Dec 08

- Did Blackstone Just Call The Top In Commercial Real Estate? (ZeroHedge, Dec 8, 2014):

Blackstone’s well-timed IPO in 2007 was almost the perfect top-tick indicator as ‘the smart money’ private-equity guys cashed out into the public markets at peak euphoria. Earlier this year we noted that, among others, Blackstone was drastically ratcheting down purchases (and in fact selling what it could) US residential real estate – and with it withdrew the only pillar holding up the housing market. And now, in the biggest deal in 7 years, Blackstone is dumping a $3.5 billion commercial real estate portfolio. Given the recent declines in CMBX pricing, perhaps, once again, Blackstone is calling the top in another bubble…

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Nov 14

“World’s Richest Restaurateur” Sees An Imminent Crash In America’s “Crazy” Real-Estate Market (ZeroHedge, Nov 13, 2014):

When it comes to the fair value of assets, especially cash-flow generating real estate, few are as qualified to opine as the man dubbed “World’s Richest Restaurateur”, billionaire Tilman Fertitta, chairman of Landry’s Restaurants which counts among its properties such brand names as Morton’s, Rainforest Cafe, Bubba Gump Shrimp Co., McCormick & Schmick’s, Saltgrass Steak House, Claim Jumper, Chart House, The Oceanaire, Mastro’s Restaurants, Vic & Anthony’s Steakhouse and many more.

Which is why his dire warning about the state of the “crazy” US real estate market, which he believes set for an imminent crash, are likely worth keeping in mind as all the panglossian permabulls see nothing but a 4th dead housing cat rebound ahead. That, and his take on inflation: “There is huge inflation going on right now.” 

From his interview on Bloomberg TV yesterday: Continue reading »

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Nov 08

- The 10 Most Expensive Homes In The World (ZeroHedge, Nov 6, 2014):

There’s an odd-looking building in South Mumbai in India that looks like it’s under construction, only that it’s finished and furnished. And by how much. Called the Antilia, after mythical island in the Atlantic, the building is famous not for its odd structures of extra high ceilings and protruding floors; it’s the second most expensive house today at $1 billion. Barring the Buckingham Palace, which is valued at $1.55 billion, it would have been our most expensive house in our list, as Forbes.com has named it in 2014. In fact, Forbes cited that it’s the first house (other than palaces) to breach the $1 billion range.

Our infographic of the world’s most expensive houses compares the home values against the British Royal’s residence. Interestingly, the palace is not the most ornate or opulent among palaces; Saudi royals and sheiks are known to live more lavishly, beating their European counterparts. But property value is not just about what the house is, but who lives in it. The Queen of England lends to the palace a value higher than the structure’s worth. Continue reading »

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Nov 04

- Why Housing Is Dead: First-Time Buyers Collapse To 27-Year Lows (ZeroHedge, Nov 3, 2014):

The Millennials (one of the biggest generations in US history) are just not getting with the status quo program. As we detailed previously, with lower credit scores, less disposable income, and a soaring number of people living with their parents; so it should be no surprise that The National Association of Realtors (NAR) today admitted that first-time homebuyers plunged to the lowest level in 27 years. The blame – of course – rather than low/no-growth fiscal policies, student debt servitude, and inequality-driving cheap-funding monetary policy, is price comnpettion from ‘investors’ and too “stringent credit standards,” perfectly mirroring FHFA’s Mel Watt’s Einsteinian insanity desire to dramatically ease lending standards and slash minimum down-payments (as we noted previously). Perhaps NAR accidentally stumbles on the biggest reason no one is buying in their profiling: the typical first-time buyer was 31-years-old, while the typical repeat buyer was 53 – smack in the middle of the Millennial collapse.

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Oct 29

- California Leads Housing Slowdown As Case-Shiller Home Prices Decline For 4 Months In A Row (ZeroHedge, Oct 27, 2014):

Following misses in yesterday’s Markit Service PMI, Existing Home Sales and the Dallas Fed report, and today’s Durable Goods numbers, we just made it a pentafecta for misses in US econ data, when the just released August Case-Shiller data for August confirmed once again that US housing is rapidly slowing down, when the Top 20 Composite Index (Seasonally Adjusted) posted another decline in August, its fourth in a row, declining by -0.15% and missing expectations of a modest 0.2% rebound (following last month’s -0.5%) decline. The best summary of the situation came from S&P’s David Blitzer: “The deceleration in home prices continues… The Sun Belt region reported its worst annual returns since 2012, led by weakness in all three California cities — Los Angeles, San Francisco and San Diego.” But who cares what the birth (and death) place of every housing bubble is doing, right?

