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A Stunning 63% Of Florida December Home Purchases Were "All Cash"

Tyler Durden's picture




 

Back in August, when we wrote that "A Stunning 60% Of All Home Purchases Are "Cash Only" - A 200% Jump In Five Years" based on Goldman data, many laughed, unable to fathom that the majority of the US housing market has become a flippers' game played by institutions and the uber wealthy, who don't need a stinking mortgage to buy that South Beach mansion. The implication of course being that housing is not effectively shut for that part of the population - the vast majority - that relies on credit to be able to purchase a home (a finding confirmed by the ongoing collapse in mortgage applications).

As it turns out we were just a little ahead of the curve as usual, and as real estate company RealtyTrac reported overnight, with data that naturally is delayed due to the delayed impact of houses coming out of the much delayed foreclosure pipeline, "All-cash purchases accounted for 42.1 percent of all U.S. residential sales in December, up from a revised 38.1 percent in November, and up from 18.0 percent in December 2012." That's a 10% increase in one month for a 6-9 month delayed series, which means that in reality, roughly about 60% of all homes are now purchased with cold, hard cash.

The chart below shows how in June and July the data finally started reflecting the Fed's September 2012 QEternity reality. As we said: 6-9 month lag.

Incidentally, broken down by states, this is already confirmed in places like Florida, Wisonsin and Alabama. From RealtyTrac:

States where all-cash sales accounted for more than 50 percent of all residential sales in December included:

  • Florida (62.5 percent),
  • Wisconsin (59.8 percent),
  • Alabama (55.7 percent),
  • South Carolina (51.3 percent),
  • Georgia (51.3 percent).

And rising fast.

At this pace the entire US housing market will be at the mercy of flippers who have access to unlimited funding and are only buying a home, with zero regard for cost,  in hopes of selling it to an even greater fool. Obviously, that has endless cheap credit happy ending written all over it.

As for everyone else: please pay your landlord, Blackstone, at the end of the month.

 

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Thu, 01/23/2014 - 13:26 | 4359300 Looney
Looney's picture

... which means that in reality, roughly about 60% of all homes are now purchased with cold, hard (cash???) freshly printed funny money.

Looney

Thu, 01/23/2014 - 13:57 | 4359499 Canadian Dirtlump
Canadian Dirtlump's picture

Apparently hedge fund / private equity money has pulled back on purchasing homes which to me is good. I find it annoying that foreign investment is buttressing over valued real estate prices in the US and Canada. I guess I need to hope for the bed to be shat in china before I can go dumpster diving for a house here.

Thu, 01/23/2014 - 14:15 | 4359581 0b1knob
0b1knob's picture

Money laundering.   Cash purchases of real estate are one of the few types of transactions the government does not track.   The houses are being bought only to be sold to launder the cash.   House flipping just like what we had in 2006-2007.

Thu, 01/23/2014 - 14:21 | 4359604 Chupacabra-322
Chupacabra-322's picture

Bush (Jeb) Crime Syndicate CIA drug trafficking money Laudering capital of the world.

They merely represent a power structure of a Step Pyamid Model of Aurthority / Monarch Reign Pyamid Model of Authority which ultimately benefits the NWO Globalite who own the Economic, Educational, Religious and Political Systems which Enslave man.

Their system is one of Debt Bondage and Enslavement. The highly educated intelligent & wealthy owners of the world banking, media, military & major corporations are in control of the world political & economic policies, so morally it doesn't really matter. They deceive, wage wars, killing and impoverish millions of the other 99% human populations, for the New World Order to satisfy their greed & arrogance, all in the name of democracy, freedom & war on terrorism. Does it sound delusional? Not if you are the so called? "God" chosen white western elephants.

There can be no secular solution to a criminal Government, until after there is a moral solution to an immoral society. "And yet the people keep looking to the criminal government and the endless revolving door of egoistic candidates as if it is they who are going to bring about a moral solution. And if, I, for example, dare to intimate that maybe, just maybe, it's up to us, as individuals and a people, to bring about a moral solution, I am tagged by some as blaming the people, not the evil overloads. And thus, we sow and we reap.

Thu, 01/23/2014 - 14:26 | 4359626 Eurodollar
Eurodollar's picture

all cash property investments .. Smells like the criminals are coming to Florida to roost. Usually with bags and suitcases full. Nice way to launder some dirt.

Thu, 01/23/2014 - 15:03 | 4359771 James_Cole
James_Cole's picture

At this pace the entire US housing market will be at the mercy of flippers who have access to unlimited funding and are only buying a home, with zero regard for cost,  in hopes of selling it to an even greater fool.

