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The Entire US Housing Market In One Chart
Last night's IPO filing of American Homes 4 Rent - the latest large "own to rent" vehicle scrambling to cash out while the cashing out is good (if not for its peer Colony which pulled its IPO as we reported last night) may or may not pull the "market conditions" card, but it did provide for an informative S-1 filing, where among other things one can find the following one-chart schematic summarizing the entire US market.
In short:
- Residential housing is the single largest "tangible" US real estate asset, worth roughly $18 trillion (but well below the total financial assets in circulation in the US).
- Housing inventory as of May was 133.2 million units, of which owner occupied is 78.9 million, renter occupied was 41.7 million, but most troubling: 12.6 million was Vacant. Some shortage.
- Of the Owner-occupied units, 3.3 million units were 90+ delinquent or in foreclosure, 2.0 million units were 30-90 days delinquent, and 5.8 million were current but with negative equity.
- It is this mismatch between 11.1 million in negative equity "owner occupied" units and 12.6 million vacant units that all those who peddle the rent-to-own dream are focused on as America becomes increasingly a society of rents.
- It also means that the millions in soon to be formerly owner-occupied homes (once the anticipated switch to rental ownership takes place) have to stay on bank books and not enter the market in other to generate the illusion of scarcity (see: foreclosure stuffing), or else the myth that there is a housing shortage will be blown right out of the water.
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Must....Somehow Pump....FED's....REIT holdings....1.2.3. LIFT!....
12 million houses are vacant. and this is called troubling? i'd say more like a nightmare.
Yes, but how many are located in nightmare urban areas..?? W. Philly, Camden, Detroit, E. St Louis, etc. < present and future urban wastelands >
Where's the chart that shows the pro forma net income per unit vs. the price paid per unit? In other words, since the purchases are usually for cash, what's the net return? I'm gonna take a wild guess and say they predict something in excess of 5%. Owning rental units means inflation is your friend.
Not to worry, China has far more vacant cities than the US, and look at their GDP growth!
Yep, whisper.
Cap rate, cap rate, cap rate.
Screw location, location, speculative capital appreciation.
That's contrary to "Depreciation Allowance" anyway.
But, inflation is nobody's friend, just less damaging when hedged.
yup. Actually I think these REITs with the single family rentals are going to be screaming shorts. The business model is flawed. There's a big difference in managing 500 single family homes spread out in the Las vegas suburbs (if you can call it that) and having one skyscraper of 500 rentals on the corner of 65th and 3rd in Manhattan.
Maybe we are seeing the ultimate write down, the one that the banks should have been made to take. I mean, they buy for cash, and when the reality of renting sets in with these 'novis' landlords they will be pounding the table to get out...at any cost or loss. So much of it is money laundering anyway, and that is the clean side of the story.
"Housing inventory as of May was 133.2 million units, of 12.6 million was Vacant."
instead of "vacant", we like to call it "housing reserves"
trying to bring it to the 10% mark as part of our re-cap program
Funny how $30million ocean front homes in Hawaii and Malibu are selling, but little starter home shitboxes can't sell for shit. Hmm, what does that tell you about Bernankes QE policies? Motherfucker!!!
Exactly my thought. Real estate is all about location, location, location. Too many of those vacant units are in urban "no-go" types of places that can't attract buyers at any price. It's a seller's market where I live.
That's what the realwhores want you to think - that there are no empty homes or foreclosure in the more "desireable" areas. That's not the case, though, if you look behind the curtain. Maybe not as many vacancies as the locations mentioned, but they are there and so are the foreclosures. In my area the people who couldn't unload their albatross before, have put them back on the market for bubble 1.0 asking prices waiting for the next round of greater fools to jump in.
Follow an Escalade and they'll lead you, more often than not, to delinquent (or soon to be) homes.
Well that explains it. My neighbors tend to drive Lexuses (Lexi?) or Acuras, with the occassional Prius or Mercedes for variety. All throughout the meltdown and ensuing recession there have been no foreclosures or short-sales in my neighborhood. I attribute that to great schools and non-flashy neighbors who live within their means.
