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We Are Concerned About The Real Estate Market – Part II – Yahoo Finance



Hedge funds and banking institutions may already be feeling the pressure to attempt to contain the losses that are piling up (source: bloomberg).

An extended decline in the global markets will continue to place pressure on institutional financial markets, banks, hedge funds, and other traditional lending and investment firms.  Investors will start to pull investment capital away from risk (out of the markets and funds) and may expose some of these larger institutions’ excessive leverage and risk exposure in the process.

This is almost exactly what happened with Bernie Madoff when his firm, Bernard L. Madoff Investment Securities, collapsed in December 2008.  As long as there was no pressure on his firm from clients pulling out capital or asking too many questions, he was allowed to continue running his Ponzi scheme.  Once investors started pulling capital out of the firm and questioning the transactions/reports, it became evident that it was all a house of cards and would come crashing down quickly.

If larger investment firms and hedge funds are attempting to “buy the dip” at this point in time, we believe they are making a grave mistake.  We believe the downside risks associated with the Covid-19 virus event are just starting to unfold and the collateral damage that may come from this massive global shutdown that is currently taking place will be unprecedented.  We don’t believe there has been anything like this happening in any recent history – even WWII pales in comparison to this event.

News is starting to hit the wires about large investment firms and Real Estate investment companies sounding the alarm. The fear is evident in the short content of a news article.

“Loan repayment demands are likely to escalate on a systemic level, triggering a domino effect of borrower defaults that will swiftly and severely impact the broad range of stakeholders in the entire real estate market, including property and homeowners, landlords, developers, hotel operators, and their respective tenants and employees,” he wrote.

Just take look at the foreclosures in the major cities starting to spike in the maps below. This was before the virus closed down most businesses, and everyone losing their jobs. Give the fact that 70% or more of the world lives pay-check to pay-check, foreclosures and real estate values are likely to plummet lower to an extreme similar to how overpriced they are now.

I have talked about his in some presentations, and in videos in the past how real estate is grossly overvalued and when the music stops, prices will tumble. Huge opportunities for those who can preserve their capital until the recession matures enough will be able to buy real estate, businesses, and equipment for pennies on the dollar, but this will take another 1-2 years from now I imagine, but it will be great for those with money on hand when things get ugly.

<h3 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Current Los Angeles Foreclosure Map
” data-reactid=”20″>Current Los Angeles Foreclosure Map

Current San Francisco Foreclosure Map

Current New York Foreclosure Map

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Many of you may remember my Crunching Numbers article from just a week ago where I attempted to model what I believe would be the likely outcome of US GDP over the next 5+ years?&nbsp; Well, it now appears others are following up with their own predictions for US GDP.&nbsp;&nbsp; Based on some of the expectations within this Bloomberg article, my predictions pale in comparison to these comments.&nbsp; Source:” data-reactid=”75″>Many of you may remember my Crunching Numbers article from just a week ago where I attempted to model what I believe would be the likely outcome of US GDP over the next 5+ years?  Well, it now appears others are following up with their own predictions for US GDP.   Based on some of the expectations within this Bloomberg article, my predictions pale in comparison to these comments.  Source:

Now, let’s try to be realistic about how this entire process is likely to take place.  We know the economy will find a base (at some point) and attempt to recover from this virus event.  The question is what does that base look like and where is the bottom?

We won’t really know where the bottom is in the global markets until most of the unknowns have been processed, most of the collateral damage has been identified and processed, and consumers realize the bottom is in sight.  At that point, there is a real chance that the global markets will begin a recovery process that may eventually push to new all-time highs.

What we’re concerned about right now is the Q1 and Q2 economic activity and how that relates to consumer markets, credit markets, existing business enterprises and the potential collateral damage to hard assets like homes, commercial real estate and other foundations of wealth.  We believe the first few dominos of this event will be the collapse of jobs, earnings, and consumer spending.  The longer the global stays in a mostly shutdown economic environment, the greater the risks these critical numbers will implode – possibly taking with it the rest of the economy.

We believe the suspension of Foreclosures for a potential 12 month period may not reduce the total number of foreclosures across the US, we believe it may compound the problem.  The suspension effort is designed to help people stay in their homes if their incomes become threatened or lost.  But the reality is that a Foreclosure suspension will simply start to build larger and larger numbers of properties in foreclosure (waiting for the suspension to be lifted) while home prices potentially collapse.

We’ll dig into more data in Part III of this article and attempt to illustrate the data we believe will point to a clearer picture of how all of this may unfold in the near future.

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for short-term swing traders.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Visit my&nbsp;ETF Wealth Building Newsletter&nbsp;and if you like what I offer, and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.” data-reactid=”82″>Visit my ETF Wealth Building Newsletter and if you like what I offer, and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Chris Vermeulen
” data-reactid=”83″>Chris Vermeulen

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article was originally posted on FX Empire” data-reactid=”84″>This article was originally posted on FX Empire


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Real estate publisher lets 70 go, blames coronavirus impact – Toronto Star



Key Media, the Toronto-based publisher of trade magazines Canadian Mortgage Professional and Canadian Real Estate Wealth, has cut more than a third of its global workforce amidst the economic fallout from the COVID-19 pandemic.

This week, the publishing and conference company issued severance notices to 70 people, in offices as widespread as Canada, the U.S., U.K., Singapore and Australia.

Before the wave of cuts, the company employed almost 200 people in eight offices

One employee who received a severance notice said they’d been told by a Key executive that the biggest reason for the cuts was that the company’s conference business had dried up almost all at once, because of the global COVID-19 pandemic.

