February 25, 2017

A Preponderance Of New Supply

A report from Multi-Housing News. “Jeffery Hayward, head of Fannie Mae’s multifamily mortgage business, shared a few highlights from 2016, as well as initiatives that Fannie Mae is embarking on in 2017. MHN: Where are you seeing a concentration of new supply? Hayward: Dallas will have a lot of new units coming online. So will Austin and Denver. Seattle has been that way for a while, along with San Francisco, San Diego and L.A. Typically the new construction is aimed toward higher rent and income levels.”

“MHN: How will market forces impact loan quality this year? Hayward: There are some challenges in the market around new supply, meaning there are some markets with lots of new supply coming in. There will be a little bit of stress on the market because there is so much new production coming on. Particularly, there are about 12 or 13 markets in which there is a preponderance of new supply. All of that doesn’t necessarily fit what we do because some of it is very high-end product.”

From Construction Dive. “Builder and developer sentiment on the outlook for apartment and condominium construction maintained its strength in the fourth quarter of 2016, edging up two points from the prior quarter to a mark of 55 on the National Association of Home Builders’ Multifamily Production Index. Multifamily developers are bullish on the segment’s fundamentals, but a flurry of units coming online in the country’s largest metros suggest saturation ahead for some, forcing rents down.”

“Chicago, for example, is expected to see rents begin to decline by the second half of 2017 as the apartment rental market there reaches capacity. Inventory in that city is expected to be up 150% from mid-2005 by 2018, according to data from Appraisal Research Counselors. Supply in that category is also beginning to outpace demand in Washington, DC. A recent analysis of Census Bureau data by Greater Greater Washington found the District added 4,682 new units in 2016, the second-most since the government agency began tracking the figure in 1980. The growth has occurred primarily in multifamily construction, and is concentrated in three emerging neighborhoods.”

“A report by Axiometrics cited in The Wall Street Journal earlier this week noted that the number of new multifamily units is expected to hit its highest level in 30 years in 2017.”

The Business Observer in Florida. “Real estate firm Quadrum Global, which has bought and turned around hotels from Chicago to New York to Miami Beach, might be new to senior living, but its executives certainly aren’t timid. Quadrum director of U.S. investments Seth Schumer got interested in the senior-living sector in 2015 when Quadrum looked into buying a distressed senior living facility in Fort Myers. The company ultimately passed on the deal, but in the process Quadrum executives met and clicked with Colin Marshall, a 20-year executive in senior living management.”

“Marshall says the amenities at Avida will also be something special. Plans for the 488,265-square-foot campus include a bar bistro, private theater, dining hall and four open-air courtyards. Multiple other projects in the region also promise resort-living and high-quality amenities. Schumer acknowledges the word ‘overbuilt’ came up in the firm’s research for Avida, especially anecdotally. But the data he looked at doesn’t necessarily prove the specific market Avida targets is at saturation level, he adds. ‘We are really excited about this,’ Schumer says. ‘We think we can build a better mousetrap.’”

The Memphis Daily News in Tennessee. “The Memphis area is seeing a boon of mixed-use developments underway or in the works, from repurposed and renovated properties. As a second-tier metropolitan market, most of Memphis’ mixed-use projects have been spearheaded by local investors. However, more out-of-town investment is likely to follow, as many first-tier markets are saturated and more expensive from a developer or investor standpoint.”

“‘Many of Memphis’ peer markets are becoming oversaturated, and out-of-town investors have noted the dearth of new housing in many parts of the core city,’ said Josh Whitehead, planning director for the Memphis and Shelby County Office of Planning & Development.”

From Biznow on Virginia. “As it prepares its $8.4B merger with Vornado, The JBG Cos is abandoning one of the biggest placemaking projects it had planned in the region. The Chevy Chase-based developer is looking to sell its six-property, 2,664-unit apartment portfolio in Alexandria’s West End. This comes as Vornado is also halting some of the NoVa projects it had planned. The developer shelved the 933-unit addition it had planned for its RiverHouse apartments in Pentagon City. It also put on hold two of its Crystal City projects.”

From Mansion Global on New York. “In its weekly snapshot of Manhattan’s luxury housing market, real estate brokerage Olshan Realty found that 29 contracts were signed last week at $4 million and above, five more than the previous week. However, Olshan stressed that the headline-grabbing number masked underlying problems—particularly the average time a property spent on the market. ‘One is tempted to paint a rosy forecast for the spring, but let’s not overlook a cloud or two on the horizon,’ said Donna Olshan, president of Olshan. ‘Year-to-date, the average days on market is 415, a 32% increase over the same period in 2016.’”

“The moral, said Ms. Olshan, is that sellers who lower their prices to a realistic level ‘are more often than not rewarded with a sale.’”

The Houston Chronicle in Texas. “Houston-based Weingarten Realty Investors, which owns neighborhood shopping centers throughout the city, will add a 30-story residential tower to its flagship retail property next to River Oaks. Weingarten senior vice president Gerald Crump reiterated the company’s commitment to owning the property for the long term. Despite a current glut of new apartments in the urban core, Houston is a resilient market, he said. ‘We’re not merchant developers and we’re not really as concerned about timing the market as the merchant developer would be,’ Crump said.”

