May292014
Home sales are up for the top 1%, the bottom 99%, not so much
The housing recovery benefits the top 1% who have the cash and the credit to complete the sale. The other 99% continue to struggle.
The rich get richer, or so they say. It’s the rich who have the cash for a down payment and the good credit to qualify for a mortgage, so the one segment of the housing market seeing the most activity is the top 1%. For everyone else, the housing recovery is something they only read about in the financial media, but it doesn’t really impact them.
With the current political and financial regime in place, the 1% benefit the most. Federal reserve policy provides cheap debt to inflate asset values, and since the 1% owns most of these assets, they benefit the most from these policies. Tax rates are low by historic standards, and with capital gains taxes at 20%, the rich escape the more onerous income taxes when they sell their profitable assets and move money into real estate. Unless we elect a true populist president and Congress that favors the middle class and the poor over the rich, the 1% will continue to do well, and so will their real estate markets.
2014 Luxury Report: Sales of Priciest 1% of Homes Climb While Rest of Home Sales Still Down
by Troy Martin | May 27, 2014
Neighborhoods in Los Angeles, Orange County and San Francisco Dominate the Top 20 List of Most Expensive Homes
Home sales so far this year are lower than they were in 2013, but there’s one sliver of the housing market that’s going strong: the very top of it. Sales of the priciest 1 percent of homes are up 21.1 percent so far this year, following a gain of 35.7 percent in 2013. Meanwhile, in the other 99 percent of the market, home sales have fallen 7.6 percent in 2014.
That’s an amazing bifurcation of the market, and the explanation is simple: the top 1% received all the benefit of the federal reserves asset inflation policies, and they are using their stock and bond gains to buy real estate.
Luxury sales are up, and way up, in metros across the country. Ten markets have seen sales growth above 50 percent so far in 2014, and Oakland and San Jose are on pace to nearly double the number of home sales since last year in the most expensive 1 percent of the market.
As for the other 99 percent? While home sales have shown meager to modest gains in the non-luxury portion of the market in Oakland (up 2.2% over last year), Miami (up 1%), Raleigh-Durham (up 1.2%) and Atlanta (up 4.8%), other markets including Phoenix (down 15.7%) and Minneapolis (down 12.5%) display a strange (and perhaps troubling) dichotomy: For the top 1 percent, the housing market is still booming. But for the rest of the market, the recovery is running out of gas. As home prices have risen, wage and job growth have failed to keep up.
Three markets from the Bay Area top the list. No big surprise for the many Bay Area readers to frequent this blog.
The price to reach the top 1 percent of the housing market varies widely by metro. In San Francisco, the most expensive 1 percent of homes sold for $5.35 million or more. In Los Angeles, joining the high-end luxury market will set you back at least $3.65 million, but if you’re willing to live a bit farther south in Orange County, you can squeeze into a luxury home for just $3.45 million. The budget luxury buyer could look to Atlanta ($861,000), Minneapolis ($881,000) or Raleigh ($815,000), where access to the top 1 percent of the market can be purchased for six figures rather than seven.
So who can afford these luxury homes? Banks don’t offer conventional loans for homes in this price range. But to put things in perspective, here’s what it would take: In San Francisco, a luxury homebuyer would need a million-dollar down payment and an annual salary of $916,000 to qualify for a 30-year fixed-rate loan, and to afford what would be a $21,369 monthly mortgage payment. In a lower-priced luxury market such as Raleigh, an annual income of just $140,000 could keep a buyer comfortably among the 1 percent in this hypothetical scenario.
Of course, like 44.7 percent of buyers in this price tier, you may prefer to pay with cash. That’s compared with the 32 percent of purchases made with cash among all home sales, as we found in our report on all-cash transactions.
The top 1% have always had a higher percentage of all-cash transactions. These people have the money, so they don’t need the debt to buy a home. Keith Jurow emailed me this great table showing the breakdown of cash purchases by price point.
