The Recent Boom Turned Investors Into Landlords
A report from the Journal Sentinel in Wisconsin. “If city living appeals to you and you’re ready to buy a place, an event Saturday will provide an opportunity to check out more than two dozen downtown Milwaukee condominiums that are for sale. ‘Unfortunately, right now we’re at a period where there’s an oversupply of apartments and a severe dearth of condo units,’ said Mike Ruzicka, president of the Greater Milwaukee Association of Realtors. Ruzicka said he would not be surprised to see some of those rental apartments converted to condos in the future.”
The Star Tribune in Minnesota. “Among apartment investors, it’s no secret that the Twin Cities is one of the healthiest markets in the nation. Rents are on the rise, vacancy rates are below average and the economy is humming. Those attractions lured Calvera Partners, a California-based private real estate investment firm, to launch its national expansion in the Twin Cities. Brian Milovich, managing principal at Calvera Partners and a graduate of the Carlson School of Management, talked about the company’s move into the market.”
“Q: Did you shop other markets? A: Other markets have always been on our radar, but the Bay Area has seen such explosive growth over the past five to seven years coupled with cap rates declining in markets like Minneapolis, that we haven’t seen the need to look elsewhere. Now that we’re seeing values in the Bay Area taking a pause, we feel there’s room to grow in other markets where urban living is still gaining acceptance.”
“Q: There’s growing concern that too many luxury units are in the pipeline. Are you feeling queasy about the supply situation? A: Yes, we keep an eye on new supply and downtown has particularly seen an influx of new high-end units. It seems as if each new building tries to ‘out-luxury’ the one built right before it with over-the-top amenities and unit finishes not even found in condo developments. Even though we don’t compete directly with the high-end of the market, any new supply will impact rents and values.”
The Miami Herald in Florida. “Although some developers are focusing on community-building amenities, Miami has no shortage of luxury condo towers with concierge services and over-the-top perks — for the few who can afford them. Estates at Acqualina: Residents of this pair of 50-story condo towers, due in 2019, won’t have to leave home for a night out. Among the amenities: A disco, a bowling alley, movie theater, soccer field, basketball court, and a salt room. What, no ice skating rink? Oh wait, yes: There is also an ice skating rink.”
“Aston Martin Residences: Can’t afford a $50 million penthouse at this 66-story luxury tower from G and G Business Development expected in 2022 at 300 Biscayne Blvd. Way? Don’t fret. Four stories worth of amenities — including an infinity edge pool — fitness spa and art gallery, will be spread throughout the 52nd-55th floors, making them accessible to any resident of the building. There’s also a rooftop helipad, for all your chopper-travel needs.”
The Houston Chronicle in Texas. “Luxury high-rises in downtown and other premium locales inside the Loop are drawing more than empty nesters and overpaid millennials. A growing pied-à-terre community is making itself at home on the upper floors of apartment and condo towers around Houston, enjoying the city’s ascendant cultural and entertainment scene while maintaining a suburban idyll a few miles away.”
“As the region and its real estate market continue to recover from the extended oil slump, these part-timers are signing leases or buying pricey condos with killer views close to the city’s cultural and entertainment venues. ‘It’s like getting away for the weekend,’ said Allison Seder, who with her husband, Mike, recently purchased a three-bedroom unit on the ninth floor of The Wilshire, a tower erected a few blocks from the 2-year-old River Oaks District.”
“The Seders and others are bringing the tradition of owning a secondary residence in the heart of a big city - more common in New York or European capitals - to a place where it has been virtually unheard of. The Wilshire, though not fully completed, already has at least 10 pied-à-terre buyers. One Park Place, a luxe apartment tower overlooking Discovery Green, has more than 20 who pay four- or even five-figure monthly rents for their home away from home. The first Wilshire units, which go for between $800,000 and $3 million, will open in July. The Seders’ unit should be ready in September. Hundreds more similar units should come online in the next few years.”
“Ed Laase came for convenience. He moved to Pearland for work in 2005 and retired from Boeing in 2013. As a Houston Rockets season-ticket holder, he traveled downtown frequently, and in 2015 bought a condominium in the Four Seasons to ease the commute. But now he sees it as a retirement option. The concierge, town car and other amenities meet the needs he would have looked to fill in a retirement home, he said. But unlike a retirement home, he likes to note, he can order alcohol at the condominium.”