The Morning Call in Pennsylvania. “The Plaza at PPL Center, home to Talen Energy, could soon be headed for the commercial mortgage bond equivalent of foreclosure, a move that would open the door to new owners who could offer lower, more competitive rents. The current owner, a group called The Plaza at 835 W. Hamilton St., which purchased the property for $83.5 million in 2007, missed a $67 million balloon payment on Dec. 1, sending the loan into default.”

“The company that oversees its overdue loan reported this month that if the owner is unable to renegotiate loan terms, it plans to transfer the building’s title to a special servicer, according to Trepp LLC, a company that tracks loans included in commercial mortgage bonds. If The Plaza goes to a special servicer — a company that specializes in liquidating commercial mortgage bond real estate — it will eventually end up in the hands of a new owner whose hands won’t be tied by the need to make payments on a pricey mortgage.”

“Experts have said the building is likely worth far less than the loan’s $67.4 million balance. Located at Ninth and Hamilton streets next to PPL Tower, it cost $43.5 million to construct. It is one of downtown’s Allentown’s showcase properties, which — if Talen leaves — would be rendered mostly vacant and in search of tenants. Talen’s rent is at least 30 percent higher than what is charged for comparable downtown offices.”

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Comment by Ben Jones
2017-02-25 08:59:08

‘The current owner…missed a $67 million balloon payment on Dec. 1, sending the loan into default. Experts have said the building is likely worth far less than the loan’s $67.4 million balance.’

Funny how often this pops up.

Comment by Ol'Bubba
2017-02-25 09:50:16

“It is one of downtown’s Allentown’s showcase properties…”

“The current owner, a group called The Plaza at 835 W. Hamilton St., which purchased the property for $83.5 million in 2007, missed a $67 million balloon payment on Dec. 1, sending the loan into default.”

I’m sure this loan was on the Servicer’s watchlist. What little is in front of me makes me think this was a marginal deal in the overheated 2007 market that’s coming home to roost.

Comment by Karen
2017-02-25 10:23:54

“downtown’s Allentown”

Well we’re living here in Allentown
And they’re closing all the factories down
Out in Bethlehem they’re killing time
Filling out forms
Standing in line…

Comment by Big Fat Ugly Bubble
2017-02-25 10:21:38

Wow, there is so much fail here. So there is PPL Center which is a sports arena and right next to it is the PPL Plaza, where the main tenant Talen Energy is located.

PPL Plaza is a “tax financing district” which, I think, it means the developer/owner gets lower, or frozen property tax benefits, so they can offer lower rents to their tenants and spur general economic activity in the area.

But that doesn’t seem to have occurred here. Talen says their rent is 30% higher than other tenants, so they are suing.

“”PPL Plaza is in Allentown’s Neighborhood Improvement Zone, the tax-financing district that has spawned nearly 1 million square feet of new and proposed downtown construction by allowing developers to offer discounted rents.”

“The building’s owner filed a federal lawsuit in 2015 alleging that the way the NIZ was drawn up and administered unfairly damaged its ability to retain Talen or find new tenants. Talen’s rent is at least 30 percent higher than what is charged for comparable downtown offices.”

It gets better. Talen is also a major contributor of state taxes being used to pay for the Arena right next door:

“Talen contributes a substantial sum in state tax dollars that are used each year to pay the construction debt on PPL Center arena.”

So, the main tenant Talen pays the state for the Arena, which then gives tax benefits to the Plaza, which is supposed to pass on those benefits (in the form of cheap rents) back to Talen, but that didn’t happen. And now the Plaza failed to pay their $67 million balloon payment and is bankrupt.

To make things even more complicated, Talen themselves got bought by a private equity firm and is no longer Talen Energy, nobody knows what the plan is for them.

The only people making any money here are the lawyers:

“”That lawsuit remains pending. The most recent activity in the case was a flurry of motions and responses in April. Talen Energy spokesman Todd Martin did not return an email seeking comment.”

Then finally:

“It is one of downtown’s Allentown’s showcase properties, which — if Talen leaves — would be rendered mostly vacant and in search of tenants.”

So then nobody is going to be paying for the Arena either. Seems like everyone is losing in this deal, there’s nothing good.

Comment by Lurker
2017-02-25 12:43:12

Awesome research, thanks for the background. It’s fun when various parties all colluding with each other for special privileges find themselves stuck in a lose-lose scenario. But how many deals exactly like this are going on all over the country?

Comment by waaahoo
2017-02-25 15:29:01

Hey Ben, Long time no see. I was around here back before ‘01 trying to make sense of what I was seeing before the crash. Great to see that you are still going strong.

Comment by Prime_Is_Contained
2017-02-26 12:31:22

I was around here back before ‘01

Think you are off by some years; I thought Ben started the blog in 2005…

Comment by Prime_Is_Contained
2017-02-26 12:34:28

Correction: looks like the archives on Blogspot begin in Dec 2004.

