From Fortune:
4 predictions for the housing market in 2015
1. The demographic wave of Millennials will help boost prices: The U.S. has been stuck in a demographic rut, which has dragged down the demand for homes. For the past decade, the largest portion of the American population was made up of Baby Boomers, folks who long ago settled down and started families. But late last year, the Census Bureau announced that the cohort of now-23-year-old Americans is the largest in the country, followed by 24 and 22-year olds, respectively. As this ascendent generation ages another year, more of them will start families and look to buy homes of their own. Jonathan Smoke, chief economist at realtor.com, argues that this generation will “drive two-thirds of household formations over the next five years.”
…
2. Young people will continue to demand housing where it’s tough to build: At the S&P Panel, Nobel Prize-winning economist Robert Shiller pointed out that since the housing crisis, the total value of owner-occupied housing has remained flat. This is because builders have not been constructing many single-family homes at all, a situation that the U.S. economy hasn’t faced since the Great Depression.Single-family home construction has been so subdued in part because the Millennial generation as a whole prefers to live where housing is expensive and where building is difficult.
…
3. Mortgage rates will rise: While many analysts were convinced that mortgage rates would rise this year on the back of an improving economy and the winding down of the Fed’s bond-buying stimulus program, the market didn’t comply. The year started out with news that the U.S. economy shrank in the first quarter, which put the market on edge. Next came news of unrest in Ukraine and slow growth in Japan and Europe, putting more downward pressure on interest and mortgage rates.
…
4. Home price increases will decelerate, but affordability will decline: The housing recovery slowed markedly in 2014. Home prices in October 2014 were up by 6.4% year-over-year, after climbing 10.6% in 2013. Economists polled by Fortune were nearly unanimous in predicting that home values would continue to rise, but even slower than they did this year. That’s because the rebound from the bursting of the housing bubble has just about run out of steam, with Trulia’s Kolko estimating that homes are only 3% undervalued relative to fundamentals nationally.
frist
bankers can be preppers too:
The Department of Treasury is spending $200,000 on survival kits for all of its employees who oversee the federal banking system, according to a new solicitation. As FreeBeacon reports, survival kits will be delivered to every major bank in the United States and includes a solar blanket, food bar, water-purification tablets, and dust mask (among other things). The question, obviously, is just what do they know that the rest of us don’t?
http://www.zerohedge.com/news/2014-12-10/why-us-treasury-quietly-ordering-surival-kits-us-bankers
If you first freeze a string, then can you push on it?
^^^^ I guess it works best if you soak it in liquidity first.
I’m pissed I’m not the jerk that suckered them into paying $200k for three dollars worth of crap.
Who else is particuipating in the national Work-In today? I am looking forward to being productive and not inconveniencing my neighbors or otherwise uninvolved parties.
http://www.telegraph.co.uk/finance/oilprices/11283875/Bank-of-America-sees-50-oil-as-Opec-dies.html
How much exposure do US banks have to fracking?
@BloombergNews:
BREAKING:
November budget deficit at $56.8 billion vs. $135.2 billion in 2013
“The budget deficit in the U.S narrowed more than economists projected in November from a year earlier, Treasury Department figures showed, as rising employment helped boost receipts and spending fell.
Outlays exceeded receipts by $56.8 billion last month, compared with a $135.2 billion shortfall a year earlier, the department said in a report released in Washington. The median estimate in a Bloomberg survey of 21 economists was for a $64 billion deficit.
Stronger hiring has helped to shrink the country’s annual deficit from a record $1.42 trillion in 2009, and economists expect the decline to continue in the fiscal year that started Oct. 1. The Treasury in October said the shortfall in the 12 months ended Sept. 30 was $483 billion, or 2.8 percent of gross domestic product, and the Congressional Budget Office said in August that it expects the deficit to shrink to 2.6 percent of GDP this fiscal year.”
@AP:
BREAKING:
US retail sales rise a solid 0.7 pct. in November; spending up on autos, clothes, electronics.
