The Investment Thesis Has Been Diminishing Fast
A report from the Times-News in North Carolina. “The Alamance County residential real estate market is more than just red hot. The average asking price of a single-family home in Alamance County has soared in the past year. From September 2015 to September 2016, the average active asking price was $174,351. From September 2016 to September 2017, the asking price stands at $229,127, an increase of 30 percent. For sales that closed, the average asking price was $167,804 from September 2015 to September 2016, while the actual average sales price was $161,196. Those numbers have risen to $182,310 and $177,983, respectively, from September 2016 to September 2017. ‘It’s on fire, actually,’ said Donna Parker, president of the Burlington-Alamance Association of Realtors.”
“Low inventory and high demand often result in bidding wars. ‘Several homes that I’ve shown recently have had multiple agents showing buyers the same property at the same time,’ said broker Sandy Ellington-Graves of Allen Tate Realtors. ‘I constantly find myself reminding buyers of the old saying, ‘You snooze, you lose!’”
The Topeka Capital-Journal in Ohio. “Are you a fan of one of the television shows featuring house flips? Maybe you’ve heard or seen the infomercials touting a path to wealth through buying cheap real estate, fixing it up and selling it for big profits. House flipping is a hot trend right now. ‘The attraction to flipping houses is the possible $10,000 or more you can get in the turnaround,’ said rookie house flipper Carrie Thompson. ‘It’s risky, because you don’t know how long it will take to redo the house and sell it. The project I’m working on now, I thought it would take three or four months, but now I’m five months into it and not finished yet.’”
The Colorado Real Estate Journal. “I first started talking to New York City-based developer Mike Ursini last March about his plans to build the tallest building in Colorado. Our agreement was that by sitting on his blockbuster $400 million development at 650 17th St., he would give the story to me first. Six months later, it didn’t work out that way, as word leaked out and the proposed iconic tower made headlines and fueled speculation whether it would ever get off the ground.”
“He had nothing good to say about the media coverage to date. ‘The blood-sucking media was irresponsible in its reporting, didn’t do its due diligence and got things wrong. I want to clear the record by saying that while we have met and worked with (the city), we never filed a formal application. The media confused us with another project that is upside-down,’ he said.”
“Although last week’s press release said the tower would have luxury condo units, he is studying whether apartment units would make more sense. He also is analyzing whether it will include a hotel, given how many hotel rooms have recently flooded the market.”
“Another prominent developer, who talked to me on the condition that I did not use his name, was more skeptical. ‘I see this in the category of I will believe it when I see it,’ the developer said, adding that he thinks that would be the consensus of most developers with track records in Denver. ‘But what worries me, even more, is that I see this symbolic of the end of this boom cycle,’ he added. ‘I’m very dubious that we will see a big project like this built this late in the cycle.’”
The Houston Chronicle in Texas. “Homeowners and real estate agents throughout Montgomery County and across Texas had been enjoying a long run of hot home sales and climbing real estate values — until Hurricane Harvey hit in late August. Although the local housing market was showing signs of losing some of its steam during the summer, Harvey’s arrival and its torrential rains poured cold water on the real estate market, hitting it with what the Houston Association of Realtors terms a ‘heavy blow.’”
“Numbers from the Houston Association of Realtors show sales of single-family home sales plunged 25.4 percent in August compared with August 2016. The late summer swoon was the first year-over-year monthly decline in almost a year, hitting all segments of the housing market. ‘Home sales were humming throughout the first three weeks of August, but the moment Harvey struck the region, everything came to a screeching halt,’ said HAR Chairwoman Cindy Hamann.”
From The Real Deal on Florida. “Developers have sold nearly 800 units or 57 percent of the inventory of new development condos in Fort Lauderdale so far this cycle, according to RelatedISG’s Fall 2017 Miami Report | Fort Lauderdale Edition. The company surveys the sales centers and sales teams of each project in east Fort Lauderdale. Of 1,410 units in Fort Lauderdale, 611 remain on the market. The inventory has nearly doubled since ISG released its last report a year ago.”
