April 25, 2017

A Glut May Pressure Owners To Drop Their Prices

A report from Multi-Housing News. “W. Allen Morris, president and CEO of The Allen Morris Co., recently spoke with MHN about how he sees the multifamily landscape shaping up for 2017. MHN: With about a quarter of the year behind us, what have you seen so far in 2017 when it comes to multifamily investment opportunities? Morris: One is that there’s less pressure on land prices as many buyers have not been able to secure financing and have backed away from new projects. There is also the reality that some markets are dealing a current oversupply of product, markets such as San Francisco, New York and Miami, among others. This has and will continue to exude downward pressure on rents.”

“MHN: What do you feel is the most important thing that investors need to be aware of in today’s multifamily environment? Morris: I would say competitive products that could drive rental rates down in the project you invest in. To that end, developers need to develop or select properties that have market differentiation, a strategic advantage over competition. One example is in our St. Petersburg project where we are leasing at above our pro-forma rental rates, and we are able to do so because we are delivering a quality product that is amenity-rich—a market differentiator.”

The Washington Post. “Apartment living has changed in recent years. Gone are the days of shag carpeting and laminate countertops. Now renters demand hardwood floors and high-end finishes similar to what they would find in a single-family home. They also want a wide-range of amenities in their buildings. Amenities are a hot topic in the apartment housing industry. In some competitive markets such as the D.C. region, an arms race of sorts appears to be breaking out as buildings try to outdo each other with lavish features.”

“‘People say, ‘Do we really need a fitness center? There’s a gym right down the street,’ said Cindy Clare, president of Kettler Management in McLean. ‘But you do. I always say 100 percent of your residents think they are going to use the fitness center, only 10 percent will, but everybody thinks they are.’”

From Metro US on New York. “With a glut of rental units on the market, New Yorkers are negotiating, scoring free rent, iPads and more from their landlords. It’s a new phenomenon. Landlords are at a disadvantage because record high rents are driving people to the outer limits of the five boroughs, while new developments are flooding the market in historically popular areas, creating high vacancy rates in Manhattan and parts of Brooklyn. In March, 35 percent of leases signed at Citi Habitats included some sort of deal sweetener for the tenant, up from 20 percent in March 2016 and 12 percent in 2015, according to company figures.”

“Jonathan Katz, for example, made out pretty well. He is now moving into a one-bedroom in Park Slope, Brooklyn, which had been vacant for more than two months. To lure him in, Katz was given three months of free rent on an 18-month lease (a savings of $8,700), did not have to pay a broker’s fee and got $100 knocked off the base rent. For an apartment that would have cost him $2,900 a month, he will now pay $2,350. ‘There was a time when concessions were few and far between,’ said Joshua Juneau, a broker for Triple Mint in Manhattan. Now, he said, ‘we’re getting 700 emails showcasing what’s available and what incentives are being offered.’”

The Chicago Tribune in Illinois. “Chicago’s Trump Tower has an unusually large number of condominiums for sale and for rent, and real estate agents predict that a glut of available units in the building may pressure owners to drop their prices. Already renters in Trump Tower say they have been able to get sizable discounts. The number for sale ‘is amazing,’ said Gail Lissner, vice president of Appraisal Research Counselors. ‘I’ve never seen that number for sale since they opened, and there have been very few transactions.’”

The Real Deal on California. “The Bloc is a bellwether for the real estate market in Downtown Los Angeles, and for quite a while, it was signaling all good things to the industry, with promises of growth and prosperity for all. But with previously announced tenants now jumping ship, a revolving door of retail leasing brokers and three pushed-back openings, the industry is beginning to suspect that the development was a false prophet.”

“After hip hotels and trendy restaurants started popping up in DTLA more than five years ago, retail was expected to be the next frontier. The Ratkovich Company announced leasing news shortly after the developer snagged the property in 2013.”

“The percentage of the Bloc’s 720,000-square-foot office tower that was leased also dropped substantially in the first quarter, though sources could not say by how much. Ratkovich said 48 percent of the space is leased. Industry insiders speculate that tenants with short-term leases were booted in favor of finding tenants who could pay more. The development company has also been rocked by some internal issues, from the sudden departure of chief operating officer Clare DeBriere in January to the Bloc’s financial troubles last year.”

The Hawaii Tribune-Herald. “The University of Hawaii at Hilo wants to lower the price of its most underused residence hall by about 18 percent next fall, part of a proposal to boost the dorm’s occupancy and generate more funding to pay back bond debt. Hale Alahonua, a 300-bed, suite-style dormitory, has remained less than 60 percent full since opening in 2013. Currently it’s about 50 percent occupied. Many students have complained the dorm is too expensive — at $3,859 per semester, it’s the priciest housing option on campus.”

