Housing market flattening out: 5 things to know

Real estate boom settles down, ‘buyer’s market’ emerging

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Posted Monday, July 29, 2019 10:38 am
David Gilbert
dgilbert@coloradocommunitymedia.com

The Denver area’s real estate boom that saw rents and housing prices skyrocket in recent years is slowing down, experts say.

“It’s flattened out a lot,” said Jill Schafer, the head of the Denver Metro Association of Realtors’ Market Trends Committee. “It’s still a good market for sellers, but buyers are regaining a lot more leverage.”

Here are five things to know:

Inventory is up:

1) Inventory of homes for sale is way up, with 9,520 homes for sale in the metro area in July — an increase of 28% over last year, and a level not seen since 2013, before the latest boom.

Increasing the supply side of the equation eases the frenzy among buyers, Schafer said.

“We’re seeing far fewer multiple-offer situations,” she said.

Prices are holding steady, with the median housing price of $428,000 up just 1.9% over last year.

That’s below the ideal appreciation rate of 3% to 5% per year, Schafer said, but eases the pressure on buyers after years of sometimes double-digit growth rates.

It also loosens up the market for sellers, she said.

“A lot of people didn’t want to sell because they didn’t know where to go,” Schafer said. “It locked up the market. But now, they have places to go.”

Starter homes still lag

2) The market for starter homes is still tight, Schafer said, because much of the new inventory is still high-priced stock.

That’s thanks to a convergence of market conditions, she said: Land in the metro area is expensive, and tariffs imposed on raw materials by President Trump are driving up construction costs. Further, high demand for contractors means they can name high prices, Schafer said.

The result, Schafer said, is that there’s little motivation for developers to build starter homes. The majority of starter home building is in places like Denver, which offers subsidies to build lower-cost homes.

Condo construction is starting to tick back up after years of underbuilding, Schafer said, which may be an outcome of a 2017 law meant to ease the burden on builders imposed by a 2005 law that made it easier to sue condo builders.

Just asking…

3) Price reductions are becoming more common, Schafer said, with high-end homes seeing the biggest shift.

Homes priced between $1.5 million and $1.75 million are being sold for 91% of asking price on average, Schafer said. Starter homes and lower-end homes are selling for much closer to asking price.

“There are sellers who overvalue their homes,” Schafer said. “They’re paying attention to automated websites. Those sites don’t know if you’re on a busy street or the condition of the property.”

The slowdown means it’s more important than ever for sellers to enlist the help of a professional, Schafer said.

“People can’t price like they could two years ago,” Schafer said. “For a long time, people didn’t have to do anything to their house and it would sell. Now, you really need to get the place in shape first. It can take months of work to get the highest price.”

Great time for buyers, but beware

4) The increase in housing inventory is good news for buyers especially when coupled with still-low mortgage interest rates, Schafer said.

That said, there are still perils to look out for.

An experienced real estate agent can recognize red flags, Schafer said, like fix-and-flip properties that have been done poorly, or multi-unit projects that are in trouble.

“Certain builders are way behind estimated delivery dates because of the lack of contractors,” Schafer said.

On the flip side, some projects have too much inventory building up, in some cases because builders are overpricing homes. In some places, that’s because landscaping or accompanying commercial developments are way behind schedule.

Expect more scrapes

5) Though Denver has outlawed the construction of slot homes — jamming multiple-unit structures into single-family home neighborhoods — communities can expect more scrape-off homes, where builders demolish an older home and replace it with a new home that’s often far larger.

“Buyers love new,” Schafer said. “They want the latest and greatest. You’d think with all these fix-’em-up shows on TV about old homes, people would want to go that way, but they don’t. They’re willing to pay for something modern.”

LEADING INDICATOR OF HOME-REMODELING ACTIVITY WARNS BIG DROP COMING

by Tyler Durden Mon, 07/29/2019

Growth in residential remodeling spending is expected to fall through 2H20, according to the Leading Indicator of Remodeling Activity (LIRA) published by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.

The leading indicator [LIRA] forecasts that annual growth in homeowner expenditures for improvement will plunge 6.3% in the current quarter to just .40% by late spring 2020, an ominous sign that a deep structural slowdown which started in 1Q18 is now spreading like cancer through the broader economy.

“Declining home sales and homebuilding activity coupled with slower gains in permitting for improvement projects will put the brakes on remodeling growth over the coming year,” says Chris Herbert, Managing Director of the Joint Center for Housing Studies. “However, if falling mortgage interest rates continue to incentivize home sales, refinancing, and ultimately remodeling activity, the slowdown may soften some.”

