January Stats Preview: A Glimmer of Hope for Inventory

The first month of 2016 is now behind us, so let’s have a look at our monthly stats preview. First up, here’s the snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series:

King & Snhomish County Stats Preview

A glimmer of hope for buyers in King County: Inventory actually increased slightly from December to January! Unfortunately for Snohomish County buyers the same is not true there. Meanwhile, sales were down big from December but up slightly from a year ago in both counties, and foreclosure notices were down just slightly from last year as well.

Next, let’s look at total home sales as measured by the number of “Warranty Deeds” filed with King County:

King County Warranty Deeds

Sales in King County slipped 36 percent between December and January (a year ago they fell 33 percent over the same period), and were up 3 percent year-over-year. I do not expect to see large year-over-year increases in sales this year unless inventory dramatically picks up from its current levels.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Snohomish County Deeds

Deeds in Snohomish fell 34 percent month-over-month (vs. a 25 percent drop in the same period last year) and were up 5 percent from January 2015.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

King County Notices of Trustee Sale

Snohomish County Notices of Trustee Sale

Foreclosure notices in King County were dpwn 1 percent from a year ago and Snohomish County foreclosure notices were down 5 percent from last year.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

King County Trustee Deeds

Trustee Deeds were down 34 percent from a year ago, and down 10 percent from a month ago. Frankly in this market it is amazing that anyone is still losing their home to foreclosure.

Lastly, here’s an update of the inventory charts, updated with previous months’ inventory data from the NWMLS.

King County SFH Active Listings

Snohomish County SFH Active Listings

Inventory edged up 8 percent month-over-month in King County—the first increase since July—but is still down dramatically from a year earlier. In Snohomish County though, inventory was down 5 percent from December to January, and still down big from a year earlier as well.

Note that most of the charts above are based on broad county-wide data that is available through a simple search of King County and Snohomish County public records. If you have additional stats you’d like to see in the preview, drop a line in the comments and I’ll see what I can do.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.


About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

50 comments:

  1. 1

    Glimmer of hope? Tim an optimist? ;-)

  2. 2

    Inventory Could Be Increasing

    Perhaps buyers are gun shy? They wonder when this stagflation will turn into an actual depression. Soon at a theater near you.

  3. 3
    GoHawks says:

    Looks like a glimmer of hope is grasping at straws. We can’t read too much into monthly changes Dec-Jan. Bottom line is pendings are holding and inventory is still terrible.

  4. 4
    erik says:

    It looks more to me like King County inventory is down 774 units.

  5. 5
    IBuyHouse says:

    Inventory should have been 4x of what it is for demand to be satisfied.

    Forget all charts and just look at the Redfin like history for good houses that sold 9 months ago (peak summer with lots of buyers) to now (they say less buyers in winters). Here is the quick observation based on 14 similar single family home comparisons:
    – Avg likes in Summer 2015: 35
    – Avg likes in January 2016: 110

    Go to open houses. You will not see speculators. You will see middle class families with a kid or two. This is a real demand play. It will last at least 4 years.

  6. 6

    RE: IBuyHouse @ 5
    Speculators Investing in Seattle Real Estate?

    Knife juggling sounds safer.

  7. 7
    Erik says:

    RE: IBuyHouse @ 5
    Good point. I too think we will have low inventory for another 4 years. In fact my best guess is the bubble won’t pop for another 8 year.

  8. 8
    Blurtman says:

    RE: Erik @ 7 – Beware the Ides of March.

  9. 9
    Cap''n says:

    On the supply side, I see no glimmer of real hope. Listings in Seattle proper have a disproportionate-to-historical chance of selling to a builder/speculator, keeping it off market until the “3x lot” or whatever shows up. And that still leaves a rabid amount of “typical” buyers that are far less than satiated. Seattle listings could increase 100 percent and no one would scream that we are in a balanced market. Remodel and hold is the mantra for most.

  10. 10
    GoHawks says:

    Human nature, people don’t sell when prices go up, they sell when prices go down. Same thing with buying. They buy when prices rise, not fall.

  11. 11
    Steve says:

    Just looked on Redfin and there is only one townhome for sale in Capitol Hill, and its over $900,000 !
    Light rail opens up on the Hill in mid- March and wondering what impact that will have on home/condo prices? Anyone have any ideas or articles that could provide some thoughts? Thanks, in advance.