“As a result of low occupancy, UH-Hilo has dipped into reserve funds to pay off a 30-year, $17 million revenue bond used to help finance the $28 million dorm when it was built. This week, administrators presented a three-year rate restructuring proposal that would slash the yearly cost to live in Hale Alahonua by more than $1,400 — putting it about $300 cheaper per year than one-bedroom double rooms in Hale Ikena, a popular apartment-style dorm and the next priciest on-campus housing option.”

“‘Why are we confident about this? Well, for the past four years, as enrollment (campuswide) has continued to decrease, housing has consistently had 18 percent of the total student population,’ said Farrah-Marie Gomes, UH-Hilo’s vice chancellor for student affairs. ‘With the (price) reduction of Hale ‘Alahonua, the expectation is we will be able to bring up total occupancy and that’s how we make those payments to debt service.’”




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117 Comments »

Comment by Ben Jones
2017-04-25 10:19:35

‘People say, ‘Do we really need a fitness center? There’s a gym right down the street…But you do. I always say 100 percent of your residents think they are going to use the fitness center, only 10 percent will, but everybody thinks they are.’

This is funny. The amenities thing started because they were backward justify what they paid for the land, which is the root of this bubble. “Why we need bocci ball courts and pools dangling from the roof!” Now there’s an oversupply, everybody has a bocci ball court or some other useless deal, and this bizarre aspect has turned into an arms race. Like the DC apartment guy said months ago, “These amenities don’t generate any revenue.” Go ahead and built your fitness center that won’t get used, it’ll put you in default all the sooner.

Comment by new attitude
2017-04-25 11:34:52

Do KOA’s have bocci now?

stay classy!

 
Comment by Carl Morris
2017-04-25 12:15:57

Apartment living has changed in recent years. Gone are the days of shag carpeting and laminate countertops. Now renters demand hardwood floors and high-end finishes similar to what they would find in a single-family home. They also want a wide-range of amenities in their buildings.

Yeah, I wanted to point out the backwards thinking with this too. I don’t think renters “demand” that much. What they DO think is that “if you’re going to charge me that kind of money then you better have EVERYTHING”. Provide (or at least don’t kill/squeeze out) cheaper options and they won’t be so demanding.

 
Comment by snake charmer
2017-04-25 14:38:46

I chucked at that one too. I remember looking at apartment complexes when I first moved to Tampa. Several had on-site fitness centers, usually consisting of a couple of dated Nautilus machines and a dusty, unplugged treadmill or stair climber. I never saw anyone working out.

The only amenity that ever gets a reasonable amount of use here is a pool. Everything else is a white elephant almost immediately.

Comment by Carl Morris
2017-04-25 15:23:12

In the complex I’m in right now in San Jose there are 3-4 diehards using the gym every time I’m there and nobody using the pool except a weekend party once in a while. I can see how Florida could be different.

 
Comment by slynnns
2017-04-25 19:39:34

Some amenities are over the top - but I agree that renters like the idea, the availability of something even if they don’t use it. It’s a type of freedom. To choose. But I’d prefer more choice in well appointed buildings without new and extravagant amenities like community cars or whatever.

In my old complex, I use the not-frequently used hot tub (nice that so few others use it so less ick factor) but the “heated” pool is baloney. Heated by solar panels alone so it’s always cold. People can only use it on hot days. I probably wouldn’t have chosen the complex if I’d known the pool was basically useless 90% of the year. Decrepit gym our owner has the gall to call “state of the art” is a joke but definitely like having it there and go through phases of using it. Certainly can’t fit an exercise machine inside the apartment. I bet a lot of these luxury amenities turn out to be mediocre “experiences” or mysteriously disappear after all the leases are signed.

 
 
 
Comment by aqius
2017-04-25 10:20:23

you know yer old when seeing “UH-Hilo” makes me think of Huey choppers instead of college abbreviated moniker.

Comment by Carl Morris
2017-04-25 12:19:57

That’s like I saw a young oil field worker talk about putting stuff in the conex or milvan the other day on FB. It’s like a bad dream somewhere in the back of my head that I can almost forget now…and I think about those guys that did all those tours over the last 15 years…I don’t think they’ll ever be able to forget. At least I didn’t have to do that.

 
Comment by junior_kai
2017-04-25 16:29:02

I know from a friend that UH-Manoa had to build fancy new dorms with all the trimmings just to keep accreditation. Of course their maintenance backlog is ginormous, but that gets ignored so long as they go deeper into debt building new stuff so they can raise tuition to the sky.

Bigger issue sounds like UH-Hilo is probably not anywhere close to self-sustaining. Great place for astronomy, astrophysics, geology, volcanology, marine biology, botany among other subjects though.