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The Rest of The Story Here

People Today Believe Anything But Reality And That Will Catch Up To Them All Very Soon In A Very Painful Way

July 29th, 2019

People Today Believe Anything But Reality And That Will Catch Up To Them All Very Soon In A Very Painful Way

As the world begins its next adventure in financial chaos and rolls over to expose its soft underbelly of lies and deceit that have been perpetrated on the public, those that see the truth have been warning the people once again. You can give people the truth but you cannot make them believe it. That is for them to come to grips with.

Trade wars are usually bad for all parties in the end but between the beginning and the end there can be some surprising developments. Human actions and delusions on the part of the public can produce strange results at times. All of our systems are based on trust. When that trust is lost, everything will come crashing down. Until then, things will go on.

If trade tariffs with China have the short term effect of creating American jobs, that could have a wealth effect by creating more disposable income in American pockets. That in turn can have a positive effect on the stock market and consumer confidence. Also, commodities are set to soar in price soon and this could carry the stock market up with it for a while.

Richard Russell once said he believed we would have a third leg in the current bull market before the bears take charge. He was right in the past and could be right again, only time will tell. This situation can not last long due to the enormous mal-investment built up in the system over many decades. A house of cards will eventually fall and the taller the house the longer and harder the fall will be.

One thing that could destroy the temporary high could be the destruction of the financial system due to loss of the reserve currency status and the replacement of the petrodollar system. If and when that happens things will not be looking good for America for a very long time. China is taking actions that could result in just that type of outcome. Their new silk road initiative and oil trading system utilizing Yuan to gold will eventually have serious consequences for Americas standard of living.

Total debts and derivatives in the world amount to 30-50 times of world GDP. The bulk of this is derivatives and when they fail they will become worthless. The 250 trillion or so in global debt will default when asset prices implode and interest rates explode. When the debt bubble explodes stocks could decline by as much as 95%. Interest rates could exceed the 20% rates we saw in the 1970’s.

In the last 100 years the value of major currencies have declined by 97-99 % relative to purchasing power in gold. The last 1-3% will follow very soon. When the financial system collapses due to losses from derivatives and stocks it will erase all of the savings, and retirement funds people were expecting to get at some future date. This will instantly impoverish the bulk of the population.

As the system collapses the banks will likely try to re-inflate assets by massive money printing which will only cause hyperinflation at some point. As hyperinflation kicks in the price of many assets like stocks, bonds, investment properties and art will likely collapse in real terms. Items like gold, silver and productive farmland will likely fare better.

Eventually deflation will carry all asset prices down as the world falls into a global depression, possibly for decades. All of these things will likely result in social unrest and wars as people become hungry and angry at a system they took for granted for so many years. The trust will be broken and people will look for something else to believe in.

One thing is for certain. People today believe anything but reality and that will catch up to them all very soon in a very painful way. Things work until they don’t. Our economy has been rolling along for decades on the stored wealth of previous generations but that is about to run out of steam very soon. When it does it will be a shock to all but a few. You can ignore reality but you cannot ignore the consequences of ignoring reality.

Overdosing On Crazy Pills

If you think everything’s OK, you’re nuts

by Chris Martenson Friday, July 26, 2019

Sometimes an otherwise-forgettable movie will be lifted up out of obscurity by the internet and made into a useful meme.

In the movie Zoolander Will Ferrell’s character, ‘Jacobim Mugatu,’ screams the line “I feel like I’m taking crazy pills!” because it seems nobody else sees what he does.

I have that feeling nearly every day now. And it’s getting more frequent and intense.

To the point where, some days, it feels like I’m in danger of overdosing on crazy pills.

Crazy Pill #1
Financial bubbles happen. History is full of them. It’s just that they’re just not supposed to happen more than once a generation.

How can so many people have completely forgotten the painful lessons of not one, but two, recent bubbles?

The bursting of the DotCom bubble in 2000 was traumatic. “Eyeballs” were favored for a time over “earnings.” But then investors woke up to the fact that all of their rationalizations for the sky-high valuations of profitless companies were actually ridiculous.

Okay, fine. Lesson learned. Earnings are actually important.

But here we go, again, less than 20 years after the DotCom bubble (and only 10 years post-subprime bubble — both far less than a full generation later to allow the keepers of the memories a chance to die off) with exactly the same dynamic at play:

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In the pre-financialization era that ended a few decades ago, a more normal mix would have been roughly 15% of IPOs with negative earnings. Today it’s nearly 80%.

Just as it was in 2000.