  12. 12
    ESS says:

    Light rail opens up on the Hill in mid- March and wondering what impact that will have on home/condo prices? Anyone have any ideas or articles that could provide some thoughts? Thanks, in advance.

    And to add to the question from above from Steve, what is the time frame that the introduction of light rail arriving in an area impact home/condo prices? At the planning stage, two or three years out, or when the project starts to operate? Furthermore, how close or far away from a light rail station are property values impacted?

  13. 13

    By ESS @ 12:

    And to add to the question from above from Steve, what is the time frame that the introduction of light rail arriving in an area impact home/condo prices? At the planning stage, two or three years out, or when the project starts to operate? Furthermore, how close or far away from a light rail station are property values impacted?

    For light rail through the Rainier Valley people were talking about it before construction began. So I think you had to be early, but being early had risks–particularly given Seattle’s history of actually carrying through on construction projects. Remember the ramps to nowhere in the Arboretum, and near the I-5/I-90 Interchange?

    I still have a saved search that looks for properties within 1/2 mile of each of those stations. Some people would be willing to walk further, but I think that’s a reasonable distance for impact.

  14. 14
    ess says:

    By Kary L. Krismer @ 13:

    By ESS @ 12:

    And to add to the question from above from Steve, what is the time frame that the introduction of light rail arriving in an area impact home/condo prices? At the planning stage, two or three years out, or when the project starts to operate? Furthermore, how close or far away from a light rail station are property values impacted?

    For light rail through the Rainier Valley people were talking about it before construction began. So I think you had to be early, but being early had risks–particularly given Seattle’s history of actually carrying through on construction projects. Remember the ramps to nowhere in the Arboretum, and near the I-5/I-90 Interchange?

    I still have a saved search that looks for properties within 1/2 mile of each of those stations. Some people would be willing to walk further, but I think that’s a reasonable distance for impact.

    We traveled on the light rail two weeks ago to the airport, and I noticed some increased residential development near some of the stations, while other stations appeared to have not much of anything happening. Of course these things take years to develop.

    On the other hand, Vancouver’s light rail system spurred dramatic development. Huge residential towers were constructed by some of the stations, especially in New Westminister. The last stop in Richmond BC has both shops and apartment buildings where none were before.

    The way traffic and the lack of housing is developing in the Seattle area, hopefully large scale and density intensive projects will develop adjacent to the light rail stations. That would alleviate some of the housing shortage in the area, as well as increase the number of riders for light rail.

    I think having one’s residence close to a light rail station is a double edged sword. On one hand, it is great to be able to access light rail without having to drive or take a bus. On the other hand, a light rail station will not only increase traffic adjacent to it, but possibly undesirable activity. Perhaps close – but not too close is the best choice.

    I remember the ramps to nowhere next to Forster Island. As a kid, I used to visit Forster island, and occasionally people would jump off the ramps into the water.

  15. 15
    Immobiliengoldfisch says:

    RE: Cap”n @ 9

    What’s a “3x lot”?

  16. 16
    sleepless says:

    By IBuyHouse @ 5:

    This is a real demand play. It will last at least 4 years.

    RE: IBuyHouse @ 5 – Cannot buy a house without a job. Our company trimmed 7% of its workforce just a couple of week ago. Rekoveree… Didn’t mention, we are a tech company. Tech companies also go thru difficult time especially most of the nowadays startups earn nothing but burn thru the investors cash. All those zillows, snapchats, ubers, etc are losing money on daily basis…

  17. 17
    redmondjp says:

    By Immobiliengoldfisch @ 15:

    RE: Cap”n @ 9

    What’s a “3x lot”?

    When the buyer/developer can sell the finished lot/house for at least 3x what they paid for it. Read the comments for the previous post on this site for more detail.

  18. 18
    Blake says:

    Beware… Mr. Bond market is flashing warning signs. Japan (the 3rd largest economy) just went to -0.10% interest rates… and I just saw this piece saying that the Fed will also have to go negative eventually…
    http://www.cnbc.com/2016/02/01/why-the-fed-must-go-negative-on-interest-rates.html
    “The Bank of Japan surprised the world late last week when it decided to use the nuclear option of monetary policy to stimulate its stagnant economy … negative interest rates. Japan joined eight other countries whose central banks, or treasuries, are charging customers to hold their money. Switzerland and Sweden are among several countries with rates below zero. In Germany, anyone who buys a German bund, (bond) pays the government for the privilege of lending Berlin money.”