But remember they're only doing this because they're depressed about not being able to create more shitty jobs for the peons due to current tax rates. 

Thu, 01/23/2014 - 18:12 | 4360411 DoChenRollingBearing
DoChenRollingBearing's picture

In Florida, many of these bought-for-cash homes are bought by Brazalians, Venezuelans, Colombians, Argentines and even Russians.

Big money looking for a safer place.

Thu, 01/23/2014 - 18:39 | 4360506 dryam
dryam's picture

It seems very naive to conclude that cash purchases are for "flipping". Seriously ZH, why are  you "stunned" by all this "flipping".

Fiat is losing it's meaning across the globe.  A system reset is coming, we just don't know the when & how.  Cash is flowing in from all over the world, and from the top 1%er's in the U.S.  Are you going to put that cash in Twitter, bonds, PM's, or real estate?  If I had several million/billion, I'd be diversifying cash into a physical assets such as real estate.  Sure, all houses depreciate & there are indifinite maintenance costs and taxes, but there's costs & risks with every asset class, particularly fiat.

Thu, 01/23/2014 - 19:02 | 4360582 kaiserhoff
kaiserhoff's picture

If they are looking for safety they had better go to the Gulf Coast,

   and choose wisely.

Thu, 01/23/2014 - 16:39 | 4360111 giggler321
giggler321's picture

Or just the general populus, getting scared into a corner of ZIRP on savings and crashing banks of 80's, not trusting metals or <digitalCoin whatever> they enter the only thing they know as it's all around them - Real Estate.  Not that it's gonna help, just that it feels safer than in the bank, IMHO.

Thu, 01/23/2014 - 18:05 | 4360385 Son of Loki
Son of Loki's picture

Yacht Owners Seek to Salvage Deduction for Second Homes

 

Kent Webb plans to write off part of the interest he pays to finance what he considers his second home, a luxury fishing boat named the Moonlighter.

 

http://www.bloomberg.com/news/2014-01-23/yacht-owners-seek-to-salvage-de...

What recession?

Thu, 01/23/2014 - 18:12 | 4360416 THECOMINGDEPRESSION
THECOMINGDEPRESSION's picture

I wonder how many free bitocoins were used to buy these houses? I rolled and made .47 of a bitcoin for free. Do that every day..FREE: http://freebitco.in/?r=224682

Thu, 01/23/2014 - 19:28 | 4360666 Dick Buttkiss
Thu, 01/23/2014 - 18:40 | 4360499 Kirk2NCC1701
Kirk2NCC1701's picture

Even if some of that cashish is being "laundered", note that (from the Fed's/Gov's perspective) it ALL seeks the USD and USD-based assets.  Money is simply changing hands, assets are changing owners, and not leaving the US, nor leaving the USD.  And we have what the Fed wants:  VoM (Velocity of Money).

In this context... Why should the Gov/Fed squawk too much?

/ Sitting in the Captain's chair, allows for a different perspective than most. /  ;-)

Thu, 01/23/2014 - 18:28 | 4360452 SandiaMan
SandiaMan's picture

Great Comments

Thu, 01/23/2014 - 18:06 | 4360384 SAT 800
SAT 800's picture

A gang of fools who imagine their buying power will be there for them in the future housing market; it won't. Typical human idiocy.

Thu, 01/23/2014 - 19:07 | 4360600 kaiserhoff
kaiserhoff's picture

Yes.

It shows how bogus and thin this "market" is and how quickly it can disappear.

Thu, 01/23/2014 - 18:57 | 4360565 Jannn
Thu, 01/23/2014 - 19:10 | 4360608 eurogold
eurogold's picture

Why is this happening ? Because no bank will give a mordgage for a Condo, so yes it is all cash, sorry I meant all FIAT.

Thu, 01/23/2014 - 19:25 | 4360654 MieleBauknecht
MieleBauknecht's picture

still think socialism is such a bad idea?

Thu, 01/23/2014 - 19:26 | 4360655 MieleBauknecht
MieleBauknecht's picture

still think socialism is such a bad idea?

Thu, 01/23/2014 - 13:17 | 4359306 El Hosel
El Hosel's picture

Elwood!

Flip Flop and Fly .... http://www.youtube.com/watch?v=NgzdgLR6tl4

Thu, 01/23/2014 - 13:18 | 4359311 NIHILIST CIPHER
NIHILIST CIPHER's picture

Chinese cash or Amerikans putting $ in hard assets?

Thu, 01/23/2014 - 13:21 | 4359341 kito
kito's picture

those assets are hard only due to the free distribution of viagra by the fed.

