The Money Spigot Is Open All The Way
A report from the San Francisco Chronicle in California. “The median price paid for new and existing Bay Area homes and condos that sold in January was $630,000, down 5.3 percent from December and up 1.6 percent from January of last year, according to CoreLogic data. In San Francisco alone, the median price paid in January was $1,067,500, down 5.1 percent from December and down 9.2 percent from January of last year. A big reason for the drop is that only 58 new homes sold this January compared with 159 last year, and new homes tend to be pricier than existing ones, said Andrew LePage, CoreLogic research analyst.”
“Sales typically fall between December and January, and this year’s decline was slightly above the long-run average of 29 percent. January sales were 17.5 percent below the long-run average for the first month of the year.”
From CBS News in South Carolina. “Looking to rent a place in the sun with good golf courses nearby? Your best bet might be the coastal South Carolina town of Myrtle Beach, a once hot tourist destination for golfers that has now become overbuilt, according to RentRange. The average vacancy rate, which demonstrates the percentage of all available units in a rental property that are vacant or unoccupied at a particular time, showed that the highest rates are in the Southeast, where vacancy rates range from 10.5 percent in Charleston to 20.4 percent in Myrtle Beach.”
“‘In these areas, builders and investors may need to compete for a limited number of renters,’ said RentRange, pointing to the oversupply of new properties that’s driving up vacancies and pushing rental rates down. ‘This is happening in Myrtle Beach, where more than 3,100 new homes were built in 2015, a 94 percent increase compared to two years earlier.’”
From Philadelphia Magazine in Pennsylvania. “‘Those who succeed over the years can steer their way through choppy waters, and that includes things you can’t control.’ Carl Dranoff, the man who said that, should know. The CEO of Dranoff Properties rode historic preservation to national prominence before a change in the law brought his business to its knees. The lessons he learned from that career setback have informed the rise of his business and his development strategy since then.”
“With two exceptions — One Theater Place in Newark, N.J. and One Ardmore Place, work on which will get underway this spring — all of Dranoff’s current and planned projects are condos, a shift he made when he saw a coming oversupply of rental apartments. ‘The statistics were available as early as 2012,’ he said. ‘The money spigot is open all the way, and anyone can get financing for a new project.’”
The Longview News-Journal in Texas. “Construction of high-end apartment complexes in North Longview apparently caused fair market rents to increase 23 percent over the past two years, housing experts said. ‘It is based on what everybody is charging in the area,’ said Karen Holt, housing navigator with Community Healthcore. “We have had a huge increase in high-end conventional properties,’ those that receive no rent subsidies.”
“Meanwhile, apartment complexes that are 20 years old or older are ’struggling to keep up. We are oversaturated with high-end properties.’”
The Chicago Reader in Illinois. “When Carolyn Smith saw a for sale sign go up on her block one evening in the fall of 2011, it felt serendipitous. The now 68-year-old was anxiously looking for a new place to live. But due to a past bankruptcy, Smith thought she would never be able to get a mortgage. So when she saw a house on her street for sale with a sign that said “owner financing,” she was excited. The next morning, she called the number listed and learned that the down payment was just $900—a sum she could fathom paying. ‘I figured I was blessed,’ she says.”
“But within a year, Smith discovered that the house was in even worse shape than she’d realized. Had Smith approached a bank for a mortgage, she likely would’ve received a Federal Housing Administration-issued form advising her to get a home inspection before buying. But as far as she recalls, no one she spoke to ever suggested one, and in her rush to get out of her old apartment, she didn’t think to insist.”
“The documents Smith signed with Harbour and National Asset Advisors required her to bring the property into habitable condition within four months, and with all the unexpected expenses, she soon fell behind on her monthly payments of $545. What felt like a private nightmare for Smith has been playing out nationwide in the wake of the housing market crash, as investment firms step in to fill a void left by banks, now focused on lending to wealthier borrowers with spotless credit histories. In a tight credit market, companies like Harbour, which has purchased roughly 7,000 homes nationwide since 2010, including at least 42 in Cook County, purport to offer another shot at home ownership for those who can’t get mortgages.”
“Smith had a heart-stopping realization: She hadn’t actually purchased her home at all. The document she had signed wasn’t a traditional mortgage, as she had believed, but a ‘contract for deed’—a type of seller-financed transaction under which buyers lack any equity in the property until they’ve paid for it in full. ‘I know people always say ‘buyer beware’, she acknowledges. ‘But I’d never had a mortgage before, and I feel like they took advantage of that.’”
