jul 14, 2017.

  • Dying Middle Class: The Number Of Americans That Can’t Afford Their Own Homes Has More Than Doubled

    Have you lost your spot in the middle class yet? For years I have been documenting all of the numbers that show that the middle class in America has been steadily shrinking, and we just got another one. According to a report that was produced by researchers at Harvard University, the number of Americans that spend more than 30 percent of their incomes on housing has more than doubled. In 2001, nearly 16 million Americans couldn’t afford the homes that they were currently living in, but by 2015 that figure had jumped to 38 million.
    When I write about ‘economic collapse’, I am writing about a process that has been unfolding for decades in this country. Back in the early 1970s, well over 60 percent of all Americans were considered to be ‘middle class’, but now that number has fallen below 50 percent. Never before in our history has the middle class been a minority of the population, but that is where we are at now, and the middle class continues to get even smaller with each passing day.
    So these new numbers saddened me, but they didn’t exactly surprise me. The following comes from NBC News…

    This post was published at The Economic Collapse Blog on July 9th, 2017.

  • Malls Swap Retailers For Gyms And Restaurants In Last-Ditch Bid For Survival

    With a record 8,640 retail stores expected to close in 2017, American malls are desperate to draw in customers as America’s retail apocalypse leaves them littered with empty store fronts. Now, some are experimenting with a model that worked for some movie theaters: Invest in restaurants and popular amenities like rock-climbing walls to sell customers a better shopping “experience.”
    To wit, Bloomberg spoke with the owner of the Newgate Mall, which plans to pour $500,000 into overhauling the outdated food court in a bid to lure restaurateurs and hungry shoppers. Rent payments from eateries are never going to recoup the renovation costs, but for landlord Time Equities Inc., that’s not the point.
    ‘The food hall is part of an effort to breathe new life into the entire 718,000-square-foot (67,000-square-meter) center and increase foot traffic, according to Ami Ziff, director of national retail at New York-based Time Equities. The company, which bought Newgate in Ogden, Utah, from GGP Inc. for $69.5 million last year, is one of many landlords wagering that elaborate makeovers will keep them competitive as they reinvent their properties in the age of Amazon.
    Costs are escalating as mall owners work to keep their real estate up to date and fill the void left by failing stores. The companies are turning to everything from restaurants and bars to mini-golf courses and rock-climbing gyms to draw in customers who appear more interested in being entertained during a trip to the mall than they are in buying clothes and electronics. The new tenants will pay higher rents than struggling chains such as Macy’s and Sears, and hopefully attract more traffic for retailers at the property, according to Haendel St. Juste, an analyst at Mizuho Securities USA LLC.
    ‘The math is pretty obvious, pretty compelling, but there are risks,’ St. Juste said in an interview. ‘This hasn’t been done before on a broad scale.’

    This post was published at Zero Hedge on Jul 5, 2017.

  • Millennials Really Want A McMansion Of Their Own, There’s Just One Problem…

    A new survey from ApartmentList.com of 24,000 millennials across the country, born between 1982 and 2004, revealed some ‘great news’ for the residential housing market…about 80% of the millennials surveyed said they’re ready to move out of mom’s basement and buy a home. There’s just one catch…
    Apparently those same millennials either have no idea how much a home costs in their respective cities and/or are really bad at math. As evidence, the following table from Apartment List illustrates the hilarious gap between what millennials think a home down payment in their area should be and what it actually is.
    Not surprisingly, the largest gaps between millennial math and reality came from the most expensive cities like L. A. and San Francisco where down payment expectations were off by a modest 50-60%.

    This post was published at Zero Hedge on Jul 3, 2017.

  • Silicon Valley Begins to Crack Visibly

    Chilling photos of for-lease signs lining the Great America Parkway There are parts of Silicon Valley where commercial real estate is still hanging on, and there are parts where it has let go.
    In Santa Clara, it has let go. Overall availability of office space in Santa Clara was nearly 19% in the first quarter, according to Savills Studley, up from 14% a year ago. Only two other areas in Silicon Valley – Milpitas and North San Jose – show greater availability at respectively 23% and a harrowing 30%.
    The availability problem becomes very real along the Great America Parkway, between Highway 237 and Highway 101. It’s near Levi’s Stadium. Nearby, Yahoo owned 49 acres of land that it acquired in 2006 and on which it had planned to build its new headquarters. It tore down the buildings on it and got the project approved for 3 million square feet of office space. It scuttled these plans in 2014 and turned the land into a parking lot for Levi’s Stadium. In April 2016, Yahoo sold the property for $250 million to LeEco, a Chinese company that had surged out of nowhere.
    LeEco was going to get into nearly everything, including electric cars in the US. It was going to build its global headquarters on it and hire 12,000 people. Then came reality. Earlier this year, LeEco in turn scuttled those plans and pulled back from the US, claiming that it had run into a cash crunch. It has since been trying to sell the property. There will be a buyer eventually, as always, but maybe not at $250 million.