Or, those of your neighbors who are not paying their mortgages, have not even been contacted by their banks. There's a lot of that. The banks have no incentive to take even the first step in foreclosing. Why should they? They don't have to mark to market, and they make money via the Fed.
I doubt your data.
To pile on: Suburbs are bound for the wasteland as well. Plagued by inadequate infrastructure, crappy construction, traffic resulting from growth & poor design, and, just darn, uninviting.
Families with school-age children will continue to move to the suburbs because they want to raise their kids in safe neighborhoods with good schools. This simple fact is unlikely to change, hence the seller's market in locations that offer safe neighborhoods and top-notch schools.
Are you a RE agent, Georgiabelle?
The young people I know have sh** jobs if any, and likely won't be having kids. let alone raising them in the burbs. Unless the burbs go down in price a whole lot more.
BTW, if you are a RE agent, please go fuck yourself and your "top notch schools." If you're not, then they should be paying you shill fees.
It's gonna be like playing fallout 3 just without the nuclear war. . . yet
No one has any idea what bank balance sheets truly look like.
That's what abrogating mark-to-market did. Now they mark to fantasy, and it's accepted as GAAP.
All housing shortages are local.
But even under more optimal conditions the whole mega landlord of single family homes thing is a very untested business model.
I'll take a large, no butter please.
GREAT chart!
Today's plunge in mortgage applications with a small rise in mortgage rates points to how sucky the US housing market really is.
http://confoundedinterest.wordpress.com/2013/06/05/whoopsie-mortgage-applications-dive-11-5-as-rates-surge-and-adp-employment-misses/
i'll second the point that all housing is local. drawing conclusions about the scarcity of housing by looking at the housing market on a national scale is a futile exercise. does anyone really think that the stock of vacant homes in detroit has an impact on the housing market in san diego? show me the stock of vacant houses where the jobs are. now, that would be actionable information.
http://online.wsj.com/article/SB10001424127887324883604578396491794558304.html
http://www.youtube.com/watch?v=kafIZwybJ68
" well, I guess I don't buy your premise, it's a pretty unlikely possibility, we've never had a decline in prices on a nationwide basis "
July 2005 The Bernank
Are we saying the Bernank is wrong? Again!?
Well it depends how you define "nation". If you define "nation" = NYC metro area + Washington DC metro area + Bay area, then he's right.
Remember, they view anything outside those areas as a grim wasteland populated by knuckle-dragging racist retards.
Friend of mine in the industry got drunk with me over the weekend and ** he talked **. It went like this.
"We're cutting our own throats. The business model was . . . a young family buys a house. They add babies and need to upsize. That's another commission. Then they get a promotion at work and transfer and that's another real estate agent's commission. Then maybe they upsize again to maximum family size. That's another commission. Then they want to retire and downsize. Another commission.
We are flushing all that. These assholes come in and buy 1000 houses to rent out. They may NEVER sell. They may rent that thing out for 40 years. We get no more commissions! Yeah, some want to flip, but anywhere other than the hype areas, if you see a owner with LLC after his name, there will never be another commission from that guy"
...if the LLC's business model actually works as advertized.
Zi-i-llow killed the mi-i-ddleman
...if wages were rising and/or there was a bubble joe six pack could participate in. The dream of buying more and more house to "keep up with the Jones'" is over.
The coming rise in Healthcare Insurance premiums will crush housing and rentals. Rates don't need to rise to bury the housing markets, a declining disposable income will be enough to do the trick....
So future vacancies will depend on how active the death panels are.
Unless the government starts cloning a new race of submissive zombies.
Oh, wait ... !!!
Marihuana/Cannabis/Zombies. They are doing it. That is exactly what it does, it reduces you amigdala, the primitive brain that rules your flight/freeze/fight reaction. Makes you mellow and tolerant. Only problem is that 10% of those who try it, get caught and start using daily, then thier probability of developing schizophrenia goes up by 500-1000% depending on family history.
