Worries About Overbuilding And Overpaying
A report from National Real Estate Investor. “Investors continue to buy fewer apartment properties than they did last year. Yet prices continue to rise. So far in 2017, the usual declines have been steeper than normal. Experts say fewer properties are available for sale, especially compared to the peak year of 2015. ‘The volume of property sales was so big… you can’t do that kind of deal volume every year,’ says James Costello, senior vice president for Real Capital Analytics.”
“Buyers are still very interested in apartment properties, keeping prices high and cap rates low. But that interest is not always enough to overcome worries about overbuilding and overpaying for assets. It seems less and less likely that prices will rise as quickly in the future as they have in the recent past. ‘Buyers won’t have cap rate compression to paper over any mistakes they make in underwriting,’ says Costello.”
The Orange County Register in California. “This commercial real estate market reminds me of an open bag of potato chips — with 98.5 percent of them eaten. The full chips are consumed — functional buildings with good owner motivation, priced aggressively but still within reason. What remains are the remnants of the whole crunch — dysfunctional, overpriced locations with zero owner motivation to meet the market and make a deal! A normal ebb and flow of availabilities and interested buyers have been usurped with feeding frenzies and bidding wars.”
“Sellers are enjoying these times. Many of us are warning a correction is near, but we also struggle to pinpoint the trigger. Remember that call you received from a broker claiming to have a buyer interested in your building? You blew him off but he was persistent. A multitude of calls morphed into a tour and subsequently an unsolicited offer. The price caused you to do a doubletake. Well, if he’s willing to pay this today, what will the building be worth next year? You don’t want to be that guy at the cocktail party talking about the deal you should’ve done.”
“If a deal seems obscene, it is. Last week we toured a project which is light years from the freeway. Mismanaged was the theme: low rents, high expenses, ownership squabble, vacant space, sky-high asking price. Yep, you guessed it. Three full-ask offers. My buyer and I shook our heads in disbelief and consoled each other. The deal wasn’t for us!”
The Columbus Dispatch in Ohio. “In an era of increasingly luxurious Columbus apartments, Hubbard Park Place raises the bar even higher. The project will include 101 apartments and 12,000 square feet of offices in a seven-story building that looks more like two buildings when it’s finished in a few months. It will have prices to match, starting at $1,700 a month and topping $4,000 for a handful of penthouse units. ‘The project will push the market,’ said Mark Wood, president of the Wood Companies, which is developing the building with Schiff Capital Group.”
“The Hubbard may raise the bar a bit, but it’s far from alone. Together with other high-end projects in and around Downtown, it represents not just a new building but a new way of living in central Ohio.”
From The Advocate in Louisiana. “Most LSU freshmen will be required to live on campus starting in the fall of 2018, the school announced Friday. Craig Davenport, an appraiser who tracks the Baton Rouge apartment market, said the move will obviously have a significant impact on the LSU-area housing market. The student housing market has been softening because of decreasing enrollment and uncertainty over the TOPS program.”
“LSU had 30,099 students at the start of the fall semester, a 2.6 percent drop from the year before. If enrollment continues to drop, coupled with the new housing requirements, it could lead to ‘lower rents, more concessions and lower occupancy’ at the complexes that target students, Davenport said.”
“Over the past few years, there has been a building boom around LSU as luxury complexes came on line, featuring amenities such as rooftop pools, study spaces that look like upscale coffee shops, lazy rivers and common areas with giant HDTV sets. From the fall of 2010 to fall 2016, Davenport said private developers and the university added a net total of 6,352 beds to the student housing mix. That number has grown further; the Park Place complex that opened this semester at 222 East Boyd added 280 units.”
The Boulder Daily Camera in Colorado. “Baby boomers have inspired a building boom across Boulder County as developers rush to construct senior housing for a local population that, by 2030, will make up a fifth of the county’s residents. A dozen developments have been constructed since 2012, with three more under construction or in planning. All told, they will add nearly 1,000 units to the county’s stock of senior housing. But as the silver tsunami sweeps the local housing market, some areas are feeling flooded. Lafayette, home to more than a third of new senior housing since 2012, is contemplating a temporary halt to boomer-focused building that, it says, is overwhelming the city’s emergency services.”
“The glut of senior construction has not been restricted to Boulder County. Apartments and assisted living facilities are going up all along the Front Range. Elizabeth Borden said that, at any given time, she is tracking 30 properties under construction for her senior housing market analysis company, The Highland Group in Boulder.”