 
 
Comment by Karen
2017-04-25 10:23:44

“This week, administrators presented a three-year rate restructuring proposal that would slash the yearly cost to live in Hale Alahonua by more than $1,400 — putting it about $300 cheaper per year than one-bedroom double rooms in Hale Ikena, a popular apartment-style dorm and the next priciest on-campus housing option.”

They are starting an arms race against…themselves.

Comment by Ben Jones
2017-04-25 10:39:53

‘There is also the reality that some markets are dealing a current oversupply of product, markets such as San Francisco, New York and Miami, among others. This has and will continue to exude downward pressure on rents…I would say competitive products that could drive rental rates down in the project you invest in’

‘‘There was a time when concessions were few and far between…Now, he said, ‘we’re getting 700 emails showcasing what’s available and what incentives are being offered.’

Comment by Blue Skye
2017-04-25 10:48:46

How could that be, a surplus of housing? I’ve been told by a poster here that we desperately need another something like 2 million housing units a year just to keep up!

Comment by slynnns
2017-04-25 19:40:51

You need that many to satiate the “investors”.

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Comment by Race Bannon
2017-04-25 19:50:58

You did know about this right?

US Housing Demand Plummets To 20 Year Low

http://1.bp.blogspot.com/-0q8fIAsczFk/VUANHEhSbnI/AAAAAAAAjRs/oANwXOUviGw/s1600/MBAApr292015.PNG

 
 
 
Comment by taxpayer
2017-04-25 10:50:52

3 cities that actually have land constraints and growing pop

grand rapids,asheville etc you can walk from the burbs to farmland in minutes

 
 
 
Comment by Senior Housing Analyst
2017-04-25 10:43:28

Thousand Oaks, CA Housing Prices Crater 15% YOY

http://www.movoto.com/thousand-oaks-ca/market-trends/

 
Comment by Blue Skye
2017-04-25 10:50:41

“record high rents are driving people to the outer limits of the five boroughs, while new developments are flooding the market in historically popular areas, creating high vacancy rates in Manhattan and parts of Brooklyn…”

It’s like a blast shock wave with a crater in the middle of it.

 
Comment by Ben Jones
2017-04-25 11:00:38

Azdudes CAT short just took him out of the wine cooler crowd. It’s all MD 20/20 from here on.

Comment by California Renter
2017-04-25 11:24:14

Up 7.4% that hurts

Comment by Ben Jones
Comment by Race Bannon
2017-04-25 12:24:22

:mrgreen:

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Comment by aqius
2017-04-25 12:32:40

throw a real caterpillar in that next bottle of Mad Dog & chase the worm

on a serious note that’s quite a surprise jump for CAT stock considering world markets seem bloated with heavy equipment.

or as the Aussie’s say: that’s quite a “jump-up”

(binge-watched Netflix Aussie Truckers /now I’m talking like Crocodile Dundee. one Australian fad in the 80s was enough)!

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Comment by ibbots
2017-04-25 11:03:56

“Since 2010, the median price for new and existing homes sold in the Dallas-Plano-Irving area has soared 77 percent. Over the same time, median incomes are up just 4 percent.”

https://www.dallasnews.com/business/economy/2017/04/25/looking-bargain-housing-dallas-place-anymore

Comment by Race Bannon
2017-04-25 11:14:29

Oooooooph.

Be happy you didn’t buy a house in the last 17 years.

Comment by Jingle Male
2017-04-26 06:01:57

Why. Is a 77% increase not enough for a buyer to be happy about? I bought quite a few houses in 2008-2010 and it is the best investment of my lifetime.

Comment by Race Bannon
2017-04-26 08:31:11

Data my good friend. Stick with the data.

West Sacramento, CA Housing Prices Crater 5% YoY

https://www.zillow.com/west-sacramento-ca/home-values/

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Comment by Jingle Male
2017-04-26 14:14:53

I am. Your data shows if you bought a house in West Sacramento in 2011 for $200,000, it is worth $350,000 today. That is data I can easily stick with. I appreciate your posting the numbers.

 
Comment by Race Bannon
2017-04-26 17:18:55

Data my friend…. data.

Coral Gables, FL Housing Prices Crater 6% YoY

https://www.zillow.com/coral-gables-fl/home-values/

 
 
 
 
Comment by JSandusky
2017-04-25 17:48:49

Must be the Chinese. Everybody wants to live in Dallas.

Comment by slynnns
2017-04-25 19:44:09

You don’t have to want to live there to want to buy there.