"Unless the government starts cloning a new race of submissive zombies"
bull fucking shit
Which it doesn't, because we've seen this trick before....
Doesn't matter what scale it is, it always comes down to property appreciation over time- the cash flow from the rentals will only cover taxes and maintainance, it's a zero-sum game there- the only way to make a net profit is from a capital gain on the ultimate sale of the property, which historically has been a 1-2%/yr gain- yawn.
People act like they're Christopher Columbus with these LLC's- please.... A couple of dumbasses who failed at being a hedge fund think they've found gold by turning themselves into REITS.......
I don't know where you live, but where I live the rent will do a lot more than pay for taxes and upkeep. If you have a mortgage to pay, maybe you break even, but if there's no mortgage, you can get good free cash flow from renting.
It may be that part of the appeal is that it's a non financial asset and property laws tend to be far, far more strict about land ownership than . . . pretty much anything else. Guns, gold, whatever.
These LLCs may be trying to insulate from inflation via rent increases.
"These LLCs may be trying to insulate from inflation via rent increases."
Good luck with that. As I've told many, many people, you cannot leverage rent. Blank stares in return. 'Merikans don't have the income stream (nominal or especially real) for rent to keep up with housing prices.
It never ceases to amaze me how dumb people are.
Not an expert. But my drunk buddy somewhat is. He says it works when there's no mortgage. The bulk buys are cash. His own buys are cash.
The youngsters are screwed. This sort of thing requires that you can make cash buys. It takes time to accumulate money.
There are a lot of folks who think you can have inflation when there is no demand for things. Rent is a big part of the inflation equation, which some may dislike, but it's true. If you have housing expense, it's likely the largest item in your monthly budget. If it's not, you're an aberration. Talk to your friends. House price increases (which are pretty much bogus, he says, via the bulk buys of foreclosures) are NOT rent increases. Check your craigslist apartment rents. See if they are spiking. They're not.
So if inflation goes up, it's because rent went up. If rent doesn't go up, it erodes food and gasoline rises. That's just mathematics. So if rents are going up, you get inflation insulation.
Not targeting you, but mearly making a statement on the dumb money plowing into real estate. "House price increases...are NOT rent increases." Exactly, but what people are buying into is that housing prices are going to continue to go up and up - I'd better get in now! The late to the party (aka, dumb money) REO-to-rent theory follows the same logic. The costs are not yielding the returns desired now, hence the smart money is exiting.
I'm simply saying that if people are dreaming of be coming the next Trump of the housing rental world, stop dreaming. It's going to end very bad.
I don't understand your rent and inflation directional flow, perhaps 'casue we differ on what is inflation.
Nod, good reply.
My buddy is not thinking appreciation. He is thinking retirement income flow with a property manager to eliminate hassle while he travels. He says (rightly) that stocks and bonds are a joke and he wants an income stream from something not involving them.
We may differ on inflation. Many argue it. But the definition is what the CPI survey says it is, and they make very clear that rent or housing expense is the dominant item of American budgets. If apartment rents are not going up, if duplex rents are not going up, then arguing about "imputed rent" being invalid is itself invalid. Rents of all sorts of abodes are not going up.
Hence no inflation to worry about. If they are going up, then the rent you would charge on your rental holding would seek to be competitive and presto, you have an indexed pension.
Sounds like a plan until the continuing unemployment picture advances (which is will), and inflation eats up that declining salary (which it is) and property taxes go up to pay 'automatic salary increases' for county and city employees (which it ALWAYS will), and on and on and on.
Oh, and don't forget that when the tenant can't pay it can take a year or more to get them out and if they claim hardship...good luck. It is easier to get a homeowner out than a tenant renting. So much for cash flow..... Nuts, forgot about the expense to get the damn place back into rentable shape for the next 'cash flow' application. Did I mention handicap and discrimination law suits? Oh well, it works for some.
It is the little details that make rockets bow down to gravity.