“Market-rate assisted living units average $4,000 per month on the low end, Borden said. Memory care dwellings begin at $5,000 per month. Only a handful of properties — four or five, according to Borden — in the county accept Medicaid. ‘If you’ve got enough money to pay for it, you can find the housing you need,’ said Borden. ‘If you can’t afford those market rents, you’re down to some very limited choices.’”
From Bisnow on Texas. “New data from Abodo Apartments puts Dallas at the eighth-highest decrease in multifamily rent growth nationwide going into October. According to the report, Dallas-Fort Worth rents have fallen by 2.82%. The biggest decrease was in Newark, New Jersey, at 6%. ‘With construction at its highest level since the 1980s, we believe that a steady decline in rent prices in rapidly growing, major metro areas like Dallas may be on the way,’ Abodo Apartments’ Senior Communications Manager Sam Radbil said. ‘Developers delivered 250,000 new rentals in 2015, and almost 285,000 more units were finished in 2016. As we have seen in the past, as more rental units become available, prices should continue to decrease.’”
“The trend is not unique to Dallas, as other supply-heavy multifamily markets around the nation experienced downturns in rent growth. ‘We anticipate that the rent growth might begin to slow in very large cities like Dallas, Houston, Chicago, San Francisco and New York because of the huge boom in multifamily construction and luxury developments coming to market,’ Radbil said.”
There is a bubble in nearly everything.
With real estate and stocks being the most glaring.
How does it end?
In misery, ruin and bankruptcy.
Then in war and a complete change is our way of government.
+++++
An Accountant Smells a Rat in Our Global Credit Bubble
by Peter Diekmeyer • Oct 2, 2017 • Wolf Street
“We are in a global finance bubble, which I call the grand-daddy of all bubbles,” said Noland. “Economists can’t see it. They can’t model money and credit. However, to those outside the system, the facts are increasingly clear.”
Noland points to inflating real estate, bond and equity prices as key causes for concern. According to the Federal Reserve’s September Z.1 Flow of Funds report, the value of US equities jumped $1.5 trillion during the second quarter to $42.2 trillion, a record 219% of GDP.
Noland may be right. A report by the International Institute of Finance released in June estimated that global government, business and personal debts totaled $217 trillion earlier this year. That’s more than three times (327%) higher than global economic output.
Adding to the complexity is the fact that not all debts are fully recorded. For example, according to a World Economic Forum study, the world’s six largest pension saving systems – the US, UK, Japan, Netherlands, Canada and Australia – are expected to experience a $224 trillion funding shortfall by 2050.
So how will this all play out? Noland believes that markets will eventually seize up as in 2008. Interest rates will then rise sharply as the much ridiculed “bond vigilantes” finally appear on the scene.
The practical effect will be that the Federal Reserve’s balance sheet, far from shrinking as is currently projected, could actually expand, to as high as $10 trillion and possibly more.
The inevitable unwinding of the global credit bubble, whether done through inflation or debt write-offs, could create considerable misery, the kind of which most Americans living today have never seen. Noland fears that in a worst-case scenario, this could lead to war, as politicians seek to distract the public from their oversight failures.
“Back in the old days, you had some constraints on the amount of credit in the system,” says Noland. “However, many of these institutions now have the ability to create literally unlimited leverage.”
The first link says there is still plenty of money to borrow. But that’s what created this whole mess to begin with.
As a somewhat ‘average man’ individual ( being UMC income-wise, I’m not statistically average, but thanks to divorce courts I’m average or worse investments/financial asset-wise ) thinking about the whole concept is daunting.
I find myself wondering “Is there anything at all that I can do to insulate (probably not) myself from or at least minimize (maybe?) the negative impact that would happen (at a personal level) should these fears of a global credit meltdown prove even half-right sometime in the next 10-30 years?”
And I just feel like that all I can do is keep on keeping on dealing with my personal short-term situation and what happens… happens.
As many know. I am an engineer. With a family.
I have studied this issue long and hard along.
It doesn’t mean I am right and I am still studying it every day. Still learning and listening.
But I have come up with a partial solution to what is coming.
1. Take care of your health.
2. Stay out of debt. Live beneath your means.
3. Keep learning. Learn new skills. Learn how to fix and build things yourself. Invest in yourself.
4. Realize that government (at all levels) will lie to you. Government will not take care of you. Government will take everything you have if it means they stay in power one day longer.
5. Buy a little gold and silver. But realize that this is just a little insurance and not much else.
6. Stay far away from bubbles. Hard to do when friends and relatives are getting “rich” and think you the fool
7. Relationships are worth more far than “stuff.” Families are worth way more than “stuff.”
8. Enjoy life. It doesn’t take lots of money.
9. Learn how to shoot safely and have at least one gun. Even if you never touch it again.
10. Be part of “something” bigger than yourself such as a Church or a volunteer organixation. All the issues we see today are the same issues seen 2000 years ago.
