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"All Is Not Well In The Housing Market" As All Cash Buyers Double In Past Year, Hit Record High

Tyler Durden's picture




 

Confirming and continuing a trend we first described a year ago, overnight RealtyTrac reported, as part of its Q1 institutional investor and cash sales report, that the percentage of all-cash buyers has soared in the past year with "42.7% of all U.S. residential property sales in the first quarter were all-cash purchases, up from 37.8% in the previous quarter and up from 19.1% in the first quarter of 2013 to the highest level since RealtyTrac began tracking all-cash purchases in the first quarter of 2011."

Curiously this is happening as institutional investors, think Blackstone, are slowly exiting the market: "Institutional investors — entities that have purchased at least 10 properties in a calendar year — accounted for 5.6 percent of all U.S. residential sales in the first quarter, down from 6.8 percent in the fourth quarter of 2013 and down from 7.0 percent in the first quarter of 2013 to the lowest level since the first quarter of 2012."

“Strict lending standards combined with low inventory continue to give the advantage to investors and other cash buyers in this housing market,” said Daren Blomquist, vice president at RealtyTrac. “The good news is that as institutional investors pull back their purchasing in many markets across the country, there is still strong demand from other cash buyers — including individual investors, second-home buyers and even owner-occupant buyers — to fill the vacuum of demand left by institutional investors.

 

“While the institutional investor purchase share declined in the first quarter in 18 of the top 20 markets for institutional investor share a year ago, home prices continued to appreciate in most of those markets, albeit at a slower pace in many cases,” Blomquist continued. “There are a couple notable exceptions that could be cause for concern: Jacksonville, Fla., where the institutional investor share of purchases was down to 13.5 percent in the first quarter compared to 18 percent a year ago and where median home prices decreased 1 percent from a year ago in March after 15 consecutive months of annual increases; and Greensboro, N.C., where the institutional investor of purchases was down to 6.4 percent in the first quarter compared to 10 percent a year ago and where median home prices decreased 8 percent from a year ago in March following 14 of 16 months were median home prices increased annually.”

Or, in other words, the smart money is fading the market as the last flippers scramble to pick up the pieces. And while one can debate the mix composition and what it means for future trends, one thing is clear. Via Bloomberg:

The cash buyers today mean that all is not well in the housing market,” said Clifford Rossi, finance professor at the University of Maryland’s Robert H. Smith School of Business. “First-time home buyers should make up 40 percent and we’re not seeing it because of mortgage rules.”

Actually we're not seeing it because US consumers are unable to chase home prices into the stratosphere and instead have opted to rent, as all the recent data has confirmed, and as even Jeffrey Gundlach confirmed recently with his bearish call on housing.

However, while the market reserved for the US middle class is floundering, one segment is still vibrant - that segment which allowed foreigners to launder their money with US real estate.

“In Manhattan, you have foreign buyers coming in and using properties as a second, third, fourth or fifth home and hedging risks in their home countries,” said Chris Mayer, a real estate professor at Columbia University Business School in New York.

And as long as the NAR continues to be exempt from anti-money laundering requirements, as Zero Hedge also described well over a year ago, this explicit money laundering will continue unabated. Them, and hedge fund managers still riding on the wave of Fed generosity of course:

In Manhattan, buyers are using cash for trophy apartments and to gain an advantage over borrowers who must depend on loans to finance a purchase. Pej Barlavi, owner of brokerage Barlavi Realty LLC in Manhattan, said three of his five current clients buying homes prevailed with all-cash offers.

 

Barlavi said two of them are hedge fund managers who used year-end bonuses to buy the properties: a $2.2 million two-bedroom apartment in Midtown, selling for $150,000 above the asking price; and $1.5 million for a one-bedroom in Tribeca. His client in the second transaction was “nudged higher by a foreign buyer” before being chosen by the seller, Barlavi said.

Bottom line: in the Miami area, 67.1 percent of sales were cash deals; New York posted 57 percent; Detroit recorded 53.5 percent; Atlanta had 53.2 percent, and Las Vegas posted 52.2 percent.

Needless to add, with risk momentum still up as the global central banks continue to pump liquidity into the system at an unprecedented pace, the trajectory of all cash transactions will keep rising until inevitably it approaches 100%, if not for the entire country, then certainly for the abovementioned key markets. At that point, US housing will be nothing but a flippers game as the ultra-rich merely flip properties from and to each other at an ever faster pace.

Just like stocks.

 

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Thu, 05/08/2014 - 10:46 | 4739723 GVB
GVB's picture

Hard assets my friend.

Thu, 05/08/2014 - 10:55 | 4739758 FieldingMellish
FieldingMellish's picture

Ahem... property taxes.

Thu, 05/08/2014 - 10:58 | 4739771 MillionDollarBogus_
MillionDollarBogus_'s picture

Paying cash for property lessens the potential for a bad loan default.  

How can that be a problem..??

I call cash buying a solution.

Thu, 05/08/2014 - 10:59 | 4739778 i_call_you_my_base
i_call_you_my_base's picture

Unfortunately there is no one to live in those houses.

Thu, 05/08/2014 - 11:04 | 4739804 BennyBoy
BennyBoy's picture

Buying houses with cash = Money laundering 

Thu, 05/08/2014 - 11:29 | 4739911 Harbanger
Harbanger's picture

Actually in most of the 3rd world, property is bought with cash as bank loans are simply not available.

Thu, 05/08/2014 - 11:32 | 4739929 thamnosma
thamnosma's picture

So?  That's a meaningless comment as prices would adjust what can be afforded under that scenario or there would be no market.

Thu, 05/08/2014 - 11:42 | 4739941 Harbanger
Harbanger's picture

If people are buying with cash then that's the market right now.  Mortgages are getting hard to come by, maybe they will go back to subprime lending again but that's not the case right now.  Why would a bank want to loan you money long term with the current low interest rate?