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Oct 25

keep-calm-and-keep-looting

- Goldman and Blackstone Enter Spanish Real Estate – Pain and Suffering for Poor People Immediately Ensues (Liberty Blitzkrieg, Oct 24, 2014):

Last year Madrid’s city and regional governments sold almost 5,000 rent-controlled flats to private equity investors including Goldman Sachs and Blackstone. At the time, the tenants were told their rental conditions would remain the same.

But as old contracts expire, dozens of people have received demands for higher rent, been told their rents will increase dramatically, been threatened with eviction or moved out to escape the insecurity. Thousands of Spain’s poor now depend for their homes on the generosity of private equity.

– From today’s Reuters article: Why Madrid’s Poor Fear Goldman Sachs and Blackstone

Less than a month ago, I warned the people of Spain that U.S. financial oligarchs had their sights set on the nation. The post was titled, Your Wall Street Slumlord Arrives in Europe – Goldman and Other Financial Firms Launch “Buy to Rent” in Spain, and in it I wrote:

Now that the financial oligarchs have had their way with the U.S. property market, to the point that average citizens can’t even afford to own a home (Zillow recently showed that 1 in 3 homes are unaffordable), it appears they have turned their sights overseas. What better market for bailed-out bankers to feast on than Spain, with its 50%+ youth unemployment rate and a continued depressed real estate market.

It didn’t take long for the results to be felt. Reuters published an article on the topic today. Here are some excerpts: Continue reading »

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Oct 25

- Burst Chinese Housing Bubble Leads To First Annual Price Decline Since 2012; Prices Drop In Record 69 Cities (ZeroHedge, Oct 24, 2014):

 It has been over six months since the Chinese housing bubble has popped. What’s worse, as overnight housing numbers out of China confirmed, the government has so far failed to contain the fallout, and according to the National Bureau of Statistics, which is anything but, after a fifth straight monthly decline, Chinese home prices have now wiped out all price gains in the past year. This was immediately spun as bullish by media outlets and sellside experts as “raising expectations the government will have to implement more economic support measures to cushion the blow.” I.e., buy stocks because central banks will push risk prices artificially higher yet again. In other words, bad is still good and failure continues to be success.

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Oct 25

- The Housing Recovery Has Been Canceled Due To Data Revisions (ZeroHedge, Oct 24, 2014):

It is now beyond stupid: the euphoric, consensus-beating data for every single month since May has been revised lower, by on average 6% and as much as 9%. Perhaps finally people will realize that there is only one number that matters in the Census bureau’s monthly new home sales report: the ±15.7 90% confidence interval. Well, people maybe, but not algos, who only care about one thing: whether the data beat or missed.

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Oct 19

- Welcome To Arcadia – The California Suburb Where Rich Chinese Stash Cash In McMansions (Liberty Blitzkrieg, Oct 16, 2014):

The city, population 57,600, projects that about 150 older homes—53 percent more than normal—will be torn down this year and replaced with mansions. The deals happen fast and are rarely listed publicly. Often, the first indication that a megahouse is coming next door is when the lawn turns brown. That means the neighbor has stopped watering and green construction netting is about to go up.

Arcadia is a concentrated version of what’s happening across the U.S. The Hurun Report, a magazine in Shanghai about China’s wealthy elite, estimates that almost two-thirds of the country’s millionaires have already emigrated or plan to do so.

– From the Bloomberg article: Why Are Chinese Millionaires Buying Mansions in an L.A. Suburb?