 
 
 
Comment by Apartment 401
2017-04-25 11:08:39

Another reason to use a credit union and not do business with TARP banks:

http://www.zerohedge.com/news/2017-04-25/wells-meeting-turns-screaming-match-shareholder-kicked-out-after-physical-approach-t

Pigmen gonna pig, so let’s give them less money to pig with…

Comment by snake charmer
2017-04-26 07:41:36

My TBTF bank now is charging me a substantial annual sum, more than fifty times the amount I earned in interest last year, for use of a basic safety deposit box. The service formerly was free. I also have overdraft protection, and that’s not free anymore either. Needless to say I will be looking for another bank.

Comment by Prime_Is_Contained
2017-04-26 19:27:00

Banks are in the fee-collection business, not the banking business.

I call it the “scam economy”; you charge your customers gotcha-fees, hoping that they don’t notice, and you wait and see if they notice, and even if they do notice, only some fraction of them will complain—and you refund fees for some portion of those that do complain (mostly because people who call run up your support costs), but you pocket millions and millions of dollars of scamming revenue from those who don’t notice or those who don’t complain, or those who don’t complain enough or care enough to deal with you sh!!#y support. But you’re not a scammer, you’re a well-known business, a captain of industry, in fact everyone knows your name, I mean brand!

Welcome to the twenty-first century, and its scam economy.

 
 
 
Comment by Blue Skye
2017-04-25 11:11:25

Housing sales in China cities is rolling over

“50 typical cities of new commercial housing turnover of 12.86 million square meters, down 4% mtm, down 22% yoy.”

“Price follows volume”

http://chinastocks.net/2017/04/21/finally-new-homes-sales-fall-20pc-or-more-in-50-cities/

Comment by Albuquerquedan
2017-04-25 12:50:42

The article states that there was panic buying as late as March, I am suppose to be impressed by sales being off for a few weeks? Power use in China is up 6.9%, hardly a sign of a collapsing economy:

http://www.shanghaidaily.com/business/energy/Wind-power-capacity-grows-again-in-Q1/shdaily.shtml

Comment by Blue Skye
2017-04-25 13:58:02

That’s right, off 22% YoY. Hardly a sign of stability. Housing bubble stumbling around the globe.

 
 
 
Comment by Apartment 401
 
Comment by new attitude
2017-04-25 11:33:04

Stawk parties on!!! The Obama economy is booming! Deficit spending is OK, per Trump… print, print, print

I need to buy some Netflix shares and get rich!

Comment by Puggs
2017-04-25 11:59:46

It’s “git” rich.

 
Comment by Albuquerquedan
2017-04-25 12:21:28

The Obama economy is booming!

Just because dead people can vote in Chicago, does it mean that a president that is no longer in office can take credit for something that he is not doing. Otherwise Bush II deserves credit for the Obama recovery since before the Obama stimulus even began the recession was technically over and we were moving back up.

 
Comment by Larry Littlefield
2017-04-25 12:56:19

Total non-financial debt increased by 5.1% of GDP last year. Real GDP increased by 1.8%.

Obama, Trump, whatever. It’s an unsustainable, debt driven economy that has left younger generations worse off in the wake of Generation Greed.

https://larrylittlefield.wordpress.com/2017/04/25/generation-greeds-last-economic-orgy-federal-reserve-z1-debt-data-for-2016-rising-housing-prices-census-bureau-data-on-worse-off-young-adults-falling-life-expectancy-etc/

Comment by butters
2017-04-25 14:00:34

Why is it unsustainable? We have sustained for so long. We can sustain another 100 yrs and another 1000 trillions….after all these are just 0’s and 1’s in the keyboard.

Comment by Larry Littlefield
2017-04-25 15:13:01

It’s’ hard to argue with falling life expectancy for the generations that follow Generation Greed. If that isn’t a sign of social, economic, spiritual failure, I don’t know what is.

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Comment by RickyDanny
2017-04-25 14:09:53

“Obama, Trump, whatever. It’s an unsustainable”

Thank you, more of this please. The comments section of this blog have always been a place I come here for insight and a perspective, but I’m having to scroll through a lot more useless political bickering these days.

Comment by MightyMike
2017-04-25 15:53:36

I’m having to scroll through a lot more useless political bickering these days.

You must have started looking at these comments some time in the past 3 months. There has been much more political bickering in the past.

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Comment by Just Some Dude
2017-04-25 17:19:38

Agreed. It seemed to me that before July ‘16 we had less mention of the words liberal, conservative, democrat, and republican. I am confident that the current increases in housing prices are not due to a single party, nor a single politician, nor a single piece of legislature. I’d say it’s more complex than that.

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Comment by JSandusky
2017-04-25 17:38:19

No it’s very simple.

 
Comment by oxide
2017-04-26 05:39:06

House prices are apolitical, yes. Both parties are on the money train for that. But you can’t really talk about jobs and trade without going political.

