From HousingWire:
Home price and wage divergence raise alarms
Elsewhere and throughout most markets, home prices and rents keep rising, but sharply declining homeownership means fewer households are benefitting and more and more households are being priced out of homeownership and forced to pay higher rents, a client note from Bank of America/Merrill Lynch says.
Similarly, home prices are up by 25% from the bottom in December 2011, while personal income has only grown by 12.8%, roughly half the level of home price growth. In the past (think housing bubble/crisis), large divergences between home price growth and income growth had disastrous consequences.
Analysts are aware but not panicking.
“At the moment, disaster is not likely looming, but the divergence is at least cause for concern, particularly for the Fed, who has pursued an asset/real estate inflation policy for the past six years. The divergences noted above – between home prices and homeownership and between home price growth and income growth – highlight the transmission challenges faced by the Fed, and why hiking rates may be necessary, if somewhat hard to justify,” says Chris Flanagan at BAML. “The Fed may feel compelled to rein in home price inflation but, at the same time, acknowledge 1Q GDP was a bust for more than just transitory reasons and take note, at least tacitly, that the economic surprise index is hovering at the lowest levels since mid-2012, just before QE3 was rolled out.”
Nah, long way to go before bubble territory.
@Gavin_McInnes: “Allah Akb-” BLAM! BLAM!
You were saying? #garlandshooting
Time for the beach
From Wolf Street:
Housing Bubble 2: Investor Purchases Hit Record, Small Investors Pile in, ‘Smart Money’ Gets Out
People buying homes to live in – rather than as investments to be rented out – form the bedrock of a healthy housing market. It was once called the American Dream. Then came the bubble, its collapse, and the new boom that is already a bigger bubble than the prior one in many cities. And in some metro areas, investors are now the majority of buyers!
In the first quarter, the proportion of owner-occupant buyers fell to 63.2% of all residential sales, down from 65.8% in the fourth quarter last year, and down from 68.6% a year ago, RealtyTrac reported today. It was the lowest quarterly level in the data series going back to 2011.
Who were the other buyers? Investors. The report defined them as buyers who purchased a property but then had their property tax bill mailed to a different address. And these investors accounted for a record of 36.8% of all home sales.
In some metro areas, investors went hog-wild, elbowing owner-occupants into minority status. Here are the metro areas with a population of at least 500,000 where this miracle of our “healed” housing market has occurred in Q1, the miracle being that investors make up the majority of all homebuyers.
Oracle sold $10 billion of notes on Tuesday, including $1.25 billion of 4.375 percent securities due in 2055, Bloomberg data show. The software maker issued the notes at a yield of 170 basis points more than similar-maturity Treasuries, 10 basis points less than where the deal was initially marketed. A basis point is 0.01 percentage point.
Microsoft Corp., the world’s largest software maker sold $2.25 billion of 40-year bonds in February with a 4 percent coupon, its first ever note of that maturity, Bloomberg data show.
who buys this crap?
I see no way Oracle survives the next 10-15 years.
Millenials hate Oracle. Millenials love postgres, mysql, and mongo. HR, ERP, CRM? Puh-lease. Their cloud offerings are so ass-backwards it’s amazing. Open Source+AWS will kill them in small and mid-market.
Microsoft is at least attempting to stay relevant. Oracle is just trying to push product down everyone’s throat with no concern about relationship. Much of this has to do with wining and dining the old guard. The new kids are disgusted. Many of the new breed of startups are completely devoid of Oracle product.
Oracle will go under before Apple, IBM, or Microsoft.
That is the reason for small sq ft affordable condo and SFH.Rent being so high,home prices rising due to lack of inventory, only way to get in is down size. 538 sq ft land with 700 sq ft house is typical in Asia today.
In Asia, big sq meter homes are expensive and they find them hard to find buyers to how much the homeowners want to sell it for. They usually end up as Ancestral Homes passed to generations. They end up in disrepair. The value is in the land and they end up as buildings when they sell.
http://www.theguardian.com/technology/2015/apr/30/airbnb-calgary-home-trashed-drug-induced-orgy
I forsee a long summer of trashed Airbnb rentals.
8 – You mean Americans need to come to grip with a lower standard of living?
I don’t know if I agree. I think this new market reflects the stagnation of wages. If wages continue on their stagflation pattern and create even more income inequality, the result will be a lower home ownership rate. Meaning, based on no wage growth, more people will be forced into renting without the ability to come up with a down payment. The wealthy, with lack of opportunity in investments, have turned the housing market into their source of gold for investing. We are officially heading towards a class of owners and renters. The price will not come down either, because the investors won’t let it. They will snatch up any house that falls to a certain price based on the rent they can make off it. Just my two cents.
grim says:
May 4, 2015 at 9:00 am
From Wolf Street:
Housing Bubble 2: Investor Purchases Hit Record, Small Investors Pile in, ‘Smart Money’ Gets Out
People buying homes to live in – rather than as investments to be rented out – form the bedrock of a healthy housing market. It was once called the American Dream. Then came the bubble, its collapse, and the new boom that is already a bigger bubble than the prior one in many cities. And in some metro areas, investors are now the majority of buyers!