Thu, 05/08/2014 - 11:45 | 4739965 i_call_you_my_base
i_call_you_my_base's picture

See my comment above. "People" are not buying houses with cash now. Investors are. The problem is that there is no end buyer with an intent to live in the place and at the purchase price no one can afford to rent it. Who's going to rent a house for $5000 / mo? No one. I guess it's slightly better in that there won't be defaults, but the losses will just be eaten by the investor.

Thu, 05/08/2014 - 11:56 | 4740014 Harbanger
Harbanger's picture

These people you call investors must be fools then.  It's their money and their losses as they cannot be bailed out like a bank, so I don't see the problem.

Thu, 05/08/2014 - 12:18 | 4740076 Raymond K Hessel
Raymond K Hessel's picture

Is there an offset from 401K distributions?  Meaning, are people using their 401Ks to bankroll property purchases? If so, this is good news because the economy is deleveraging away from paper assets to real assets without having to borrow (thus creating a new paper asset, the note).

Thu, 05/08/2014 - 12:53 | 4740187 imapopulistnow
imapopulistnow's picture

QE lifts equity values.  Rich people convert some of their stock into cash and buy real estate.  It is one of the transmission mechanisms for QE.

Thu, 05/08/2014 - 12:56 | 4740202 pig lipstick
pig lipstick's picture

I really dont understand articles like this because they fail to draw a credible conclusion. Obviously, we are to read this article and draw conclusion that "cash buyers are BAD."  But WHY are they bad?

WHY is it bad that Foriegn Investors are voting with their hard earned dollars that they have faith in the USA versus their own country, or another?

WHY is it bad that people with cash/money want to buy an asset class?  Isn't this instead a confirmation on other articles that claim stock market valuations are too high?  These people are voting along with ZH in agreement every time they purchase a property.

Who are we to judge what those with cash do with their money?  It's almost like these people are being portrayed as "stupid."  Let me ask you this:  They HAVE money, so are we saying that they are not as smart as those that do not? 

The FED has FORCED this hand.  It's not "flippers!"  It's not "stupid" money!  It's not "evil corporations." It's not crazy foreigners "stealing your property!"

The fact is this:  People with cash need a place to park their money and they can't do that in paper because of ZIRP and a manipulated stock market.  This is by design.

BLAME THE FED, NOT THE SQUIRRELS JUST TRYING TO GET A NUT!

 

 

 

 

 

 

 

 

Thu, 05/08/2014 - 14:41 | 4740603 Texas Ginslinger
Texas Ginslinger's picture

Paying cash is bad because the USA economy is designed to be fueled by debt.

Banks collect interest on money they lend, which is created by a Federal Reserve mouse click.

If consumers don't borrow money from banks, their profits suffer.

Credit card companies have a term for folks who never carry a debt balance - deadbeats.

Anyone who is debt free and stays that way is an enemy of the economy, in the eyes of the Fed and big banks.

 

 

Thu, 05/08/2014 - 20:32 | 4741786 oooBooo
oooBooo's picture

What happens when everyone who wants to invest in a house has too many?

Houses require care and even worse owning them is taxed.

Without renting them there is a finate number that can be purchased for investment by anyone because of the on-going costs.

When the cash stops buying houses, what happens to the prices?

The prices start falling such that non-investors can afford them.

Or what happens when the supply of houses is largely in the hands of investors? 

The only price support then becomes investors trading them amongst themselves.

That's where the problem is, not so much cash sales.

Thu, 05/08/2014 - 13:16 | 4740278 daveO
daveO's picture

Corporate money's different. The bosses get paid just like the CEO of Citi. 

Thu, 05/08/2014 - 12:01 | 4740026 Georgia_Boy
Georgia_Boy's picture

From CNN/Money:  "In California, Chinese nationals and immigrants are "parking their cash in single-family homes," said Meyers [Jeff Meyers, founder of Meyers Research]. In Irvine, Calif., for example, 80% of sales over the past year were to Chinese buyers, he said."

That should help put to rest the doubts about whether Chinese or other foreign money could be distorting housing prices here.  And if a chinese guy comes along and offers me 50% over market to buy my house, I'm taking it!

Thu, 05/08/2014 - 12:09 | 4740050 Confused
Confused's picture

Let me get this straight. Foreigners are buying houses. In cash. No worries from banks for money laundering. I move $2,500 overseas and all my shit gets flagged for money laundering? 

 

Seems to fit in with the fairness doctrine I keep hearing so much about. 

Thu, 05/08/2014 - 13:00 | 4740220 Harbanger
Harbanger's picture

"No worries from banks for money laundering."

Banks don't care about money laundering, it's the IRS that makes them flag your money transfers.  They care about where your money is going.  When these investors purchase property, they file a tax return showing the sale price amount and pay a transfer tax.  The IRS can investigate where those cash funds came from and whether that money was already taxed.

Thu, 05/08/2014 - 13:24 | 4740310 Confused
Confused's picture

Agreed. I just know from my own personal experience, I have had trouble from banks regarding transfers for very little money as to the origin, and its purpose. Tax, well, thats an entirely different level of trouble that I'm sure these people are side stepping. 

Thu, 05/08/2014 - 15:40 | 4740883 migra
migra's picture

Mortgages are not at all hard to come buy if you have good credit and income. The grossly overpriced housing market is the problem. I could buy today in San Diego but I refuse to get locked in a 30 year note in a overpriced rigged market. Instead I'll stay in my grossly overpriced apartment that I can walk away from with a 30 day notice.