‘The statistics were available as early as 2012,’ he said. ‘The money spigot is open all the way, and anyone can get financing for a new project.’
This guy was all over it in real time. Shows how long the money spigot has been wide open.
I don’t get it. We’ve seen this movie before and it doesn’t end well.
One of the reasons I think it’s the same mania. We eased right back into free money, flipping. Take these bay aryans. Double digit increases, for something like 40 months straight, and with each month they got more comfortable. Yet when I find a UHS in Florida saying 18% is sustainable, we laugh.
bay aryans
LOLZ
I didn’t follow Bubble 1.0 as much, but it seems a bit different this time in that there’s a lot more institutional investment in single and multifamily rental property. Someone in a previous thread mentioned it wasn’t a bubble yet due to rents tracking housing prices, because that’s what happened last time. But if there’s a bubble on the commercial side that causes the rents to skyrocket and house prices go up as a result, then you would expect rents to track prices a bit better than they tracked each other last time.
If that’s what’s happening it would also suggest the cause for the bubble bursting might be a bit different than the cause of the previous bubble.
This bubble doesn’t include as many of the M.T. Pockets types. Sure, there’s subprime at the bottom, but the strippers with 5 houses thing is not as prevalent.
Rents are much more directly tied to supply/demand than home prices.
Freely flowing capital can effect home prices, and it can effect cap rates for apartments (ie. the value of apartments), but it does not effect rents.
Yes, people can use cheap capital to buy apartments, fix them up, jack up rents, etc. But, that business plan doesn’t work unless the market has relatively low vacancy.
There has always been institutional investment in multifamily (apartments), the only thing that is new this time around is the meaningful investment by institutions into single family homes. HOWEVER, I think there was a substantial expansion in ownership by “mom and pop” owners (which were the predominant owners of SFH rentals previously).
The big players represent maybe a few hundred thousand homes…there was a 4MM home increase in the SFH rental pool.
“but the strippers with 5 houses thing is not as prevalent”
That’s only because strippers are cagey hustlers. They’re not gonna fall for this scam again. As scammers themselves, they see this game for what it is now.
“They’re not gonna fall for this scam again.”
Maybe they have some skin in the game?
Rents are much more directly tied to supply/demand than home prices.
True, but the substitution effect ensures that rents don’t get too much higher than sale prices. The effect is less prevalent the other way since it’s harder to switch from homeownership to being a renter.
Freely flowing capital can effect home prices, and it can effect cap rates for apartments (ie. the value of apartments), but it does not effect rents.
If it effects home prices than a higher sale price can put pressure on the landlord to push the rents a bit higher to hit a target cap rate. If they have any takers then there’s your new “market value”. I did this the last time I listed my property: I listed high to see if there were any takers, and luckily for me there were. If there weren’t I would have just dropped the price a bit.
As you say, this only works if there aren’t a glut of properties on the market. On the other hand a coworker was just telling me the new owners of his apartment complex jacked up the rents there, bunch of people moved out, and no one moved in to replace them. So you can push too hard. But if you were pricing comps and came across that complex, would you necessarily know about the high vacancy rate caused by that price? Or would you just assume that was “market value” for those units? And if you are careful in this regard, is your standard of care typical of the industry? I know I’ve seen a fair number of rental listings that just use Zillow’s rental estimate, and good luck getting Zillow to tell you how they come up with those numbers…
HOWEVER, I think there was a substantial expansion in ownership by “mom and pop” owners (which were the predominant owners of SFH rentals previously). The big players represent maybe a few hundred thousand homes…there was a 4MM home increase in the SFH rental pool.
Point taken. I think the point I was trying to (imprecisely) make is that, with investment properties being a larger share of the market, one has to also look at the financing and lending standards of investment properties, not just the residential market. For example, in 2015 Freddie Mac raised the maximum number of financed properties from 4 to 6 and dropped the requirement of 2 years of rental income history. That a limit of 4 financed properties and prior experience renting property was considered constraining on the market is an interesting data point, and one that is missed if one solely focuses on the residential market.
But if you were pricing comps and came across that complex, would you necessarily know about the high vacancy rate caused by that price? Or would you just assume that was “market value” for those units?
