What They See As An Insatiable Appetite
A report from the Boston Globe in Massachusetts. “It’s too soon to declare victory, but Mayor Marty Walsh’s housing policies are clearly starting to help the two-thirds of Boston residents who rent their homes. City statistics show that average rents fell by 4 percent last year in older units in Boston. The biggest reason for the dip in rental prices up to this point is visible on the skyline: After taking office, Walsh pledged to build 53,000 new units of housing, a goal he appears to be on track to meet. Many of those new units, whether they’re condos or apartments, are too expensive for the average family. But the city believes that they’ve reduced the demand on older housing stock enough that owners of existing units have been forced to lower their prices to compete. The law of supply and demand, it would appear, is working in Boston.”
The Daily Press in Virginia. “As apartment rent growth stabilizes after high post-recession demand, renters are expecting more from Peninsula properties, managers say. Hampton Roads is expected to lag behind the nation in apartment demand this year after experiencing job losses related to cuts in defense spending and lagging population growth, according to the latest Hampton Roads Real Estate Review and Forecast. ‘We’re still slightly oversupplied,’Chris McKee, president of operations for The Franklin Johnston Group, said.”
The Baltimore Sun in Maryland. “As developers flood Baltimore with apartments in response to what they see as an insatiable appetite for new residences, the numbers raise a question: Are there too many? Just over 5,600 residential units, mostly apartments, were under construction in Baltimore and 1,800 more were approved as of April, according to the city’s planning department. Another 1,400 units opened just last year.”
“William H. Cole IV of the Baltimore Development Corp., said he thinks the market will determine its own saturation point. ‘As soon as lenders stop financing these projects, we’ll know we’ve reached our capacity,’ he said. ‘But we haven’t reached that yet.’”
“But it could be coming. The Wall Street Journal reported in February that major banks were becoming increasingly cautious in lending for multifamily projects nationwide.”
The Journal Sentinel in Wisconsin. “The Brady St. area is landing another new apartment development, the latest in a series of higher-end projects targeting younger renters on Milwaukee’s east side. Ogden Multifamily Partners LLC will start construction soon on a five-story, 30-unit building, said Jason Pietsch, firm principal. The new buildings are tapping into continued strong demand among millennials for higher-end apartments in the area near E. Brady St.’s taverns, restaurants and shops, Pietsch said.”
“Keystone on Brady’s average monthly rent is $1,650 for a one-bedroom unit, Pietsch said. Nine10 at Land Place will have larger units, and somewhat higher rents, he said. There are some concerns about whether the east side and downtown apartment market is being overbuilt, Pietsch said, especially with River House bringing a large number of new units. But interest in and around Brady St. remains high, he said.”
The New York Post. “Billionaire’s Row is headed for its first foreclosure. The dubious distinction is going to a stunning apartment on the 56th floor of 157 W. 57th St. — the city’s first ‘billionaire’s building,’ which is home to the Big Apple’s only $100 million condo. ‘This is the first high-end condo to go into foreclosure,’ said Kashy Eyn, of Platinum Properties, who is listing the property with Cash Bernard.”
“A mystery buyer who shielded his identity behind an LLC, Central Park Immobilier, bought the unit for $21.4 million in 2015. It is now on the market for $22.5 million — where it has agonizingly lingered for the past 547 days, according to Streeteasy. There is now a lien on the property for $20.9 million ‘plus interest and costs,’ and a foreclosure auction is slated for June 14, according to Property Shark. ‘We rarely see luxury condos up for auction, let alone in such an exclusive building as One57, home to the city’s most expensive condo ever sold,’ a Property Shark spokesman said.”
“A source told The Post there have been several offers on the unit, but the seller has rejected them ‘because they weren’t high enough.’ Only about 30 residential properties in Manhattan have been slated for the first time to go to foreclosure auction during the first quarter of 2017, said Property Shark’s Nancy Jorisch. One57 was funded by a subsidiary of an Abu Dhabi company linked to a $7 billion global money-laundering investigation, The Post revealed last year.”
‘As soon as lenders stop financing these projects, we’ll know we’ve reached our capacity,’ he said. ‘But we haven’t reached that yet.’
Here’s the key: lenders are chasing yield and have screwed the pooch in the process. Yes, insatiable is what they used to say about NYC safe deposit boxes in the sky:
‘Only about 30 residential properties in Manhattan have been slated for the first time to go to foreclosure auction during the first quarter of 2017′
Only? These people could pay. They are walking away.
“linked to a $7 billion global money-laundering investigation…”
Poof.
Green handshakes aren’t worth it. Not for a house or a multi-level building.
