Weekend Topic Suggestions

How’d it go from $85 bn to $89 bn?

What ‘Star Wars’ has to do with QE
MJ Kim/Getty Images

Star Wars character Darth Vader.

by David Weinberg
Marketplace for Friday, May 24, 2013

Is the end of quantitative easing near?

This week Ben Bernanke testified before the Joint Economic Committee in Washington. And you can’t talk to Bernanke these days without asking him about quantitative easing. Or to put it in English, the Fed’s strategy of purchasing assets from commercial banks to keep cash flowing into the economy.

QE is controversial. It’s even been called a “Jedi mind trick.” This weekend being the 30th anniversary of “Return of the Jedi,” we thought we’d look at that analogy.

After Luke Skywalker found out that Darth Vader is his father, he accused Obi-Wan Kenobi of lying to him. Obi-Wan said it wasn’t a lie from… a certain point of view.

“A certain point of view?” Luke asks.

“You’re going to find that many of the truths we cling to depend greatly on our own point of view,” Obi-Wan replies.

So is quantitative easing the Darth Vader of economic policy? Well, it depends on your point of view. You might say that QE has spurred lending, created jobs and has kept inflation below 2 percent. More like a young Anakin Skywlaker before he turned to the dark side.

“He was the best star pilot in the galaxy,” Obi-Wan says of Anakin.

Or, like many of its critics, you might say it’s only a matter of time before QE causes inflation, it’s creating artificial price bubbles, and it hasn’t had any noticeable impact on unemployment.

As Darth Vader says, “Give yourself to the dark side.”

Bernake says he has no plans of ending the Fed’s $89 billion a month spending on Treasuries and mortgage-backed securities.
…

View the original article here

Open House Report: Weekend Open House Report: Outer Parkside Edition

Friday, October 25, 2013, by Sally Kuchar

Location: 2075 44th Ave. at Quintara St.
Size: 5-bed, 3-bath, single-family home
Price: $899,000
Pitch: "Outer Parkside Perfection! Begins with a spacious formal entry with chic tiled floor and beautiful leaded glass door and sidelites. Upstairs, a great room, with emphasis on the wonderfully remodeled gourmet kitchen with SS appliances and lots of seating at the granite counters. Medium oak floors throughout the upper level; wide plank hardwood at lower. All 3 baths have tiled walls and floors. 5 spacious bedrooms, with a french balcony in the master that maximizes light and the expansive ocean views. Downstairs, a bright family room with french doors opening to a large deck and great yard - a good balance of brick pavers, grass, and mature plantings. Live large!"
Open House: Sunday, 2 to 4pm

Location: 2571 42nd Ave. at Vicente St.
Size: 3-bed, 2-bath, single-family home
Price: $739,000
Pitch: "Traditional 3BD/2BA versatile two level single family home. Light filled and inviting enjoy partial ocean views from Kitchen and Bedroom overlooking beautiful landscaped garden. Lower level offers 3rd BD or family room with full bath, direct access to garden, separate laundry room and a 2 car tandem garage. Walk to Ocean Beach or the San Francisco Zoo. Close to several quality public/private schools, L Tarval MUNI, Lakeshore Plaza, Highway 1 & 280 and much more. Truly a delight!"
Open House: Sunday, 2 to 4pm

Location: 2375 44th Ave. at Taraval St.
Size: 2-bed, 1-bath, 1,162 sq. ft. single-family home
Price: $689,000
Pitch: "Bright and attractive home offers nice upgrades with excellent potential for expansion, with large lot (25' x 120') and wide open space on garage level. Updated eat-in kitchen with granite counters and plenty of cabinet space. Pleasant dining area opens to living room with corner wood burning fireplace. Two bedrooms in back of home have views of the Pacific Ocean & overlook the large backyard, which is waiting for your gardening vision. Updated bath w/ separate shower stall and tub. New interior paint, refinished hardwood floors, clean and ready to move in! Convenient to MUNI, just blocks from Ocean Beach and popular coffee shops/restaurants of the Outer Sunset."
Open House: Sunday, 2 to 4pm

View the original article here

Open House Report: Weekend Open House Report: Nob Hill Edition

Friday, May 24, 2013, by Sally Kuchar

Location: 850 Powell St., #303
Size: 3-bed, 3-barh, 2,822 square foot condo
Price: $2,850,000
Pitch: "The ultimate in glamour and sophistication, this stunning Ann Getty-designed Park Avenue-style condominium residence on San Francisco's world-famous Nob Hill provides a fabulous City lifestyle- perfect for grand-scale entertaining, yet well-suited to a contemporary lifestyle. Featuring three bedrooms, three baths, library, formal dining room, eat-in kitchen and separate service elevator in one of the City's most iconic Art Deco era doorman buildings, The Francesca- this crown jewel of Nob Hill is truly one of the City's architectural treasures. And an exciting location on one of the City's most architecturally distinguished blocks, this gracious and elegant residence enjoys close proximity to world-class shopping, restaurants and theaters."
Open House: Sunday, 2 to 4pm

Location: 1625 Hyde St.
Size: 2-bed, 2-bath, 1,565 square foot TIC
Price: $1,495,000
Pitch: "Take one step into this light-filled home with sweeping Golden Gate Bridge views and you will feel at the center of one of the most beautiful cities in the world. The sophisticated full-floor 2 bedroom, 2 bathroom apartment is part of a 3 unit Tenancy-in-Common building and includes one car parking and in-unit laundry room. The high ceilings open living and dining rooms are perfect for entertaining and features panoramic views of the Bay. The spectacular eat-in kitchen will delight the most demanding cook with custom cabinets and the best appliances from GE, Bosch and Fisher Paykel. Bathrooms are luxurious with top of the line finishes. Bamboo and leather flooring, recessed lighting and thermo paned windows complete this gorgeous residence"
Open House: Sunday, 2 to 4pm

Location: 1153 Leavenworth St.
Size: 2-bed, 1-bath, 1,029 square foot condo
Price: $785,000
Pitch: "This lovely condo is located in Nob Hill, one of San Francisco's most desirable neighborhoods! It has a living room, eat-in kitchen, bathroom with a jetted tub, large walk-in closet in the hallway, a nook used as an office or storage area, and two bedrooms in the rear that face a very quiet and private street. There is a gas fireplace in the main bedroom. This wonderful unit comes with a deeded one car parking space, a deeded large storage unit, washer/dryer in the common area, and low HOA dues of $240/month. It is located steps away from the #1 Muni bus line, trolley, LeBeau's Deli, Chico's Market, cafes and restaurants on Polk Street, CVS, Trader Joe's and walking distance to Union Square and the Financial District!"
Open House: Saturday, 1 to 4pm; Sunday, 2 to 4:30pm

View the original article here

Weekend Project Inspiration: 4 Ways to Give Your Stairs a Makeover — Real Simple

Creating successful interiors is all about paying attention to the details. Whether you are going for a classic look or something totally unexpected, time spent focusing on how to elevate the little things to a new level always pays off.  Real Simple shares four not-too-difficult ways to make the most of an oft-overlooked spot in any home - the lowly stair riser. 