11. Don’t pay more than production cost ($55/sqft) for a house. Less depreciation of course.
All great advice.
“short-term situation”
My personal opinion is that you should be working toward a long term goal. Mine was to get out of debt, downsize, live way below my means, save to buy some modest shelter (what I ended up with works very well but it’s not what I had in mind originally). I’m there.
I’m there.
So… what’s your goal now, Blue?
Prime,
I built a shop/studio as part of these preps so now I will go at it with the phone and computer off. If I do any math it will be in fractions of an inch and not require calculus. May not seem like a big goal, but I gave this up decades ago to single parent four kids and the whole engineering career to pay the bills. I haven’t had an uninterrupted week of vacation in over 20 years. I have enough ideas to keep me busy for a long time. If my grandkids want to visit, they can learn a craft!
I’ve been cruising on my boat for 15 years but never took a trip more than six weeks long and had to answer emails and solve problems while I was on vacation. I will go for as long as I want. If I do anything before noon it will be fishing. I sold my dock this week. I won’t need it.
Just to add:
Faster boats, younger women, older whiskey.
LOL—sounds like a GREAT plan!
Wow, I never realized that during all of those cruising adventures you were still working on board…
Re: selling your dock: when your boat is in the water, and you’re working in your shop/studio, where will you tie up now? Or is your plan only to work in the studio when your boat is in dry-dock?
I’m thinking a couple of things. I can do small work aboard the boat if I want to blend the two things. Also, I can rent a slip at a local marina for a month for about 1/5 of what I was paying in dues and assessments at the yacht club for the year. So there are options to explore.
One of the most glaring bubbles to me is in that of new car and truck prices. They’re nothing short of shocking.
Agreed, it’s shocking how little car you get for $20K these days. They took out the “econo” from “econobox”.
And new truck prices, simply absurd, yet they’re everywhere. Some neighbors have two shiny new $50K trucks parked on the driveway.
Living in the land of DebtDonkeys.
Anecdotal, re: 4wheels affordability:
I follow a multitude of Financial Independence (”FI”) forums. For the most part, these bloggers are not shy with math, running cases, and they are literate. For the most part, they are engineers, s/w developers: one is a doctor. A formidable group, to be taken seriously.
One of these bloggers did a set of calculations based on new vs. used. His conclusion was that the most cost-effective course of action is to buy a ten year old car that has been maintained, and run it into the ground.
*Ahem* (buffs fingernails on lapels): I bought an out of favor, manual transmission, extremely reliable two year old car (2004 model) in 2006 and am still driving it. 230K miles now. I plan to keep it till it rusts out from beneath my feet.
Did not do this strictly from the standpoint of following the FI doctrine. I just love the utility of this SUV. Honda Element - wish “they” would bring it back.
Well, FI DOES have a lot to do with scoring non-bubbly housing and transportation, is how this response relates to the HBB, lol!
That’s sort of what I like to do. But my problem is that I like models that have very high performance potential. Which usually tend to be popular and not as depreciated. So I have to do that while keeping in mind which models have the most potential but are unloved. Previously it was early 90s Mitsubishis. Now they’ve aged out and the 2000 Evos that replaced them haven’t depreciated enough. So I’m on to BMW 335s, which depreciate horribly. Unfortunately they aren’t as reliable as they could be, but it’s still a combo that works for me. Easy 500+hp for not much money.
The N54 has given a lot of trouble to almost everyone I know who had one. It seems more like a S## (///M engine) than a mainline engine.
On the flip side, Dinan and others have been able unlock a ton of additional power on it.
So far it’s cost me about $32K, including purchase price, minus gas, for 7 years of driving a N52 powered 5 Series touring. For me it’s a been a good compromise - it wears like smart custom tailored suit when I need to interact with people and carry an image, and hauls all I need otherwise. I expect to keep it for a long time.
Luckily the expensive problems happened to me while it was still under CPO warranty. But my big complaint was that both sticking injectors (huge direct injection injector sticking OPEN and flooding the cylinders!) as well as stupid electronic water pump both stranded me with no warning. Back in my Mitsubishi days basically the crank angle sensor was the only thing that would actually strand you without warning and that was a once in ten+ years occurrence. I don’t count timing belts because they didn’t break if you did them on schedule.
“His conclusion was that the most cost-effective course of action is to buy a ten year old car that has been maintained, and run it into the ground.”
