• Category Archives Real Estate
  • Kushner’s Records At Deutsche Bank Subpoenaed As Mueller Avoids Trump

    As it turns out, President Trump’s legal team was telling the truth when it said that Special Counsel Robert Mueller hadn’t subpoenaed financial records related to the president’s business activities from German lender Deutsche Bank, contrary to Bloomberg reporting.
    On Friday, the New York Times reported that Deutsche Bank had received a subpoena for records on accounts linked to the Kushner Companies, the family real-estate empire of Trump son-in-law and senior adviser Jared Kushner. This contradicts reports by both German and US media organizations dating back to July which insinuated that Mueller had been digging into Trump’s multi-decade career in real estate. Even after his infamous bankruptcies in the 1990s, Trump managed to maintain a functioning lending relationship with Deutsche, which has lent him and his businesses hundreds of millions of dollars over the years.

    This post was published at Zero Hedge on Dec 22, 2017.


  • New Home Sales Surged 17.5% MoM In Nov To Highest Level Since 2017 (Biggest Gain In Inventory-strangled West)

    This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.
    New home sales for November surged 17.5% MoM in November to 733k units sold SAAR. The US finally made it back to 2007 levels.

    This post was published at Wall Street Examiner by Anthony B Sanders ‘ December 22, 2017.


  • New Home Sales Explode Higher: Biggest Monthly Jump In 25 Years

    Earlier we discussed that US personal savings tumbled to the lowest since 2007, and now we can also conclude that one of the things Americans splurged on last month was New Homes, because according to the Census on Friday morning, new home sales in November soared by a near record 109K to 733,000 from a downward revised 624,000 in October (from 685,000 previously).

    This post was published at Zero Hedge on Dec 22, 2017.


  • Americans have no savings and with very good reason: housing, education, and health care have seen extraordinary inflation while wages are stagnant.

    It has now become a daily ritual in which story after story of broke Americans plaster the web. Yet somehow on the mainstream press, very little is discussed about this topic. Americans are largely broke because inflation is vey real. Housing, education, and health care costs have soared out of control while wages have remained stagnant. The way Americans continue to pay for these items is by going into loan shark levels of debt. There used to be a pretense that ‘we’ actually cared about having a middle class but that is now thrown out the window. At this point, we are in a full on sprint towards low wage capitalism. Many people live on a paycheck to paycheck diet and are berated about saving more for retirement. The reality is, the new retirement model is working until you die.
    In the land of no savings
    Sunday morning, I wake up and take a stroll through the neighborhood. ‘Did you hear about Bitcoin? Wild right?’ I’m asked by a stranger at the park. ‘Sure seems wild. You own any?’ To which I get the following response, ‘I wish I had some money to even invest!’ I think we live in a world where most Americans are merely spectators to the wild gyrations of the market. They hear about investments too late or mistake speculation with actual investing.

    This post was published at MyBudget360 on December 21, 2017.


  • Canadian Homeowners Take Out HELOCs To Fund Subprime Purchases

    The HELOC (Home Equity Line of Credit) has been a blessing and a curse for Canadian households. While it has helped spur house prices and simultaneously provided consumers the ability to tap into their new found equity, it has also crippled many Canadian households into a debt trap that seems insurmountable.
    Between 2000 and 2010, HELOC balances soared from $35 billion to $186 billion, according to the Financial Consumer Agency of Canada, an average annual growth rate of 20%.
    As of 2016, HELOC balances sit at $211 billion, a 500% increase since the year 2000. While also pushing Canadian household debt to incomes to record highs of 168%.
    Scott Terrio, a debt consultant, says the situation is a full blown ‘extend and pretend’ meaning borrowers are just continuously refinancing or taking on more and more debt in order to sustain their lifestyle. Canadians can extend their debt repayment terms and pretend to live a lifestyle they can’t otherwise obtain.