    How crazy is that?
    I just refied at 3.0%, but now I think the bank should pay ME to loan me that money!? :-)
    (…my “investments” in the years ahead will be paying off that debt giving me a guaranteed 3% return per year tax free!)

    Deflation is bad sh*t, because it is so hard to reverse:
    The Economist explains “Why deflation is bad” (Jan 7th 2015)
    -snip- “The nominal interest rate cannot fall below zero, because that would mean reducing savers’ bank balances every month, and would prompt them to withdraw their deposits from banks and stash cash under the bed. Together with inflation, this puts a floor on the real interest rate too. If inflation is low and real rates can’t fall far enough to boost demand and perk up prices, demand will weaken still further. This is the dreaded deflation trap.
    …To avoid the trap, central banks can resort to unconventional policies such as quantitative easing, although there is debate over their fairness and efficacy (hah! yes!!). In the long run, some economists think inflation targets should be higher. That would give more room for real interest rates to fall when economies are hit by negative shocks. But in a few decades, the problem may disappear: in a cashless economy it is impossible to stash money under the bed.” (end quote)

    Fun times ahead! … Brother can you spare a bitcoin?

  19. 19
    Deerhawke says:

    I am glad that Tim is an optimist because it beats the alternative.

    On the other hand, I would not put any money on this being a good spring for buyers. In fact, if I were making a bet, mine would go in the opposite direction.

    For one thing, month-on-month statistics are only useful in the certain limited circumstances. And the story told by the year-on-year statistics is the same story we have been seeing for some time now. Sales up despite inventory dropping. It is hard to see how this will not result in a solid price increase.

    For another thing, as a builder I am seeing tremendous competition for teardown sites and buildable lots. And there is a even more competition for nearly completed houses.

    Sign of the times– I got calls from 2 different real estate agents who have had someone pull the permits for the houses I am building. They printed out the floorplans and have sent someone by to photograph the houses, including shots of the interior of the house taken through the windows. They want to set up a time for their buyers to come through so they can make an offer before the house goes on the market. And they say they are willing to make an offer that includes a premium to cover the amount that might be earned through a bidding war.

    Is that the sign of a market that is getting better for buyers?

  20. 20
    Erik says:

    RE: Deerhawke @ 19
    Crazy that buyers are that desperate. Buyers that overpaid a year or so ago are reaping the benefits now. For now there is no end in site for this bubble.

  21. 21
    PleaseSell says:

    I am a buyer and have been looking since last 6 months thinking that “it will get better”. Now I feel sick. I hate the other buyers. I walk into an open house and it is like a fish market. All the people with their extended families crawling over the house like it is theirs already. Are the houses being given away for free? Sure not – just look at some examples of the listing price vs selling price.

    https://www.redfin.com/WA/Redmond/14420-NE-61st-St-98052/home/516299
    https://www.redfin.com/WA/Bellevue/5923-149th-Ave-SE-98006/home/235916
    https://www.redfin.com/WA/Bellevue/2529-170th-Pl-SE-98008/home/428384

  22. 22

    Remember Kenny Roger’s “The Gambler” Song Lyrics?

    Snippet:

    “…You’ve got to know when to hold ’em
    Know when to fold ’em
    Know when to walk away
    And know when to run
    You never count your money
    When you’re sittin’ at the table
    There’ll be time enough for countin’
    When the dealin’s done

    Every gambler knows
    That the secret to survivin’
    Is knowin’ what to throw away
    And knowin’ what to keep
    ‘Cause every hand’s a winner
    And every hand’s a loser
    And the best that you can hope for is to die
    in your sleep…”

    SWE’s financial Report for January 2016:

    2016
    Jan 0.19% 1.49% (4.96%) (8.72%) (5.62%)
    YTD 0.19% 1.49% (4.96%) (8.72%) (5.62%)
    Last 12 mo 2.06% 0.28% (0.59%) (9.72%) (7.21%)

    The order is long-term CDs, long-term bonds, American stocks, foreign stocks and foreign stocks.

    Long-term CDs grabbed the most cash! General Mutual Fund Stocks are all losses, a joke.

    Home prices paced by general stock market? Eventually?

    Maybe we should ask Trump, the other establishment candidates all lie? LOL

  23. 23

    RE: Blake @ 18
    During Katrina Even Gold Wouldn’t Feed You, Let Alone Cash

    A case of beer, can of coffee, ammo or bag of weed would get you the bag of food though.