@CNBCnow:
BREAKING:
Weekly jobless claims at 294,000 vs. 297,000 expected
My millennial daughter just bought her first house, a 50s Sears home 3 bdr 1 bath in the Midwest. $140k.
12 – Blasphemy
A lie on so many levels.
Millennial buys a house – lie – millennials do not buy houses
Millennial buys a 1950s house – lie – millennials only live in tiny houses and brooklyn sublets
Millennial buys a 3 bedroom – lie – see lie #2, no millennial has a need for 3 bedrooms unless they are renting to 4 roommates or planning to run an illegal airbnb hotel. Uber does not drive in the midwest so the likelyhood of the latter is extremely low. Roommates? Right. See lie #4 below.
Millenial in the midwest – lie – the great millennial migration of 2013 has resulted in a complete decimation of the millennial population away from the coast lines.
“The Department of Treasury is spending $200,000 on survival kits for all of its employees who oversee the federal banking system, according to a new solicitation.”
Only 5 wet naps? I frequently go through that many in my morning ritual.
WJ [12];
Of course you realize that purchase price is only a 20% down payment in “blue ribbony’ NJ towns. As a NJ homeowner, even buying at what was –in hindsight– almost precisely the bottom of the dip, that thought turns my stomach.
Sears Catalog Homes (sold as Sears Modern Homes) were ready-to-assemble kit houses sold through mail order by Sears, Roebuck and Company, an American retailer. Sears reported that more than 70,000 of these homes were sold in North America between 1908 and 1940.
My Parents house was listed in the 1923 Sears Catalog.
1950s was Levitt era of tract home building for cheap houses
WestJester says:
December 11, 2014 at 9:28 am
My millennial daughter just bought her first house, a 50s Sears home 3 bdr 1 bath in the Midwest. $140k.
“US retail sales rise a solid 0.7 pct. in November; spending up on autos, clothes, electronics.”
I told you all to load up into the market once oil started falling. I haven’t been 100% stock funds in my 401K in nearly a decade. And it’s crazy considering the length and breadth of the recovery. Will be playing it way more conservatively come January.
Nothing for nothing, have I not stated this over and over again. This is my main reason for why housing will be huge in 10 years. The demographics will finally line up. This rut in our economy has a lot to do with the largest group in our population going into retirement mode…..aka meaning they have stopped spending. They drove up the real estate market in the bubble too. Yes cheap financing was to blame also, but the biggest culprit in the run up on real estate prices was demographics. The baby boomers were in the segment of their life where they spent the most money (40’s and 50’s). They were upgrading their homes like crazy.
Now a new generation will take over and I plan on taking full advantage. If you were smart, you put yourself in a position to take advantage of this in the past 3 years by purchasing real estate with free money from the banks and at depressed price levels due to the demographics.
“1. The demographic wave of Millennials will help boost prices: The U.S. has been stuck in a demographic rut, which has dragged down the demand for homes. For the past decade, the largest portion of the American population was made up of Baby Boomers, folks who long ago settled down and started families. But late last year, the Census Bureau announced that the cohort of now-23-year-old Americans is the largest in the country, followed by 24 and 22-year olds, respectively. As this ascendent generation ages another year, more of them will start families and look to buy homes of their own. Jonathan Smoke, chief economist at realtor.com, argues that this generation will “drive two-thirds of household formations over the next five years.””
19- When I say take advantage, I mean investment properties. You can’t make money off of real estate with one property. You need multiple properties. Otherwise you can’t sell high and buy low. If you own one property, what are you going to sell high and buy high?
Puff’nStuff [19];
Nothing for nothing, have I not stated this over and over again.
And you’re just as wrong as the Fortune mag is. Though I can’t say what their motivation is.
I just had a visit with a non-denominational quant who suggested that maybe in the next year or two, wages will be rising, if trends continue. Recently have been running down the part time pool of labor, converting into full time. When that pool of slack runs out, wages should rise.
I’m not in the camp of believing wages can never rise. Chinese wages have risen something like 600% over the last 20 years. Global sourcing is forever, but the pace of global wage rebalancing could slow.
LendingClub opens at $24.75/Share
Rally on!