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


  • These PE Firms Are About To Get Crushed By Their Subprime Auto Bets

    In the aftermath of the ‘great recession,’ private equity firms placed massive bets on subprime auto finance companies with the typical “thesis” going something like this: “well, people have to get to work don’t they?”…genius, if we understand it correctly.
    Of course, the “thesis” seemed to be confirmed when auto securitizations performed relatively well throughout the financial crisis, amid a sea of mortgage bonds getting wiped out, and private equity titans were off to the races with wall street titans from Perella Weinberg to Blackstone and KKR scooping stakes in small niche lenders.
    Unfortunately, as Bloomberg points out today, the $3 billion bet on subprime auto lenders hasn’t played out precisely to plan as the “well, people have to get to work” thesis has proved to be somewhat less than full proof.
    A Perella Weinberg Partners fund has been sitting on an IPO of Flagship Credit Acceptance for two years as bad loan write-offs push it into the red. Blackstone Group LP has struggled to make Exeter Finance profitable, despite sinking almost a half-billion dollars into the lender since 2011 and shaking up the C-suite multiple times. And Wall Street bankers in private say others would love to cash out too, but there’s currently no market for such exits.
    Since the turn of the decade, buyout firms, hedge funds and other private investors have staked at least $3 billion on non-bank auto lenders, according to Colonnade. Among PE firms, everyone from Blackstone and KKR & Co. to Lee Equity Partners, Altamont Capital and CIVC Partners waded in.

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


  • Holiday Spending Set To Hit 12-Year High Thanks To…Debt

    Even though consumer confidence cooled for a second straight month in November, CNBC is reporting that holiday spending for the average American household is on track to be the highest in 12 years.
    Amazingly, the CNBC All-America Survey found that the average family will spend $900 for the first time in the 12-year history of the poll, eclipsing last year’s estimate of $702 by a wide margin.
    Furthermore, the survey of 800 American households – which has a margin of error of plus or minus 3.5 percentage points – found a surge in the percentage of Americans planning to spend more than $1,000. The number climbed to 29%, up from24% last year.
    But before economists and retail analysts begin recalibrating their expectations, it’s worth noting that much of this spending will be funded by debt. Another study by RentCafe which examined spending habits of American renters discovered that, in the 50 largest US metropolitan areas, the average renting family will go into debt due to holiday-related expenses, debt that must be paid off in the opening months of the following year.

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


  • Coming Housing Boom Could Mean It’s Time to Add Raw Materials

    In its November report, mortgage security firm Freddie Mac called 2017 the ‘best year in a decade’ for the housing market by a variety of measures. These include low inflation, strong job growth and historically-low mortgage rates. This assessment is very encouraging, not just for homebuyers and builders and the U. S. economy in general, but also for commodities, resources and raw materials as we head into 2018.
    Although past performance is no guarantee of future results, it’s still instructive to look back at how materials performed the last time the U. S. was ramping up housing starts and mortgages. The last housing boom, which peaked in 2006, was accompanied by elevated commodity prices. We could see a return to these valuations over the next couple of years on higher demand, a stronger macroeconomic backdrop and cyclical fundamentals, as shown in the following chart courtesy of DoubleLine Capital:
    ***
    Speaking on CNBC’s ‘Halftime Report’ last week, DoubleLine founder Jeffrey Gundlach said he thought “investors should add commodities to their portfolios’ for 2018, pointing out that they are just as cheap relative to stocks as they were at historical turning points.
    ‘We’re at that level where in the past you would have wanted commodities’ in your portfolio, Gundlach said. ‘The repetition of this is almost eerie. And so if you look at that chart, the value in commodities is, historically, exactly where you want it to be a buy.’

    This post was published at GoldSeek on Thursday, 21 December 2017.


  • UK’s Toxic Housing Mix

    Asking prices for houses in the UK are starting to fall at a time when first time buyers in the UK continue to struggle to get on the ladder.
    The average house price in the UK has now moved lower by around 25k according to property website Zoopla, but are still nearly 8 times the average wage, which is around 30K per year.
    ***
    Schemes like help-to-buy require a 5% deposit which would equate to around 11k for a house at the national average of 223,807 and in London it would mean close to double that at 22k minus any fees as the average asking price is 481k here.

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


  • Free Parking Isn’t Free

    How much off-street parking should a restaurant have?
    This of course, is a pretty important question for the owner of the restaurant, since he or she will need to make sure that people can easily access the building in order to eat there.
    Any entrepreneur who wants to run a profitable restaurant will need to guess how many parking spots are needed, based on a variety of factors – such as proximity of housing, public transportation, and the personal preferences and demographics of the clientele.
    If the owner supplies too little parking, then motorists will simply drive on by, opting to dine somewhere that offers an easily-accessible parking space.
    On the other hand, the owner doesn’t want to provide too much parking because parking spaces use up square footage that could be used for other purposes such as a larger outdoor patio on a restaurant.
    Thus, in economic terms, parking spaces are no different than any other amenity that might be offered by a business, such as tables, bathroom stalls, air conditioning, and windows.

    This post was published at Ludwig von Mises Institute on December 21, 2017.


