Fewer underwater borrowers, NY Metro among the highest positive equity

From CoreLogic:

CoreLogic Reports 256,000 US Properties Regained Equity in the Third Quarter of 2015

CoreLogic … today released a new analysis showing 256,000 properties regained equity in the third quarter of 2015, bringing the total number of mortgaged residential properties with equity at the end of Q3 2015 to approximately 46.3 million, or 92.0 percent of all homes with an outstanding mortgage. Nationwide, borrower equity increased year over year by $741 billion in Q3 2015.

The total number of mortgaged residential properties with negative equity stood at 4.1 million, or 8.1 percent, in Q3 2015. That was down 4.7 percent quarter over quarter from 4.3 million homes, or 8.7 percent, compared with Q2 2015* and down 20.7 percent year over year from 5.2 million homes, or 10.4 percent, compared with Q3 2014.

For the homes in negative equity status, the national aggregate value of negative equity was $301 billion at the end of Q3 2015, declining approximately $8.1 billion from $309.1 billion in Q2 2015, a decrease of 2.6 percent. On a year-over-year basis, the value of negative equity declined overall from $341 billion in Q3 2014, representing a decrease of 11.8 percent in 12 months.

“Home price growth continued to lift borrower equity positions and increase the number of borrowers with sufficient equity to participate in the mortgage market,” said Frank Nothaft, chief economist for CoreLogic. “In Q3 2015 there were 37.5 million borrowers with at least 20 percent equity, up 7 percent from 35 million in Q3 2014. In the last three years, borrowers with at least 20 percent equity have increased by 11 million, a substantial uptick that is driving rapid growth in home equity originations.”

Highlights

Of the 10 largest metropolitan areas based on mortgage count, Phoenix-Mesa-Scottsdale, Ariz. had the highest percentage of mortgaged residential properties in negative equity at 14.2 percent, followed by Chicago-Naperville-Arlington Heights, Ill. (13.8 percent), Riverside- San Bernardino-Ontario, Calif. (11.4 percent), Washington-Arlington-Alexandria, DC-Va.- Md.-W.Va. (10.8 percent) and Atlanta-Sandy Springs-Roswell, Ga. (9.7 percent).

Of the same 10 metropolitan areas, Houston-The Woodlands-Sugar Land, Texas had the highest percentage of mortgaged residential properties with positive equity at 98.2 percent, followed by Dallas-Plano-Irving, Texas (97.9 percent), Los Angeles-Long Beach-Glendale, Calif. (95.4 percent), Minneapolis-St. Paul-Bloomington, Minn.-Wis. (94.4 percent) and New York-Jersey City-White Plains, N.Y.-N.J. (94.3 percent).

This entry was posted in Demographics, Economics, Housing Recovery, National Real Estate, New Jersey Real Estate. Bookmark the permalink.

133 Responses to Fewer underwater borrowers, NY Metro among the highest positive equity

  1. grim says:

    CoreLogic has NJ Statewide – Negative Equity in Q3 of 10.4% of mortgage holders.

    Given that approximately 1/3rd of NJ homes are owned outright, that means the total of underwater homeowners is approximately 6.9%.

  2. Ragnar says:

    Second

  3. Ragnar says:

    Seems like positive home equity should make relocating for a new job easier. Potentially leading to the opportunity for wage gains, and more home price gains.

  4. Comrade Nom Deplume, screwing around at work says:

    I know Greece is, like, so 2014 but I saw this and had to share”

    “No news. Why no news? Because the news you read is almost always by uninformed reporters and is totally irrelevant in 99.999% of the cases.

    Example: Greece has not paid a single debt since Rome took over in 146 BC. And yet, everyone keeps asking me about Greece.

    News flash: They will borrow more money, and AGAIN they will not pay their debts. Nor should they.

    Greece is a subsidized beach resort, healthy food, etc but they aren’t a real country – (sorry in advance to anyone offended by this) and then in three years, for less than the cash Google has in the bank, the entire world will figure out another way to bail them out.

    That’s all you ever need to know about Greece.”

  5. leftwing says:

    As one of the oldest civilizations seems like the Greeks have figured it all out. Our slackers are pikers compared to them lol.

    On the housing stats, wow. Number of underwater borrowers is sinking like a rock. Amazing stat and trendline looking at it. 8.1% currently, down from 8.7% in just one quarter and down from 10.4% YOY, which is as noted a 21% change.

    A movement of 20% in anything year over year is a head turner, let alone this.

    While I would have expected some strong positive change as underwater loans make their way through foreclosure and are replaced by new loans with a large slug of equity cushion the size of the change is really dramatic.

  6. grim says:

    5 – Keep in mind the acceleration in resolution of foreclosures in NJ. We saw a good increase year over year, with the trend looking to continue into the next year. If it does, I think we’ll see a similar improvement in the underwater numbers by this time next year. Increase in home prices is irrelevant to this factor.

  7. leftwing says:

    Agreed.

    Kind of debunks the theory that market constipation is a result of people being underwater, no?

  8. Call me cynical, but I think the group-think analysis at the big banks is that RE is going to turn down again so they’re flippin’ REO while the REO flippin’ is good. We’re at absolute all-time RE price highs in Boston right now but wages are still flat, employment is in no way full, and interest rates can only go up (plus the tuition bubble is springing leaks which should also hit us pretty hard eventually).