  24. 24

    By ess @ 14:

    We traveled on the light rail two weeks ago to the airport, and I noticed some increased residential development near some of the stations, while other stations appeared to have not much of anything happening. Of course these things take years to develop.

    . . .

    I think having one’s residence close to a light rail station is a double edged sword. On one hand, it is great to be able to access light rail without having to drive or take a bus. On the other hand, a light rail station will not only increase traffic adjacent to it, but possibly undesirable activity. Perhaps close – but not too close is the best choice.

    There are a number of townhouse projects near the stations, but probably not so close to the line that you would actually see them. So maybe that is reflecting your concern. That and developers can probably get more money and faster sales for units which are not directly next to a busy street.

  25. 25

    RE: Kary L. Krismer @ 24
    Toastmasters at the Boeing Field Site

    We now have more non-Boeing employees than Boeing employees attending….another technical bit the dust today, but will be attending as a non-Boeing or equivalent individual. Did anyone say stealth layoffs? Its embarrassing to the Boeing folks to admit it, but the truth is hard for the “Establishment” media to swallow? Snippet from Bruce Springsteen’s My Hometown:

    “…Now Main Street’s whitewashed windows and vacant stores
    Seems like there ain’t nobody wants to come down here no more
    They’re closing down the textile mill across the railroad tracks
    Foreman says these jobs are going boys and they ain’t coming back to your hometown
    Your hometown
    Your hometown
    Your hometown…”

    Seattle will never become a Detroit….LOL

  26. 26

    RE: softwarengineer @ 25
    Stable Low Priced Oil Forever?

    There goes our wages’ and pensions’ COLAs, down the oil depression drain.

    https://finance.yahoo.com/news/wont-see-70-oil-until-153900001.html

    New Seattle Homes plummet in price too?

  27. 27
    GoHawks says:

    RE: softwarengineer @ 26 – The sun rose today Softwareenginner, the sky did not fall, have a cup of coffee and smile. Life could be a lot worse.

  28. 28
    Blake says:

    By GoHawks @ 27:

    RE: softwarengineer @ 26 – The sun rose today Softwareenginner, the sky did not fall, have a cup of coffee and smile. Life could be a lot worse.

    SWE is retired now… he’s worried about the rest of us!

  29. 29
  30. 30
    Blurtman says:

    By Homeshopperrr @ 29:

    Mortgage rates are crazy low:
    http://www.bankrate.com/funnel/mortgages/mortgage-results.aspx?market=28&loan=850000&perc=20&prods=4&fico=740&points=Zero&cs=1

    But the media is blaming Yellen for raising rates too soon. And how is it that recently insolvent institutions with a continuing history of committing fraud and paying billion dollar fraud settlements can borrow near zero?

  31. 31
    redmondjp says:

    RE: Blurtman @ 30 – Fascinating, isn’t it? They claim that they raised rates, but there is no real evidence that it actually happened . . .

  32. 32
    greg says:

    RE: softwarengineer @ 25

    Microsoft continues its stealth layoffs. A dozen here, 18 there never ending. They then rehire for slightly different jobs but hire H-1B or at entry level.
    This has been going on for at least 5 years, the media are completely ignoring it. It is all about keeping wages down and controlling employees.
    Long term I suspect MS will shift growth away from the NW in order to reduce costs. One wonders if the software workers of tomorrow will find themselves in the same position as the auto workers did 30 years ago.

  33. 33

    RE: PleaseSell @ 21

    It has always been easier, and usually doable, to find and buy a home in the 6 months from February through August than it is from August to February. Not uncommon for people who come to me in August to have the same “problem” for a number of reasons. Six months is not a long time, but which six months can make the experience frustrating and less pleasant. My August people in the same area and price range (generally) will be closing and moving in to their home in the next two weeks or so. That pulls at least one out of the mix for you. :) When we get to early April a lot of the backlog of “last year’s” buyers are in their homes and it gets a tad easier. More new inventory each week from here forward, every home gone pending is one less buyer. It eases up a bit more each week from here to June and then the cycle repeats.

    Bottom line, the next six months is a bit easier than the last six months. Always is that way for people who start looking in August. Some years are worse than others, but always pretty much the same problem.