Thu, 01/23/2014 - 13:34 | 4359391 Miffed Microbio...
Miffed Microbiologist's picture

In my local it is definitely the Chinese. 700+ homes are often seeing only 3 days on the market according to a couple of RE agents I know. I guess Michael Crichton's book Rising Sun is due for an edit.

Miffed;-)

Thu, 01/23/2014 - 14:19 | 4359593 Never One Roach
Never One Roach's picture

Same here. I went with my brother to look at houses and an amazing number of mainland Chinese and a handful of Middle Easterners and Nigerians were laying out cashola for their children going to school here. They spend almost no time looking at the house... they ask how much and then wire in the money and that's that! No one asks any questions where the money comes from or how they got it. Most don't even get a home inspection.And these are half million dollar houses! Interestingly, the sales people told us despite the increase volume, prices have acutally dropped from last year in order for them to move the boxes faster.

WTF!?

It's truly a Golden Age for builders and house sellers in some areas.

Thu, 01/23/2014 - 18:50 | 4360548 Arius
Arius's picture

the land is limited, it is very simple really ....

Thu, 01/23/2014 - 19:37 | 4360701 Freddie
Freddie's picture

You don't own the land or house.  The county does.  What happens when all these people with tangible houses have a reset but the county still expects to get paid $7,000 a year in property taxes? 

Well in the Depression - the banksters took the homes and farms.

Thu, 01/23/2014 - 13:18 | 4359312 Rainman
Rainman's picture

" All Bitcoin " purchases by Spring !

Thu, 01/23/2014 - 13:36 | 4359402 Nue
Nue's picture

Or used dentures, wheelchairs and shuffleboard sets.

All oveseen by a woman screaming "Who runs barter town?"  

Thu, 01/23/2014 - 13:18 | 4359321 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Who's buying? Certainly not the commie chinese ;)

Thu, 01/23/2014 - 13:26 | 4359359 GolfHatesMe
GolfHatesMe's picture

Hart to tell while I am looking the other way - NAR

Thu, 01/23/2014 - 13:39 | 4359323 Kirk2NCC1701
Kirk2NCC1701's picture

Mostly "Breaking Bad" cash.

"Hi, my name is Saul Goodman, PA, and I've got cash buyers for your house.  Better call Saul!"*  ;-)  ;-)

* www.BetterCallSaul.com

Thu, 01/23/2014 - 19:44 | 4360711 eurogold
eurogold's picture

You really have issues don't you ? Why is all cash a bad thing ? Maybe you prefer another "sub-prime" fiasco ? Who would that benefit...other than the bankers ?

 

Thu, 01/23/2014 - 13:21 | 4359330 kchrisc
kchrisc's picture

My bet is that Europeans are stashing cash with "returning" dollars.

The locals may want to brush up on their Russian and German.

"Save a wall, use a guillotine."

Thu, 01/23/2014 - 14:11 | 4359567 slightlyskeptical
slightlyskeptical's picture

It's French in my area of S. Florida. You would think that I lived in a suburb of Paris at this point.

Thu, 01/23/2014 - 13:22 | 4359342 youngman
youngman's picture

I bet there are many Colombians and Venzuelans in that group

Thu, 01/23/2014 - 18:42 | 4360517 Kirk2NCC1701
Kirk2NCC1701's picture

No Argentinians though.  They can't afford jack, nor get their hand on Dollars.

Thu, 01/23/2014 - 19:17 | 4360615 eurogold
eurogold's picture

Surprise ! Any argentine with money already has a condo in Miami....and there are alot of Argentines with money.

Thu, 01/23/2014 - 13:23 | 4359344 _ConanTheLibert...
_ConanTheLibertarian_'s picture

I envision many people running around with briefcases full of cash.

Thu, 01/23/2014 - 13:22 | 4359345 Sudden Debt
Sudden Debt's picture

IT'S CASH ON THE SIDESLINES STEPPING IN!

it's a bit like cash out of thin air but with another name

Thu, 01/23/2014 - 13:25 | 4359349 fijisailor
fijisailor's picture

Tyler you missed the class of real estate investor who was just a prudent saver and bought the market at its low.  Obviously that was not in December of last year though but in 2008.  I know there aren't many of us like that in this country but there are also a lot of foriegners buying into FL real estate.

Thu, 01/23/2014 - 13:25 | 4359353 geno-econ
geno-econ's picture

Hot drug money from South of the border ? No surprise if birth rate skyrockets in Florida and it is not because Bob Dole and the elderly are using Viagra !

Thu, 01/23/2014 - 13:43 | 4359441 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

South Florida, Like South Texas and South Cali are hotbeds for the cartel not to mention droves of third world mongrels looking for work.