    Keep in mind the acceleration in resolution of foreclosures in NJ. We saw a good increase year over year, with the trend looking to continue into the next year. If it does, I think we’ll see a similar improvement in the underwater numbers by this time next year. Increase in home prices is irrelevant to this factor.

  9. grim says:

    I think the driving factor in the drop, for NJ anyway, is resolution of foreclosures, not necessarily strong home price increases.

    Although I would agree, new purchases coming in with strong equity positions and very stable mortgage performance – this sets the stage for future market stability.

  10. leftwing says:

    Especially if only 10% in NJ are underwater.

    Strip out the Newark/Elizabeth/etc, Camden, and AC horror shows and the balance of the State, which would still include large swaths of southern and northwestern rural dead money, would seem to be at what, 98% positive equity?

  11. [8 cont’d] In other words, I think the foreclosures we’re seeing now weren’t so much held up in the courts as they were held up on the banks’ balance sheets. Even some paltry raises by the Fed gives the big banks much more earnings to be offset by their finally recognized mortgage losses.

  12. leftwing says:

    “We’re at absolute all-time RE price highs in Boston right now but wages are still flat, employment is in no way full, and interest rates can only go up (plus the tuition bubble is springing leaks which should also hit us pretty hard eventually).”

    Ex, I think you nailed some big points on sale/inventory stagnation (btw Grim, how do those numbers look in NJ so far YOY?).

    I’ve said for a while that in my area at least the inventory/sales volume problem is one that has originated at the *higher* end of the market. There is absolutely no desire in my area – unlike in the recent past – to move up out of a standard issue 30 year old 4/4 colonial. Without moveup buyers at the top end there is little new inventory at the next level down, which keeps cascading all the way to the new buyer. And we all know there is no new construction whatsoever for first time buyers.

    Without the moveup buyer existing inventory levels get constipated. And the population cohort that would look at those top end houses are staring down the three issues you note Ex – multiple college tuitions (with no financial aid), rising rates, and no near term employment windfalls. Roll in a budding realization of their own retirement and their parents’ health and nobody is moving, regardless of the amount of embedded house equity.

    These are the conversations occurring in my age group at HS sporting events among parents.

  13. leftwing says:

    In other words, I don’t believe any inventory/sales volume problem was a result of underwater borrowers.

    From which follows, I then don’t believe these strong numbers will solve that issue, even agreeing with Grim that the underwater numbers are likely to improve.

  14. rags (3)-

    Or getting the fcuk out of NJ.

    “Seems like positive home equity should make relocating for a new job easier. Potentially leading to the opportunity for wage gains, and more home price gains.”

  15. Greeks as the original serial deadbeats?

    I’ll take Crumbling Civilizations for $500, Alex.

  16. anon (the good one) says:

    @TheStalwart

    BOOM. Housing starts and Permits crush expectations. Time to hike!

  17. anon (the good one) says:

    @markets

    Housing Starts in U.S. Beat Forecasts

  18. leftwing says:

    Hike is a done deal. Market has moved on to next year, where will FF rate be, 0.75 a low end to 1.25/1.50 at top end.

  19. expat (8)-

    Ding, ding, ding…we have a winner, folks! The banksters know that the septic system is still jam packed and that another massive downturn in RE is just around the corner.

    “Call me cynical, but I think the group-think analysis at the big banks is that RE is going to turn down again so they’re flippin’ REO while the REO flippin’ is good. We’re at absolute all-time RE price highs in Boston right now but wages are still flat, employment is in no way full, and interest rates can only go up (plus the tuition bubble is springing leaks which should also hit us pretty hard eventually).”

  20. leftwing says:

    Hope Yellin was downright Greenspanian in her word selection.

    It has been a while since we have seen the type of word parsing analysis of a Fed Chief’s commentary that will occur today.

  21. leftwing says:

    “Ding, ding, ding…we have a winner, folks! The banksters know that the septic system is still jam packed and that another massive downturn in RE is just around the corner.”

    Credit the consumer too. With 95% above water there is a reason rentals have exploded, not home sales. They don’t want to touch the sh1t either.

  22. grim says:

    The banksters know that the septic system is still jam packed and that another massive downturn in RE is just around the corner.

    Possibly, but the fact is mortgage performance since the bust has been incredibly strong – now to take this prima facie would be obvious folly (since mortgages will always perform well, until they don’t) – however, we know the performance is almost wholly driven by the very tight lending standards that existed post-bubble.

    So, if the market were to tank – this group – would be largely unaffected. This is VERY different from bubble lending, where the last to lend was the first to fail. Pre-bubble buyers are largely insulated, if they made it through the first decline, then into recovery, it’s unlikely that we would see large scale default in this population – because they would have in all likelihood already have defaulted. We’ve gone though nearly 10 years of recessionary slag, I have to imagine we’ve weeded out the weak players.

    Post-bubble consumer balance sheets have significantly improved, don’t forget the positive savings rate – meaning there is more cushion.

    In addition, there is no huge overhang of heloc/helo second mortgage debt, like leading into the last bust.