A foreclosure is dramatically more difficult, longer, and expensive (on average) than an eviction... Look at it this way, a foreclosure seeks to not only rid the owner of his possessory interest in the real estate, but also his ownership in the land... needless to say, there are a few more hurdles for taking peoples' homes.
THESE ARE CASH BUYS.
If you think it's hard to evict, cut their rent and explain how you're trying to help them avoid a bad credit rating.
They'll pay, and then leave when they feel like it.
And when you cut their rent, you are cutting the national inflation rate, if your situation is common.
Where I live I can easily, as in today, buy two or three homes that will cash flow a down right incredible without using cash. I've got a duplex that grosses almost double the property tax/payment/insurance. Since December of 09 I've had less than three months of rent loss due to vacancy.
It is all local. I'm only interested in actual money that makes it way to my pocket, true income producing property where I can carry a mortgage.
That said, there is no way these companies are going to be able to make a true return. The amount of man hours used for renting/maintaining, repairs, etc. along with vacancies will destroy any return they are hoping to see in single family units. I'm done with single family unless it is truly too good a deal to pass up, and with currently multi family prices it looks like I'm out of that market unless I build.
Suppose you inherit the single family place free.
Property Value interest rate
"it's a zero-sum game there- the only way to make a net profit is from a capital gain"
The property value depends on the discounted free cash flows (CF) that it generates and the rate of increse/decrease of those cash flows. CF = Rent - Expenses - taxes (all income, property, etc)
Value = CF/R where R is the expected rate of return. Guess where R comes from? Well from the return that you could obtain with an alternative investment of similar risk. For instance an A quality bond? Or BB? do you think that rates are going up? or down? From there se what happens to your Value (capital gain) as the interest rates go up?
And if you are right and CF = zero, then Value is actually cero.
Finance 101
throat was already cut back in 2005. this is just sicking leeches on the still gaping wound while putting clean bandages on everyday and calling it healed.
Even the WSJ (or maybe it was the NYT) reported there were over 109 months supply of empty houses.
That's alot. And since then builders have gone wild adding thousands of houses to the market thinking an endless supply of zero-down (or near zero-down, depending on yoru area) mortgage loans .... loans to people for Giant houses they cannot afford.
I see lots of sellers in the Burbs listing their houses for about 40% higher then estimates ....they simply don't sell and the Sellers get very frustrated. Many are stuck with a massive lead weight (mortgage) tied to their ankles. Unrealistic prices and a tad of irrational exuberance. Remember, an American moves on the average every 4-to-5 years...this is painful in a alling house market. I know, I've been there and done that.
And "No Thanks!"
Now, I'm a Cheap (and Wiser) Bastard and not paying for ANYTHING unless it's at least 40% reduced.....(preferably 80-90%). Patience.
It's getting ugly.
CheapBastard,
You should rename your handle to
CheapWiserBastard
It would be more appropriate, since I am in total agreement.
Silly Tylers...reality is for doomers.
never seen real property in such an unreal state
Next door to where I live in Hawaii is the US's largest housing estate; you drive on the corporation roads for a half hour up and down the mountain around and around and see blocks of vacant houses. It looks like an advertisement for Neutron Bombs. They were either built for the speculation market; or the people went back to the real world where there's some-kind of an economy. If you already have your retirement figured out, you can probably find an individual owner who's a "motivated seller". But it's a very boring place. you can't rent anything because nobody has a job.
but can you grow weed?
Yea! and Create a Zombie society that you can then abuse at your will. Dream of slavers...
YO dick, just cuz you are to fucking week willed to handly a little pot dosent mean that everyone is. Do you call the nanny state to change your diapers when you shit yourself?
America is a throwaway society. I know there is alarm at non-occupied homes, but it is not tha simple. Recently looking at some homes, there is no doubt why they are not occupied. They are trashed. The useable life on these fab houses is 25 years or so. Yes, they dont make them like they used to and 100 year old homes are often in better shape. These disposable fab houses need to be priced accordingly: $50k? Basically assume the price is depreciated over 25 years and then worth zero. Burn it down and build a new house on the lot.