“‘I wasn’t just looking for a high-rise. We wanted amenities,’ he said. ‘You ever tried to get a drink in a nursing home? You can’t.’”
The Real Deal on New York. “Thanks to the recent condo boom that’s turned scores of investors into landlords, there’s an abundance of ultrahigh-end units on the rental market. And just like the rest of the rental market — where landlords have been throwing out concessions for the better part of a year — tenants in the uberluxe market are scoring fat discounts.”
“Robby Browne estimated the high-end rental market is down 10 to 15 percent since late 2015. He said that one of his clients, who’d been getting $19,000 to $20,000 a month for his two-bedroom at 40 East 66th Street, agreed to discount the condo to $18,000. It’s also taking longer to do deals. Douglas Elliman’s Tal Alexander recently used ‘light staging’ on a $20,000-a-month rental at One57, which still took about 60 days to rent. Alexander said he’s telling clients that overpricing is a waste of time. ‘If [renters] see the apartment linger, they think it’s more negotiable.’”
“Savvy renters, meanwhile, are jumping on the opportunity. ‘Our clients on the rental market are getting 20 percent off on some of these apartments,’ said Bold New York’s Jordan Sachs. ‘You’re dealing directly with an owner, not a professional landlord. All he wants is cash flow, and every day the apartment sits vacant is affecting his return on investment.’”
“Neighborhoods like Tribeca and Chelsea that have been magnets for condo developments are teeming with high-end rentals, since many new developments closed in the past year and investors are putting their units on the rental market. ‘We’re seeing a flood of apartments $40,000 and higher,’ said Sachs.”
“To be sure, uberluxury rentals make up a fraction of the overall rental market, where there were 30,000 apartments available citywide as of late May, according to StreetEasy. A search turned up just 530 apartments listed for $15,000 and up, and about half that number were properties asking $20,000 or more.”
“Yet, the balance of power is no different in the overall rental market, where agents said supply continues to far outweigh demand, putting pressure on landlords to entice tenants. ‘There’s a boatload of inventory,’ said Citi Habitats’ Rory Bolger. ‘These landlords think if you build it they will come, but sometimes you wonder: Where are they coming from?’”
“Citi Habitats’ Dave Maundrell said his team is launching five new buildings in the next two weeks — including 371 Humboldt Street in Williamsburg and 248 Duffield Street in Downtown Brooklyn. All five are no-fee with one month of free rent, which is now par for the course in new development. Maundrell said he thinks landlords are coming to grips with reality after months of pressure to drop prices and offer concessions. ‘There’s a lot of product that wasn’t really worth what people were asking for it,’ he reflected.”
‘The first Wilshire units, which go for between $800,000 and $3 million, will open in July. The Seders’ unit should be ready in September. Hundreds more similar units should come online in the next few years…Ed Laase came for convenience. Unlike a retirement home, he likes to note, he can order alcohol at the condominium.’
“‘I wasn’t just looking for a high-rise. We wanted amenities,’ he said. ‘You ever tried to get a drink in a nursing home? You can’t.’”
You can’t really blame them for flogging these overpriced air boxes to bar flies. But I wonder how many drinks Ed will slosh down before he has to try and unload this thing.
So that is worth spending $3 million?
For a drink?
I am sure for a few hundreds a year a uber drink service can be arranged.
Johnny Walker Blue Label? Pinch?
Regards,
Roidy
You are missing the point Ben: It’s not the fact that alcohol is served at his condo, it’s the fact that he can CALL for alcohol. He needs to brag to his friends about how he can just press a button and some ‘boy’ brings him a drink. He’ll probably order 5 drinks a year, but brag about his call service 500 times a year.
It’s not luxury to use the amenity - it’s luxury to brag to people about the amenity.
LOL, if you are in a nursing home, you should not be drinking!
I’ve seen quite a few nursing homes and how they operate. They ran the gamut from “I’m throwing her over my shoulder and getting her the hell out of here” to almost luxurious. Thank goodness my mother was there for rehab, so her stays were relatively brief. In one place, an attendant, despite my visiting twice a day along with my brother’s visits, handled her so roughly she broke two of her ribs. (This happened despite the staff knowing she wasn’t alone and that someone cared and was watching.) The aide was “disappeared” and the management was clueless about who it could have been. Sure.