That’s been my formula albeit not by choice, but it has worked well for me to remain debt free. I will add that Mrs Gandhi has been frustrated.
The practical effect will be that the Federal Reserve’s balance sheet, far from shrinking as is currently projected, could actually expand, to as high as $10 trillion and possibly more.
But…they promised it was going down?!?
Is this a bell ringing at the top?
Former disgraced and corrupt ex-New York governor Eliot Spitzer (D) now building apartment in Brooklyn!
But…but…beach volleyball is included in your $6,500 per month rent!
+++++
Spitzer, Now Building Rentals in Brooklyn, Bets on Perfect Views
Bloomberg | Oct 02, 2017
Former New York Governor Eliot Spitzer stands inside his under-construction Brooklyn rental project and takes in the view. There’s the panorama of Manhattan’s skyline to the front, the Williamsburg Bridge to the right. And to the right of that is a competitor’s mega-development promising 2,800 more apartments.
Spitzer, now head of his family’s real estate company, is building his first apartments at a time when other developers are also filling Brooklyn with rentals. He’s delivering 857 units across two towers in New York’s hippest and most populous borough, where the apartment supply has been expanding for two years and rents have declined in nine of the past 12 months.
Along the same Williamsburg street as Spitzer’s development, an eventual 2,800 rentals are planned at the site of the defunct Domino Sugar factory. Farther north, Greenpoint Landing is expected to bring 5,500 new apartments.
The Williamsburg project, to begin leasing next spring, will have amenities such as a beach volleyball court, two swimming pools, a demonstration kitchen and communal piano — “the usual,” said Charles Morisi, an executive with Spitzer Enterprises who oversees the project.
One-bedroom rents are likely to start at $2,800, with two-bedrooms estimated at $4,500 to $6,500, said David Maundrell, who oversees marketing of new developments in Brooklyn and Queens for brokerage Citi Habitats.
$6,500
That has to be more than what 80% of Americans clear in a month after taxes are withheld.
How many New Yorkers who are in the market for an apartment can afford that?
I guess at least 2,800 of them….right next door to 5,500 more of them…and down the street…
HAHAHAHAHAHAHAHA!
Like Obama buying in dc
Lefties are natural born peakers
They don’t like capitalism n fckup often
Manassas Park, VA Housing Prices Crater 7% YOY
https://www.zillow.com/manassas-park-va/home-values/
Realtors are liars.
Well, if he’s willing to pay this today, what will the building be worth next year?
Heaven forbid you that you made a killing if you “sold it too soon”, that’s as bad as “giving it away”.
RE Las Vegas massacre.
An apartment investor with a $100 a hand gambling habit.
I wonder when some reporter will head off to the deed recording office(s) to check the (recent?) mortgages on those properties.
Apparently he wired $100k to the Phillipines the week before…he may have been on his way to being broke, but he wasn’t broke yet.
100K can go pretty far there too. Could be a boomer that went bust. Hope others dont get the same idea as all these bubbles burst and they find their pensions just aint there.
If Stephen Paddock was a deep in debt gambler who thought the casinos ripped him off - why didn’t he go after them?
He shot up a country music festival full of innocent people. But full of pro-Trump folks. He picked his target very carefully and with months of preparation.
There are lots of angles that need to be investigated.
The muslim angle (ISIS called him one of their soldiers). He did travel to the ME last year and his girlfriend is Indonesian (the largest population muslim country).
The hateful left angle. He has lots of links to the angry left. And as they keep saying “Trump is evil and equal to Hitler” without dispute from the leaders of the left (like obama and Hillary), eventually, someone is going to follow the lead.
And we just recently had a Republican congressman and his aides nearly assassinated by another older white left wing Hillary supporter male. Funny how the left buried that story.
He seemed to have made his wealth in real estate. Did he lose it too?
NBC reported that he was “known” to authorities with no details. His father was once on the FBI’s top 10 most wanted.
There will be mucho info coming in the next few weeks. Who knows where it where lead.
But I doubt he was someone who just “snapped.” Way too much planning and preparation to include wiring his girlfriend $100,000 days before he committed this crime.
they keep saying “Trump is evil and equal to Hitler”
Who is they? Do you have a link for that?
Here’s the narrative you’re looking for:
https://www.salon.com/2017/10/02/americas-white-man-problem-after-las-vegas-a-familiar-script-unfolds/
The angry left…
“I breathed a sigh of relief when it was revealed by Las Vegas police that it was a white man who rained down death and pain into a crowd of concertgoers. I doubt I was alone in such a sentiment. “
In about a minute I found 5 links. The Washington Post writer claims that comparing Trump to Hitler actually belittles Hitler. The final article from Newsweek claims that Trump is not Hitler but rather Mussolini.
