Also 2007 negative…
Years ago, I heard stories that land prices can fall 90% in a real estate downturn.
In a downturn, commercial property can be very bad as vacancies can soar and land prices crash.
Economy weak…
Average daily S&P close per quarter…
In the last 3 months, Redfin, Bloomberg and Zillow see real estate down -1 to -2% this year…
Besides adp…see this from juggling dynamite…
As Rosenberg Research pointed out yesterday, Friday’s NFP US jobs estimate of +139k in May came amidst downward revisions to the prior three months, totalling -187k. In other words, benchmarked off where we were at the turn of the year, surveyed employment has contracted in 2025.
Cumulative downward revisions from January to April from the first new job estimate to last revisions, have totaled -219k or around -50k per month: “this is the same pattern of downward revisions we had in the fall of 2007, just ahead of the Great Recession, because the thing about downward revisions to the payroll data over multiple months is this: it is a leading indicator for turning points in the cycle”.
He predicted car prices would GO DOWN in May…( a no debt car dealer)
Developers -off the record-confirm the earliest turn around 2030…AND negative equity households at 14% already
Quotes from book-
Cycles of wealth are now much faster and more extreme. The rich are a new “Potemkin Plutocracy” and the important lessons and consequences are brought to light of day in this engrossing book.
Not only do they control more than a third of the country’s wealth, their increasing vulnerability to the booms and busts of the stock market wreak havoc on our consumer economy, financial markets, communities, employment opportunities, and government finances.
How one couple frittered away a fortune trying to build America’s biggest house —90,000 square feet with 23 full bathrooms, a 6,000 square foot master suite with a bed on a rotating platform—only to be forced to put it on the market because “we really need the money”.
• Repo men who are now the scavengers of the wealthy, picking up private jets, helicopters, yachts and racehorses – the shiny remains of a decade of conspicuous consumption financed with debt, asset bubbles, “liquidity events,” and soaring stock prices.
• How “big money ruins everything” for communities such as Aspen, Colorado whose over-reliance on the rich created a stratified social scene of velvet ropes and A-lists and crises in employment opportunities, housing, and tax revenues.
• Why California’s worst budget crisis in history is due in large part to reliance on the volatile incomes of the state’s tech tycoons.
AND the recent fires…Jumbo mortgages
In the affluent Los Angeles neighborhoods scorched by wildfires, jumbo mortgages on multimillion-dollar homes are commonplace, making the loans a potential pain point for the banks left holding them.
More than 72% of mortgage debt fell into the category of nonconforming — also known as jumbo loans — in the parts of Los Angeles devastated by the fires. That’s nearly five times the nationwide average, and almost triple California’s 26% rate, according to a Bloomberg News analysis of Consumer Financial Protection Bureau data. More than $11 billion of jumbo loans were issued in the affected areas and kept on bank books from 2018 through 2023.
…The banks could face a slew of financial and reputational issues — foreclosing on distressed borrowers, trying to recoup losses from insurance companies should homeowners abandon their obligations, selling off the land to investors and eating any losses if they fail to collect the full value of the real estate.
Canada unemployment keeps rising…
At the same time, US manufacturing activity contracted further in May to the lowest level since November. The Institute for Supply Management (ISM) purchasing managers’ index of manufacturing activity fell to 48.5 in May, from 48.7 in April. It was last above 50 in January and February, though that followed 26 consecutive months of contraction.
New orders and backlog of orders indices declined at slower rates than in April, though new export orders at 40.1 from 43.1 in April were lows only seen in the 2008-09 and 2020 recessions. Excluding the pandemic period, new export orders were at their lowest reading since 2009.
The downturn in Canada’s manufacturing economy continued in May (below since 2011) with output and new orders both lower, while manufacturing employment decreased at the fastest rate in nearly five years.
Optimism of Nov-Mar is now over!
Last year of claims link…
Credit Flow Investor 