“…As this ascendent generation ages another year, more of them will start families and look to buy homes of their own. Jonathan Smoke, chief economist at realtor.com, argues that this generation will “drive two-thirds of household formations over the next five years.”
Really? Many millennials marry later and often have large debt that either:
1) Disqualifies them for more (mortage) or
2) Can’t afford a mortgage after paying the regular cost of living bills.
*Salaries have not increased in 15 years but home prices and everything else has,
dramatically.
Dude, it’s not the 1980s or 90s. I think Mr. Smoke had been tokin’ on something.
“Young people will continue to demand housing where it’s tough to build..”
Young people will continue to demand AFFORDABLE housing (doesn’t mean they”ll get it).
This guy thinks demographics are going to revitalize real estate sales. Not with this economy.
[15] libturd,
When I served on a federal advisory panel a few years ago, one of my welcoming gifts was a small packet that had a surgical mask and wet naps.
I found that rather odd and a bit disconcerting.
Most millenials don’t save because they have never been taught how. Passion Fruit might be right about buying investment properties. I expect most millenials will have to rent due to their inability to even save the 3% necessary to purchase a home. Plus the need for mobility will continue to see this generation overpay to rent, rather than buy and staying put resulting in some real long-term savings.
Just go back over the past 5-7 years and remember that the position of Jonathan Smoke was held by Lawrence Yun, and before him David Lereah, author of the comic gem of a book “Why the Real Estate Boom Will Not Bust“, released in January of 2006.
” one of my welcoming gifts was a small packet that had a surgical mask and wet naps. ”
The mask was obviously there to be handed to the person in the stall next to you.
[2] expat
These are going to examiners-in-residence, the examiners that basically work out of the bank’s own offices. I guess the thinking is that banks may be targets of anarchists, and the bank will protect its own so the examiners need something too. Or the bank doesn’t do squat so only the examiners have protection. Such as it is.
[29] libturd
“The mask was obviously there to be handed to the person in the stall next to you.”
Not sure it would have helped.
[15] Buffalo wings for breakfast? Mmmmmm.
Only 5 wet naps? I frequently go through that many in my morning ritual.
[6] “Who else is particuipating in the national Work-In today? I am looking forward to being productive and not inconveniencing my neighbors or otherwise uninvolved parties.”
I was going to participate, but I’m still so traumatized by the Mike Brown case that I need to reschedule my Work-In day for sometime next month.
Speaking of flushable wipes, it’s definitely the greatest invention since sliced bread. That stuff left the worst dingleberries and wasn’t terribly absorbent. Plus when you pooped outside, the birds would attack.
What is national work-in day?
In my search for the answer, the disproved eye-witness in Ferguson, Dorian Johnson just landed a government job.
Only in America.
Adding some helium to the balloon….
http://www.bloomberg.com/news/2014-12-10/rundown-brooklyn-jersey-homes-draw-aussie-fund-on-returns-quest.html
nom?
http://www.businessweek.com/articles/2014-12-10/is-the-bar-exam-broken-or-are-law-students-dumber#r=rss
37, Chi those guys buy any rundown POS at stupid prices. They have totally distorted the market in ghettos closest to NYC.
37 – they are either geniuses or idiots, only time will tell
Grim a little bit of both, some of what they buy will eventually become very valuable, other stuff is destined to be permanent section 8. In any event they will make money, even overpaying provided the government keeps funding section 8, which creates artificially high rents in the hood. I’d go with neither, the way Australian pension funds work they must invest in property, because of this they’ll overpay, this is probably one of the smarter ventures but it is still totally driven by government policy rather than some strategy. They are buying for the cashflow and the strong rental market rather than the actual assets themselves.
[38] chifi,
No good answer here. Perhaps the answer isn’t that the bar passage rate is too low this year, but that the rate was too high in prior years. The year I passed in Mass, which I did by a very comfortable margin the rate was high, much higher than the average. I attributed this spike to the fact that the essay used two questions that were similar to questions used prior exams. Barbri prepped with those questions so the people who used Barbri did well. By contrast, everyone I know who used West’s bar prep, failed, and eventually so did West bar prep.