“Fort Lauderdale is faring slightly better than Miami, according to ISG principal Craig Studnicky. Projects that are under construction, like Jade Signature, Muse Residences and Residences by Armani/Casa in Sunny Isles Beach, are discounting their remaining inventory, he said. In Sunny Isles, developers have sold 1,720 units in the Sunny Isles market since the beginning of the cycle. Discounts range from 10 percent to a whopping 30 percent to attract Latin Americans who have stayed away from South Florida because of the dollar’s strength.”
From Bloomberg on New York. “Manhattan condo buyers who rent out their apartments are getting little more yield than they would with government debt. Newly purchased condos that were listed for lease in the second quarter brought their owners a median return of 2.5 percent, according to StreetEasy. It’s been stuck at that level since the end of last year, the lowest in data going back to 2010. The median yield on relatively risk-free 10-year Treasury notes was 2.25 percent in the second quarter. ‘This is the lowest point we’ve seen in history,’ Grant Long, a senior economist at StreetEasy, said in an interview. ‘It’s a steady downward trend.’”
“The investment thesis had promise in 2011, when rental yields peaked at 3.9 percent in the third quarter. But as developers added ever-pricier units to the skyline and the supply of rentals swelled, income prospects for those who buy and lease out condos have been diminishing fast. In 2011, the median purchase price of condo units that became rentals during the third quarter was $899,000, StreetEasy said. In the second quarter of this year, investors who bought condos to lease out paid almost double that amount — a median of $1.7 million.”
“‘With a glut of supply at the top of the market, the outlook for price appreciation on a Manhattan luxury condo these days is dim, particularly for investors interested in a quick profit,’ Long said.”
A press release from California. “The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) last week issued the following statement in response to Republican leaders’ tax reform plan: ‘The tax reform proposed by the Republican leadership will eliminate the incentive for people to buy homes, shrink the middle class, and raise taxes on hundreds of thousands of California homeowners,’ said C.A.R. President Geoff McIntosh. ‘The doubling of the standard deduction, coupled with the elimination of state and local tax deductions, such as property taxes, will adversely impact California and its housing market. The average California homebuyer could end up paying $3,000 more a year in taxes under today’s proposal.’”
“‘Homeownership has and continues to be the best way for families to grow wealth and increase the middle class. Congress should look at ways to incentivize and increase homeownership rates, not increase taxes on families wanting to buy a home.’”
Coral Gables, FL Housing Prices Crater 10% YOY
https://www.zillow.com/coral-gables-fl/home-values/
Trump wants to turn everyone into renters. He is a landlord at heart.
Only bigger and bigger government with more and regulations and higher taxes can create affordable housing…
create affordable
housing
hc
edu
more…..?
Given the homeownership rate in the US is at an all time record low because rental rates are half the cost of buying, President Trump doesn’t have to do anything but let the market do its magic.
“Homeownership has and continues to be the best way for families to grow wealth and increase the middle class”
The truth is that buying overpriced houses on credit decimates wealth.
Everyone under the age of 35 has already been turned into a renter by Housing Bubble reflation measures, which drove prices back up out of reach just as they began to settle down to affordable levels. Trump is just trying to level the playing field between renters and owners. What is it about fairness that you so despise?
Great video on this webpage on micro apartments. They seem pretty well thought out.
Very high density too.
++++++++
San Francisco developer builds 160 unit apartment building on 9,000 square foot lot
“This is only a 9,000 square foot lot and yet we have 160 apartments in it. It comes to about 800 units an acre.”
I have no idea how he got permission to build such dense housing. (See here for an explanation of how San Francisco politicians deliberately prevent affordable housing from being built.)
The video also explains how these “micro-apartments” cater specifically to people who do not own cars.
The amenities in the building are quite amazing.
This type of high density apartment building is exactly what the city needs. And they need a huge number of them.
https://danfromsquirrelhill.wordpress.com/2017/10/01/san-francisco-developer-builds-160-unit-apartment-building-on-9000-square-foot-lot/
AGENDA 21
And 20 years from now when all the Techies move out just think of all the crime you can fit into 800 units an acre.