Neither. You would see the high rents as an outlier as you looked at other properties.
“We’ve seen this movie before and it doesn’t end well.”
Will there be a shadow inventory this time?
Will people be able to stay in their homes for 2, 3 or 5 years without paying their mortgage?
Perhaps some form of victim creating Robo-signing?
Bailouts, will there be bailouts?
Or will the market be allowed to crash and find it’s true level?
How does the saying go? History might not repeat itself, but it often rhymes.
Yes, but will this cycle rhyme with which prior cycle? I think not 2005-2007, but prior cycles.
Sung in the key of GD?
The difference this time is that the moneyed set is in much larger control of the housing stock as a whole. It remains to be seen if that has any influence on the crash.
The market will crash because of the price being too high.
PFP,
I completely disagree with your statement “the moneyed set is in much larger control of the housing stock as a whole.”
The aggregator of homes that Blackstone founded and plans to IPO here shortly — “Invitation Homes” is the name — owns only 48,000 homes and it is the biggest player, BY FAR. #2 American Homes 4 Rent owns 35,000, and #3 Colony owns 19,000 homes.
Compare that to 134M+ housing units in the United states, of which 42.5M are occupied by renters, and you’ll see that these institutions own a mere pittance of the US housing stock.
Falls Church County, VA Housing Prices Crater 10% YoY
https://www.zillow.com/falls-church-city-county-va/home-values/
What is wealth?
Is wealth harvesting energy? Is wealth owning land and collecting rents? Is wealth a hard to find metal? Is wealth power over people?
Maybe wealth is what is inside your head. One person said, if/when the collapse happens, the gold or paper money in your pocket won’t help you — it’s the skills you have in your brain that will help you.
You are your own gold.
Economists call that form of investment human capital. I like investing in it, as it is portable, liquid, and hard to tax.
If your wealth is smart, it will negotiate to live inside your head rent-free.
“Is wealth power over people?”
For me it is. They work, I reap.
Wealth that schmucks willingly, eagerly and freely continuously transfer over to me.
For years and years and years and years.
Life is good.
You make a good point, Mr. Banker, these debt junkies serve you masterfully. I’m still coming for your head, though.
Unfortunately, that’s how it usually ends. And the non-banker neighbors in the same nice neighborhoods get it too . . . so it’s better to live on the wrong side of the tracks when the mobs come.
“What is wealth?”
I’ve read here previously, “Information is wealth… that’s why you don’t have any.”
“A big reason for the drop is that only 58 new homes sold this January compared with 159 last year, and new homes tend to be pricier than existing ones, said Andrew LePage, CoreLogic research analyst.”
LMFAO. A real estate pimp will inevitably confuse cause and effect.
The reason for the ginormous drop in sales is that the wheels fell off demand. The folks who invested top dollar aren’t going to just give it away at a loss…Yet!
‘New listings in pricey Bay Area counties, such as Marin, San Francisco, San Mateo, and Santa Clara rose significantly from December, a possible indication of sellers cashing out robust price appreciation experienced over the past few years.’
Sales tank, listings boom, shortage gone. Funny how that works.
There’s a table at the bottom of this link with detail. It isn’t just San Francisco sales that are off. And wasn’t January 1 when the Chinese government sprang the surprise rules on transferring money? It was an immediate order, IIRC.
Trying to beat the rush.
Mark Hanson made a good point I hadn’t thought of: that many people/institutions are waiting for Trump’s capital gains tax reduction before listing. So the current swell of inventory may just be a hint of the tidal wave on the way later this year.
Let’s do some more numbers:
Median family income for San Francisco: $84k
Median home price for San Francisco: $1.13M.
Ratio of home price to income: 13.5
Median family income for San Francisco area: $65k
Median home price for San Francisco area: $712k
Ratio of home price to income: 11 give or take.
Now, where do we get our three to one ratio for houses versus income?
Tallahassee median income: $61k
Tallahassee median home price: $167
Ratio: 2.7.
Ok, found it. I thought I’d lost it for a second. Ratios of 13.5 and 11? This will never get right. It was allowed to get like this over a very long period of time. Just won’t work.
Regards,
Roidy
That is true but also distorted. In dense urban areas a larger percentage rent and home ownership is a luxury good. The same rules of financial physics apply but only to that limited demographic that actually buys properties.
