The bank said home prices will stay high and go even higher. The housing shortage will persist. And mortgage rates may not fall much — even if the Federal Reserve finally delivers long-delayed interest rate cuts. ...

"This will take many years to work itself out. There isn't a magic fix," Michael Gapen, head of US economics at Bank of America, told CNN in a phone interview. "The message for first-time homebuyers is one of patience and frustration." ...

Bank of America warns the lock-in effect could persist for another six to eight years, keeping a lid on supply during that time.

This is how out of  touch with reality banksters are with society.  To them, this is a problem that can't be fixed.  There's not enough supply and people won't move. So for the better part of the next decade housing costs will stay high, go higher and people will be frustrated.  Do they really think we can keep going with more homeless every year for another 8 years?  They don't see the connection between homelessness and lack of affordable housing?

The solution is OBVIOUS.  START BUILDING MORE HOMES!  Affordable homes!  Not 2 bedroom apts that go for $3500/mo.  If the private sector won't build them, da goobermint needs to do it.  Starting yesterday, not 8 years from now.

WTF isn't there some politician who will step up and suggest this ASTOUNDINGLY OBVIOUS solution? 

https://www.cnn.com/2024/06/27/economy/housing-market-prices-inflation/index.html

RE

Watching the RE market crumble is like watching grass grow but less exciting. lol.  The payoff though when the worm finally turns is marvelous, so it's worth keeping track of what is going on.  This is the first article I've seen which gives insight into the depth of the problem in the banking and insurance industries.  This won't stay confined to regional banks holding thee mortgages,  insurers, reinsurers and TBTF banks underwriting CMBS securities are going to get hit as well.  2026 looks like the worst, except the probability of recession could accelerate the decline and force liquidation of properties before they need to refi.

Anyhow, unlike 2008 where the banking crisis arrived during a period of economic growth, this one is going to arrive when the economy is already shrinking.  Bailouts are going to be uch harder to manage with currencies that are already questionably backed with irredeemable dent.  Firinig up the Helicopter and loading the Bazooka with Funny Money will not be so EZ.

https://investorplace.com/2024/07/the-commercial-real-estate-meltdown-is-spreading/

RE

A $TRILLLION$ in CRE debt on office space probably not worth more than 50 cents on the dollar. lol.  AIG was Chump Change at a measely $100B.  They're gonna need a Bigger Bazooka. 


This is going to be REALLY entertaining. 

https://hbr.org/2024/07/u-s-commercial-real-estate-is-headed-toward-a-crisis

U.S. Commercial Real Estate Is Headed Toward a Crisis

RE

Good explanation of why Capitalism and the "Free Market" fails to build affordable housing.

https://ggwash.org/view/96392/why-no-ones-building-middle-income-housing-in-american-cities

Why no one's building middle-income housing in American cities

RE

Quote from: RE on Jul 25, 2024, 01:23 PMGood explanation of why Capitalism and the "Free Market" fails to build affordable housing.

https://ggwash.org/view/96392/why-no-ones-building-middle-income-housing-in-american-cities

Why no one's building middle-income housing in American cities

RE

That article was illustrative and clear.

QuoteBecause neither the office-building developer nor the warehouse developer can afford to pay $10 million—at that price, their projects will not generate sufficient economic returns to be financially viable—they cannot compete for this land. Thus, the land will be sold to become an apartment building.

The wisdum of de market!

* Caught with its pants down the wisdum of the market reveals itself.  It wants to make more rich people by making more poor people.

** Circumstances of being rich or poor can determine how you feel about the wisdom of de market.  However poor people often identify with their dreams over their realities and go total Stockholm syndrome.  Rich people do not make this mistake at all.  Those who seem to are simply assholes.

*** Working day and night to grow inequity and maintain business as usual, the working man is the ultimate philanthropist.

Quote from: RE on Jul 25, 2024, 01:23 PMGood explanation of why Capitalism and the "Free Market" fails to build affordable housing.

https://ggwash.org/view/96392/why-no-ones-building-middle-income-housing-in-american-cities

Why no one's building middle-income housing in American cities

RE

That article was illustrative and clear.

QuoteBecause neither the office-building developer nor the warehouse developer can afford to pay $10 million—at that price, their projects will not generate sufficient economic returns to be financially viable—they cannot compete for this land. Thus, the land will be sold to become an apartment building.

The wisdum of de market!

* Caught with its pants down the wisdum of the market reveals itself.  It wants to make more rich people by making more poor people.

** Circumstances of being rich or poor can determine how you feel about the wisdom of de market.  However poor people can identify with their dreams over their realities and often go total Stockholm syndrome.  Rich people do not make this mistake.  Why would they?  Those who seem to are generally assholes pretending to be nice because they can.

*** Working day and night to grow inequity and maintain business as usual, a working man's dreams make him the ultimate philanthropist.  Driving by the new apartment building the working man imagines it must be nice to live there.

A few may find out.

In their dreams.  Because that is the only way they ever will.  Unless perhaps they are of the professional class with a huge 4-hoe-1-K. when they retire. 

Not so many like that though.  Rich people come to America from all over the world now.  It is the migration crisis nobody talks about.  Money does not always talk.  Sometimes it shuts the fuck up and makes things expensive.




To be rich and live in a faraway land.

If you are from anywhere else in the world, that faraway land can be America.

And making things too expensive for the locals is an American tradition.  Everyone with money is welcome.  Everybody else can swim a river and drown.