I don’t favor buying beach properties. While owners may see appreciation, the cashflow stinks. If you factor in the negative cashflow from buying one of these with debt, the investment returns are not that great. For example, look at today’s featured property and examine it’s investor returns.
So where are people buying beach properties?
Top 20 Beach Town Housing Markets
May 22, 2014, By RealtyTrac Staff
… For the report, RealtyTrac first selected the top 100 best beach towns based on four criteria: average temperature, percent of sunny days, percent of days with good air quality, and crime rates. The top 100 towns based on these criteria were then sorted by median value of single family homes and condos, from lowest to highest. The top 20 markets all had median home values below $1 million.
“Buying near the beach is one of the best ways to ensure a property will appreciate in value,” said Daren Blomquist, vice president at RealtyTrac. “Whether buying for retirement, a vacation home or a primary residence, homes located in quality beach towns benefit from virtually unlimited demand and a finite supply of land to build on.”
Four of the top 20 beach town housing markets were in Florida, led by Hobe Sound, a town of less than 15,000 located in Martin County about halfway between West Palm Beach and Port St. Lucie. Hobe Sound had an average temperature of 76 degrees, 64 percent sunny days, 98 percent of days with good air quality and a crime grade of A+. The town ranked No. 1 on the list thanks to its low median estimated market value of homes and condos: $191,189.
Five California beach towns were in the top 20, led by Los Osos in San Luis Obispo County on the Central Coast of the state. The town of about 15,000 had an average temperature of 60 degrees, 78 percent sunny days, 100 percent good air quality days and an A crime rate grade. Its $418,403 median home value was the lowest among all California beach towns on the list and ranked it No. 6 among the top 20.
Other California beach towns among the top 20 were Morro Bay at No. 11, also on the state’s Central Coast, along with the Southern California towns of Dana Point at No. 16, Seal Beach at No. 17, and San Clemente at No. 19.
Dream Beach Town Estates
If you are interested in browsing for dream beach town estates in Southern California, we have a page devoted to the best deals in this market. I’ve set up a query of the highest rated new listings that’s updated hourly. Check it out.
Meet with us to register at Orchard Hills and save money
Orchard Hills is having a grand opening this weekend. We expect a big turnout to see this much anticipated debut.
We are offering buyers a refund of anything over 1.5% back on new construction from our fee that is paid to us by the builder.
Contact Shevy at 949.769.1599, and he will arrange to meet you at the opening to register. He must accompany you to registration in order to secure your rebate.
[listing mls=”LG14110168″]
Book profits from stocks and park the gains in RE. Whocoodanode? Problem is, expectations are that the supply of greater fools is endless.
Where should one park their money then?
That is like asking what type of house should one buy.
Sure, I’ll be your huckleberry
… wherever they want to park it.
side notes:
* short-term gains come at the expense of long-term valuations
* Sheep live to be fleeced, so there is NO safety in the herd
“All right, lunger. Let’s do it.”
but, my favorite line is:
Do you know what it is in response to?
Doc was my favorite.
I think he was responding to someone who said they had a lot of friends. I remember laughing pretty hard after the particular exchange, but can’t recall offhand who the other character was.
Great movie. Val Kilmer’s role as Doc was definitely epic.
My favorite character from any movie, but don’t tell my wife. She thinks it is Mr. Darcy.
Turkey Creek Jack Johnson
Turkey Creek Jack Johnson: Why you doin’ this, Doc?
Doc Holliday: Because Wyatt Earp is my friend.
Turkey Creek Jack Johnson: Friend? Hell, I got lots of friends.
Doc Holliday: …I don’t.
Isn’t it?
It appears to be in California.
The inflationist are wrong! We don’t have inflation, but we do have speculators making short term profits in food and energy. These prices will never be passed through when the debt destruction begins.