But you already know that the “press” does this to Trump everyday.
Right?
Hitler:
http://www.newsweek.com/just-how-similar-donald-trump-adolf-hitler-501252
Hitler:
http://www.diversityinc.com/news/trump-hitler-comparisons-intensify/
Hitler:
http://www.newsweek.com/hitler-trump-germany-nazi-president-641392
Hitler vs Trump:
https://www.washingtonpost.com/posteverything/wp/2016/09/13/dont-compare-donald-trump-to-adolf-hitler-it-belittles-hitler/
Trump is Mussolini:
http://www.newsweek.com/hitler-trump-germany-nazi-president-641392
There were plenty of such references right here before the election.
“they keep saying “Trump is evil and equal to Hitler”
“Who is they? Do you have a link for that?”
http://www.washingtonexaminer.com/seven-times-the-media-compared-trump-to-hitler/article/2610443
Nobody quoted there called Trump equal to Hitler.
“Nobody quoted there called Trump equal to Hitler.”
Weak
5. MSNBC’s Rachel Maddow told Rolling Stone in July that studying Hitler helped her understand Trump: “Over the past year, I’ve been reading a lot about what it was like when Hitler first became chancellor,” she said. “I am gravitating toward moments in history for subliminal reference in terms of cultures that have unexpectedly veered into dark places, because I think that’s possibly where we are.”
Who is they? Do you have a link for that?
You’re kidding, right? I hear this all the freaking time.
No, I’m not kidding. Who do you hear saying that Trump is equal to Hitler?
Don’t be such a pissant.
Who do you hear saying that Trump is equal to Hitler?
For starters, some of my coworkers, and they don’t shut up about it either. And I’m not talking about red diaper baby types. These are private sector employees with six figure salaries. I also over hear people saying that in public places like the checkout line at the supermarket.
But if you want links, steadykat and Jeff have already provided several. And they’re from MSM outlets like Newsweek. I especially like the Washington Post article.
MightyMike: No, I’m not kidding. Who do you hear saying that Trump is equal to Hitler?
Here is a rich repository of references: https://www.google.com/search?q=trump+equivalent+to+hitler
Try the comments boards of almost any major website. Washpost, thehill dot com, NYT, you name it. And by the way, if you try to make even a logical argument against it, then you are a Russian bot-troll. It’s like the liberals can’t fathom that there are people voted for Trump. They are either deplorables or a few bits and bytes.
I usually wonder if its a left wing nut, a right wing nut, a religious nut, a foreign nationalist nut or just a nut.
His race, place of residence and guns imply right wing nut, but why would one of those shoot up a country music festival.
I considered Vietnam vet with untreated PTSD, since the TV documentary about the war was just on, but there is no indication he served.
So my guess is FB facing the end of a lifestyle and going out with a bang.
If he was a right winger, a gay pride parade would have made more sense as a target for him.
or maybe a group of retired teachers
There is no logical explanation for psychotic behavior.
Actually, there are many good explanations for psychotic behavior. If his father had antisocial personality disorder, he likely abused all his children. If other ASPs are a guide, it was likely severe abuse.
Abuse someone bad enough and young enough and you’ve produced someone with rage and possibly psychosis
His dad was a bank robber. He barely seemed to have a job history, but a lot of money. His brother Eric said that he helped make him wealthy so they could retire, same with their mom.
All from real estate, supposedly.
Wonder if the seed money for their real estate wealth came from the banks, in the form of an unauthorized withdraw.
Yeah, and even if the money was somehow legit, his dad’s mental health does raise some genetic questions.
his dad’s mental health does raise some genetic questions ??
That’s exactly what I was thinking.
Dad looked like Uncle Fester too. No surprise his son was a leftist - getting beat by life with the ugly stick does that for ya.
He was a degenerate gambler up to his eyes in debt.
Ethan in Northern VA: Wonder if the seed money for their real estate wealth came from the banks, in the form of an unauthorized withdraw.
Sounds like a bailout, except without all the political theater.
So far I’m not seeing evidence that he was right wing or left wing.
The muslim angle (ISIS called him one of their soldiers). He did travel to the ME last year and his girlfriend is Indonesian (the largest population muslim country).
It’s all over the news that the girlfriend is an Australian originally from the Philippines and that no one in law enforcement believes the ISIS claim. What dopey loser website did you get the Indonesian girlfriend lie from?
