Another Housing Crash

[djd09]

BEIJING (Reuters) - China reported weaker-than-expected investment and retail sales in April and a drop in home sales, clouding its economic outlook even as policymakers try to navigate debt risks and defuse a heated trade row with the United States.

https://www.reuters.com/article/us-...es-suggest-economy-losing-steam-idUSKCN1IG06H

 

[Randolph Kinney]

BEIJING (Reuters) - China reported weaker-than-expected investment and retail sales in April and a drop in home sales, clouding its economic outlook even as policymakers try to navigate debt risks and defuse a heated trade row with the United States.

https://www.reuters.com/article/us-...es-suggest-economy-losing-steam-idUSKCN1IG06H

The Chinese are heavy investors of real estate in Canada and the US.

https://appraisersforum.com/forums/threads/vancouver-bc.220194/

 

[Joe Flacco]

I heard in China the government owns all the land and when you buy a property the land is under a 60 year lease. After 60 years it returns to the government. Or maybe there is a new lease? I don't know.

 

[Randolph Kinney]

Chinese investment in US real estate fell 55% in 2017

Chinese investment in U.S. commercial real estate registered a jaw-dropping 55 percent decline in 2017, a result of tighter capital controls imposed by the Chinese government, increased regulatory scrutiny and more attractive opportunities in other countries, according to a report by Cushman & Wakefield released this morning.

While experts had expected a sharp decline, the numbers reveal that the bottom fell out.

https://therealdeal.com/la/2018/03/27/chinese-investment-in-us-real-estate-fell-55-in-2017/

I suspect the same is true for residential real estate.

 

[djd09]

America's poor becoming more destitute under Trump: U.N. expert

GENEVA (Reuters) - Poverty in the United States is extensive and deepening under the Trump administration whose policies seem aimed at removing the safety net from millions of poor people, while rewarding the rich, a U.N. human rights investigator has found.

Philip Alston, U.N. special rapporteur on extreme poverty, called on U.S. authorities to provide solid social protection and address underlying problems, rather than “punishing and imprisoning the poor”.

In a report, Alston said that as welfare benefits and access to health insurance were being slashed, President Donald Trump’s tax reform awarded “financial windfalls” to the mega-rich and large companies, further increasing inequality.

https://www.reuters.com/article/us-...estitute-under-trump-u-n-expert-idUSKCN1IY0C3

 

[Joe Flacco]

Isn't it better to create jobs for everybody that wants a job rather than giving out money to everybody for not having a job?

 

[Randolph Kinney]

As income stagnates, millions of Americans are struggling to make ends meet.

Some 50.8 million households or 43% of households can’t afford a basic monthly budget for housing, food, transportation, child care, health care and a monthly smartphone bill, according to an analysis of U.S. government data released this month by the United Way Alice Project, a nonprofit based in Cedar Knolls, N.J. that aims to highlight the number of people who live in poverty.

The project uses standardized measurements to calculate the “bare bones” household budget in each county in each state. It maintains that the federal poverty level — currently $25,100 for a family of four — doesn’t accurately illustrate the number of people living in poverty because it doesn’t take into account the dramatically different costs of living across the U.S.

https://www.marketwatch.com/story/5...-cant-afford-basic-living-expenses-2018-05-18

California leads the nation. Can't afford rent or to own a home.

 

[djd09]

South Florida’s rising property values are good news for people looking to sell — and for local governments that want more taxes without having to raise their tax rates — but they’re not helping regular workers trying to find affordable places to live.

Friday’s preliminary estimates of taxable property value show healthy gains from last year, with Broward County values up 6.2 percent, Palm Beach County’s 4.8 percent higher and Miami-Dade County posting a 3.9 percent increase, according to their property appraisers.

In addition, South Florida governments will see a boost in tax revenues from $10.8 billion in new construction that is being added to the rolls this year.

“We’re still on an upward trend,” Broward Property Appraiser Marty Kiar said. “Hopefully things continue on this path. … With the housing market, you just never know.”

http://www.sun-sentinel.com/real-estate/fl-reg-property-values-rise-20180531-story.html

The tax man is happy.

 

[djd09]

How The Government Is Manipulating And Distorting Markets In Everything

A recent CBO report estimated that the government spends about $300 billion to intervene in the housing market each year. That's based on a range of activities, from direct subsidies to homebuyers, to the mortgage interest tax deduction, and the backstop of Fannie and Freddie.

And thus it's no surprise that the housing market doesn't work like other markets, and that we had a major bubble there. Even now, Goldman Sachs estimates, the government is adding at least 5% to the cost of each home, through its various "affordability" measures.

But it's not just housing. Virtually every important sector of the economy is being manipulated in some way.

http://www.businessinsider.com/how-the-government-is-distorting-the-price-of-everything-2009-11

 

[Randolph Kinney]

At $21 trillion in federal debt with rising interest rates, more of the tax revenue goes to service the interest on the debt leaving less to support social programs.

And, the GSEs are sensitive to interest rates as they sell MBS to investors which are discounted to raise the yield.