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Comment by Professor Bear
2017-02-25 09:00:53

“Jeffery Hayward, head of Fannie Mae’s multifamily mortgage business, shared a few highlights from 2016, as well as initiatives that Fannie Mae is embarking on in 2017. MHN: Where are you seeing a concentration of new supply? Hayward: Dallas will have a lot of new units coming online. So will Austin and Denver. Seattle has been that way for a while, along with San Francisco, San Diego and L.A. Typically the new construction is aimed toward higher rent and income levels.”

I have seen lots of new multifamily luxury housing coming online in San Diego.

Which brings to mind the question: Isn’t “multifamily luxury housing” an oxymoron?

Comment by Ben Jones
2017-02-25 09:09:18

Like that article about “luxury” houses in San Marino yesterday. I’ve been there. Kinda plain, 1950’s stuff with no garage. For 2 million you should at least get a garage. The only thing luxury is the price.

Comment by anberlin
2017-02-25 16:27:24

Luxury market is frozen due to increased scrutiny of cash buyers:

I’d say stick a fork in it, but thats tough with something thats frozen. Popcorn time, bitchez!

Comment by Albuquerquedan
2017-02-25 09:12:10

Bear, you can always move to 401’s old stumping grounds:


Comment by Mafia Blocks
2017-02-25 09:29:10

“Which brings to mind the question: Isn’t “multifamily luxury housing” an oxymoron?”

Or a Donkism. Hey……. An oxymoron and a Donkism is synonymous! : mrgreen:

Comment by Karen
2017-02-25 10:16:36

Here’s some luxury apartments being built in Dallas:



Must be some special grade of particleboard they use for the Class A apartments.

Comment by butters
2017-02-25 12:16:26

I guess, call it “luxury” and charge more seems to be the name of the game.

Comment by Big Fat Ugly Bubble
2017-02-25 17:20:11

The cheaper stuff, they grind it up for the wood pulp in our foods.

Comment by SW
2017-02-25 19:45:06

Those appear to be concrete forms.

Comment by Mafia Blocks
2017-02-25 20:08:05


Wrapped with Tyvek and windows in the rough openings before stripping formwork?

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Comment by Karen
2017-02-26 13:26:54

I didn’t mean to imply the whole thing was made of particleboard. Wouldn’t that be…. impossible?

Let’s not give these “builders” any ideas. I’m sure they’ll start building luxury housing out of papier-mâché any day now.

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Comment by Prime_Is_Contained
2017-02-26 12:36:14

Must be some special grade of particleboard they use for the Class A apartments.

LOL!!! Awesome line, Karen…

Comment by Karen
2017-02-26 13:43:17

AND, to make this complex even more luxurious, it sits a few feet from a major highway. The road I was on when I took the pic is a frontage road that runs along the Dallas Tollway, and is also a very busy road.

Look how the building, and people’s porches, come right up to the busy road. Nothing says luxury like sitting on your balcony as thousands of cars scream by and street people walk up to ones at the red light asking for money.

Here’s the address: https://www.google.com/search?q=15480+Dallas+Parkway+Dallas+TX+75248&oq=15480+Dallas+Parkway+Dallas+TX+75248&aqs=chrome..69i57.2669j0j7&sourceid=chrome&ie=UTF-8

Comment by Ben Jones
2017-02-25 09:06:01

In Chicago:

‘Condo developers wonder when luxury housing market will take off’

Comment by palmetto
2017-02-25 09:17:41

They’re going to be wondering a long time.

Comment by Albuquerquedan
2017-02-25 09:30:54

Yes. QE always favored the rich and that was my view when they first announced. Even told PBear that Obama was about to create the biggest transfer of money to the rich that the country had ever seen. It was the rich that got access to the cheap money not Mainstreet in the flyover areas. Now, that it is ending, it is the high end market that is going to enter into a correction. However, I agree with Oxide there is no sign of a glut on housing in the lower to middle part of the market. It is not like we have been building two million units of housing per year like we did in the last general housing bubble.

Comment by Ben Jones
2017-02-25 09:53:55

I think we can all agree the year is 2017. I was thinking about this yesterday. How did I reason my way to knowing this luxury apartment/condo thing would bust? First it was the crazy talk, “You can’t lose, it’s never going to end. Safe deposit boxes in the sky.” More importantly, it was the motivation: money was being throw at them chasing yield. So they made up stories to justify ever higher prices for the land. Rich renters, millennials who are willing to pay 60-70% of income on rent and demand bocci ball courts.

IMO forget about predicting. Understand what’s going on now and extrapolate from that. It was clear 2 years ago they were building too much and the wrong stuff. And you sure won’t know what to do looking in the rear view mirror.

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Comment by Raymond K Hessel
2017-02-25 10:10:28

Agree with you, Ben. 2017 will be the year extend-and-pretend finally runs out of road and true price discovery starts to impose itself. The indications and warnings are all around for those who care to see them. A major, overlooked factor will be geopolitical black swans - most notably the rise of nationalism in Europe, and China’s military assertiveness. The Sunni-Shia conflict heating up in the “crescent of crisis” in the Middle East is another situation to watch, given the potential impact on oil flows through the Straits of Hormuz.