From ombre to chalkboard to wallpaper to a little bit of bling, jump below for all the links...

From Real Simple:

(Image: Jonny Valiant / Real Simple)

View the original article here

Open House Report: Weekend Open House Report: Whale Edition

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Friday, February 1, 2013, by Sally Kuchar

Location: 4179 23rd Street, Noe Valley
Size: 4-bed, 4.5-bath, single-family home
Price: $3,600,000
Pitch: "This is a WOW house!! Walk into the main level of this fully remodeled 3 level home and enjoy the dramatic high vaulted ceilings with an open floor plan perfect for entertaining. Chef's kitchen, family room, dining room and living room with a stunning gas fireplace. Powder room and deck off of kitchen plumbed with gas for BBQ complete this floor. Next level down has a second large family room, full bath, proper laundry room and wine storage room - interior access to 2 car garage. Garden level down has 4 bedrooms, two en-suite. Master bath has separate shower and tub and large walk-in closet. This home shines with beautiful finishes, 8' doors, high ceiling on each level and an incredible south facing yard."
Open House: Sunday, noon to 2PM

Location: 3249 Jackson Street, Presidio Heights
Size: 6-bed, 5.5-bath, 5,672 sq. ft. single-family home
Price: $4,750,0000
Pitch: "Rare Opportunity: Classic Queen Anne circa 1895 built as one of Presidio Heights' earliest homes. Ideally situated on a very deep premium south facing lot. This iconic residence offers unparalleled architectural intrigue with a modernized open floor plan catering to the 21st century. With an abundance of natural light, dramatic volume, south facing outdoor oasis off kitchen, au-pair quarters (income unit?), 2 car garage parking and rare privacy this trophy home is NOT to be missed. Walk Score 94, just a short distance to Presidio Ntl Pk, Julius Kahn Playground, Sacramento St and Laurel Village. This stately home has been in the same family for 23 years!"
Open House: Saturday, noon to 3:30PM; Sunday, noon to 2PM

Location: 130 Locust Street, Presidio Heights
Size: 4-bed, 5.5-bath, 4,900 sq. ft. single-family home
Price: $7,775,000
Pitch: "130 Locust has been exquisitely renovated and offers views of the Golden Gate Bridge and a beautiful landscape Garden with direct access from the kitchen and family room. There are three ensuite bedrooms on one level and a fourth bedroom on the upper level plus a Guest/Aupair suite on the garden level. 130 offers a view family room and office plus an entertainment/media room on the garden level. Heather Hillard is the interior designer, David Armour the architect and Thompson/Suskind general contractors offering the finest in quality and workmanship. Walk to Julius Kahn playground, Sacramento Street and Laurel Village. Located in the heart of Presidio Heights with a Walkscore of 97."
Open House: Saturday, 2 to 4PM; Sunday, 12:30 to 2:30PM

View the original article here

Weekend Topic Suggestions

That’s California. Let’s check our old standby:

Phoenix Real Estate Market 2012 Review:

[sorry, this is from a realtor, but it's MLS data]

“Overall Home Supply – For the entire Phoenix MLS at the first of November, the total number of active real estate listings was 22,826 while the number of sold listings for October was 7,724. One year ago, total active listings were 25,879 properties. So, the active inventory is lower at the end of this year than last.

…Chandler: 1.5 months inventory
…Mesa: 1.8 months inventory
…Gilbert: 1.6 months inventory”

http://www.thompsongroupaz.com/phoenix-real-estate-market-2012-review/

————–

Even adjusting for realtor propaganda, that sounds like pretty tight inventory.

Now, foreclosure activity:

Shrinking inventory for big investors

By Catherine Reagor
The Republic
Fri Dec 7, 2012 3:02 PM

As foreclosures continue to fall in metro Phoenix, the dominant buyers and sellers in the region are changing. Fewer sales of lender-owned inexpensive foreclosure homes means a rapidly shrinking pool of houses for investors to purchase.

As a result, more homeowners will be able to sell to buyers for higher prices because they aren’t competing with lenders.

In November, lenders foreclosed on 1,549 houses in Maricopa County. That’s the lowest level since December 2007, right before the foreclosure crisis hit metro Phoenix, according to the Information Market. During 2011, a typical number of foreclosures was 4,000 to 5,000 a month.

Foreclosure starts, the early indicator of foreclosures, fell to 2,094 last month. By comparison, in March 2009, lenders started the process to foreclose on more than 10,000 metro Phoenix houses, a monthly record for the area. These declines in foreclosure activity are key to telling what will happen to the housing market in coming months.

But there’s another piece of foreclosure data that is even more important now: The total number of foreclosures in lenders’ pipelines across metro Phoenix was 10,606 at the end of November. A year ago, there were double that many foreclosures under way in the region. Two years ago, there were more than 40,000.

Homes on which lenders are in the process of foreclosing are the ones investors hope to buy for low prices and turn into rental houses that bring them high returns on their cash.

Big investors including Blackstone, American Residential and Colony Capital have dominated metro Phoenix foreclosure auctions and its lender-owned home sales market this year. Those firms and other want to package their thousands of rental homes and resell them to investors through real-estate investment trusts, or REITs.

http://www.azcentral.com/business/realestate/free/20121205shrinking-inventory-big-investors.html

——————

So this is the pattern in both Arizona and California:

+ Foreclosure activity at a low (forclosures happened in 2007-2012?)
+ inventory at a low (for both public and investors)
+ big investors snapping up for cash or in bulk (for rental or later sale)
————-
= Bidding wars for screwed-over regular Joe.