Thu, 01/23/2014 - 13:28 | 4359369 LawsofPhysics
LawsofPhysics's picture

Say it with me "fungibility" - unintended consequences?

 


fungibility

    Use Fungibility in a sentence
fun·gi·ble

[fuhn-juh-buhl] Show IPA adjective Law.
(especially of goods) being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind.

Thu, 01/23/2014 - 13:28 | 4359377 juicemoney
juicemoney's picture

Makes sense really.

 

Anybody who has capital tied up in derivatives, stocks or fiat currency is bailing into the first assets they can find. If I was a foreign investor, big-time banker or large scale drug dealer I'd be doing the same.

Thu, 01/23/2014 - 13:41 | 4359434 Professorlocknload
Professorlocknload's picture

And anyone who has capital tied up in stacks of Ben Franklins, see's what's coming, maybe?

It's all flight capital. Flight from foreign and domestic authority, ie, their Credit Currencies.

Thu, 01/23/2014 - 14:02 | 4359519 Hal n back
Hal n back's picture

all the stock gains of the last 5 years are going into retirement homes--more or less a "freebie".--a guy how had 3 mil invested in markets has doubled it-more if picking the right stocks-so take the 3 mil, pay tax and buy the house of your dreams.

 

now the only problem is paying for upkeep and taxes etc.

 

 

Thu, 01/23/2014 - 14:07 | 4359550 Blankenstein
Blankenstein's picture

Yeah, putting all your money in at this top of the reinflation of the housing bubble will be a good decision.  With upkeep and taxes you forgot to add falling prices when the interest rates rise and the specuvestors head for the exits.

Thu, 01/23/2014 - 13:30 | 4359379 Oldwood
Oldwood's picture

The Chinese have nothing on us. They may have ghost cities but we are just spreading them out so as to not be as noticable. How many of these cash buys are occupied versus just holding for the price to go up? Most investors are not all that interested in being property managers.

Thu, 01/23/2014 - 13:29 | 4359380 Seasmoke
Seasmoke's picture

There is a reason there are lots of bubbles in a LAUNDRY !!

Thu, 01/23/2014 - 18:57 | 4360562 forwardho
forwardho's picture

CASH.

It's the reason for the treason!

People will always find a way to out fuck the fuckers.

Thu, 01/23/2014 - 13:31 | 4359385 Seasmoke
Seasmoke's picture

This is how Ben believes he helped Main Street. Hang the motherfucker for Treason !!!

Thu, 01/23/2014 - 13:40 | 4359395 Kirk2NCC1701
Kirk2NCC1701's picture

Hey, I read on ZH recently that the Chinese are busy buying up Detroit for cash (cashing in Debt/USTs?).

If so, I got some nice rental props to sell you:  in good condition, rented, and handled by reliable Prop. Mgmt. Co.  Cashflow positive. 

For those who take their Constitutional Right to Privacy seriously, you can simply buy the LLC that owns the associated property (no change of Title; only IRS is notified of change of LLC ownership). 

Will accept a mix of Cash (USD, CAD, CNY, EUR), 0.9999 Gold (Pandas, Eagles, Maples) or BTC.   All perfectly legal, VERY discrete (handled via lawyer).  :-)

Email me: Kirk2NCC1701 at hush mail dot com.

Thu, 01/23/2014 - 13:35 | 4359400 TrulyStupid
TrulyStupid's picture

After taking profits on record stock market prices, some investors are sticking into "unervalued" real estate in Florida etc. Future returns will depend on availability of renters with cash flow.  If the S&P goes bear... look for more hot money going into florida real estate.

Thu, 01/23/2014 - 13:36 | 4359403 yogibear
yogibear's picture

Housing bubble #2 ready to deflate.

Thu, 01/23/2014 - 14:18 | 4359595 Blankenstein
Blankenstein's picture

Another sign it's coming soon:

The ad banner on the top of my page says, "cash for houses."  It's like the ones you would see on billboards before the bubble burst the first time - red and yellow with a cave man.  

Thu, 01/23/2014 - 13:40 | 4359430 olle
olle's picture

Sounds like Europe/Russia, you start a company in R and become a minority owner, the company is struggling on... and after five years you partner comes over and buy the house netxto you... for casch... capitalism

Thu, 01/23/2014 - 13:42 | 4359437 CJHames
CJHames's picture

I was in Costco last weekend.  We go there around once a month on average, and I've always been amazed at the size of carts people pull around and just how much they buy there.  But saturday I couldn't help but notice how much less folks were buying.  We flew through the check out line because carts only had a few items in them.  It was noticeable, and it was odd. We live north of Dallas in the 11th wealthiest county per capita in the U.S. of A.