Watch this video … it describes a world seeking yield in a deflationary environment.
http://finance.yahoo.com/blogs/daily-ticker/why-bond-yields-are-tanking-223925663.html
Further proof the Federal Reserve and Central Banks from the developed world have failed. They cannot defeat the deflationary forces that are now clamping down on the world. The world economic system is about to fundamentally change.
This might be one reason bond yields are rising….
Bad news everyone: The economy is shrinking
1Q GDP revised down as pundits join hands in hope and delusion
Bad news everyone – all that government spending didn’t keep the economy from contracting in the first quarter after all.
The nation’s domestic economic output for the first quarter was revised downward Thursday, posting a contraction of -1.0% from a meager positive 0.1% initially reported.
This was the first gross domestic product contraction since the first quarter of 2011, the Bureau of Economic Analysis reported.
And just last month everyone was popping corks over the initial 0.1% figure. (Sorry Jacob.)
If one needs further proof how bad this is and how the second quarter won’t be able to make up the slack of the first, consider that Joseph Lavorgna, chief U.S. cargo cultist economist at Deutsche Bank, told CNN Money that he predicts the economy will rev up and grow at more than a 4% pace in April through June.
He also said that the contraction in the first quarter GDP was entirely expected — although neither Lavorgna nor any of his peers forecast it — and that investors shouldn’t worry.
Whatever Lavorgna predicts, bet on the opposite happening.
Notably, CNN Money apes this Polly Anna attitude:
A slump was entirely expected, and economists aren’t too worried. They forecast a bounce back in the spring.
(Note to CNN: Check your calendar.)
New Redfin chief economist Nela Richardson said she believes the economy has lost ground, particularly in housing, and that there’s nothing in the data she sees now to indicate the second quarter will be much better, or at least enough to make up for the first quarter.
The decrease in real GDP in the first quarter included declines in residential fixed investment spending. The balance was negative contributions from private inventory investment, exports, nonresidential fixed investment, and state and local government spending.
Worse still and more specific to housing, pending home sales for the month of April plummeted 9.2% compared to April 2013, the National Association of Realtors reported Thursday.
While there are signs the second quarter will improve from the first quarter contraction in terms of both the economy overall and housing in particular, it’s not going to be close to the 4% the financial spin doctors and witch doctors are talking about.
This stagnation in the first quarter is part of the continuing cycle we’ve seen since the start of the “recovery” in mid-2009 – growth by inches and long plateaus.
We’ve had the worst four years in the history of GDP growth, no matter how hard the sell-side and sunnysiders try to say otherwise.
There’s nothing right now to suggest that anything will be breaking that continued, tepid cycle, and a lot to suggest the economy is weakening, not strengthening.
It seems to me like any new round of QE gives the US Economy about 6-8 quarters of growth, then it starts losing its strength, and a new round must be implemented with an even higher dollar figure. It’s like a drug, in that it takes more to accomplish the same benefit over time.
With that said, the Fed has been publicly stating that the U.S. economy has been improving since Bernanke went on 60 Minutes 5 YEARS AGO declaring “Green Shoots”. What I’ve always said, if that’s the case why ZIRP and QE?
It’s going to be real interesting to see what happens in the bond market if the FED retraces its taper. The Emperor will be exposed without a robe of lies! It will indicate to the entire world that something is fundamentally wrong with the global economy.
I stick with what I said in the past, there is no organic growth in the world economy. There are no inflationary pressures. There is no free market, but only implementation from Central Planers. Finally, the 33 year Keynesian experiment of perpetual declining interest rates and expanded borrowing has failed.
The time to pay the piper is rapidly approaching.
How do you think this plays out?
I see them printing money until things at least appear to get better. I don’t know where all the printed money will go; perhaps it will merely compensate for the debt deflation, but the only course of action I see them taking at this point is more of the same.
If the Fed walks away from the printing press, they relinquish all power. It’s all they’ve got. Lee essentially suggests they will go quietly. Nonsense. They are the thrashing dinosaur stuck in a tar pit.