As for America, we’ve never been so disunited, and the breakdown of public and private morality does not bode well for our future. People will have few qualms or disincentives about walking away from mortgages they overpaid for. I hope there will be millions of quiet patriots who carry in their hearts the true country and devotion to the Constitution, and enough decent people of all races, colors, creeds, etc. to see us through the turbulent times that may lie ahead.

Comment by Big Fat Ugly Bubble
2017-02-25 10:35:34


Comment by Ben Jones
2017-02-25 10:42:11

February 22, 2017

Oversupply Is The Big Fear

A report from the Real Deal. “Banks are shying away from financing new apartment projects as supply starts to outpace demand. This year more than 378,000 new apartments are expected to be completed nationwide, according to real estate researcher Axiometrics Inc. But only 50,000 of the 88,000 apartments completed in the fourth quarter of last year were rented out, the Wall Street Journal reported. ‘Our business has radically changed,’ Toby Bozzuto, chief executive of the Bozzuto Group, which has about eight buildings in New York City, told the newspaper. ‘I haven’t seen anything this seismically different since 2008, when credit dried up.’”


It’s going to be a credit event. Recall the Tucson report I posted the other day: 80% of apartments were needing to refinance in the next year. Most CRE loans are relatively short term. If this continues to play out in this direction, a bunch of them won’t be able to get financing.

Comment by Anonymous
2017-02-25 16:13:49

Co-sign, RKH.

Comment by jerzdebil
2017-02-25 10:14:00

Doesnt matter, prices on the high end will take/are taking a hit which will propagate down through all price levels - it worked exactly like that in the last bubble. The number of million dollar places for sale in my hood is stunning. Many of them wont be million dollar places in 2-3 years.

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Comment by butters
2017-02-25 11:33:57

Ha ha

In trickle down econony, the misery also trickles down.

Comment by new attitude
2017-02-25 19:50:25


Comment by SW
2017-02-25 20:01:30

Check out Mark Hansons blog sometime. His thesis is that no market is isolated (luxury, middle tier, low tier). When luxury prices balloon the marginal price action lifts all lower tiers.

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Comment by Raymond K Hessel
2017-02-25 09:22:22

The underlying economy, from all indications, is still deep in malaise. People are already paying far too much of their income for housing. I don’t understand who they think is going to be renting all these “luxury” apartments at premium prices.

Comment by Mafia Blocks
2017-02-25 09:45:01

Which brings up a fundamental point.

Do you really believe wages are going to triple or quadruple to meet the grossly inflated prices?

Of course not.

Prices will continue falling to dramatically lower and more affordable levels meeting wages.

Comment by Raymond K Hessel
2017-02-25 10:13:39

Historically, any time median home prices have exceeded median incomes by a factor of more than 3, they have always reverted back to the norm. However, the tsunami of Fed money-printing has so skewed “the markets” and created such grotesque bubbles and distortions that its hard to say when sanity and true price discovery is going to assert itself.

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Comment by azdude
2017-02-25 12:09:53

“The only difference will be that those with experience will leave the markets with the money from those whom will ultimately gain the experience.”

Comment by In Colorado
2017-02-25 13:03:07

When was the last time median prices were 3x median incomes? 1979?

Comment by Mafia Blocks
2017-02-25 13:18:53

About 2001 prices exceeded median income.

Comment by Apartment 401
2017-02-25 17:32:11

all these “luxury” apartments

I’m getting paid rather well for the way I need to live wiring these luxury apartment buildings. Cherry Creek needs to be moar Cherry Creek.

Comment by Ben Jones
2017-02-25 09:27:44

Notice how much of this we are seeing in February 2017:

‘Multifamily developers are bullish…but a flurry of units coming online in the country’s largest metros suggest saturation ahead’

‘Schumer acknowledges the word ‘overbuilt’ came up in the firm’s research…‘We think we can build a better mousetrap.’

‘Many of Memphis’ peer markets are becoming oversaturated, and out-of-town investors have noted the dearth of new housing in many parts of the core city’

‘Despite a current glut of new apartments in the urban core, Houston is a resilient market’

Comment by Albuquerquedan
2017-02-25 09:36:57

Twice the housing starts when we had just over half the population, yes we are older as a nation but the millennial population is a big as the baby boomer population.


Comment by SW
2017-02-25 20:10:07

Millennials are a fundamentally different breed. Having kids later, living in smaller spaces, having fewer kids than boomers. The old housing production norms may not apply.

Comment by palmetto
2017-02-25 09:38:23

Another CRE vacancy in California:


“Nestle USA has announced that it will move its headquarters from Glendale, California, to Rosslyn, Virginia, taking with it about 1200 jobs.

The once Golden State has lost some 1690 businesses since 2008 and a net outflow of a million of mostly middle-class people from the state from 2004 to 2013 due to its onerous tax rates, the oppressive regulatory burden, and the genuine kookiness which pervades among its ruling elites.”

“A clueless Glendale official is apparently unconcerned about the financial repercussions of Nestle’s departure saying that it was “no big deal” and saw it as an “opportunity,” whatever that means!”

