Whiff of Reality at Crazy Super High-End Housing Market?

BS asking prices meet the ax.

No, Cantor Fitzgerald CEO Howard Lutnick didn’t “save” $81 million when he bought the most expensive listing in New York City, the 12,000-square-foot, 16-room triplex penthouse on the 41st, 42nd, and 43rd floors of The Pierre, a co-op tower on Fifth Avenue dating from 1930s. By the way, the owner also pays monthly maintenance charges for the apartment of $51,840).

Asking price was $125 million when it was first listed in March 2013. In December that year, the price was slashed to $95 million. In 2015, it was cut to $63 million. That’s half of the original asking price. But it still didn’t sell. So it was taken off the market. After it underwent a modern redesign, it was re-listed in April 2016 for $57 million. It still didn’t sell. But on August 2, Page Six reported that Lutnick bought it for $44 million. At 65% below asking.

“Cantor Fitzgerald CEO buys iconic triplex at $81M discount,” said the Page Six headline.

“Best Real Estate Headline Ever,” said Jonathan Miller, real-estate appraiser and author of the Elliman Report series, in his Housing Notes.

Miller has a word for this phenomenon of enormous blue-sky asking prices that trigger subsequent massive and serial price reductions until finally someone bites: “Aspirational pricing.”

The very idea that a home seller would discount their home by $81 million to make the sale is an insane thought. This speaks to the concept I call “aspirational pricing.” The asking price was set to a price so ridiculous that it would literally sit on the market for years and the market would unlikely catch up in a lifetime. More importantly, it serves as misdirection for other high-end properties coming to the market by influencing them to also wildly over price as well.

The 6,800-square-foot fully furnished penthouse occupying the top floor of the beachfront condo tower at 321 Ocean in South Beach, Miami Beach, was listed for sale in December 2015 for $53 million. The sellers had bought it when the building was completed six months earlier, for $20 million.

“Financier Aims for Ambitious $53 Million Miami Penthouse Flip,” The Wall Street Journal said at the time. The hopeful flippers are Boris Jordan and Elizabeth Jordan:

Founder of the private-equity and advisory firm the Sputnik Group, Mr. Jordan previously served as chief executive of the state-controlled Russian media conglomerate Gazprom-Media, and as head of the Russian television network NTV.




But the hot air has come out of the condo market in Miami Beach. In the second quarter, after years of soaring, the median sale price for non-distressed condos dropped 7.5%, and the average price plunged 15.2%, according to the Elliman Report. The median price per square foot dropped 12.5%.

So the hoped-for flip hasn’t worked so far. And price cutting has commenced. Recently, the price was cut to $39.5 million. And still no takers. So the condo flippers changed their listing agents from ONE Sotheby’s International Realty to Douglas Elliman Real Estate. And a few days ago, the price was cut again, this time to $34,999,999.

That’s a very hopeful number, all these nine’s. Like a car on a car lot. And it’s down 32% or $18 million from the original asking price. The new listing agents told the Wall Street Journal that the previous asking prices, despite the reductions, had been too high.

Food for additional and perhaps amusing thought: Zillow’s estimated price – the infamous “Zestimate” – is $7.6 million.

The agents blamed factors such as Brexit, the US election, and currency fluctuations for the trouble in the high-end market in Miami Beach last year. These factors deterred international buyers, they said.

If this foreign buyer doesn’t materialize with an acceptable offer, the flipper might become the end user.

Another deal emerged on August 4 after the sellers cut prices from “aspirational” to something more in line with the, albeit crazy, market. A 9,200-square-foot five-bedroom mansion in Los Angeles, built in the 1960s on 1.2 acres with a three-bedroom guest house and a four-car garage, was listed for sale last year at $27.5 million. After a while, the price was cut. And after several price cuts, the most recent asking price was down to $19.9 million.

Now, Adam Levine, lead singer of the pop rock band Maroon 5, bought it for $18 million, “according to people with knowledge of the transaction,” said the Wall Street Journal, which added that “people familiar with the home said it needs renovation.” So that would be 34.5% off original asking price.

The couple still hasn’t sold their digs in Beverly Hills, which they listed for sale last summer at $17.5 million. Nothing happened. So they cut the price to $15.95 million. Nothing happened. And they pulled it off the market – perhaps they’ll try again later, presumably at a still lower price.