By way of example, let’s look at Uber and Lyft. Both companies aren’t just unprofitable, but wildly so. The more these companies make in revenue, the greater the accompanying losses:

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This is the very essence of a broken business model. It’s no different – literally, exactly the same – as a circa-1999 DotCom losing gobs of money on a pie-in-the-sky business scheme that sounded great but didn’t actually work.

No matter to Lyft’s stock price, though, as the market (or ““market”” as I refer to it because it’s so deformed it needs double quote marks to signify that condition) now values this cash-burning furnace at $18.9 billion:

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The Rest of the Story at the link below:

Overdosing On Crazy Pills

Again, Federal Reserve Enriches Affiliates at Expense of US w/ Wayne Jett (1of2)

Sarah Westall
Published on Jul 28, 2019

Listener favorite, Wayne Jett, returns to the program to discuss how the Federal Reserve uses their various tools to enrich themselves at the expense of the general public. He explains that it is very important for the currency to remain stable and not fluctuate no real tie to actual market conditions. He also discusses the latest new nominations to the Fed and how that is a promising move in the right direction. See more of Wayne Jett's work and to purchase his book, "The Fruits of Graft" @ http://ClassicalCapital.com

Kevin Shipp – Americans Not Ready for Coming Financial Calamity

Greg Hunter

Published on Jul 27, 2019

Former CIA Officer and whistleblower Kevin Shipp says a very big risk is the global economic system suffering a financial calamity. This includes the U.S. Shipp contends, “Russia and China are stocking up on gold . . . as they agree to stop using the U.S. dollar and go to the yuan and ruble, which means they will stop recognizing the U.S. dollar. The dollar will lose its value because of that. We have a huge debt, and by 2025, our deficit will be $30 trillion. It is impossible to pay that off. The global deficit is $245 trillion. This thing has got to burst, and it’s going to burst. . . . Donald Trump has come out against the Deep State and Shadow Government in ways I could only dream of. I am a Trump supporter, but what he has got on his hands is a coming catastrophe. You cannot stop the collapse caused by the deficit . . . . . Trump will take some significant action. This is a national security issue, and he can step in and make some changes. This is a huge catastrophe, and Americans are not aware of what is coming . . . and are not ready for a financial calamity.”

John Williams – New Money Printing Extraordinarily Dangerous

Here’s the John Williams video that was referenced:

I Have Properties That I Think Are Priced Right, And It’s Just Not Happening

July 23, 2019 Ben Jones

A report from the Wall Street Journal. “U.S. home sales slumped in June as home prices for major West Coast cities declined for the first time since 2012, ending the spring selling season with a thud. ‘Prices have dropped in Silicon Valley and sellers just aren’t used to the concept that [prices] can go down,’ said Ken DeLeon, founder of DeLeon Realty in Palo Alto, Calif. ‘There’s just this malaise buyers had of, ‘I feel like it’s gonna drop further.’”

“A deepening slump in expensive coastal markets also shows little sign of reversing. The median price of a home fell in San Jose, Seattle and Los Angeles in June compared with a year earlier, according to Redfin. For San Jose, that was the seventh month of annual price declines. The slowdown in the West Coast markets now spans all price points, including starter homes, which had been the tightest segment of the market. In San Jose, inventory for homes in the bottom-third price tier nearly doubled in June compared with a year earlier, while prices dropped 3.8%, according to Redfin.”

“While price declines are concentrated on the West Coast, other costly markets such as New York, Boston and Denver area also weakening. Denver saw the second-largest increase in starter homes for sale in June, according to Redfin, at nearly 63%. ‘We are entering a buyers market hard,’ said Steve deGuzman, an agent at REX Homes in Denver. ‘Values accelerated so quickly we don’t have a way for the first-time buyer to enter the market.’

The Palm Beach Post in Florida. “Palm Beach County home prices retreated in June after jumping to a post-crash high in May. The median price of houses sold by Realtors last month was $356,990, down from May’s $364,900 and up less than 1 percent from a year ago. The dip might ease an affordability squeeze that’s hampering buyers, but it’s frustrating for sellers. ‘This is a welcome relief for buyers and a caution to sellers who may be overpriced,’ said Jeffrey Levine, President of the Realtors of the Palm Beaches and Greater Fort Lauderdale.”

“Home sales fell in June, typically the busiest buying season in Palm Beach County. Realtors counted 1,692 transactions last month, down from 1,805 in June 2018. It was the slowest June since 2014, when the county’s housing market was emerging from a wrenching collapse. Nearly every economic indicator supports strong demand for homes. ‘We should be throwing a huge party, and of course we’re not,’ says George Ratiu, senior economist at Realtor.com.”