Thu, 05/08/2014 - 11:39 | 4739949 Offthebeach
Offthebeach's picture

The Realtor/Money Churn Support Local Valuations And Tax Industry is pushing for new new NEW NEW , Super New Not Like Last New,....programs/scam/rackets/schemes. Just a couple of example. Federal Expanded Section-8, Section-9,10 and 11.
Then there are Pre Veterans Housing programs for middle school serf boys schedualed to fight in ....2023-Defense Of Saudia Arabia Campaign And Domestic Stimulas Action, in 2037 The Manchuria-Fukashima Nuclear Highspeed Railroad Defense of High Yeild Bonds War, and The Baltic Trans BMW-Soviet Liberation From Rapacious Moscow High Frequency Trading Default Black Swan Event War.

Thu, 05/08/2014 - 12:21 | 4740084 Raymond K Hessel
Raymond K Hessel's picture

This is some kind of spam bot.  They are using Wordle on this site's comment pages to develop a post that would fit.  Actually, this is what many of your posts read like to me.

Thu, 05/08/2014 - 13:07 | 4740249 Blano
Blano's picture

Actually it kind of sounds like tony wilson.

Thu, 05/08/2014 - 15:42 | 4740893 Offthebeach
Offthebeach's picture

Since the crony capitalist socialist are and will be controling , mostly, the future, one method of prediction is, somewhat, word spambot (ish). Just release yorself from reason, be extreme. You'll have trouble keeping up with the flood and speed of state idiocy.

Thu, 05/08/2014 - 11:00 | 4739786 LawsofPhysics
LawsofPhysics's picture

Even better, no banks to bailout right MDB?  Good call MDB!

Thu, 05/08/2014 - 11:04 | 4739805 NoDebt
NoDebt's picture

Individual cash buyers.... who just got that cash by clearing out their 401k

Thu, 05/08/2014 - 11:12 | 4739842 LawsofPhysics
LawsofPhysics's picture

more likely they are some of the fortunate few closer to that zero interest rate money spigot.  Fuck em.

Thu, 05/08/2014 - 11:21 | 4739877 NoDebt
NoDebt's picture

On the high end, absolutely agree.  But there are now TWO housing markets (just as we are rapidly transforming into a two-class society).  My own simple observations say this is true almost regardless of geography.  In other words, it's NOT just "location, location, location" as the only driver any more.  

Even beach property near O.C. Maryland I see it.  High end homes are FLYING.  Regular guy homes go begging and sell well below ask.

There are a lot of foreclosures going on down there, too.  You'll never see a sign on the yard, but I know a guy who does rehab work for the banks on those properties.  He showed me a house that just went through foreclosure less than 100 yards down the street from my Father's house... and neither my Dad or me ever knew.  Those foreclosures weigh primarily on the price point of "regular guy" houses.

 

Thu, 05/08/2014 - 11:27 | 4739903 fonzannoon
fonzannoon's picture

Sane thing by me. There are literally 2 markets. The 500k and up market, which has unbelievable demand, and the under 500k, which is just overloaded with inventory and the owners can't get out of them.

Thu, 05/08/2014 - 12:26 | 4740097 Raymond K Hessel
Raymond K Hessel's picture

If anyone wants to buy a foreclosure and needs to develop a price the bank will accept, irrespective of anything else, here's how you do it.

 

You find out how much was owed on the property, Let's say $100.  

Research to find out what the loan is being held at.  You will need a Bloomberg machine or you will have to scour MERS and MBS websites.  Let's say 63 cents to the dollar.  The $100 loan is valued at $63.

Add 10% to cover mgmt fees, so $6.30, let's just round up, $7. 

$63 + $7 = $70 is your offer price.  They will jumps on it like a giraffe petting Ruskie oligarch.

Thu, 05/08/2014 - 17:36 | 4741169 hidingfromhelis
hidingfromhelis's picture

No.  If a bank is trying to sell a property, they are trying to get the maximum price in a reasonable amount of time on the market.

Regardless of what the loan was before foreclosure, the bank is going to try to get market value.  In the (very) few cases where the loan balance was lower, why would they sell it for less?  Since most loan balances on foreclosed properties exceed the market value, one would pay more for properties using your formula in most cases.

Bloomberg Machine, MERS, and MBS sites for current info?  Are you serious?  Half the time, MERS doesn't even know who holds the note at any give time.  Besides, if you can get far enough into MERS and MBS sites to get actual information, then you're likely a TBTF already and don't need to bother with this stuff.

How much do the "Flipping Houses Using None of Your Own Money" courses cost at the local Holiday Inn these days?

Thu, 05/08/2014 - 11:30 | 4739905 LawsofPhysics
LawsofPhysics's picture

Please, those close to the "free money" spigot are also buying rentals at every level of the spectrum.  I can see it everywhere.  those with a real job in the under 500K market are fucked  for numerous reasons, mostly the result of all that "low inflation".

Thu, 05/08/2014 - 11:38 | 4739943 plane jain
plane jain's picture

Regular guy houses seem to be flying along pretty well here...SE Michigan.  Rents are high and availability of rentals is tight.  IMO it is pushing people into buying if they can.  Houses between 1200 - 1800 sq. ft., 30 to 60 years old are going for $200K - $250K.  Looks like banks are even starting to put foreclosures on the market.  One I checked out this week the neighbors said it had been sitting empty for 3 years.

I think we may have missed the best balance of prices/interest rates here.  My husband thinks prices will fall, but if interest rates climb we might be better jumping now.  Plan to stick around the area 10 years, just looking for a place to live, not an "investment".

Thu, 05/08/2014 - 11:48 | 4739979 LawsofPhysics
LawsofPhysics's picture

You are going to pay "rent" either way, but when it comes to any "asset", remember, when fraud is the status quo, possession is the law.

So, if the numbers are right, ask yourself, "do I consider my place of residence, my home, an asset?"

That is all.  In my humble opinon, the fewer middlemen you have to deal with in life, the better. (fuck the landlord, be your own landlord).

Thu, 05/08/2014 - 13:26 | 4740320 MisterMousePotato
MisterMousePotato's picture

Conventional wisdom is that one is better served by buying when interest rates are high (and, hence, prices are low), and then refinancing (or selling) when interest rates drop. So, no, fret not. Eventually, this will work to your advantage; it's just that no one can tell you how long you'll have to wait.