In San Francisco, the most expensive home currently for sale isn’t even finished yet. The 6,941-square-foot five-bedroom penthouse occupies the top flow of the condo tower at 181 Fremont that is still under construction. It should be ready for move-in next year. The developers put out an asking price of $42 million, hoping for some condo flipper or a foreign buyer or a startup-billionaire kid or something.

That these prices floating up there in this rarefied high-altitude air are slashed by mega-percentages isn’t a sign that the high-end market is collapsing – though it doesn’t appear to be doing all that well either. It’s a sign that “aspirational pricing” is seen as BS pricing by the market. And nothing happens until enough massive price cuts occur. Even then, there might not be any action.

A first red flag for California goes up. But for the Bay Area, it’s more than a red flag. Read…  These Job Trends in Silicon Valley, San Francisco Bay Area Will Hit Real Estate, the Economy, Municipal Budgets & Hype




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  63 comments for “Whiff of Reality at Crazy Super High-End Housing Market?

  1. beth
    Aug 7, 2017 at 7:34 pm

    I share with you another person who is analyzing the San Francisco housing market.

    My feeling is that we should get a handle on this idiocy. Here is one
    person’s stab at that.

    https://www.strongtowns.org/journal/2017/8/6/california-housing-crisis

  2. MC
    Aug 7, 2017 at 7:56 pm

    They really should start off at $100 Million, because at that point, what’s the difference between that and $50 Million. These guys could act like the cheap stores you see on the strip mall offering 80% discounts, and it’s got to move something right?

  3. Michael
    Aug 7, 2017 at 8:21 pm

    The bubbles alive and growing. Houses still selling here in Fremont well over $1 million with no end in sight.

    • alex in san jose
      Aug 7, 2017 at 8:54 pm

      Yep my boss’s house, where I am a couple days a week, is “worth” well over a million and it’s just a standard 2-story McMansion crammed onto a small lot, with tons of deferred maintenance. Miss the 1970s? You wouldn’t in that place!

      • Al Hi
        Aug 8, 2017 at 3:14 pm

        Alamo, CA too. and it’s the Mississippi of the east bay.

  4. Gershon
    Aug 7, 2017 at 8:36 pm

    When the Fed’s financial house of cards comes crashing down and the EBT cards stop working, cities like New York and Los Angeles are going to be dystopian nightmares.

    Now much for your condo then?

    • alex in san jose
      Aug 7, 2017 at 11:53 pm

      Gershon I’ve put plenty of thought into “what happens when the EBT cards stop working” and even lived on a survivalist place for a few years. I did it all – gardening, raising crops, keeping chickens and butchering same, helped a bit with the sheep, learning about irrigation and fertilizers and all sort of things. We even used the “humanure” system; after all, when the survivalists’ beloved collapse comes, the public sewers will stop working too.

      And that’s exactly how it was – preparing and stocking up all kinds of tools and gardening implements and stuff like candles, and essentially hoping and praying for the Great Collapse, when we’ll have to defend our morally-superior survivalist selves against the Golden Horde, who will come streaming out of the cities and right to our place, to steal our sheep and our buckets of rolled oats and so on. That’s when we’d get to use those 1000’s of rounds of ammo! Plus all the other morally inferior people around locally who we’d just have to shoot ….

      Because we were survivalists! Good people, as opposed to bad people, who are bad because they live in cities and don’t prepare. It’s OK to shoot bad people, in fact the survivalist religion kind of demands it, like other religions call for converting or killing the infidel.

      We had one crazy living next door (just lots of drugs, meth prominent among them) and more people right across the street who got visited by the sheriff the way some people get visited by the Avon Lady. We had a boastful guy a street or so over, boast about all his guns and one night a bunch’a guy invaded his place, stole several of his vehicles, pretty much all of his guns, and the torture he was put through left him a bloody unrecognizable beast that staggered to his neighbor’s place, half-dead.

      Gun shots at night were not unusual – not .22 shot or maybe the odd shotgun blast, but pow-pow-pow-pow, pistol or AK. Surprisingly high crime rate in this rural area. Lots of people with various “apocalypse religions” from really right-wing Christian to the prepper religion to stuff that’s hard to describe; just generalized paranoia and “better get them before they get me” viewpoints.