“The disconnect has proven disconcerting for sellers. Douglas Rill, owner of Century 21 America’s Choice, said he’s listing Palm Beach County homes for owners who are confused about why so few offers are coming in. ‘They’re saying, ‘What are you doing wrong?’ Rill said. ‘I have properties that I think are priced right, and it’s just not happening. It’s a little frustrating.’”

The Fresno Bee in California. “The once red-hot California housing sales market is officially now ‘weak,’ state analysts say, but the year-long flattening does not necessarily suggest the state is headed toward an economic downturn. In a brief report issued Monday, the state Legislative Analyst’s Office weighed in on the latest California home sales trends, noting that homes sales statewide in June were down from the same month last year, and notably lower than historic norms.”

“The state analysis, based on data from Zillow, the California Association of Realtors and Moody’s Analytics, estimated 25,900 non-distressed home sales statewide in May. That is below the 28,000 sales number from June of 2018, and below the ‘long-term historical average of 31,400 sales per month.’ Similarly, sales numbers are low in recent months in Sacramento, and sales prices have flattened as well.”

From ABC 7 News in California. “If you want to buy Joe Montana’s mansion in Calistoga, now’s the time. He’s reduced the sale price from $49 million down to $29.8 million.”

Please check out the housing market tracker:

Home Prices up 3.4 Percent in June as Supply Flattens

We Will Have To Reboot Our Standard of Living To Survive As a Nation

21st Jul 2019 by Ewelina Jakos

In 1940 you could buy a nice cape cod style home for around $2,500. Someone entering the job market likely started out at $25 a week. A 1940 Buick with a straight 8 would run you $895 and up.

Why this stroll down memory lane? Because it is meant to show how much inflation has changed the price of things. When we still used money that was based on gold and silver, inflation was kept in check to some degree. Fractional reserve banking and excessive credit creation have distorted the value of things we depend on for life and we are coming to the end of that failed experiment. All of our recent prosperity has been paid for with our ability to print dollars out of thin air.

If you want to know where we are being led you only have to stroll down any city street where the homeless live, or you can look through the many pictures of the great depression. The American people are being systematically impoverished and it is being done knowingly by those in charge and is allowed by a dumbed down, apathetic public too busy staring at their iphone to notice.

FOR MORE THAN 10 YEARS THEY HAVE KEPT THE LID ON THIS…
BUT NOW THIS INDEPENDENT DOCUMENTARY REVEALS THE DARK CONSPIRACY THAT MAY WIPE OUT 281 MILLION AMERICANS IN THE NEXT 6 MONTHS.

If this nation is to survive and retain a reasonable standard of living and quality of life, we will have to downsize to a level that we can actually afford. We will need to forego the 2,000 sq. ft. $300,000 homes we all like so much and settle for a more affordable 900 sq. ft. $30,000 home we can actually pay for. We will have to give up the $40,000 autos coming out of Detroit now and settle for a smaller inexpensive model that can actually get 60 mpg.

We will also need to return to a financial system that is based on real value. This being gold and silver money. If we try to use anything else we are simply trying to fool ourselves. You cannot use a currency that does not act as a store of wealth over the long term.

We can do this by choice and salvage what is left of our country or we can continue on the current path and end up an impoverished country with a dictator in charge like most other failed nations in the world.

If we want to continue having a country worth living in we need to go back to what we know works and try to build up from there. We no longer have sufficient manufacturing capacity to employ all of the people in this country and any kind of welfare will not work without debasing the currency.

This will necessitate 20% of the population going back to living on small farms to insure they have a job and sufficient resources to care for their families. Nothing else in our current situation will work. We have too many unemployed people living off of the state and this will end soon. We will either have a mass exodus from the country or a mass extinction within it. As unpleasant as it sounds that is our future if we do not make substantial changes while we still have time. That time is nearly up.

Downsizing our lives and our wants will be a necessary change if we want to salvage something of our future. We have lived too long in fantasy land and now we must come back to reality. The west line has moved and we will never get back all of the production jobs we once had. We must accept that and accept that our country will be less productive and less prosperous in the future and learn to live within our means.

To Be Economically Free, We Must Do This One Thing

Get economic collapse news throughout the day visit http://x22report.com
Report date: 07.18.2019

Boris Johnson has the no-deal deadline on Oct 31, Parliament is out of session at this time, the EU countered Johnson by have those in Parliament create an amendment to block this. Foreign purchases of homes have imploded. Mnuchin says he and Pelosi have worked out a budget for the next two years. To be economically free Trump and the patriots need to shutdown the [CB] and remove the power of the reserve currency