My grandfather, who was in a nursing home permanently due to Alzheimer’s, was left to wander, fell and split his eye in half by falling into the corner of a sink. We had kept him home until he was 95, then it just got too dangerous. He died at 102.
My grandmother, who had a stroke and was pretty much out of it, couldn’t eat by herself so one of us would show up to feed her. If we didn’t, the attendants would put the food down and pick it up untouched an hour later, and this was with us watching and complaining. My mother would tip the attendants, asking that they make an effort. After a year there, my grandmother passed away at 88.
If I end up in a nursing home and still aware, I’ll be bribing anyone I can for booze, and if I can manage it, drugs to OD.
Your stories mirror what I have seen in the nursing home in the town where I grew up (and the one in which my mom died a few years ago).
A century ago, we at least had institutions run by religious orders, where they weren’t in it for the money. That doesn’t guarantee anything of course, but there was a higher probability of having caregivers that actually cared.
‘the Bay Area has seen such explosive growth over the past five to seven years coupled with cap rates declining in markets like Minneapolis, that we haven’t seen the need to look elsewhere. Now that we’re seeing values in the Bay Area taking a pause, we feel there’s room to grow in other markets’
Those 3 and 4% cap rates don’t look so good anymore, so hey! Let’s throw some Yellen bucks into another low return market. This is poof money looking for a place to die.
‘Estates at Acqualina: Residents of this pair of 50-story condo towers, due in 2019, won’t have to leave home for a night out. Among the amenities: A disco, a bowling alley, movie theater, soccer field, basketball court, and a salt room. What, no ice skating rink? Oh wait, yes: There is also an ice skating rink.”
‘Aston Martin Residences: Can’t afford a $50 million penthouse at this 66-story luxury tower from G and G Business Development expected in 2022 at 300 Biscayne Blvd. Way? Don’t fret. Four stories worth of amenities…’
The Miami Herald won’t mention it, but almost none of these are selling. 2019, 2020? Bring it on big spenders.
“Residents of this pair of 50-story condo towers, due in 2019,”
Ain’t happenin’. What is a salt room, anyway? Oh, wait, this:
http://abcnews.go.com/GMA/video/salt-room-therapy-work-44429596
‘Now that we’re seeing values in the Bay Area taking a pause, we feel there’s room to grow in other markets’
Thus begins the contagion.
Ruzicka said he would not be surprised to see some of those rental apartments converted to condos in the future.”
Another sign of the coming correction….apartments being converted to condos. This will drive up the price of apartment buildings purchased by conversion speculators, a further imbalance of the market. 2020 is going to be ugly.
A letter to the editor:
‘The implicit theory of growth behind Boulder’s current expansion is that it can become a fast-growing commercial center and retain its residential quality of life at the same time. That idea is proving to be a fantasy, along with many of the other visionary positions of our local government.’
‘Now the City Council has voted overwhelmingly to insert co-op housing in virtually any zoning district in the city and is pushing density through such bizarre ideas as “density transfer.”
‘The indisputable fact is that the unaffordable housing problem is being driven by the push for commercial expansion. As one letter write wrote prior to the 2015 election, “You can’t build your way to affordable housing” — as has been demonstrated in San Francisco and Aspen. Boulder has fallen behind the wisdom of Palo Alto and other cities, which now understands this fallacy well. “Affordable” housing is really only more building, and not affordable at all. Indeed, much of the so-called affordable housing built in the city over the last two years opts out of the affordable housing requirement. Millions are being made, to a great extent by non-Boulder residents, by selling off beautiful downtown and neighborhood space.’
‘It is time to halt the onrush of profiteering in the form of building construction. Ugly, overbuilt edifices now loom over the streets in the whole downtown area, west of 30th Street, and are overtaking the city. Views have disappeared. Homelessness is skyrocketing, as is crime.’
I was under the impression that Boulder was officially a “no growth” community, surrounded by a permanent green belt. Doesn’t mean that tear downs are not allowed, with much larger replacements built
It is. But they are total suckers for “affordable housing” that’s not too close to their house if you will include a little in your building plans.
