April 30th, 2018

Homeless in L.A. – homeless population surges 75% in past six years. 

There is a homelessness crisis in Los Angeles County.  The homeless population has surged by 75% in the last six years all the while home prices are back to peak levels.  Yet the home ownership rate still hovers near generational lows. California has seen massive growth in rental household formation.  Surveys continue to find that Millennials prefer different living styles than their baby boomer parents.  Forget about surveys, just look at the actual market.  Record low inventory is being driven by baby boomers staying put and the lack of home building thanks to hardcore NIMBYism.  So it is no surprise that we now have a homeless crisis in L.A. County.  Recently, in Orange County a large group of homeless encamped in various areas where set to be moved into affluent areas of the county and people went ballistic.  So where do we go from here?

Read the rest of this entry »


April 11th, 2018

The Housing ATM is back – Cash-out share of all refis hits pre-crisis levels.

It was only a matter of time that people started using their homes as ATMs.  It is clear that the housing cheerleaders are drinking a mega dose of housing Kool-Aid and somehow think that people are immune from repeating past mistakes.  But here we are seeing cash-out refis hitting pre-crisis levels.  And this assumption is based on the underlying mentality that yes, a home is really worth that amount and now people are locking in these high price levels.  But guess what?  You have to pay that money back on your glorified crap shack.  This was one of the many reasons for the last housing bubble where people believed the hyped and went into deeper debt because of this notion that a home was an ATM with a roof on it.  The overall tone is incredibly housing positive even though there are major issues in the housing market.  For example, the homeownership rate is near generational lows and much of the household formation since the bubble burst has come in the form of rentals.  Now homes are being used as ATMs.  What can go wrong?

Read the rest of this entry »


March 23rd, 2018

Total value of U.S. homes is $31.8 trillion – Los Angeles homes now valued at $2.7 trillion, the size of the U.K. economy.  Chinese home buyers in the U.S.

Housing values in the U.S. have reached a new peak.  In total, U.S. homes are valued around $31.8 trillion according to Zillow.  That is 1.5 times the GDP of the U.S. and close to three times the GDP of China.  Crap shacks in Los Angeles are now worth $2.7 trillion, which is more than the United Kingdom’s GDP. What is very telling is that real estate values across the country in virtually every large metro area are near peak values.  In places like San Francisco, they are in a new stratosphere.  The allure of real estate is now fully engulfing the nation and flipping rates are at decade highs.  People want to get a piece of the action.  You also have many ex-pats now taking their money abroad and retiring in more affordable countries where they can stretch those Taco Tuesday dollars while money from China is flowing the other way and boosting prices in some areas dramatically.

Read the rest of this entry »


March 5th, 2018

Median home price in San Francisco hits $1.42 million:  A standard condo in San Francisco is now selling for $1.15 million.

San Francisco housing has entered into a new reality.  Tech money and foreign cash continues to flood the market and pushing prices to astronomical levels.  The typical San Francisco crap shack now will cost you $1.42 million, a new record high with condos going for $1.15 million.  The city is entering into escape velocity of gentrification.  You have older Taco Tuesday baby boomers with rudimentary tech knowledge that bought decades ago living next to a new generation of wealth and tech savvy professionals.  You see this as well in Los Angeles.  Some real estate “experts” barely have a working understanding of tech but definitely know how to navigate to Zillow to view their inflated prices. San Francisco is such an odd case study.  A city that outwardly states it supports the poor but when you look at prices even making $100,000 a year makes you part of a new high income poor – at that income level a sizable amount of your net income is going to go to simply paying for housing unless you want to be part of the mega commuting culture that is now emerging in California.  What is going on in San Francisco?

Read the rest of this entry »


© 2016 Dr. Housing Bubble