“The current economic climate has had a huge effect on the company’s revenues, and we have forecast a significant negative impact on the company’s bottom line for 2020. This means that unfortunately, we are no longer able to continue your employment,” the severance notice stated.

Email and Skype messages to company CEO Mike Shipley, who lives in Antigua, weren’t immediately returned.

Key Media publishes 130 trade magazines devoted to real estate, mortgages and insurance. It also runs 70 annual conferences and trade shows.

Earlier this week, Saltwire Media, Atlantic Canada’s largest newspaper chain, laid of 40 per cent of its staff and shut down all of its weekly papers for at least 12 weeks, citing a plunge in advertising in the wake of the COVID-19 pandemic.

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Real estate market in Lethbridge still open for business – CTV News



The economy has been slowing down since the province and city have declared states of public health emergency, but realtors are still doing their best to provide service to their customers.

Real estate offices like Sutton, and RE/MAX may have closed their office doors to the public, but thanks to new technology, it doesn’t mean their business has been suspended.

“We take the necessary precautions,” says Jennifer Brodoway, real estate agent for ViewLethbridge. “Some realtors are wearing gloves, we have hand sanitizer with us and we are doing any documentation by email. We can even do virtual tours.”

Real estate remains a vital part of Lethbridge’s economy, with over 2,500 properties sold last year.

Surprisingly, some realtors are even busier than ever now, despite the social-distancing measures imposed by the province.

“I think (I have seen) a slight increase in showings on houses that are vacant,” Brodoway explains. “People feel more comfortable going to vacant houses. They know they are not disturbing anybody and they know these houses have been cleaned are ready to be shown.”

Brodoway also says some of her clients are looking to buy out of caprice, but rather out of necessity.

“Some people have already sold their houses and they have nowhere to live and we are happy to help those people,” she said.

The federal government has announced this week people who have been temporarily laid-off may be eligible to receive $2,000 a month until this summer. The government hopes this aid will help Canadians to keep their homes to avoid a similar crisis the United States and the rest of the world suffered in 2008.   

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How Toronto's Real Estate Industry is Dealing with the Impact of Coronavirus – Toronto Storeys



In just two weeks, the world has changed drastically. We’re now living in the face of major business closures and shutdowns, stock market declines, and even fights in the aisles of grocery stores over toilet paper.

The novel coronavirus or the COVID-19 outbreak, whichever you prefer, has drastically affected the day-to-day life of everyone around the world and impacted every industry in one way or another. But has this global virus truly impacted the real estate industry in Canada’s largest city yet?


The first confirmed COVID-19 case was announced in Toronto on January 25, and in the days that followed several additional cases began to be reported throughout the province. And while the real estate world took note, it largely continued to operate in its normal way. Now, that normalcy has changed, and a different approach is needed.

Brokers, buyers, and sellers are now navigating the unfamiliar territory together amid the pandemic and an industry that thrives on in-person showings and meetings is now charging forward digitally, with brokers turning to virtual house tours as opposed to traditional open houses.

And yet, despite everything that’s going on, Toronto’s real estate market continues to show how strong it is, with February being a record month for new home sales. In fact, a total of 4,665 new home sales were made last month, a 211% increase from February 2019, demonstrating that it’s still business as usual – for now, at least.

At least that’s the case for Elliott Taube, president of International Home Marketing Group, a leading new home brokerage that specializes in the pre-construction industry and supports medium to large developers in the GTA with integrated sales and marketing solutions. Taube says that while International’s sales offices are currently closed, the company is still busy as always and continues to help clients and customers by moving things digitally – through FaceTime, Zoom, phone call meetings, and emails.

Yet, despite the uncertainty of what’s going on, Taube says International is still moving forward with getting the thousands of units ready to hit the market in the coming months.

“We’re working as if things are still moving forward,” said Taube, adding, “but we’re still trying to be as responsible as possible, so no more face-to-face interactions.”

And in light of it all, Taube says his team is still getting the same amount of work done as they are learning to be more efficient, with in-person meetings that may have once taken 1-2 hours now lasting just 45-minutes, saving the team immense amounts of time. Taube also says that since the industry is considered an essential business, International will continue to work as usual and looks forward to when he can have his team back together under one roof.

Meanwhile, Debbie Cosic, founder and CEO of In2ition Realty, also echos a similar tune, saying that while there’s no question the real estate industry has been affected by the COVID-19 pandemic, it hasn’t been impacted as much as one might think.

“Ontario’s list of essential services includes supply chains, construction, real estate agents, moving companies and land registration services. This is because the real estate industry is critical to our economy, as well as to people’s lives in general,” says Cosic.

“Keeping construction on new homes going translates to the movement of materials and badly needed jobs for workers in these areas. The selling and buying of resale homes keeps owners moving… and moving forward. There may be delays, but we have faced those in the past and persevered.”

Cosic explains that consumers, while practicing social distancing responsibly, of course, can do most of their home shopping online. The same goes for the real estate industry and consumers can now take virtual tours of resale homes and visit the websites of new home and condo builders to find out just about everything they need to compare.

“With open houses cancelled, we agents may not be able to meet in person, but we have fantastic electronic options at our fingertips: phone/video calls and conferences, apps, email, and e-transfers,” said Cosic.

“Investors, in particular, may choose to make their purchases strictly through electronic means – which is an option we’ve offered for years.”

Cosic says that even if there is a dip in sales, with consumers postponing home shopping, she knows that from history it will only be temporary in the long run.

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