Actual data saying how well Americans are doing is hard to decipher. According to a NY Times podcast inflation is under control and Ameicans are earning more. Enough to offset inflation.

Implication, quit yer bitchin.  You ungrateful cunts.

I totally agree.  As a professional I earned six figures.  Now after the pandemic forced me into retirement I indeed have been getting increases at my part-time McJob.  Enough to offset the cost increases for coffee and donuts on the way to work for sure.

Whoop-de-do.

Yes.

Sadly. even a crash in prices of 50% won't do much to resolve the affordable housing crisis,  Most of the price drops will come in Luxury Housing for the rich.  Even if prices come down a little with the low end housing, there's still not enough of it because it hasn't been profitable to build it, and falling prices will not inspire capitalist builder to break ground on more of it.  In addition, with recession coming, job losses will result in still MOAR people getting evicted or foreclosed on, leading to bigger homeless numbers.

Timing is important alsi here, since if it hits before the election, that mat affect the voting significantly.  Not that it matters much who wins.

https://www.noradarealestate.com/blog/will-the-next-housing-crash-be-be-worse-than-2008/

Will the Next HOUSING CRASH Be WORSE Than 2008?

RE

You found a self serving website.  Of course they want lower interest rates.  They are on the selling side.  They are chock full of short term fixes.  They got their mind on their money and the money on their mind.

The current housing situation is the result of years of inaction.  Total political social bad faith, and sloth.  Failure to regulate 'the market' has now priced most Americans out of the housing market to a point where it can no longer be ignored.  Blind faith in the unregulated manifestation of capitalism has screwed the pooch.

The wisdom of the market however is capable of fixing things.



Inflation to the rescue.  Billionaires become trillionaires.  Houses are affordable after the savings of the working class is drained.  That is the key point.  After 'everyone' is broke and everybody in a service job now earns a hundred bucks an hour.  Houses are affordable again.  Decimation has cleaned things out.

It works because not everyone goes broke.  The owning class still owns the same stuff, and more since the middle class is wiped out.  If you have enough money, your money knows how to stay ahead of inflation.  Enough being far more than the average person has.

Shit always rolls downhill under current arrangements.  A holder-over from medieval times.  The system survives and current arrangements are maintained.

NIMBY is real problem also. People like the idea of greater housing stock and lower prices but God forbid you build a real estate around the beautiful countryside that MUST be preserved! If houses get built I might have to associate with the chavs so build it somewhere or else I will vote my local MP out! It is this attitude that leads to a horrendously complex planning code that stifles development.

The other major factor in houses not being built is no one wants to develop cheap accommodation. Everyone wants to build luxury apartments because the profit margins are larger. That is why proper social housing has only been the domain of governments as their primary concern has not been about profit maximization. Issue is most governments don't have the appetite for this and even if they did, they are too broke to build houses at scale. Due to this the problems get worse as housing stock does not match population growth. This is especially the case in the big cities where the jobs are.

Nice 2 hear from U Monsta!    Howz collapse progressing in Jolly Old England?

RE

Quote from: monsta666 on Aug 04, 2024, 01:12 AMThe other major factor in houses not being built is no one wants to develop cheap accommodation.

Homes have been built where I live at a steady rate for twenty years. The newest development is about half a mile away.  I live at the last place around Lake Washington to be developed.  The new development paves over the last hobby farm in the area.  It had a few horses.

No home near us has been built smaller than ours in all that time, and we have 1700 square feet.  Americans can't afford them, but there seems to be a never ending stream of Chinese Ex-pats ready to buy them. 

I did not buy Halloween candy last year.  We had no kids.  Every year there were fewer kids until there were none.  New families can't afford to live here.  But the new schools all could win architectural awards.

Older Chinese women have no fashion sense.  They like to take walks for exercise wearing a mismatched patchwork of colors.  Usually alone.  Indian women always walk with someone else.

Quote from: RE on Aug 04, 2024, 08:04 AMNice 2 hear from U Monsta!    Howz collapse progressing in Jolly Old England?

RE

Yes, good to hear from you Monsta.  Are you hearing anything about things?

I tend to follow British events and a follow few of your presenters.  I get the impression quality of life has taken a hard hit where you are in the last couple of years.

Thanks for the well wishes. Not sure if things are worse in the UK than elsewhere. We got the same issues you see everywhere i.e. the cost of living is increasing at a faster rate than wage growth. Fortunately for me I do get yearly wage increases which is more than what can be said for others.

As for news, the biggest thing doing the rounds are the riots taking place in various cities. It is ostensibly about immigration but really it mostly racist idiots running amok. The catalyst for the whole thing was a stabbing but it turned out the culprit was a native British citizen. His nativity is only called into question simply because of the colour of his skin. In any case with him not being an immigrant or a Muslim their primary argument does not apply.

It is not the first riot nor would I expect it to be the last one. I do think it will die down once people get bored and the new football season starts in two weeks time. I expect the people who are currently rioting will soon rather be watching the footie. I suppose you could say that is similar to the games in Rome. Things change but don't change.

Sad to hear it is racially based.  But since it is, our news has suppressed the identity of the perpetrator and the motivation of the miscreants.  Any reference to the triggering event is children murdered.  No elaboration whatever.

QuoteWhat started as targeted anti-immigration demonstrations quickly descended into directionless disorder. A library in Liverpool, reopened in 2023 as an "education to employment" service for people of all abilities, was set ablaze.

All we get from our mainstream media is lies.