But...but...government building codes and permitting requirements are stricter than ever!
Like my dad (old skool carpenter) sez, "just becasue the inspector checks the outlets does't mean house wont fall down tomorrow."
And government home inspectors are basically paid based on the number of homes they approve in a day, not whether or not they find violations. The FHA appraiser that looked at my home didn't do anything but walk around and turn on the faucets. It was my job to hire someone to look at the foundation, electrical, and drains.
Drywall covers a lot of shit. Go to a recently built Pulte home and pull off some interior drywall and count the number of wall studs that aren't anchored to anything. 90% of the wires and pipes aren't put in to code.
20 years ago I was working in residential construction in the suburbs north of Dallas. There isnt enough time for me to list all the poor/substandard practices and materials I saw. Corners were cut everywhere and just whitewashed over to look nice until after the sale. We joked about our "tail-light warranty". It is guaranteed for as long as you can see our tail lights when we drive away.
Basicly, those "500k+" houses werent worth 30k new. They will not have held up well over time, and I'm sure they arent building them any better now.
The great State of Texas has the most pro contractor laws in the nation. You have an issue with a contractor, any issue, and you will find out real fast just how the homeowner has ZERO rights and must learn to enjoy anal penetration.
Shitty Construction: http://www.zerohedge.com/news/2013-06-05/meanwhile-philadelphia
This is proof that you guys are right!
What?! You mean the US is becoming like China and producing poor quality products? Well at least they're still able to sell them at the higher western premiums! It's called "Made in the USA (under Government regulations)."
adr and pirate are correct. I was shocked when I saw some of these new houses being built by various builders...just thrown up with crappy knotted wood.....crappy plastic piping....huge tears in the wrap....you name it.
I see lots of "new" neighborhoods already falling apart after only 5 years. Perhaps maintenance --air con, carpentry, etc-- is the place to be excpet they are being priced out by $6/hour laborers from abroad.
Buyers beware.
California has MILLIONS of those disposable houses, rotting by the minute; they are to people who need shelter what the crumbling highway infrastructure is to people who need to go somewhere--without being killed. We have a decade at the most before this country is a non-big screen version of the movie The Road...
true, as we speak, society is throwing america away
wtb larger image!
I'm sure the banks are dwelling on the numbers.
So only 20% are truly owned(minus property taxes ofc)
Yes and housing prices in Canada are totally out of control!
But wait: "Among Canadian homeowners, the number of mortgage-free Canadians has increased slightly to 41 per cent in the fourth quarter from 38 per cent in the first quarter, and the highest level since 2006." (Nov, 2011)
It's OK, every home built since about 1996 was built to only last about 20 years before falling into a smoking crater.
Voila, no more shortage!!!!
Seriously, I'm not kidding. I went to look at some homes built in the late 90s and early 2000s when I bought my home in 2009. Every one I looked at had cracked foundations, bowed walls, leaking roofs, and sagging windows. From what I have seen and heard, the construction from 2002-2007 didn't get any better and even cut more corners.
Planned obsolescence entered the halls of Lennar, Pulte, etc. Just like appliances in the 1970s. What better way to ensure future profits as a publicly traded construction company than to build your product to fail.
@adr
I can proudly say that I have never lived in a home that was built before 1976 and I've never owned one built before 1962.
1962 ... Back then a 2 x 4 was almost the full 2 inches by 4 inches. I said almost. Seems like they keep shaving an eighth of an inch off the dimensions every decade or so. I see some of them today as small as a RCH less than 1.5 x 3.5 inches.
You don't use 2 x 4 to build a house. Do you?? If you find a home with exterior walls built of 2x4's please do not buy it.
Where I live all the walls are studded with 2x4's. The homes are over 30 years old and are still standing.
If you live in colder climes, 2 x 6s may make more sense. In warmer areas, framing exterior walls with 2 x 6s is overkill.
2x4's have been 1.5x3.5 since at least the 1970's.