Doesn’t mean that tear downs are not allowed, with much larger replacements built”
I hear LA just passed a law about tear downs . Co-worker has been making allot of money doing this in and around Pacific Palisades so maybe the games up for giant re builds in LA. These are 10M dollar flips.
Some small time flipper’s I know are out of the game now no more modest homes in Ventura County that is homes around 300K , all gone.
Saw a new model in Moorpark the County club estates 1.8M with a view of a giant water tank. weird people looking at it too, all dressed up with tiny dogs on diamond leases. getting extremely wealthy around here. Chinese were there too a few at least.
My brother just sold ~680K to a Korean and mentioned flipping with all his cash, I told him bad idea. A tract home in Simi with bad cat piss stains on the carpets and a dirt back yard.
Its getting bad again totally unaffordable.
The oil slump is over?
Drill, baby, drill!
Oil falls to 3-week low, logs largest weekly decline in a month
By Myra P. Saefong and Sara Sjolin
Published: June 2, 2017 3:28 p.m. ET
U.S. decision to withdraw from climate deal sparks supply concerns
…
I filled up for $2.15/gallon the other day.
‘The United States federal excise tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel.[1][2] The federal tax was last raised in 1993 and is not indexed to inflation, which increased by a total of 64.6 percent from 1993 until 2015. On average, as of January 2017, state and local taxes and fees add 31.04 cents to gasoline and 31.01 cents to diesel, for a total US average fuel tax of 49.44 cents per gallon for gas and 55.41 cents per gallon for diesel.’
https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_States
So frackers are profitable at $1.60ish.
What other product does an American citizen pay a 25%ish tax on?
Maybe cigarettes…
“What other product does an American citizen pay a 25%ish tax on?
“Maybe cigarettes…”
An interesting question, especially concerning cigarettes.
Here’s something from the April 1 edition of The Washington Times …
“California’s cigarette tax increased by $2 a pack Saturday under new tobacco policies passed by voters during last November’s general election.
“Smokers in California will now pay $2.87 in state taxes for a pack of cigarettes, more than tripling the 87-cent tax levied before the new excise took hold April 1.
“In implementing the $2 tax hike, California has become home to the ninth highest cigarette tax in the country, the Sacramento Bee reported Saturday. As the nation’s most populous state, however, the increase will undoubtedly have an effect on California’s coffers in addition to the wallets of the Golden State’s millions of regular smokers.
“According to a state tax map available at the Campaign for Tobacco-Free Kids, the three states bordering California now have significantly lower per-pack excise taxes at $1.32, $1.80 and $2 a pack in Oregon, Nevada and Arizona respectively.”
I sense a cigarette smuggling industry immediately evolving to fill the tax-gap between California cigarette prices and the lower cigarette prices of its three neighboring states.
Stay tuned.
Here’s a link to the Washington Times article about cigarette taxes in California …
http://www.washingtontimes.com/news/2017/apr/1/cigarette-tax-hike-takes-effect-california-costs-s/
Who pays for the bridge? Are bridges cheap?
Do you drive a 5000 lb cigarette?
Joey Glasses and Tony Roast Beef got pinched last week for untaxed smokes.
‘Who pays for the bridge?’
If you guys weren’t so broke you wouldn’t worry about money all the time.
“What other product does an American citizen pay a 25%ish tax on?”
It could be a lot worse. From Wikipedia:
“United Kingdom. From 23 March 2011 the UK duty rate for the road fuels unleaded petrol, diesel, biodiesel and bioethanol is GB£0.5795 per litre (£2.63 per imperial gallon or £2.19 per U.S. gallon). Value Added Tax at 20% is also charged on the price of the fuel and on the duty.
They pay more in fuel tax than we we pay for fuel + tax in the US. And they pay 20% sales tax not just on the gasoline, but on the fuel taxes as well!
Funny…I keep hearing about how “sustainable investing” is all the rage…yet tobacco companies continue to steadily make money hand over fist–despite taxes rising higher and higher to reduce demand.
I just heard where the returns tobacco companies have been making are something like 15% per year over very long periods of time.
I suppose it pays to be invested in a vice that many large institutions have refused to invest in for the “social good”. You can get great returns at a low price.
“If you guys weren’t so broke you wouldn’t worry about money all the time.”
