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Home Prices In 80% Of US Cities Grow Twice Faster Than Wages... And Then There's Seattle

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Posted by ZeroHedge

on Wednesday, 27 December 2017 06:59

According to the latest BLS data, average hourly wages for all US workers in November rose at a stubbornly low 2.5% relative to the previous year, well below the Fed's "target" of 3.5-4.5%, as countless economists are unable to explain how 4.1% unemployment, and "no slack" in the economy fails to boost wage growth. Another problem with tepid wage growth, in addition to crush the Fed's credibility, is that it keeps a lid on how much general price levels can rise by. With record debt, it has been the Fed's imperative to boost inflation at any cost (or rather at a cost of $4.5 trillion) to inflate away the debt overhang, however weak wages have made this impossible.

Well, not really. Because a quick look at US housing shows that while wages may be growing at roughly 2.5%, according to the latest Case Shiller dataevery single metro area in the US saw home prices grow at a higher rate, while 16 of 20 major U.S. cities experienced home price growth of 5% or higherdouble the average wage growth, and something which even the NAR has been complaining about with its chief economist Larry Yun warning that as the disconnect between prices and wages become wider, homes become increasingly unaffordable.

And while this should not come as a surprise - considering we have pointed it out on numerous occasions in the past - one look at the chart below suggests that something strange is taking place in Seattle, which has either become "Vancouver South" when it comes to Chinese hot money laundering, or there is an unprecedented mini housing bubble in the hipster capital of the world. Also worth keeping an eye on: price appreciation in Sin City has quietly surged in recent months, and in September home prices surged 10.2% Y/Y, the only other double digit price increase in the US after Seattle. Considering that Las Vegas was the epicenter of the last housing bubble when prices exploded higher only to crash, it may be a good idea to keep a close eye on price tendencies in this metro area. 

case sept oct 0

....continue reading HERE

...also from ZeroHedge:

Charles Hugh Smith Explains "Why I'm Hopeful"



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Real Estate

Coming Housing Boom Could Mean It's Time to Add Raw Materials

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Posted by Frank Holmes - US Global Investors

on Thursday, 21 December 2017 06:40

another-housing-bubble-12202017

In its November report, mortgage security firm Freddie Mac called 2017 the “best year in a decade” for the housing market by a variety of measures. These include low inflation, strong job growth and historically-low mortgage rates. This assessment is very encouraging, not just for homebuyers and builders and the U.S. economy in general, but also for commodities, resources and raw materials as we head into 2018.

Although past performance is no guarantee of future results, it’s still instructive to look back at how materials performed the last time the U.S. was ramping up housing starts and mortgages. The last housing boom, which peaked in 2006, was accompanied by elevated commodity prices. We could see a return to these valuations over the next couple of years on higher demand, a stronger macroeconomic backdrop and cyclical fundamentals, as shown in the following chart courtesy of DoubleLine Capital:

equities versus commodities
click here to enlarge

Speaking on CNBC’s “Halftime Report” last week, DoubleLine founder Jeffrey Gundlach said he thought "investors should add commodities to their portfolios” for 2018, pointing out that they are just as cheap relative to stocks as they were at historical turning points.

“We’re at that level where in the past you would have wanted commodities” in your portfolio, Gundlach said. “The repetition of this is almost eerie. And so if you look at that chart, the value in commodities is, historically, exactly where you want it to be a buy.”

A Wealth of Positive Housing Data



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Real Estate

Canada's 6 City Housing & The Plunge-o-Meter

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Posted by Brian Ripley - Canadian Housing Price Charts

on Tuesday, 12 December 2017 09:04

6cityh

Click chart for Larger Version 

In December 2017 Toronto metro SFD prices, 8 months since the March 2017 spike and peak price, continued slipping and to date have lost $207,895 or 18%. Vancouver prices are still defying gravity; FOMO and speculative pricing is still on. 