Yeah but these new ones have about 3 growth rings. No strength. No doubt some Monsonto Silver Pine engineered for 5 year harvest cycle.
4x4s are 3-3/8". The mills have had proprietary techniques in saw blades for several years now that produce very little in waste too. I believe they get 6 2x4s out of a peeler core nowadays.
I knew an architect in Charleston, SC who designed many housing projects in several Southern states....he called these houses'stage sets' and no quams about the sham.
The banks have been pushing "rent-to-own" to avoid asset writedowns. Well, maybe that's worked up until now, but it ain't gonna last another 5 years. Housing Meltdown 2.0 is almost here.
My parents have their house paid off.
I think I'll move back home and wait for them to kick the bucket.
typical of the new generation of parasites.
You's better hope mom and pops don't reverse mortgage behind your back.
Doh, dad didn't pay the property tax and you don't have the cash to make the payment. Out on the lawn for you!!!
No way.
He's takin' over the garage.
And they ain't jack shit the old farts can do about it.
120.6 Million Occupied.
41.2 Million Positive Equity and 26.5 Million No Mortgage = 67.7 Million not underwater.
Which leaves 52.9 million homes that are in Neqative Equity, Delinquent, or Foreclosure.
Which means almost half of U.S. housing is in the shitter.
Recovery!
Neqative Equity, Delinquent, or Foreclosure is 11.1 million.
they mean recovered like the recovered alcoholic
LIESman just said the follwoing...paraphrasing
"what if the weakness we are seeing in the markets is not due to the worsening job numbers and the housing market showing signs of weakness, but instead this is the weakness we perhaps anticipated due to the sequester?"
i yeild the floor....
Yes, the first thing I think of when I look at a house is the sequester.
DAMN THOSE SPENDING CUTS LESS THAN THE COST OF ONE OBAMA VACATION!!!!!!!
That damned sequester stole my car, emptied my bank account, and seduced my girlfriend.
When are we going to rise up and just say no to this evil?
Steve LIESman needs to be bitch-slapped back into the last century.
its hard to do this when he has the .gov goober in his mouth....unless you want to slap his ass, in which case he will probably like it....
"It's the republicans fault"; that sounds familiar.
and he continues . . . "On the other hand, what if I'm a shameless lying shill?
I bought the biggest cantaloupe I'd ever seen at the grocey a few weeks ago even though it wasn't ripe. It sat on the kitchen counter so long to ripen that it became a familiar entity. I named it Liesman.
are we to assume them that "ownership", at least for the majority of American citizenship, in our rapidly expanding socialist paradigm is becoming the very real barbarous relic? indeed the temporary facade of ownership underpinned as it has been by the tenuous and largely emphemeral relationship of lender to lendee is being stripped away. a home's man is its vassal.
Considering you really don't own your home thanks to property taxes, why would you really want to own anyway?
The sad death of the idea of a free country.
Ran into a RE broker from Merced County California (one of the worse most over built areas in the whole country).
Stated they were breaking ground on 13 NEW 2,500sqft homes in a neighborhood that already had over 20 vacant (OREO) homes in the shadow inventory.
Green shoots of insanity.
Merced is a shithole...
i know cause i got farmland down there...
mother fuckers r stealing everything including shits thats even nailed down....
Money laundering.
Shadow inventory isn't for sale to the general public. I've tried to purchase on several occasions and been denied by fnma/home path because I wasn't a first time buyer, or classified as "disadvantaged"
On a couple tries, the under bid got the house, even though my offer was higher and in cash. Guess the tax payer doesn't mind the low bid on his shadow houses.
OT question. JPM has 421,323 ounces of gold registered at comex, as you can verify yourself.
http://www.cmegroup.com/trading/energy/nymex-delivery-notices.html
And so far this month they have received delivery notices for 509,400 ounces from their house and customer accounts, as you can verify at the Comex site as well.
http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf
So the question is, how are they going to deliver 90,000 ounces of gold they don't have?
There may be 90,000 ounces left in Fort Knox.
If not there is German gold in Manhattan.
