• Category Archives Real Estate
  • US Home Prices Surge To Record High As Homebuilder Hope-Reality Gap Largest Ever

    Following April’s declines across the home sales data (as well as a dip in homebuilder optimism), existing home sales in May surprised positively (up 1.1% versus -0.4% exp) and follows a small upward revision to April’s drop.
    First-time buyers accounted for 33 percent of all sales in May, down from 34 percent in the prior month.

    This post was published at Zero Hedge on Jun 21, 2017.

  • San Francisco and tech driven housing mania: The median home in San Francisco reaches a new high of $1.5 million.

    San Francisco real estate is deep into a tech driven mania. Home prices in the Bay Area are comically out of reach for most families and people are getting squeezed out like ketchup in a disposable packet. What seemed like a new peak was once again surpassed. The housing market is running on massive fumes and delusions run rampant. The justifications for current prices run abound. Yet the truth of it all is that we are deep into a manic phase of the market. The current median price for a home in San Francisco is now $1.5 million. This is for your standard crap shack flavored box. People are still buying even though volume has trended lower but just look at the current price range. A lot of this is being fueled by wildly high tech valuations and people believing that prices will never adjust. In other words, a bubble.
    Tech driven mania in San Francisco
    Home prices are up nearly $300,000 in one year simply because San Francisco is going through a housing mania. Tech valuations are off the charts and there seems to be this belief that prices will never come down. The consensus seems to think that buying real estate at any given point is a smart move. They simply cannot foresee a correction in the cards. What is interesting is that some think that since people didn’t buy in the last dip why would they buy this time? So therefore you should buy today. The problem with that line of reasoning is that it doesn’t focus on the most important economic item for most people – the actual jobs they hold.

    This post was published at Doctor Housing Bubble on June 19th, 2017.

  • Housing Starts Suffer Worst Streak Since Jan 2009, Permits Plunge

    For the first time since Jan 09, Housing Starts dropped for the 3rd month in a row in May, drastically missing expectations (-5.5% vs +4.1% exp.) with both March and April revised notably lower. Building Permits also tumbled in May and massively missed expectations (-4.9% vs +1.7% exp.).
    No one saw it coming…

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

  • Demand For Hong Kong Micro Apartments Surges As Buyers “Downgrade Expectations”

    The surge in Hong Kong housing costs has lifted home prices well beyond the bounds of affordability for most local families and young professionals, leading to long lines at housing sales that were sometimes oversubscribed by as much as 15x. But while home prices have risen for every type of home, Bloomberg notes that the intensifying demand for micro-apartments – some of which are as small as 128 square feet (about the size of a garden shed) – has caused prices for this segment of the housing market to climb more quickly than normal-sized homes. Why? Because they’re practically all Chinese buyers can afford.
    ‘The pool of buyers for small flats is getting bigger and bigger because people have to downgrade their expectations of the size of flats they can live in,’ said Nicole Wong, regional head of property research at CLSA Ltd. in Hong Kong. One 161 square foot micro apartment sold by property giant Henderson Land Development Co. was bought for just under $500,000. For that amount, buyers would be better off sleeping in their cars. Specifically, a Tesla Model X, which, as Bloomberg notes, is about 160 square feet, the same size of the above-mentioned apartment. Bizarrely, this is one instance where a Tesla Model X might be considered a bargain: They start at $150,000 in Hong Kong.

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

  • Visualizing Baltimore’s Opiate Experience

    A quick drive through some of the more desolate parts of East Baltimore will give you some insight into a crisis that is consuming not just Baltimore, but almost every corner of the United States.
    The streets are littered with boarded up warehouses and tenement housing-rows and rows of dilapidated, graffiti covered buildings that litter the landscape like tombstones, commemorating a once vibrant city that has succumbed to a trifecta of affliction: economic hardship, racial tension, and rampant drug addiction.

    This post was published at Zero Hedge on Jun 13, 2017.