For the record, I am not a Cali hater. It actually pains me to see stuff like this happen, Cali was once the gold standard for US states, the place where innovation happened and dreams were made real. The rest of the US looked to Cali as an example. It is the most diverse state in terms of topography, with beaches, deserts, mountains and forests. As much as I joke about it, I would in fact hate to see it secede, which would be a disaster both for Cali and the rest of the US.

It could be turned around, but not with Brown and others in state govt.

Comment by jerzdebil
2017-02-25 10:11:00

My boss just came back from Cali where he took a tour of a company that is doing high end carbon fiber manufacturing in Sacramento, looking to possibly partner with them in the future. They’re getting out of Cali because the ridiculous regulations make it much more attractive to go elsewhere - I think they were looking at north carolina where they already have a small footprint.

My boss also noted there was a sign at the airport there that warned that something on the other side of the sign was found by the state of California to cause cancer. Didnt say what though. He thought maybe if he went on the other side of the sign he would just drop dead. Nope. Good on ya, golden state, keeping the people safe (not really) - signed, the union of concerned sign makers.

Guess thats why thousands of tax payers - a truly endangered species in Cali if there ever was one - are leaving the state every year and taking their jobs and their money elsewhere. I know I did over a decade ago, one of the best decisions of my life!

Comment by palmetto
2017-02-25 10:34:58

North Carolina is probably a good choice, but from where I sit, it seems to have been infested with an influx of people from the Northeast and Mid-Atlantic determined to make it less fiscally conservative. And driving up prices in many of the more desirable areas. Ol’ Bubba could probably give more insight.

I was scrolling through Zillow and Realtor.com looking at RE prices in some of the suburbs of Asheville. Good lord. There seems to be much of the same lower end panic buying that we’ve had around here, with more expensive properties sitting with the green “down” arrows, indicating price reductions. Some of the houses at the lower end I wouldn’t give two cents for, they don’t seem to be all that well built, but I haven’t seen them up close and personal, just on the internet, so it’s hard to say. Again, Ol’ Bubba could probably give more insight into the quality of older homes in NC.

Comment by Ol'Bubba
2017-02-25 14:47:07

“North Carolina is probably a good choice, but from where I sit, it seems to have been infested with an influx of people from the Northeast and Mid-Atlantic determined to make it less fiscally conservative. ”

I’ve been in Charlotte for the past 10 years, and there certainly are a lot of people here who were born in the Northeast and Mid-Atlantic, myself included. I wouldn’t characterize this segment of the population as “determined to make [NC] less fiscally conservative” but rather as determined to get out of the ridiculously overpriced Northeast. In addition to the NY and NJ crowd, there are quite a few people from Ohio and West Virginia. I recall having a conversation with a young man from Cleveland a few years back. His comment was that as you’re heading down I-77 out of Cleveland, Charlotte is the first “good, big place you get to.” He referenced WVa as a place you just keep on driving through.

As far as the quality of the older homes in NC, I guess it’s a mixed bag. Some of the affluent close in areas which were built up just after WWII were built with care and high quality materials, and some of the smaller houses built in the less affluent areas show their age.

Homes need to be maintained, materials become obsolete (or go out of style), and the “in” areas change over time. The population in Charlotte has exploded over the past 30 years, so a lot of the housing stock is less than 30 years old and built to accommodate the influx of new residents.

Bottom line is that there are a lot of people living in the metro NY area that are miserable with the cost of living and the negative impact it has on the quality of your life.

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Comment by Apartment 401
2017-02-25 17:45:30

Great comment! I did that Interstate 77 drive Cleveland to NC many times…

Comment by Big Fat Ugly Bubble
2017-02-25 11:08:59

“My boss also noted there was a sign at the airport there that warned that something on the other side of the sign was found by the state of California to cause cancer. Didnt say what though.”

I spent most of my life in various places in California, and in the past 5-10 years, I noticed the same thing. Signs popping up all over the place warning you about cancerous materials. Pretty much everywhere you go, you’ll get cancer. Weird.

Comment by redmondjp
2017-02-25 12:59:22

Nobody fights the war on cancer better than politicians - who can be against that? They should just create a generic sign that says “Life is terminal” and be done with it.

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Comment by In Colorado
2017-02-25 13:05:46

It is a proven fact that if you live long enough in California, you will die there. They should just shut the whole state down and evacuate everyone.

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Comment by anberlin
2017-02-25 15:36:15

I too have seen this same warning, on the back of food packaging. WTF? Doesnt list which of the ingredients might be the offender, I guess the master planners dont want us minions to get bogged down in the details.

Starting to think its a way for Cali to shake down any businesses that dont pay fealty or have the gall to leave - “oh yeah? We’ll just make up a ’study’ that shows that everyone who ever used your product X died. Watch your sales in the biggest state in the country dry up”. Wouldnt put it past those scum, their slimy governor is currently looking to slash college aid to middle class families while increasing what is given to illegals. The libs’ hatred of honesty, decency, the rule of law and the middle class has no bounds apparently.