“Lee essentially suggests they will go quietly.”
I never said that …
“How do you think this plays out?”
IMO … In a generalizing sense, the big parts of the reset will look like this:
The bad part = Debt Destruction, asset prices decline, austerity for many including pensioners & retires.
The good part = Debt Destruction, New equity owners, increase in productivity and ingenuity, a New “New Deal”.
I don’t believe that it will mimic The Great Depression. I do not believe that it will remove The United States of America’s influence on the world, mainly because there is no other country that could possibly replace America that will not also suffer from this economic reset … in particular China, which will suffer more than the USA.
Interesting idea. I have to imagine the federal reserve and every other central bank will turn on the printing press to make sure that doesn’t happen — they may ultimately fail to prevent the reset, but they will try until their printing presses break, IMO.
I agree … and they will fail if they try the old way of QE.
What makes you think that the Federal Reserve will not indemnify the banks for their loses? I believe if they FED knew what they know now (that QE failed), they may have done this back in 2008.
Because China is buying up the world’s physical gold, or because China has possession of $3.66 TRILLION in foreign exchange reserves, $1.27 TRILLION of which is in US Treasuries?
Just wondering, does it occur to you what China can buy with $3.66 TRILLION? How much oil, natural gas, gold, silver, farming equipment, food, copper, machinery, and other governments China can buy with $3.66 TRILLION? Or is China just going to suffer more? PERIOD! And their foreign reserves are just irrelevant? PERIOD!
Where do you get this stuff? Do you think this up yourself?
(hint) Don’t believe anything you read. Seriously. Question all of it.
The demographics in China are horrible. They’re old, and getting older.
China does not have the natural resources to feed, heat and transport its own population.
China does not print money, they actually print (empty) Condos, neighborhoods, shopping malls, cities and towns.
Unlike Japan, China does not create, produce and export ONE product that is in demand in the western world. China does ONE thing really good … they build products cheaply from American, European and Japanese Corporations, then export them. China is indeed a Banana Republic.
“The fact is if he cares so much about America and he believes in America, he should trust in the American system of justice,” Kerry said.
Really? So, if I think that the American justice system is corrupt and has one set of rules for the 1% and another for the other 99%, then I don’t care about America or believe in America? Maybe. If bought and paid for John Kerry is an example of and American Senator, then what? I guess I think of America as being it’s people and it’s codified morals known as The Constitution, not it’s government.
Inflation means high interest rates, high rates means the system will blow up faster. Low inflation means low rates the system can sustain itself a while longer but when the time comes the fireworks can be much bigger. Maybe the only solution is to print the money outright and just give to everybody to repay the debt. That could trigger extreme inflation but will solve the debt problem. The current system is creating debt as money and new [and bigger] debt is always needed to repay the old ones plus interest. Sounds familiar? It’s the definition of a ponzi scheme. The whole global financial system is a ponzi scheme that the bankers must perpetuate to avoid prosecution.
Median rises as low-end sales decline changing the mix
Residential properties sold at an estimated annual pace of 5,213,793 in April, a decrease of less than 1% from March but an increase of 4% from April 2014, according to RealtyTrac.
The median sales price of U.S. residential properties — including both distressed and non-distressed sales — was $172,000 in April, an increase of 4% from the previous month and an increase of 11% from April 2014 — the biggest year-over-year increase since U.S. median prices bottomed out in March 2012.
“April home sales numbers are exhibiting the continued effects of low supply and still-strong demand that exist in many markets across the country,” said Daren Blomquist, vice president at RealtyTrac. “Annualized sales volume nationwide decreased on a monthly basis for the sixth consecutive month and the 4% annual increase in April was the lowest year-over-year increase so far this year. Meanwhile median home prices nationwide increased to the highest level since December 2008.