In the first quarter, the proportion of owner-occupant buyers fell to 63.2% of all residential sales, down from 65.8% in the fourth quarter last year, and down from 68.6% a year ago, RealtyTrac reported today. It was the lowest quarterly level in the data series going back to 2011.
Who were the other buyers? Investors. The report defined them as buyers who purchased a property but then had their property tax bill mailed to a different address. And these investors accounted for a record of 36.8% of all home sales.
In some metro areas, investors went hog-wild, elbowing owner-occupants into minority status. Here are the metro areas with a population of at least 500,000 where this miracle of our “healed” housing market has occurred in Q1, the miracle being that investors make up the majority of all homebuyers.
Good stuff in today’s Black Knight Mortgage Monitor
http://www.bkfs.com/Data/DataReports/BKFS_MM_Mar2015_Report.pdf
12 – The top five states by
percentage of borrowers
underwater are Nevada
(16.4 percent), Florida
(15.1 percent), Maryland
(14 percent), Illinois and
New Jersey (13.7 percent
each)
Low-end homes in the
New York-New Jersey
CBSA are 30X more likely
to be underwater than
high-end homes
http://www.bkfs.com/Data/DataReports/BKFS_MM_Mar2015_Chart12.pdf
Looking at negative equity
rates by home price tiers,
we see that the bottom 20
percent of homes by price
continue to struggle with
negative equity
» Negative equity rates
on high-end homes
are limited, even in the
hardest hit states
» At the state level, negative
equity rates on homes in
the bottom 20 percent
of prices (Tier 1) are 9X
higher than on high-end
homes
Grim,
I completely agree with you about Oracle. They are the Blackberry of databases. I’ve been a user of it for 17 years and have seen zero improvements over the years. Perhaps it’s my companies implementation of it, but I doubt it. It really feels archaic when you use it. Kind of like the way surfing the net on Blackberry felt like the old days of surfing on Lynx.
Not liberal… pro-government statist
Comrade Nom Deplume, the loan snark says:
May 3, 2015 at 9:24 am
When notoriously liberal law prof Alan Dershowitz says that the charges against the Baltimore Six are “crowd control”, that should tell you something.
For what ever it’s worth…the last few conversations I’ve had with people refinancing all were doing 15 years. Big change from a decade ago where everyone I know kept refinancing into 30 years. I must check the databases to see how my buddies at the shore were doing. They refinanced into additional 30s as often as I mowed the lawn. Then again, they were also silly enough to purchase life insurance for their child. went with Gerber. How quaint. I wonder how their variable annuity policies are doing?
Well, they can probably squeeze a bit more blood from the ol’ Java stone.
19 – Also IBM, Apple (and the US Federal Government) are customers of theirs.
D-FENS, #2,
I kinda know the guy with the winning Mohammed drawing.
http://www.americanthinker.com/blog/2015/05/the_muhammad_cartoon_that_won_the_draw_muhammad_contest.html
I was gonna write “I’ve never used an Oracle product” but of course I have, just never voluntarily.
Oracle…is Fusion out yet?
I tried the new Bridgewater Shake Shack today, just opened recently. Moderately positive review. Good taste, high prices. The burger tastes good, but is kind of small. Fries were crisp. Shake (strawberry) was fine, but again not a great value proposition, not outstanding. A colleague suggested his future meal would be one double burger, one regular burger, and tea.
I don’t get what the big fuss is about this place. I definitely wouldn’t stand 30 minutes in line for this, unless I was younger and looking for an excuse to wait in line with a girl for a long time. Today’s line wasn’t long at 12:30. They took my order in 2 minutes.
(24) If you want value, head west on 22 about 15 minutes and look for Polar Cub. They lines are ridiculously long. Mob scene for that stuff around 8 every night during the season. Man, I wish I owned that place. Owner doesn’t accept any bills over 20. Strictly cash only.
I just started watching the Showtime series Shameless this weekend. I like the characters Kash and Linda, married Muslim proprietors of the convenience store, “Kash and Grab”. Kash is a closeted gay and his wife is a take-no-prisoners business woman.
Rags. Chipotle was a completely new concept. FF burritos. It spun off of MickeyD’s so mega profit margin was a gimme. Shake Shack is not differentiated in any way than really any other burger joint. If I was invested in the IPO. I would have gotten out of it on the first day. Is the P/E higher than Netflix still?
Expat, by far (IMO) the best show on TV. It’s extremely entertaining, artsy, intellectual and gritty. At times, even believable. Very unusual for TV today.