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Comment by Anonymous
2017-02-25 16:24:59

Those ubiquitous warning signs are due to Prop. 65:


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Comment by rms
2017-02-26 01:21:52

“Signs popping up all over the place warning you about cancerous materials. Pretty much everywhere you go, you’ll get cancer. Weird.”

I was shopping at a dollar store in San Jose for a 20-oz plastic tumbler; every label had a CFCs warning, made with 50% recyclable materials, etc., and no plastic bags either, just paper, so I carried my purchases. The [in] peeps have personal cotton bags with some logo on it. I’m not cool.

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Comment by Lurker
2017-02-25 12:55:09

Good riddance if they take their exploitative water bottling operations with them. Have fun with your new friends, Virginia!

“Nestle extracted 36 million gallons of water from a national forest in California last year to sell as bottled water, even as Californians were ordered to cut their water use because of a historic drought in the state. And the permit that Nestle uses to operate its water pipeline in the San Bernardino national forest costs just $524 a year.”

““A simple back-of-the-envelope calculation tells us that Nestlé is making hundreds of millions of dollars from this water,” says Peter Gleick, president of the Pacific Institute and author of Bottled and Sold: The Story Behind Our Obsession with Bottled Water. “They’re converting a public resource into private profit.”

“Asked on Southern California Public Radio last year whether it would reduce water extraction, Nestlé Waters North America CEO Tim Brown said, “Absolutely not. In fact, if I could increase it, I would.”

Comment by palmetto
2017-02-25 16:24:13

They do the same thing here in Florida. They pretty much own Crystal Springs in Zephyrhills, which is the headwaters of the Hillsborough River that flows through Tampa.

Comment by palmetto
2017-02-25 09:56:25

‘Schumer acknowledges the word ‘overbuilt’ came up in the firm’s research…‘We think we can build a better mousetrap.’

Maybe, but not in time to profit much. Peak baby boom was 1946-1956. People born after that constitute a shrinking pool of retirees, and especially retirees who can afford Shumer’s “better mousetrap”.

Comment by Albuquerquedan
2017-02-25 10:03:47

California was lost when the federal courts invalidated much of Prop 187 and the globalist Republicans failed to help the state Republicans. An immigration bill similar to 187 could have been passed by the U.S. Congress and even the court opinions acknowledge that it had the Congress did have the constitutional authority to restrict immigration in the way that 187 did. The state went from being a fairly even divide state politically that actually leaned Republican to being a one party Democratic state.

Comment by Raymond K Hessel
2017-02-25 10:25:31

Unrestricted immigration has ruined California. It ceased to be the Golden State by the end of the 1970s and has been going downhill ever since.

Comment by Panda Triste
2017-02-25 11:59:36

First time I’ve ever agreed with you. After the 1982 peso collapse and the lust for cheap labor it was all over.

Comment by butters
2017-02-25 10:26:56

CA was lost when it became a “STATE” from a territory.

Comment by palmetto
2017-02-25 10:37:28

“the federal courts invalidated much of Prop 187″

That’s called kritarchy (rule by judges) and it has become a problem in the US, overriding the will of the voters, legislating from the bench.

Comment by Anonymous
2017-02-25 16:30:52

I can’t disagree with you on this.

Comment by Raymond K Hessel
2017-02-25 10:21:14

Spain is finally jailing some of the worst malefactors who caused the housing bubble and 2008 financial crisis. It is noteworthy that the last three IMF heads have received criminal convictions. We will not see systematic reform until the regulators, enforcers, and judiciary who turned a blind eye to gross malfeasance on Wall Street and its supposed oversight bodies are finally held accountable for their criminal negligence or complicity.


Comment by Big Fat Ugly Bubble
2017-02-25 11:22:16

“Many of them are so intimately connected to the political and business establishment that it’s almost impossible to imagine them warming a bench in a jail cell.”

“Between 2003 and 2012 Caja Madrid (and its later incarnation, Bankia) paid out over €15 million to its senior management and executive directors through its “tarjeta negra” (black card) scheme.”

They needed the money for their bunga-bunga parties or whatever it’s called..

These people should get the guillotine, not jail.

Comment by Albuquerquedan
Comment by Ben Jones
2017-02-25 11:03:37

I saw that article the other day:

‘Mohammed Alardhi, executive chairman of Investcorp said: “We believe the US economy is poised for significant growth. We have a long history of investments in the US, and our $1.2 billion investment in residential properties in the past 18 months demonstrates our belief that the US real estate market provides high-quality investments.”

‘Atlantic Point is a 795 unit housing property located in Bellport, New York while The Highlands is a 556 unit property in Grand Terrace, California and Villas at Green Valley is a 609 unit building in Henderson, Nevada.’

Comment by Jessica
2017-02-25 10:42:38

Starting to see some strange things in NoVA. The Sterling area (the nice, non-illegal haven) is now experiencing bidding wars — in February!

Prices are up 20K from 2 years ago. Bubble?

Comment by Neuromance
2017-02-26 00:36:17

Interesting: I went to Zillow to look up 20164, and about 2/3s of the listings are distressed. Surprising in Virginia (recourse + non-judicial). Maryland shows this sort of thing too but it’s foreclosure process is famously slow. It’s been a while since I looked at Zillow but I feel like this would have jumped out at me if I’d seen it in the past.