  • 2018’s Number One Risk

    To find the market’s biggest weakness, a good place to look is at the most crowded movie theater with the smallest exit.
    European bonds.
    ***
    You’ve probably seen the charts of European high yield floating around, so I won’t reproduce it here. Yields in the low 2s for BB credits. There was also a European corporate issuer that managed to issue BBB bonds at negative yields a few weeks ago. I think that might have been the top.
    No shortage of stupid things these days:
    Bitcoin Litecoin Pizzacoin Canadian real estate Swedish real estate Australian real estate FANG Venture capital But European bonds are potentially the stupidest. Maybe even stupider than bitcoin!
    Although there is nothing stupid about it – the ECB has been buying every bond in sight, and there’s lots of money to be made frontrunning central banks.

    This post was published at Mauldin Economics on DECEMBER 21, 2017.


  • What Bubble? Silicon Valley Homes Going For Nearly $2 Million Over Asking Price

    If you’re still holding out hope that the following chart is anything but another massive housing bubble in the making then you should probably ignore the disturbing evidence to the contrary that we’re about to present below…
    ***
    Back in 2005/2006, one of the key signs that housing markets across the country were overheating was the number of houses that, thanks to soaring demand from speculators, were suddenly selling at prices well in excess of their asking price. That said, as a local CBS affiliate in San Francisco points out, the premiums of 2005/2006 pale in comparison to homes in Silicon Valley today that are selling for as much as $1-$2 million over their original asking prices.
    But if you thought they area housing market couldn’t get any more outrageous, consider a home on Colorado Avenue in Palo Alto.
    It listed for $2.9 million, but sold for $3.9 million, $1 million over asking price.

    This post was published at Zero Hedge on Dec 20, 2017.


  • Existing Home Sales Jump Right In The Middle (of what?)

    Sales of existing homes soared in November 2017, according to the National Association of Realtors (NAR). Up 5.6% in just the one month, at 5.81mm (SAAR) homes sold that’s the highest pace for resales since December 2006. After several months of glaring weakness, either a delayed rebound from hurricane disrupted activity or a burst of renewed optimism has gripped the real estate market (I’d bet the former given the timing).
    The breakdown of home sales by price last month shows a dramatic reversal from 2017’s persistent skew toward activity only at the upper ends. The NAR reports that sales in the all-important mid-range absolutely spiked. In the $100k to $250k tier, activity was up 42% year-over-year; in the next higher stage, houses priced $250k to $500k, there were 34% more completed transactions this November than last.
    These results actually raise more questions than provide answers. They’re the kind of distortions typically reserved for anomalous conditions, or statistical problems in the data series. For almost all November’s big jump to be channeled only into the middle leaves too much to suspicion, particularly given how the upper ends of the housing market have been where the vast majority of growth has been derived for several years running.

    This post was published at Wall Street Examiner on December 20, 2017.


  • Why A Scathing Wall Street Is Furious At The Trump Tax Plan

    Back in October 2016, the “millionaire, billionaire, private jet owners” of America’s elitist, liberal mega-cities (A. K. A. New York and San Francisco) celebrated the tax hikes that a Hillary Clinton presidency would have undoubtedly jammed down their throats proclaiming them to be a ‘patriotic duty’. Unfortunately, now that Trump has given them exactly what they apparently wanted…an amazing opportunity to ‘spread their wealth around”…they’re suddenly feeling a lot less patriotic.
    Of course, as we’ve noted numerous times, while most people across the country and across the income spectrum will benefit from the Republican tax reform package, the folks who stand to lose are those living in high-tax states with expensive real estate as their SALT, mortgage interest and property tax deductions will suddenly be capped. And, as Bloomberg points out today, that has a lot of Wall Street Traders in New York drowning their sorrows in expensive vodka and considering a move to Florida.

    This post was published at Zero Hedge on Dec 20, 2017.


  • What Will the Tax Bill Do to the Housing Market?

    The enormity of this change has not been fully appreciated just yet.
    The tax bill now becoming law will impact the housing market in a big way via four mechanisms that gut the government’s subsidies of homeownership:
    Nearly doubling the standard deduction (but wait…) Lowering the cap on the mortgage interest deduction for new purchase mortgages Capping the deduction for state and local taxes at $10,000 Eliminating the deduction for interest on home-equity debt, such as HELOCs. The Big Equalizer: The New Standard Deduction
    Nearly doubling the standard deduction – from $6,350 for individuals and $12,700 for married couples filing jointly in 2017 to $12,000 and $24,000 respectively in 2018 – would be a simple way of giving many Americans an instant, massive, no-hassles tax cut.
    But wait: The law also eliminates the personal exemption of $4,050 allowed for each family member. A married couple will see an increase in the standard deduction of $11,300 (compared to 2017). But it will lose $8,100 in personal exemptions. This whittles down the net increase in deductions to $3,200. For couples with kids, it gets more complicated.