  • Visualizing The Train Wreck Of Auto Inventories

    On May 10, 2017, there were 145,763 new 2016 vehicles unsold.
    Today, 2016 new car inventory stands at 112,310.
    At the current rate of sale, we will not sell through the new 2016 inventory till the last week of August.
    Why this matters Dealers always focus on selling their oldest vehicles first. This is because the majority of dealers floor plan their inventory.
    As a vehicle gets older, the interest expense grows larger. Because of this, the oldest inventory always gets the prime real estate at a retail dealer location for maximum visibility. Newer arrivals are usually staged in lower customer traffic areas and not discounted as much in efforts to sell the oldest vehicles first. This method of inventory control works great as long as supply doesn’t overwhelm demand.

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

  • Simply Unaffordable! Manhattan Has Nation’s Highest Rents Followed By San Francisco (Wichita KS The Cheapest)

    This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
    New York City, composed resrticted land masses such as Manhattan, Brooklyn and Staten Island, has the most expensive housing rents in the nation followed by another restricted land mass known as San Francisco. According to RentCafe.com, Boston MA is the third most expensive area in terms of housing rents.

    This post was published at Wall Street Examiner on June 3, 2017.

  • Trump Retains Marc Kasowitz As Private Attorney For Russia Probe

    As reported earlier by Charles Gasparino of Fox News and subsequently confirmed by ABC, President Trump has reportedly retained a private attorney for Special Counsel Mueller’s probe of alleged collusion between the Trump campaign and Russian officials. Not surprisingly, Trump has chosen Marc Kasowitz of Kasowitz Benson Torres LLP whose list of ‘notable representations’ includes representing “President Donald J. Trump in a wide range of litigation matters for over 15 years” at the very top, most recently in regards to Trump’s threat to sue to NYT for an October story that he groped and kissed women. In addition, Kasowitz represented Trump in numerous other cases, including on his divorce records, real estate transactions and allegations of fraud at Trump University.
    #BreakingNews – @realDonaldTrump retains atty Marc Kasowitz as private atty in independent counsel probe more coming
    — Charles Gasparino (@CGasparino) May 23, 2017

    This post was published at Zero Hedge on May 23, 2017.

  • Housing ‘Recovery’ Stumbles As Starts, Permits Plunge In April

    After a big plunge in March (it’s the weather, stupid), Housing Starts were expected to rebound in April… but did not! Starts dropped 2.6% in April, after March’s 6.6% drop. Building Permits also tumbled 2.5% MoM – also multiple standard-deviations below expectations.
    Single family permits dropped to 789K, the lowest since November (and multi-family is also at its lowest since Nov)

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

  • Wall Street’s Big Fugly Secret Revealed

    When the ship starts to sink, the rats begin to think only moments ahead. The big picture falls by the wayside. Surviving until tomorrow is all that matters. Next year is lifetimes away.
    There are a few places in the world you can see this happening in real-time.
    One such place is Wall Street.
    Case in point:
    The flash boys are hitting a dead-end. Bloomberg has just reported on a strange real estate buy in Chicago. A tiny group of stock traders purchased 31 acres of undeveloped land for $14 million, twice the going rate… just to plop down an antenna.
    Looking at the paperwork, the antenna is owned by World Class Wireless, an affiliate of Jump Traders.
    And here’s why…
    Just across the street is the building for the CME Group – the world’s largest futures exchange.
    ‘The high tech microwave antenna,’ ex-Wall Streeter Dr. Fly writes in his iBankCoin blog, ‘is able to intercept data coming out of the CME before it makes its way to the east coast – creating an arb situation that last microseconds. It is the definition of cheating, rich, powerful people using their position to jimmy rig trades in their favor, all but guaranteed. It’s like having a time machine that can go a microsecond into the future and see prices and then trade off of the knowledge using very sophisticated high speed quants.’

    This post was published at Laissez Faire on May 12, 2017.