We take offense to that! I’m still worried. Very worried.
2Banana
Unfortunately it is much worse than 25% tax load.
To get the $2.15 to pay the .50 tax you have to earn the money first, pay your witholding tax say 30% - - - -
So frackers are profitable at $1.60ish.
—————–
And they keep getting better and better at fracking (lower and lower cost).
Beautiful, isn’t it? I hope OPEC keeps on cutting output…will help our trade deficit immensely.
I talked with a guy who works in the oil patch when I was in Texas recently. I couldn’t follow everything, but he explained how one guy can sit in a control room next to a well and create 10 legs off the main spot underground, and then make star shaped crevices at each of the ten. This business is being transformed and OPEC is still sitting around playing games.
But that’s always how it goes. Look how long Microsoft sat around dithering about Windows while Apple was busy conquering mobile and Google was busy conquering the Web.
The difference is MSFT is a profitable venture. Apple and google not so much.
Uh, yeah, except for the massive profits they generate.
One guy in a control room… wow talk about automation. Time for those coal miners in West Virginny to get with the program.
“The oil slump is over?”
Not yet.
https://nd.craigslist.org/cto/6159407076.html
Don’t look now but even Snookyville is over-built.
$70 bucks a month? Near the beach? Sure!
“It’s worth repeating that rents are negotiable. So many apartment blocks are springing up here, some landlords are struggling to find tenants. They will accept a lower offer just to get tenants in their apartments. If you want a house, those rents can be negotiable, too, but it depends on the area. Some homes are in popular areas and the landlords know they can get what they ask for.”
http://www.sihanoukville-cambodiajournal.com/2017/06/04/renting-in-sihanoukville/
What’s a 2/2 going for in Ho Chi Minh City?
Depends on if it’s a ‘luxury’ unit in one of the many massively overbuilt towers that are empty. Almost US prices. Last year my Gf bought a small small place near downtown for 30k.
This Snooky?
Milwaukee Pimp Snooky
Do people like this guy actually exist?
What I find most fascinating about Pimp Snooky is his incredible pride in his accomplishments. Is the winner of the Nobel Prize in Medical Achievement this proud of himself?
“What I find most fascinating about Pimp Snooky is his incredible pride in his accomplishments.’
What I find most fascinating is how he makes slaves out of these women by treating them like sh1t.
Come now, Mr. Banker. A pimp’s profession is far more honorable than yours. Or a realtor’s for that matter.
I’m not complaining, I’m fascinated. I’m wondering how I can incorporate some of his methods in the dealings I have with my clients.
Perhaps I’m too nice a guy.
(nah)
“I’m wondering how I can incorporate some of his methods in the dealings I have with my clients.”
Are you a real banker? Because I was under the impression that Mr Snooky’s methods are standard operating procedure for bankers.
A snippet from yesterday’s post, and spot on:
‘NC (Noam Chomsky): Well, that’s the fault of the information system, because it’s very comprehensible and very obvious and very simple. Take, say the United States, which actually suffered less from these policies than many other countries. Take the year 2007, a crucial year right before the crash.’
‘What was the wondrous economy that was then being praised? It was one in which the wages, the real wages of American workers, were actually lower than they were in 1979 when the neoliberal period began. That’s historically unprecedented except for trauma or war or something like that. Here is a long period in which real wages had literally declined, while there was some wealth created but in very few pockets. It was also a period in which new institutions developed, financial institutions. You go back to the ’50s and ’60s, a so-called Golden Age, banks were connected to the real economy. That was their function. There were also no crashes because there were New Deal regulations.’
‘Starting in the early ’70s there was a sharp change. First of all, financial institutions exploded in scale. By 2007 they actually had 40 percent of corporate profits. Furthermore, they weren’t connected to the real economy anymore.’
‘In Europe the way democracy is undermined is very direct. Decisions are placed in the hands of an unelected troika: the European Commission, which is unelected; the IMF, of course unelected; and the European Central Bank. They make the decisions. So people are very angry, they’re losing control of their lives. The economic policies are mostly harming them, and the result is anger, disillusion, and so on.’
“It was also a period in which new institutions developed, financial institutions.”
Check.
“You go back to the ’50s and ’60s, a so-called Golden Age, banks were connected to the real economy. That was their function.”
