They’re not even trying to blame the weather this time.
Hot Air Hisses Out Of Housing Bubble 2.0: Even Two Middle-Class Incomes Aren’t Enough Anymore To Buy A Median HomeSubmitted by testosteronepit on 04/07/2014 12:35 -0400
“There was a moment when it made sense,” said Blackstone Group, largest home buyer in the US. But not anymore.
A national average sounds an alarm: investors that drove up the housing market are bailing out
Would you like to buy a house for one dollar? If someone came up to you on the street and asked you that question, you would probably respond by saying that it sounds too good to be true. But this is actually happening in economically-depressed cities all over America. Of course there are a number of reasons why you might want to think twice before buying any of these homes...
After Seven Lean Years, Part 1: US Residential Real Estate: The Present Position And Future ProspectsSubmitted by Tyler Durden on 01/13/2014 10:24 -0400
In the last 8+ years, housing has proceeded through a cycle of bubble-bust-echo-bubble: now the echo bubble is crumbling, for all the same reasons the 2006-7 bubble burst: a prosperity based on asset bubbles and low interest rates is a phantom prosperity that cannot last.
This past week saw the initial public offering of the single most anticipated IPO of 2013 - Twitter. If you tweeted about it then you are not alone as the news dominated the media headlines and the market. With Twitter already sporting a 11x price-to-sales ratio, and no earnings, what could possibly go wrong? However, it is that growing complacency among investors that should be the most concerning as the general sentiment has become that nothing can stop the markets as long as the Fed is in the game. This week's issue of things to ponder over the weekend provides some thoughts in this regard...
Well over a year ago, we first suggested that the conventional wisdom thesis for the bounce in home prices - namely a spurt in household formation - was dead wrong. Sure enough, as has been confirmed empirically, the only reason for the latest dead cat bounce in home prices has been the Fed, and banks complicit in engaging in "foreclosure stuffing." And while it was easy to deflect the topic of just what is driving the housing market (because none of the bulls would want to admit it is just another credit and liquidity-driven bubble) for over a year, with the traditional "things will be back to normal soon" fall back used every time, as time passed and none of the traditional ingredients for a housing recovery fell into place, some started scratching their heads. This came to a boiling point today, when real-estate firm Trulia, looking at the latest Census Bureau data on household formation, finally threw in the towel and rang the panic button as not only have young Americans set anchor in their parents' basement, but even refuse to get a job.
Detroit may be on its way to becoming a ghost town, but the disappearance of homo sapiens from the streets just means the largest US bankrupt city is about to have a new master - man's formerly best friend, in the form of tens of thousands of stray dogs most of which happen to be a particularly vicious breed of pit bulls. Step aside Motown, and say hello to Dogtown.
Almost three years ago we warned of the consequence of the disincentives for the working man in the US at the lower-income level. Then, last November we noted the dismal fact that 'work is punished' in America for a large majority of the non-elites. And now, as the part-time new normal becomes more and more understood in the mainstream, we ask once again... If you could stay home and relax all day and actually make more money than you do at your current job, would you do it?
Congress: "Is it fair to say that Wall Street has benefited more [from QE] than Main Street has?"
Bernanke: "I don't think so... I want to emphasize that we're very focused on Main Street... Our low interest rates have created a lot of ability to buy automobiles..."
Let’s face it, the Las Vegas real estate market has gone full Chinese. By full Chinese, we mean a centrally planned bubble has been created that is just asking to blow up. We’ve covered the renewed insanity of the Las Vegas market before, but this article from yesterday’s Wall Street Journal provides even more detail. In a nutshell, as a result of Assembly Bill 284, which essentially made foreclosures impossible in Nevada, extremely delinquent homes are not coming for sale, and this phony market signal is leading to rampant overbuilding and price speculation. Bubbles and bullshit. It’s the American way.
The good old days are back, those of the last housing bubble when money grew on trees.
Not even the most prodigious and reckless money-printing binge can fix it
The next Great Depression is already happening - it just hasn't reached the United States yet. Things in Europe just continue to get worse and worse, and yet most people in the United States still don't get it. We have been warning that the next major wave of the ongoing economic collapse would begin in Europe, and that is exactly what is happening. In fact, both Greece and Spain already have levels of unemployment that are greater than anything the U.S. experienced during the Great Depression of the 1930s. Pay close attention to what is happening over there, because it is coming here too. A full-blown economic depression is raging across southern Europe and it is rapidly spreading into northern Europe. Eventually it will spread to the rest of the globe as well. The U.S. economy has become a miserable junkie that is completely and totally addicted to reckless money printing and gigantic mountains of debt. If we stop printing money and going into unprecedented amounts of debt we are finished. If we continue printing money and going into unprecedented amounts of debt we are finished. Either way, this is all going to end very, very badly.
Timing couldn’t be worse.