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US Real Estate ... IYR, HGX, PHM


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US Real Estate ... IYR, HGX, PHM

Updated May'23: OverValued at $67? But PE is only 6x

PHM- etc ... 10yr chart: since 2013: Apr.21: $67.13, PER: 5.79, Yield: 0.95%

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10yr chart: since 2013:

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http://rt.com/business/171496-china-california-homes-property/

China buys $22bn worth of US homes, leads global pack

Chinese buyers spent $22 billion on US homes in the 12-month period ending in March, or about 24 percent of total foreign sales by dollar value, according to a study released Tuesday by the National Association of Realtors (NAR). That’s up from $12.8 billion, or 19 percent, on the previous year.

Total international purchases of American homes jumped to $92.2 billion, according to the NAR, an increase of $68.2 billion on the year before and $82.5 billion for the year ending in March 2012.

Foreign clients made up about 7 percent of transactions in the $1.2 trillion US real estate market.

Thanks to a surging economy that has seen China rival the United States as the world’s economic superpower, newly affluent Chinese customers are the silver lining in the US real estate market, which is slowly rebounding following the 2008 financial crisis.

Chinese buyers, looking for their own piece of the ‘American Dream,’ paid on average $523,148 per property. By comparison, Americans paid an average price of $199,575, according to NAR’s statistics.

Sixteen percent of sales went to Chinese buyers, and is the fastest growing sector, behind Canada at 19 percent, down from 23 percent the year before. Mexico ranked third with 9 percent of sales and India and the UK both accounted for 5 percent.

(Added in edit, a chart):

IYR / iShares U.S. Real Estate ETF ... All-Data :

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HGX / PHLX Housing Index ... All Data : 3-yrs : 12mos / 10d

http://i273.photobucket.com/albums/jj235/jimolsen2/AG/HGX-all_zpsgjbktnlq.gif

PHM / Pulte Group Ltd ... All Data : 3-yrs : 12mos / 10d

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http://www.zerohedge.com/news/2014-07-10/introducing-ghost-skyscrapers-new-york-city

 

Introducing Ghost Skyscrapers... In New York City

Late last month, New York Magazine published a lengthy and very important article titled: Stash Pad – Why New York Real Estate is the New Swiss Bank Account. ..... it’s a real shame to see the continued transformation of Manhattan into nothing more than an oligarch playground.....
“The Census Bureau estimates that 30 percent of all apartments in the quadrant from 49th to 70th Streets between Fifth and Park are vacant at least ten months a year.”
....it appears The Bank of China is facilitating money laundering for wealthy Chinese to move dirty money overseas and park it in real estate. The article is titled, Chinese Purchases of U.S. Real Estate Jump 72% as The Bank of China Facilitates Money Laundering, and noted that in some California communities 90% of purchases are being made by the Chinese. ....
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Clif High has predicted that the US housing market will crash soon after June 13th 2014

US Housing Market - Post June 13th, hits a [loosening] language structure that is multiply dimensional. Meanings of [loosening standards] (yet again), as well as [loosening (of laws?)], and [loosening] of the [damed inventory]. However, the result is being forecast as [opposite] what the [banksters] hope for. It will instead produce a [backlash (of prices?)] that will begin in the [south west] and is described as [sweeping/moving across] the [continent]. The [loosening] will NOT be a good thing over all, and is also cross linked over to [secrets revealed] where the [loosening (from banks)] will [expose] both [banksters] and [former banksters] with [piles (huge) of stolen wealth]. (6/3/2014)

http://www.zerohedge...-housing-market

 

 

Did China Just Crush The US Housing Market?

..... the marginal buyer in the US luxury housing segment was ... Chinese oligarchs ......

..... all the relentless move higher in ultra luxury properties prices was simply a recycling of China's hot money, which ..... merely ended up in US real estate.....

..."how?"

....it has to do with officially sanctioned "money laundering" services by ... two of China's largest banks: Bank of China and ... Citic.....

 

PBOC not only was aware of these secretive and law-breaking deals, but was effectively encouraging them....

....why would the PBOC agree to quietly bless this activity which it has, at least openly, blasted vocally in the past?

Simple - to keep inflation in check.

Assuming there is the anticipated resulting backlash and crackdown on Chinese banks, .... this could well be the worst possible news not only for Chinese inflation .... but also for the ultra-luxury housing in the US.

 

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"Clif High has predicted that the US housing market will crash soon after June 13th 2014"

 

After June 13th - like End of June / Early July, could prove to be an excellent call for a Top

 

 

HGX / PHLX Housing Index (INDEX)... update : 5-yr-Chart // PHM-5yrs : PHM-1yr : PHM-vs-HGX-4yrs

HGX_zps6973ac78.gif

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NEW TAX NEEDED ?

 

“The Census Bureau estimates that 30 percent of all apartments in the quadrant from 49th to 70th Streets between Fifth and Park are vacant at least ten months a year.”

....it appears The Bank of China is facilitating money laundering for wealthy Chinese to move dirty money overseas and park it in real estate.

 

Here's My suggestion:

 

TAX EMPTY apartments:

If someone can PROVE it is their main home - because they list it as their primary residence for Tax Purposes, then fine.

But if not:

They should pay a tax, the higher of:

==

+ Tax due from Rental income

+ Taxed AS IF it were rented out at 50% of Expected Rental income

 

This would encourage people to Live there, or rent it out.

Why should the Rich get away with holding these resources without contributing ??