 

 

Thu, 01/23/2014 - 13:53 | 4359481 John Law Lives
John Law Lives's picture

I wasn't aware Collin County ranked that high.

Thu, 01/23/2014 - 13:53 | 4359482 PrecipiceWatching
PrecipiceWatching's picture

Carts full of goods?

Costco LOVES Obama and his Free Shit Army

Thu, 01/23/2014 - 14:11 | 4359565 Tsar Pointless
Tsar Pointless's picture

That's interesting. Considering I'm a frequent CostCo patron, and always see people who appear to have jobs shopping there.

BTW - a majority of "Free Shit Army" members live in solid Republican areas. It's true. Look it up for yourself. I don't do charity work.

Thu, 01/23/2014 - 14:26 | 4359630 Blankenstein
Blankenstein's picture

You mean like the ones in Detroit, Newark, Baltimore, Philidelphia, Kansas City, Chicago, etc.  

Thu, 01/23/2014 - 19:22 | 4360641 Budbud
Budbud's picture

No.  He's talking about all of those EXTREMELY CONservative, GOP voting reddest of the red states like Mississippi, Alabama, Louisiana, West Virginia, Kentucky, Arkansa, New Mexico, South Carolina, Tennessee and Oklahoma!  You know, THE POOREST STATES in the country!  You know, ALL those states where GOP/CONservative politics and policies have been fully embraced for YEARS!  And just like the CONservative/GOP movement promised, just take a gander at ALL the immense economic prosperity and ALL the good, stable, traditional, Norman Rockwell-esque families DECADES of CONservative/GOP policies have bestowed upon all of these locales!  It worked!!!

Oh wait... It didn't.  They're the poorest financially AND they have the HIGHEST divorce rates!  So much for CONservative policies bringing people up financially and "saving" the "traditional" family.

Folks, just look the facts up.  It's not that hard these days.

Oh, and if you get a chance... check out which states have the highest numbers of residents on disability.  Let's just say... you'll be seeing red.

Thu, 01/23/2014 - 23:58 | 4360932 Blankenstein
Blankenstein's picture

People trying to mislead break things down into Red State vs Blue State or use percentages, which can very misleading when the populations of the areas are vastly different.  For example, Dewey, SD has one of the largest percentages on SNAP benefits at 43%.  But that is 2367 people, the population is only 5538.  Where as Cook County illinois "only" has 19% on SNAP which is 1,013,052 people receiving benefits.  A little more research is required than googling on the internet and taking at face value what is presented by politically motivated websites. 

 

http://swampland.time.com/2013/12/04/interactive-republicans-more-likely...

 

Interesting how in Red States, the blue counties match up with the some of the higher SNAP enrollment counties.  

 

http://authentic-connecticut-republican.blogspot.com/2012_11_01_archive....

Thu, 01/23/2014 - 13:47 | 4359453 venturen
venturen's picture

We will all be peasant serfs farming land for our Goldman overlords. 

Thu, 01/23/2014 - 13:53 | 4359479 jbvtme
jbvtme's picture

and that's the good news

Thu, 01/23/2014 - 13:53 | 4359474 jbvtme
jbvtme's picture

not

Thu, 01/23/2014 - 13:55 | 4359485 Poofter Priest
Poofter Priest's picture

This number sounds about right. Perhaps a bit low for my neck of the woods.

And...I'm finding housing prices are at around 2006-2007 prices again up through October.

Let's see. Prices are almost at the top of the last bubble.

People are making even less than before.

Hmmmm.....

 

BTW....I've heard of cash buyers @ $900,000+ from Vietnam, China, and all over the Pac Rim.

Thu, 01/23/2014 - 13:58 | 4359501 CuriousPasserby
CuriousPasserby's picture

I set up trusts for people in Florida to buy such houses. (Reason for trust is to keep their name off the worldwide public records and avoid probate, among other benefits.)

Most of them are individuals taking money out of zero interest bank CDs or using their self-directed IRA to buy houses to rent out. One client bought a bunch of houses for under $30k each, rents them for $500 a month and has a nice income from it. 

Thu, 01/23/2014 - 14:06 | 4359542 Hal n back
Hal n back's picture

my mother who passed 2 years ago lived in one of the big seniors communities-I guess 25,000 units-most bought around 1980. -now as that generation is dying off there are units for sale all over the place and yes you can buy a little condo for 25k--I have been thinking about buying one and establishing florida residence to save income taxes. Could put it on Visa card if the title co would do that and get miles.

 

 

Thu, 01/23/2014 - 19:48 | 4360729 eurogold
eurogold's picture

I say do it if you can !