Is it just me, or are the big investors trading the shadow inventory among themselves, in the shadows? The general public can’t buy this inventory. Either they can’t see it, or they can’t work and save wages as fast as banks can borrow from the discount window (at 1% interest rates). Meanwhile, LL’s see the low inventory and high prices and raise rents accordingly.

And if all the foreclosures already happened in ~2007-2010, then where did all the original mortgages go? Is this what the Fed is ultimately buying from Fannie+Freddie at $40 billion/month?

HBB (especially alpha) predicted this years ago: rake in juicy fees on origination, when it goes kablooey shovel the toxic mortgages off on the taxpayer, snap up the actual “distressed” assets for pennies, and then then sell in bulk for rentals.

The rich are fighting over what little blood we have left.

View the original article here

Holiday Weekend Topic Suggestions

I think we have a great deal to be grateful for, such as modern new inventions and greater prosperity.
With all the news talk about how this decade compares with that, it’s often not even comparable.
My first computing experience began in High School with a Wang card-reader that barely did arithmetic.
Shortly thereafter, a hand calculator emerged, priced about $450 that could do multiplication and division and even had a percent key. Wow.
By 1980, my College had a computer that worked with punch cards. By 1985, it was fully integrated with computer data consoles and a few programming languages. Apples, Amiga, Commodore and IBM laptops had all entered the market.
I started out with a 16k laptop that was an amazing 4 times the previous model for data storage, with a floppy disc, rather than cassette tape storage. We also had the first COLOR “RGB” consoles. I started out with amber and green screens. You can see where this is going.
I used to stay up nights drinking beer with computer geeks and downloading data on a 1200 baud modem. Soon we got a 2400 bps modem and WOW, we doubled out data stream. It was like magic.
WE didn’t have the WEB, web-sites, internet access (only university inter-library access and bbs services). We didn’t have Cell Phones. My first dial-up systems used a rotary telephone. Most kids don’t even know what that is.
My college car was a 1972 Datsun pickup. It was built poorly, but mechanically unstoppable.
Cable TV? You must be joking. We started out with 5 network channels in the 1960s. That was it.
World satellite communications? Didn’t exist.
VCR’s had begun to be developed. Then we got DVD’s around the 1990’s or so.
My 8-track and cassette players have been replaced by CD’s. Online music?? MP3 players?? what’s that?
Shopping “malls” were new creations. WE had local stores and strip centers for 1/2 my adult life.
Jet skis? What are you talking about? Snow mobiles?
Look around your house. I still have VINYL records and still play them. I like to put the stylus down on the track i want to hear.
But lots of the stuff you have didn’t exist in 1980.
ONline library? Forget about it. You need to look something up? A trip to the local library and a dig through the Card Catalog (no computer files). 3×5 cards. Index cards. Rotary Business lines with Phone books delivered for every phone.
The advances of medicine and available care could fill a book. I never had an MRI before 1999.
I could go on for the rest of the day.
A lot has changed and in many ways our lives are much easier and more efficient. I think my standard of living is mostly improved. I am communicating with you in ways that were not possible in 1980 or even 1990.
But all this has come at a cost. We spent way too much to achieve a greater, bigger and richer society. I say that collectively, as I personally did not. I got dragged along by the purveyors of Big Government as the pandemic to every social ill.
There have been vast improvements to people’s lives, but societies live by way of comparison. We all live better than most Regal Elites of past generations to whom “salt” was a luxury, Ice was shipped around the world for cold (before refrigeration), Books were rare, and “climate controlled” buildings were simply a dream.
The simple truth is that whatever “new thing” some people are able to possess, others will feel left out and “oppressed” because they don’t have one, too. And somehow, it’s not fair and the government should “do something” about it.
We live in a world of scarcity, not abundance. Human efforts have created more abundance, but the desire to “fairly distribute” it will remain a source of conflict so long as humans are working to debate and resolve the issues.
Unfortunately “credit” allows people to live more abundant lives and create the illusion that they are more “wealthy” than they really are. This includes societies as well as individuals. While my personal fortunes are ones of comfort (not rich) and occasional luxury of “dining out”, I FEAR for the future, as my SAVINGS are the target of people who think they deserve to have my past work “re-distributed”. I am better off now than in 1980 when leaving school and continuing to work. I don’t think I will be in 5 more years. Who can say?

As for the vagaries of “timelines” whereby we delineate certain “ages” , “events” “dynasties”, etc., i’ll pass on that for now. History is a dynamic flow from one generation to the next (even the idea of “generations” is difficult to pinpoint). Ideas and laws are constantly changing and evolving even before some event X is used as a trigger or motivation for the events that follow. Slavery was a dying institution before the Civil War and given more time would most likely have been legislated away. We’ll never know.
Had war not been declared over the occupation of Danzig, would there have been a WWII? We’ll never know. WE only have past events to judge, and make conjecture about what “might have happened”. It’s like a “pre-emptive strike”. The new thinking here is that the government can arrest you for what they suspect you might do.
That’s Constitution Law at its finest.
It’s a “new way” of interpreting our most honored traditions. I fear this, too.

View the original article here

Open House Report: Weekend Open House Report: Eureka Valley Edition

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Friday, November 9, 2012, by Sally Kuchar

Location: 744 Church Street, Unit A
Size: 2-bed, 1-bath, 1,005 square foot condo
Price: $920,000
Pitch: "This is THE location. Classic architecture on the corner of Church and Cumberland with perfect views of Dolores Park and the SF skyline. The flexible open floor plan for this home can either accommodate two bedrooms or a spacious one bedroom with formal dining room. Other features include a gas burning fireplace with brick surround, refinished solid wood floors, spacious remodeled eat-in kitchen with granite counter tops, private garage, separate laundry room & large modern two level garden with spectacular views of SF. Blocks away from some of the City's finest Shops and Restaurants: Destino, Farina & Bi-Rite. This amazing condo combines all the best attributes of a City HomeLocation, Modern Detail and Classic Style. Welcome Home!"
Open House: Sunday, 2 to 4PM