  • Home Capital Sells $1.5 Billion In Mortgages At Unknown Price To Shore Up Liquidity

    As recently as a few weeks ago, the business model of Canada’s largest alt-mortgage lender, Home Capital Group, was originating and sourcing mortgages. Then a liquidity crisis struck, sending the company’s business into a tailspin and unleashing an unprecedented bank run on the company’s retail deposits. And, as of today, the company is now in the mortgage selling business. In a press release, the company announced it has entered into an arrangement with an undisclosed third party to sell up to a total of $1.5 billion in funded mortgages and loan renewals, in a desperate attempt to shore up liquidity, and confirmation that other attempts to raise capital have failed.
    While Home Capital added that the deal includes up to C$1 billion of uninsured mortgages and C$500 million of insured mortgages, or about 10 percent of the company’s total mortgage book, it did not provide the most important information: at what price it sold the mortgages.
    As HCG adds, the Third Party has “indicated an interest in further expansion of this arrangement at a later date” suggesting that the terms of the transasction were quite advantageous.
    ‘This purchase arrangement is designed to give us the ability to continue to serve as many customers as possible in the mortgage broker channel, and we are optimistic that there can be opportunities for future growth,’ said Bonita Then, interim Chief Executive Officer of Home Capital. ‘Meanwhile, we continue to work very hard to develop additional sources of funding, while carefully managing our liquidity.’

    This post was published at Zero Hedge on May 9, 2017.

  • Silicon Valley ‘Tech-Slaves’ Forced To Live In Their Cars

    Faced with some of the most expensive rental housing in the nation, some Bay Area residents are feeling priced out and are seeking low-cost alternatives.
    As the Nasdaq soars to record highs on the back of Silicon Valley’s hub of computer and technology companies, some people are even turning to cars, vans and RVs for housing…

    This post was published at Zero Hedge on May 6, 2017.

  • Another Fraudulent Jobs Report

    ‘Willing suspension of disbelief’ is defined as a willingness to suspend one’s critical faculties and believe the unbelievable; sacrifice of realism and logic for the sake of enjoyment. First off, I want to state upfront that there’s nothing enjoyable about the monthly non-farm payroll report unless you enjoy being subjected to brain damage.
    Each month the Government asks us to suspend our critical faculties and accept the headline-reported number of new jobs created by the economy as well as the unemployment rate. Once again the Government did not disappoint, as it headline-flashed the alleged creation of 211,000 jobs and an unemployment rate of 4.4%.
    Unfortunately, for the mindless masses who consume fast-food style news from mainstream news sources, once the headline numbers are absorbed and the ‘experts’ reaffirm them with their idiotic psycho-babble, the numbers as reported miraculously become The Numbers.
    To say that the latest non-farm payroll report stretches the ability to suspend one’s disbelief is an understatement. The Government wants us to believe that 211,000 new jobs were created in April – ‘seasonally adjusted,’ of course. A cursory glance reveals that 162,000 working age civilians decided to just leave the labor force, which explains the alleged decline in the unemployment rate. Either those folks who walked away were bequeathed with Social Security disability, took out a big student loan and enrolled for an online degree program at one of the many online universities or, most likely, their jobless benefits expired and they simply gave up looking for a job that pays more than minimum wage (Note: the latter explanation is supported by the recent spike up in auto loan, credit card and mortgage delinquency rates).

    This post was published at Investment Research Dynamics on May 5, 2017.

  • Exposing The Student Servitude Scam

    Authored by Gordon Long via MATASII.com,
    Many today strongly believe it is morally wrong to indenture students to the degree of liabilities presently required to achieve the education required to become a productive contributor within our modern society.
    The question we need to demand answers to is why has college costs for students exploded upward, while salaries and job positions for graduates has not? What is driving the relentless and inexplicable surge in the debt burden for students and their parents?
    The well researched “Ivy League Inc” by my friends at OpenTheBooks only begins to scratch the surface of what is minimally a sham and may be better described as an orchestrated banking scam, not to dissimilar in design to the last financing bubble (i.e. the Residential Real Estate bubble in the last decade). Let me take the discussion in a critical direction which they politically may have felt it to be too sensitive to broach?
    First, to quickly grasp the underpinnings of how this sham has been symphonized it would help to frame our thinking around what might appear as two unrelated notions of how the capitalist system works (or more appropriately in the case of growing student debt – doesn’t work!).

    This post was published at Zero Hedge on May 4, 2017.