      I finally decided I’d learned what I’d come there to learn, I’d produced crops and built stuff and fixed stuff and knew a lot of handy things, and here it was 2012 and the world had not collapsed. I was promised zombies, and where were the zombies?? Instead here I was, doing all the chores I was supposed to do plus all the chores everyone else were supposed to do, and if things ever got as bad as these people wished for, it was gonna get bad, fast. Because these are the misfits who are too crazy to make it in a city or town. One of the nuts had already threatened to stab me because I’d sneezed.

      So I left. I left free rent and – admittedly – good food (lots of steak and fresh veggies from the garden, this particular Jonestown hadn’t gotten to the point of food restriction for control) and chirping birdies and all that. And endless work and endless soap opera.

      I suggest you read the writings of one “Ferfal” on “Surviving in Argentina” on city vs. rural. Rural living is not a panacea. And as for “Ferfal”, he eventually settled, with his family, in Ireland, in a nice city there and they’re very happy.

      • Hiho
        Aug 8, 2017 at 1:58 am

        The other day I was reading in a very popular online forum a post about survivalism and I was horrified.

        It was just like you said: survivalists boasting their moral superiority and explaining how they would exterminate urban people when the time came.

        It seems that they were eagerly looking forward to the civilization collapsing. They were also looking forward to a civil war, thinking how they could siege and exterminate entire cities “cut the water supply and wait outside”. In the end they just want a pretext to take out their guns and engage in a killing spree.

        It goes without saying that lots of them are just kiddies that have seen too many times “the walking dead” before they daddies send them to the bed, but some others might be real and dangerous.

        There is something profoundly wrong and rotten in your society. We do not have these kind of bastards in europe, and if we had them, they would not have guns at least.

        In a healthy society people are not hording food and goods and wishing the civilization collapses to be able to shoot some random urbanites leaving their houses in the brink of famine.

        It is just disgusting.

        • Nicko
          Aug 8, 2017 at 6:23 am

          I’ve lived in several developing countries – a few of which have gone through political and social revolutions. When the shit hits the fan, you know what happens? The military steps in….and they don’t suffer moral quandaries when dealing with hyper-active libertarian gun-nuts in the ‘rural’ areas who are threatening to step above the law. No, those twerps are shot first.

        • TIm
          Aug 8, 2017 at 7:17 am

          Both world wars and numerous religious inquisitions would suggest that you have these people in your societies in droves.

          Get off your moral high horse and crack open a history book.

        • Frederick
          Aug 8, 2017 at 7:31 am

          Hiho you said it right ” In a healthy society” The US has NOT been that for a very very long time I’m glad I left to be honest Not to say there aren’t plenty of good people in the states but something has been askew since 2001 especially

        • Meme Imfurst
          Aug 8, 2017 at 7:38 am

          All I have to say to you is …..later that day.

          Europe indeed, as you sit on a time bomb.

        • TJ Martin
          Aug 8, 2017 at 8:43 am

          Good lord this thread went right off the rails completely irrelevant to the topic at hand .. didn’t it !

          Oh well … may as well chime in with my two and a half cents [ inflation you know ]

          @ Nicko ? Spot on – right on the money – hitting the nail so hard on the head the damn thing went straight thru to China and out the other side ! Thats exactly how it’ll all play out .

        • Ambrose Bierce
          Aug 9, 2017 at 9:16 am

          They were channeling the Khmer Rouge in Cambodia?

      • Ricardo
        Aug 8, 2017 at 2:44 am

        alex in san jose That is a sad story. I live in the Philippines out in the province and survival for many people is just a normal way of life.
        My wife and I lived a whole year without electricity simply because we didn’t have the money to connect to the mains. You can do that sort of thing in a tropical climate but would be impossible in many Northern or Southern Hemisphere climates. We would wake up before daylight and get the charcoal fire going to cook breakfast and go to bed at sun down. It makes for a healthy life. But I can tell you that for the first few months I would find my anger rising at sun down time. That shows you how adapted we have become to having electricity and hence extra hours of light to the day.
        Living a basic lifestyle, especially if you have come from western culture like myself, teaches you very quickly how to learn the art of patience or else give up and run back “home”.
        Now I come to a place like New Zealand (because of a death in the family) and I can’t wait to get out of the place and back to a hotter climate (its the middle of winter here in New Zealand) and a more basic lifestyle where we can harvest vegetables out of the garden 4 times per year and eat fruit like avocado, mango, pomelo, banana’s and coconuts from our own fruit trees.
        Its hard work living in western society. If its not keeping up with the Joneses then its learning how to survive for the coming apocalypse which hasn’t happened/or is taking a long time to come. And both those scenarios seem to produce their fair share of “crazies”.