Location: 331 Liberty Street
Size: 3-bed, 2.5-bath, 2,015 square foot condo
Price: $1,799,000
Pitch: "Located in one of San Francisco's most sought-after locations, a block from Dolores Park and a quick walk to a full array of hip restaurants & cafes, this contemporary Liberty Hill Condo with spectacular panoramic views feels as though it's perched up above the City's skyline. With the completion of construction in 2006, features include new concrete foundation, steel moment frames, french drainage system and all new plumbing, electric and HVAC systems, CAT5 and surround sound. 2 levels with panoramic view walk-out decks and spacious open-plan living/dining/kitchen area. Bamboo floors and contemporary finishes throughout."
Open House: Saturday and Sunday, 2 to 4PM

Location: 105 Danvers Street
Size: 4-bed, 3-bath, 2,952 square foot single-family home
Price: $2,480,000
Pitch: "This exceptional home is located in Eureka Valley within walking distance of shopping, restaurants, parks and MUNI. Fun is the word: the first floor, formerly a grocery store converted home(see photo), has high ceilings, a game rm that opens to the outdoor terrace and garden, service kitchen with sink, garbage disposal and dishwasher, a full size refrigerator and convection oven all of which make it ideal for entertaining. Step out to the sunny south patio and garden! Enjoy indoor/ outdoor living at its best! Upstairs: The Living room has a fireplace and bay window. The adjoining dining room has a deck. The professional kitchen, a master-suite with designer bath and 2 guest bds which share a beautiful designer bath. 1 Parking pad + 1 lease"
Open House: Saturday and Sunday, 1 to 4PM

View the original article here

Weekend Topic Suggestions

Not paying any taxes in 2009 is one hypothesis. I’ve heard two others. One is that he made a lot of money in 2009 by shorting the market. The other is that he took advantage of the IRS amnesty in 2009 to declare previously unreported off shore accounts. That would mean that he had been failing to report them in violation of law in previous years but has zero criminal liability because of the amnesty.

All of these scenarios are consistent with him having given 23 years of returns to the McCain campaign when he was being considered as McCain’s VP as 2009 hadn’t happened yet. The 23 years given to McCain seem to concentrate the focus for something he doesn’t want public in the years after he gave his info to McCain and before 2010, the year he has disclosed.

I personally think that the zero taxes in 2009 is unlikely. It could be very, very low as a percentage of his income, but he did get some income from speaking fees and such and only $3000 of that can be offset by capital losses. I’m not sure that having his tax rate be 5% for one year is all that overwhelming. And besides, you can spin it as not really being a 5% rate since there are real recognized losses in there. Yes, if someone adds the ordinary income and cap gains without the losses it will look outrageously low, but the cap losses are there too.

Shorting the market is also a possibility, but it would just show in his returns as a good year in investing when everyone else was doing poorly. Possible, but I don’t think his campaign has shown itself all that self-aware when it comes to understanding that people resent folks who appear to have information the rest of us don’t. And it would play into his “I understand the economy” meme. Possible but not that likely.

Oddly enough, that leaves the IRS amnesty as the most likely scenario. It wouldn’t be my normal first choice. The man has been running for president for a long time. You would think he would have started reporting the income off any foreign accounts a good long while ago since US citizens and residents are liable for taxes on their world wide income. But until the US got a bunch of Swiss banks to hand over the names of their US account holders, the likelihood of getting caught was essentially nil. It trends a little conspiracy theory for me, but I see this one as most likely.

View the original article here

Weekend Topic Suggestions

Is today’s Chinese investor in U.S. residential real estate positioning himself similarly to Japan’s commercial real estate investor circa 1990?

A guy can hope…

Updated June 21, 2012, 10:37 p.m. ET

Courting the Chinese Buyer
By LAUREN A. E. SCHUKER

A new wave of buyers from China is snapping up luxury properties across the U.S., injecting billions of dollars into the country’s residential-real-estate market.

The industry is scrambling to court the new buyers. Some developers of new projects are installing wok kitchens, following feng shui principles and putting lucky numbers on choice units; others are packaging property sales with government programs designed to encourage foreign investment. Real-estate agencies are flying representatives to China, and hiring Mandarin-speaking agents.

In Los Angeles, New York and even Miami, buyers mostly from China—and some are from Hong Kong, Singapore and Korea—are radically altering the landscape. Last month, a Chinese couple paid $34.5 million for a Versailles-style mansion on Sunset Boulevard in Beverly Hills, Calif. A year earlier, a Hong Kong businessman paid around $28 million for a nearby estate. Over the last six months in New York, several full-floor apartments in a new Manhattan high-rise called One57, each with a price tag of roughly $50 million, have gone into contract with Chinese buyers, according to two people close to the situation.

Late last year, Fang Yi Liu, a businessman from Shanghai, snapped up 17 apartments for a total of $14 million in the Artech, a modern glass building resembling a cruise ship that overlooks the Intracoastal Waterway near Miami.

In a nod to Asian buyers, the building put many of its most luxurious full-floor apartments on the 80th through 88th floors—a clever way to appeal to the Chinese belief that eight is the luckiest number. Apartment 88 is under contract to a Chinese buyer for around $50 million.
…

View the original article here

Weekend Topic Suggestions

Apparently, a majority of Americans *always* believe home prices will rise again. I suppose cargo cultists should be expected to patiently await their personal versions of the Second Coming.

Attitude Check
A majority of Americans believe home prices will rise
Justin Sullivan/Getty Images

A realtor sign advertises a reduced price in front of a home for sale May 27, 2009 in San Anselmo, Calif. More Americans believe home values are going to go up than they are going to go down.

Interview with Frank Newport
Marketplace for Thursday, May 31, 2012

Kai Ryssdal: With the American housing market going the way it has the past couple of years, we’ll take our good news where it comes. Earlier this week, the S&P/Case-Shiller Home Price Index reported a slight — very slight — gain in home prices. A scant tenth of 1 percent.

Not great. But you know how we are, right? The facts say one thing, we think another.

The editor in chief at Gallup, Frank Newport, is here every week to give us an Attitude Check, what Americans really think about the news of the week, which today flies in the face of those facts I mentioned.

Frank, good to have you back.