San Francisco has gotten so expensive, some tech companies can’t convince employees to move there
Michelle Castillo | @mishcastillo
Published 5:11 PM ET Thu, 6 April 2017
https://www.cnbc.com/2017/04/06/san-francisco-cost-of-living-pricing-out-tech-companies-workers.html
Micro-apartments=human hamster balls.
https://duckduckgo.com/?q=human+hampster+ball&bext=msl&atb=v83-7&ia=images&iax=1
The name of that 160 unit thing is the Panoramic. What kind of person would use such a grand, expansive word to descibe a contracted mess of sub 250 SqFt living spaces?
This person:
https://www.panoramic.com/about/patrick-kennedy-bio/
From Patrick Kennedy’s bio:
In April, 2007 Panoramic Interests sold its rental portfolio of 7 buildings to the Equity Residential Apartment REIT of Chicago for $146,000,000, the largest real-estate transaction in Berkeley’s history.
Wow, closing a deal in 2007, good timing! I wonder what kind of “living space” Mr Kennedy resides in?
The video was interesting but…
I’m curious how the overall ROI for the developer compares to a building with larger units. It just seemed like it was unsaid that ‘this way lets us squeeze more profits out’.
They’re targeting a very particular type of person (young). Doesn’t really help anyone with a family, etc.
Theoretically it helps families by adding more rental units to the overall housing stock. Those 160 single people are no longer individually competing for a two bedroom+ existing unit that they would have ended up trying to get with a roommate.
All that risk.
For T-Bill returns.
But…but…appreciation!
***********
“Manhattan condo buyers who rent out their apartments are getting little more yield than they would with government debt. Newly purchased condos that were listed for lease in the second quarter brought their owners a median return of 2.5 percent,
Another example of artificially low rates and QE creating deflation.
‘Newly purchased condos that were listed for lease in the second quarter brought their owners a median return of 2.5 percent’
And another:
‘It was just a 1,200-square-foot nook in the gleaming white, 365,000-square-foot mall known as the Oculus, but Lars Akerlund considered it the “crown jewel” of his burgeoning espresso chain Fika.’
‘It was a jewel he never got to polish. As construction costs ballooned and the World Trade Center mall missed its original opening date, Fika’s investor pulled out. But the mall operator, Australia-based Westfield, would not let Akerlund out of his lease and instead dragged the company into court last year, seeking more than $5 million in promised rent.’
“This is David against Goliath,” said Darren Oved, a partner at law firm Oved & Oved, which is representing Fika. “It certainly stands to reason that, had the retail market continued to go up, we wouldn’t be fighting about this. Westfield’s willingness to sue is indicative of how the market is not as frothy.”
‘Availability has jumped in seven of 12 Manhattan retail submarkets tracked by real estate services firm Cushman & Wakefield over the past year, running as high as 32.8% on Fifth Avenue between 42nd and 49th streets.’
‘Hundreds of thousands of square feet of retail space are still being added through new developments. At the same time, many retailers seem less than eager to take more space. Neiman Marcus reportedly wants to reduce the size of its store at a million-square-foot mall being built in Hudson Yards. The Howard Hughes Corp. has yet to announce any major signings at a 400,000-square-foot retail project opening next year at South Street Seaport.’
http://www.crainsnewyork.com/article/20171002/REAL_ESTATE/170929854/bitter-battle-over-small-caf-space-shows-retails-big-problem#
Another example of artificially low rates and QE creating deflation.
I’m not sure folks really understand the dynamics of this as it relates to real estate. People often point to lower rates driving cap rates lower and prices higher. However, they don’t think about the supply side.
Said succinctly, low interest rates allow developers to add supply at relatively low rents–even if construction costs have been rising.
Additional supply generally puts a hamper on rental growth as compared to a world with higher interest rates.
The data bears this out:
ProLogis presented at a conference recently, and they showed a graph of rents on logistics buildings going back to 1998. On a nominal basis, rents are currently at a 20+ year high (maybe all-time high, but the graph doesn’t go back that far). However, on an inflation-adjusted basis, rents would need to grow by another ~25% to get to 1998 levels (which would be close to a 20-year high).
A link…the graph is on page 15:
http://ir.prologis.com/~/media/Files/P/Prologis-IR-V4/events-pdfs/2017/baml-conf-9-12-17-v1.pdf
I believe the opposite dynamic is also true…that in locations/property types with relatively low vacancy rates and good demand, higher interest rates will bring about rent inflation.