    The only group left are the marginal bubble buyers who were not shook out, but I just don’t see these people being a large population anymore – they’ve got 10 years worth of equity, potential refinancing, etc. Their position is NOT the same as 10 years ago.

    The dynamic will be different, it always is, but I am not seeing what is going to be the smoking gun in another collapse – short of wholesale economic depression.

  23. [22] The RE market may very well not tank, but as interest rates rise and wages stay flat, student debt stays high and baby boomers don’t retire, I can see the market just drifting down to where it’s supposed to be…about 3.0-3.5 X income in the “nice” towns while the cities fill up with the wealthy (not NJ cities, of course).

  24. chicagofinance says:

    clot: same person methinks……just different meds…..

    Splat What Was He Thinking says:
    December 16, 2015 at 7:04 am
    No doubt Pumpty is on the same track now as Duck and some of the most infamous trolls in the history of NJRER.

    These people just can’t help themselves.

  25. chicagofinance says:

    I still love pretorious……defending the world from high on the bluff in Weehawken…..

  26. chicagofinance says:

    pret said that Cioffi’s internal CMO hedge fund at Bear Stearns was a one off…..

  27. Juice Box says:

    Got Equity? Time to fire up a trillion dollar bubble in Home Equity conversion for the Baby Boom generation.

  28. left (12)-

    All involved in the RE racket should tattoo this to their eyelids:

    “Without the moveup buyer existing inventory levels get constipated. And the population cohort that would look at those top end houses are staring down the three issues you note Ex – multiple college tuitions (with no financial aid), rising rates, and no near term employment windfalls. Roll in a budding realization of their own retirement and their parents’ health and nobody is moving, regardless of the amount of embedded house equity.”

    50-100 years of teeth-gnashing torpor. Coming soon to a crapshack collection near you.

  29. anon (17)-

    Never mind that most of these starts are prolly rental units…

    “Housing Starts in U.S. Beat Forecasts”

  30. leftwing says:

    Heeeeeyyyyyyy!!! (two thumbs and leather collar up)

    Call the Fonz. Those reverse mortgages are ‘government guaranteed’ ya know…..

  31. leftwing says:

    for juice, 27

  32. Juice Box says:

    Got Equity? Should I advise my in-laws to take our a HECM reverse mortgage for 600k and then flee to Costa Rica for their retirement?

  33. grim (22)-

    That’s why Phony, Fraudy and FHA are working overtime to return to the fog-a-mirror borrower standards of the past.

    All housing “gains” since 2007 have been accomplished via gimmicks (ZIRP, Clunkers for Houses) that essentially bring out-year purchases forward. Now that the bag of tricks is depleted, it’s time to crank up the sausage grinder again.

    Sure, the post-boom borrowers may not be affected in the next downturn, but it won’t have to be much of a downturn to have serious ramifications, since housing has been dead man walking for close to eight years.

    “Possibly, but the fact is mortgage performance since the bust has been incredibly strong – now to take this prima facie would be obvious folly (since mortgages will always perform well, until they don’t) – however, we know the performance is almost wholly driven by the very tight lending standards that existed post-bubble.”

  34. We are also simply not minting either new families or individuals in their 20-early 30s with either the desire or the assets to purchase housing.

  35. Giant
    Rolling
    Multi-Decade
    Deflationary
    Credit Collapse
    Depression
    With
    Foodstamps

  36. Essex says:

    22. Makes sense grim.

  37. box (27)-

    Bet The House.

    Were I of a mind, I’m pretty sure I could hook up with a bankster company to tout cash-out equity programs with “financial advisor services” aimed at getting borrowers to throw their newfound cash at all sorts of high risk yield chasing.

    Natch, all cash out refi in the US is for “home improvement purposes only”.

    “Got Equity? Time to fire up a trillion dollar bubble in Home Equity conversion for the Baby Boom generation.”

  38. Fast Eddie says:

    Lock in now or be priced out forever.

  39. Fast Eddie says:

    We are also simply not minting either new families or individuals in their 20-early 30s with either the desire or the assets to purchase housing.

    Sell? Sell to whom?

  40. Lock and load, or be overrun by hordes of Visigoths.

  41. wing (21)-

    Yep. People who get coldc0cked in the jaw tend not to want to repeat the experience.

    “Credit the consumer too. With 95% above water there is a reason rentals have exploded, not home sales. They don’t want to touch the sh1t either.”

  42. wing (31)-

    Funny how the TV touts for reverse mortgages (Fred Thompson) are all croaking.

    On a long enough timeline, the survival rate for everyone drops to zero.

    “Those reverse mortgages are ‘government guaranteed’ ya know…”

  43. Bet Vigoda ain’t got no stinking reverse mortgage.

  44. It’s been years since I spent a Fed announcement day in such a state of nausea, combined with excitement and dread.

  45. box (33)-

    Only if a strategic default is their endgame.

    “Got Equity? Should I advise my in-laws to take our a HECM reverse mortgage for 600k and then flee to Costa Rica for their retirement?”

  46. number2 says:

    Is the short seller tax break still in limbo for 2015? Extended for 2016?