Frank Newport: Good to be with you, Kai.

Ryssdal: I want to make sure I’m reading your data right: More people in this country believe home values are going to go up than they are going to go down? Do I have that right?

Newport: That’s right. Thirty-three percent: ‘Yes, home prices in my area are going to go up;’ 23 percent, down. Back to 2005, we had 70 percent saying prices were going to increase.

Ryssdal: All right, so extrapolate for me, just because there’s been some buzz this week with the Case-Shiller and all the rest of it that somehow we have approached a housing bottom. Do people believe more broadly that housing is at least not going down any farther? Do you know that?

Newport: We have, right now, seven out of 10 Americans who say it’s a good time to buy a house, so that’s a good sign as well in terms of these perceptions, which of course are very important because you have to perceive the reality for the reality to become real.

Ryssdal: Whoa. That’s very zen, man.

Newport: Very zen-esque, but it’s the key principle of social psychology, regardless of what Case Shiller tells us and all that. If people don’t think prices are going to go up, they’re not going to go buy houses.

Ryssdal: Right. Does that imply that if people are interested in buying houses again, that they actually will? Is there execution in addition to that aspiration?

Newport: Well, that’s an interesting question, and for that we would need to look at the actual data that are out there, because we don’t know. What we’re measuring here is kind of the environment — the context, as it were — that buying could take place. We do know one thing, empirically. We say: Do you own a house? And that’s at 62 percent — and Kai, that’s as low as we have seen it since we’ve been asking that question. So actual homeownership is down. Where it will go in the future? We’re going to wait and see.

Ryssdal: What about, Frank, this whole issue of people owing more on this homes than they’re worth, whether they’re underwater or not? Is it still a sizable chunk of the American housing market?

Newport: Well it’s pretty negative. In the good ole days, in 2006, 92 percent of Americans who owned a home said ‘it worth more than I paid for it.’ Now it’s 53 who say it’s worth more, but 43 percent say it’s worth less. A lot of those are underwater, we make a presumption. And a lot of those, by the way, are younger homeowners based on our data.

View the original article here

Weekend Topic Suggestions

Is there any real news to report on the GSE principal reduction front? It almost seems like the airwaves on this story went dead after around April 10, 2012. I’m a bit surprised this isn’t a bigger issue, given the number of wealthy (aka voter) households potentially impacted, whether as payers or recipients of unearned income,and that it is a presidential election year.

Fight brews over principal reduction for upside-down homes
Published: 25 April 2012 08:30 AM
By Brian Bean & Tim Hardin

Lawmakers, finance industry figures and The White House are ramping up pressure over mortgage balance reductions for distressed homeowners.

Christine Lagarde, managing director of the International Monetary Fund, called this week for principal reductions to help ease the global financial crisis and boost a worldwide recovery.

“The housing problem in the U.S. is something that needs to be addressed” and it is “a matter of urgency,” she said last week at the Brookings Institution in Washington, D.C.

Her message was aimed at Edward DeMarco, acting director of the Federal Housing Finance Agency, which oversees GSEs Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

DeMarco has overruled requests for principal reductions by GSEs, saying such a move could actually be a more costly solution and prompt homeowners who are not in distress to “strategically” miss payments.

“A key risk in principal forgiveness targeted at delinquent borrowers is the incentive created for some portion of these current borrowers to cease paying in search of a principal-forgiveness modification,” DeMarco said earlier this month at the Brookings Institution.

Eleven state attorneys general recently sent DeMarco a letter urging the FHFA to allow mortgage giants Fannie Mae and Freddie Mac to use principal writedowns as a workout solution to “preserve assets and prevent unnecessary foreclosures.”

The Obama Administration has pressured DeMarco to allow GSEs to utilize principal reductions, proposing triple incentives for lenders who participate. Obama even tried to have DeMarco, an independent appointee who does not report to him, removed from the FHFA. But his efforts were blocked by Senate Republicans.

Some lawmakers and banking industry officials oppose principal reductions, saying they’ll do more harm than good.

“Principal reductions create an incentive for a huge group of borrowers who have continued making their payments, despite lower home prices, to stop paying in hopes of principal forgiveness,” Frank Keating, president and chief executive of the American Bankers Association, said this week on The Hill online finance blog.

“A broad principal reduction program would result in fewer investors who are willing to lend for housing finance, increased borrowing costs and tighter credit availability,” he added.

Sen. Bob Corker (Tenn.), a Republican member of the Senate Banking, Housing and Urban Affairs Committee, said principal reductions punish taxpayers.

“The last thing the federal government should be doing is taking taxpayer money and creating a program that incentivizes homeowners to not pay their mortgages,” Corker wrote in a letter sent this week to DeMarco.

Officials from Fannie Mae and Freddie Mac last month sided with lawmakers in urging their conservator to consider principal reductions for the most distressed homeowners. Their requests came after the agencies reworked analyses to account for new triple financial incentives for principal reductions.
…

View the original article here

Open House Report: Weekend Open House Report: Old School Edition

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Friday, April 27, 2012, by Philip Ferrato

This week, a glimpse into the past with three houses from the '30s— in various degrees of vintage fabulous— open on Sunday.

Location: 3845 Washington Street
Size: 5-bed, 4.5-bath, 3,044-square-feet
Price: $3,400,000
Pitch: "Beautiful Presidio Hts. home with wonderful patio and walk out level garden. Elegant foyer with curved staircase leads to both the formal living and dining rooms. Remodeled kitchen with great nook. Both kitchen and dining room have French doors overlooking garden. Fifth bedroom (currently a den)with full bath and powder complete the main floor. Upstairs are a large master suite with dressing area, two additional bedrooms, and fourth bedroom currently used as a library with built-in bookshelves. Downstairs are two storage rooms, an office, and laundry room providing great potential! Two car side by side car has internal access. Lovely level garden! Sunny, wonderful home!"
Our Take: 1938 dress code calls for twin sets, pencil skirts and pearls. Next door to Capri pants and Louboutins at the evergreen 3855 Washington Street. Plus we'd kill for the breakfast nook.
Open House: Sunday, April 29 from 2:00PM to 4:00PM