Check.
“Starting in the early ’70s there was a sharp change. First of all, financial institutions exploded in scale. By 2007 they actually had 40 percent of corporate profits. Furthermore, they weren’t connected to the real economy anymore.”
Check.
“In Europe the way democracy is undermined is very direct. Decisions are placed in the hands of an unelected troika: the European Commission, which is unelected; the IMF, of course unelected; and the European Central Bank. They make the decisions. So people are very angry, they’re losing control of their lives. The economic policies are mostly harming them, and the result is anger, disillusion, and so on.”
That’s in Europe, but here in the United States - the Land of the Dumbed-down - people haven’t caught on that their willingness, their eagerness to become debt slaves is what it is that is doing them in financially. Americans believe it is wonderful that they can sign a dotted line or two and commit themselves to sending large chunks of their shrinking paychecks to total strangers each and every month for years and years and possibly for decades.
Part of it is they’re bad at math. I remember talking to a fellow, smart guy actually, who believed that a HELOC was free money. Paying it back was somehow “paying yourself.” As opposed to what it really is, paying back the HELOC lender with interest, in addition to paying the first lender, the mortgage, so there are now two loans against the house. It’s just a 2nd mortgage, a subordinate loan. Slap a new label on it, put out some slick ads, and voila, it’s brilliant can’t-lose financial wizardry even for otherwise intelligent people.
“Part of it is they’re bad at math.”
An anecdote:
Recently I had a conversation with a guy about Vegas and gambling and in particular playing roulette.
Bet on black, he said, and you will always win.
Say what?
I pointed out to him that there are 38 slots that the ball can land in and only 18 of them are black hence the odds of landing in a black slot are less than even by about 5% or so.
He nodded and smiled and then he again said “Bet on black and you will always win”.
The math says one thing but his experience - real or imagined - says another. And so it goes.
Casinos: Math or no math, build them and they will come.
Real estate investor’s version of this folk wisdom:
“Bet on
blackreal estate, he said, and you will always win.”‘Starting in the early ’70s there was a sharp change. First of all, financial institutions exploded in scale. By 2007 they actually had 40 percent of corporate profits. Furthermore, they weren’t connected to the real economy anymore.’
When the country went off the gold standard, it really expanded the financial sector’s minds about the level of skimming that was possible.
This was posted on Reddit just after the Manchester concert bombing:
“We all know the protocol by now - 1. This has nothing to do with Islam. 2. The guy was a mentally ill ‘lone wolf’. 3. Those who object to points 1 and 2 are racist bigots. 4. Change Facebook profile to flag of inflicted country. 5. Light some candles, hold a vigil and go on a peace march. 6. Wait for the next slaughter to happen. 7. Repeat.”
You forgot “light up public buildings and monuments with (fill in flag colors of Amish-struck nation).” Nod in solemn agreement as all the talking heads on TeeVee repeat the mantra of “Diversity is our strength” and we are “Stronger together.”
While the stock market keeps climbing, the retail apocalypse on Main Street keeps getting worse.
http://www.businessinsider.com/list-of-stores-closing-2017-6
A sign that the current leg up in housing prices is getting long in the teeth is that many families in our circle who sat on the fence for years recently threw in the towel and bought — just as San Diego prices finally surpassed their pre-financial crisis precipice.
Normally Joe SixPack steps up to buy overpriced assets at exactly the point when the smart money exits the market.
Dumb ‘em down, profit.
didn’t see any CFA /mba types at open houses in my hood. Not even whitey.
no explanation needed
http://www.apartmenttherapy.com/this-chelsea-studio-is-listed-for-under-500k-but-theres-a-reason-244966
The next one
A Tiny Rooftop Studio Apartment in the West Village
LOL, the artwork and books. Not that there’s anything wrong with them.
‘A growing pied-à-terre community is making itself at home on the upper floors of apartment and condo towers around Houston, enjoying the city’s ascendant cultural and entertainment scene while maintaining a suburban idyll a few miles away.’
‘As the region and its real estate market continue to recover from the extended oil slump, these part-timers are signing leases or buying pricey condos with killer views close to the city’s cultural and entertainment venues. ‘It’s like getting away for the weekend,’ said Allison Seder, who with her husband, Mike, recently purchased a three-bedroom unit on the ninth floor of The Wilshire.’