    “Technically, the tax break expired at the end of 2014, leaving homeowners in limbo for 2015. Although it is widely expected to pass, if it weren’t renewed, homeowners who received some relief this year could now take a hit when they file their taxes next year.”

    http://www.wsj.com/articles/tax-break-for-home-short-sellers-at-risk-1450045785

  47. Essex says:

    IMHO my own desire is to put as little as I can into the next place.
    Meaning. Buy a move-in-ready place.

  48. grim says:

    I said it a hundred times already. Standard of Living – WE GO DOWN NOW

    This is not a contradiction to a housing market which will not implode.

  49. Fast Eddie says:

    I said it a hundred times already. Standard of Living – WE GO DOWN NOW

    The culprits are government spending at every level and pension obligations. Everything else is a choice.

  50. number2 says:

    #51 – agreed, THAT is the new normal. Call it the singularity, call it the all boats rise, call it the taper off, call it the new level – but we’re all global now. & agreed, housing will not implode – housing will have less worth (note, not worth less) and there is going to be less ability to afford it. On the plus side, fitting flat screens on a wall makes up for stereo cabinets – now if only the clothing and closets could adjust accordingly; ah, the next frontier – it all comes back to textiles.

  51. Dissolution into nothingness.

  52. grim says:

    In fact, home prices INCREASING while standard of living is DECREASING would be the most reasonable manifestation. Think about this for a minute. Housing getting LESS expensive while standard of living decreases is actually the contradiction, not the other way around.

  53. Raymond Reddington formerly Phoenix says: says:

    52. Fast Eddie
    Blame the children and their texting fingers for that….

    “The culprits are government spending at every level and pension obligations. Everything else is a choice.”

  54. Raymond Reddington formerly Phoenix says: says:

    The movie Idiocracy plays into this topic very well…

  55. grim says:

    And frankly (tinfoil hat on) – the current zeitgeist feels like it’s an engineered preparation for the coming lower standard of living…

    For example:
    – Lower carbon footprint – using less energy
    – Tiny houses
    – Tiny cars
    – Used market trends (upcycle, etc)
    – Non-employer provided healthcare
    – “Sharing economy”
    – Contractual work arrangements becoming trendy (Lyft, Uber, etc etc etc) – no more long term employment

    Am I crazy here? It feels like someone is tying to apply liberal amounts of lube for the events to come.

  56. grim (55)-

    Classic deflationary credit collapse. The thing of desire becomes more and more precious as the credit transmission mechanism that allows for the finance of its purchase atrophies.

  57. No house for you, motherfcuker.

  58. Raymond Reddington formerly Phoenix says: says:

    43 Splat,

    The coming Death Panels will assist in shortening the timeline. In current medicine, the medicare patients have less trouble getting the help they need vs privately insured patients. Procedures/care is done many times based on medicare/insurer rules rather than common sense or practicality. Who do you think runs a tighter ship, private or public??
    The older folks have an advantage, and will continue to do so for quite some time.
    Then the bottom drops out……

    “On a long enough timeline, the survival rate for everyone drops to zero.”

  59. Raymond Reddington formerly Phoenix says: says:

    58.
    Everything you proposed could be considered increased efficiency.
    Same thing as working a 21 hr day on one cracker and a cup of water.
    Globalists love this type of talk…..

  60. I’m sorta behind Bernie (as much I could be a backer of any mentally ill person running for elected office), because I sorta want to see all the dumb schmucks who believe in “something for nothing” howl when a pro soci@list like Bernie finishes the job started by the rank amateur (and GWB in blackface) Bojangles.

    Of course, no matter who gets elected prez, the butt-r@pe of the productive classes will continue, unabated.

  61. grim says:

    When did die become a bad word? When did we forget about mortality and fragility? When did it become the responsibility of the healthcare system to guarantee this?

  62. Raymond Reddington formerly Phoenix says: says:

    64. Grim,
    If you and I could trade places for just one day……….

  63. There is no healthcare system in the US. There is only a sickcare system, which is designed to kill and impoverish as many Amerikans as possilbe.

  64. chicagofinance says:

    clot: how many lines did you do this morning? your output to 11AM matches your cumulative total for 2015 up until 12/15…….

  65. Fast Eddie says:

    Raymond [56],

    It’s their pudgy, muppet, texting fingers. Get it right. Poor millenials, they are so precious and clueless. How will they find the capacity to soften the blows while they are being bludgeoned to death?

  66. number2 says:

    #58, don’t forget vegan = unwinding the sun converting middle”man” to save water and land.

  67. Juice Box says:

    Re: 46 – if you don’t have to make payments how can it be a default?

  68. leftwing says:

    Rate hike normally stimulates volume as buyers try to ‘lock in’ a new house before rates rise more.

    What y’all think about supply? Will we see some uptick as brokers push reticent sellers to ‘get out’ before rates rise more and make their residences tougher to sell?

  69. Raymond Reddington formerly Phoenix says: says:

    68. Eddie,
    One day, those “muppet” fingers will be standing over your wrinkled body somewhere in a hospital trying to help you survive. Or will you have a doctor that looks like Colonel Sanders and can’t see 3 feet in front of his face.
    Two things will happen for sure.
    1. You will get what you deserve.
    2. Most of those muppets will still have a pulse long after yours is gone….

  70. Fast Eddie says:

    One day, those “muppet” fingers will be standing over your wrinkled body somewhere in a hospital trying to help you survive.