Not really…. Not at all. Take Manhattan for example. Those who can afford “luxury” lease. That’s why they can afford it. They’re smart and lease it.
+1, lots of people with service jobs crammed into rentals, distort the income numbers in the big CA cities.
I lived in San Francisco most of my life, and owned (and have now sold) several houses there. The reason you can have a 13.5 income multiple is the people making $84,000 are not the ones buying the homes. About 70% of the population rents, 30% owns — and many of the owners have had their homes for decades and purchased at modest prices (i.e., very little turnover of the owner-occupied housing stock).
The last home I sold was for $1.25M and the buyer made $350,000 at Genentech. His personal multiple was 3.6 — nothing like the 13.5 you quote. His mortgage was a little over $4,000 a month and I doubt seriously he is having any trouble paying it. In fact, I was concerned about the house appraising and he offered to pay cash and get a mortgage later if he ran into issues with financing.
Is genetech out of business yet?
Owned by Roche (Switzerland). I think their ability to pay high salaries has something to do with the price of prescription drugs. Maybe if Trump orders the prices down by 90% they will have trouble paying such high salaries (after they burn through the billions of cash they are sitting on).
A guy I know is a single man (divorced) who works for Genentech…lives in a $2+MM home.
Is he smart enough to rent it?
Yes, Genentech does pay well, and gives nice stock grants to boot. I was amazed my buyer made that high a salary for being in a non-executive position. Plus they get to ride to work on those sleek private buses. My pay when I left topped out at around $90,000 … that is why I no longer live in San Francisco!
I live in Bay area. Price of housing has gone up 50K to 100K per year. Salaries can not meet those prices. Only way to pay is via stock options. In Bay Area, Google, Amazon, Facebook, Apple are the 4 big guns and there are many other lesser ones. They’ve tens of thousands of employees who have a lot of stock options worth lot of money.
Last but not the least, there are always some startups that succeed and they create many millionaires every single year. In other words, there is almost always someone who wants to pay 50K or 100K extra for the same house, for whatever their reason may be (close to work/good school district/less commute/ Chinese community / less crime area and so on).
So in Bay area, jobs and also stock market are a big influence on housing.
Median family income for San Francisco area: $65k ”
65K = poop throwers at the google bus in SF
SF is dirty and crowded.
Haven’t seen this posted, apologies if it has.
Serious salaries; Serious problems:
https://www.theguardian.com/technology/2017/feb/27/silicon-aa-cost-of-living-crisis-has-americas-highest-paid-feeling-poor?CMP=Share_iOSApp_Other
After all that does make sense considering California is the poorest state in the nation.
In fact, I was concerned about the house appraising and he offered to pay cash and get a mortgage later if he ran into issues with financing.
Mmhmm
“The reason you can have a 13.5 income multiple is the people making $84,000 are not the ones buying the homes. ”
That’s the point. Housing is so steep that a huge majority cannot afford to buy any of it. In fact, you’ve prompted me to look at the 1-bedroom rents. Those will run you about $2k/mo in the ‘low rent’ districts and some $3.8k in the nicer areas.
Now, this is equivalent to a $445k house. I figure $80k downpayment (Why yes! Of COURSE that’s reasonable.) With a $2100 principle and interest payment every month. I’m not including insurance, maintenance, etc.
Now, for a $3.8k monthly rent, we could get $800k house with a $140k downpayment. As far as the downpayment goes, please see previous snark.
Ok, $84k is a median income in the SF proper. You live in a 1-bdrm in the poorer area of town you will pay $24K per year. One bedroom.
3-bdrm will run you $6.6k per month in the heart of San Francisco. This is about $80k/year. We are talking a house that is $1M now.
Rent or buy, this is unaffordable. I do understand about renting in cities. What you say makes sense in most places: Atlanta, Chicago, St Paul/Minn. but nowhere in California it seems.
I would think that a correction at these levels to more affordability would cause a nightmare in the financial markets just in California alone.
I’m not optimistic.
Regards,
Roddy
The first house I bought in SF was for $146,000. Put 20% down. Interest rate was 10.125%. The payment was a little over half my take-home pay, and I was really scared for the first few years if I had made the right decision vs. continuing to rent for peanuts (my mortgage payment was THREE TIMES my apartment rent. Plus it was a really crappy house. You could get a very nice house in other parts of the country back then for $50,000.