LOL, no. Its tied to wages, even for trophy/vacation areas, which are tied to wages of the top 10%. You cant borrow to pay your rent - for long, anyway.
PLD rents out warehouses to companies like Amazon, etc. I’m not talking about residential rents, which I agree are primarily tied to wages.
all the way back to 1998? wow
Page 11 is also interesting…rents are <5% of logistics companies cost structure…so, rents can move meaningfully without destroying a logistics company’s business.
This is decidedly unlike residential, where people are paying 30-50% of their income in rent.
I couldn’t tell if you were being facetious regarding 1998, but their CEO of Europe and Asia noted on their last conference call that the same thing is true going back to 1980 (maybe longer?). His quote (per Seeking Alpha’s earnings call transcript) was:
Question: “But is there any benchmark that we need to be thinking about in terms of how far rent growth could go?”
Answer: “to your first question on, are we at prior peak rents in some markets. Yes, we are. That was a decade ago. We are 35 % below the last market peak inflation adjusted that’s a point. So in terms of — the price of everything else has gone up, but the customers have had a tremendous bargain for the last 20 years because cap rate compression has given a bargain on rents at the cost of the capital market. So they’ve got long ways to go before they reach real term rents even forget about the peak, but even going back to 1980, real rents are way, way down. So I think this could be a longer term phenomena. But I don’t want to speculate about it.”
It’s just that this particular chart only went back to 1998–not that real rents were higher just before 1998.
1982.
I believe the opposite dynamic is also true…that in locations/property types with relatively low vacancy rates and good demand, higher interest rates will bring about rent inflation.
The fact that existing owners want to increase their cap rates to follow market rates (by increasing their rents) does not imply that they will have the pricing power to do so.
The buildings that go back to the bank and resell at market prices (e.g. much lower due to the increase in the market cap-rate) should in theory be able to undercut them badly.
It’s a good theory, and it will be interesting to see whether it applies; that depends upon whether the foreclosure market is healthy and functional, or as artificially shut down in the commercial space as it was in the residential space during the last go-around.
The fact that existing owners want to increase their cap rates to follow market rates (by increasing their rents) does not imply that they will have the pricing power to do so.
Existing owners don’t want higher cap rates…they want low cap rates and higher rents.
I’m talking about specific low vacancy markets. Those are the markets that today have rent growth somewhat limited by new supply, which is helped with low interest rates.
My point is that pricing power for landlords increases when there is a supply/demand balance that benefits them. And in markets where “locations/property types with relatively low vacancy rates and good demand, higher interest rates” will bring about higher yield expectations (higher cap rates), and so all, else equal, the marginal new development will be shelved…thus limiting new supply.
It is that limiting of new supply through the increase in interest rates/cap rates in markets where there is already low vacancy that will allow existing property owners to increase rents.
Existing owners don’t want higher cap rates…they want low cap rates and higher rents.
I think what existing owners want may vary depending on their timeframe and income/growth orientation. Clearly ALL owners would like higher net operating income—so their intent for the numerator is clear; some owners would prefer higher market values (e.g. if they want to sell, or change their capital structure), while others care very little what the market value is at any given point in time (e.g. those that have an income orientation and a multi-decade timeframe). But you’re correct, I was using cap-rate a little sloppily; I tend to think of it in traditional terms at time of purchase, but then fix purchase-price into the denominator rather than market price for a longer-term holding. Is there a better term that would apply to such an individual cap-rate fixed at time of purchase?
And in markets where “locations/property types with relatively low vacancy rates and good demand, higher interest rates” will bring about higher yield expectations (higher cap rates), and so all, else equal, the marginal new development will be shelved…thus limiting new supply.
I totally agree, RW—higher rates will demand higher cap-rates for projects to move forward, and many simply won’t pencil out if rates go up much.
One of the things I’d love your thoughts on, as it is something I struggle to get my head around: my gut tells me that rents have been affected by QE much more than most people appreciate. I can’t point to a specific mechanism or channel of communication—but it is hard to explain the huge increases that we’ve seen based on incomes or job growth, e.g. fundamental demand. If there has been a channel by which QE impacted rents, then any unwind (or even the end of reinvestment) may have unanticipated effects on the flip side.