 
 
 
 
Comment by Financial Moralizer
2017-04-25 15:26:37

Almost 8 years ago, back in May 2009, the DOW was at 8500 and Nasdaq was 2000. LOL. This is the greatest bull market in history. And why stop now? Don’t fight the Fed.

 
 
Comment by Andrew
2017-04-25 11:52:42

In Boston, 25 percent of the properties had a fitness center, allowing owners to charge a $66.93 per unit per month premium for it.

-I can, and do, go to my local gym for less than half that. its $7 per week. And I can turn the spigot off any time. Broken stuff gets fixed quickly. and there’s no way an apartment complex has as much to choose from. Just saying.

Comment by Taxpayers
2017-04-26 06:12:02

Planet fitness $10 a month

 
 
Comment by Albuquerquedan
2017-04-25 11:54:57

The big screen TV is cheaper but be prepared for more homeless, sick and ignorant people:

http://www.msn.com/en-us/money/markets/the-important-things-are-more-expensive-than-they-were-10-years-ago/ar-BBAl6u6?li=BBnbfcN

 
Comment by taxpayer
2017-04-25 11:57:39

maybe real estate closing forms should show city/state pension liabilities w years and amounts required to be solvent.
Chi IL about 8k per human ,so that’s about 40k per non welfare non gov earning human
dat be allot,yo

Comment by 2banana
2017-04-25 12:02:45

It’s funny you mention that…

That is almost EXACTLY what I do!

But all city liabilities. Not just pensions.

Comment by Larry Littlefield
2017-04-25 15:17:43

If there were any fair accounting in this country, every tax at every level would be cut to just the taxes that pay for public services and government benefits RIGHT NOW.

And then an additional surcharge that EVERYONE COULD SEE would be imposed to pay for costs shifted from the past to the present. Service on debts not used for entirely new infrastructure. And at the federal level to pay for past tax cuts, the Great Recession bailouts, and the Medicare prescription drug program. Excess pension payments due to past retroactive increases, past taxpayer underfunding, and fraud. Extra infrastructure maintenance due to past deferred maintenance.

Your property tax bill would show — here is your property taxes owed, and here is your additional Generation Greed surcharge.

Your income tax form would run all the way down to taxes owed, and then the final line would be the additional surcharge.

There would be a surcharge on your transit fare, on your toll, on your water and sewer bill, etc.

Comment by MightyMike
2017-04-25 15:56:14

Then add another surcharge that shows home much the accountants have to be paid to make all of those calculations.

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Comment by Senior Housing Analyst
2017-04-25 12:22:55

Flower Mound, TX Housing Prices Tank 13% YoY As Housing Demand Tanks

http://www.movoto.com/flower-mound-tx/market-trends/

 
Comment by 2banana
2017-04-25 14:38:29

Hmmmm…why resturants are closing….

——-

Today, Magrogan acknowledged that his group’s last Philadelphia restaurant - Harvest Seasonal Grill & Wine Bar at 40th and Walnut Streets - was permanently closed.

In addition, Magrogan said in a statement, “the business and tax environment in Philadelphia contributed to us examining the long-term viability of this location. Paid sick leave, city wage tax, the soda tax, and other city regulations make it a much more difficult business environment, compared to our suburban locations.”

http://www.philly.com/philly/blogs/the-insider/Why-a-restaurateur-Magrogan-Philadelphia.html?mobi=true

Comment by new attitude
2017-04-25 15:25:10

We lost 2 Applebees this month. I may have to microwave my frozen food at home now.

Comment by Ben Jones
2017-04-25 15:52:32

How much does Applebees charge to let you use their microwave?

Comment by new attitude
2017-04-25 16:51:11

Microwave use is free, I just need to get in line behind the cooks.

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Comment by JSandusky
 
 
 
Comment by Financial Moralizer
2017-04-25 16:26:22

Do they let you drink the oil from the deep fryer?

Comment by Throbert
2017-04-25 16:51:00
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Comment by Mr. Banker
2017-04-25 21:35:14
 
Comment by Mr. Banker
2017-04-26 05:28:02

What’s wonderful about these pranks is they demonstrate just how dumbed-down people have become.

One simple phone call from a stranger who projects authority and - presto! - unrestrained lemming-like behavior is unleased.

No questioning, no critical thinking - nothing.

A nation of dummies. (My bread and my butter.) A job well done by our educational system.

No dummy left behind.

Bahahahahahahahahahahahahahahahahahahahaha.