  • The Hunt for Taxes is Global

    Taxes are the root of all evil for this is the confrontation against the people that historically leads to civil unrest and then revolution. The American and French Revolutions were over taxes. Historically, even the Roman Empire was forced from time to time to grant tax amnesty as was the case in 119AD. You even have Roman Emperors such a Trajan (98-117AD) engaging in social legislation known as the Alimenta, which was a welfare program that helped orphans and poor children throughout Italy. The Alimenta provided general funds, food and subsidized education for children. The funding came from the Dacian War booty initially. When that ran out, it was funded by a combination of estate taxes and philanthropy. The state provided loans like Fannie Mae providing mortgages on Italian farms (fundi). The registered landowners in Italy received a lump sum from the imperial treasury. In return, the borrower was expected to pay yearly a given proportion of the loan to the maintenance of an Alimentary Fund – a kickback so to speak. Taxes and social programs have been a very long time.

    This post was published at Armstrong Economics on May 5, 2017.

  • One Of The World’s Biggest Oil Hedge Funds Just Liquidated All Its Longs

    That didn’t last long.
    Just one week after Canada’s largest alt-mortgage lender Home Capital Group sent shockwaves across the Canadian financial system, when it confirmed that long-running allegations about its liar-loan business were true, and suffered a spectacular bank run necessitating emergency loans which yield a stunning 22.5%, the company is now “actively seeking expanded sources of funding” having drawn half of its C$2b rescue loan, according to an email sent to mortgage brokers seen by Bloomberg News.
    ‘This is a fluid situation, and we are optimistic our challenges are temporary,’ Pino Decina, executive vice president of residential mortgage lending, said in the email.
    He further said that despite what’s “written in media” the company continues to experience demand for financing from brokers. He did not deny, however, the rest of what is written in the media, namely that as the company’s GICS’s mature, it risks running out of liquidity in the coming weeks even with the full C$2bn facility fully drawn, especially since by now it is almost certain that its retail deposits have all been redeemed.

    This post was published at Zero Hedge on May 4, 2017.

  • Irish Property Bubble – 38pc Believe Housing Market Will Crash

    Irish Property Bubble? Central Bank Governor Denies Is Bubble
    Central Bank of Ireland governor Philip Lane yesterday rejected suggestions of an Irish property bubble and that the economy is on the brink of another housing bubble and said the recent increase in house prices is not indicative of a property bubble forming.
    However, this optimism is not shared by a large part of the Irish people as there are very high levels of concern about the risk of another property bubble and property crash according to the latest Sunday Independent/Kantar Millward Brown poll:
    ‘A quite astonishing 38pc of people believe that the housing market is destined to collapse as it did during the last recession. That is a much larger share than those who believe the contrary.
    Growing fears about another property crash are reflected in another question put by the pollsters – ‘Is this a good time to buy a house?’

    Five years ago, when the recovery hadn’t got going and property prices were on the floor, an overwhelming majority thought it a good time to buy. Now less than half do.

    This post was published at Gold Core on May 4, 2017.

  • New Risk for Investors: Fed Considers Jacking Up Inflation Target

    Investors are under-estimating inflation risk. As a consequence, they are under-pricing inflation protecting assets including precious metals.
    The Federal Reserve has given itself the objective of engineering an inflation rate of around 2%. However, there are many ways in which real-world inflation can potentially outpace the Fed’s 2% target.
    Firstly, the Fed’s preferred inflation gauges are flawed. The so-called ‘core’ rate of consumer price inflation strips out food and energy costs. The core Personal Consumption Expenditures (PCE) index has also been criticized for underweighting housing and medical costs.
    The PCE number for March, which came out on May 1st, shows the Fed’s favored inflation gauge running at 1.6% year over year. That’s down slightly from the previous month’s reading of 1.8% (2.1% for the headline unadjusted PCE).
    Since 2012, the core inflation rate has been running below the Fed’s 2% target. That has caused investors to grow complacent toward inflation risk. They seem to be operating under the assumption that 2% is a ceiling.
    That is a dangerous assumption – not only because of food and energy inflation not being properly accounted for, but also because even the official ‘core’ number could rise well above target for extended periods.

    This post was published at GoldSeek on 4 May 2017.