    This post was published at Wolf Street on Jul 2, 2017.

  • Home Attitude Adjustments

    The National Association of Realtors (NAR) reported today that pending home sales declined for the third straight month. As with so many other accounts, it’s not really the downside that is relevant but how instead there has been little to no growth for quite some time now. The NAR’s index value, which is how the organization reports the level of pending sales, was 108.5 in May 2017. That’s up 42% from the low in 2010, but also slightly less than the peak in June 2013.
    The immediate issue appears to be inventory, meaning the lack of it. In a separate report on resale activity, the NAR continues to estimate declining numbers of houses available for sale even though the real estate market in terms of price seems to be healthy. The change in inventory coincides, as you might expect, with the level of pending sales. The inflection for both occurs in the middle of 2015.
    It is neither a housing correction nor anything like a bubble collapse. Rather it seems to be hesitation. Potential home sellers around summer 2015 appear to have grown more sensitive and cautious at the margins. Those people who might have otherwise been happy to sell and likely move up in size or price suddenly became reluctant to do so.

    This post was published at Wall Street Examiner on June 28, 2017.

  • Pending Home Sales Slowed

    This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
    The third consecutive decline in signed contracts to purchase previously owned U. S. homes indicates progress in the housing market is stalling on the heels of lean inventory and rising prices, according to data released Wednesday from the National Association of Realtors in Washington.
    Pending home sales index dropped 0.8% m/m (est. 1% gain) after revised 1.7% slump.

    This post was published at Wall Street Examiner by johnnymanzielbr ‘ June 28, 2017.

  • McMansions Are Back And They’re More Hideous Than Ever

    The McMansion rose to prominence in the early-to-mid-2000s and to this day is the epitome of the excesses created by the biggest mortgage bubble in the history of mankind. In suburbs all across America, these 3,000 – 5,000 square foot, cookie-cutter monstrosities, with their foam pillars and lots that were just barely larger than the footprint of the houses themselves, were popping up faster than you could say “subprime mortgage.”
    Unfortunately, as we’re forced to report frequently here, Americans tend to have very short-term memories and can’t seem but help but constantly repeat the sins of their past. As such, it’s hardly a surprise that the average size of new homes in the U. S. is once again skyrocketing at an even faster rate than the early part of this century.

    This post was published at Zero Hedge on Jun 26, 2017.

  • Meet The Money-Laundering, Nigerian Oil Magnate Behind New York’s $50MM Condo Foreclosure

    Last night we noted that yet another luxury condo at Manhattan’s One57 tower, a member of ‘Billionaire’s Row,’ a group of high-end towers clustered along the southern edge of Central Park, had gone into foreclosure – the second in the span of a month. The 6,240-square-foot, full-floor penthouse in question, One57’s Apartment 79, sold for $50.9 million in December 2014, making it the eighth-priciest in the building and likely the largest residential foreclosure in Manhattan’s history.
    According to Bloomberg, the owner of the apartment attempted to conceal his/her identity by using a shell company (you know how those kooky billionaires can be) but was able to obtain an ‘unusually large’ mortgage with an even more unusual term: one-year.
    In September 2015, the company took out a $35.3 million mortgage from lender Banque Havilland SA, based in Luxembourg. The full payment of the loan was due one year later, according to court documents filed in connection with the foreclosure. The borrower failed to repay, and now Banque Havilland is forcing a sale to recoup the funds, plus interest.
    Of course, it was only a matter of time until the mystery man behind Manhattan’s most recent luxury real estate epic fail was exposed. As such, meet Nigerian oil magnate, Kola Aluko.

    This post was published at Zero Hedge on Jun 24, 2017.

  • New Home Sales Rise 2.87% in May (To 1995 Levels), Median Home Prices Decline 3%

    This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
    After a bad showing in April, new home sales rebounded in May and rose 2.87% to 619K units SAAR.

    New home sales in The West rose 28.57%.
    While new home sales (white line) rose in May (to 1995 levels), the median price per square foot is considerably above the peak of the housing bubble.

    This post was published at Wall Street Examiner by Anthony B Sanders ‘ June 23, 2017.