Any thoughts?
I also have a hard time seeing a mechanism that drives rents higher from QE directly. The only mechanism that I do see would tend to increase development, which should drive rents lower…this is from the effect noted…lower interest rates makes more development pencil, more development leads to more supply, and all-else equal, lower rents.
I’ve heard the argument that QE allowed people to buy Class C/B, renovate, and jack up the rents. However, people who rent C/B apartments don’t have a hell of a lot of spare change lying around, and it is easy to find an alternative place to rent more cheaply (Craigslist, Apartments.com, etc.)…if there is something to rent more cheaply. That business plan ONLY works well if there are low vacancy rates in Class C/B apartments.
2 observations about this development cycle:
1. Lots of QE simply ended up as excess reserves back at the Fed, and combined with Basal III requirements, banks were very conservative lending to new development. Yes, this is a controversial statement, but I believe to be true. So, QE may have helped make properties “pencil” (lower cost of interest, and less pressure on cap rates), but it still took a lot of equity to make the development happen.
2. Major equity players targeted “Gateway” cities and primary markets (industrial in the Inland Empire isn’t “gateway”, but certainly a primary market for industrial). This was the equity that paired up with cheap debt in order to make meaningful development happen. Without lots of equity (that was focused on these primary markets), despite low interest rates, development was restrained.
So, we end up with lots of development in downtowns and primary markets, less development in the suburbs, and less development overall than a typical cycle…leading to supply gluts and weak rents in downtown, yet rent growth overall.
With respect to “Fundamental Demand”, I think you are mis-defining “demand”, and you are missing two important factors.
Demand is the desire for someone, or some entity, to occupy space in a building. On the residential side, this is certainly correlated to job and income growth, but it is also related to population.
The two factors I think you are missing are:
Demographics; and
Replacement of obsolete structures
Demographics will lead to increased demand even with weak job growth. One guy retires, doesn’t leave his paid-for house, and one guy takes his job. No job growth, but you still have a need for a housing unit. Logic would say that the new person looking for a place to live is likely at the bottom of the totem pole, as everyone else shifts upwards to take the newly retired person’s more senior position–and probably already is in an apartment or house.
Consider this…if there is net new jobs of 100k in a month, how many people turn 65 years old during that same month?
300,000–this was a number from Pew in 2010…and that number is increasing.
And while mortality increases with age, we are still at a point where the population of folks over 65 years old is increasing–from 2010 to 2020, the estimate was an increase in the “over-65″ population will increase by about 15 million people. This is on average an additional 125,000 people per month (including deaths) in the over-65 cohort. This grows to 140k per month from 2020 to 2030. It then slows down over the next 20 years, but the total over-65 population still grows through 2050.
You can’t just look at jobs. You also have to look at the demographic pig moving through the python.
The second piece if the demolition of obsolete structures…~300-400k housing units are destroyed each year that need to be replaced. Which puts housing starts at 1.2MM into context.
So, how do these two things manifest themselves? Low vacancy rates.
What do we know from low vacancy rates? Low vacancy rates give tenants less to choose from, and makes it easier for landlords to raise their rents.
If you point me to a low vacancy market with restrained development, there is a strong likelihood that market has rent growth greater than inflation. I don’t care the property type.
If you point me to a high vacancy market, rent growth will be weak–I don’t care the property type. And weaker still if someone is stupid enough to add more space to the already oversupplied market.
If you point me to a low vacancy market with meaningful development, it all depends on how much (and what type of) development is occurring.
Generally, I don’t think QE drove higher rents, but I think QE unwinding will be inflationary, NOT deflationary. However, I think it will take some time to take hold given the amount of excess reserves.
Interesting—thanks, RW. Let’s chat about the inflationary/deflationary angle on a current thread, ok?
“higher interest rates will bring about rent inflation”
Really? Since lower interest rates have gone along with higher rents, higher interest rates will have the same effect?
Higher interest rates will ultimately crush the debtor. That is not the renter.