If this information is accurate, I guess the local GSE loan limits are above the buyer’s ability to pay. They seem to be assisting people onto the foreclosure conveyor belt.

Comment by Rendie
2017-02-25 11:20:55

I’m curious if all the low inventory stuff is true. In my socal city There has been a lot of apts built in the last 5 years. The Apts are apparently at 99% but mostly due to a city requirement from a few years ago to provide free housing for non residents and specific low income goups. Sfr builds actually just started last year, but there are at leaSt 1k coming online this year. BUT dozens of other houses have been open houses for 2 years now, and almost 30% of the three largest communities around me are obviously empty. If they sit empty and falling apart for years should that count as low inventory?

Comment by butters
2017-02-25 11:36:04

I’m curious if all the low inventory stuff is true.

It’s true because nobody questions the “official” data. They are as real as inflation rate, unemployment rate and facebook’s gazillion “monthly active” users.

Comment by Ben Jones
2017-02-25 11:39:55

One apartment guy in NC said the other day managements will lie about vacancy so their banks won’t know.

Comment by Ben Jones
2017-02-25 11:41:07

Route 128 Woos With Amenities And Cheaper Rent. Is It Enough?

‘Route 128, “America’s Technology Highway,” ended 2016 with a 14.8% vacancy rate, but developers anticipate that number will drop once companies see the amenities, lower rents and bigger spaces this submarket offers.’


Comment by strawman
2017-02-25 12:06:29

I work in an office park on 128. Our company (which admittedly occupies a significant double-digit percentage of the building space, but still!) is the only tenant left in the park. I’ve noticed a few other newly empty parking lots along the highway as well. Developers have been building new space all up and down the corridor like mad, for a number of years now. Honestly, I’m surprised they managed to get it up to 85.2% occupancy.

Comment by redmondjp
2017-02-25 13:07:47

This is also the case in the greater Seattle area. The “for lease” signs in front of the suburban office/business parks have been present ever since I moved here in the 1990s - they have to replace the signs every so many years because they fade and the pressure-treated 4×4 posts holding them up rot off at the base.

And they continue to build new ones! Another sign of too many Yellenbucks looking for a place to die.

Comment by Ben Jones
2017-02-25 11:51:19

‘Multifamily construction in urban Chicago and Indianapolis is solid, and apartment supply pipelines are expanding in Ohio as well. “Demand for multifamily assets has been very strong in the metros that have had solid job growth,” Nordby says.’

“Homeownership rates are down and construction, until 2013, was pretty low all over the Midwest, so these are the salad days for apartment owners in the region.”


Comment by Big Fat Ugly Bubble
2017-02-25 12:26:24

That’s actually a pretty positive view. I hope it is sustainable. More and more, for the tech jobs, you can do either all or most of it from home, as a remote worker. Tech companies are increasingly friendly to those situations. Some tech companies exist entirely “online”, they don’t even have a HQ or if they do it is a minimal one. Though, it’s not the same as being in the office together, there are some things you lose, but it can work. What do they say, one of the popular sci-fi authors wrote — the future of America is software development and high-speed pizza delivery. :-)

Comment by Big Fat Ugly Bubble
2017-02-25 11:52:57

From China today. They say there are $220 billion in bad loans. That means the true number is probably in the trillions.


“Last year, a top official of the International Monetary Fund (IMF) asked China to take immediate steps to tackle rising corporate debt to avoid new “debt bubble”. ”

lol isn’t that the pot calling the kettle black?

Comment by azdude
2017-02-25 12:11:03

I pulled some equity to buy a motorhome.

Comment by Ben Jones
2017-02-25 12:48:49


Comment by redmondjp
2017-02-25 13:11:28

That, right there, is a fully-depreciated RV - the value can only go up from here!

Comment by azdude
2017-02-25 14:42:04

That old vintage stuff is real valuable again. Sweat equity b@tchez!

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Comment by Mafia Blocks
2017-02-25 16:21:38

Portland, OR Housing Prices Crater 15% YoY


Comment by In Colorado
2017-02-25 13:10:13

I can’t think of anything that depreciates faster than a motorhome. You might as well have taken the money, thrown it into a pile, doused it with gasoline and set it on fire.

Comment by butters
2017-02-25 12:11:36

Is noo-yawk-chk banned?

Comment by In Colorado
2017-02-25 13:11:20

Maybe her paycheck bounced?

Comment by redmondjp
2017-02-25 14:09:25

Yes, once the OSF (Soros-backed Open Society Foundation) checks stop coming, certain people stop posting! I’ve noticed the same thing on my local real estate blog.

Comment by Roll
2017-02-25 16:12:59


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Comment by Big Fat Ugly Bubble
2017-02-25 17:30:21

I think, it either ate too much crow from the crow buffet, or the Russians finally got to it.

One thing I love about the HBB, I learn new phrases all the time. Like recently, “horse hockey”. Never heard that one before. Seems like playing horse hockey is another HBB pastime I wasn’t aware of. :)

Comment by Michael in Brisbane
2017-02-26 05:23:50

Colonel Henry Potter from the TV show MASH used to say “horse hockey” back in the 70s.

