Posts Tagged ‘housing’

LinkSwarm For April 19, 2024

Friday, April 19th, 2024

Israel’s Iran strike is shrouded in mystery, California is shockingly “permissive” on sex trafficking children, Warhammer goes woke, and a new Doom speed-running record. It’s the Friday LinkSwarm!

  • Early reports said that Israel struck at Iranian nuclear facilities at Isfahan, but current reports say that’s not the case.

    Senior US military sources:The target of the Israeli strike was an Iranian military base in Isfahan near Natanz, not the nuclear facilities themselves. “The Israelis hit what they intended to strike,” The targets within this strike included Iranian air defense systems at the air base including those used to protect their nearby nuclear facilities. It was a message to the Iranians, “We can reach out and touch you.” The Russian made air defense systems were shown to be ineffective. There was one target but multiple strikes within that target. The Israelis used missiles and unmanned aircraft – in other words no manned aircraft (F35’s or others) were used as part of this strike

    Both Israeli and Iranian sources are being cagey about what actually was hit. Right now it’s looking like it was a very limited strike, almost just a “See? We can hit them if we want to” strike to satisfy the Biden Administration’s endless calls for “restraint” while they continue to pound Hamas into a fine red paste. But it does offer a certain amount of support for the Kayfabe theory of Middle East politics…

  • Speaking of Gaza, that plan to send U.S. servicemen there to build a pier was an asinine one, but it was great to demonstrate just how badly screwed up naval logistics is for sudden overseas deployments. (Hat tip: Stephen Green at Instapundit.)
  • Powerline has a pretty staggering chart on Biden inflation:

  • “Traffick a kid in California, spend the weekend in jail; try it in Florida and they execute you.”

    The penalty for the equivalent of child trafficking in “progressive,” “forward-thinking,” “compassionate” California is a maximum penalty of a year in jail, and a minimum of two days in jail, plus a $10,000 fine which may or may not be paid depending on sentencing details.

    Plenty has been said in recent years about soft-on-crime policies in states led by Democrats, and with good reason. Perhaps it should come as no surprise that political movements that believe the execution of preborn children is morally and legally permissible would also enforce such loose penalties for child endangerment and exploitation. But this seems, even for liberals, unconscionable.

    Thankfully, it’s not that way everywhere. Other states with right-leaning leadership handle child predation, shall we say, “differently.”

  • But California especially loves setting sex offenders free if they’re illegal aliens.
  • Speaking of idiot laws in California, their new “mansion” tax means that no one can afford to build apartment complexes any more.
  • “Landmark NHS England Report: Science Doesn’t Support Gender-Affirming Medicine.” Wait, you mean mutilating children to demonstrate your trendy wokeness is a bad idea? Who knew?
  • Despite that, the Biden Administration is going to shove transexualism down the throats of colleges by fiat by rewriting Title IX rules without congressional approval.
  • Uri Berliner exposes the radical wokeness at NPR and is fired by new ultra-woke Alpha Karen NPR head Katherine Maher.

    It turns out that Katherine Maher is no ordinary ascendant progressive media executive. No, this woman’s social-media history reveals her to be the Kwisatz Haderach of white wokeness, presumably bred through generations of careful genetic selection to be the supernaturally perfect embodiment of Affluent White Female Liberalism. (As many have noted, she not only acts but looks like Titania McGrath.) It’s vaguely unreal: If there was a trendy progressive take floating around on Twitter and popular within media circles, then you can reliably bet she was there to voice it in the most preeningly insulting way possible.

    (Hat tip: Ed Driscoll at Instapundit, who also offers lots of choice Chris Rufo commentary on tweets from Maher.)

  • “Texas Congresswoman Beth Van Duyne (R-TX-24) has taken out a full-page advertisement in the New York Post in an effort to recruit law enforcement from New York City, encouraging them to ‘escape New York and move to Texas. Sadly, the corrupt and crumbling Empire State is so purposefully anti-law and order, that you should no longer put your careers and lives in the hands of politicians who couldn’t care less about you or your families,’ the advertisement states.”
  • I’ll take “Headlines You Don’t Want To Read At Breakfast” for $400: “New York Suffers Record Rise in Potentially Deadly Disease Caused by Rat Urine. New York City has seen a record jump in the number of human leptospirosis, a disease caused by rat urine that can cause kidney damage, liver failure, and even death.”
  • The University of Texas at Dallas closes its DEI office and eliminates 20 jobs. Progress!
  • “A far-left extremist that firebombed a pro-life office in Wisconsin in 2022 has been sentenced to 7.5 years in federal prison, along with three years of supervised release and a $32,000 fine.”
  • The return of the Turtle Tank.
  • A mass cancellation attack is trying to get Reporting from Ukraine’s YouTube channel deleted.
  • Republicans aim to use ballot initiatives to overturn unpopular Democratic Party policies. “Republicans in Washington are moving to get three major ballot initiatives passed. These measures will repeal Democrat-passed policies that are becoming unpopular among locals. The three changes would repeal the state’s sanctuary status for illegal immigrants, end an attempt to ban natural gas, and a change to the laws to strip squatters of their rights.”
  • You’ll need to click Show More for this one:

  • Venezuelan illegal alien attempts to rob a bank using a translator app.
  • Fleshlight + AI = Brave new frontiers of sad perversion.
  • Has Warhammer gone woke? “I can’t help thinking that you finally started to bow to pressure from ‘Modern Audiences,’ and you were almost certainly encouraged to do this by a sudden infusion of investment money from BlackRock.”

    The moment you make any concession, no matter how tiny, you’ve already given the game away. You’ve made it known that you’re prepared to bow down to their demands if they put enough pressure on you. And so, inevitably, their demands are never going to end. They’ll literally never be happy because there’s always going to be some other thing, some other piece of problematic lore, some other rule or exclusionary detail that has to be altered to comply with their constantly evolving demands, and all in the name of inclusion and diversity.

    Because these people don’t care about your hobby, they don’t care about integrating into a community of like-minded individuals. All they care about is that the community bends and reshapes itself to suit them, until eventually they bend it so much that it breaks. People like that are complete and utter poison for any hobby, any fandom, any franchise. All they ever manage to do is stir up conflict, resentment and division, driving people away and turning fans against the very company that tries to pander to them, because their very reason for existing is to undermine and destroy the thing they claim that they’re trying to save.

    And if you’ve got any common sense whatsoever or any love for the fandom that you’re so passionate about, you’ll think very carefully before bending the knee to them.

  • Madam Web finally crawls just past the $100 million mark before going to streaming to die.
  • And by the way, Disney still isn’t in the black on it’s purchase of Star Wars and Lucasfilms.
  • My review of Godzilla x Kong: The New Empire.
  • After 6 months and 100,000 attempts, Doom speedrunner beats 26 year old record…by one second.
  • “White House Calls In Elmo To Help Explain Latest Global Conflict To President.”
  • “Biden Unveils Official Campaign Slogan ‘Death To America.'”

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    Posted in Border Control, Crime, Democrats, Elections, Foreign Policy, Global Warming, Jihad, Media Watch, Military, Regulation, Social Justice Warriors, Texas | 1 Comment »

    Credit Crunch Crisis Carpocalypse

    Tuesday, April 11th, 2023

    I’ve already covered how small business bankruptcies are at record highs and manufacturing is at a three year low. To those woes add a severe credit crunch.

    How severe? How about $105 billion drop in loans in just two weeks.

  • “This credit crunch greatly increases the chances that America is going to have a deflationary recession or depression at some point in 2023. And, in fact, we could already be in it.” Ya think?
  • “We’re going to see the unemployment rate start to spike in America in the second half of 2023, In fact, we’re already seeing a big increase in unemployment claims data from the Federal Reserve shows that continued unemployment claims has surged since September.”
  • “We’re seeing a big surge in mortgage defaults right now across America, particularly on what’s called FHA mortgages. FHA mortgages are these first-time home buyer loans that the US government sponsors and allows people to only put three to five percent down. Well, these loans now have a 12% default rate in the most recent month of February 2023.”
  • Debt-to-income ration is now higher than it was at the pre-subprime meltdown peak in 2008.
  • “The Biden Administration has been very aggressive in wanting to expand mortgage access to low-income borrowers who can’t afford these mortgages. And they do this under the guise of expanding the benefits of home ownership to everyone, but really what they’re doing is they’re saddling at-risk economic households with a lot of debt near the peak of a housing bubble.”
  • “When banks tighten the belt and businesses can no longer get loans, businesses have to shut down, or what businesses have to do is, they have to start liquidating their holdings and taking whatever cash they have and use it to pay expenses. This is actually a concern of mine.”
  • “This bank credit crunch which is occurring right now could cause even more bank runs in the future” as people pull money out of the bank to cover expenses.
  • Quantitative tightening is back on.
  • “Mortgage application demand is on par with what we saw basically in the worst of the last housing crash in 2008, 2009, 2010, and so, no, there is no recovery.”
  • “The regular home buyer is still out of the housing market and is not returning.”
  • “The money supply in America is contracting…every other time in history it contracted, which was four times, we had a depression, a panic and a banking crisis.”