Thu, 01/23/2014 - 14:06 | 4359543 Hal n back
Hal n back's picture

my mother who passed 2 years ago lived in one of the big seniors communities-I guess 25,000 units-most bought around 1980. -now as that generation is dying off there are units for sale all over the place and yes you can buy a little condo for 25k--I have been thinking about buying one and establishing florida residence to save income taxes. Could put it on Visa card if the title co would do that and get miles.

 

 

Thu, 01/23/2014 - 19:35 | 4360686 Atomizer
Atomizer's picture

Just watch the HOA fees. That's how you get bent over.

Thu, 01/23/2014 - 13:59 | 4359507 krispkritter
krispkritter's picture

Local investor I know is doing more cash purchases now than prior to 2008.  He buys foreclosed or distressed properties for cash, takes a cut, flips them to rehabbers for resale or rent.  I see clients and friends of friends still buying houses and condos.  Neighbor who works for Pulte says they are still building and selling them although they have inventory in some areas farther from metro areas that are not going as fast, presumably because gas is still 'expensive'.  Local house that was listed for more than 2 years, sold about 4 months ago for $170k down from $295k.  Property on my road listed for about 2 years, went under contract a couple months ago and is back on the market after they failed to get a construction loan.  A house on my road sold first day it was listed, full price.  That was a desperation kind of move by the Buyer though.  Crazy market.   

Thu, 01/23/2014 - 14:00 | 4359513 cliffynator
cliffynator's picture

In my little town in Florida, just south of Daytona Beach, I'm seeing a big rise in long-time-empty and recent sales of houses turning into rentals.

We have cash from a previous windfall and are looking for a bigger house, but now everyone and their mother is all excited about rising prices around here.

And all the realtors tell me how everything is moving, moving, moving! Of course, they've been telling us that for 3 years or so, now.  Developments that were stalled for years suddenly started building, and now there's a bunch of houses being offered by the builders who are finding they can't move the fresh inventory. Perhaps they didn't notice the short sales and foreclosures in their developments, next to the brand new houses they were eagerly putting up.

Meanwhile, I feel the asking prices of the houses out there are gapped-up from what we were expecting.  We're not exactly chomping at the bit to hand that money off...even if it is getting worthless at a faster pace.

 

Thu, 01/23/2014 - 14:04 | 4359528 seek
seek's picture

Foreign USD coming home to roost + fresh Fedbucks.

So much for "exporting inflation." It's going to show up in strange ways like this.

Long homeless and multigenerational households (yet another Orlov prediction for the US come true.)

Thu, 01/23/2014 - 14:04 | 4359534 8ticks
8ticks's picture

I was at a holiday party in Tampa talking to a very young and excited real estate agent. He was a student from Switzerland who went to school at the University of Tampa and ended up staying here, going into real estate.  

He speaks 5 different languages, and he said he is "balls to the walls" busy. 

I said no one I know is selling, or buying and the only 3 familes I know who have moved in the last 3 years were forclosed on. Who the hell is buying all this real estate? 

His number 1 clients? Asian Indians, number 2? Chinese.  All cash deals, all investments. 

He said it is near impossible to qualify Americans, regardless of credit and income, for a mortgage. 

I told him, listen, when the Rockfeller Center in New York sells again to someone in Asia, start looking for another job. 

 

 

 

 

Thu, 01/23/2014 - 15:25 | 4359863 WhyWait
WhyWait's picture

Asian Indians, Chinese with too much money:  trying to park it someplace safer than at home?  

Thu, 01/23/2014 - 19:02 | 4360584 Arius
Arius's picture

america is an international heaven for foreign investors ...

Thu, 01/23/2014 - 19:34 | 4360683 edotabin
edotabin's picture

well at least it is still something.  Nothing is made here anymore and fracking is probably not all that it was made out to be...... What's left? Maybe some agriculture.....

Thu, 01/23/2014 - 15:27 | 4359870 krispkritter
krispkritter's picture

I have a client/friend who is 1/2 of a Chinese/Vietnamese couple who actively advertise in Chinese magazines for FL properties.  I need to drop him a line and see how that side of their business is doing.  They still have their C21 franchise so they must be doing some business to stay afloat.

Thu, 01/23/2014 - 19:54 | 4360748 eurogold
eurogold's picture

What is wrong with all cash buyers ? Even if they are foreigners ? All or most cash used to be the norm before the banks pulled the "sub-prime". This is a good thing !

Thu, 01/23/2014 - 14:15 | 4359584 Bunga Bunga
Bunga Bunga's picture

Sign up on cash.gov and become eligible for Obamacash.