“U.S. median home prices have now increased 21% since hitting bottom in March 2012, although they are still 28% below their pre-recession peak of $237,537 in August 2006,” Blomquist continued. “There are a surprising number of markets, however, where median home prices have surpassed their previous peaks since the Great Recession ended in June 2009.”
Home price appreciation continues to cool in some of last year’s hottest markets
Nationwide median home prices in April increased 11% from a year ago — the biggest year-over-year increase since U.S. median residential property prices bottomed out in March 2012. April marked the 25th consecutive month where U.S. median prices increased on an annual basis.
But home price appreciation continued to show signs of slowing in some fastest appreciating markets from a year ago. In Phoenix, median sales prices for residential property increased 9% annually, down from 30% annual price appreciation in April 2013 and the lowest annual price appreciation for the city since March 2012.
I was surprised that RealtyTrac showed a 4% gain in home sales for April. That contradicts the NAR data showing a 6% decline, which if anything is biased to the upside. RealtyTrac has always had poor data quality practices. I remember during 2008/09 they had very unreliable foreclosure statistics leading many of us to lovingly refer to them as RealtyCrap.
National Housing Market Inflates in April
Inventory and price continued to rise for the month of April suggesting a healthier national housing market, according to the National Housing Trend Report released by Realtor.com. The group cited trends from the previous year which found “dramatic shortages” being replaced in 2014 by moderate home price gains in tandem with increasing inventories.
The group believes the bumps in both inventory and asking price suggest a strengthening national economy.
“Home prices and inventories are more in balance in most markets—a sign of improving housing health and optimism across much of the country,” said Move, Inc. CEO Steve Berkowitz. “As sellers gain confidence, we also are watching spring sales data closely to gauge whether buying activity will be in line with these early indicators.”
Compared to the previous year, inventories in April were up 14.2 percent to roughly 2 million, while the median list price rose 6.5 percent year-over-year to $207,500. The time homes spent on the market was an average of 86 days, a 6.2 percent increase compared to the year before.
The report noted that although some reports showed a cooling market in the beginning months of 2014, pending home sales in March experienced their first gain, rising 3.4 percent.
The company’s report also commented on the slowing rate of home appreciation. The company believes that slowed appreciation signals that housing is becoming more affordable, as rising equity comes more in line with asking prices.
“However, these deficits aren’t as large, suggesting these markets are not likely to experience the kind of unsustainable appreciation that states like California experienced during most of 2013. While California, Nevada and Arizona continue to see supply-driven increases in prices in many markets, supply is beginning to catch up with demand,” the company said.
Energy sector states continue to post strong gains in the housing market, with Texas and Colorado exceptionally strong.
HARP Delays 77,000 Foreclosures in 2014
The Federal Housing Finance Agency (FHFA) released its latest Refinance Report, looking at data from the first quarter of 2014. The government agency reported that in Q1 2014, approximately 77,000 refinances were completed through the Home Affordable Refinance Program (HARP), bringing the total refinances through HARP to 3.1 million since the program’s inception.
Total refi volume decreased in March, dropping to levels last seen in 2008. HARP was initially set to expire on December 31, 2013, but was extended to expire on December 31, 2015 in order to continue helping homeowners underwater on their mortgage.
The first quarter of 2014 marks the fourth straight quarter that total refinances and HARP refinances have declined. The report attributed the decline in refi’s to March’s rising interest rates.
The total volume of HARP refinances was 21 percent of all refinances for the quarter, with 12 percent of loans refinanced through HARP with a loan-to-value ratio greater than 125 percent.
In the first quarter of 2014, 23 percent of HARP refinances for underwater borrowers were for shorter-term, 15- and 20- year mortgages. The remaining 77 percent of loans were for the longer, more traditional 30-year note.
According to the FHFA, borrowers who refinanced through HARP had a lower delinquency rate compared to borrowers eligible for HARP who did not use the program.