Well they better start stacking into the delivery trucks. It looks like HSCB (317,400 ounces bought in their house account) and Barclays (128,900 ounces bought in their house account; 83,000 ounces being delivered to customer accounts) are getting most of it.
Don't worry, Blackrock is going to buy them all.
US will soon be a nation of renters.
Blackrock?
Wait a minute. I thought they said The Aliens" would buy all those high priced houses.
My contention is that if Property Taxes are > 0.5% of assessed value, you don't really 'own' the place. You're merely leasing from the City/County/Nobility.
Vacant properties are a health & safety, and moral hazard. And should be leveled. That would also get rid of excess inventory, create opportunity for the construction industry, and green jobs, supplies and technology.
Heck we're #1 in the Destruction & Construction business around the world! How's about some of that Destruction & Construction here at home?
Mr. Obama, Tear Down These Walls!
Death panels for houses!
... a-a-a-nd it's gone!
Break all the windows! We'll hire 20 million glass installers and be rich!
s/0
So own to rent is picking up pennies in front of a steamroller? Got it. Leveraged insanity. Equity eats a giant shitburger no matter what.
So if banks actually dump houses onto the market because the Fed owns all the bonds: you write down the asset and equity eats it.
Banks don't foreclose, rates stay low, people buy houses: you can't compete on the rents vs mortgages, cash burn. Equity eats it.
Banks don't foreclose, rates stable, builds slow, you're good, but you only ever make an annuity income. You get no asset appreciation and you hold on to an increasing depreciating asset. Over time, your rents have to beat the taxes, the depreciation and your bond interest. Equity doesn't eat it. But it was better off being a REIT or MLP.
Should rates rise and banks hold on to inventory, you're completely screwed. There's no money to borrow. Housing prices drop. And more than likely you can't roll your debt load.
Shorting these things is like the new IR swap.
Seems like the end result these people want is no housing pricing correction at all. That cheap money propping up the stock market is being used to rob private home ownership while still staying in the stock market via these hedge funds chasing yield. Rehypothication being used to transfer tangible assets up the food chain away from the serfs. TBTF is coming next for these ass clowns since we can't throw the serfs off the land less there be a real revolt when that happens.
Next up government backed rent loans floating government/corporation hyrid crony owned rental houses with almost no chance in hell of ever beating the system to actually be able to get a real mortgage and in turn lottery ticket to actually own property in the new normal America. Then if you can get your lottery ticket they will make the payment terms so rigid you can't ever pay it off in your lifetime anyways and rig the game so the title reverts back to the lien holder once you do pass on.
I haven't seen this in 6 years....people are getting properties under contract (larger commercial type deals) and trying to flip them now. These are bank owned deals too...the banks should know better then contracting with flippers. Flippers only add cost, no value.
"It also means that the millions in soon to be formerly owner-occupied homes (once the anticipated switch to rental ownership takes place) have to stay on bank books and not enter the market in other to generate the illusion of scarcity (see: foreclosure stuffing), or else the myth that there is a housing shortage will be blown right out of the water."
Well, now that there's a template, it doesn't matter if they stay on bank books or not.
As man in 30s who takes home only 50K a year and saves 30K what am i suppose to do. Companies do not sell gold unless you buy in bulk.
keep looking, they exist.
I have no investments with Peter Schiff or his company but you could try him and see
http://www.europacmetals.com/our-products.aspx
As man in 30s who takes home only 50K a year and saves 30K what am i suppose to do. Companies do not sell gold unless you buy in bulk.
You save over 50% of your income? My God man do you want a Federal Reserve Death squad coming after you? Hope your posting behind a proxy.
Well it's fucking settled. The depression, oops, recession is over.
Prosperity for everyone.
Hey Ben! Send over some MO POMO!!!!
What a fucking disaster.
With all this turkey meat floating around there should plenty of opportunity for a pack of wolves (myself included) to get some healthy eatin in.
Rising prices, rising interest rates, stagnant incomes, little employment growth, smaller families and tighter credit; yep, we are in a true housing boom. Maybe for the top 20%, the markets are booming, but there will be little to support the market when that bubble de-bubbles.