Thu, 05/08/2014 - 13:32 | 4740336 daveO
daveO's picture

A realtor used that 'rates are going up!' line on a relative last year, just when sales were turning down again. If rates ever normalize(10-yr at 4-5%), houses will drop by about half. Higher priced houses will probably lose 3/4th's. Of course, that'll take a foreign shock. There's no way the FED will 'unrig' rates on it's own.

Thu, 05/08/2014 - 15:29 | 4740835 MachoMan
MachoMan's picture

My husband thinks prices will fall, but if interest rates climb we might be better jumping now.

If interest rates rise, home prices will fall...  whether you hit some magical point where the prices are decreasing more quickly than interest rates are increasing is simply a timing decision...  but, I don't think you and your husband see the matter differently. 

Thu, 05/08/2014 - 11:17 | 4739862 Spastica Rex
Spastica Rex's picture

Add this to Charles Hugh Smith's definition of "Middle Class:"

Ability to buy second or third home with cash.

Thu, 05/08/2014 - 11:33 | 4739931 thamnosma
thamnosma's picture

You are such a troll.  No problem at all, everyone is doing so well they are flush with dollars to purchase homes.   What a joke.

Thu, 05/08/2014 - 15:13 | 4740768 pelican
pelican's picture

The problem?  Well, for one the people who protect and develop your society lose motivation.  Police, Spies, Doctors, Professors, Engineers and Teachers then cannot afford one. 

 

See how well that works out when you have removed them from the ownership club. 

Thu, 05/08/2014 - 15:31 | 4740851 MachoMan
MachoMan's picture

They already like taking orders and primarily work for the state...  not sure what magical upheaval you're dreaming of...

Thu, 05/08/2014 - 11:04 | 4739807 GVB
GVB's picture

Yes, agreed completely. But it does tell us something, right?

Thu, 05/08/2014 - 11:19 | 4739873 Harbanger
Harbanger's picture

As far as I know, property taxes are tax deductable.  So is mortgage interest.

Thu, 05/08/2014 - 11:42 | 4739959 cornedmutton
cornedmutton's picture

I believe only on your first home and you must be living in it. Although I really wouldn't know as I've been a renter all me life....

Thu, 05/08/2014 - 12:02 | 4740030 Harbanger
Harbanger's picture

No.  It's deductable as a business expense along with interest paid, insurance and other costs.  You personal home gets you a 250k tax shelter for any gains you made in the sale.  The rest is taxed.

Thu, 05/08/2014 - 12:42 | 4740155 safe as milk
safe as milk's picture

"No.  It's deductable as a business expense along with interest paid, insurance and other costs."

that only works, if you rent the property out. otherwise, it's a passive loss which is a lot more complicated to use as a writeoff.

Thu, 05/08/2014 - 10:47 | 4739728 lo574
lo574's picture

Come on now.  Someone needs to buy those foreclosures and get 'em off the books to things "appear" alright.  *LOL*  Yes, definite sarcasm.  Drink the koolaid!

Thu, 05/08/2014 - 11:12 | 4739843 Never One Roach
Never One Roach's picture

The biggest threat to seniors’ retirement might be the roof over their heads

 

More seniors today are carrying mortgage debt in retirement than ever before, rising from 22% to 30% from 2001-2011, according to a new report by the Consumer Financial Protection Bureau. Over the same period, the median mortgage balance for older Americans has nearly doubled from $43,400 to $79,000.

 

More seniors today are carrying mortgage debt in retirement than ever before, rising from 22% to 30% from 2001-2011, according to a new report by the Consumer Financial Protection Bureau. Over the same period, the median mortgage balance for older Americans has nearly doubled from $43,400 to $79,000.

Thu, 05/08/2014 - 12:58 | 4740208 imapopulistnow
imapopulistnow's picture

It is the hangover from the HELOC/MEW days.  Paying down thewse mortgages is part of the on going deleveraging process.

Thu, 05/08/2014 - 13:47 | 4740375 daveO
daveO's picture

My next door neighbors(84 and 80) are even worse off. They took out a re-fi about 8 yrs ago, at the top, for somewhere around $115! At the same time, I was telling them I was selling all my rentals before the market crashed. Then, they actually went back to the bank looking for another re-fi since then! The appraiser put the value below what they already owed. They were livid. I have no idea what they spend their money on. They drive old cars, collect several pension checks and have VA coverage in addition to Medcare. The worst thing is they've lived there since 1974! Think of the interest payments they've made to the banks in 40 years.

I told them about a comparable foreclosure, nearby,that sold for half of what they owed. They were not amused. The idea of being homeless in your 80's is fast becoming a reality with so many stupid people around.  

Thu, 05/08/2014 - 10:50 | 4739740 Kaiser Sousa
Kaiser Sousa's picture

"what bubble...?"

Ben BerYellen

Thu, 05/08/2014 - 10:51 | 4739741 OC Sure
OC Sure's picture

...Bonds, up, up, and away.

Thu, 05/08/2014 - 10:52 | 4739745 madcows
madcows's picture

Looks like all the hot FED money is going into exotic cars and house purchases.

Thu, 05/08/2014 - 10:53 | 4739748 101 years and c...
101 years and counting's picture

in 20 years there will be an accurate book detailing how every american became a slave to the fed/wall st.  hint: they bought all the homes and made you their serfs.

Thu, 05/08/2014 - 11:03 | 4739795 Offthebeach
Offthebeach's picture

The book was written in 1913.

Just increasing the Vig since then.

Company slave jobs, Fedgov company housing, Fedgov ebt fed farm carbo floating pig pink slime food, Fed obama HB-1 Paki physian assistant china calk cancer pills with a VA gurney in the dumpster alley......