No, higher rents today generally have been caused by not enough supply being added.
We are seeing the opposite effect in markets where there HAS been a lot of supply added.
If cap rates rise, it will reduce the economic viability of many development projects, which will further restrict supply…driving rents even higher.
‘The media confused us with another project that is upside-down’
Oh dear…
Sedalia, CO Housing Prices Crater 15% YOY
https://www.zillow.com/sedalia-co/home-values/
From wikipedia:
The median income for a household in the CDP was $37,045, and the median income for a family was $40,000.
The median family income is 40K and the median shack price is $582K
Sounds reasonable to me.
Okay “Housing Bubble Blog” readers, let’s all take a guess at when the next housing crash/correction will begin… I say Fall 2018.
You?
Define “begin”. My guess is that in hindsight we will eventually say it’s already begun.
Maybe by “begin” it could mean that it’s beyond denial, and pundits start saying “No one could have seen it coming”
+1, Carl—already begun. It’s limited to certain segments at the moment (started in high-end condos & apartment buildings), but will spread to them all.
Ding ding!!!
And not only will Housing Bubble Blog regulars acknowledge the beginnings of the Great Unwind started with the ill winds of the 2017 hurricane season, but hordes of Housing Bubble denialists will eventually claim that they called it as well.
Summer 2020.
We are in the “freeze” or stagnation zone right now, IMO. There’s some activity, but a standoff between buyers and sellers for the most part. Last time, the freeze occurred in early 2006. The actual crash didn’t come until 2008. If the same thing occurs again, maybe 2019. But I hope you’re right and that we’re earlier this time.
But I hope you’re right and that we’re earlier this time.
Now that everybody thinks they are an expert at reading the Fed cycle and it’s always safe to buy the dips I’m expecting it to cycle faster.
The Fed is like a drug dealer. They’ve been giving the goods away for free to keep market share up. Cycle? Yeah like bouncing down a flight of stairs.
I like to think of it as the “permanently high plateau” zone…
Before I can give you an answer you have to tell me what the yield curve is going to do over the next 3-5 years.
If it stays low and flat, then this could go on for a while.
If it rises and gets dramatically steeper, then a correction could happen much sooner.
“…when the next housing crash/correction will begin…”
Lots of private capitol was invested last time whereas this time the government is backstopping a much larger share of the mortgage market. Add in the automobile, consumer credit cards and student loans… yeah, it’s just too big to fail. The reserve status of the dollar is the only thing keeping this sinking ship afloat, IMHO.
+1 Carl… it’s already begun to unravel.
Goodbye Tom Petty and thanks for the music.
https://www.youtube.com/watch?v=s5BJXwNeKsQ
Not dead yet.
Can’t confirm his death yet. Dang, please, hang in there, guy.
https://www.cbsnews.com/news/lapd-clarifies-cannot-confirm-tom-petty-death/
I read his obituary in Greenwich Time’s obituary section, went back after seeing Overbanked post and it was gone.
Thanks palmetto
That CBS interview was really good.
Yer Welcome!
I remember years ago when I moved to Ft. Lauderdale, listening to one of the local radio stations while I was driving to some watering hole one evening. They were taking dedications and some chick called in and wanted to dedicate a song to Tom Petty to wish him well after an incident where he injured his hand. She asked them to play Mellencamp’s “Play Guitar”. Here it is:
https://www.youtube.com/watch?v=rxuFWnul7II
Thanks for the tunes, Petty you magnificent rocker!
College Place, WA Housing Prices Crater 8% YOY
https://www.zillow.com/college-place-wa/home-values/
The Vegas mass murderer was a Degenerate.Real.Estate.Gambler.
Surprised? You shouldn’t be.
https://www.washingtonpost.com/news/post-nation/wp/2017/10/02/las-vegas-gunman-liked-to-gamble-listened-to-country-music-lived-quiet-retired-life-before-massacre/
If he really was the mass murderer, and not some patsy. The whole thing stinks like the dickens.
What do you mean?
Some people think that he didn’t really do it, but took the fall for it (and conveniently offed himself). Given that he had no real motive (or at least none that anyone knows of), it does make one wonder what really happened.