Location: 45 Yerba Buena Avenue
Size: 3-bed, 3-bath, 2,976-square-feet
Price: $1,449,000
Pitch: "Stately two story three bedroom, three bath home. Elegant scale and style, tax records show 2967 square feet. Excellent floor plan, details, gorgeous hardwood floors, huge fireplace. Lovely garden. Needs some updating. Huge lot, 9374 square feet. Excellent opportunity, detached garage. Very impressive! Walk to West Portal. Trust Sale, no court confirmation. Property purchased As Is."
Our Take: Vast. Empty. Echoing. And is that a buildable lot we see?
Open House: Sunday, April 29 from 2:00PM to 4:00PM

Location: 691 Marina Boulevard
Size: 4-bed, 4-bath, 4022-square-feet
Price: $3,625,000
Pitch: "Experience the finest San Francisco has to offer. Built in 1937, just as the Golden Gate Bridge was being completed, this magnificent home is the perfect blend of classic style and modern convenience. The superb Spanish design blends perfectly with the picturesque bay setting. A tasteful 2005 renovation has brought this property into the new century. Enjoy unparallel views of two world renowned landmarks right from the front windows and patio. This once in a lifetime opportunity is a rare chance to call Marina Boulevard home."
Our Take: Ever wonder what those fabulous old 1930s houses along Marina Boulevard look like inside? Surprisingly depressing— and recently reduced $200K.
Open House: Sunday, April 29 from 2:00PM to 4:00PM

View the original article here

Weekend Topic Suggestions

Has the Chinese growth slowdown bottomed out, with a soft landing on the way?

And does frequently saying ’soft landing’ increase the chances of one occurring?

The Associated Press April 13, 2012, 08:18AM ET
China’s economic growth falls to nearly 3-year low
By JOE McDONALD

BEIJING

China’s declining economic growth fell to its lowest level in nearly three years in the first quarter, but analysts said it should rebound in coming months.

The world’s second-biggest economy grew by a still-robust 8.1 percent in the three months ending in March, down from the previous quarter’s 8.9 percent, data showed Friday. It was the weakest expansion since the second quarter of 2009 but above the government’s 7.5 percent target for the year.

China’s rapid growth has fallen steadily since 2010 as a slump in global demand battered its exporters and Beijing tightened lending and investment curbs to cool an overheated economy and surging inflation.

An uncontrolled slump could have global repercussions, hurting demand for oil, industrial components and consumer goods at a time when U.S. and European growth are weak. It also might fuel political tensions in China as the ruling Communist Party prepares for a sensitive, once-a-decade handover of power to younger leaders.

“This quarter’s growth was pretty weak,” said IHS Global Insight analyst Xianfang Ren. “Starting from next quarter, growth should strengthen.”

The World Bank and private sector analysts expect China to achieve a “soft landing,” with growth rebounding later this year. But some worry the slowdown might be too sharp, raising the risk of job losses.

The World Bank and International Monetary Fund expect 8.2 percent growth for China this year — below 2010’s explosive 10.4 percent expansion but ahead of low single-digit forecasts for the United States, Japan and Europe.

Last year’s unexpectedly steep plunge in demand for China’s exports due to U.S. and European economic woes prompted communist leaders to reverse course and ease controls on bank lending to help struggling manufacturers.

“The `soft landing’ scenario is very likely,” said Frances Cheung, senior strategist for Credit Agricole CIB in Hong Kong.

Still, Cheung said financial markets might react badly to the latest data, because a recent rally in prices was based on expectations Chinese growth would be stronger.

Chinese leaders are trying to reduce reliance on exports and investment and shift to growth based on domestic consumption. In line with that, they reduced their annual growth target through 2015 to 7.5 percent from the 8 percent level of recent years.

On Friday, the Cabinet issued a statement pledging to press ahead with reforms intended to increase domestic consumption but announced no major policy changes, suggesting Communist leaders are satisfied with the latest economic performance.

The statement cautioned that China still faces difficult economic conditions due to uncertainty in key export markets and possible pressure for prices to rise. It called on the public to remain diligent and calm.

In a possible sign of gathering economic strength, Chinese factory activity, retail sales and exports accelerated over the course of the first quarter.

Industrial production rose 11.9 percent over a year earlier in March, up 0.5 percentage points from the January-February period. Growth in retail sales rose by a similar margin to 15.2 percent. Export growth rose two percentage points to 8.9 percent, though that was well below China’s double-digit rates in recent years.

“China’s economy is stabilizing,” said Sheng Laiyun, a spokesman for the National Bureau of Statistics, at a news conference.

IHS Global Insight’s Ren said China also should benefit from an improved outlook for the U.S. economy, which would help exporters, and recent growth in real estate sales.

Data released Thursday showed bank lending in March soared to just over 1 trillion yuan ($160 billion), well above analysts’ forecasts.

On Thursday, the World Bank trimmed its growth forecast for China this year from 8.4 percent but said it should avoid an abrupt downturn. It said growth next year should rebound to 8.6 percent.

“The near-term challenge we see is maintaining this `soft landing‘ that we see under way,” the bank’s lead China economist, Ardo Hansson, told reporters.
…

View the original article here

Weekend Topic Suggestions

In my next life, I want to be Simon Johnson.

Break Up the Banks
It makes no sense to keep bailing out bankers while demanding austerity for everyone else.
By Simon Johnson|Posted Friday, Dec. 23, 2011, at 1:26 PM ET
Former Washington Mutual CEO Kerry Killinger
Photograph by Mark Wilson/Getty Images.

Santa Claus came early this year for four former executives of Washington Mutual, which failed in 2008. The executives reached a settlement with the FDIC, which sued them for taking huge financial risks while “knowing that the real estate market was in a ‘bubble.’ ” The FDIC had sought to recover $900 million, but the executives have just settled for $64 million, almost all of which will be paid by their insurers; their out-of-pockets costs are estimated at just $400,000.

To be sure, the executives lost their jobs and now must drop claims for additional compensation. But, according to the FDIC, the four still earned more than $95 million from January 2005 through September 2008. This is what happens when financial executives are compensated for “return on equity” unadjusted for risk. The executives get the upside when things go well; when the downside risks materialize, they lose nothing (or close to it).

At the same time, their actions and similar actions by other bankers are directly responsible for both the run-up in housing prices and the damaging collapse that followed. That collapse has impacted nonbankers negatively in many ways, including the loss of more than 8 million jobs.