    • Cheerful enough. But if you’re a car dealer, things are even worse:

  • Banks are cutting off backing loans and providing credit to dealerships.
  • Not just used car dealers, but even national brand, nameplate dealerships.

  • This all started back in 2020, when banks started lending way too much money on cars that simply aren’t worth it, to consumers that simply couldn’t afford these payments, and shouldn’t have got the car in the first place…Let’s fast forward to 2023. We’re seeing record high repossession rates, and we’re seeing record high portfolio sell-offs, where people are just liquidating their paper because they don’t want to take on the risk of all these really bad auto loans, because they owe too much money. People are not making payments and they see the value of cars going down.

  • The fewer banks dealers can pit each other against for loan terms, the higher the interest rate consumers have to pay.
  • Dealers (not the banks) are also the ones who get screwed if a customer misses their first through third car payment.
  • Texas car dealer: “He was floored because he sells a lot of trucks between $45- and $65,000 trucks. Four of his banks told him that they’re no longer lending over twenty five thousand dollars.” (Previously.)
  • “I promise you this: it’s only gonna get worse.”

    • But wait! It gets worse!

  • “Capital One is going to start pulling their floor plans from dealers.”
  • “Floor plans” are the lines of credit dealers use to purchase cars to populate their lots, even the big nameplate dealers.
  • “Dealers are overexposed right now. They have paid way too much for their inventory and now they are having a hard time selling it.”
  • “It is so much harder now than it has been in the last two years to get people approved for loans to be able to sell these vehicles.”
  • “[Banks] do not want to get stuck holding the bag on these cars.”
  • “Dealers have been stupid. They have overpaid and they have too much inventory right now.”
  • “Some of these dealers, if they’re having cars 60, 90 days and maybe they’re getting a little bit behind on their payments [the] floor plan company will actually go to these dealers lots and they will take these cars that have been sitting too long, they’ll take them to the auction.”
  • “If they didn’t have the cash, the liquidity, to begin with, then they have to start liquidating cars, and they have to liquidate them fast to be able to pay their flooring lines…if they lose these flooring lines, they might as well not be in business, they don’t have the cash to be able to buy more inventory to be able to sell it to make more money.”
  • Banks pulling their floor lines could potentially crash the whole car market.

    • Things are going to get worse for car dealers before it gets better, and six months from now might be a great time to buy a car, assuming you’re not too busy shooting starving looters trying to steal your canned goods…

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    Posted in Democrats, Economics, Regulation, video | 9 Comments »

    Then: Commercial Investors Are Sucking Up All American Housing! Now: They’re Losing Their Shirts!

    Thursday, September 8th, 2022

    If you can remember all the way back to pre-Flu Manchu 2020, housing prices were soaring and there were a raft of articles decrying how commercial investors were snapping up housing as fast as they possibly could, pricing ordinary Americans out of the market.

    Now, some two years later, it’s evident that a lot of those commercial investors kept buying right up through the peak of the market, and are now proceeding to lose their shirts on those deals thanks to the Biden Recession.

    Take, for example, OpenDoor, the company that sends out those endless “We want to buy your home” letters. They promised investors they were going to use the Internet to revolutionize home-buying by flipping homes at scale and cut out the middle man. How well did they succeed?

    Now that they’ve had a while to run their system, the answer is: Not so well.

    Takeaways:

  • One thing I was unaware of: Commercial investors in residential real estate fund their purchases through variable interest rate debt.
  • OpenDoor’s outstanding debt balance “has ballooned from $271 million to $6.1 billion.”
  • Every point rise in interest rates costs OpenDoor $40 million more in interest rate payments.
  • “OpenDoor is truly a modern day house of cards. The company’s revenue grew from $1.8 billion in 2018 to over $8 billion in 2021. To grow they scaled, going from 18 markets to 44 markets in the U.S. In those four years, the company went from flipping 7,000 homes a year back in 2018 to now flipping 21, 000 homes most recently in 2021.”
  • “Despite OpenDoor’s top-line growth, the company has incurred loss after loss after loss, each bigger than the last, even in a strong rebound year in 2021. Where the company sold a record number of homes, OpenDoor incurred a record loss of over $600 million.”
  • Some math snipped. “OpenDoor would need to sell roughly sixty thousand homes a year just to break even with how much it costs the company to exist in its current burn rate. Every time the interest rate goes up a single point, OpenDoor needs to sell an additional 2,000 homes in order to offset that additional $40 million.”