Bahahahaha… lenders who finance the projects don’t keep the loans they originate so there is no incentive for them to cut back, but they do receive hefty fees for the loan so there exists a hefty incentive to keep making them.
Bahahahaha … lenders get to pocket the rewards and pass on the risks.
Not quite a perfect world, but close to it.
They’re doing “God’s work”, and it’s for the society’s own good, so it’s good and just that they keep the profit and pass on the losses.
I was considering a modern orthodox economist’s take on crime: “A thief stealing from you increases aggregate demand: he sells the item and gets money, and you must replace it, perhaps even using debt, further increasing aggregate demand, thus increasing jobs. Therefore, crime is good for the society. And what’s good for the society is good for you. So, you should stop complaining about it and let crime flourish.”
And, topical: There was a big mob bust today in New York. Among the crimes are money laundering and illegal gambling (and murder).
But these are organizations providing good jobs and good incomes.
The contrast between these organizations and legal ones doing not dissimilar things is interesting.
Remember.
Only bigger and bigger government with more and more regulations and higher and higher taxes can solve our problems.
Now add the massive growth of state and local taxes…
+++++
Per Capita Taxes Have More Than Doubled Since JFK
Terence P. Jeffrey | May 31, 2017 | http://www.cnsnews.com
In 1961, the fiscal year Kennedy was elected, the federal government collected about $94.388 billion in taxes, according to the Office of Management and Budget. The population that year was about 183,691,481, according to the Census Bureau. That meant federal tax revenues equaled about $514 per capita — or $4,121 in 2016 dollars.
By 1965, the fiscal year Lyndon Johnson beat Barry Goldwater, the federal government collected about $116.817 billion in taxes from a population of about 194,302,963. That year federal taxes equaled about $601 per capita — or $4,578 in 2016 dollars.
In fiscal 2016, according to OMB, the federal government collected about $3.268 trillion in taxes. That equaled about $10,114 for each of the 323,127,513 people in the country.
Per capita federal taxation in fiscal 2016 was 121 percent more than it was in 1965 and 145 percent more than it was in 1961.
Fifty-five years ago, when taxes were less than half what they are now per capita and consumed a smaller share of the economy, President Kennedy, a Democrat, believed Americans deserved a better deal.
In 1961, the economy grew at 2.6 percent — the same as it did in 2016. But Kennedy did not think that was good enough. He wanted more growth. He believed lower taxes was the path to it.
Kennedy’s vision for the tax code did not aim at taxing the rich so the federal government could redistribute wealth to the poor. It was about keeping America great — rather than putting us in a position from which we would need to make her great again.
The year Kennedy gave this speech, growth in real GDP rebounded to 6.1 percent. The last time America saw growth at that level or better was 1984, when Ronald Reagan was president, and it grew by 7.3 percent.
We have now seen an unprecedented 11 straight years in which the economy has not grown by even 3 percent.
Along those lines:
‘After taking office, Walsh pledged to build 53,000 new units of housing, a goal he appears to be on track to meet. Many of those new units, whether they’re condos or apartments, are too expensive for the average family. But the city believes that they’ve reduced the demand on older housing stock enough that owners of existing units have been forced to lower their prices to compete.’
Great, build stuff that’s too expensive and hammer the existing landlords. Why not just build affordable air boxes? Oh yeah, land prices doubled, tripled and more. The various governments/central banks have really made a mess of this whole thing.
http://www.bostonmagazine.com/news/blog/2017/01/27/boston-luxury-condos-video/
Kennedy’s vision for the tax code did not aim at taxing the rich so the federal government could redistribute wealth to the poor.
What would the details of such a vision entail? Kennedy would have had to prefer a system in which everybody the exact same amount - not even a flat tax, just a flat fee. There can’t be any evidence that he had any such vision.
Just try to think…
Everyone got to pay less in taxes. And thus had more to spend. And this created economic growth.
Today, when people want to keep more of their hard earned money….they are called selfish and wanting to starve illegal Salvadorian MS-13 gangster kids…
None of that is a response to my criticism and the reference to MS-13 is bizarre.
Today, when people want to keep more of their hard earned money….they are called selfish and wanting to starve illegal Salvadorian MS-13 gangster kids…
Please provide a link to someone who has made this assertion.
Just try to think…
Everyone got to pay less in taxes. And thus had more to spend. And this created economic growth.
That’s sounds a little too good to be true and you know what that means. Maybe you should try to think. On the other hand, maybe it would be better if you didn’t. In the words of the great baseball player Ted Williams, “If you don’t think too good, don’t think too much.”