No no no... This is all Goerge Bush's fault...
The five minute chart for the S&P500 futures contract today looks like "no bid". Or something that fell down a staircase. sell some moar please; make me some more "money".
If you need to check where these 12.3 million units are, and where's hot and where's not, here's a couple of useful tools:
Forbes Census map (only listed by county, use the text bar to load a county you're interested in; shows inflows / outflows)
USA immigration Map 1960 vrs 2010 (national)
Zillow 1st Quarter data 2013 infographic of houses with negative equity (this one is a KILLER. Brilliant stuff. Detroit is a sea of dark red)
Please note: I discovered one of those "dirty little secrets" when looking into this. Certain counties provide census data that includes prison populations in their jurisdictions as inhabitants. Obviously, this is somewhat true, but it's being used to gerrymander / artificially weight rural counties in terms of % vote to Senate positions (and mostly by Republicans, I see) but more importantly: They ain't gonna be buying a house anytime soon.
From the Zillow report:
Zillow Q1 2013 Negative Equity Report Summary: Zillow Q1 2013 Negative Equity Report Summary: According to the latest Zillow Negative Equity Report, 25.4 percent of U.S. homeowners with a mortgage were in negative equity, or “underwater,” at the end of the first quarter, owing more on their mortgage than their homes are worth. This represents approximately 13 million homeowners nationwide, and is down from 31.4 percent (or 15.7 million homeowners) in the first quarter of 2012. American homeowners with a mortgage were collectively underwater by approximately $950 billion at the end of the first quarter of 2013, the first time this figure has fallen below $1 trillion since Zillow began using our current methodology to track negative equity. As home values rise, more homeowners can expect to be freed from negative equity. Zillow currently predicts that the negative equity rate will fall to 23.5 percent by the end of the first quarter of 2014, bringing almost 1.5 million more homeowners into positive equity. Still, despite widespread home value appreciation recently, millions of homeowners remain trapped underwater. Of the top 30 metros covered by Zillow, 25 were underwater by more than 20 percent in the first quarter, and 20 had negative equity rates above the national average.
So, basically, you're inflating the money supply by at least a trillion dollars to get rid of that negative equity trap. But, as this is now under $1 trillion dollars of negative equity worth, your economy should be hitting the Moon soon.
Good luck with that.
Wow, very informative to see it all heat mapped. Can anyone find any worse than Clayton county in Atlanta? 82% underwater! All of Atlanta looks pretty well fucked though.
Big Data, and proper analytical tools becoming open to everyone will certainly lead to a certain power shift in the US economy. i.e. Next time a politician says their State is a glowing example of something - go check for yourself.
This is why you should fight for free / open data and help out the EFF. Having visited the census.gov site, the raw data is there, but it's atrociously organized.
Bought ours at 171K. Hopefully selling at 155K. 10K in improvements.....we will buy in ten years all cash.
The US Financial Powers that are - namely the US Treasury and the FED do not want have their TBTF banks take the hit on losses. They also to not want these same banks to take the hit with having sold fraudulant MBS Bonds, which would have to be made whole after many a law suit.
The only thing holding all this together, is the willingness of underwater owner occupied properties still making mortgage payments.
Apparently CalSTRS is a major contributor to this madness.
We don't see the dire consequences here... yet.
http://www.zillow.com/visuals/negative-equity/#9/33.7289/-118.1923
Bidding wars and low inventory; waiting for reality to hit the Los Angeles/Orange county beaches.
But when?
People don't want a home anymore that requires upkeep, tax burden, a mortgage and insurance. It's a waste of time and money, not that difficult to see. You cut your throat on a daily basis when you own a home, you're always obligated to someone or a gov entity. That's the way they like it.
A house is a wooden box that sits and rots in the rain say the realtors, so sell it fast and often. In the long haul, it will be worthless.
Unless, of course, its valuation is used for levying property tax, then it's worth more than you ever imagined.