“Year-to-date through March 2014, HARP refinances represented 41 percent of total refinances in Georgia and 38 percent of the total refinances in Florida, nearly double the 21 percent of total refinances nationwide over the same period,” FHFA said.
Other notable states with a large percentage of HARP refinances as a percentage of total refinances include Nevada (33 percent), Michigan (33 percent), and Illinois (31 percent).
I think your headline is misguided. HARP borrowers have to be current on their mortgage with no lates in the last 12 months. Most of these loans would never have defaulted assuming no HARP refinance, and lowering the rate/payment makes it even less likely they will do so. If the loan has mortgage insurance prior to the HARP refi, they must retain the MI on the new loan, so if the loan defaults and forecloses, the MI company is in first loss position.
“According to the FHFA, borrowers who refinanced through HARP had a lower delinquency rate compared to borrowers eligible for HARP who did not use the program.”
Can somebody say strategic default?
Mortgage Apps Drop in Prime Selling Season Despite Low Rates
After moving up for three straight weeks, mortgage application volumes dropped last week as activity fell for both purchases and refinances.
The Mortgage Bankers Association (MBA) reported Wednesday that applications fell 1.2 percent on a seasonally adjusted basis for the week ending May 23. On an unadjusted basis, application totals were down 2 percent.
On the refinance side, MBA reported a 1 percent week-over-week decline in applications, reversing an upward trend that lasted nearly a month. The refinance share of mortgage activity was unchanged at 52 percent of total applications.
After booming with the start of the housing recovery, refinance demand has waned with the gradual pickup of mortgage rates from last year’s all-time record lows.
As of last week, MBA recorded the average 30-year fixed rate at 4.31 percent, a drop from 4.33 percent the week prior. It was the lowest rate since June 2013, the group’s records show.
Meanwhile, MBA’s seasonally adjusted Purchase Index fell 1 percent from mid-May. Unadjusted, purchase volumes were down 2 percent, ending the week 15 percent lower than the same time in 2013.
Some Wells Fargo Mortgage rates. Sorry, I can’t create a good table.
Product Interest Rate APR
Conforming 1and FHA Loans
30-Year Fixed 4.125% 4.209%
30-Year Fixed FHA 3.875% 5.456%
15-Year Fixed 3.375% 3.521%
5-Year ARM 3.125% 2.957%
5-Year ARM FHA 3.250% 3.968%
Larger Loan Amounts in Eligible Areas – Conforming and FHA
30-Year Fixed 4.125% 4.167%
30-Year Fixed FHA 4.000% 5.536%
5-Year ARM 3.375% 3.005%
Jumbo Loans – Amounts that exceed conforming loan limits
30-Year Fixed 4.000% 4.028%
5-Year ARM 2.875% 2.819%
“Pent-Up” Pending Home Sales Demand Missing; Down 9.4% YoY
But it’s the weather… nope… NAR blames excess inventory as giving people too much choice and slowing their purchasing decisions for the notable miss on both MoM and YoY sales. This is the 7th month in a row of declining YoY sales. The 0.4% rise MoM missed expectations of 1.0% as the pent-up demand from a cold winter appears to be missing in action. Of Course NAR is optimistic (but even they are cautious), “an uptrend in closed sales is expected, although some months will encounter a modest setback.”
7th month in a row of YoY declines…
http://www.zerohedge.com/news/2014-05-29/pent-pending-home-sales-demand-missing-down-94-yoy
Dipshit economists blame the weather for their blown call on 2014 housing
Yellen Has Scant Power to Relieve U.S. Housing Slowdown
The hesitant housing recovery has surprised and concerned Federal Reserve Chair Janet Yellen and her colleagues at the central bank. It’s not clear how much they can do about it.
While the industry is rebounding from a weather-ravaged first quarter, the pickup will probably fall short of previous projections, according to economists at Goldman Sachs Group Inc. of New York and Macroeconomic Advisers LLC in St. Louis. As a result, they trimmed their forecasts for economic growth in the second half of 2014 to about 3.25 percent from 3.5 percent.