    Unless she’s hot, I’ll retire to bedlam.

    2. Most of those muppets will still have a pulse long after yours is gone….

    If they don’t put down the iShit devices and start exercising their mind and body, they may d1e from a coronary attack before I will.

  71. Raymond Reddington formerly Phoenix says: says:

    73. FE
    Sorry, you are getting Colonel Sanders…..

    “Unless she’s hot, I’ll retire to bedlam.”

  72. Bystander says:

    #22 grim,

    Perhaps the coming crisis will not center around how the house performs itself but how other cost pressures will push people to the edge..then over. Health insurance/bills, property taxes, student loans, food etc. That will be the crisis and a major driver of commodity downfalls over next decade. Also, let’s be clear on equity. How many post-2002 buyer’s could sell today and not bring money to the table. Not a lot after realtor fees, closing costs and conveyance taxes. We are far from real equity.

  73. leftwing says:

    I don’t think there will be any housing crisis. As Grim argues the ingredients just aren’t there.

    Just a slow, downward slide. Values may go up, nominally, but will not keep pace with inflation and certainly not taxes. Other household items, especially big ticket like healthcare and education, will continue to outpace home values and general wages. Retirement income will get/is whacked as well, as the Fed and State programs tap the brakes due to solvency and pensions have already all but disappeared. Social, rather than economic, issues will take center stage to the detriment of the latter.

    We will time warp back to the 70s. Just like then a decade or so later, after the reset of reversion to mean, something will happen to break us out again.

    Buckle up Babbit.

  74. leftwing says:

    I have enough memory of the Seventies to remind my older cousins that I’m eternally grateful I did not spend any important years of my life there.

    Little depressing we are heading back to that time.

    The 80s, 90s, and aughts were one he11 of a ride though. Eternally grateful to whatever greater Being of the cosmos that He gave me my 20s, 30s, and 40s in those decades.

  75. Fast Eddie says:

    How many post-2002 buyer’s could sell today and not bring money to the table. Not a lot after realtor fees, closing costs and conveyance taxes. We are far from real equity.

    Which is why these figures posted are useless. And even more so coming from CoreLogic. When you bet on a horse, no matter how badly it’s trailing in the race, are you going to instantly start rooting for the lead horse?

  76. Grim says:

    That’s s completely nuts thing to say.

    2003 buyer can’t sell today without cash at closing…

  77. 1987 Condo says:

    Flipped house across street from me started at $699k, thought was worth maybe $579k apparently under contract for just over $600k.

    Realtor says she does not have enough supply to show due to warm weather.

    Back from SLC office, UE around 3%, losing employees left and right, getting $10k to $15k boosts.

  78. Fast Eddie says:

    How many? Houses had multiple bids within an hour as early as 2001. How do I know? We were outbid. Let’s push it to 2004. I have a meeting now but the glossy advertising by the syndicate isn’t going to change a thing.

  79. Grim says:

    I just lost a guy, no way we could match his offer.

  80. Essex says:

    WASHINGTON (MarketWatch) – The Federal Reserve voted unanimously on Wednesday to raise interest rates by a quarter point, marking the first increase in more than nine years. The bank raised its fed funds rate to a range of 0.25% to 0.5%, ending an unprecedented seven-year run of near-zero interest rates. The vote was 10-0. The board of directors also raised the discount rate to 1% from 0.75%. Looking ahead, the Fed said it will “carefully’monitor” actual inflation in light of ‘current shortfall.” And given current economic conditions, the bank said interest rates are only likely to increase in a “gradual” manner, ending up at a long-run target of 3.5%. That was unchanged from its September forecast.

  81. 1987 Condo says:

    For those who have sworn otherwise:

    Fed Rate Hike- Yes
    End of QE- Yes
    Rioting each Fall- No

  82. number2 says:

    #84 – does end of QE include no more covering short sales? it’s a gain of income to the short seller?

  83. leftwing says:

    Long bond yields barely moved on announce. 30 year yield is actually down now, sub 3%.

    Yellin still to speak, shortly.

  84. leftwing says:

    82. Which business Grim? Booze, RE, or other?

  85. Juice Box says:

    For the Nerds

    Force Block for Google Chrome (Prevent Star Wars Spoilers)

    https://chrome.google.com/webstore/detail/force-block-the-star-wars/bplpphlobgcnjhoglonpnkooaaenlmol

  86. Libturd at home says:

    Just got back from being a chaperon on my 10-year old’s field trip. The other parent volunteers were absolutely glued at the hip to their precious child. I’ve never seen anything like it. One teacher had to carry two defibrillators around the entire time on the off chance that some kids heart would stop as we walked. She had to carry two of them. One for kids over 80 pounds, the other for kids below. What have we become? Really, we are so pussified. The kids enjoyed my beat boxing on the bus ride home.

  87. Libturd at home says:

    Begin Santa rally now.

  88. Fast Eddie says:

    All you cats who were waiting to unload your underwater sh1thole should have bailed a long time ago. The gates are open and the rates have the green light. And for all you sellers still holding for your dream price, good luck.

  89. Comrade Nom Deplume, the anon-tidote says:

    Driving up from Wilmington Delaware and just after crossing over into Chadds Ford Pennsylvania, I noticed a new Maserati dealership is going in.