Someone doth protest too much.
Signed,
Seth Rich
The gov was paying out a lot less in Social Security, and Medicare hadn’t been created yet. Plus there wasn’t nearly the MIC that there is now.
every shthole has a DEPT of SOVIET Housing
I’m a 50’s guy
“kill a commie for mommy ”
then get rid of all these agencies the republic lived w/o for 175 years.
I go w 1910 tax burden about 8% all in
now about 40%
And then the music stopped…
++++
Pending Home Sales Crash Most In 3 Years, Hit By “Double Whammy” Of Price, Inventory
May 31, 2017 - ZeroHedge
Signed contracts in April tumbled 5.4% YoY (NSA). This is the biggest drop in pending home sales since August 2014 and comes on the back of last week’s disappointing housing ‘recovery’ data as perhaps Fed- and Trump-driven mortgage-rate rises have finally hit the American ‘pocketbook’.
“Realtors are indicating that foot traffic is higher than a year ago, but it’s obviously not translating to more sales.”
Serious question: How do realtors measure ‘foot traffic’?
Open house sign in sheets? More contacts from potential buyers?
I think there are sign in sheets for open houses. If the house has a lockbox and the buyer’s agent shows the home when the home is empty, then the buyer’s agent leaves his business card on the counter. Then realtors call each other for lock box combos. I guess you could add all those up.
April is tricky as the weather is great everywhere and you can move just as the school year ends and…………
And now we will see true price discovery…
Carrying cost (P/I, taxes, HOA, insurance) have to be at least $1 million a year. That is a heck of a cost for a shoebox in the sky that you don’t even live in…
+++++
“A mystery buyer who shielded his identity behind an LLC, Central Park Immobilier, bought the unit for $21.4 million in 2015. It is now on the market for $22.5 million — where it has agonizingly lingered for the past 547 days, according to Streeteasy. There is now a lien on the property for $20.9 million ‘plus interest and costs,’ and a foreclosure auction is slated for June 14, according to Property Shark.
‘bought the unit for $21.4 million in 2015. It is now on the market for $22.5 million — where it has agonizingly lingered for the past 547 days’
That’s one and a half years. He basically tried to flip it immediately. As I said about the NYC tower (tallest residential in the US) that is now undercutting recent buyers, imagine the HOA fees on these things. These are truly white elephants:
‘White elephant - Wikipedia
https://en.wikipedia.org/wiki/White_elephant
A white elephant is a possession which its owner cannot dispose of and whose cost, particularly that of maintenance, is out of proportion to its usefulness.’
An LLC bought it…makes you wonder whether the LLC was the shell for a wealthy family, or a cabal of 50 doctors and dentists who all tried to make a quick buck.
Me thinks it’s the former
I looked at this building on Google Maps. There’s a $100M condo in there? Really? Looks like another smelly cubicle farm to me like an insurance company or something. Of course, I have no real taste. I think buttermilk and sweet cornbread are cuisine-like fare. Ok.
Now the foreclosed $21M condo is what I’m having trouble with. So, this LLC buys a $21M condo in a building with a $100M condo on a bet that the $21M condo is actually underpriced. Surprise! It’s both the $100M condo and the $21M condo that’s overpriced. I’m wondering if the $100M condo is next. That high-priced POS must be a cashflow sponge no matter who owns it.
It could also be money laundering.
The clot thickens….
Regards,
Roidy
Ok, I did some digging. Not much digging, but some digging was done.
In Manhatten studio apts are going for $1000/sqft.
In Manhatten 3bdr 2b condo (Harlem) was $700/sqft.
Both looked like on-street parking. I wouldn’t own a car if I lived in Manhattan. Both were the least expensive properties on realtor.com.
Mahatten employment website says experienced computer engineer earns $136k/yr in New York. (https://www.labor.ny.gov/stats/lswage2.asp#17-0000)
I finance $860k for a studio apt. mortgage for 30 years. My affordable monthly payment will be $4019/mo. I add 10% for ins. and taxes which comes to a very reasonable $4420/mo.
Now, my take home salary from a great and wonderful position as a comp engr. is $86K. My living expenses will be drawn from the $36k left over after my affordable mortgage payment.
Better hope there isn’t any real price discovery.
Regards,
Roidy
You really believe taxes on $860,000 studio in NYC is $4,800/year????
That does not even cover the HOA (coop) fees and the doorman.
$4,800 is probably missing a zero. NY taxes upstate are 3%.
Hey now, I told you it was … affordable. That’s the term my Real Estate Professional uses.
Regards,
Roidy
It’s a cute expression to conceal the fraud.