That thought crossed my mind. What if others did the shootings and just killed him to leave a neat package to close the case.
No matter what, it’s a tragedy that so many people died in a senseless, violent act.
Yes, I’m sure the truth will come out.:roll:
I guess I just don’t believe that there could be such a massive orchestrated event. The number of people who would have to be on board for such a cover-up is immense. The entire police dept. would have to be dirty, etc. I’m not buying it.
Anyone else find themselves wondering why there were two windows busted out in the photos of the Mandalay Bay Hotel, not just one? And they were fairly far apart…
The end window looks like it faces a slightly different direction, so probably to get a different shooting angle.
As horrific as this is/was, if the cops hadn’t breached that door as fast as they did, it could have been much worse. Apparently he gunned down a security guard in the hallway.
The end window looks like it faces a slightly different direction, so probably to get a different shooting angle.
Sure… except that if his goal was the attack the concertgoers, either one of the two seemed to have a sufficient angle of coverage of the event. So why bother with both?
Who knows? But if I had to guess, he probably wanted to be able to shoot at cops on the adjacent streets as well. They reported to be pinned down under heavy fire.
“I guess I just don’t believe that there could be such a massive orchestrated event. The number of people who would have to be on board for such a cover-up is immense. The entire police dept. would have to be dirty, etc. I’m not buying it.”
Many will desperately grasp at any conspiracy theory that comes along rather than face the utterly terrifying prospect that a comfortably wealthy man with a visibly normal existence could suddenly deviate into a heinous criminal.
Many will desperately grasp at any conspiracy theory that comes along rather than face the utterly terrifying prospect that a comfortably wealthy man with a visibly normal existence could suddenly deviate into a heinous criminal.
Great point, PB—but not just a criminal, a heinous psychopath; that is rather hard to get ones’ head around.
one’s
Who knows? But if I had to guess, he probably wanted to be able to shoot at cops on the adjacent streets as well.
I just assumed he wanted to be able to go back and forth between the two positions so that even if people were shooting up at him they would be less likely to get him. I’m not sure what the inefficiency of carrying so many guns was about…other than that it seems like a lot of tactical work and expertise went into it for a guy who supposedly wasn’t into that sort of thing.
In past incidents I’ve thought “well…it could have been worse if the person had actually known what they were doing”. This is the first case since those guys walked down that street with body armor on many years ago that I’ve thought “well…this was about as bad as it could get with normal rifles”.
Yeah, I’m waiting for the news that the money was running out and the property sales weren’t working out.
Yeah, and that’s what the media is most afraid of telling you.
That he was a Realtor.
And don’t forget to hashtag your next Instagram post with #PrayForVegas.
“‘Homeownership has and continues to be the best way for families to grow wealth and increase the middle class.
If that were true, wouldn’t it follow that the historically unprecedented homeownership rates of the mid-to-late 2000’s should have translated into an increase in membership in the middle class? And yet reality shows nothing of the sort.
I’m not a proponent of buying a home for “wealth creation”. I still feel that a home is an expense, not an asset. It should be viewed the same way one views food or clothing. Yes, you might buy a steak instead of hamburger, or Armani Suit instead of a sweatsuit, or a 3,000 square foot house instead of renting a studio apartment, but the basic needs are the same…food, clothing, and shelter.
However, ISTR reading that if you looked at Picketty’s data that went into “Capital in the Twenty-First Century”, his conclusions (as I understand them) about the rich getting richer because returns on capital exceeding economic growth, was almost entirely due to returns from real estate.
The guy to noted this was some dude at MIT:
http://fortune.com/2015/04/06/inequality-piketty/
You better believe that paper is on the desk of every politician that is looking to preserve the GSEs. We simply MUST allow everyone to borrow! It is their way to prosperity!
I read the entire Piketty book, it was enlightening. Lots of good stuff in that book. One thing that always intrigued me though was this: why haven’t we had any major innovation in housing? I mean, every other industry has been radically transformed since the 1900s, but housing is still pretty boring. I suppose renting out subsections of your dwelling to strangers a la AirBnB is somewhat of an innovation, but nothing mind-blowing. What was it that Thiel says, “We wanted flying cars and got 140-characters instead.”