    The McLaren dealership is over closer to Newtown Square, several miles away. So this is the first uber luxe auto dealer near me. Closer to my house, we have all the usual suspects: Audi, Acura, infinity, Mercedes Benz, Volvo, BMW, but everybody around here drives those. They are hardly luxurious.

  90. Fast Eddie says:

    Libturd [90],

    Were they all chained together, too? And I’m chided for ridiculing the squishy little muppets. This is the future of our country.

  91. Ragnar says:

    58, grim
    Yes, you are correct, these alleged trends (which I think may be overrepresented in the media as these seem to be more big-city (SF, NYC) phenomenons) are basically glamorizing poverty, or at least extreme cost-consciousness. The “experience economy” is never been something I’m much into. Take away their I-devices and I bet they will suddenly become much more possessive and materialistic.

    However, I do think that in the very long run, i.e. on a multi-decade basis, standards of living will rise, assuming the anti-materialistic caliphate or canklephate is not established, leading to a new dark ages.

    For a reminder of why long run human trends have been positive, I suggest taking a look at this free online text by the late economist Julian Simon “The Ultimate Resource” (which btw is human ingenuity).
    http://www.juliansimon.com/writings/Ultimate_Resource/
    A brief quote from the conclusion:
    “The longer run is a very different story than the shorter run. The standard of
    living has risen along with the size of the world’s population since the beginning of
    recorded time. And with increases in income and population have come less severe
    shortages, lower costs, and an increased availability of resources, including a
    cleaner environment and greater access to natural recreation areas. And there is no
    convincing economic reason why these trends toward a better life, and toward lower
    prices for raw materials (including food and energy), should not continue
    indefinitely.
    Contrary to common rhetoric, there are no meaningful limits to the continuation of
    this process. (Resolving this paradox entailed considerable explanation in the early
    chapters.) There is no physical or economic reason why human resourcefulness and
    enterprise cannot forever continue to respond to impending shortages and existing
    problems with new expedients that, after an adjustment period, leave us better off
    than before the problem arose. Adding more people will cause us more such problems,
    but at the same time there will be more people to solve these problems and leave us
    with the bonus of lower costs and less scarcity in the long run. The bonus applies to
    such desirable resources as better health, more wilderness, cheaper energy, and a
    cleaner environment.”

    “And frankly (tinfoil hat on) – the current zeitgeist feels like it’s an engineered preparation for the coming lower standard of living…

    For example:
    – Lower carbon footprint – using less energy
    – Tiny houses
    – Tiny cars
    – Used market trends (upcycle, etc)
    – Non-employer provided healthcare
    – “Sharing economy”
    – Contractual work arrangements becoming trendy (Lyft, Uber, etc etc etc) – no more long term employment

    Am I crazy here? It feels like someone is tying to apply liberal amounts of lube for the events to come.”

  92. [91] Lib – I’ve been shopping since late last week;-) JAH, CTL, ACG, AWF, NAT

    CTL is an old friend and I sold a very large position around 36 in March, bought back below 24.50 this week.

  93. Juice Box says:

    re# 84 – “For those who have sworn otherwise.”

    This symbolic rate hike was predicted by pretty much everyone for the past year. It is an irrelevant at .25%, we won’t be near normal for another 5 years, that is another 5 years to what should be a real expansion period not the artificial floor we have now. That is 20 quarters of .25% rate hikes. Good luck with that the winds of recession still blow.

  94. Libturd at home says:

    There have been a spate of earnings estimate downgrades so be careful after St. Nick swipes the cookies.

  95. yome says:

    Ted Cruz: Officials Investigating if Presidential Candidate Revealed Classified Information
    Senate Intelligence Committee Chairman Richard Burr said he asked to review the GOP debate transcript after Cruz made comments about the percentage of phone numbers under surveillance.

  96. NJT says:

    Re: JJ (whom I found very entertaining) I bet he got a great severance package and I also bet he won’t find another gig as good. Wish him well, though.

    *No new house for wifey now.

  97. Raymond Reddington formerly Phoenix says: says:

    97. Rags,
    Do that and the companies they work for will have a coronary. Employers want to reach you 24-7, be on call, on demand at all times. Where is my employee and his van? How long did he stop somewhere? Where is my package right now?
    Its efficiency. The more crap (not the phone, it increases efficiency)houses, mortgages, debt the millennials have, the less freedom they have from the psycho boss/corporate masters. I don’t blame them, it’s the old goats that cause/caused the problem and should be held down and force fed the problems they caused.
    Wealthy think global (don’t give a rats rectum about the USA.) Middle Class, the disappearing one, think national (Rah Rah USA). Poor class think local (where is the nearest check cashing store).
    The USA is a consumer based economy–import trinkets from China, jack up the profits by fudging numbers and buying politicians while sitting on you butt, then using marketing techniques to convince people that they need things in order to feel good about themselves.
    Let the old goats choke on their giant homes-let their taxes continue to rise in order to pay for the benefits they chose to bestow among themselves….

    “Take away their I-devices.”

  98. Raymond Reddington formerly Phoenix says: says:

    Redux
    In Bergen County, approx a week ago, 7 workers fell off a scaffold. I wonder if the boss was part of the seven or was he holding an “I-device” on the ground….