That said, I always maintained that the bar exams should be tougher. I’ve taken two now and they were mere speed bumps. For NJ, I know that I handled one essay badly because I didn’t know the local procedure but it mattered not because I did well on the rest of it.
Finally, do we really want lawyers out there who are dumber than the ones we have now? Lemme tell you, there are plenty of idiots in my profession. And the thought of the delicate flowers from Columbia joining our ranks makes me want to vomit.
[34] libturd
TMI. Oy.
[33] renter
“I was going to participate, but I’m still so traumatized by the Mike Brown case that I need to reschedule my Work-In day for sometime next month.”
I think that I will try to get a private letter ruling from the IRS that grants an additional six month extension for tax filing because I am so traumatized by the Eric Garner case.
It involved taxes. >sniff< Someone hand me a tissue.
Aha. Something you want to tell us?
“..Perhaps the answer isn’t that the bar passage rate is too low this year, but that the rate was too high in prior years”
[45] Charlie,
Yes, yes there is.
I smoked the F’ing bar exam. Okay?
Mrs. Deplume got her MBE result from the judge that gave her the good news (she was clerking for the state Supreme Court Chief Justice at the time) and it was a 146. The judge remarked that it was an impressive score (and it is). 130 is usually good enough to pass.
Mass. won’t tell you your MBE if you pass. So I picked the highest waiver jurisdiction I could find–Maine. You could waive in with 155 or better on the MBE. So I asked the Mass BBO if I had a sufficient score for Maine and they said “Yes.”
Not saying I had the highest score on the bar exam that year, but it had to be up there.
[46] redux
Forgot to finish. So when I tell the missus the news, she gives me a dirty look and says “Do you have to do everything better than me?”
I said “Yes. Yes I do.”
From the lead article:
Home prices in October 2014 were up by 6.4% year-over-year, after climbing 10.6% in 2013. Economists polled by Fortune were nearly unanimous in predicting that home values would continue to rise, but even slower than they did this year.
I should expect so, particularly as price increases of 6-10% in the face of <2% overall inflation would seem to be unsustainable.
The price of oil has deflated 40% in the past 6 months. The price of gold has deflated 30% in the past 3 years. Prices can decline without causing the end-of-times.
But keep pumping, housing industry. Your commodity is special.
I smoked up outside a building where the bar exam was being conducted. #crimingwhilewhite
The Bar Exam has very little to do with being a good lawyer.
http://thehungjury.blogspot.com/2014/07/national-lampoons-new-york-bar-exam.html
So Mark Walburg just got back from requesting a pardon for poking the Asian guy’s eye out. I think he said whats the big deal not like they can see out of those little slits anyhow.
#50 : just look above…her a successful corporate lawyer, him a blog bum
Please don’t call them wet naps. They are moist towelettes.
I call them asswipes. Surprised no one has trademarked the name.
http://gawker.com/your-fucking-butt-wipes-are-clogging-sewer-systems-1275892538
Adult wipers have also cost the Washington Suburban Sanitary Commission more than $1 million dollars because they’ve had to “install heavy-duty grinders to shred wipes and other debris before they reach pumps on the way to the treatment plant.” On top of this, officials in the District’s water and sewer agency have spent over 500 hundred man-hours in the last year “removing stuck wipes.” And this summer, after hearing complaints that toilets wouldn’t flush in London, a 15-ton “glob of wipes and hardened cooking grease the size of a bus” was discovered in a sewer pipe.
35 percent. $1 million dollars. 500 hours. 15 tons. You know what number is a lot less scary than all of these fucking numbers? Two. The number two—and using dry paper to wipe it—is a lot less scary.
But with “flushable” wipes making up 14 percent of the $4 billion “pre-moistened” wipe market, and with sales predicted to grow annually by 6 percent for the next five years, the Federal Trade Commission is now leading an investigation into the “flushable” label. Want to know what some guy at the FTC is doing today? Oh, he’s currently calling around and asking for data from wipe manufacturers and the wastewater industry because you just can’t get over yourself and wipe like a fucking grown up.