It is also leading to austerity: Taxes are increasing and government spending is falling at the local and state level around the country. A difficult fiscal conversation still lies ahead at the federal level, but cuts and contractions of various types seem likely.

Some people argue that Americans need to tighten their belts. That’s an interesting discussion, particularly at a time with unemployment is still above 8 percent (with recent declines largely the result of many jobless workers’ decision to stop looking). Precipitate austerity is hardly likely to help the economy find its way back to higher employment levels.

But what about government support for the big banks? Is this contracting in the light of our current fiscal pressures? Unfortunately, it is not. Much government support remains, implicitly through allowing banks to be “too big to fail” and explicitly through various kinds of backing provided by the Federal Reserve.

The rationale behind supporting big banks is that they are needed for the economy to recover. But this position looks increasingly doubtful when the banks are sitting on piles of cash while creditworthy consumers and businesses are reluctant to borrow.

The same situation exists in Europe today, where the reality is even starker. Banks are receiving ever-larger bailouts, while countries that borrowed are cutting social programs and face rising social tensions and political instability as a result. Countries like Greece, Italy, and arguably Portugal overborrowed and now their citizens face severe consequences. But the bankers face no consequences whatsoever for overlending.

To be sure, some major European financial institutions may now face difficulties, and perhaps some of their executives will end up being fired. But does anyone think that the people who ran European banks into the ground will leave their positions with anything less than considerable wealth? There is no real austerity—now or possibly in the future—for leading bank executives.

The protesters of “Occupy Albany” issued a powerful consensus statement recently, which reads in part:

The interests of those who purchase influence are rewarded at the expense of the People, from whom the government’s just power is derived. We believe that this failure in our system is at the core of many interconnected issues we face as a society, and its resolution is key to a just future. We therefore demand true democracy, decoupled from the corrosive influence of concentrated economic power, and we call all who share in this common goal to stand with us and take action toward this end.

Big banks represent the ultimate in concentrated economic power in today’s economies. They are able to resist all meaningful reform that could really change their compensation schemes. Their executives want to get all the upside while facing none of the true downside.
…

View the original article here

Chef Kitchens: This weekend the Wall Street Journal...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Monday, March 5, 2012, by Sarah Firshein

This weekend the Wall Street Journal talked to Chicago chef Grant Achatz: "My home kitchen is airy, with a gas stove, a stainless-steel island table in the center and granite countertops. [...] There's also lots of cabinet space, so we're able to have a spice cabinet with pullout drawers, an oil and vinegar cabinet and a starch cabinet." [WSJ]

? Back to top

? Previous: Carrie Bradshaw's Original Sex in the City Home Tries Flip

? Next: Here's a Simplified Timelines of the History of Real Estate

View the original article here

Open House Report: Weekend Open House Report: Cow Hollow Edition

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Friday, February 24, 2012, by Sally Kuchar

Location: 2701 Van Ness Avenue, #605
Size: 0-bed, 1-bath; 547 square feet
Price: $319,000
Pitch: "Stunning south facing condo with views of Pacific Heights and the surrounding hills. Hardwood floor, formal entry, formal dining room and an enormous walk in closet the size of a small bedroom. You will ove the charm and period detail."
Our Take: We couldn't think of a better floor plan for a studio. There's also a shared roof deck with views of the Golden Gate Bridge. Monthly HOA dues are $442.64 and there's lease parking available for $300.
Open House: Sunday, 2 to 4PM

Location: 1734 Bay Street, #201
Size: 2-bed, 2-bath; unlisted square footage
Price: $779,000
Pitch: "PRICE Reduced!!! Walk Score: 97!! Bright, remodeled 2/br/2ba condo. Elevator to all levels. Easy walk to Chestnut St, Marina Greens & Sunday Farmers market at Ft Mason."
Our Take: We're particularly fond of this unit because it seems spacious for its price, especially considering the location. We're also suckers for Mid-Century modern exteriors. Monthly HOA dues are $410 and there's 1-car parking in the garage. No pets.
Open House: Sunday, 2 to 4PM

Location: 3131 Divisadero Street
Size: 2-bed, 1.5-bath; 1,740 square feet
Price: $989,000
Pitch: "This top floor 2 bed, 1.5 ba TIC is centrally located in Cow Hollow, has great appeal & is w/ in walking distance of all the restaurants & shops on Union & Chestnut Streets. Close to transportation & parks too! It is a 45% interest in a 3 unit building. Other 2 units are owner occupied."
Our Take: Sure, it's a TIC. But look at that backyard! It's like a tropical wonderland. Monthly HOA dues are $378 and there's 1-car parking in the garage.
Open House: Sunday, 2 to 4PM

View the original article here

Weekend Topic Suggestions

One of the regulars was kvetching on here a day or so back about the need to use “real statistics.” Suppose I wanted to get “real statistics” on the size of the shadow inventory; varied reports suggest it lies anywhere on the range from 1m to 10m or so, depending on the definition and data used.

Where would one find such “real statistics” on the size of the shadow inventory if one wanted them?

Wednesday, January 11, 2012
Michael Olenick: 9.8 Million Shadow Inventory Says Housing Market is a Long Way From the Bottom

By Michael Olenick, founder and CEO of Legalprise, and creator of FindtheFraud, a crowd sourced foreclosure document review system (still in alpha). You can follow him on Twitter at @michael_olenick

“Shadow inventory,” the number of homes that are either in foreclosure or are likely to end up in foreclosure, creates substantial but hidden pressure on housing prices and potential losses to banks and investors. This is a critical figure for policymakers and financial services industry executives, since if the number is manageable, that means waiting for the market to digest the overhang might not be such a terrible option. But if shadow inventory is large, housing prices have a good bit further to go before they hit bottom, which has dire consequences for communities, homeowners, and the broader economy.

Yet estimates of shadow inventory, and even the definition of what constitutes shadow inventory property, vary widely. For example, the Wall Street Journal published a Nov. 11, 2011 article, “How Many Homes Are In Trouble?” where values varied from 1.6 million (CoreLogic), to “about 3 million” (Barclays Capital), to 4 million (LPS Applied Analytic), to 4.3 million (Capital Economics), to LPS Applied Analytics, to between 8.2 million and 10.3 million (Laurie Goodman, Amherst Securities).