My point is even in the 1980’s people in coastal areas of California had to make sacrifices to buy a house. This is in no way a new phenomenon. I am glad I made the plunge though, and didn’t wait for prices to fall.
“Ratio of home price to income: 13.5″
The people originating mortgages at these ratios should be in jail.
That’s the market ratio, not the ratio for an individual loan.
1. “Jumbo” loans typically require 25%+ down (decreasing this number);
2. As noted above, the “median income” in SF is not a homebuyer, but a home renter. If there are only 30% homeownership rate, the 85th percentile is buying the median home.
Doubtful….. but prove it.
“Anything that can’t continue forever will stop.
– Herbert Stein’s Law”
Wow, that Chicago Reader article about buying houses on contract. Wow.
So much going on there. I only skimmed the article, but a couple of things really stood out.
The Weatherspoon woman and her husband who bought a house in 1957 for $24,000. A $24,000 house in the inner city in 1957! The problem, as with today, wasn’t the loan terms… it was the price!!!
And the main subject of the article, Carolyn Smith. I almost fell over at this part,
“Next, they gave her a key code that allowed her to go in and look at the house, explaining that she’d be purchasing it “as is.” Smith thought the two-flat looked like a fixer-upper—the door had been damaged in an apparent break-in, and there was no hot-water heater, furnace, or kitchen sink…”
Yet after seeing this, she still agreed to buy this house!
The article said she agreed to pay $34,000 in 2011. How can people have no basic math skills, no knowledge of or sense of history - the article writer was able to pull together an amazing amount of information about what has gone on with housing in Chicago over the last 60 years.
Did this 68 year old woman have no idea that houses in these poorer neighborhoods, considering inflation, have actually gone DOWN in value over the decades? She has probably lived there her whole life. How could she not know? What did she think she was going to accomplish by buying this house?
And why do journalists write these sorts of articles blaming everyone else, instead of trying to educate people not to make bad decisions? I mean, if they care so much for people and are so incensed about the situation.
Life in these poorer neighborhoods is really difficult. I can certainly understand why this woman wanted to get away from her current landlord and living situation, but she jumped out of the frying pan and into the fire.
just amazing so many people are so scared to death to give a lawyer a few hundred to go over the contract and prevent this from happening.
“just amazing so many people are so scared to death to give a lawyer a few hundred to go over the contract and prevent this from happening.”
+1
A lot of people live their whole lives thinking lawyers are to be avoided if at all possible.
Litigators are to be avoided if at all possible (legal fights only benefit attorneys).
Business attorneys keep you OUT of trouble.
Business attorneys keep you OUT of trouble.
Yes. But J6P has no experience with that. They just know to avoid lawyers.
Not always true; some J6P’s are very adroit at using lawyers when they stand to gain, ie slip-n-fall, faking car accident injuries, etc.
Yeah, forgot that’s gotten more popular as times have gotten more desperate. Maybe they are more comfortable now.
Once again… the contract/terms of the loan… are beside the point!
She paid to much. They all paid too much.
Right?
How can people have no basic math skills, no knowledge of or sense of history
how about this…..they think they found a winning lottery ticket and if they tell anyone, someone might scarf it up and leave them destitute.
+1
I guarantee that’s how the sales folks make it sound
“And why do journalists write these sorts of articles blaming everyone else, instead of trying to educate people not to make bad decisions? I mean, if they care so much for people and are so incensed about the situation.”
Housing sales likely make-up a bulk of the paper’s advertising revenue.
I know this is old-hat. Money. What is it, traditionally? Money has normally served two purposes:
1. Store of value
2. Medium of exchange
Lately, in the past 50 years or so, we have removed #1 requirement, and re-defined it as #2 only.
‘Store of value’ part has been a floating item for a long time since the 70’s after Nixon. Before that time, we did have a mechanism for storing value via gold, not perfect but pretty good. Before that, prior to the Fed creation in the 1930’s, there was total de-centralization of money and gold, and store-of-value, medium of exchange were directly tied together. De-centralization of power seems to be a good thing.
After we started printing money — how do we store value of our labors? We have no choice, we cannot use paper money. We must instead try to invest in stocks, bonds, or houses or land. We back the currency by the threat of murder or nuclear bombs. That is the ultimate backing of our currency, our capability of war. We can’t use money as a way to preserve the value of our labor. That is simply the landscape.
We can’t use money as a way to preserve the value of our labor. That is simply the landscape.”