Who knows where she is from?
Like I said - lots of info will be coming out and lots of angles need to be investigated.
An as aside - how much voter fraud is out there…lots.
++++
Vegas Shooter’s Girlfriend Used Multiple ID’s, Multiple SS Numbers, and Married Two Men Simult.
The Conservative Treehouse | October 3, 2017
Much like the San Bernardino attack revealed a manipulative scheme for green-card marriages, so too is the Mandalay Bay Massacre revealing the use of multiple identities within the associations of the killer. Marilou Who?
(Via NewsWeek) Marilou Danley, the live-in girlfriend of Las Vegas gunman Stephen Paddock, and now a “person of interest” in the shooting investigation, is a Philippines native who has used two Social Security numbers during her two-plus decades in the United States, and was married to two men at the same time, public records show.
The person who may hold the key to solving the mystery of why the Vegas gunman killed 59 and wounded nearly 600 people led a convoluted life of her own, with two simultaneous husbands, a bankruptcy, two Social Security numbers, multiple addresses in several states and even different ages depending on which state records you review.
The details are part of a Newsweek investigation into Danley’s past, which takes on a new urgency now that the FBI is frantically working to bring her “immediately” back from overseas for more information about the shooting and the $100,000 Paddock wired to her family there days before the shooting.
In California, her name is registered as Marilou Natividad-Bustos and her birthday is listed as January 1962, making her 55 years old. Under a different Social Security number in Nevada, her name is Marilou Lou Danley and her birthday is listed as December 1954, making her 62.
At times, her identities merged: Marilou filed for bankruptcy in 2012, under the name Bustos, while she was still married to Danley and living with Paddock in Reno. Her lawyer during the bankruptcy has not yet responded to a request for comment. Marilou held multiple addresses, some simultaneously—in Arkansas, Tennessee, California, Florida and other states, and often moved through cities within those states. (more).
Ron Paul | Infowars.com - October 3, 2017 -
“Ya know the NSA and the CIA and the FBI they do a little spying on us, they know what we had for breakfast last week and they know where we spend our money and they know where our cell phone is but they don’t know a guy that has twenty-three rifles in a hotel over looking thousands of people.”
https://www.infowars.com/
For all us ‘olds’ this story about senior crap shacks in Boulder does not end well no matter when we live.
Just like those apartments in NYC, those senior housing developments seem targeted at the top 20% (or smaller) of people economically.
Everyone competing for the same shrinking audience, while ignoring the growing crowd.
“We’ll compete with the Japanese with three year old Buicks.”
The growing crowd can live their in 20 years, before or after the bankruptucy/workout/foreclosure.
That would be ‘where’ we live - not when. Sheesh this getting old cr*p sucks.
You want to make houses affordable???
There are two issues.
The price of the house and the taxes on the house.
Insane property taxes that make houses unaffordable are directly tied to public unions.
+++++++
Defunding the Public Sector Unions
Townhall.com | October 3, 2017 | Barney Brenner
Public sector unions. George Orwell would be proud of the term. Public sector really means government, and our government includes large levels of bureaucracy. So public sector unions are really alliances within bureaucracies, and they’re working against the interests of the general public with power that private unions don’t possess.
A chance is coming in the next year to start reining them in. In Janus vs. AFSCME, the U.S. Supreme Court will likely prohibit government employees from being forced to pay dues to unions whose politics they disagree with. These unions are almost entirely Leftist so they’re backing politicians a good part of their membership votes against.
As bad as that is, the fleecing of their members pales in comparison to their mugging of taxpayers through government employee pensions which are so lopsided that they’ve become a cause of municipal bankruptcies. To understand why, we just need to know of a crucial distinction between private and government unions.
In the private sector, the owners write the paychecks and pensions are limited to what the workers and the company put in and can afford. Since the monies paid in are a pre-determined amount or percentage, it’s known as a “defined contribution” plan. Not so on the government side, since whatever politicians promise in pensions (known as “defined benefit”) can be pulled from your pocket, despite the amount that the government worker contributed. And we taxpayers, the owners, don’t sign the checks, the politicians do. We’re just forced to pay the bill. It’s a deal between devils, the product of unethical legislators conspiring with unscrupulous union officials.
But it gets worse. The unions ask politicians for these unsustainable pensions, and the office-holders acquiesce, knowing that union members, often on taxpayer time, will work for their reelection. And before the consequences of these pensions hit, the politician will often be out on their own generous retirement plan. Meanwhile, the union’s dues are helping to finance campaigns and pay for ads for the ongoing and corrupt reelection bargain.
