A report from CBS 8 in California. “Trisha Cortez, 35, said she started her search for her first home with her partner back in 2021. They needed to move from the North Park property they had been renting for 10 years because their landlord was doing renovations. ‘[We submitted] 33 offers before we finally got an accepted offer,’ she said. Cortez said she finally bought a home in the College Area. It’s a one-bedroom condo a little over 500 square feet. ‘We paid $60,000 or $70,000 over asking price,’ she said.”
“According to University of San Diego Economics Professor Alan Gin, the median home price in San Diego last year was $764,000, a 26% increase compared to the year before. Gin said the median price is eight times the median income in San Diego.”
From ABC 30 in California. “Los Banos Mayor Tom Faria says the median sales price of a home is up to $425,000 — too high for many who grew up here but a deal for people moving in from out of town. Faria says over 60% of the Los Banos workforce commutes to Fresno and Stanislaus counties but even more to the Bay Area.”
“‘People can’t afford a house there, so they move here and then of course, that puts pressure on this housing market,’ he said. ‘But these wages won’t support those prices and then these people are forced to move.’ Residents priced out of the market have been moving to cities like Chowchilla.”
From City Watch LA. “The scheme relied on constant population growth, presuming eternal desire for Southern California’s lifestyle and land. The recent dip in population suggests that presumption has been punctured. The decline is real – an empirical data point. It also aligns with perceptions in many precincts that Southern California’s promise is being spoiled by public corruption, homeless encampments, and a push for residential density that flies in the face of the backyard-as-rec-room culture that has defined the place.”
“There are more specific reasons for concern in a recent report from Chapman University titled ‘Restoring the California Dream,’ penned by Joel Kotkin and Marshall Toplansky. ‘Nearly 80 percent of all jobs created in the state over the past decade paid less than the median income, a percentage far below our prime competitors. The inconvenient truth is that in key metrics such as housing costs and income growth, most Californians are doing worse than their counterparts elsewhere.’”
“The region’s dominant city and driving force—L.A.—is looking disheveled these days, like a place that’s just a recession away from being broke. Walk a few blocks from City Hall—or drive around and check the freeway underpasses – and L.A. feels like New York circa 1970.”
From CBS 4 in Colorado. “Dozens of families in the Green Valley Ranch community of Denver have faced foreclosure at the hands of the Master Homeowners Association. According to the Denver Department of Housing Stability, the MHA was behind 50 of the 119 total HOA-related foreclosures in 2021. Gil Gonzalez Ramos is one of those who lost his home in a judicial foreclosure. Gonzales Ramos admits he failed to pay fines handed down by his HOA. However, he only expected a lien on his home. He never realized the HOA had legal power under Colorado law to push for a foreclosure.”
“Gonzales Ramos said he purchased the house 17 years ago as affordable housing. He told CBS4 he has never missed a payment to Wells Fargo on his mortgage. However, he confessed he ignored fines he was being cited for property upkeep by his HOA. ‘It is frustrating to deal with this, especially when I have to explain to my children what is going on,’ Gonzales Ramos told CBS4’s Dillon Thomas. ‘Apparently I no longer have a home. They sold it,’ said Ramos.”
From ABC News. “Residents across western Queensland claim the banks are either flatly denying loans based on their remote location or requiring deposits of up to 50 per cent. The big four banks — Commonwealth, National ustralia Bank, ANZ and Westpac — said there was no postcode ban on finance, and they actively lend to buyers in the outback. Mechanic Rob Warner in nearby Thargomindah said he came up against ‘every barrier possible’ when trying to buy his local roadhouse.”
“‘When we approached the big four and the brokers, as soon as we put the postcode in, they pretty much said everything changes and no,’ he said. The situation was so dire, Mr Warner had to ask the roadhouse’s seller to guarantee him the loan to get it approved. ‘We were lucky that we knew the seller, but it’s postcode discrimination,’ he said. ‘It’s a disincentive for anyone to move to the outback. If people need a 40 per cent deposit no one is going to do it.’”
From Stuff New Zealand. “Almost a quarter of properties listed on Realestate.co.nz in February dropped their asking prices after listing, in a possible sign of sellers’ price expectations no longer aligning with what buyers are willing, or able to pay. The phenomenon of more properties dropping asking prices has been seen across a number of online sites, including Trade Me, where the number of price-drops almost doubled in January compared to the year before, and Homes.co.nz, which saw a modest increase year-on-year.”
“Realestate.co.nz figures suggest price drops had been relatively common for months, with 18 per cent of listings in December dropping their prices, and 14 per cent in January. Asking price reductions usually equated to price drops of between 6 and 8 per cent. Homes.co.nz chief data scientist Tom Lintern said changes in advertised listing prices indicated a shift in buyer and seller expectations, and that the market was changing.”
“‘It is becoming evident that sellers are expecting prices to grow in a similar way to 2021, but buyers are not willing, and some are unable to match these expectations,’ Lintern said.”
From Forbes. “It is a common misperception, going back to the 1970s, that rapid oil price increases lead to recessions. Contractionary Fed policy is what has occurred historically. In fact, the Fed has had contractionary monetary policies in place prior to all three oil price shocks, mostly out of concern about inflation as I discuss below. These policies have preceded our recessions and most of the oil shocks that we have experienced, and hence they have caused our recessions. Furthermore, in the 1970s, the Fed compounded the effects of the oil price shocks by increasing their monetary stance in response to oil price increases, worsening the effect of the shock.”
“To recap: the oil embargo was concurrent with the 1973 recession, as was the Iraqi invasion of Kuwait concurrent with the 1990 recession. Thus, in both these instances, it is clear that oil price spikes did not cause the recessions. The 1979 energy crisis preceded the 1980 recession, and many think it also caused the 1980 recession. For all three recessions, the Fed was more concerned with controlling inflation than supporting economic growth, and therefore had contractionary policies in place before the recessions, thereby causing the recessions.”
From Mises.org. “During the 1980s Japan was feared as an economic and technological powerhouse. Most observers attributed their stock market bubble and high growth rates to easy monetary policy, management style, and government managed technological development. Since 1990, the Japanese government has been fighting price deflation with monetary inflation and trying to increase growth by government deficit spending. By all accounts it has not worked.”
“In retrospect, the new-era thinkers of the Japanese bubble economy seem conceited and hopelessly naïve, but that is the power of bubbles to deceive. One of the few observers to correctly identify and characterize the bubble was Christopher Wood, who wrote that Japan ‘became so arrogant in the late 1980s because it really believed it was immune from the natural laws of the marketplace. This really was one of the most astonishing acts of mass delusion ever, and future historians … will marvel at it.’”
“In the wake of the bubble and bust, Japan experienced a long series of corruption scandals, a procession of failed prime ministers, the ousting of financial ministers, the conviction of bureaucrats for corruption, and the breakup of its one-party system. However, the Japanese have failed to truly recognize the cause of their bubble and to liquidate their economic mistakes. Instead they embarked on a post-bubble course of easy credit, public works, and deficit spending that has only served to condemn the Japanese economy to continuing economic doldrums.”