What was it that Thiel says, “We wanted flying cars and got 140-characters instead.”
That was Bruce Gibney who wrote that…but yes, also from Founders Fund. Speaking of which, I think Gibney has a new book out: “A Generation of Sociopaths: How the Baby Boomers Betrayed America”.
I think I need to get it.
By the way, despite Gibney retiring from Founders Fund, his original manifesto (although retitled) is still on their website.
http://foundersfund.com/the-future/
Speaks to the importance of this as the Funds view on investing…they try to solve really hard problems: 1. Such problems attract really smart people who want to solve them; and 2. If you are successful in solving the problems, there is likely meaningful profit that can be generated.
The balance sh@t will never go back to zero. Its like an unlimited place to store debt.
Of course it will never go back to zero—it wasn’t anywhere near zero prior to the GFC.
I would expect that it will never get back anywhere near the $800B that it was back then.
Every financial emergency is an excuse to increase it somewhat—money stolen directly from the people, IMO, never to be returned.
I agree PIC. I think I’ve noted before that by my estimation, by the time they are burning off housing debt from their balance sheet at $20B per month, that will be the natural rate of decline (ie. they won’t be buying any at that point). That’s a couple of years out if I remember my spreadsheet correctly.
At that point, the only way they could shrink the balance sheet faster would be to sell paper on the open market…and I don’t think they’ll ever do that.
Even 5 and 10 years out therefore, the Fed will still have hundreds of billions of MBS on the books ($500B PLUS), and that’s not counting their treasuries.
I think we are looking at $1.5T+ Fed balance sheets pretty much for the rest of my life.
So at what discount rate would u buy a mbps bond 2005 Reno,las Vegas,miami ?
Half of the fed pool is carp like that.
6% ,7 ??? Any bids
I’m not a buyer at all. And my point is that even if the Fed doesn’t sell them onto the open market, the loans are amortizing, so some principal is paid down every month…and some homes are sold…and when they are sold, the loans are repaid in their entirety.
In other words, even of the Fed doesn’t sell any, their balance sheet will shrink.
If you have a license to steal and a means to quietly do so undetected, then why not go for trillions?
A good parasite doesn’t kill the host?
And where it goes from here is irrelevant. Apparently there’s no legal requirement for a zero balance sheet, and it can be expanded back to ginormous proportions on a whim at a moment’s notice.
San Clemente, CA Rental Rates Crater 6% YOY
https://www.zillow.com/san-clemente-ca/home-values/
Discounts range from 10 percent to a whopping 30 percent to attract Latin Americans
Maybe it is just me, but if I bought a condo for $1,000,000 and I read in the paper my neighbor bought the exact same condo less than2 years later for $700,000 I would be incredibly pissed at myself and the developer!!
Myers Beach, FL Housing Prices Crater 7% YOY
http://www.movoto.com/fort-myers-beach-fl/market-trends/
‘The tax reform proposed by the Republican leadership will eliminate the incentive for people to buy homes, shrink the middle class, and raise taxes on hundreds of thousands of California homeowners,’
Do California Democrats expect to find a sympathetic ear in DC by railing on Republican majority policies?
crushing.housing.losses.
I suspect that the version of the tax plan currently under discussion won’t fly,, for one simple reason: It violates the NAR talking points.
This is an interesting listing in my area that just came back on the market after multiple false starts:
https://www.zillow.com/homedetails/2527-Buena-Vista-Ave-Walnut-Creek-CA-94597/18407963_zpid/?view=public
10/02/17 Listed for sale $788,000
08/22/17 Listing removed $1,087,000
08/01/17 Price change $1,087,000
07/05/17 Price change $1,097,000
06/14/17 Price change $1,137,000
06/01/17 Listed for sale $1,147,000
01/18/07 Sold $599,000 $313 Public Record
Obviously they are hoping to have a bid war started by relisting really low… Personally I’m sitting on the sideline waiting to upgrade my paid off house. I’m in an OK school district but I’d like to upgrade before my daughter starts 1st grade in about 2 years, so I’m really hoping this is finally the start of the downward trend, I think we’ve been plateaued for about a year now.