Thu, 05/08/2014 - 11:05 | 4739811 Bangin7GramRocks
Bangin7GramRocks's picture

A slave to the same men and women that should've been jailed in 2009. If only more people knew what happened, there would be riots across this country. I wanna be sedated too!

Thu, 05/08/2014 - 10:53 | 4739749 Billy Sol Estes
Billy Sol Estes's picture

Freddie Mac has $4b profit too...suckers

Thu, 05/08/2014 - 10:54 | 4739751 JRobby
JRobby's picture

65% all cash in FL for 2013

Thu, 05/08/2014 - 10:54 | 4739752 Bangin7GramRocks
Bangin7GramRocks's picture

Yet another reason why it suck balls to be under 25. Insane college debt, piss poor job market and impossibly expensive home prices. This will be America's Angriest Generation and rightly so!

Thu, 05/08/2014 - 11:08 | 4739799 jbvtme
jbvtme's picture

fuck those entitled brain washed drones. they haven't got the slightest clue what's going down. they're chumps like their parents

Thu, 05/08/2014 - 12:29 | 4740103 Raymond K Hessel
Raymond K Hessel's picture

Generation Tantrum!!

Thu, 05/08/2014 - 12:59 | 4740214 imapopulistnow
imapopulistnow's picture

No starter homes for them...

Thu, 05/08/2014 - 11:05 | 4739809 Max Cynical
Max Cynical's picture

"This will be America's Angriest Generation and rightly so!"

Especially as 10,000 baby boomers qualify for SS, free healthcare, perscription drugs (did I miss anything?)...every day for the next 19 years.

http://www.pewresearch.org/daily-number/baby-boomers-retire/

Thu, 05/08/2014 - 11:11 | 4739840 mr1963
mr1963's picture

The country is being bled dry by 65+ and -30 year olds. The 40-60 age group is footing the bill for the entire country when they should be saving for retirement. I paid taxes up the whazoo last year, my kids all got $3k back...

Thu, 05/08/2014 - 11:31 | 4739924 sleigher
sleigher's picture

Is that we allow all the illegals in?  Younger generations don't want to have kids or marry because no money.  

 

http://theeconomiccollapseblog.com/archives/the-economics-of-marriage

Thu, 05/08/2014 - 11:36 | 4739939 thamnosma
thamnosma's picture

BTW, this is what "troubles" criminal Eric Holder today:

Attorney General Eric Holder says the White House continues to hear 'troubling' reports of school districts raising barriers to enrollment for children brought into the US illegally - @AP

I consider him more dangeorus and evil than Obama.  

Thu, 05/08/2014 - 12:32 | 4740112 Raymond K Hessel
Raymond K Hessel's picture

That's because you bought into the narrative that Obama has no control over his cabinet, that they do whatever they want and that he gives them the freedom to make judgement calls.  

The President who controls his public image tighter than Hitler somehow is also the same President that manages with a soft touch.  

That's why you consider him more dangerous and evil than Obama.  Because you bought into Obama's narrative.  Obama is an evil genius of such calibre that hasn't been seen on the world stage in over 70 years.

Thu, 05/08/2014 - 15:40 | 4740884 RichardParker
RichardParker's picture

" no control over his cabinet, that they do whatever they want" 

Typical sociopath strategy to avoid culpability. Another favorite is that they "just didn't know.

Thu, 05/08/2014 - 11:44 | 4739963 plane jain
plane jain's picture

Happening all over.  A good thing IMO.  Maybe we have passed peak humans just a few decades after passing peak resources.

http://www.cbsnews.com/news/dropping-birth-rates-threaten-global-economi...

Thu, 05/08/2014 - 12:33 | 4740116 Raymond K Hessel
Raymond K Hessel's picture

You should be the first to help reverse overpopulation.

Thu, 05/08/2014 - 13:40 | 4740366 plane jain
plane jain's picture

Done and done. We have one child.  Don't plan to have anymore, so below the 2.1 children per woman for replacement.

Thu, 05/08/2014 - 11:51 | 4739998 Offthebeach
Offthebeach's picture

Outsourced families to turd world. Like pig shit eating chinese "fresh" carp, kids raised in dirt floor mud huts the brought in as compliant, liberty/right ignorent labor. Way way better for the elite then some pickup driving ex-Marine mumbling about "rights".

Thu, 05/08/2014 - 13:51 | 4740402 daveO
daveO's picture

With $17 Trillion in debt, it won't last 19 years.

Thu, 05/08/2014 - 11:23 | 4739884 greatbeard
greatbeard's picture

>> it suck balls to be under 25.

You can't buy youth.  Enjoy it for what it is rather than getting all wrapped up in the material world Madison Ave pushes.  Go out and enjoy life and stop chasing material goods.

Thu, 05/08/2014 - 11:31 | 4739900 indmotor
indmotor's picture

@Bangin7GramRocks

Bunch of over edjewcated cry baby pussies. There are so many houses for cheap but these gutless communist young people don't want to earn anything or work their way up. Want to start at their parents level. The saying is true. "the longer You stay in school the less intelligent You become".

 

Thu, 05/08/2014 - 12:17 | 4740074 Bangin7GramRocks
Bangin7GramRocks's picture

You are being a dick. 40 years ago, a guy could finish high school and get a real hard working job making enough money to buy a starter home and raise a family. Then it changed to where the same guy needed to get a degree and have his wife work to afford the same starter home and the ability to raise a family. Now, two young college graduates can't even afford a starter home in many markets. And that's if they are both lucky enough to be employed. School debt, low wages and artificially high home prices are crushing these people. And they are not all brain washed, video game playing assholes. 

Thu, 05/08/2014 - 12:34 | 4740122 Raymond K Hessel
Raymond K Hessel's picture

Burn.

Thu, 05/08/2014 - 12:37 | 4740132 Tortfeasor
Tortfeasor's picture

You think that if you just check the boxes you're told to check you're entitled to a certain lifestyle? Tough nuggets, it ain't happening. You're gonna have to put in effort to win at life, and that effort must be applied in a mindful and smart direction.