Here is picture of said shitberg:
http://www.nbcnews.com/science/science-news/fatberg-dead-ahead-15-tons-slime-wet-naps-clog-london-f6C10843060
Please don’t take away my asswipes! I like things squeaky clean back there. Plus, I heard that sh1tberg was a fake and the PR campaign had been paid for by the TP lobby.
@chrislhayes:
Striking to watch “whataboutism” being resurrected by American conservatives to defend torture.
[52] charlie,
Argh, busted!
https://www.facebook.com/PearlsComic/photos/a.10152137834673764.1073741825.132583843763/10152923304268764/?type=1&fref=nf
David Stockman, on how, when and why we are about to reap the whirlwind:
“September 15, 2008 is the day that Lehman died and the moment that the world’s central banks led by the Fed went all-in. As it has turned out, that was an epochal leap into the most dangerous monetary deformation that the world has ever known.
It needn’t have been. What was really happening at this pregnant moment was that the remnants of honest capital markets were begging for a purge and liquidation of the speculative rot that had built up during the Greenspan era. But the phony depression scholar running the Fed, Ben Bernanke, would have none of it. So he falsely whooped-up a warning that Great Depression 2.0 was at hand—-sending Washington, Wall Street and the rest of the world into an all-out panic.
The next day’s AIG crisis quickly became ground zero—the place where the entire fraudulent narrative of systemic “contagion” was confected. Yet that needn’t have been, either. In truth, AIG was not the bearer of a mysterious financial contagion that had purportedly arrived on a comet from deep space.
As subsequent history has now proven, AIG’s $800 billion globe spanning balance sheet at the time was perfectly solvent at the subsidiary level. Not a single life insurance contract, P&C cover or retirement annuity anywhere in the world was in jeopardy on the morning of September 16th.
The only thing gone awry was that the London-based CDS (credit default swap) operation of AIG’s holding company was monumentally illiquid. Joseph Cassano and the other latter-day geniuses who were running it had spent two decades picking up nickels (CDS premium) in front of a steamroller, while booking nearly the entirety of these winnings as profits—all to the greater good of their fabulous bonuses.”
http://www.zerohedge.com/news/2014-12-11/duck-and-cover-lull-breaking-storm-nigh
lol
http://www.nme.com/news/john-lydon/81671
215 years of overtime for Port Authority workers in first 9 months of 2014
Port Authority 113th Recruit Class Graduation – 8.22.2014
Overtime payments at the Port Authority Police Department were $15 million over budget for the first nine months of the year, but agency officials say the problem has eased since then, as new officers help reduce the need for overtime. (Tony Kurdzuk/The Star-Ledger)
Steve Strunsky | NJ Advance Media for NJ.com By Steve Strunsky | NJ Advance Media for NJ.com
Email the author | Follow on Twitter
on December 10, 2014 at 3:30 PM, updated December 11, 2014 at 3:37 PM
View/Post Comments
JERSEY CITY — The average employee of the Port Authority of New York and New Jersey worked nearly four weeks of overtime during the first nine months of 2014, when the agency went $35 million over budget for overtime pay, according to the agency.
In total, Port Authority overtime payments for the January-September period came to $192 million, a figure that was 23 percent higher than budgeted projection, the Port Authority’s chief operating officer, Stephanie Dawson, told the Board of Commissioners’ Operations Committee on Wednesday.
Put another way, the agency’s 7,000 employees worked a total of 1.89 million hours of overtime during the first nine months of the year. That’s an average of about 270 hours each, nearly four full weeks of work at overtime rates, and more than 215 years of overtime.
Typical of the agency, police overtime payments accounted for the bulk of overruns, with $15.1 million in overtime payments, or 19 percent, above what was budgeted for the first nine months of the year.
The good news, Dawson told commissioners, was that new hires were finally beginning to reduce the police department’s nagging overtime problem. Dawson said police overtime hours were down 21.5 percent in October compared to September, to 50,561 hours from 64,421, and continued to dip by another 5.7 percent in November, to 47,660 hours.