Is Oracle trying to raise money to buy salesforce?
http://www.mercurynews.com/business/ci_28015071/salesforce-stock-soars-takeover-talk-centering-oracle
16 Oracle is so bloody expensive, and the product isn’t fun to work with. It isn’t DB2 bad but as their cash cow I could see it’s days as numbered. They have some decent products but they don’t do a good job marketing them and are onerous on licensing cost. What they acquired from Sun was good stuff but they did a lot to aggravate the user communities. Solaris is still a much better OS for x86 Unix servers(Zones, the provisioning software, file system wise, debug tools, performance, and scalebility, the userland space still sucks hard) but Linux really owns that space in most orgs which is pretty sad because Sun was selling it really cheaply. Cost is enemy number one with Oracle, it is too costly to justify what it does, and the fact that they have alienated developers, something MS is even wise enough to avoid(SQL sever is the easiest DB to develop for) means unless it is someplace ultra corporaty they will avoid it and with a resurgent DB2 they face big competition in the corporate space as well.
All is well in the Hamptons
The market for summer rentals in the Hamptons has rebounded this year, with properties asking just shy of $2 million only two years after many struggled to break the $1 million barrier.
One Southampton property is listed at $1.8 million, with three in East Hampton going for $1.6 million. Around a dozen properties in the Hamptons are asking seven figures to rent for a 105-day window, according to Crain’s – two years after many rentals had difficulty breaching the $1 million mark.
Factors playing into the higher prices for summer rentals include limited inventory, with only 8,000 rental properties available on the East End, according to brokerage Convergex Group. The number of millionaire households also grew 19 percent last year to 16 million, according to Boston Consulting Group.
While rental costs for higher-end properties appear to have increased, the median price of $45,000 for a summer rental is unchanged from last year, according to Convergex. Sales volumes and prices for Hamptons properties jumped considerably last year, brokerage Saunders & Associates reported in February
I think Oracle also owns the peoplesoft product….How many large global organizations and government agencies use it? Never under estimate a bureaucrat’s unwillingness to change.
Part of the reason why everything is so expensive here. Everyone has their hand out. These are the real thugs of NJ.
New Jersey can teach us something about ethics
This past week’s news from New Jersey was probably no surprise to veterans of Garden State politics.
Some 19 months after the infamous Bridgegate scandal broke, onetime Chris Christie ally David Wildstein pleaded guilty to corruption charges connected to the closure of lanes on the George Washington Bridge, probably just the first criminal charge in the federal probe of the incident. A month earlier, Sen. Robert Menendez, D-N.J.,was indicted for allegedly exchanging favors for gifts and
The two recent cases are but the latest in a long string of scandals that have given the state a uniquely sleazy image. Abscam. The troubled, if brief, reign of Gov. James E. McGreevey. The 2009 conviction of the newly elected mayor of Hoboken, part of a corruption case that included a motley outfit of small-town executives, state lawmakers, building inspectors and even rabbis.
http://www.newsday.com/opinion/oped/new-jersey-can-teach-us-something-about-ethics-1.10379385
[28] Lib – I aqree, great show. I never even heard anything about this show…ever. I just happened to watch an old movie (The Day After Tomorrow) with Emmy Rossum on Friday night. She looked familiar so I looked her up on imdb to see what else she has been in and Shameless turned up with a very high rating(8.7). I’ll usually go out of my way to at least try anything that’s rated that high on imdb. I already finished Season 1 and am 1 or 2 episodes into season 2.
^^^ Shameless also reminds me of The Black Donnellys from 2007. It was only on a half a season and they didn’t even air all the episodes, but I really liked it. I even bought the un-aired episodes on iTunes because I didn’t want it to end.
“It is true that we have grown adroit at feigning astonishment at the episodic convulsions of violence in American cities, but that doesn’t make them any less predictable or their roots any less apparent.
With the exception of the riots that followed the assassination of Martin Luther King, Jr., every major riot by the black community of an American city since the Second World War has been ignited by a single issue: police tactics.
(The explosion in Baltimore occurred in the same week as the twenty-third anniversary of the Rodney King riots, in Los Angeles.) ”
What Racism Has Done to Baltimore
by Jelani Cobb
Education, employment, health, housing, and policing are all broken. Is this what life in an American city should be?
Salesforce? That’s a hoot. Oracle bought RightNow for $1.5 billion 3 years ago and drove it right into the ground. At that point RightNow was competing head to head with SFDC. Then, Oracle refused to invest and let the product stagnate. Also, most of the key folks from RightNow jumped ship to Zendesk. Most every RightNow customer is dying to get off the platform, a good number of which had jumped to Salesforce.