Thu, 05/08/2014 - 10:55 | 4739753 GrinandBearit
GrinandBearit's picture

Besides Blackstone and Asians... where is all this cash coming from? 

Why would anyone buy RE now when it's obviously another bubble?

Would not be surprised if the Fed was somehow stuffing money into private pockets and instructing them to buy homes in order to make people think there is a housing recovery.

Sounds crazy I know, but these guys are desperate as hell.

Thu, 05/08/2014 - 10:57 | 4739766 i_call_you_my_base
i_call_you_my_base's picture

It's different this time.

Thu, 05/08/2014 - 11:06 | 4739816 jbvtme
jbvtme's picture

blackstone, chinese and belgians

Thu, 05/08/2014 - 10:59 | 4739777 LawsofPhysics
LawsofPhysics's picture

Turning bullshit paper in physcial assets...

kind of makes sense to me, but all "stimulus" is fungible and I am sure this time "it's different".

No worries, the capital mis-allocation and mal-investment continues.

Thu, 05/08/2014 - 11:07 | 4739803 OC Sure
OC Sure's picture

"where is all this cash coming from?"

 

What is a printing press?

Counterfeit is never hoarded. It is transmogrified into real things.

Thu, 05/08/2014 - 11:10 | 4739834 youngman
youngman's picture

This is the first stage of hyperinflation...spend as fast as you can for something of value....the paper you hold loses its value every second you hold it...

Thu, 05/08/2014 - 11:28 | 4739908 greatbeard
greatbeard's picture

>> first stage of hyperinflation.

I agree with that.  Everything I watch is flying off the shelves.  Florida housing? Forget it.  It is smoking.  Even RVs, at least the used ones I watch, are flying out the door.  It used to be an RV could sit for a year or more.  I'm seeing them selling in weeks.

I rarely buy groceries anymore as I eat very simple and grow a good bit of my own, but people who never mentioned food prices are complaining to me.

It's amazing, from my point of view, to watch it all, and it does seem like the end game of hyperinflation is upon us.  But they have proven many times over they can keep thing thing going for a long time.

Thu, 05/08/2014 - 11:47 | 4739974 plane jain
plane jain's picture

Decided earlier this spring that I would like to have an RV and a diesel vehicle to haul it.  Seems like a pretty good plan B considering.

Thu, 05/08/2014 - 12:27 | 4740099 greatbeard
greatbeard's picture

>>  Seems like a pretty good plan B

If done right it's a nice way to go.  I've got a really nice hobby farm thing going, but honestly, I enjoyed the RV life just as much, or more, and would go back.  I just old my faithful rig and wish I hadn't now.  But I can buy another.  If  you buy the right rig, and imo only about 10% of them are decent, and put in a good solar system, it makes a very nice movable shack.

Thu, 05/08/2014 - 13:00 | 4740222 imapopulistnow
imapopulistnow's picture

The $ will need to crash first before any hyperinflation.

Thu, 05/08/2014 - 13:43 | 4740378 TheEndIsNear
TheEndIsNear's picture

Yes, we are only in the very early stages. Real hyperinflation is at least a year or two away.

Thu, 05/08/2014 - 11:29 | 4739914 CrazyCatLady
CrazyCatLady's picture

Last time i checked, every country had a mafia.  Isnt one of the chief jobs laundering money? 

Thu, 05/08/2014 - 10:57 | 4739767 Never One Roach
Never One Roach's picture

How much of this 'cash' is flooding in from overseas buyers with "No questions asked' where they got it?

Thu, 05/08/2014 - 10:57 | 4739769 LawsofPhysics
LawsofPhysics's picture

All stimulus is fungible motherfuckers.

Thu, 05/08/2014 - 11:02 | 4739791 cherry picker
cherry picker's picture

Maybe they are using student loans to buy homes, ever think of that?

Thu, 05/08/2014 - 11:52 | 4739999 plane jain
plane jain's picture

Well that could be a brilliant plan for a youg couple starting out.  Each pump hard at the student debt well, "die" conveniently and start up in a new location with a new identity and buy a house for cash.  Learn something skills based while you are at it so a "diploma" isn't really an issue.

Thu, 05/08/2014 - 11:03 | 4739798 Watchingtheweasels
Watchingtheweasels's picture

America has gone from a country where one wage earner could buy a new car, a house, and support a family to a country where two (and sometimes three) wage earners cannot buy a new car...and this data confirms its transformation into a rental society as foreign and domestic investment funds pay cash for houses and then turn around and rent them to the sheeple. Last one out, turn out the lights, please.

Thu, 05/08/2014 - 11:04 | 4739808 buzzsaw99
buzzsaw99's picture

Actually we're not seeing it because US consumers are unable to chase home prices into the stratosphere...

that.

Thu, 05/08/2014 - 11:05 | 4739813 The Boognish
The Boognish's picture

This is the endgame for TPTB. They spent decades killling the family farm and then buying up the farm land from farmers who couldn't compete with the giant ag firms who are massively subsidized by the federal government. Now the Fed is printing money so the common prole will not even be able to own a house. The real power in a country lies with the people that own the land. We are having our birth right sold out from under us to the national and international beneficiaries of the Fed's money printing. We are headed to a place where we will live as serfs at the behest of the landed gentry.

Even if you own property they will eventually use property taxes and environmental laws to wrest control of that property from you. They are doing this now in Oregon and other places where the Endangered Species act is being used as a weapon by the connected to make people's land unusable and then buying the property up at discount rates. They then set up some mitigation scam which unencumbers the property.

No wonder they want to take our guns away so badly.

Thu, 05/08/2014 - 11:39 | 4739945 Watchingtheweasels
Watchingtheweasels's picture

"Even if you own property they will eventually use property taxes and environmental laws to wrest control of that property from you. "

Happening all over the country, unfortunately.