 
 
 
Comment by JSandusky
 
Comment by Albuquerquedan
2017-04-26 06:12:10

The impact of raising the minimum wage is being felt in store closures and restaurant closures (hard to blame restaurant closures on Amazon):

http://www.arkansasonline.com/news/2017/apr/25/study-minimum-wage-rise-hits-low-qualit/

 
 
Comment by MightyMike
2017-04-25 15:58:18

Restaurant employment is still growing faster than the rest of the economy.

https://fred.stlouisfed.org/graph/fredgraph.png?g=dl3k

Comment by In Colorado
2017-04-26 06:59:50

I wonder if the long term and steep rise in restaurant prices, especially at mediocre chains, might have something more to do with it. And prices have been going up for years, long before minimum wage was raised. Also, I seem to recall the steady increase in expected tip % numbers rinsing from 10-12% to 18-20% now.

You can make a filet mignon dinner at home for far less than a fatty, salty rubber chicken dinner at a chain restaurant.

Comment by MightyMike
2017-04-26 07:13:10

I wonder if the long term and steep rise in restaurant prices, especially at mediocre chains, might have something more to do with it.

It’s unclear how that could be a cause of the continued growth in restaurant employment. There’s always a lot of change going on in the industry, with restaurants getting started or getting shut down at a quite a high rate.

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Comment by MightyMike
2017-04-26 08:43:01

You can make a filet mignon dinner at home for far less than a fatty, salty rubber chicken dinner at a chain restaurant.

It’s possible that so many people have the lost the habit of cooking their own meals that their willing to keep paying more every year to have other people do their cooking for them.

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Comment by slynnns
2017-04-25 21:02:43

Boo hoo hoo. Whiny business owner thinks paid sick days of minimum wage are what is putting him out of business. In SF, they just add taxes to the end of the bill. Sure it takes a psychological toll on diners - but doesn’t cause them to increase menu prices per se.

Isn’t this the same industry where Papa John’s owner whined that providing crappy healthcare to workers would require the chain to raise pizza prices by a whopping 17 cents per pizza??? Really? Who wouldn’t pay 17 cents more for a pizza? Would many people even notice? Obama care was about taking the burden off business to be the sole source of healthcare because individuals are now able to purchase it themselves even with prexisting conditions.

Slightly related (value of spare change), I just had a homeless woman on the street turn down a dollar when a friend I was walking with offered her her spare change. Woman said, what good would a dollar do her? Yeah. Friend asked her how she could help her - woman said she wanted a million dollars. :) Can’t lock em up anymore. Crazy is free to roam.

Comment by MightyMike
2017-04-25 21:32:06

Everyone wants a million dollars.

 
 
 
Comment by Senior Housing Analyst
Comment by oxide
2017-04-25 17:11:26

I disagree with this:

Millions of young American students are piling on more student debt (now over $1.0 trillion nationally) to attain that cushy job (which is harder to obtain) than starting from the ground-up.

This guy is still using the old-school model of starting on the factory floor and working up to CEO. You may as well try out for the NBA. Really, an undergraduate degree is the best way to go, IF you choose a decent major like accounting or tech/engineering.

Comment by Race Bannon
2017-04-25 17:44:27

Hey Donk.

 
Comment by California Renter
2017-04-25 21:32:31

Starting from the ground up means staying on the ground nowadays. We need decent technical schools (ones that aren’t scams to get federal grant money) that will teach people trades and how to work in modern high tech factories where most of the manual labor is done by automation. Those systems have to be regularly maintained/repaired and skilled technicians are hard to find.

Comment by oxide
2017-04-26 05:22:33

I don’t disagree with the need for technical training. But there is a pretty thick career ceiling between the shop floor and the cushier cubicle jobs. It’s very difficult for technicians to cross into the higher-pay cubicle jobs unless they get a BA at night school.

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Comment by MightyMike
2017-04-26 07:14:58

Only around 20% of American jobs require a bachelor’s degree. If those are the only good jobs in the economy, that’s a big problem.

 
 
 
 
 
Comment by sod
2017-04-25 16:38:56

There are three units in our complex with the same floor plan as ours available right now. Each one is at least $100 more than I’m currently paying and as high as $200 more depending on the unit.

There is a crap load of new apartments coming online in the immediate area with basically the same rents if not a bit higher, 900-1000/mo for a 600sqft studio and up from there.

I think rents should come down because of all the new inventory but I don’t see any evidence of that. I also thought that the market was topped out at 17500, house prices would have corrected by now and that facebook would never amount to anything so I’m not optimistic about decreasing rents.

Comment by Carl Morris
2017-04-25 16:49:56

I also thought that the market was topped out at 17500, house prices would have corrected by now and that facebook would never amount to anything so I’m not optimistic about decreasing rents.

I hear you. But I don’t think it’s so easy to hide that many empty rental units from the market UNLESS you make them all Section 8. Which would totally go with the other stunts we’ve pulled to support high prices for the last 10 years.

Comment by sod
2017-04-25 17:42:44

I didn’t think about that but it’s quite possible. There’s already some section 8 apartments in a prime location that have been here awhile. Not sure if that’s a mandated thing or what.