        • alex in san jose
          Aug 8, 2017 at 6:54 pm

          Ricardo – I am doing Western society “lite”. I live in a place with “the electric” and even internet (after a years-long standoff with my employer; he thought I should pay for it, while I could not justify paying 10% of my gross income for it, he finally caved and paid. It’s just a notch better than dial-up.) but no running water. I don’t have a car. I don’t have a TV. Never one to let a diet fad pass me by, I’m following the “keto” diet but to make it harder, keepin’ it Kosher, or at least Kosher-style. (True Kosher requires living in one of a very few areas of the US and having a lot of money, or moving to Israel). This pretty largely eliminates processed foods from my diet, with the end result that I feel great, eat great, and am about 15 lbs down in less than a month.

          I can’t afford health insurance, so my plan is to try to stay healthy.

          Yes, I agree, living the Western lifestyle is expensive and it’s a real treadmill keeping it up. I’m kind of halfway on the treadmill now and I have no wish to step fully on.

      • Cynic
        Aug 8, 2017 at 3:31 am

        Ferfal left Ireland because he couldn’t stand the awful, depressing weather and less than friendly people (I always thought it an odd choice) – now in Spain and loving it.

        He has much of interest to say about the Argentine Crisis.

        My family is part Argentinian -step-mother from Buenos Aires, Basques exiled after the Civil War – and I can confirm the accuracy of what he says. Much is applicable elswwhere.

      • Paulo
        Aug 8, 2017 at 7:35 am

        Whack jobs are nuts and is always best to avoid them. Always. Self-proclaimed survivalists are whack jobs, pure and simple.

        I live in a very wonderful rural coastal valley on the BC Coast. All of us have guns….for hunting. We all know our neighbours and overlook their irritating traits. I am building a small house on our property for an old guy with nowhere to live, and all of my neighbours came to help me raise the outside walls. He will be paying for the well and I am paying for the rest, including Hydro. His rent will be a nominal $300/month, which is the same as a supsidized veterans/seniors complex in a nearby city. Another neighbour is insisting he help with the rafters and roofing. I sell them all eggs and we trade back and forth whenever we need something. I have keys to a neighbours shop with the instructions to, ‘Use whatever you need, whatever you need”.

        You pick your location, and then nurture your relationships. If people think they can go it alone and in opposition to their neighbours, or community, they will discover they have simply moved into a nest of snakes. If you work with your neighbours you will create a bastion of support and reliability.

        I contend that this, “reap what you sow” attitude is reflected in all things and that is usually works for the benefit of all.

      • CrazyCooter
        Aug 8, 2017 at 9:25 am

        I was like to comment, regarding preppers, that “You can never prepare for that which you have not experienced.”

        The truth is – you don’t really know what you need to know, and don’t until you need it and don’t have it.

        The long tail of possibilities is just that.

        I actually made a life move along the same line of thinking, but in a much more measured manner. Happy with how it worked out for me and I think I will fair better than most if we have a zombie apocalypse (or whatever).

        Regards,

        Cooter

      • Old Farmer
        Aug 8, 2017 at 10:52 am

        What the whacko survivalists fail to understand is that in difficult circumstances the unit of survival is not the individual–it’s the community. An ammo-laden survivalist with a toothache and appendicitis might begin to get a glimmer of that truth.

      • Jeff
        Aug 9, 2017 at 10:08 am

        Thanks for sharing your experience and perspective on this. Very interesting.

      • Cato
        Aug 12, 2017 at 10:06 am

        Thanks for sharing Alex and Paulo. Your information is really interesting and informative. Much appreciated.

    • Anonymous.1
      Aug 8, 2017 at 3:33 am

      LOL. EBT cards. . . I wonder what the impact of eliminating/or slashing the mortgage interest tax deductions will have on homeowners.

  5. Petunia
    Aug 7, 2017 at 9:05 pm

    It is nothing more than a dutch auction, you start with a high price and keep reducing it until a sucker buys. This is how they sell fish and digital advertising. Interesting comparison.