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http://www.zerohedge.com/news/2014-08-01/suddenly-wall-street-bailing-housing

 

Suddenly, Wall Street Is Bailing On Housing

 

....traders are looking for the exits from housing debt and the door is very narrow....

 

None of this matters all the time the virtuous circle continues of billions in Fed money driving down spreads/rates across the board... but when investors get itchy fingers and decide to sell, this happens...

20140801_FNMA_0.jpg

 

As Bloomberg reports,

the $8.2 billion of risk-sharing securities sold in the last year by government-controlled Fannie Mae and Freddie Mac can shift their losses from homeowner defaults to bond buyers.
One slice of a deal issued in May traded at 95.7 cents on the dollar yesterday, down from 99.7 cents at the end of last month
, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

A plunge like this in one specific mortgage bond as small doors and large crowds do not play well with one another.

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I'm listening to the latest Clif High's report.

He said that all those non western people who have been buying property in the USA

will be abandoning American real estate because they saw all those troubles in Ferguson.

Especially at the high end of the market

They will or are trying to get out now before the Ferguson effect reaches where they have invested

These foreign buyers are the very last people propping up the market and they're leaving

He also includes Britain in this forecast as well.

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This is what he said

By late Nov /Dec, you should start seeing ..... the housing market described for 2014 in the US and in Britain, as getting ready for a depression style deflation or a dump of prices
It's going to get real ugly in terms of how that occurs as there is this race ... to get out
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PHM / Pulte - holding up pretty well ... update

 

xx

 

A good short now?

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http://libertyblitzkrieg.com/2014/10/15/meet-the-pied-a-terre-levy-the-proposed-tax-that-could-crush-high-end-nyc-real-estate/

 

Meet the Pied-à-Terre Levy – The Proposed Tax that Could Crush High End NYC Real Estate

 

....The real-estate industry is mobilizing to kill a proposed levy on non-resident owners of apartments valued at more than $5 million.....

 

Brokers warn of economic calamity if officials slap a luxury tax on apartments owned by someone who lives in the city less than half the year.

 

The measure would raise about $665 million annually by requiring part-time New Yorkers to pay a 0.5 percent surcharge on dwellings valued at more than $5 million. The tax would rise incrementally to 4 percent for units valued at more than $25 million.

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http://www.zerohedge.com/news/2014-11-19/open-floodgates-chinese-inquiries-us-real-estate-soar-35-after-easing-visa-rules

 

Open The Floodgates: Chinese Inquiries On US Real Estate Soar 35% After Easing Of Visa Rules

 

It’s bad enough that American financial oligarchs have leveraged free money polices of the Federal Reserve to purchase tens of billions of dollars in real estate only to rent it back to people who were kicked out of their homes during the 2008 crisis, but the government is now going out of its way to allow Chinese (and other foreign criminals) to launder money via U.S. property........

Apparently, the level of ill-gotten funds flowing into U.S. real estate still hasn’t reached the level desired by policy makers. As such, China and the U.S. have extended the terms of multiple entry short-term tourist and business visas to 10 years from one year.Reuters reports the result has been a 35% jump in Chinese interest.....

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http://www.zerohedge.com/news/2015-01-17/pin-meet-housing-bubble-20

 

'Pin' Meet 'Housing Bubble 2.0'

 

.... No amount of government data manipulation, feel good propaganda spewed by the captured mainstream media, or Ivy League educated Wall Street economist doublespeak, can change the fact this economy is in the dumper and headed much lower. The Greater Depression is resuming its downward march toward inevitable war.......

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http://www.zerohedge.com/news/2015-02-07/nyt-exposes-criminal-money-laundering-underworld-supporting-manhattans-luxury-housin

 

The NYT Exposes The Criminal Money-Laundering Underworld Supporting Manhattan's Luxury Housing Bubble

 

We will let readers go through the article on their own, but we will highlight something that we have been writing virtually every year since late 2011, and which, as usual, got us branded as conspiracy theorists if only in the beginning. Because, you see, once it hits the NYT it all magically becomes fact.

 

The New York Times documented a decade of ownership in this iconic Manhattan way station for global money transforming the city’s real estate market.

 

The Times also found a growing proportion of wealthy foreigners, at least 16 of whom have been the subject of government inquiries around the world, either personally or as heads of companies.

 

Lacking incentive or legal obligation to identify the sources of money, an entire chain of people involved in high-end real estate sales — lawyers, accountants, title brokers, escrow agents, real estate agents, condo boards and building workers — often operate with blinders on. As ... a former manager of the condos at Time Warner, said: “The building doesn’t know where the money is coming from. We’re not interested.”

 

What becomes clear combing real estate records is that many Time Warner buyers have taken even greater steps, beyond using L.L.C.s, to keep their names out of sight. On many deeds, the line for the buyer’s signature is left blank, is illegible or is signed by a lawyer or other representative. Phone numbers are registered under lawyers’ names; the owner’s line on renovation permits is signed by Time Warner staff members; tax statements are addressed to the L.L.C.s. And because most of the sales are in cash, there are few mortgage statements, another public document that might identify an owner or trigger scrutiny.
Nobody knows where the money comes from. Why? Because most of the time it has been obtained illegaly
There is much, much more in the NYT article, most of it dealing with the revealed identities of the buyers, most of whom one can say with absolute certainty are either domestic or offshore tax-evaders, oligarchs or outright "organized" crime lords, or even worse
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