 
 
 
Comment by Senior Housing Analyst
2017-04-25 17:14:34

West San Jose, CA Rental Rates Crater 8% YOY As Inventory Skyrockets

https://www.zillow.com/west-san-jose-san-jose-ca/home-values/

 
Comment by JSandusky
2017-04-25 17:15:27

Very informative video.

High Rent Blight. https://www.youtube.com/watch?v=mXPOimCIXz4

Could this be happening in residential properties as well?

 
Comment by new attitude
2017-04-25 17:23:29

From HUD:

In Santa Barbara County, the threshold for a family of four to be considered low income is $72,050. For Monterey County, that number is $65,100.

Comment by JSandusky
2017-04-25 17:32:28

That’s very low. Everybody makes millions here.

 
 
Comment by new attitude
2017-04-25 17:25:56

APRIL 25, 2017 8:04 AM
US new-home sales climb to 8-month high in March
BY JOSH BOAK
AP Economics Writer

U.S. sales of new homes shot up in March to the fastest pace in 8 months, as more Americans are upgrading their houses in a positive sign for the broader economy.

The Commerce Department said Tuesday that new-home sales rose 5.8 percent last month to a seasonally adjusted annual rate of 621,000, the highest rate since July last year. Sales are running 12 percent higher during the first three months of this year than during the same period in 2016.

Homebuilding helps to feed growth across the economy. Housing starts and new-home sales are climbing amid a shortage of existing homes on the market, generating gains in construction jobs and sales of building materials. The real estate sector is still recovering from the bursting of the housing bubble a decade ago, with sales last month on pace to more than double the total for all of 2011.

 
Comment by azdude
2017-04-25 17:29:48

how much money did you guys lose today?

Comment by Ben Jones
2017-04-25 17:37:21

Don’t blow a gasket when you look at this Mad Dog.

https://finance.yahoo.com/quote/CAT?p=CAT

Comment by azdude
2017-04-25 18:01:16

read the earnings report my friend. GAAP earnings were down bigtime from last year. Its a lot of bs for dumb@ss retail investors.

Comment by Race Bannon
2017-04-25 18:25:30

Check yer blinker fluid az_donk.

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Comment by phony scandals
2017-04-25 18:32:39
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Comment by Senior Housing Analyst
2017-04-25 17:37:19

Santa Cruz County, CA Housing Demand Craters 23% YoY

http://files.zillowstatic.com/research/public/County/County_Turnover_AllHomes.csv

 
Comment by JSandusky
2017-04-25 18:18:09

What a fukushima!

Fannie Mae Introduces Innovative Solutions for Borrowers with Student Loan Debt

Innovations Help Borrowers Pay Down Student Debt and Overcome Debt Related Obstacles When Buying a Home - See more at:

http://www.fanniemae.com/portal/media/financial-news/2017/student-loan-debt-6546.html#sthash.RigxS9Ic.dpuf

Comment by Taxpayers
2017-04-26 03:49:11

Is trumpf sleeping through Fannie Freddie bs

 
Comment by Puggs
2017-04-26 08:57:23

But, but..but I thought all millennials just wanted to rent an urban loft in downtown Denver so they were within crawling distance to the local brewery and dispensary.

 
 
Comment by phony scandals
2017-04-25 19:17:27

All Wars Are Bankers’ Wars

https://www.youtube.com/watch?v=PmILOL55xP0

 
Comment by sod
2017-04-25 19:20:06

Off topic for this post, but I thought this was an interesting article:

“In Detroit, the Wayne County Register of Deeds is looking to expand its mortgage and deed fraud unit to deal with a crush of cases. The problem is so severe the office runs a round-the-clock property fraud hotline and has a marked deed-theft patrol car used by investigators following up on tips. Investors in Kuwait, Australia and the United Kingdom looking to capitalize on Detroit’s resurgence are among those who have been caught up in scams.”

http://www.postandcourier.com/business/scams-push-foreclosure-fraud-to-limit-taking-victims-homes/article_6d45d84e-26d5-11e7-9f03-3757f1e2a87b.html

Comment by Mr. Banker
2017-04-26 06:41:17

“Around the U.S., deed theft has emerged as one of the most sophisticated and devastating frauds ever to menace homeowners.”

I’m jealous.

“Foreclosure “rescue” scams that have stolen thousands of dollars from individual homeowners in the years since the housing collapse have been pushed by savvy perpetrators to their limit. They use lies to convince the desperate to sign over their title, then force them into homelessness or a years-long legal battle.”

Hey, that’s my territory they are infringing upon!