    • chip javert
      Aug 8, 2017 at 2:41 pm

      Actually, it’s pretty much how everything is sold. It’s called a clearing price.

      I can’t think of a single thing that starts off low (refusing legitimate offers) and continues to go higher…

      • Petunia
        Aug 8, 2017 at 6:03 pm

        Most regular auctions start with a low price and that price is bid up by the demand of the buyers. A dutch auction starts at a top price and sells at lower and lower prices.

  6. Truth Always
    Aug 7, 2017 at 9:14 pm

    When or IF is this sanity coming to middle class houses in SF Bay?

    I fear not.

    Anecdotal met an acquaintance who put an offer on a house worth 2.2 million in Cupertino with get this – 1 million down out of which 600k the couple has saved up (all their savings) and 400k from overseas transfer.

    The said couple makes around 250k combined a year….have 3 elementary school or younger kids.

    I am afraid for their financial security because they have a 5/1 ARM….What else can go wrong?

    • Tom Stone
      Aug 7, 2017 at 10:12 pm

      No reason to worry “Suzanne Researched it”.

  7. Sporkfed
    Aug 7, 2017 at 9:15 pm
  8. Cookie
    Aug 7, 2017 at 9:34 pm

    It’s still crazy here in Los Angeles! Houses go pending in days. Also, With all the high sales and property taxes, I don’t know how an average person makes it here.

  9. milking institute
    Aug 7, 2017 at 10:34 pm

    What can i do to get you into this car TODAY?

    • MD
      Aug 8, 2017 at 3:53 am

      Year’s free supply of milk..?

      You’re obviously the man with the resources to offer that deal.

      Let me know.

  10. Cynic
    Aug 8, 2017 at 3:43 am

    There’s trouble at the high-end in London, too.

    I know someone who bought a place for £29m, reduced from £35m – 18thc property, walled, beautiful garden, one of the finest views over London, a unique property – and thought to sell his old home nearby for around £8m, a very nice family home.

    After 2 years, only one tentative enquiry. £8m is not an out of the way price in that part of town. I don’t believe he feels much pressure to drop price though. Cash purchases both.

    All the intense competition to secure a property seems to have migrated downwards in London – even in formerly rather unpleasant neighbourhoods – leaving the top a little stranded.

    Lots of little people stretching themselves way too far to get their ‘home’, and the rich getting cautious.

    • MD
      Aug 8, 2017 at 3:59 am

      Yes – who’d have ever thought that a market built on Chinese and Russian speculators laundering their ‘honestly earned’ cash by buying London real estate to leave empty could ever fail?

      Just vexing.

      Who’d have thought that a market in which the base price for a one-bed former socially-owned ‘apartment’ is GBP 300K in a crumbling block with litter-strewn stairwells and snarling drug dealers hanging around WASN’T in fact based on ‘fundamentals’, but on fear and greed (sorry – ‘aspiration’)?

      Beats me.

      • Pi
        Aug 8, 2017 at 1:02 pm

        I’m not sure that borrowed money qualifies as “laundering”.

  11. Raymond C. Rogers
    Aug 8, 2017 at 3:59 am
  12. Rob
    Aug 8, 2017 at 4:09 am

    London is just as ludicrous.

    £10 mill south of the sewage filled river with a northern balcony view… hahahahah

    http://www.mouseprice.com/property-for-sale/ref-30511245/albion+riverside+london+sw11+

    Then this one

    http://www.mouseprice.com/property-for-sale/ref-28151362/rutland+gate+knightsbridge+london+sw7

    10 Jul 17: Asking price reduced 7% to £12,950,000
    21 Apr 17: Asking price reduced 14% to £13,950,000
    26 Oct 15: Available
    23 Oct 15: Under offer
    14 Oct 15: Marketed at £16,200,000
    06 Feb 06: Sold for £5,250,000

    £5.2m is the most any property has sold for in that street in history

    http://www.mouseprice.com/property-for-sale/ref-28351638/anderson+street+london+sw3

    29 Jun 17: Asking price reduced 10% to £4,750,000
    24 Oct 16: Asking price reduced 4% to £5,250,000
    09 Sep 16: Asking price reduced 4% to £5,495,000
    27 Jun 16: Asking price increased to £5,750,000
    07 Jun 16: Asking price reduced 12% to £4,950,000
    05 May 16: Asking price reduced 10% to £5,600,000
    02 Nov 15: Marketed at £6,250,000
    16 Sep 13: Sold for £3,562,500