  34. 34
    ess says:

    Inventory low – prices higher – and look at Snohomish County (which I am interested in). Don’t know if prices are higher because King county people who are priced out of the market are heading north and forcing prices up, or if new (and thus bigger inventory) is skewing the prices. Regardless, it is a significant increase in price.

    http://www.seattletimes.com/business/economy/shortage-of-homes-for-sale-drives-prices-higher/

  35. 35
    Erik says:

    RE: greg @ 32
    Maybe the gluttony is over for software people? They seem way overpaid for their intelligence level anyway.

  36. 36
    Ron says:

    No one said software engineers were that intelligent or that intelligence had anything to do with your salary. They are just in high demand.

  37. 37
    redmondjp says:

    RE: greg @ 32 – Don’t tell the City of Redmond about this! They are planning on unending growth. City finances will be devastated otherwise. It will be interesting to see if there are any observable effects this year from the Microsoft vendor employee time out period that is affecting some unknown number of workers.

    Did anybody else notice in local news this week that the City of Des Moines has a $1M budget deficit and is planning on employee furloughs? During these booming economic times? Hmmmm . . . maybe they can set up an RV park near a methadone clinic!

  38. 38

    RE: greg @ 32
    When CCs Like Green River and Our High Schools Were Most of the Techs in MSFT

    Innovative products like Windows 95 and 98 emerged in the 90s….today’s labor on the cheap legal American replacements method= VISTA computer programming and X-Box apocalypse video games . Enough said. Degreed engineers are a tiny minority of MSFT’s workforce, ask the no degree Bill Gates….who thinks he has the degree engineering credentials to rate real engineers? LOL

    Yep, I’m retired at 62! I still worry….like when my retirements checks arrive. I’m working P/T too for no pay, I’m swimming in retirement money today, so do case management for special needs, protective payee and medical representative duties for my Autistic adult son voluntarily. I still am on the board for a health care small company and write research reports to cut nurse and doctor workers’ labor costs. That’s what bioengineers do best….CUT LABOR costs. My current Blue Cross family plan costs $16,000/yr….they call it the Cadillac type plan….I call it a normal health insurance plan that actually covers the costs.

    BTW, most of the bioengineering is outsourced as we simultaneously in-source replacements for our laid off MASSES of RNs. Think of the money the hospitals save doing this…..LOL

  39. 39
    GoHawks says:

    RE: softwarengineer @ 38 – “I’m swimming in retirement money.” Golf clap…….

  40. 40
    Blurtman says:

    By redmondjp @ 37:

    RE: greg @ 32 – Don’t tell the City of Redmond about this! They are planning on unending growth.

    The future, Mr. Gittes!

  41. 41

    By Erik @ 20:

    RE: Deerhawke @ 19
    Crazy that buyers are that desperate. Buyers that overpaid a year or so ago are reaping the benefits now. For now there is no end in site for this bubble.

    Buyers only reap the benefits when they sell. Until then, in a rising real estate market, they just pay higher property taxes.

  42. 42
    MD says:

    AMZN is down 27% in the past 5 weeks. The stock market is showing clear signs of distress. If we get hit hard by a bear market this year, it may quickly become a buyers market in Seattle.

  43. 43
    Blurtman says:

    By MD @ 42:

    AMZN is down 27% in the past 5 weeks. The stock market is showing clear signs of distress. If we get hit hard by a bear market this year, it may quickly become a buyers market in Seattle.

    “For some home buyers, the funds for their down payment comes from their stock portfolios. When the stock market slides, so does the net worth of investors. Without the necessary liquidity to make the down payments, home buyers are forced to defer their purchases. Rising stock prices restore portfolio values, creating the funds for home buying.”

    http://finance.zacks.com/stock-market-affect-housing-market-7272.html

  44. 44
    js says:

    One wonders if the software workers of tomorrow will find themselves in the same position as the auto workers did 30 years ago.

    It’s getting much quicker and easier to write code these days, and it seems like more and more software work is connecting existing systems via APIs.

    My guess is at some point we will reach “peak automation”, where most of the software has already been written and/or the software writing itself is mostly automated. At this point, demand for knowledge workers will start to go down, a lot of them will have to find a different line of work. Any guesses? Perhaps they can use their quick fingers to become piano players? Massage therapists? Sew clothing for a living? Three card monte?

  45. 45
    David B. says:

    RE: Erik @ 35 – You better hope not. It’s the salaries of us software people that’s driving the local real estate market you’re attempting to profit from.