She attributed the declines to the addition of 249 new officers from a record Police Authority Police Academy class that graduated in August, which followed a class of 200 rookie cops in December 2013, the department’s first graduating class since 2009. She told commissioners the downward trend would continue.
“The expectation is that the recent classes will make a difference, and they’re already making a difference,” Dawson said.
The Port Authority has been criticized for years for its overtime spending, particularly among beat cops and supervisors, some of whom double their base salaries through overtime, particularly as they near retirement when pensions are a function of overall pay.
While Port Authority commissioners cautiously welcomed the signs of improvement, they reiterated their growing impatience with the agency’s overall overtime situation. Aside from the police department, there were substantial January-September overruns at the agency’s two largest civilian departments: PATH, where overtime costs exceeded projections by $5.4 million, or 22 percent; and aviation, which was $11.2 million over budget, or 59 percent.
“You’ve heard, Stephanie, the frustration of the board at every meeting,” Chairman John Degnan told Dawson, though he added that he was “pleased” with the October and November police numbers.
The overtime presentation came just hours before commissioners adopted the Port Authority’s $7.8 billion 2015 budget. And during the overtime discussion, Commissioner Richard Bagger noted that projections for the coming year were “substantially below,” real overtime numbers for 2014, making him concerned that the numbers would prove overly optimistic and again lead to overruns.
To curb overly optimistic, or unrealistic projections, Commissioner Ken Lipper said managers should be held accountable.
“If they don’t meet the overtime projections, they should be penalized,” Lipper said.
Degnan agreed, and directed Dawson to come back to the board with some kind of overtime management performance measure.
Steve Strunsky may be reached at sstrunsky@njadvancemedia.com. Follow hin on Twitter @SteveStrunsky. Find NJ.com on Facebook.
Progressives making good on their (unspoken) efforts to kick religion to the curb and end the charitable tax deduction.
Today, the House dems managed to kill off a bill to extend deductions for certain charitable contributions. Obama threatened to veto it anyway. Charitable tax deductions disproportionately benefit the wealthy and divert money from the government; this has long been a source of irritation for democrats. The objection was that it wasn’t “paid for” with offsets. (wait, isn’t that the GOP position? I’m confused). Whatever the rationale, the left has long sought to limit, if not eradicate, the charitable deduction.
Also, the administration issued proposed regs that require hospitals, nursing homes, etc., to recognize gay spouses. For most people, this provokes a “so what?” but how many hospitals, nursing homes, and hospices are run by the Catholic Church? I smell another RFRA lawsuit in the works.
Two of Ottoman’s heroes in a moment of bourgeosie excess. . . .
http://www.brainjet.com/world/6562/23-amazingly-powerful-pictures-of-world-history?til=d-df-6562#slide/10/0
Let’s call a spade a spade, they are baby wipes. I used them extensively, but only in Spring of 2000 (on myself, that is) when I was mountain biking in Moab for two weeks and camping each night. They were recommended by the tour company as a way to get yourself clean when showers were in short supply.
Damn. I thought this was a great idea for a new TV cooking show.
LOS ANGELES (AP) — A TV and video game actor was charged with killing and cooking his ex-girlfriend’s pet rabbit, sending her grisly photos of the procedure and threatening to do the same thing to her, authorities said Wednesday.
Dimitri Diatchenko, 46, of North Hollywood, was charged Tuesday with felony counts of cruelty to an animal with use of a knife and making criminal threats.
http://www.huffingtonpost.com/2014/12/11/dimitri-diatchenko-killing-rabbitt_n_6311794.html?ncid=txtlnkusaolp00000592
http://www.brainjet.com/world/6562/23-amazingly-powerful-pictures-of-world-history?til=d-df-6562#slide/9
Let’s try that again for Otto and anon’s favorite historical figures.
Not surprising that inversion and redomestication isn’t solely a US problem. In fact, we are late to the game
http://www.bloomberg.com/news/2014-12-11/ferrari-fleeing-italy-prompts-angst-on-losing-country-s-icons.html
Whiskey Whiskey Whiskey Whiskey Whiskey
[70] grim
Five of my favorite words