    So some painter and decorator bought for £3.56m in 2013, 4 years ago, and is now desperate to sell at £4.75m. Its only a 240 sq mt terrace Chelsea house. The basement must have cost £300-500k just for the construction and then fit out will have cost a lot of money given the obvious standard of it

    http://www.hamptons.co.uk/buy/property/4-bedroom-semi-detached-house-in-london,sw3-ref-3683808/

  13. Stevedcfc72
    Aug 8, 2017 at 4:16 am

    Funny to see Brexit is being blamed as one of the reasons for house price reductions in Miami Beach.

    • Nicko2
      Aug 8, 2017 at 6:28 am

      Brexit means Bankers getting canned, bonuses reduced….ergo, less dough for vacation property.

      On the money laundering side, oil price collapse and increasing sanctions reduces reach of Russian oligarchs.

    • Meme Imfurst
      Aug 8, 2017 at 7:58 am

      It is the butterflies….may be some in the stomach this time not in the wind.

  14. michael w Earussi
    Aug 8, 2017 at 5:33 am

    It’s hard for me to understand why anyone would pay so much as 10 cents for any property in south Florida which could easily be under water in 20 years.

    • Frederick
      Aug 8, 2017 at 7:34 am

      Crazier things have been known to happen Michael

    • Meme Imfurst
      Aug 8, 2017 at 8:00 am

      for the same reason some one buys one in Detroit….hope

      • TJ Martin
        Aug 8, 2017 at 8:36 am

        Actually though hope may apply when it comes to buying a home in Detroit in some alternative universe … buying beach front property in FL is more a case of sticking one’s head in the sand [ pun intended ] in a moment of abject delusional thinking .

        What concerns me personally on the matter is a very well educated New Jersey buddy of mine and his wife considering selling their inland home to buy a ( new construction ) beachfront condo on the NJ coast … right smack dab in the middle of where the destruction of NorEasterCane Sandy was the worst … not even so much as considering flood insurance .

        Sigh … kind of makes you wonder … what do people do with their brains … doesn’t it .

        • Petunia
          Aug 8, 2017 at 9:35 am

          I lived thru 5 hurricanes in south Florida without any flooding because Florida spends billions on water management. I would buy on the south Florida coastline anytime, but never in New Jersey because they don’t have the same water management systems.

          New Orleans has been underwater the past two weekends due to heavy rainstorms, the kind I experienced daily in Florida. The money from Katrina was misspent building up parts of the town and not dealing with the water management issue. New Orleans is definitely going to perish at this rate, because they are not dealing with managing their water.

          Flash flooding is also a problem inland in Texas. Just read the news. These areas have infrastructure issues they don’t want to pay to manage. It isn’t rising sea levels.

  15. michael w Earussi
    Aug 8, 2017 at 9:47 am

    You can only manage water so much. But a 10′ rise in sea level in a century would be a challenge, even for us.

    • Petunia
      Aug 8, 2017 at 10:56 am

      Trust me, there’s no derivatives contract the climate change hoaxers can sell you that’s going to make a 10′ sea level rise survivable. If you believe that crap, just give them your money now, because you are not going to need it.

  16. James McFadden
    Aug 8, 2017 at 10:08 am

    The question to ask is why is money laundering falling off?

    • Aug 8, 2017 at 10:36 am

      I don’t have an answer, but the cities in this report are under the closer scrutiny of the Treasury Department’s Financial Crimes Enforcement Network (FinCEN):

      http://wolfstreet.com/2017/02/24/how-much-money-laundering-in-us-housing-market/

      • James McFadden
        Aug 8, 2017 at 11:56 am

        Interesting – perhaps that explains the downturn. After reading The Panama Papers I began to get a feel for how money laundering works and how prevalent it is — and how Trump, with his luxury properties, has taken advantage of it going back to the 1980s. I wonder how long it will take Steven Mnuchin to put the kibosh on that crackdown.

      • Truth Always
        Aug 8, 2017 at 7:51 pm

        I suspect that smart overseas investors would buy 2 or 3 properties to be under the radar of FINCEN.