Since the union members and the politicians are both government employees, we have two factions of government colluding to defraud their true employer, the hard-working body of US citizens that funds the paychecks of both. And the union officials also get their salaries from the taxpayer, indirectly through the paychecks of union members.
This arrangement on a national level goes back only to 1962, when John F. Kennedy signed Executive Order 10988, allowing “collective bargaining” for federal employees. Politicians soon turned this to their advantage.
CA needs more H1b to fund the pension systems.
H1B engineers pay for fireman to retire at 55 what could go wrong?
I wonder what they pay firemen in China ?
Public sector really means government, and our government includes large levels of bureaucracy.
such useful information there
Get your rage-ravaged skull on the Trump Train.
You can’t handle the truth, can you, Mike?
Bannana
And if the politicians don’t agree with the union demands, the union gets to appeal it to a higher politician who will always agree - in Ontario Canada.
I liked your post about dealing with bubbles. Also suggest 12. Exercise
I tend to believe that artificially low property taxes (like California’s prop
tend to allow for artificially inflated house prices. Like the MID, low property taxes allow the inflation of the asset. If property taxes go up, the asset has to fall some amount to offset this.
High property taxes haven’t stopped the bubble in other states. And no MID hasn’t stopped it countries like the UK.
Ps unions are worse than issis Putin pol pot etc.
More criminal than MortgageMonkeys?
Elizabeth Borden
Nice :-).
Albany, OR Housing Prices Crater 11% YOY
http://www.movoto.com/albany-or/market-trends/
Bought a side of a duplex in 1984, lived there until 2005 with no cash out refi.
Sold in 2005.
Rented from 2006 - 2012
Bought a house in 2005.
I am starting to feel like it’s time to sell and move on.
http://www.generalrv.com/product/fifth-wheel
Bought a house in 2005.
Should have been Bought a house in 2012.
u should have bought a lot of stocks and homes and got free money.
I sold in 2005 also. No cash out refi. Been renting ever since, but getting real tired of it, to tell you the truth. Renting didn’t used to be so tough, but in an unstable financial environment, it straight-up bites the big one. Everything’s fine until “Owner says sell!”.
That fifth wheel/RV lifestyle model was recommended by a RE paralegal on one of the Florida relocation boards. They took down his posts, lol. He said it was the best way to avoid real property taxation. Find a lot in a decent location, live life and move on if things get hairy.
“Been renting ever since, but getting real tired of it, to tell you the truth. Renting didn’t used to be so tough”
That’s a fact.
Although my experience renting was somewhat limited and a long time ago
(1 year in Greenwich basement apartment that I could damn near return my beer rental on the train tracks outside the back door and 1 year in a pretty nice 2 bed 1 bath in Juno Beach Fl. in the early 80s)
it didn’t used to be so tough. I actually liked both of my LLs back then. Not the BS I put up with these clowns from 2006 - 2012.
I got lucky with my single-family rental from 2004-2011. Owner lived nearby, was a long-term owner of the property (and never intended to sell), appreciated a tenant who never called him for anything and maintained the property well. He apologetically raised my rent a couple of times, but when I left, I was probably 25% below market.
I think he still owns the home.
But I can certainly see what a nightmare it would be if you had a less stable/flighty landlord.
Other than the deferred maintenance, our LLs were pretty much OK until they decided to sell. Then things got weird.
There were also problems with the property that were not the fault of the LL, such as drainage issues created by the vacant, unmaintained land behind the HOA. Also there were issues with the HOA which I won’t get into. All the homeowners were affected, though, not just our LL.
Dear Blue Sky,
Where do you live when the water is frozen?
Your life seems prime. If I were single, I’d follow your example. No doubt.
I imagine that my materialistic wife would hate your lifestyle. Especially when she got older, unable to climb ladders, no closet space, that sort of stuff. [Do you have any plans for when you're too old for boating, other than drowning?] Fine way to go, imho.
I imagine you live in a 1-bedroom apt in the off-season. I couldn’t deal with the transition, myself. If so, how do you deal with being all cramped up during Winter? I used to be river rat, I don’t understand how you do it in the off-season.
Per Ben’s comment asking about how Mike lives, I feel compelled to say, I live in a crappy, long ago-needs-new-carpet, 3-BD/2-BA rental SFH in Iowa and the landlord has taken differed maintenance to the extreme. Last fall, the excuse for Not fixing the roof leak was, ‘we didn’t get around to it’, then it became, ‘we’re sending a guy out this Spring’,… all the last three years, the roof leaked, and I haven’t seen anybody. I guess I’m glad I haven’t seen a Sargent Shultz city inspector demanding entry to my domicile, then [true story] telling my landlord to fix the ceiling - and not the leaky roof - like the last time in another nearby city, psft. [Is Trump gonna do anything about that? My Realtywhore owned city adminitratprs....]. Anyway, That said, I don’t feel any better about the roof leak on my chair in the living room.