“Housing is a growing worry,” said Macroeconomic Advisers’ senior economist Ben Herzon.
Yellen and many of her colleagues agree. The Fed chair flagged the industry as a risk to the outlook in testimony to Congress on May 7, while Federal Reserve Bank of New York President William C. Dudley said last week he had been surprised by how weak it had been recently. He added that he still expects gross domestic product to “get back on a roughly 3 percent growth trajectory” after stalling in the first quarter.
The trouble from the Fed’s perspective is that many of the forces holding housing back are outside of its control. While the Fed can influence mortgage rates through its conduct of monetary policy, it can’t do much, if anything, to counteract the other causes of faltering demand: lagging household formation, stingy lenders and wary borrowers.
10 year at 2.42%
Stocks and bonds both increasing.
So much for the idea that the increase in bond prices is due to a rotation out of stocks.
Where is the money coming from? It certainly isn’t a resurgent economy or a huge influx of foreign capital.
The Fed. There is QE. And my guess is the banks are using their reserves as collateral to buy equities and bonds. And then of course, there is Belgium.
short squeeze
There is low volume in stocks (lack of sellers) so it’s doesn’t take much to prop up. That leaves money to prop bonds. Bond are advancing I think in anticipation of the first QE package from the EU. Mario Draghi is the next “Maestro”. The FED can take a break this time around.
Same lack of buyers as sellers.
Does this foretell the death of traditional banks? We can always hope…
Younger Americans are open to Google, Apple, PayPal becoming their bankers
Summary:
A new report from Accenture finds that our finances move into the virtual world, the younger set is growing more inclined to trust internet and retail brands with their money than traditional banks.
Your next bank might just be Google or Walmart if the younger generation of North American bread earners has anything to say about it. A recent survey conducted by Accenture found that many people between the ages of 18 and 34 were amenable to the idea of doing their banking completely online as well as getting their financial services from non-traditional financial service providers.
PayPal was at the top of the list, with 46 percent of that age group saying they would be “likely” of “very likely” to bank with the eBay-owned company. That shouldn’t be too much of surprise since PayPal is already a dominant player in payment services. But Google, Amazon, Apple and Walmart rounded out the top 5 list of potential alternate banking providers – not the first companies you’d think of when opening a checking account.
Accenture’s poll of 3,846 bank customers in Canada and the U.S. found that we’re becoming much more comfortable with the idea of “branchless” banking where all transactions, from depositing checks to applying for loans, are conducted in the web browser, on the mobile phone or by telephone. When asked whether they would consider a branchless alternative when they next switched banks, 27 percent of those polled answered in the affirmative. Among the 18-34 demographic that number rose to 39 percent.
Of course, whether many of these companies would ever consider becoming banks is doubtful. They would be joining an industry much more heavily regulated than their own. I’m not sure if Google wants to add the Federal Deposit Insurance Coporation and Federal Reserve to its list of regulators.
It’ll be interesting to observe how the Google Glass, Facebook generation, which has been pretty much “hey anything goes” when it comes to privacy, personal information, behavioral data, etc. deals with banking, financial planning, and most of all, data security. My impression is that the younger gen gets this, but only few are really concerned about. Thus far convenience and “cool” factor trumps all, including privacy, personal data and security.
I could be wrong about this. Hopefully the next gen will promote banking services via concerns that provide it all (convenience, privacy, security) as well as sound lending practices.
The Cartel will shut them down somehow. No one go around the Fed. The Fed wants it’s share and influence. Just like what did with Bitcoin.
Larry,
I love your website and read it daily, however I have an issue with the rebate program at Orchard Hills.
From what I have heard, orchard hills will be giving back anywhere from 10k-20K depending on cost of the home.
If Shevy is only giving back anything over 1.5% at Orchard Hills, the buyers will get NOTHING and shevvy will basically get the entire rebate.