  46. 46
    gabbar says:

    Correction will come. 2012 was not that far ago. Microsoft is making less money this year than it was making then, but higher multiples support a higher stock price. Startup funding is slowing down. Seattle market is heavily tied to tech now. Look at what happened to the cloud companies in today’s stock trading. LinkedIn and Tableau got their stocks halved in 1 day.

  47. 47
    Erik says:

    RE: David B. @ 45
    That’s true. I want one more big score from you software people before the big one comes and takes your jobs.

  48. 48
    Deerhawke says:

    Of course, Tim will be posting his data so we can have a more informed discussion, but just looking at the stats in the Seattle Times this morning, it appears that we have definitely arrived at the point where a lack of inventory is pinching off sales. There is no real standing inventory left. If there are no new new listings, there can’t be any new pendings. It is pretty much a 1 to 1 ratio.

    Or maybe we can infer that lack of inventory and high prices are diverting sales south. While sales were down in Seattle, the East Side and North King County, they were up in Southeast and Southwest King County. Interesting to note that the couple profiled in this morning’s Seattle Times article wanted to buy in West Seattle but ended up buying in Burien.

    And the median price in Seattle broke $600,000 for what I think is the first time. It was up 19.5% from last January’s $517,500 to $618,450. A cool hundred thousand dollars increase in one year. Wow.

    So the question is whether this is a bubble or whether this is just the new normal. I have seen both. In the late 80’s I was living in Manhattan and watched condos on the Upper West Side double in value in a year. The received wisdom said it was a bubble, but guess what– the price never went back down. In 2007, I sold most of the lots I owned because I was sure it was a bubble– and it was.

    If I were to guess, I would say this is a fundamental change in the market rather than just a temporary bubble.

    Pure and simple, we have a lot of people moving here from all over the country. There are jobs here and people want this lifestyle. The people who were already here don’t seem to be inclined to sell their houses and leave. And it is hard (and expensive) to build new for-sale housing. We have natural and legislative growth constraints that restrict development. As a result, little is coming on the market and whatever does triggers multiple offers and gets substantially bid up. Overall, it is really all about rising demand and restricted supply.

    A friend believes that the only thing that will bring down the price of housing in Seattle is getting hit by the inevitable “big one.” But then I pointed out to him that after Katrina the price of housing in New Orleans went up dramatically.

  49. 49
    Blake says:

    RE: gabbar @ 46
    Re: LinkedIn and Tableau got their stocks halved in 1 day.

    70-80% of the stock trading (at least) is short term speculation… you can expect to see some more of this as this hot money shifts and goes elsewhere..

    It all “afloat”…
    Japan has gone full monetization and well be pumping 80 trillion yen per year into their markets (and all over the world) for the foreseeable future. ETFs, REITs, US bonds etc.
    http://ritholtz.com/2016/02/156379/
    -snip- We expect the entire array of debt instruments issued by the government of Japan to transact at an eventual interest rate of zero or lower. Thus Japan can finance itself with the assistance of its central bank at no interest cost and without reasonable limits. Deficits don’t matter; interest rates don’t matter; and the capacity to finance is without limits until some market reaction occurs to alter this mix.

    Japan is the third largest economy in the world, and it is a mature capital market system. It has an active stock market with companies that are engaged in global finance and commerce. Furthermore, Japan operates with a system that discourages activist influences from affecting its corporate and business culture. It also has an aging demographic.

    The BOJ’s new policy means that the force of subzero interest rates will be applied to an economy where rates have been near zero for two decades and where attempts to reignite inflation have been singularly unsuccessful. The BOJ’s inflation target is a sustainable 2%, but they have been unable to reach that level for two decades.

    You will see BOJ allocations to buy an ETF of stocks and a basket of REITs, in addition to debt instruments of various types. It is still difficult to assess the effects of these extraordinary Japanese measures, coupled with equally remarkable negative-interest-rate policy measures being implemented in Europe, on interest rates and inflation pressures in other mature and maturing economies around the world. We now have a situation where one-fourth of global GDP is produced in 23 countries that are trading with a negative-interest-rate policy.

  50. 50
    kmac says:

    By ess @ 14:
    On the other hand, Vancouver’s light rail system spurred dramatic development.
    ……………………………………………………………………………………………………………

    You mention Vancouver regularly.
    It sounds like things may be starting to unravel up there:
    This $6.2M Vancouver mansion was sold in 2010: It’s been vacant and rotting for six years
    http://news.nationalpost.com/news/canada/this-6-2-million-mansion-was-sold-in-2010-today-its-vacant-and-rotting

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