However; I’ve become accustomed to the 800 Dollar rent I’ve paid lo these past six or so years, which was a HUGE jump Up from the 450 Dollar shotgun shack I was renting when I was young and full of Lots of Fun. I look around and see people are paying twice the 800 Bucks I am paying, easily, and I want to stay put, in spite of the leaks, but then again, ask me again once the rainy season kicks-in and the mold situation gets even More noticeable. …But yeah, I’ve been looking for an out.
If I have to pay double my current rent, I don’t see how, buying beats renting. [Sorry, my good friend, Housing Analyst]. I am Very tempted to buy, wife kicking me in the butt and making me regretting Not buying in 2012.
I priced out floating RV’s [boats] they are not attractive -not at all - especially compared to land roving RVs, plus, the railroad lines run up and down both sides of the river, blowing their horns 15 or 19 times every twenty minutes or so as they make way [bastards] some engineers have more of a strong arm than others. I long to escape the torment of train engineers blowing their horns, usually, and predominantly, during sleeping hours. However; not enough to enter the gates of the local mobile home trailer park, Hell. And, I do mean, Hell.
I have chalked my situation up to being one of a screwed person. Educated, via the internet, superior to a University Cad, but screwed, none the less. …If I weren’t married, I’d seek greener pastures. perhaps I’ll wind up doing so, anyway?
So far, The Fed has thwarted my ambitions to create a family, or I guess, I’ve failed to thwart, The Fed. Damn it! I guess the University Cad has a one Up on me there, but it seems rather, i dunno, lop-sided or something? Idiocracy? Time will tell.
I blame no one, but myself. Perhaps, I should have gone head over heels in debt like everyone else and just embraced the, ‘Fat, Dumb and Happy’ matrix. A.k.a. The Blue Pill.
Also, do you have a bike, if so, where do you store it? On the stern?
Oh crap, why am I even asking, when Ben began this blog, I was a young man. Today, I am old. I can’t even imagine what it must be like for those of you who are ahead of me in years. …Such a crazy world we live in. WFD, i wish luck upon those younger than us all/
Anyways, you might see me around the Net by the nic of helot. That’s an interesting word, helot. Ever look up the def? and wonder how it might apply to you, too?
I’m taking a WAG that your “materialistic wife” doesn’t read this blog.
Clark,
This is cottage country. I rented a room in a B&B off season on the cheap. The wonderful lady who owned the place usually invited me to meals and she was a great cook. I did some handyman stuff in exchange and had the run of the house. By the time she retired and sold the house I had enough cash saved to buy a shack and that’s where I spend my winters.
You are never screwed until you have no dreams and you give up.
Last year I met a couple who were cruising full time. The lady made a comment to me about the importance of choosing a partner who fits the lifestyle. So, that’s what I was doing wrong as a younger man!
I feel your pain, clark. My LL was into deferred maintenance, big time. I also had to contend with a long term roof leak, although to be fair, they did attempt to deal with it. Patching didn’t work, even a whole new roof didn’t work. What worked was fixing the soffit, which one section was hanging down with a gap in the middle for two years.
“Also, do you have a bike, if so, where do you store it? On the stern?”
Yes I have a bike. It can go on the railing forward or on the flybridge.
On the stern I have a dingy. It is handy for landing on the beach or to find a store where there is no big dock. I call her the “Stern Mistress”.
Live like you are young until nature makes it absolutely impossible.
How poetic.
Baltimore rental rates fall almost 5 percent in September
Baltimore Business Journal-Oct 3, 2017
So says a new report from Zumper, a real estate research website, which measures rental rates from the 100 largest metropolitan areas in the country on a …
https://www.zumper.com/blog/rental-price-data
They have data on all 100 cities on this blog posting:
Summary:
1 Bedroom Year on Year
35 had rent declines
28 were positive, but less than or equal to 5%
19 were between 5 and 10%
18 had rents grow more than 10%
2 Bedroom Year on Year
29 had rent declines
34 were positive, but less than or equal to 5%
27 were between 5 and 10%
10 had rents grow more than 10%
Downtown Salt Lake City, UT Housing Prices Crater 5% YOY
https://www.zillow.com/downtown-salt-lake-city-ut/home-values/