“‘The scammers are no longer content with stealing $5,000. Now they want the whole house,’ said Dina Levy, who heads the Homeowner Protection Program in the New York attorney general’s office, which has spread word about deed theft and prosecuted culprits.”

Comment by Carl Morris
2017-04-26 10:08:57

“‘The scammers are no longer content with stealing $5,000. Now they want the whole house,’ said Dina Levy, who heads the Homeowner Protection Program in the New York attorney general’s office, which has spread word about deed theft and prosecuted culprits.”

Hahah…they’ll wish they took the 5k.

 
 
 
Comment by phony scandals
2017-04-25 20:51:16

Looking forward to Operation Gotham Shield tomorrow.

 
Comment by Bradford99
2017-04-25 21:26:42

Lumber tariff?! What an interesting way to break the back of new housing industry

Comment by MightyMike
2017-04-25 21:33:19

Trump’s Canadian lumber tariff could cost US homebuyers about $1,200 per house

The NAHB estimates the new duty will increase the price of an average single-family home by $1,236.

Just the anticipation of it has pushed lumber prices higher by about 22 percent since the start of this year.

The Trump administration argues that government subsidies for Canadian lumber are unfair.

http://www.cnbc.com/2017/04/25/trumps-canadian-lumber-tariff-could-cost-us-homebuyers-about-1200.html

Comment by azdude
2017-04-26 05:12:12

well maybe some american workers can have a job to buy a house?

Comment by Albuquerquedan
2017-04-26 06:43:44

Yes. The extra $1200 and in fact the entire amount paid for lumber will circulate in the US economy not the Canadian economy. So is the straw that breaks the camel’s back in Canada? The economy is barely hanging on now, add in a lost of some forestry and lumber jobs and you could get a downward cycle that crashes home prices and really starts a depression.

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Comment by MightyMike
2017-04-26 09:02:47

No the Canadian and American economies are highly integrated. A rise in unemployment north of the border will mean fewer Canadians vacationing in Florida and Arizona. Some of the newly employed American forestry workers will be cars and trucks made by the Big 3 automakers in Canada.

The bigger question is how Canada was chosen. During the campaign Trump gave the impression that he would go after China and Mexico. It’s make you wonder what’s going on with that wacky crew in the White House.

 
Comment by Albuquerquedan
2017-04-26 12:08:50

So the us should put up with any trade abuse because trade wars are not good? It is exactly that type of thinking that has gutted the middle class. Canada and for that matter Sweden are going to implode but it will be do to welfare state policies and insane. Home prices not primarily due to our trade practices. Of course a highly over inflated balloon is easy to pop.

 
 
Comment by Burned Alive in Tucson
2017-04-26 08:23:04

LEGIONS of transient American Lumberjacks will now be able to buy $500,000 starter homes, woohooohoo.

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Comment by Blue Skye
2017-04-26 08:23:25

The price of softwood lumber has been grinding lower. I doubt euphoric FB wannabees are going to notice anything.

 
 
 
Comment by azdude
2017-04-26 05:57:30

race and senior analyst meeting:

https://www.youtube.com/watch?v=LnXZ5ZOtl7o

 
Comment by Albuquerquedan
2017-04-26 06:18:23

The story itself is not about housing, but it has an interesting chart showing homeownership by race in LA. Makes sense because Koreans and Indians would be recent immigrants:

http://www.nbcnews.com/news/asian-america/communities-work-build-understanding-25-years-after-la-riots-n748591

 
Comment by azdude
2017-04-26 07:27:47

time for a rocket cash out refi again b@tchez!

 
Comment by Professor Bear
2017-04-26 08:29:37

San Diego Union Tribune
San Diego median home price hits $515,000 in March — highest point in a decade

The San Diego County median home price reached $515,000 in March, its highest point in a decade and a 7.7 percent increase in a year, real estate tracker CoreLogic reported Tuesday.

The San Diego County median home price reached $515,000 in March, its highest point in a decade and a 7.7 percent increase in a year, real estate tracker CoreLogic reported Tuesday.

The median price had been below half a million dollars since October last year, which had some analysts surmising costs had hit an affordability wall. But, the March numbers show some buyers are willing to go higher to get homes.

Comment by azdude
2017-04-26 09:32:12

MOAR STAWKS AND HOMES

 
 
Comment by Senior Housing Analyst
2017-04-26 08:37:21

Union City, CA Housing Prices Crater 7% YoY On Plunging Housing Demand

https://www.zillow.com/union-city-ca/home-values/

 
Comment by Justme
2017-04-26 09:34:39

TSE:HCG

Canada’s HCG stock is down some 58% today. The Canadian bubble may finally have burst.

https://www.bloomberg.com/news/articles/2017-04-26/home-capital-gets-c-2-billion-loan-will-miss-financial-goals

 
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