Could be why people are bidding up houses ?
“Smith had a heart-stopping realization: She hadn’t actually purchased her home at all. The document she had signed wasn’t a traditional mortgage, as she had believed, but a ‘contract for deed’—a type of seller-financed transaction under which buyers lack any equity in the property until they’ve paid for it in full. ‘I know people always say ‘buyer beware’” she acknowledges. ‘But I’d never had a mortgage before, and I feel like they took advantage of that.’”
What a brilliant financial innovation!
Cockroach Theory suggests that there are a lot more ‘contract for deeds’ out there waiting for the clueless debt donkeys to discover what kind of agreement they signed.
“In a tight credit market, companies like Harbour, which has purchased roughly 7,000 homes nationwide since 2010, including at least 42 in Cook County, purport to offer another shot at home ownership for those who can’t get mortgages.”
If 7000 cockroaches are already in plain view, what might be the total number?
…aka Rent to Own.
Or is it Rent to Foreclosure?
In NY it is called a “Land Contract”. No bank loan. Pretty much rent to own.
The contract-for-deed sales grew out of the blatent racism of the 1950’s. It’s in the article. But we’re coming up on 50 years of equal protection under the law. At some point, don’t these folks need to take at least some responsibility for themselves?
Smith’s retirement from her job as an adult educator at Malcolm X College, in the spring of 2013
I wonder what she educated those adults in. Reading comprehension?
So she bought the house in 2011 for $545/month, and then retired in 2013 with a monthly fixed income of $1,100/month. And she couldn’t figure out that she couldn’t keep up the payments for long after that? She was going to have problems paying even a regular mortgage. Not to mention that the house itself might not even be legal for habitation.
Really, her best option would have been to retire and then get out of Chicago and live in an area with very low rent. Trailer park in rural Illinois, maybe? But racism would likely kick in again. Also, the elderly do seem to suffer from a syndrome of “But this is my ho-o-o-me.”
“Not to mention that the house itself might not even be legal for habitation.”
The article suggests she didn’t see that coming.
Which reminds me of the unfortunate situation of a colleague at work. After 3″+ of rain everywhere in San Diego this past Monday, her home sustained some significant flood damage. And it turns out that not many San Diego contractors have flood damage repair experience.
Best article ever on the evils of globalism.
http://www.zerohedge.com/news/2017-02-28/whats-so-bad-about-globalism-spoiler-alert-everything
“As far as I can tell, globalism is a scheme concocted by the rich to destroy the working and middle classes through worldwide financial imperialism.
have a strong hunch that globalism is also a plot hatched to obliterate indigenous cultures and real human differences under the deceptive ruses of “multiculturalism” and “diversity.”
This is why I’m confused whenever I hear someone say they hate “the rich,” oppose “imperialism,” and support “the working class” while being an unquestioning cheerleader for open borders and global government.
Like Marxism’s pipe dreams about an eventual and irreversible dictatorship of the proletariat, the most seductive hook about globalism is the idea that it’s inevitable. Technology has made us an increasingly interconnected planet, and therefore the only logical and moral thing to do is establish a benevolent global governmental authority with the power to tax and imprison and torture and abuse.”
As you know, Globalism is euphemism for one-world government run by corporations. That’s all there is.
OBEY.
Yup. Corporate one-world rule. NAFTA, CAFTA, etc. were supposed to create an EC-like regional government for North America. We’ll see how much Trump slows this down.
Will Europeans wake up and stop the rampant immigration in time? Stay tuned . . .
Globalism = neo-feudalism.
From yesterday:
————-
Comment by rms
2017-03-01 23:39:55
Toll’s great grandpa probably ran a penny-hang in London.
————-
I had to look up what a penny-hang was. This is how charities housed the drunken, poor, and homeless in Victorian gilded age London.
One penny sit-up: bench space for you to sit on, no sleeping allowed.
Two penny hang: You get to hang over a rope, in a line with other penny-hangers, okay to sleep. (Possible origin of the phrase “hangover”) To wake people up in the morning, they cut the rope.
Four-penny coffin box: what it sounds like. You get to sleep lying down, and you get some breakfast too.
https://wonderfulcollection.wordpress.com/tag/penny-hang/
My first reaction was OMG. But these penny places at least had heat, were out of the rain, and were cleaned.
