It’s Friday desk clearing time for this blogger. “To sweeten a recent offer on a small house with a few acres here in Texas, near Austin, I pledged to keep Jenny and Jeremy—two aging donkeys the seller no longer had use for. Caught up in the adrenaline of the deal, I didn’t take into account just how expensive it could be to care for two large animals—a cost I later learned can easily top several thousand dollars, per donkey, per year, especially as their health deteriorates. That same real estate frenzy led me astray in other ways, too.”
“Worst-case scenario, I could be on the hook for about $55,000 in additional costs with all those problems, including the care of the donkeys—a figure that could go far higher ‘if other issues emerged after purchasing the 50-year-old house and property,’ my agent told me. But I was undeterred, raising the question: Who, exactly, was the jackass here?”
“Downtown Los Angeles office towers are eerily vacant. Graffiti-splattered boards cover shuttered restaurants. Darkened shops with ‘For Lease’ postings outnumber ‘Open’ signs on some streets. Yet most of the apartments that emptied in 2020 are filled again. ‘Downtown is coming back,’ said Ryan Patap, a market analyst for CoStar Group. ‘It’s not a complete ghost town. There’s hope.’”
“A bloated Bel Air, Calif., mansion that began life as a $500 million whisper listing in 2017 is now sinking under a $180 million mountain of debt. It officially hits the market for $295 million on Jan. 10 and will be on the auction block a month later — the latest example of a hyped Los Angeles megamansion that failed to perform. ‘It’s one of the ugliest homes I’ve ever seen,’ a broker who toured the property said. ‘Only someone with terrible taste who wants to scream to the world that they’re rich [would buy it], and even then, I’m not so sure.’”
“As Niami’s homes and dreams got bigger, so did his losses. One home he marketed for $100 million, dubbed ‘Opus,’ ended up valued at $38 million and sold for an unknown price. ‘LA was a cheeseball place and then it got sophistication like New York, and cheeseball finishes no longer fly off the shelves,’ a broker said. ‘[Niami’s] stuff looks like Las Vegas casinos back in the day.’”
“The Columbus on Fifth apartment complex in Miami’s Little Havana neighborhood has been targeted in a $9.7 million foreclosure lawsuit. Columbus Apartments LLC constructed the eight-story, 107,506-square-foot building in 2019 and is the borrower. However, the company is no longer the owner of the property as the result of a different lawsuit. Ocean Bank sold the loan to COF Investment, the company that filed the foreclosure complaint, in December. According to the complaint, the new owner of the loan is entitled to seize the property because its mortgage holds priority to the construction lien used to foreclose on it, and the original borrower has stopped making payments.”
“Oregon’s foreclosure moratorium was put in place to prevent foreclosures for people who couldn’t pay their mortgages as a result of the pandemic. The moratorium expired at the end of the year. Since it expired, people are no longer able to defer their mortgage payments. Latest numbers show more than 8,600 homes in Oregon are already at risk of foreclosure.”
“The Treasury selloff that started the year is rippling across the globe as investors scramble to price in the risk that the Federal Reserve raises interest rates faster than currently anticipated to contain inflation. ‘Gone are the days investors bought bonds with their eyes closed, confident in central banks’ eventual support for the market,’ wrote Padhraic Garvey, head of global debt and rates strategy at ING Groep NV.”
“‘The Fed set the cat among the pigeons as the minutes made it clear an acceleration in Fed tapering will give them more options,’ Prashant Newnaha, an Asia-Pacific rates strategist at TD Securities in Singapore told Bloomberg.”
“Opinions are mixed over whether the recent deceleration in housing price increases marks the beginning of what the government has identified as the ‘much-awaited inflection point,’ or just a short period of respite before resuming the years-long uptrend. Some say the market has peaked, as evidenced by a sustained, steep fall in trading volume over the past month amid a significant drop in housing value in key areas of Seoul.”
“While authorities are taking steps to bolster the property industry and stabilize markets, they’re unlikely to go too far with stimulus measures. Beijing won’t want to risk inflating asset prices after spending much of the last year popping speculative bubbles. The People’s Bank of China in December said it wouldn’t flood the financial system with cash, and the only state-backed rescue of a struggling developer was tough on the company.”
“‘We do not believe in the large ‘policy bazooka’ intervention, nor direct bailouts, as likely scenarios,’ Citigroup Inc. strategists including Dirk Willer wrote in a note.”
“In 2000, James Glassman and Kevin Hassett ‘correctly’ predicted in ‘Dow 36,000, The New Strategy for Profiting in the Coming Rise of the Stock Market’ that the Dow Jones Industrial Average would hit 36,000. So yes, the Dow reached 36,000 in 2021, however not in 2008 as forecasted. They got the right plane but the wrong airport.”
“In 2005, as chief economist for the National Association of Realtors, David Lereah warned, ‘Are You Missing the Real Estate Boom?’ Of course, real estate can be profitable. Still, Lereah’s subtitle, ‘Why Property Values Will Continue to Climb Through the End of the Decade,’ was way off base. Using our home as an example, its appreciation over the last two decades is less than the S&P 500’s, even with South Walton’s soaring prices.”