    • The end of the video touches on how Zillow lost $881 million by trusting an algorithm that had them paying above-marker prices. We covered that briefly here some nine months ago. Here’s a video with more details:

    But it’s not just OpenDoor and Zillow. Here’s a video that explains why all the large-scale commercial buyers of residential real estate (including those buying to rent it out rather than flip) are screwed by rising interest rates:

    Takeaways:

  • The Fed “is now committing to not only continue increasing interest rates, they’re committing to keeping interest rates elevated for the foreseeable future.”
  • “These real estate investors are going to be losing money in the housing market on their investments, and that they are going to have to fire sale their portfolio as a result.”
  • “Over the last year, the investor profit or the cap rate in America is about 4.5%, which was pretty good in 2021, when interest rates were zero, but now that interest rates are projected to go to 3.8%, we can see that investors who buy real estate in America are basically getting very little premium over buying a short-term government bond.”
  • “As this investor demand continues to go down, home prices are also going to continue to go down in America, because in many markets investors were quarter of the demand, a third of the demand for homes over the last of couple years, and in some neighborhoods investors were 50—60% of the demand.”
  • “A lot of people think [commercial buyers pay] cash, but folks, it’s never cash, it’s always a bank in the background giving these hedge funds and private equity funds money to buy single-family homes.”
  • “They’ll give these hedge funds maybe 70—75% percent of the money to go do it, like a normal loan. The thing is, the loans that these Wall Street investors use to buy homes are often adjustable rate loans, where every time the fed hikes interest rates, the Wall Street investor has to pay more in debt service and interest on their existing portfolio.”
  • “We’re gonna get to a point soon over the next six months where these Wall Street investors are having to pay more to their bank and their warehouse lender than they’re going to receive in income and rent from their tenant. Like, literally, these Wall Street investors not only are going to see the value of their property going to go down, they’re going to begin losing money in terms of cash flow.”
  • So not only will investors have to sell, but frequently they won’t have any choice.

    Because their lender, their bank, is going to do something called a margin call. At a certain point, they’re gonna say “Hey Wall Street buyer who I’m giving money to, the value of the homes has gone down and now you can barely afford to pay interest. You’re gonna have to now just pay us off, or pay us down,” and when the bank does that margin call, these investors are then going to be forced to sell off their portfolio, because they’re going to need the cash, causing a massive, widespread dump of inventory onto the U.S. housing market.

  • He doesn’t mention Austin by name in this video, but he does in another pegging it as the #5 market most likely to see price drops. “This is a market in absolute freefall.” “In the span of just five months, the number of homes for sale in Austin has increased from 1460 and February to nearly 8 000 in July.” He thinks home prices could down by 40%. Naturally, as an Austin-area home-owner, I think that’s way too much, but I do expect significant retreats from the highs reached early this year.
  • He also thinks inflation is going to get worse (which is probably a good bet).

    • (In another video covering some of the same ground, he mentions BlackRock, one of the biggest boogeymen in public perceptions of buying residential real estate. Guess what? “BlackRock is not a big player in terms of owning, managing and buying real estate in the U.S.”)

    Like the fear of Japan buying everything in the late 1980s, fear that institutional investors will make owning a home impossible for ordinary Americans turned out to suffer from the same recency bias, assuming that what is going on right this minute will continue for the foreseeable future.

    Like assuming that the giant ants are unstoppable, or that Hispanics will always vote for Democrats, assuming that housing prices will always go up and that credit will always be cheap are categorical mistakes that the market will eventually punish you for making, and the companies that made it are now bleeding red ink.

    People who sold during the bubble made out like bandits, and people who bought during it got screwed, but what can’t go up forever won’t. Bubbles pop. Absent government distortions of the market*, supply and demand have a way of adjusting.

    Anyway, if you need to buy a house, nine months from now is probably going to be a great buyer’s market…

    *And yes, lots of cities and states try their damnedest to prevent new housing from being built. I’m looking at you, California.

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    Posted in Austin, Economics, Texas, video | 11 Comments »