    Everyone with a white shirt should spend a week wearing a blue one, nope, won’t happen. Way too elitist. Work hard to get college degree, then off to easy street….

  99. Essex says:

    101. Uuuuh. Yeah. Funny thing jj . Guy could spin a tale.

  100. Fabius Maximus says:

    With JJ I would hold off to see if it was a jump, a use or a heart attack. Iv’ve seen all three in the past few weeks. The heart attack was fit low 50s out for a run in the woods. So you never know

    If he did get canned I would not worry too much. He has a good skill set and his industry is going batsh1t crazy with Job openings

  101. Bystander says:

    Grim,

    Sure they paid down principal over 10+ years so perhaps not cash at closing but how many would come out with a check that represents:

    -return of their original equity
    -original closing costs
    -improvements made to house
    -now, take out selling closing costs, realtor fees and transfer taxes.

    That is what I consider real equity, not the phony term used to help housing cheerleaders.

    From 2003 onward, it is not looking so hot. Actually I bought in March at 14% below the 2005 price (so probably at early 2004 price) . The 2005 buyer obviously got wiped out and the 2011 buyer took a big loss to sell to me after you factor in the above. I would bet many are in this boat.

  102. Libturd at home says:

    Based on what I always witness, no one ever pays down their housing debt. Well besides me.

  103. Fabius Maximus says:

    Grim you also have to factor in double renters. If you can’t sell your current place, rent it and rent your next place.

    Onc thing I have not seen yet is the 50 year mortgage. I”m sure we will see it at some point.

  104. Grim says:

    From Jan 1 2003 to current, you are talking 20-25% increase in prices.

    Consider 12 years of mortgage pay down.

    So not only are they recouping the initial equity/down payment, but the additional principal. Improvements won’t net greater than cost, but will yield return.

    Cash at closing is far from reality.

  105. joyce says:

    Aren’t they still buying bonds?

    1987 Condo says:

    End of QE- Yes

  106. chicagofinance says:

    https://youtu.be/jJewbFZHI34?t=1m27s

    Libturd at home says:
    December 16, 2015 at 2:42 pm
    Just got back from being a chaperon on my 10-year old’s field trip. The other parent volunteers were absolutely glued at the hip to their precious child. I’ve never seen anything like it. One teacher had to carry two defibrillators around the entire time on the off chance that some kids heart would stop as we walked. She had to carry two of them. One for kids over 80 pounds, the other for kids below. What have we become? Really, we are so pussified. The kids enjoyed my beat boxing on the bus ride home.

  107. homeboken says:

    Chifi – YouTube brought me right back to a movie I thought was just hilarious growing up – The Disorderlies.

  108. chifi – JJ’s LinkedIn profile indicates he still has his current job, but that’s not unusual to leave as is if you’re out on the bricks looking. No indication that he’s offered his current house for sale. If he needs cash maybe he’d sell his “beach condo” one town away, I’ll check on that when I get a chance. I do have his home phone, but I’ve never talked to him. Maybe I’ll give it a try.

    chicagofinance says:
    December 15, 2015 at 8:23 am
    BTW I guess jj got canned…..seriously…..this is worse than any of the clot benders that knocked him out for days at a time…..at least clot is back on his feet after some dialysis…..jj must be fuct forever……RIP jj….

    ex-Pat….can you do some cyber-forensics for us?

  109. The Great Pumpkin says:

    Yes, but the pumpkin is an idiot. Called this crap in 2012 and got slapped around on this board. I was told by people on this board that stagflation was the norm and I was a babbling idiot. Yes, I sounded like an idiot for stating this in 2012 due to the fact that almost every individual involved in economics said that wage inflation would not come again. Everybody was obsessed with the gloom(who can blame them, it was some gloomiest times ever experienced in most of the people’s lives). I understood what was wrong with the economy, how over the previous decades, all the money went to the top combined with other minor factors(like bad lending practices to keep it going and demographics). I also realized that by 2012, that everything is a cycle, not always identical, but cycles none the less due to the nature of the economic system in place. I also understood in my study of history that the doom never lasts. People calling for the end of the world are never ever right. The biggest messes always somehow get fixed.

    The mess was a stagflation of wages under times of economic growth. You can’t grow an economy for 3 decades and not pass on growth to the consumer. Don’t let the consumer have some of the growth, and eventually the economy will go from growth, to stagflation, and eventually deflation for obvious reasons.

    Why would the economy continue to grow if the consumer can’t signal to businesses that they demand a product or service? They can’t signal to the businesses that they want something because they have not been given the means to, because that growth was not shared with them. The consumer with stagnating value at wages combined with higher prices has no choice but to cut what he/she wants. The result? A domino effect message of telling businesses to cut back. They did that alright, they cut back workers and slimmed down their workforces to keep the profit growth up. Leading to less and less demand. Setting itself up for a deflationary spiral that you can’t escape.

    I knew that nobody wanted deflation, esp the FED! The only way they could fix this is to eventually hire and give raises, bring balance back between the consumer and business relationship. What you are seeing now is the beginning steps of this.