        That is the only plausible explanation of 15-20% y-o-y rise in prices here in Fremont, CA. So the ill gotten gains paid all cash will not come under the radar of FINCEN. Also you can rent one house or two houses while living in the third one. It’s better than buying a much expensive house.

        Either that and / or the working middle class is getting stupider in the quest to buy million dollar homes. You really should look at Redfin on million dollar buys you all the way from Milpitas to Union City.

    • Petunia
      Aug 8, 2017 at 10:58 am

      It’s not falling off, it’s going to the new weed growing industry.

  17. Singaporan
    Aug 8, 2017 at 10:20 am

    The bubbles shrinking. Houses aren’t selling here in Sac area with no bottom in sight.

  18. Bobby Dale
    Aug 8, 2017 at 10:28 am

    Petunia,
    From someone who owns property in South Florida and New Orleans please accept this:
    Miami flooded recently, most damage was to vehicles, rainfall totals 2-3 inches. 4.78 in Davie
    New Orleans flooded, most damage to vehicles, rainfall totals 4.5-5.5″ throughout the area. Very few homes flooded as most homes in lower lying areas are raised. New Orleans has a different topography than South Florida and manages water differently.
    And how often did you experience 5″ rainstorms in two hours in Florida? (be specific) North Florida (the panhandle) gets more of these than South Florida.

    • Petunia
      Aug 8, 2017 at 11:16 am

      I lived in south Florida for almost 15 years Palm Beach and Broward counties. I got rain almost every day some wet seasons. In fact, I never used my sprinkler systems anywhere. Before that, I visited Miami since the 1970’s every few years. One year in Palm Beach we got hit with multiple hurricanes. We got plenty of wind damage but the streets were never flooded.

      The South Florida Water Authority is expensive but they do manage to move the water. Once they moved excess water all the way up to the Orlando area, who needed it. Beyond that I don’t know what’s done up north. Davie is west nowhere near the water and could be out of the water district area, maybe they need to spend some money.

      I know of some areas in Miami, Alton Rd. is one, that have always flooded because they were built up in the 1930’s and 1950’s and owners will not allow their art deco or mid century buildings to be “improved”.

      I don’t know New Orleans well at all, but have been reading the news there for a while in anticipation of a trip there. They can only pump up to one inch of rain an hour and they got 5″ and not for the first time either. Who’s fault is that? Most of the water issues in Louisiana are due to how the Mississippi has been diverted over the years. Mostly badly. None of this has anything to do with rising sea levels, only with bad or mostly nonexistent water management.

    • Petunia
      Aug 8, 2017 at 11:28 am

      BTW, that flood in Baton Rouge had nothing to do with rising sea levels either. Just more nonexistent water management.

  19. raxadian
    Aug 8, 2017 at 11:22 am

    Is not like millon dollar/euros buildings being sold for less will affect most people that much. Sure construction will take a hit but construction always end taking a hit in a crisis.

    Also most million dollar houses are badly built.

  20. intosh
    Aug 8, 2017 at 12:03 pm

    Airbnb’s Worst Kept Secret

    “A small number of commercial property managers generate a majority of Airbnb’s overall revenue”

    “Just 10 per cent of hosts account for a majority of the revenue and the nights booked on Airbnb consistently in Toronto, Vancouver and Montreal”

    “”They’re basically running hotels … that are split across multiple apartments”

    http://www.cbc.ca/beta/news/canada/montreal/airbnb-study-montreal-1.4237710

  21. Ehawk
    Aug 8, 2017 at 12:40 pm

    ummm. OK… but what about the 90% of US population that buys below 500K?

    The bottom market is still going up… shacks that were 70K in Nebraska keep going up or the 200K house in Fresno is now 280K.

    Rents that were $700 are now $1100 for low income people…

    Middle class and lower income people are screwed…

    • Plunging
      Aug 8, 2017 at 2:44 pm

      That’s why inventory is skyrocketing and homeownership rate is at 50 year lows. No interest until prices plunge.

      • Art Vandelay
        Aug 8, 2017 at 8:54 pm

        Where do you see inventory “skyrocketing”?

        • Plunging
          Aug 8, 2017 at 10:28 pm

          The operative question is, where isn’t it?

  22. Ambrose Bierce
    Aug 9, 2017 at 9:18 am

    Consider the process, last year it was the ONE percent vs the NinetyNine, now its the POINT ONE percent.

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