Thu, 01/23/2014 - 14:16 | 4359586 SmittyinLA
SmittyinLA's picture

About a year after the drug dealer bailout of housing and bankers fails the govt will question where all the cash came from, the whole "no questions asked about housing cash" policy will be trashed when the state needs more revenue.  

Thu, 01/23/2014 - 14:23 | 4359612 ptoemmes
ptoemmes's picture

Miami...kind of like the Cocaine Cowboy days of the 70s.

Thu, 01/23/2014 - 14:25 | 4359628 Poofter Priest
Poofter Priest's picture

Something else to note from 'my neck of the woods' is that rental property went out of sight on the cap rate.

There was no way the rental rates could cover the mortgage plus taxes (figuring at the 20% down payment) back in the last bubble.

The whole reason for buying rental property was because "the market price is just going to keep going up."

But rental rates did not climb accordingly. Especially when it was property management companies doing credit back ground checks as part of the tenant qualification process. Too many people failed.

Thu, 01/23/2014 - 15:02 | 4359714 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

Anecdotal:

* My sister in SoCal sold her place last year $1.5MM to Chinese all-cash buyer.

* She then, at the Riverside Co. courthouse, bought a Palm Springs area foreclosure on golf course with amazing views for less than 1/10th that.

* There is a vast supply of inferior housing stock here inside the DC beltway, little red-brick jobs from 40s-50s that no one really wants, get torn down or gutted and expanded.  The DC area has I believe 7 of the 10 wealthiest counties in the country, measured by average household income.  The gubmint is the Big Show.  If you are a contractor, DC is a good place to be.

* I bumped into an immigrant guy this week here in Fairfax Co. who is a fix-em-up flipper.  He offered to flip contracts to me for all-cash with $10k profit to him... Yeah, like I'd want him cherry-picking his contracts and flipping the duds to me...

* The residential market here in my neighborhood is healthy, with homes selling pretty quickly with prices at or above 2005/2006 peak. 

Thu, 01/23/2014 - 14:57 | 4359745 RaceToTheBottom
RaceToTheBottom's picture

Houses have become only available for the 1%'ers.  Please update your records accordingly.

Thu, 01/23/2014 - 15:01 | 4359761 pragmatic hobo
pragmatic hobo's picture

probably part of the $4 trillion chinese offshore cash stash looking for place to hide ...

Thu, 01/23/2014 - 15:25 | 4359857 begintowin
begintowin's picture

The new owners will now have their property taxes raised by their local municpality to pay for more "government services".

Thu, 01/23/2014 - 18:29 | 4360458 InflammatoryResponse
InflammatoryResponse's picture

begintowin,

 

actually it will be more of a license fee for out of town local landlords.   and if a prop management company was smart they'd makes sure ordances were passed requiring local "supervision" of said rental properties. :)

 

 

 

Fri, 01/24/2014 - 13:14 | 4363193 begintowin
begintowin's picture

IR,

I am ignorant of the facts that you describe.

Are you saying the municipalities would not collect property taxes due to some arcane property management exemption? Why would local government give them such an allowance?

What about banks that foreclose on residential property? Aren't they on the hook for the property taxes since they now own the property?

Thu, 01/23/2014 - 17:16 | 4360231 withglee
withglee's picture

The harvest is well underway ... and oh what a harvest!

Thu, 01/23/2014 - 17:41 | 4360307 Cornholiovanderbilt
Cornholiovanderbilt's picture

we need to invade florida.  Those fkn terrorists!!

Thu, 01/23/2014 - 18:08 | 4360392 Son of Loki
Son of Loki's picture

Moar money will flow in from SA:

 

Argentine Default Chaos Relived as Blackouts Follow Looting

 

For Dominga Kanaza, it wasn’t just the soaring inflation or the weeklong blackouts or even the looting that frayed her nerves.

It was all of them combined.

The looting that began in neighboring Cordoba province when police officers left streets unguarded to strike for higher pay had spread to the outskirts of Buenos Aires, sparking panic in Kanaza’s neighborhood.

 

http://www.bloomberg.com/news/2014-01-23/argentine-default-era-chaos-rel...

 

 

Thu, 01/23/2014 - 18:07 | 4360395 syntaxterror
syntaxterror's picture

Since 50%+ are buying all-cash, QE isn't "supporting the housing market" since mortgages aren't required.

Thu, 01/23/2014 - 18:49 | 4360534 Youri Carma
Youri Carma's picture

I am sure the FED is still buying MBS, Mortgage Backed Securities with QE money.

http://www.zerohedge.com/contributed/2014-01-19/complete-and-total-failu...

FED bought $4 trillion worth of government bonds and mortgage-backed securities.