Please no. No price discovery.
Property taxes will never have a price discovery. “To Infinity and Beyond!!”
No wonder the transient lifestyle is taking hold. LOL!!
There’s price discovery every year.
Yeah, “discovered” they went UP exponentially. Time to move again.
The problem is that they went up everywhere else as well! There’s nowhere to move to!
Looks like Crow Breath is going to need more mouthwash:
http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic
Degenerate day traders only crow on days the futures are up a few pennies.
No shortage of $750,000 starter homes here:
http://www.bizjournals.com/denver/news/2017/05/31/denver-still-leads-most-cities-for-home-resale.html
I just have one thing to say about all this: Covfefe!
You own it all.
Baizuo!
Went to Wimbledon this morning to take the tour (son is a tennis buff)
As we walked from the tube station to the site, we walked past an estate agent’s (realtor) office and took a peek at actual house (not flat) prices in the area.
Holee cr@p!
The place makes Palo Alto look cheap.
Elections are coming up here in England (will be home before). The Labour Party leader, a dude named Corbyn, promised “free daycare for all, with no means testing”. When an interviewer on a radio talk show asked him how he was going to pay for that all he could do was hem and haw. The newspaper headline was that he got “kebabed”
That said, when Prime Minister May said that people would have to dip into their assets if they had over 100K pounds in assets (house included) to help pay for dementia and alzheimers care there was a firestorm.
The oddsmakers are saying the Labour will gain seats in the House of Commons but aren’t predicting a Labour PM on Downing Street.
Kinda like they predicted the UK would stay in the EU?
Recent polls show Corbyn and Labour losing ground.
just what UK needs, more socialism. May sounds to the left of Gore on acid.
They’re boned.
From what I’m seeing in the West Kensignton/Chelsea part of town, about half the locals are members of the Free Sh!t Army. You have people living in $1,000,000 flats, driving beamers, Audis and benzes, living one block away from the “projects” (AKA council housing). The streets are filthy with trash, without a public trash can in sight (I’m guessing they don’t have them because they’re worried that a terrorist would leave a timed bomb in one, set to explode at rush hour when the sidewalks are crammed with people.
Also, on more than one occasion in Chelsea I have heard the locals walking near us make derogatory remarks about Americans.
I won’t be coming back here for a long time.
The Obamas buy the DC house that they had been renting:
——————
https://www.washingtonpost.com/news/reliable-source/wp/2017/05/31/the-obamas-are-buying-their-rental-home-in-washington/?hpid=hp_local-news_obama-house-345pm%3Ahomepage%2Fstory&utm_term=.b20966fca96b
“Spokesman Kevin Lewis, in a statement, said the purchase just made sense for the family: “Given that President and Mrs. Obama will be in Washington for at least another two and a half years, it made sense for them to buy a home rather than continuing to rent property.”
D.C. records show that [Bill Clinton press secretary Joe] Lockhart sold the home for $8.1 million to Homefront Holdings LLC, which is controlled by the Obamas. The deed transfer was recorded on Wednesday. Lockhart bought the home in 2014 for $5.295 million, records show.”
————–
That’s quite a kickback for Lockhart…
Kind of strange to “buy” it after all the security upgrades. Who paid for them? Was it us?
Paging Daniel Crowman: http://www.msn.com/en-us/money/markets/oil-sinks-as-rising-output-imperils-opec-led-deal/ar-BBBJx1q?li=BBnbfcN
The crows seemed to be calling his name, thought Caw.
http://www.cnbc.com/2017/05/31/caixin-china-manufacturing-pmi-for-may-falls-to-11-month-low.html
I heard Brian Moynihan (BoFA CEO) on Bloomberg radio the other night. One tidbit caught my interest: He said their annual stress test results were previously 60,000 pages, and this year would be around 100,000 pages.
Like anyone is going to read and make sense of 100,000 pages. This sounds like pure “regulatory theater.”
Neel Kashkari’s criticism of the banks’ “living wills” is similar. His comment is that some of the biggest “living wills” are hundreds and hundreds of pages long (I think I heard upwards of 1,000 pages). And during the crisis, decisions needed to be made over a weekend…there is no way a “living will” of this size could be read, understood, and implemented with such short timeframes.
As such, his view is that the “living wills” (a key part of Dodd Frank trying to solve “TBTF”), are largely useless in practice.
So instead, he’s an advocate of massively increasing the capital requirements for the largest banks (like doubling, or tripling it).
Hopefully his voice will be heard. Strong, simple regulatory rules are hard to avoid.
Lending standards slip again.