    If you think the fed would raise the rate without seeing actual strength in the labor market, you guys are foolish. They are not raising the rates for the sake of raising them, they are raising it because it’s needed. They will battle hardcore inflation if they don’t. They had no rate rises for 9 years, and you think they are raising it now out of farce need? Come on guys, you are smarter than this.

    The great pumpkin is coming whether you laugh at it or not. If it didn’t come, the whole thing crashes and we know there is almost no shot of that ever happening.

    1987 Condo says:
    December 16, 2015 at 1:57 pm
    Flipped house across street from me started at $699k, thought was worth maybe $579k apparently under contract for just over $600k.

    Realtor says she does not have enough supply to show due to warm weather.

    Back from SLC office, UE around 3%, losing employees left and right, getting $10k to $15k boosts.

  110. The Great Pumpkin says:

    Grim, sorry about the penny talk. I was not pumping anything. It was an otc play I think is worth a gamble. I have my money in it, did all the research behind it, and was sharing because I’m seriously a nice guy and look at you guys as friends. You might not like me, but I consider us all friends who come and discuss issues we enjoy on a daily basis. So yes, I consider you guys friends even if you don’t feel the same. I will not mention this penny stock again, except if it makes me money. I will have to share if it does. No harm in that.

  111. The Great Pumpkin says:

    22- Grim, our thoughts are not much different when it comes to end of the housing market. Stand by my statements in my debates with fast eddie and clot back in 2013. I stated it was a great time to buy and that pretty much any property you buy in 2013 will be worth significantly more in 2025 in the next housing bubble. Mostly, anytime you buy real estate in the downward part of the cycle, you don’t lose. With how bad the housing market was in the past 10 years, you can bet it created conditions for extremely good buys. I maxed out on my purchase. I did what my intution told me to do with the free money available for 3o years, take advantage, and get as much as they would allow you. Buy depressed asset with unbelievable rates combined with an unbelievable time period(30 years). If they let you take it, you take it, and as much as they will give you. When they tighten the loan market, you jump to get a loan, esp when they are bribing you with unbelievable low rates that basically equate to free money. They needed people like me with good credit and a down payment to try and stabilize the housing market, and I needed them and their free money. Funny, last time I stated it was free money, people on this board blasted me and told me that quantative easing/low rates are here for good. Today, we witness the first step in the rise in rates and a return to a normal market/economy. Glad I took full advantage of the abnormal market that created great prices on real estate, and at the same time provided abnormally low rates. Thank you, governor!!!

  112. The Great Pumpkin says:

    Exactly! Now watch them squirm and come up with reasons to deny it.

    1987 Condo says:
    December 16, 2015 at 2:03 pm
    For those who have sworn otherwise:

    Fed Rate Hike- Yes
    End of QE- Yes
    Rioting each Fall- No

  113. The Great Pumpkin says:

    Didn’t I always call for wage inflation to take place in 2017/2018, with those wage gains driving the next upward cycle of the real estate market in 2020?

    Juice Box says:
    December 16, 2015 at 3:12 pm
    re# 84 – “For those who have sworn otherwise.”

    This symbolic rate hike was predicted by pretty much everyone for the past year. It is an irrelevant at .25%, we won’t be near normal for another 5 years, that is another 5 years to what should be a real expansion period not the artificial floor we have now. That is 20 quarters of .25% rate hikes. Good luck with that the winds of recession still blow.

  114. Libturd at home says:

    ChiFi: I hesitate to post this hear.

    https://youtu.be/SIZB9suugUY

  115. Libturd at home says:

    here

  116. joyce says:

    There is considerable uncertainty about the consequences, however. The Fed plans to raise rates in a new way. Usually, it drives up borrowing costs by draining money from the financial system.

    But it has pumped so much money into the system as part of its stimulus campaign that drainage is impractical. Instead, beginning Thursday morning, the Fed planned to pay banks and other financial firms not to lend below its new benchmark rate.
    http://www.nytimes.com/2015/12/17/business/economy/fed-interest-rates.html?_r=0

  117. Comrade Nom Deplume, Newspeak Editor says:

    More on the advent of fascism.

    https://m.youtube.com/watch?feature=youtu.be&v=KJVZa9_Ha5c

    Skip the long ad. Or not. The lede is worth it

  118. chicagofinance says:

    1992?

    Libturd at home says:
    December 16, 2015 at 9:10 pm
    ChiFi: I hesitate to post this hear.

    https://youtu.be/SIZB9suugUY

  119. Raymond Reddington formerly Phoenix says: says:

    123. Video looks fake.

  120. grim says:

    Is that really stu?

  121. grim says:

    Mind … Blown …

  122. Did this trigger Jerry Lewis’ seizures, Stu?

    OMFG. It is the end of the world as we know it.

  123. Essex says:

    Two of the whitest men in the known universe.

  124. chicagofinance says:

    grim WTF? He’s posted it here in the past…..

  125. Comrade Nom Deplume, the anon-tidote says:

    [125] red

    Not the first time I’ve heard of a stunt like this. There are a lot of people who feel that way. And it was clear he was preying on their lack of knowledge.

  126. Libturd at home says:

    Yes…that’s really me.

  127. Mendy says:

    You completed various fine points there. I did a search on the issue and found most folks will have the same opinion with your blog.

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