Tag Archives: housing market

  • Blog
    Charles Krupa

    Sorry Losers!

    How the Fed has screwed the many to benefit the few
    by Chris Martenson

    Friday, September 2, 2016, 8:48 PM

    41

    By its actions, the Federal Reserve has selected a precious few winners and many, many losers.  Sadly, you are highly likely to be one of the losers.

    Sorry!

    I'm one, too, if that helps soften the blow.

    But we have a lot of company.

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  • Blog
    Dreamstime

    The Marginal Buyer Holds The Pin That Pops Every Asset Bubble

    So it's important to watch him very closely
    by Adam Taggart

    Friday, August 19, 2016, 6:01 AM

    14

    Those of you who took an Economics class in college may remember the saying that prices are set "at the margin". That's a fancy way to say that prices are set by the person (or people) willing to pay the most.

    This person willing to pay top dollar is called the "marginal buyer". Most of us don't really think about him, but he (or she) is very, very important.

    Why? Because the marginal buyer not only determines price levels, but also their stability and degree of volatility. The behavior of the marginal buyer, as well as the degree of competition for his/her "top dog" spot, sets the prices of nearly every asset class held by today's investors.

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  • Blog
    klublu/Shutterstock

    How Much Longer Can Our Unaffordable Housing Prices Last?

    Spoiler alert: not much
    by charleshughsmith

    Friday, October 9, 2015, 9:12 PM

    30

    Markets discover price via supply and demand: Big demand + limited supply = rising prices. Abundant supply + sagging demand = declining prices.

    Eventually, prices rise to a level that is unaffordable to the majority of potential buyers, with demand coming only from the wealthy. That’s the story of housing in New York City, the San Francisco Bay Area and other desirable locales that are currently magnets for global capital.

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  • Blog
    Blueximages | Dreamstime.com

    Is This Decline The Real Deal?

    Or just another head-fake bear trap?
    by charleshughsmith

    Wednesday, August 6, 2014, 2:36 PM

    11

    Is this stock market decline the "real deal"? (that is, the start of a serious correction of 10% or more) Or is it just another garden-variety dip in the long-running Bull market? Let’s start by looking for extremes that tend to mark the tops in Bull markets.

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  • Insider
    Tang Yan Song/Shutterstock

    Get Ready For Falling Home Prices

    Don't be as vulnerable as you were in 2008
    by Brian Pretti

    Tuesday, June 3, 2014, 5:15 AM

    3

    Executive Summary

    • The new drivers of the current housing price cycle
    • Why investment capital, not normal household formation, has become primary for pricing
    • What the implications of an investment-driven housing market are
    • Why prices will fall & what homeowners (residents & investors) can do now

    If you have not yet read The US Housing Market's Darkening Data, available free to all readers, please click here to read it first.

    The The New Drivers of The Current Housing Cycle

    1. Cash

    First, we are currently seeing something in residential real estate markets that has not occurred in our lifetimes – the magnitude of all-cash offers. 40-50% of residential real estate purchases have been for cash in recent years. This phenomenon has no precedent in recent economic history. Why is this happening?  We need to remember that a primary goal of the Federal Reserve in setting short term interest rates near 0% was to induce investors to buy “risk assets” – think real estate and common stocks.  By eliminating rate of return in safe securities such as Treasury bonds, CD’s, etc., the Fed essentially forced formerly conservative investors to purchase higher risk assets in order to get any acceptable rate of return.

    In good part, the all-cash offers are coming from investor’s intent on buying to rent. Intent on obtaining an acceptable cash on cash rate of return as yield can no longer be found in safer investments. This crosses the boundaries between investors in the asset accumulation phase of life and retirees starved for yield, draining formerly CD-centric bank accounts in order to purchase income-producing rental properties…

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