Thu, 01/23/2014 - 18:54 | 4360557 Buzz Hacksaw
Buzz Hacksaw's picture

Sure QE is supporting this BS. Those greed pigs should be Outa Biznez already. Instead they are alive and well and buying up the USSA on the cheap.

Fri, 01/24/2014 - 00:26 | 4361629 bilejones
bilejones's picture

Unless, of course, the QE cash is going to those cash buyers of the houses.

Thu, 01/23/2014 - 18:23 | 4360442 Youri Carma
Youri Carma's picture

5 states with the highest foreclosure rates - Foreclosures hit a three-year high as a percentage of overall sales
23 January 2014, by Quentin Fottrell (MarketWatch)
http://www.marketwatch.com/story/5-states-with-the-highest-foreclosure-rates-2014-01-23

Florida: 1 in 409
Maryland: 1 in 487
Illinois: 1 in 605
Nevada: 1 in 677
Utah: 1 in 718

Thu, 01/23/2014 - 18:27 | 4360451 verbot
verbot's picture

Verbot.exe...load mem...mem load sarc.sarc load wit....module missing press any key to continue...

So what is the rebate for inch long mosquitos? Or the giant boas? Is there any reason to care if a fool thinks florida will survive intact going forward and bets on that deal? 

See another fallacy is that foreign investors are equals to americans but they are just that....foreign. we can pretend to "sell" anything but its not moving and unless their home country is willing to kick butt and invade we can do anything we want.

Now who is tired of keeping your rich asshole b8llionaire rich? How long will it take to remove all wealth if just a few key folks were to balk....?? Just like florida homes a billionaire and his wealth will experiance creative destruction when locals take back assets...dumbass billies..

Thu, 01/23/2014 - 18:38 | 4360503 Atomizer
Atomizer's picture

Smart buyers. Expurgated the banking middleman under usury FICO standards. Bravo to the home purchasers.  

Thu, 01/23/2014 - 18:39 | 4360505 Buzz Hacksaw
Buzz Hacksaw's picture

Mostly with your money. Suckers!

I resemble that!

Thu, 01/23/2014 - 18:43 | 4360513 muleskinner
muleskinner's picture

Bought my first home with cash, bought my farm with cash. Don't need no steenkin' cash when you can buy houses and land with the worthless stuff. Not that I don't want money, I want a place to live and a place to survive much more than money. Besides, your money ain't worth the paper it's printed on. If you like your money, you can keep your money.

I like silver coins, money worth keeping. Paper money doesn't have much going for it. "And I don't give a damn about a greenback dollar, spend it fast as I can... for a wailin' song and a good guitar, the only things that I understand, poor boy, the only things that I understand." - Hoyt Axton

Thu, 01/23/2014 - 19:04 | 4360588 22winmag
22winmag's picture

The pimps and cheerleaders at the National Association of Realtors always manage to leave this little detail out.

Thu, 01/23/2014 - 19:05 | 4360592 IREN Colorado
IREN Colorado's picture

When the music stops you need something you can hold in your hand, like a deed to real estate. Gold is better but a single family property beats the hell out of DJI futures.................

 

Thu, 01/23/2014 - 19:35 | 4360687 MarcusAurelius
MarcusAurelius's picture

Once again I'll quote Jim Grant, "the Fed can paper over what it looks like but it can't change what it is". 

I don't know how this will all turn out, but I do know that there has been such a push away from the way traditional business is done that real estate will never be the same in the good ol's USA. Let's see what happens up here in Canada when the price of real estate goes south like every other country that has credit creation to goose its GDP. Maybe Blackstone can buy up our houses too once they decline in value and a number of owners are turffed out. Oh ya, it doesn't matter if you are upside down up here you are still responsible for the payments of the house. 

Thu, 01/23/2014 - 20:39 | 4360860 deflator
deflator's picture

Was reading the comments section following an article on MSN money that was advising people that going forward homes should not be thought of as an investment but a place to live. Justification was stagnating wages, high cost of materials for maintenaince and expectations for higher property taxes.

 In the comments section there were several posters in all caps, I STARTED BUYING HOUSES IN 1994 AND I CAN TELL YOU A HOUSE IS AN INVESTMENT!!!!

 There you have it.

Thu, 01/23/2014 - 21:13 | 4360968 Spungo
Spungo's picture

This economic recovery is so strong that Americans don't even need to borrow money to buy houses at record high prices!

Thu, 01/23/2014 - 23:38 | 4361504 bilejones
bilejones's picture

Here's one reason why the cash market is so high.

Thinking of this myself: could be great for section 8

 

http://www.poconorecord.com/apps/pbcs.dll/article?AID=/20140123/NEWS/401...

Do NOT follow this link or you will be banned from the site!