Anyone owning a detached house in the scorching hot Vancouver market is sitting on an unredeemed lottery ticket with time running out as buyers hibernate into the seasonal decline. The Bank of Canada interest rate up-moves is thinning the crowd even more.

 
In Calgary prices are labouring under the new Energy Sector 2.0 as the oil majors head for blacker fields; big money is fleeing Canada and has been for nearly 20 years, and on the street, Calgary buyers are avoiding condo units in favour of townhouses and especially detached properties.
 
​When earnings drop so do asset prices. ​Wage earners needed to buy a single family detached house in: Vancouver: 3.4, in Toronto: 1.9, in Calgary: 0.9 and in Montreal: 0.7

​It remains interesting to note that the combined average sum price of a Vancouver, Calgary & Toronto condo is currently 49% more expensive than a median priced Montreal SFD;  last month it was 52% (no typo). It was 51% in APR 2017, 49% in FEB 2017 and 41% in July 2016 at the Vancouver peak. Montreal has more listing inventory available for sale than any of the other 5 biggest metros in Canada and the lowest monthly absorption rate based on total listings and sales.

Screen Shot 2017-12-12 at 8.17.30 AM

In case you have forgotten the depth and velocity of the previous market reversal when Canadian real estate prices plunged in 2007-2008 (chart); householder equity vanished as follows:

  • '07-'08 Average Vancouver SFD lost $122,900, or 15.9% in 8 months (2%/mo drop)
  • '07-'08 Average Calgary SFD lost $92,499, or 18.3% in 18 months (1%/mo drop)
  • '07-'08 Average Edmonton SFD lost $78,719, or 18.5% in 21 months (0.9%/mo drop)
  • '07-'08 Average Toronto SFD lost $63,867, or 13% in 13 months (1%/mo drop)
  • '07-'08 Average Ottawa Residence lost $25,664, or 8.6% in 6 months (1.4%/mo drop)
  • '07-'08 Median Montreal SFD lost $6,000, down 2.6% in 6 months (0.4%/mo drop)

 



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Real Estate

November Figures: Vancouver vs Toronto Single Family Prices

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Posted by Brian Ripley - Canadian Housing Price Charts

on Friday, 08 December 2017 06:58

vanchart

Larger Chart & More Analysis

In November 2017, Vancouver detached house HPI prices remained at resistance but strata prices continued ticking up through the July 2016 peak. The manic buying spree moved detached prices up 21.5% per year since the JAN 2013 low and are now up 121% in the last ten years.

chart-toronto 12 orig

Larger Chart & More Analysis

In November 2017 the Toronto housing sector prices remained depressed below their near term showoff spike highs as listing levels spike on seasonally slow sales; that and the winter tendency to hibernate is producing the right side of the "Eiffel Tower" price series.​

Compare Vancouver & Toronto Housing Chart HERE



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Real Estate

Three Buy Signals for This Hated Sector

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Posted by Chad Shoop - The Edelson Institue - The Edelson Institue

on Tuesday, 05 December 2017 07:28

It seems like investors were writing off the real estate sector entirely.

With the rise of technology used to shop online, work from home and even go to school, real estate has been a hated sector.

But it’s a sector I have been a fan of this year, triggering gains of 15% and 17% in my Pure Income service.

That’s because even though I know the landscape for real estate is changing, I still see the crowds at the malls, the wait times at restaurants and the continued need for hospitals and health care facilities.

So the decline in values recently has looked like an opportunity to me.

But my personal experience or viewpoint doesn’t have anything to do with my recommendation today.

Instead, three separate computer-based buy signals are flashing bullish signals on the real estate sector, and I have a possible triple-digit opportunity for you.

Let me explain.

Three Buy Signals for the Real Estate Sector

Let’s start with the three buy signals on the sector before I give you the opportunity.

The first is the most basic, a price chart of the SPDR Real Estate Select Sector ETF (NYSE: XLRE).

shoopchart1



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