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Comment by Albuquerquedan
2017-02-25 12:34:57

Never mind buying even looking at a house now can be dangerous:


Comment by Professor Bear
2017-02-25 13:00:24

Especially if the buyer is armed with federally guaranteed, low interest rate, low down payment financing…

Comment by Albuquerquedan
2017-02-25 13:24:48

Another debt donkey trying to live well but ending up in the well. Poor internet, I type and thirty seconds later letters appear hard to compose a sentence.

Comment by Albuquerquedan
2017-02-25 13:19:24

She was very close to being under water.

Comment by Ben Jones
2017-02-25 13:03:03

Black contractors lose their shirts on Shipyard project

‘Company touted by mayor is near bankruptcy’

Comment by Senior Housing Analyst
2017-02-25 13:28:34

Sacramento, CA Housing Prices Crater 6% YoY


Comment by @AltFacts
2017-02-25 15:27:51

There has never been a riper time for dictatorship of the proletariat by the oligarchy.

Comment by @AltFacts
2017-02-25 15:57:26

Are you concerned that America is turning into a dictweetership?

Comment by palmetto
2017-02-25 16:26:41

As much as I disagree with your point of view, that dictweetership line made me laugh.

Whatever happened with your employees? Are you still having a rough time of it, or was it just a bad day you were having?

Comment by Albuquerquedan
2017-02-25 16:39:19

No happy the dictator with a pen and phone is gone. When you enforce existing laws on the books you are acting like a president. When you create amnesty out of thin air you are a dictator.

Comment by AbsoluteBeginner
2017-02-25 15:29:24

Co-worker just came back from vacating in Costa Rica. Quarter acre of land goes for $50,000. No deals. Gringo has locust infested it.

Comment by Professor Bear
2017-02-25 15:47:38

A former colleague threw away her secure full time position to run off to Costa Rica and start a business. Her boyfriend and business partner was a Countrywide alum. I am not sure if he had to leave the U.S., though I did hear that he walked away from an underwater San Diego investment condo.

Comment by palmetto
2017-02-25 16:31:41

My sis had a couple of friends, husband and wife, who went off to Costa Rica about 10 years ago to do the same thing. They came back after about a year. They weren’t allowed to work there and actually had local residents following them around to make sure they weren’t working, or so they said. They found living there rather creepy, things were not so good outside the walls of their gated community.

Comment by In Colorado
2017-02-26 11:44:28

I love how Americans think they can just show up at a foreign country and be granted papers to work.

I’m not surprised that they found living there to be “creepy”. Costa Rica is a third world country, not suburban America. Meaning that you have to bribe a lot of people to get even the most simple things done.

Sure, those beachfront houses in the TV shows look cool, but they don’t tell you about the blackouts and the irregular tap water supply. Or how you might be robbed in your home unless you live in a gated, guarded community (and even then you might get robbed).

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Comment by Senior Housing Analyst
2017-02-25 16:02:57

Denver, CO Rental Rates Crater 5% YoY


Comment by Raymond K Hessel
2017-02-25 17:20:04

Latest unwanted import from Tijuana: raw sewage.


Comment by Big Fat Ugly Bubble
2017-02-25 17:45:57

This is not an uncommon occurrence. San Diego beaches are frequently contaminated by the sewage from Mexico, in addition to San Diego’s own contamination contributions from their failing sewage system (which they were given millions to fix but it doesn’t seem to have been fixed very well). So, their beaches are closed a lot of the time.

When it rains it gets worse. From the article, the beaches were already closed due to contamination:

“San Diego County beaches, which typically would be closed by such a spill, already were off-limits to swimmers and surfers because of runoff as a result of recent storms, Dedina said.”

It’s a bummer — the main popular idea of San Diego lifestyle is sun and fun, surfing and swimming — and it used to be true, in older times, but the today’s reality the ocean is a cesspool much of the time.

Comment by Professor Bear
2017-02-25 18:35:57

Brown water is not very inviting for surfers or swimmers. It’s worst in the rainy season, when raw sewage often flows downriver from Tijuana straight into the ocean. I doubt that The Wall will be sufficiently impenetrable to stop the shit from flowing north.

Comment by Big Fat Ugly Bubble
2017-02-26 04:02:47

It’s not just San Diego, it’s also places like Corpus Christie which you don’t hear about very much on MSM. They have very bad water infrastructure and they have to tell residents not to drink water all the time, because of bacterial problems in the main distribution pipes because they are so old and porous and the bacteria grows in there.

I’m all for spending money on infrastructure to ensure health of our country — if and only if we can make sure no corruption and crappy work, which seems to be the norm like when we gave San Diego millions for nothing.

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Comment by In Colorado
2017-02-26 11:36:18

I remember San Diego having sewage issues all the way back in the 1980’s, especially when there were heavy rains. I can only imagine the havoc those rains wreak on Tijuana’s infrastructure.

Comment by phony scandals
2017-02-25 21:47:49

Pennsylvania and Massachusetts

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