Why do these numbers vary so much? Even though CoreLogic is generally considered to have one of the best databases of loans, its estimates of loan performance and odds of default are based on credit scores, which is a badly lagging indicator. Laurie Goodman is seen by many as having the most carefully though out model, even though industry insiders are keen to attack her bearsish-looking forecast.

I have a large database of my own, and am familiar with housing and mortgage information sources. I’ve come up with my own tally of shadow inventory and have also tried to analyze — OK — take a stab at – what I call “shadow liability,” meaning the amount of money taxpayers, investors, banks, will be lose if those homes are liquidated. Assumptions using those terms are also in the attached spreadsheet. My analysis comes up with a total close to that of Goodman’s range, 9.8 million using a narrower definition than Goodman’s of what constitutes shadow inventory.

Put more simply, things are actually worse than any of the prevailing estimates indicates, although Goodman is very close to the mark. Current loss experience suggests that this figure is staggering, easily in the $1 trillion range.
…
Definition of ‘Shadow Inventory’

A term that refers to real estate properties that are either in foreclosure and have not yet been sold or homes that owners are delaying putting on the market until prices improve. Shadow inventory can create uncertainty about the best time to sell (for owners) and when a local market can expect full recovery. Also, shadow inventory typically causes reported data on housing inventory to understate the actual number of inventory in the market.

Investopedia explains ‘Shadow Inventory’

With the unprecedented number of foreclosures stemming from the subprime mortgage meltdown of 2007-2008 and the overall housing market collapse during that crisis, lenders were left with significant real estate holdings. Many lenders were slow to put their inventory up for sale for fear of flooding the market and further driving down prices, which would in turn lower their potential ROI.

View the original article here

Open House Report: Weekend Open House Report: Under 500K Edition

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Friday, February 17, 2012, by Sally Kuchar

Location: 76 Littlefield Terrace, Potrero Hill
Size: 2-bed, 1.25-bath; 956 square feet
Price: $465,000
Pitch: "Located in sunny Potrero & the best area (west side) of the Parkview Heights development facing south-east with views of the hills & beyond, this beautifully renovated townhouse will please the hard to please. The upper level has 2 bedrooms, one with a basin, & a full bathroom that has been fully renovated. The main floor has a wonderfully remodeled kitchen with Dual Decor free range (gas), Bosch dishwasher & microwave & Profile refrigerator. The warm living room has HW floors & a custom Italian wall unit. A deck and a hot tub are just outside the back door. Anderson windows have been installed. There is direct access from the private garage (with storage) to the home. So many amazing improvements it will blow your mind. One of a kind!"
Open House: Sunday, 2 to 4PM

Location: 273 Lowell Street, Corcker Amazon
Size: 2-bed, 1-bath; 981 square feet
Price: $499,000
Pitch: "Another stunning home for you and your family with great income potential. Top floor consists of 2 bedrooms, 1.5 baths, formal living and dining room, with beautiful skylights throughout. Beautiful, original refinished wood floors throughout. There is a half bath in the kitchen area. Sun-room with excellent City views extends off the kitchen and offers a pleasant reading area. Downstairs is unwarranted, and not guaranteed by Seller, but it includes 2 additional bedrooms, 1 full bath and full kitchen; perfect for the in-laws. Clear Pest Report on file, ready for move in. This is a regular sale with brand new roof, updated plumbing and electrical!"
Open House: Sunday, 2 to 4PM

Location: 140 South Van Ness Avenue, SoMa
Size: 1-bed, 1.5-bath; 830 square feet
Price: $449,800
Pitch: "This two level 1 bedroom 1.5 bathroom condominium featuring views of the San Francisco skyline & bay bridge, spacious living/dining combination and in unit stackable washer/dryer. Kitchen includes all appliances, granite counters & maple finish cabinets. Master suite with office alcove & a bathroom that boast marble counter and limestone floor & tub surround. This home is conveniently located to Market Street F line, public transportation ( BART & MUNI) and ideal for commuters as the central freeway is one block away & connects to the 101 & 280. 140 South offers a 24hr access fitness center, courtyard & conference room. Close to Hayes Valley, the Castro, Valencia Corridor shopping & restaurants, the Opera, Ballet, & SoMA night life."
Open House: Sunday, 1 to 4PM

View the original article here

Open House Report: Weekend Open House Report: Noe Valley Edition

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Friday, January 27, 2012, by Sally Kuchar

Location: 628 29th Street
Size: 3-bed, 2.5-bath; 1,843 square feet
Price: $959,000
Pitch: "Charming and spacious detached home set at the back of the lot behind a gorgeous, lush garden with lawn and stone patio. Great Noe location, close to shops & restaurants on Church St, Apple Shuttle, and numerous transit lines. This home is as comfortable and convenient as it is beautiful. Note washer and dryer are not part of sale, but may be negotiable."
Open House: Saturday and Sunday, 1 to 3PM

Location: 369 Day Street
Size: 3-bed, 2.5-bath; unlisted square footage
Price: $1,595,000
Pitch: "369 Day is a completely remodeled Victorian with all modern amenities. Rebuilt from the studs, it has maintained much of its Victorian character while suiting a modern lifestyle. Believed to be attributed to seminal SF builder Fernando Nelson, the home is perfectly situated with ample southern exposure for excellent Noe light throughout."
Open House: Saturday and Sunday, 2 to 4PM

Location: 4483 23r Street, Unit 2
Size: 2-bed, 1-bath; 924 square feet
Price: $599,000
Pitch: "Nicely upgraded, crisp, south facing, rear unit in small 4 unit HOA. Brightly flooded with light. Manufactured wood styled flooring, new carpeting and freshly painted throughout. Eat-in kitchen with gas range, stainless appliances and pantry. Bedrooms have nice room scale. Second bedroom has 2 large closets - one is currently modified as a desk area. Bathroom is updated with unique granite tile. Unit looks out over serene common garden. Large parking space for one car with independent access. Some extra storage in garage. Steps to Muni and easy access to Noe Valley amenities, freeways and shopping."
Open House: Saturday and Sunday, 2 to 4PM

View the original article here