“This is how charities housed the drunken, poor, and homeless in Victorian gilded age London.”
The church made money from their penny-hang. No charity.
Hmmm… I had to look this up.
In 1850 England, the size of a pennyloaf* is about 8 ounces, which is at best a dollar in today’s currency. So ~100 coffin beds at 4 pence, say $5/bed, is $500 per night in today’s dollars. I dunno, how much would it cost to clean and coal-heat a big room, plus provide 100 bowls of soup? More or less than $500 in today’s dollars? That’s not much of a profit margin.
And we have an easier way to know that there wasn’t much of a profit margin on penny-hangs. If it was so profitable, then why let the churches and the Salvation Army have all the fun? Private companies would be setting up money-raking prenny-hangs on every street corner.
——————-
*A penny loaf was establish in the 13th century. It was the loaf of bread that could be purchased for one penny (240 pence/pound). The size of the bread varied depending on the price of flour and labor. I think it’s a good measure of the value of money, at least in England.
By the way, here is the reference to the size of a penny loaf in 1850. Of all things, the document is an argument in favor of globalization, claiming that an 1850 penny loaf was larger in 1850 than an 1830 loaf because free trade decreased the price of flour. (Search for “penny” in the document.)
http://archive.spectator.co.uk/article/26th-january-1850/2/vrtudirts
Hey Donk.
Denver has over 6,000 homeless:
http://www.thedenverchannel.com/news/front-range/denver/homeless-find-shelter-in-vacant-denver-houses-slated-for-redevelopment
And Denver is really overpriced:
http://www.thedenverchannel.com/news/front-range/denver/colorado-uber-lyft-drivers-are-sleeping-in-cars-to-make-ends-meet
“This sucker could go down” — George W. Bush
Heckova job, Yellen.
It’s gotten so bad that many homeless can’t even afford to be homeless in Denver, they have to commute from Colorado Springs to be homeless here…
They can’t be as poor as DebtDonkeys. They’re so poor they can’t afford to spend the night.
I dunno, my coffin box is pretty comfy.
lol@donk
The Fed is trying to jawbone up the dollar (and suppress gold prices) again by jabbering about a mythical March rate hike. Not a chance, but I appreciate the discount gold.
http://www.marketwatch.com/story/gold-loses-luster-as-dollar-climbs-to-8-week-high-2017-03-02
“Manhattan Resale Home Prices Tumble the Most in Four Years”
https://www.bloomberg.com/news/articles/2017-01-04/manhattan-home-prices-fall-as-sellers-concede-to-slowing-market
“Manhattan Resale Home Prices Tumble the Most in Four Years”
This is bad news for Uncle Bill, Mr. French, Sissy, Buffy and Jodie.
…. and millions of DebtDonkeys anchored to rapidly depreciating assets.
It’s beautiful to see greater fools waking up in a state of shock to realize their folly.
Keller, TX Housing Prices Crater 10% YoY
https://www.zillow.com/keller-tx/home-values/
5 popped bubbles
cre
farm land
car loans
student loans and college degree value– gender studies etc.
soon re morts- again
We are seeing an uptick in blue-collar turn-over. I was politely heckled when I suggested that they can barely pay their bills on $50k gross these days. The medical deductions over the past few years have been absurd, and the cost to operate and depreciate a car isn’t going down. But management ($120k+) likes their blue pills and rose-tinted shades.
NY Teamsters’ Pension Fund Goes Belly Up
BY: Bill McMorris
March 1, 2017 3:50 pm
A New York labor union has exhausted its pension fund, leaving thousands of retirees at risk and sparking calls for a forensic audit.
http://freebeacon.com/issues/ny-teamsters-pension-fund-goes-belly/
Another success story brought to you by the Fed.
I spent yesterday and half of today poking around Odessa and Midland. I saw things I expected and didn’t. I’ll fill in later. People out here work for a living! Off towards north Texas and Big D this afternoon.
“Odessa and Midland.”
Friday Night Lights
Have a safe trip.
Thank you for the updates, Ben! Do you plan to shoot any video?
And people working for a living is a good thing to see.
Video costs extra.
Have fun and keep her on the road Jonesy! The crew is retrofitting the RagesCages and tuning up the BanVan ready for your return!