They’d acquire it and then tell everyone they are shutting it down, and that you’ll need to migrate to Fusion sales. If Oracle buys Salesforce, Zendesk is the beneficiary.
Sorry, but no better burger joint than White Manna Burgers in Jersey City/Hackensack. Everything else is *****
Hamptons are so expensive for rentals I never hear of “kids” meaning anyone under 32 buying shares in a house. The rental costs went up crazy more than inflation.
I was basically a low paid clerk at 23 at bottom of ladder splitting a two bedroom apt in Queens and driving a beat up used car and I had a Full Share in a Hampton houses and went all 16 weekends plus my vacation.
Owners have took all the crap shacks for the help and rentals are much more high end and economy is so much better that prices are insaannnnnneeeeee like Crazy Eddie used to say.
A few years ago I stayed at the Hampton Maid hotel which is one of my favorites in Shinecock Hills. It is the lowest price nice hotel. And close to Southampton and the prices for my two weeknights were shocking. But go to Yelp and tons and tons of folks give it great reviews and even think prices are good. But only because when you compare 2015 prices at other places not bad. But I am comparing to 1990 prices.
My little dumpy beach place shocking what folks want to rent it for. One guy offered me for month of August enough to cover the years maint plus my insurance for four weeks. I am the treasurer and a well known cheapskate so maint is not rising anytime in next ten years yet rents keep rising. How long can that last.
http://www.hamptonmaid.com/#
White mana in hackensacj trumps white mana.in jc
I met Lazarus one night in the 80s at the White Manna in Jersey City at around 2:00 AM.
White mana in hackensacj trumps white mana.in jc
Blasphemy!
Or was it Lemmy Kilmister that I met? Either way, I swear, the dude rose from the dead.
I ask the millenials at work who the current guitar G0d is and I get blank stares like puppies waiting for din din. Can they even name a rock guitarist? Or are they too busy being the absolute greatest generation eva?!!
Glenn Straub is f*cking nuts.
http://www.bloomberg.com/news/features/2015-05-04/craps-and-cryogenics-blow-your-savings-and-live-forever-in-the-new-atlantic-city
Gary,
They find a new one every week on youtube, link it to pinterest then move on to next thing. There is no concept of listening to entire album either. Just saw Jeff Beck two weeks and guy is still insane at 71. Only disappointment- little to nothing off Blow By Blow or Wired.
Bystander,
I played both of those albums until there was nothing left. I envy you that you saw him.
Agree the ShakeShack valuation is ridiculous. Screams short.
#40 – Ah, the 80s… 8675-309.
Dedicated to NOM:
NORTHAMPTON, Mass. — Smith College, the largest of the all-female Seven Sisters schools, is changing its policy to accept transgender women.
The new policy, which takes effect for those applying this fall, followed a year of study. The women’s college had previously asked undergraduates to have consistently identified as female since birth.
Smith president Kathleen McCartney and board chair Elizabeth Mugar Eveillard said in announcing the change on Saturday that since Smith’s founding, “concepts of female identity have evolved.”
Smith will not admit students who were born female but identify as male.
Other women’s colleges, including Mount Holyoke and Wellesley, also have changed their policies to admit transgender women.
The advocacy group GLAAD said it worked with Smith alumnae for the change. GLAAD president and CEO Kate Ellis said Smith joins a growing number of colleges that “respect and afford equal opportunity to all women.”
Jeff Beck wins any tie-breaker in guitar comparisons because he builds, restores, and works on his own American muscle cars and early hot rods. Speaking of cars, I was in traffic, behind an early 70’s Lotus Europa a couple days ago. A Europa is almost the English equivalent of a Porsche 914, but, thanks to Colin Chapman, the Europa was first (and more spartan). I was in absolute awe in how tiny it was in every dimension. I could see that the cosmetic chrome bumper was at the same approximate height as the drivers neck. I looked up the exact specs later. As light as 1350 lbs, only 42″ tall, and you could park it on a 4′ x 8′ sheet of plywood and all 4 wheels would be on it.
Make sure to click on the picture under “Dimensions” to blow up the picture.
http://www.lotus-europa.com/manuals/s2work/tech/index.htm
50. Smith College.
Timely, talking colleges with my oldest again tonight. Made him aware of the change, told him as a transgender he would be a shoo-in.
He agreed, but only if he could be a lesbian transgender woman there.
comment in mod for any one of six reasons. thanks grim.
oops, guess not.
What, like a 10’s millennial version of Bosom Buddies?
For the guitar players one of the best (lost too early) playing one of the best songs ever.
4:48 is the start of the drop mic moment
https://www.youtube.com/watch?v=-j3-EXejYao
Burgers.
Shake Shack is Meh… Smash Burger for a chain is way better.
In Bergen county the best burger is still Bobby Flay with “Bobby’s Burger Palace”. While some here may hate him, his burgers NAIL IT!
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