Now this is some new paradigm thinking! Part time, in the same city. This phenomenon was reported in NYC a while back, before it tanked.
‘The Seders and others are bringing the tradition of owning a secondary residence in the heart of a big city - more common in New York or European capitals - to a place where it has been virtually unheard of. The Wilshire, though not fully completed, already has at least 10 pied-à-terre buyers’
‘The Wilshire is a 17-story luxury high rise from Pelican Builders.’
https://www.houstonproperties.com/houston-condos/inner-loop/the-wilshire
17 stories and you’ve got ten of these suckers. Nice try Chronicle.
Price cutting gains momentum in U.S. housing market
The Business Journals-Jun 1, 2017
The list of markets with cuts on for-sale properties is led by Camden, New Jersey, but spans the country to include Houston, Philadelphia, Phoenix and Chicago.
How long will it take from the onset of price cuts in luxury condo markets until the full fruition of fire sales almost everywhere in U.S. residential?
Sounds like the logic of people who think it’s going to appreciate so fast they don’t even need to rent it out to make money.
Your Former Sears May Soon Be a Giant Parking Lot for Uber Drivers and Amazon Workers
Here comes a parking lot full of Uber drivers next to the former Sears (SHLD) .
“The growth of e-commerce and the increasing emphasis on delivery speed as well as pick-up services for retail goods will likely precipitate a convergence of industrial distribution and retail real estate,” Fitch said in a note on Tuesday.
Fitch essentially predicts that well-located malls - calculated by their proximity to population density plus the per capita income of that region - will prosper in the future as distribution and pickup centers for e-commerce retailers like Amazon (AMZN) , the giant online corporation which saw its stock hit a record $1,000 a share on Tuesday, rather than shopping destinations.
See-ya, Sears.
See-ya, Sears.
“Owners of infill retail locations that can also function as delivery and pickup locations will likely be winners as this convergence accelerates,” Fitch analysts said. “‘Location, location, location’ applies, possibly now more than ever.”
And, with excess parking facilities, Fitch said some mall real estate investment trusts, REITs, are already considering how they will transform the space into hubs for Uber drivers and self-driving cars to carry out the delivery services.
With anchor stores such as Macy’s (M) , J.C. Penney (JCP) , and Sears continuing to close stores in droves, and leaving mall owners struggling to drive foot traffic, it’s hard not to imagine Fitch’s prediction coming true very soon.
Old Model:
Store A with multiple retail outlets in “well-located malls - calculated by proximity to population density plus the per capita income of that region” requiring Buyer A to enter said retail outlet to purchase Item A. Benefit was Buyer A might also purchase item B, C and D. Additionally, Buyer A might stop into Store B to purchase item A2.
New Model:
Amazon with multiple “distribution outlets” in “well-located malls - calculated by proximity to population density plus the per capita income of that region” requiring Buyer A to use stupid iPhone app to “enter” Amazon and purchase item A. Savings from buying online now wiped out due to extensive build-out of distribution network, shipping and “local” sites for speedy delivery. The best part is Amazon Locker, whereby Buyer A purchases Item A with tax and drives to pick up the item. Never considers the implicit loss of money due to picking up instead of using “free shipping”.
End-game: Every retail outlet is Amazon branded with millennials going “back to the future” to shop like their parents used to. Gasp. Might require looking up from the f%cking screen every now and again.
More money, more stuff you need keep in storage:
https://finance.yahoo.com/news/san-francisco-160000-gets-storage-locker-141346453.html
http://www.zerohedge.com/news/2017-06-04/us-jobs-market-much-worse-official-data-suggest-full-story
The US Jobs Market Is Much Worse Than The Official Data Suggest: The Full Story
when you run completely out of unemployment benefits, you are not counted as unemployed anymore and because the “official” unemployment rate went below i think 6 or 7% the extended benefits went away too, no more 52,72 or99 weeks but you still dont have a job.
It is quite humorous these Unemployment statistics. They call something like 60,000 houses and ask a few questions. Then they seasonally adjust +/- a couple hundred thousand. I wonder how many of the responses are “FU”. The government has the computing capabilities to record all of our phone calls and emails and can’t even give an actual count of how many of us have over the table jobs? It is ridiculous.
