National averages paper over gritty details on the ground and are a crummy indicator as to what is happening in specific metro areas. But even with this caveat, a national average suddenly sounded an alarm for the housing market: the smart money is bailing out.
Entries in Housing (47)
Teachers are a symbol of the middle class. In California, they earn on average $69,300 annually, fifth highest in the country. Not exactly a pittance. But it is a ludicrous pittance if they’re trying to buy a home.
First-time buyers, a powerful economic energy, create real demand and make the housing market grow. We’ve been praying for their arrival like we’ve been praying for rain in parched California. But the more we pray, the fewer there are.
OK, I get it. Life-threatening cold temperatures, polar vortices, and snow mayhem can put a damper on home construction, mortgage applications, first-time buyers, and home-builder confidence. But they also plunged on the West Coast where the weather was gorgeous.
“Foreclosure Rebound Pattern”: Foreclosures SUDDENLY Jump 57% in California (And Soar In Much Of The Country)
The cynic in me says the dizzying jump in foreclosure starts in January in much of the country, after years of sharp and consistent declines, must be some kind of data problem. Maybe RealtyTrac’s computers got hacked, or something. But that’s wishful thinking.
It’s back, a new and improved contraption, a synthetic structured security that on its polished surface looks like that triple-A rated mortgage-backed toxic waste that helped blow up the banks and your 401(k) in 2008. But this time, it’s different. It’s even worse.
The salary you must earn to be able to buy the median home in San Francisco is $125,071. That home costs $705,000 – up 24% from a year ago. San Francisco tops the list of the most unaffordable cities. Households earning the median income of $51,000, well, forget it.
Prices for housing have jumped and rents have jumped too, yet the 38.7 million renters, 34% of all households, watched with dismay as their real wages declined. They’ve got a problem with the “wealth effect” that Bernanke held up as pretext for printing money.
Number one is Palo Alto, epicenter of Silicon Valley craziness, where home prices are now 40% higher than they were at their prior bubble peak. What are we calling this phenomenon? Bubble? Nope. “Housing recovery.” But the middle class has hit a wall.
Now part three, after soaring home prices and mortgage rates. It was drowned out by the hullaballoo over the Fed’s taper announcement. It came from Fannie Mae and Freddie Mac. It will drive up mortgage payments even more.
By Lee Adler, The Wall Street Examiner: Looks can be deceiving. The way the media reports housing starts today, you’d think housing is booming. Total starts were reported at 1.09 million units. Consensus expectation was 950,000. Headline writers went nuts on that.
By Doug French, Casey Research: In March, 2009, under pressure from Congress, the Financial Accounting Standards Board, a private-sector organization, motivated banks to become the worst slumlords and neighbors imaginable.
By Lee Adler, The Wall Street Examiner: Is the long running US housing bubble saga coming to an end? From the way the National Association of Realtors reported that pending home sales had a year to year decline in September, you’d think so. But they compared two seasonally adjusted numbers. In unadjusted terms, the index rose (a still lousy) 1.1%.
By Joao Peixe of Oilprice.com: Property developers in the US, aware that land value jumps as soon as mineral deposits are found in the area, have begun to retain oil and natural gas extraction rights beneath the houses they sell – to sell those rights to oil and gas companies in the future. In many cases they don’t even advise property buyers.
You can’t get away from it. The media fawn over it. Rational neighbors drool unexpectedly. Ads flood the airwaves. "Learn our simple three-step system on how to flip homes," the announcer says. Everyone knows: untold riches are waiting for you. "Right here in the Bay Area," he says. It’s hot, so hot that people will get burned. And banks will get hit (again).
By Lee Adler, The Wall Street Examiner: New home sales remain depressed, near historic lows despite the biggest August sales increase in 7 years. Housing may not be a drag on the economy, but it’s not making a positive contribution either. Yet housing inflation rages, with new home prices above the peak of the 2006 bubble. If that was a bubble, what’s this?
Oaktree Capital and Carrington Mortgage are trying to dump a portfolio of 500 single-family homes they’d bought out of foreclosure. They’re trying to get the heck out of the once hot buy-to-rent trade. Blackstone, which gobbled up 32,000 of these homes, is trying to get its money out. They all are. That trade is turning sour. Trouble in the housing market!
When the Fed shied away from tapering its $85 billion a month in asset purchases, while simultaneously downgrading the economy for the third time this year, it gave the impression of being mired in fear. It has many reasons to be afraid. But one in particular.
While Texas hadn’t experienced the crazy run-ups in home prices that other cities had seen during the housing bubble, it did experience a collapse in demand for new homes. For builders the story was bloody. In Dallas, half of them didn’t make it. But now, prices in the delayed Texas housing bubble hit all-time highs. Builders are giddy. And cracks are forming.
By Lee Adler, The Wall Street Examiner: There’s been a lot of talk over the past year about the housing “recovery.” But the fact of the matter is that in terms of new single-family homes, there’s no genuine recovery, but there’s certainly a bubble in prices.