Thu, 05/08/2014 - 17:32 | 4741212 hidingfromhelis
hidingfromhelis's picture

The Return to Serfdom

Thu, 05/08/2014 - 11:55 | 4740012 plane jain
plane jain's picture

Yeah you wouldn't want people to be able to produce food on their own land.  Might disturb the neighbors.

http://www.policestateusa.com/2014/michigan-right-to-farm/

Thu, 05/08/2014 - 13:56 | 4740431 daveO
daveO's picture

I don't it's coincidence that Nixon closed the gold window AND created the EPA.

Thu, 05/08/2014 - 11:06 | 4739814 Falconsixone
Falconsixone's picture

Red China some how buying North America because the US Government needs to buy more helicopters and dildos.

Thu, 05/08/2014 - 11:07 | 4739820 youngman
youngman's picture

Its foreigners buying....from the cash they stole from thier own countries..they are funny about that...

Thu, 05/08/2014 - 11:31 | 4739920 Cthonic
Cthonic's picture

Money laundering, writ large.

Thu, 05/08/2014 - 11:08 | 4739822 Kreditanstalt
Kreditanstalt's picture

Those who actually HAVE jobs - and have held them throughout the recession - are doing very well, thank you!

They're hogging all the salary & jobs and can afford second houses, boats, new cars, trophy wives, RVs...  But as a proportion of the population, they're shrinking.

Thu, 05/08/2014 - 11:46 | 4739971 thamnosma
thamnosma's picture

There's truth to that.  It's not that they are hogging jobs, after all you can only have one.  It's just so many of those job are disappearing.   The thieves in the various public unions are bleeding us dry and living very, very fat while pretending to be "workers in a union".  They are parasites.  You may even know some personally since we are talking teachers, cops, fire fighters, bureaucrats.   It's more like the old Soviet Union really.

There are a few industries, especially tech, which promote bubble real estate prices in California and bio-tech in North Carolina.

But in this sort of job market, employers are in the catbird seat.  New employees get paid less and probably receive no health insurance, thereby being permanently impoverished in Obamacare.

Thu, 05/08/2014 - 12:37 | 4740133 Raymond K Hessel
Raymond K Hessel's picture

How do you hog a job?  Sounds like code for fellatio.

Thu, 05/08/2014 - 11:10 | 4739835 elwind45
elwind45's picture

Pretty much has to be or nobody would believe the story otherwise?

Thu, 05/08/2014 - 11:15 | 4739854 NoWayJose
NoWayJose's picture

It should be fun to watch the housing market crash, and to see who gets bailed out again by the US Government, the Treasury and the Fed.  The most interesting thing is that low rates were supposed to 'save' us from the last housing collapse - not CAUSE one...  so what 'medicine' will they apply next crash?

Thu, 05/08/2014 - 11:19 | 4739872 Seasmoke
Seasmoke's picture

What's the purpose in printing counterfeit paper, if you aren't going to use it.  Hard assets before it's too late. 

Thu, 05/08/2014 - 11:21 | 4739878 elwind45
elwind45's picture

Sweet deals nation and you think this money would risk anything to cut you back in!

Thu, 05/08/2014 - 11:48 | 4739912 Mercury
Mercury's picture

 Needless to add, with risk momentum still up as the global central banks continue to pump liquidity into the system at an unprecedented pace, the trajectory of all cash transactions will keep rising until inevitably it approaches 100%, if not for the entire country, then certainly for the abovementioned key markets. At that point, US housing will be nothing but a flippers game as the ultra-rich merely flip properties from and to each other at an ever faster pace.

 

Much more importantly, average or even reasonably affluent Americans are being squeezed out of this critical, hard asset market.

The market for "key" RRE isn't necessarily a bubble. What may be underway instead is a permanent shift of hard, income generating assets into the hands of a small minority who have directly benefited from The Fed's "stimulus".

In other words, that's not a swelling bubble you're hearing/seeing but the last few bars being played in a game of hard asset musical chairs. Aren't RE bubbles usually accompanied by gobs of unwisely extended credit?

There’s an argument to be made therefore that buying half-decent RRE now at inflated prices will leave you in a better place than holding a bag full of diminished buying power and little or no hard assets X years hence.

Thu, 05/08/2014 - 13:07 | 4740250 imapopulistnow
imapopulistnow's picture

Wall Street bankers will soon own your homes, most farm land and the equity value of most companies.  We are becoming a nation of peasant serfs.  Serfs who do not understand what is happening and who are fooled into supporting this transformation under the guise of nonmonetary social justice issues.

Thu, 05/08/2014 - 14:05 | 4740463 daveO
daveO's picture

Actually, I believe we've already passed that point. Only 25% own their house out right. People have been renting(mortgages) their houses from the banks since the 60's, always re-financing, never paying off. When I bought my house(late 80's), the last owners owed nearly twice what they originally paid in '68! They were absolutely desperate for cash and gave into my demands that they pay all the closing fees. After all, what's a few thousands more when you've already given the bank your life's savings?

Thu, 05/08/2014 - 16:27 | 4741031 pig lipstick
pig lipstick's picture

Oh yeah?  What are you going to do about it?  The ONLY answer is to MAKE MONEY and stop crying about it.  This IS the environment the FED is FORCED to create because they have no other alternative at this point (I am equally as pissed that this is the path the FED is on, but thats another topic).  Either make money NOW, or forever slide down the serfdom path.  It really is as easy as that to understand.

Thu, 05/08/2014 - 11:29 | 4739913 What is The Hedge
What is The Hedge's picture

Having read all the articles here regarding cash purchases of real estate, I wonder each time if this is due to foreclosures and not some need to hide cash. The implications of cash due to foreclosure is far different than what is discussed here. Plus, these sales are always considerably below market which then depresses appraisals which lowers market prices.