F&F loans: Flip or Foreclose.
New DU Version Eases DTI Requirements
by: Jann Swanson
Mortgage News Daily
May 31 2017, 10:55AM
Fannie Mae has announced changes in underwriting for loans submitted to its Desktop Underwriter (DU), Version 10.1.
• The maximum allowable debt-to-income (DTI) ratio that can be submitted in DU will be 50%. For DTIs between 45 and 50 percent, certain additional compensating factors will no longer be required.
• The maximum allowable LTV, CLTV, and HCLTV ratios (LTV ratios) for adjustable-rate mortgages will be aligned with fixed-rate mortgage LTV ratios for all transaction, occupancy, and property types, up to a maximum of 95%.
• DU is regularly reviewed to determine if its risk analysis is appropriate. Version 10.1 will include an update to this risk assessment and it is expected to increase the percentage of Approve/Eligible recommendations received by lenders, particularly those with DTI rations between 45 and 50 percent.
http://www.mortgagenewsdaily.com/05312017_fannie_mae_lending.asp
buy a house and get rich! Its all about timing.
Since you borrow relentlessly, your “dollar cost averaging” makes timing a matter of works until it doesn’t.
This was an interesting tidbit: Goldman Sachs buys Venezuela government bonds. That they did it is unsurprising - they saw an angle and they took it. Their business is profit, not “God’s work” (although their PR justifications are guffaw-inducing, a la ““We recognize that the situation is complex and evolving and that Venezuela is in crisis,” Goldman Sachs said an emailed statement late Monday. “We agree that life there has to get better. We made the investment in part because we believe it will.”
)
But, the tidbit that caught my eye was this: “The South American nation’s legislature vowed to launch an investigation into whether the investment by Goldman Sachs’s asset-management arm broke any laws…”
They also morphed into a bank holding company back in September 2008, obtaining protection from Uncle/Auntie Fed, i.e. access to the public treasury in case they get into trouble.
This is one of the benefits of Wall Street consolidation, to these companies, to the detriment of society. Per the link, many disparate companies have become banks. Risk to one arm of the company threatens deposits and brings Fed money injections with public wealth. 100,000 page stress test results obfuscate not clarify.
Every time I think of the media going batchit crazy over covfefe, I crack up laughing. Even funnier are the media dorks who monitor POTUS’ twitter, waiting to pounce. Get a life.
On a lighter note, Rob Schneider, who I never really cared for all that much as a comedian, has a very nice Twitter thought:
https://i.redd.it/cb7dy1gliw0z.jpg
So true.
no idea what a covfefe is. Not missing the TV!
Time to rake in the payola for services rendered to Wall Street and the insurance companies while a “public servant.”
http://www.marketwatch.com/story/obamas-buying-their-swanky-dc-rental-home-for-81-million-2017-05-31
OT, but one of my favorite hangouts on Lake Ontario is SOL this year as the water level in Lake Ontario is a record high (5 ft above normal). This is a friendly place to get some supplies while beach bumming anchored behind the dunes. Closed. They are holding back the water to keep the St. Lawrence from being a disaster. The Great Lakes feeding Lake Ontario and the river systems have plenty to send to keep this going on for months.
You’re welcome Montreal.
https://www.youtube.com/watch?v=xIocgheVRUI
I guess cheap flooded houses for sale
latest on Canada floods-400 Canadian army soldiers dispatched
https://www.youtube.com/watch?v=BgNM07IlZFA
Joey Glasses got pinched for untaxed cigs if you can believe it.
I’m worried.
Mind boggling all the land and real estate for sale in this country:
http://www.landwatch.com
Cheap acreage in northern Maine, away from everyone. If people want cheap houses, there ya go.
There is no land left. Agenda 21.
Do you mean taxes are the future?
We’re gonna get pinched.
How can liquidity be tightening in China when their Keynesian fraudsters are even more reckless and irresponsible than ours?
http://www.scmp.com/business/article/2096330/offshore-yuan-4-month-high-cash-squeeze-hits-banks
Crooked Hillary claims that US citizens served as Kremlin cats-paws in “weaponizing” information to be used against her, which is why she lost the election.
Not because she was a horrible candidate who ran a horrible campaign.
Not because she was a one-woman crime spree.
Not because of her 30-year trail of corruption, sleaze, scandals, and influence peddling.
Kremlin cats-paws in here, you know who you are….
http://www.marketwatch.com/story/hillary-clinton-americans-likely-helped-russia-influence-election-2017-05-31
misread another one, Ray
It’s a twisted Divine Right thing. Shame on those who did not bow down.