    This post was published at Wolf Street on Dec 20, 2017.


  • Fire! Existing Home Sales Surge To 11-Year Highs As Median Price Over 2x Wage Growth (Low Inventory Continues)

    Home price growth is on fire!
    US Existing Home Sales rose to 5.81 M units SAAR in November, an increase of 5.6% MoM.
    Existing home inventory has been declining since The Great Recession and keeps getting worse as median price of existing home sales keep rising.

    This post was published at Wall Street Examiner on December 20, 2017.


  • In Dramatic Reversal, China Gives Up On Deleveraging Pledge

    Last week, when looking at the latest Chinese credit data, we made two troubling observations: first, China’s economic growth was slowing across a number of key data points despite massive new credit injected into the economy over the past year. Second, that the formerly massive credit impulse – which was responsible for pushing the global economy and markets out of the early 2016 rut – was no more, and that overall system credit growth slowed to 14.4% yoy from 14.9% the prior month, which was the slowest total credit growth in the past 27 months.
    While there were some nuances, such as where in China’s economy was credit being overstimulated (household) and where it was stifled (shadow banking), the bottom line as we showed in one chart is that absent a significant burst in credit creation, or credit impulse, China’s real estate prices – the backbone of the entire economy and its “wealth effect” – was lookingat a hard landing.

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


  • The Most Expensive Housing Zip Codes in the US

    Hang on to your hat.
    The winner is Atherton, a small town in Silicon Valley with just one zip code, with a median sale price (not asking price) of $4.95 million in 2017. But that’s down 8.8% from the even juicier $5.5 million in 2016.
    It beat Sagaponack’s 11962 zip code. The community in the Hamptons had reigned supreme in the prior two years. But in 2017, it dropped to 15th place ‘mainly due to more sales recorded at lower price points, which slashed its median sale price in half,’ to just $2.82 million, according to Yardi’s PropertyShark. That’s quite a step down from $5.5 million last year.
    In second place is New York City’s 10013 zip code, which covers TriBeCa with its luxury condo developments. It came in with a median sales price of $4.1 million, up 7.7% from last year.
    In third place is 33109 in Fisher Island, ‘a small, secluded island community’ in Miami-Dade County, with a median sales price of $4.05 million, which is up nearly 20% from 2016.

    This post was published at Wolf Street on Dec 19, 2017.


  • Is Renter Nation Dead? Single-Family Housing Starts, Permits Highest Since 2007

    October’s 13.7% MoM spike in housing starts was revised dramatically lower to just +8.4% which makes November’s 3.3% rise (vs expectations for a 3.1% decline) somewhat less impressive. Building Permits dipped from recent highs.
    Northeast starts tumbled -39.6% and down -12.9% in Midwest, but jumped in South +11.1% and West +19.0%

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


  • The Full List Of Every GOP Senator Who Stands To Be Personally Enriched By The Tax Bill

    Submitted by David Sirota of International Business Times
    When the U. S. Senate takes up the final tax bill this week, more than a quarter of all GOP senators will be voting on a bill that includes a special provision that could give them a new tax cut through their real estate shell companies, according to federal records reviewed by International Business Times.
    The provision was not in the original bill passed by the Senate on Dec. 1. It was embedded in the final bill by Sen. Orrin Hatch of Utah, who is among the lawmakers that stand to personally benefit from the provision.
    In response to Democratic lawmakers who have slammed the provision as a lobbyist-sculpted giveaway to the rich, Republican Majority Whip John Cornyn promoted on Twitter a column by Ryan Ellis, a registered bank lobbyist who has been working to influence the tax legislation and who has defended the provision.
    In all, 14 Republican senators (see list below) hold financial interests in 26 income-generating real-estate partnerships – worth as much as $105 million in total. Those holdings together produced between $2.4 million and $14.1 million in rent and interest income in 2016, according to federal records.
    IBT first reported on the tax carve-out, which allows investors in ‘pass-through’ entities, including real-estate partnerships such as LLCs and LPs, with few employees to deduct part of their income that passes through those partnerships. In response to IBT’s reporting, Republican Sen. Bob Corker, who owns up to $35 million in ‘pass-through’ real-estate interests, claimed he did not know of the carve-out when he announced his support for the legislation on Friday, after previously casting the only Republican vote against the bill in the Senate, which did not then include the provision.

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