 

Thu, 05/08/2014 - 11:41 | 4739956 thamnosma
thamnosma's picture

But the market is going up.

Nope, foreclosures are kept off the market for that exact reason.  The banks cannot afford the price discovery of foreclosures hitting the market at once.   The fantasy bubble prices inflate the value of all the garbage they have on their books and keep them solvent.

What you suggest is not happening.

Thu, 05/08/2014 - 11:30 | 4739915 abatis
abatis's picture

I purchased my home for cash. It seemed safer than leaving the cash under the matress.

Thu, 05/08/2014 - 11:59 | 4739926 Cthonic
Cthonic's picture

That was my mistake.  If 30yr rates fall another 50 basis points (doubtful), I'll correct it.

Thu, 05/08/2014 - 11:38 | 4739942 thamnosma
thamnosma's picture

Such pessimists here.  Clearly the recovery is in full swing and Americans are loaded with cash from rising wages and a hot job market.  The country simply no longer needs mortgages.  We are awash in middle class prosperity like never before.

Thu, 05/08/2014 - 11:39 | 4739944 corporatewhore
corporatewhore's picture

they will change the mortgage rules and they will also change the rules for student loans and repayments.  the game isn't over by any means and most consumers will think this is great.

as an aside i am actually starting to see homes in my area listed for $100k.  something is afoot, i'm just not sure what it is.  maybe just real estate agents looking to make a quick commission by pricing below market or ridiculously below market

Thu, 05/08/2014 - 14:12 | 4740489 daveO
daveO's picture

Now that the MBS buying is being tapered, I suspect that banks are starting to unload again. They haven't given many loans since the last collapse so, they won't be hurt nearly as bad from this leg down. 

Thu, 05/08/2014 - 11:48 | 4739976 zaphod42
zaphod42's picture

Yeah, yeah... seniors are over their heads in debt on their homes.  Not all of them, though.  And, I plan on selling my paid for home and buying a much smaller, more affordable home when I retire (if ever).  I will do it cash, thank you!  

I wonder how many of those all cash deals reflect others of my bent?  

Another consideration - according to Never One Roach, median balance is $79,000.  If the value of the home is $379,000, they will have $300,000 cash left over to use for smaller home.  Cash deal, anyone?

Craig

Thu, 05/08/2014 - 12:10 | 4740051 22winmag
22winmag's picture

Shoot the big time perpetrators... not the small time speculators.

Thu, 05/08/2014 - 12:35 | 4740125 LooseLee
LooseLee's picture

Didn't those TRAITORS in congress give 'special deals' to certain 'investors' to buy real estate for pennies on the dollar?

Thu, 05/08/2014 - 12:52 | 4740184 novictim
novictim's picture

Statistics should be left to The statisticians.

Existing home sales and New Home sales are at historic lows. So when you talk about the percentage of sales being carried off by the All Cash Crowd, this detail needs to get major consideration.
Statistics need context.

The reality is that cash buying is on a significant decline.

Thu, 05/08/2014 - 12:54 | 4740192 ObamaDepression
ObamaDepression's picture

A friend of mine here in San FRancisco is a partner at a law firm. His wife is an atty too. They were looking to upgrade from their condo to a house but were always outbid.

They finally gave up looking when they were outbid by $400k on the last house. This was not even a hih demand area where wealthy techies buy.

From what I've heard Chinese are buying home all over the Bay Area, sight unseen.

Thu, 05/08/2014 - 13:33 | 4740342 Lin S
Lin S's picture

How is this going to end?  Seeking (detailed) answers...

Thu, 05/08/2014 - 13:30 | 4740333 kevinearick
kevinearick's picture

pulling the ladder up, collapsing the middle class, off-sheet dead assets...

Thu, 05/08/2014 - 13:33 | 4740345 Lin S
Lin S's picture

Will the Chinese price us out of RE?

Or, are they being gamed/scammed by .gov, and in for rude surprises further along?

How will all of this play out?

Seriously, no sarc please.  I really want to know.

Thu, 05/08/2014 - 13:37 | 4740352 Lin S
Lin S's picture

< sell my LA suburb house

< rent my LA suburb house

ZH'ers have taught me we don't really own a home at all, and some here have said "I will never own another house again, ever."

I was starting to think the same, but still I wonder: if the ChiComs are buying up property, should I hold on to mine and just rent it out?

Or should I sell and use the proceeds to buy PMs?

Please advise.

Thu, 05/08/2014 - 13:44 | 4740382 FightingtheFed
FightingtheFed's picture

Don't be so sore.. Wall Street is doing awesome!! Don't be a hater. 

You maggots are suppose to slave for a living.. Quit your bitching and get back to work!

 

You've been had and there's not a damn thing you can do about it...

 

Thank you sir may I have another... lol

Thu, 05/08/2014 - 13:44 | 4740383 FightingtheFed
FightingtheFed's picture

Don't be so sore.. Wall Street is doing awesome!! Don't be a hater. 

You maggots are suppose to slave for a living.. Quit your bitching and get back to work!

 

You've been had and there's not a damn thing you can do about it...

 

Thank you sir may I have another... lol

Thu, 05/08/2014 - 14:55 | 4740691 Dre4dwolf
Dre4dwolf's picture

In New York its all Russian and Chinese buyers paying all cash.

No "New Yorker" is really buying a house, its just foreigners with stacks of cash.

Thu, 05/08/2014 - 15:28 | 4740832 Vidbizz
Vidbizz's picture

I offed my old McMansion & just bought a smaller house with cash.  Rural, 2 acres, dirt road.  Won't own the banks any money - debt free.  Going semi-Galt.

Thu, 05/08/2014 - 15:57 | 4740944 ECONOMICRESET
ECONOMICRESET's picture

Just a question? Never been to Asia, but could they be taking personal loans out against their 40% profit, vacant in all directions, third homes they own in china and using that cash to buy here?

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