The surge in foreigners buying up U.S. real estate has been well documented in recent years. Of all this buying, no nation has demonstrated a bigger increase in purchases than China. In fact, it is estimated that 24% of all foreign purchases of domestic real estate this year have come from China, up 72% from last year. In my post from July, Chinese Purchases of U.S. Real Estate hit $22 Billion as The Bank of China Facilitates Money Laundering, I noted that:

In some California communities, 90% of real estate buyers are from China. Yes, 90%. Naturally, many of them are buying multi-million dollar homes in “all cash” transactions. Continue reading »

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Oct 15

Wells Q3 Mortgage Pipeline

- Mortgage Application Pipeline At America’s Largest Mortgage Lender Drops To Lowest Since Lehman (ZeroHedge, Oct 14, 2014):

So much for the much hyped, if quite negligible, second quarter rebound in mortgage activity. After rates tumbled, and continued to tumble, there was some hope that at least the offset to the bond market screaming contraction and deflation (something even stocks have realized in recent days), would be more American’s buying homes, which naturally means applying for mortgages. Well, that dead cat bounce has come and gone. As America’s biggest mortgage lender, Wells Fargo, reported moments ago when it once again magically managed to report EPS and revenues which came right in line with expectations (of $2.11 and $21.2 billion), the US housing picture is once again the worst it has ever been (excluding those days around the Lehman bankruptcy when all of finance died for a few weeks).

Case in point: according to Wells Q3 Earnings Supplement, while Mortgage Applications declined from a transitory one year high of $72 billion in Q2 to $64 billion, this number is going far lower. The reason: Wells’ Morgage Application Pipeline just tumbled back to $25 billion, matching the lowest number since Lehman, and putting an end to any debate about the state of the US housing market.

In short: the only people buying houses in the US now are foreigners laundering their illegal, tax-exempt profits (ever fewer) and those as close to the Fed’s ZIRP as possible, and, of course, paying all cash. Everyone else: not so much.

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Oct 09

Man Tries to Trade Decrepit Detroit House for New iPhone
Man Tries to Trade Decrepit Detroit House for New iPhone (ABC News)

- Man Tries to Trade Decrepit Detroit House for New iPhone (ABC News, ‘Good Morning America’, Oct 8, 2014):

One homeowner is resorting to bartering for the latest iPhone as a tactic to sell a beleaguered property in Detroit.

The owner has dropped the asking price on a three-bedroom home in east Detroit from $5,000 to a new iPhone 6 as the owner is desperate to sell ahead of the area’s tax auction season where “thousands” of homes near foreclosure will flood the market, real estate broker Larry Else told ABC News.

“This house is really not worth much at all,” Else said. Continue reading »

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Sep 30

- China Housing Bubble Bursts: Q3 Land Sales Crater 50% (ZeroHedge, Sep 29, 2014):

China may be doing everything in its power to divert attention from the simple fact that its housing bubble, the largest in the world in terms of both assets comprising it as well as divergence from fair value, has burst. But while there is no clear threshold of what constitutes a bursting bubble when it comes to housing, the latest data out of Soufun, China’s largest real-estate website, which said that land sales have dropped a massive 22% to 1.7 trillion Yuan in 2014 so far, is likely as clear an indication as any that Beijing is about to panic.

And if that was not enough Bloomberg adds that land sales in 300 cites followed by Soufun fell almost 50% Y/Y to 415.9 billion yuan in 3Q, while residential land sales declined more than 50% to 265.3b yuan in 3Q. Continue reading »

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Sep 28

- Last Time this Happened, the Housing Market Crashed (Wolf Street, Sep 25, 2014):

This chart shows how truly screwed up this housing market really is.

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Sep 18

muppets-kermit-dead

- Goldman’s Former Head Of Housing Research Predicts Housing Crash, Recession Within Three Years (ZeroHedge, Sep 17, 2014):

When a former Goldman executive and the prior head of its housing research team comes out with a shocking analysis so contrary to what the same individual would do in his “former life” when he would be extolling the “inevitable” rise of home prices from here to eternity and beyond, and also throw in an open letter to none other than president Obama, predicting at least a 15% crash in home prices in the next three years, a move which would without debt catalyze the next US recession, it is time to pay attention. Meet Joshua Pollard, who in February 2009 took over coverage of US Housing at Goldman Sachs.  His point, in short: “House prices are 12% overvalued today. They have already started to decline. Today’s misvaluation matches the excess of 2006-07, just before the Great Recession… 5 of the last 7 US recessions were led by a weakening housing market… I am lamentably confident that home prices will fall by 15% within three years.” Or, as some may call it, crash.