West Texas lots of wide open country
The Marfa lights, also known as the Marfa ghost lights, have been observed near U.S. Route 67 on Mitchell Flat east of Marfa, Texas, in the United States. They have gained some fame as onlookers have ascribed them to paranormal phenomena such as ghosts, UFOs, or will-o’-the-wisp, etc.
So Snapchat, a company that makes a toy which it gives away for free and which tries to make money by selling add ons for it, and which struggles to make a profit went public and now has a market cap of $33B (at this moment)
I wonder how long this madness will last. The dot com boom collapsed on itself and went out with a whimper. How long until the inane app bubble collpases?
$33 billion for an app that has no “value” beyond letting teenz send each other disappearing nude selfies…
I’ve also read that it’s hard to use, with a non intuitive interface, so it’s not even a well designed toy.
On that note, King Entertainment, the makers of Candy Crush, another free toy, who makes their money by selling “power ups” (cheats) for their games, was sold to Activision last year for $6 billion.
Twitter Part 2.
lots of money to be made! get in, get out.
fb - 400b
goog - 580b
why should it surprise you that snotchat is 30b?
I heard on the radio that Snapchat is now worth more than the top 11 NFL teams, combined.
I think I’d rather have the NFL teams.
When you see the sock puppet on the TV commercial, you’ll know that the end is near . . .
I see the Amazon grocery delivery trucks in my neighborhood now . . . just like the HomeGrocer.com trucks (”Hey, it’s the peach man!”) were two decades ago.
Rinse, lather, repeat . . .
Santa Clara, CA Housing Demand Craters 22% YoY
http://files.zillowstatic.com/research/public/City/City_Turnover_AllHomes.csv
Lower prices on everything:
ETRADE: Introducing $6.95 online equity
and options trade commissions
Our standard commission rate will decrease from $9.99 to $6.95.
The serial dissemblers of the RE and mortgage finance industries are trying mightily to lure the last of the FBs into the doomed housing bubble.
http://www.businessinsider.com/the-housing-markets-trigger-moment-2017-3
“Vancouver, WA Family Says Realtor Was Caught On Camera Stealing From Their Home”
http://www.kptv.com/story/34644392/vancouver-family-says-realtor-was-caught-on-camera-stealing-from-their-home
Get ready for more incoherent mumbling about “the data” by Yellen the Felon, who will have to come up with some creative rationale for deferring yet another rate hike.
http://www.zerohedge.com/news/2017-03-02/why-you-should-be-nervous-about-janet-yellen’s-speech-tomorrow
Fargo-based Vanity closing stores in 27 states
FARGO (KFGO) - After nearly 60 years, Fargo-based Vanity is closing its stores across the country. Board Chairman Jim Bennett, in an exclusive interview with KFGO News, says the women’s fashion retailer has filed bankruptcy and will close 140 stores in 27 states.
Vanity employs as many as 1,700 people, depending on the time of year, with more than 100 at its corporate headquarters in Fargo. Bennett says competition from internet retailers was a significant factor in the decision.
In North Dakota, Vanity has locations at West Acres in Fargo along with Grand Forks, Bismarck, Minot, Williston and Dickinson. Stores in Minnesota are in Alexandria, Bemidji, Duluth, Rochester, Virginia, Willmar and Mankato. It also has three stores in the Twin Cities.
http://kfgo.com/news/articles/2017/mar/01/kfgo-news-exclusive-fargo-based-vanity-closing-stores-27-states/
Peak rent?
http://wolfstreet.com/2017/03/01/peak-rents-dive-in-costliest-cities-soar-in-mid-tier-cities/
Down here in SE Region IV I don’t recall rents dropping much at all in the 2007 crash.
House prices did but not rents.
Maybe it was because they allowed people to stay in houses where they weren’t paying the mortgage and maybe it had something to do with decent places in decent neighborhoods to sit empty for years and if someone called the notice posted by the bank (which I did on six or seven) they would tell you they couldn’t talk to you because the house had not been foreclosed and the person on the mortgage was still the owner.
Or it was because rents never spiked, and once people started to lose their homes they needed to live somewhere…adding supply of renters.
Rage:
https://www.youtube.com/watch?v=PZbG9i1oGPA
https://www.reddit.com/r/personalfinance/comments/5×4qvt/wife_put_one_digit_wrong_when_doing_an_online_ach/
Williamsburg Brooklyn Rental Rates Crater 8% YoY
https://www.zillow.com/williamsburg-new-york-ny/home-values/