I just saw some liberal comment that since unemployment was 5%, why were jobs important? Dumb bunnies. If the employment picture were really all that good, then people wouldn’t have turned out for Trump in such numbers. But the main issue is how many people are underemployed. Of the 95% employed people, how many of those jobs are good-paying enough to be a net benefit to the economy? ISTM that many of those jobs barely pay enough to garner income taxes. And it’s just going to get worse as the baby-boomers retire from their $120K jobs and are replaced by $60K Millenials.
Aren’t all these economic reports completely fabricated? I kind of feel bad for the analysts that have to analyze fake numbers for a living. What a pointless thing to do.
Future historians will marvel that the Keynesian fraudsters at the central banks were allowed to continue their swindles and rackets for as long as they were before it all came crashing down.
https://www.bloomberg.com/gadfly/articles/2017-06-02/central-banks-are-raining-cash-and-flood-is-swelling-bond-danger
The Fed has painted itself into a corner once again. If they follow through on announced rate hike plans, markets will crash without the crutch of stimulative stealth intervention, as nobody believes their Boy-Who-Cried-Wolf announcement.
FINANCIAL TIMES
US Interest Rates
Fresh doubt raised over Fed rate rise
Subdued inflation and signs of weaker economic growth fuel concerns
6 hours ago
by: Robin Wigglesworth, US markets editor
A growing number of investors and analysts are questioning whether a widely-expected US interest rate increase at the Federal Reserve’s upcoming meeting is warranted in the face of subdued inflation and signs of weaker economic growth.
Minutes from the last central bank meeting indicate that policymakers are planning to tighten monetary policy again at the June 14 Federal Open Market Committee gathering, and financial markets are pricing in a 90 per cent probability of a quarter-point rate increase, according to Bloomberg data.
However, US economic data have undershot forecasts. The implied probability of a Fed interest rate increase on June 14 and the Citi Economic Surprise Index — which measures economics data surprises relative to expectations — have diverged markedly since the beginning of May.
The decline in the surprise index means that data released have been worse than expected, and comes as a hoped-for US economic acceleration has failed to materialise. Inflation remains weak; the jobs data for May released last Friday were disappointing; and some policymakers — such as James Bullard, head of the St Louis Fed — have questioned whether the US central bank should pull the trigger in June. Some fund managers are beginning to feel similarly.
“I have been on the side of Bullard for the last 30 days or so,” said Kevin Giddis, head of fixed-income at Raymond James. “If you add to that a slowing growth pattern along with some real difficulty that the administration is having with its pro-growth initiatives, I think it is in the Fed’s best interest to ‘wait and see’ versus ‘full steam ahead’ when it comes to raising rates now.”
…
FWIW, give this story a close read and take a look at how much of it is fact and how much of it is opinion:
https://www.yahoo.com/news/vladimir-putin-exhumes-jfk-assassination-004835276.html
in my hood near DC the populace is ignoring Trump cuts and paying big premiums
EX: a flip w 50k in improvements folks are paying a 2x or 100k premium.
I would have thought after last years flat market and potential cuts we were headed down. Dead wrong.
for all the techno geeks this morning
http://www.zdnet.com/article/ibms-breakthrough-worlds-first-5nm-chip-that-one-day-could-power-samsung-phones/
20 billion transistors on a chip.
Amazing.
yeah, I’m into tech. and still waiting for Lisa Lisa’s phone number, aNYCdj?
whattya say, can’t you do a solid for a fellow blogger!?
I swear all my van doors open from the inside, don’t live at home w/mom & can rap “Fantastic Voyage” on demand.
no question about it: I’m a catch.
line forms to the right.
(”line forms to the right” was what Paula Abdul’s security team told me during last nights show at the Golden One Center here in SacTown.
so much for special backstage access from my AARP-Alex-Trebeck card!)
http://www.zerohedge.com/news/2017-06-05/soaring-debt-slow-growth-even-more-debt-systemic-crisis
Soaring Debt = Slow Growth = Even More Debt = Systemic Crisis
Just up the road from where I live in Laurel heights(SF) a 4 bed/3.5bath house sold for 3.5m in Sept. of 2014. Well it just sold for 1.6m a few days ago!