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Sep 04

- Chinese Homebuilders Expand in America as U.S. Auto Loans Hit Record Levels (Liberty Blitzkrieg, Sep 2, 2014):

Just a little tale from the streets of America
Sparkled promises paved with pathos and hysteria
Trenchant, weary native sons
Step back, step back
And see the damage done
Meander to the horizon 
The streets of America

– Bad Religion, Streets of America

Late last week I published a post titled, Your Wall Street Slumlord Arrives in Europe – Goldman and Other Financial Firms Launch “Buy to Rent” in Spain, in which I highlighted the fact that U.S. financial oligarchs had recently turned their sights toward Spanish real estate after feasting on the American market for several years and driving home prices to unaffordable levels for much of the native population.

Interestingly, today I came across an article in the Wall Street Journal that noted Chinese homebuilders are beginning to make a more aggressive push into the U.S. market. One of the main reasons for this phenomenon appears to be: Continue reading »

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Sep 03

Your Wall Street Slumlord Arrives in Europe

- Your Wall Street Slumlord Arrives in Europe – Goldman and Other Financial Firms Launch “Buy to Rent” in Spain (Liberty Blitzkrieg, Aug 28, 2014):

Liberty Blitzkrieg was early in reporting on the trend of financial firms entering the U.S. residential real estate market with “all-cash” bids for tens of thousands of homes with the intention of turning former homeowners into permanent sources of rental income. The first of many pieces I published on the topic was in January 2013, titled: America Meet Your New Slumlord: Wall Street.

Now that the financial oligarchs have had their way with the U.S. property market, to the point that average citizens can’t even afford to own a home (Zillow recently showed that 1 in 3 homes are unaffordable), it appears they have turned their sights overseas. What better market for bailed-out bankers to feast on than Spain, with its 50%+ youth unemployment rate and a continued depressed real estate market.

We learn from Bloomberg that: Continue reading »

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Aug 26

One of many future unmarketable ghost towns thanks to Fukushima?


- Whole Canadian ghost town for sale…for less than $1 million (RT, Aug 24, 2014):

A 50-acre ghost town Bradian in Canada’s British Columbia province is up for sale with the cost of all its 22 buildings now having dropped – to a “mere” $995,000.

Located 4 hours from Vancouver, the mining town in the South Chilcotin Mountains has just four residents. Still it can boast 22 buildings on over 50 acres of land, with phone and power lines intact. Continue reading »

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Aug 20

Absolute Bubble Insanity: For Nearly Half A Billion Dollars, Here Is The World’s Most Expensive Penthouse (ZeroHedge, Aug 19, 2014):

Forget Hong Kong, London and New York: when it comes to the pinnacle in absolute real estate insanity – perhaps in all of history – look no further than James Bond’s favorite gambling mecca, Monaco. It is in this tiny Riviera principality where we find the Tour Odeon, a double-skyscraper being built by Groupe Marzocco SAM near Monaco’s Mediterranean seafront, which will contain a 3,300 square-meter (35,500 square-foot) penthouse with a water slide connecting a dance floor to a circular open-air swimming pool. The description is nice, but it is the bottom line that is mindblowing: Bloomberg reports that the apartment may sell for more than 300 million euros ($400 million) when it goes on the market next year, French magazine Challenges reported. That would make it the world’s most expensive penthouse, according to broker Knight Frank LLP.

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Aug 13

- Here Is The Average Cost To Rent A 2-Bedroom Apartment In Your City (ZeroHedge, Aug 12, 2014):

With record rental expenses already forcing millions of Americans to have far less disposable income for everything else once the monthly bill for the roof above one’s head is paid, here is a breakdown of 25 selected US metropolitan areas, ranked from most to least expensive, how much it costs to rent a two-bedroom apartment (one can only assume the $1,440 price listed for New York is based on some non-GAAP, magical numbers that exclude reality).

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Jul 18

- Housing Starts Tumble, Miss Most Since January 2007; Permits Have Biggest Two-Month Plunge Since Lehman (ZeroHedge, July 17, 2014):

“Epic disaster.” Those two words best explain what just happened with US housing starts and permits in June.Those who want a slightly more detailed narrative of what the Department of Commerce just reported here it is: in June housing starts were expected to print at a solid 1020K, to validate the sustainable “recovery.” Instead, what happened was that the May downward revised number of 985K, which was a consensus beating 1001K last month, crashed to 893K, a drop of 92K which was the biggest since the January “polar vortex” effect, the biggest miss to permaoptimistic expectations since January 2007, and which brought the total number of starts to the lowest level since September 2013. Was it the harsh weather’s fault this time too?

 

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