Please tell me that either I am wrong about how much Orchard hills will refund or you guys made a mistake about how much shevy want to give back to the buyer. Because if orchard hills, like most other new builds in irvine are giving back 10-20K (not a percentage but a flat fee based on price of home) and Shevy is only giving back anything over 1.5% of house price, then this is a raw deal for buyer since he/she will likely get NOTHING, while Shevy gets EVERYTHING. Getting the entire refund for signing your buyer in sounds like a complete scam, especially since all the work will be done on the builders end.
Do we seem like scammers to you?
Contact Shevy and ask him about the details.
[email protected]
Larry,
please dont take my comments personally and if I offended you, then I apologize. I am not calling anyone a scammer but rather im simply doing the math. If the offer is a refund for anything above 1.5% but there will be nothing above 1.5% to give, then I have to question the offer being presented.
Since this advertisement is on your website, it should be open to questioning if something doesnt make sense or add up.
With that said, no need for me to contact Shevy, I have no interests in Orchard Hills. However you or Shevy might want to clear it up for other buyers interested in Orchard Hills.
I’m sure Shevy will work within whatever parameters the builders set up to make the deal good for both parties. The rebate over 1.5% is standard, but the commissions are generally higher on lower price point homes. If Orchard Hills is paying $20,000 that’s still more than an average commission on a less expensive home, and it leaves plenty of room to provide rebates.
just a FYI. there are other discussions on this already…
http://www.talkirvine.com/index.php/topic,10941.msg231322.html#msg231322
I don’t go over there any more. Many over there still blame me for shutting down the original forums five years ago. It was completely Omkar’s idea and decision, but I got all the blame. It isn’t entertaining to read people talking shit about me without any basis.
It is too easy to bad mouth you with the truth than to bother making stuff up.
I didn’t realize I had so many bad traits.
There was an exchange one time where a poster denigrated somebody else for living in Foothill Ranch and not Irvine, as if they weren’t special enough to overpay for a stucco box on a tiny lot in their zip code. At that moment, I realized that I no longer wanted to interact with those mindless zombies. Some of them I still regard as decent folks, but the overall mindset is one of condescension to anyone that doesn’t believe Irvine is special.
Clearly, the wealthy just don’t get it. They continue to absorb property that is overprice according to the rental parity model.
Or like us, they buy a home to LIVE IN. When we bought, I thought home prices still had about 5% or 10% to decrease and it just did not matter. A home is an expense. People, even wealthy people, buy homes to LIVE IN. They, and I, could care less about rental parity. They, and I, get it, whenever it is of interest to get it, and sometimes it is not of interest. I grew up in MB, and when folks buy a home to live in, especially a three story box close to the sand, rental parity does not mean squat. When buying the MIra Costa feed ins, rental parity is not even on the radar.
My last post was sarcasm. But, not to worry. No more sarcasm from me. That was my last post at ochousingnews.com. Wish all of you well.
Jimmy,
Don’t go away. Without people like you providing a different perspective, we become an echo chamber.
You know you are providing a point of view that goes against the prevailing opinion here, so you will take hits for it. Mellow Ruse and El O have been coming here for 2 1/2 years, and besides taking shots at each other, others occasionally join in.
Agreeing with us is not a precondition to posting your comments. I hope that you reconsider.
I knew you were being sarcastic. My response was based on such knowledge.
Cowboy Up!
jimmy-
It would be a serious shame if you took off. I’ve been following your posts since the Lansner blog days and I enjoy reading your viewpoint. A lot of times the most successful investors see opportunities that the crowd shuns, and if you try to convince others it can be frustrating. I would say that the way your posts have influenced my thinking is not to look only at the current cashflow yield, but to project what the yield will be in 5, 10, and 20 years down the road. That is an outstanding point that I guarantee 99% of investors overlook. Anyway, I hope you stick around, but if not, thanks for the insight.