October 9, 2017

A Race For The Bottom

A report from NBC Montana. “The city of Missoula has issued more than 1,100 building permits so far this year and residents hope it will even out rent prices. New Missoula residents Carly and Greg Hill moved to the Garden City for law school with the hope of finding affordable housing. The Hill family found many vacant places to rent but struggled to find a place with adequate space and an affordable base rent. Greg Hill said they eventually decided to buy a place instead. Now, they look at their new home as an investment. ‘Even though we are only going to be here a few years we can sell this place and kind of get our money back but rent will be cheaper,’ Greg Hill said.”

“As for others moving to Missoula in the near future, Greg and Carly Hill recommend looking at as many places as possible, because there are a lot of options.”

From The Tennessean. “On July 24, the Gallatin Municipal-Regional Planning Commission did not recommend approval of a resolution to approve an amendment to the plan, and on Aug. 15, the council requested additional discussion on the amendment for Hunter Pointe which includes Hunter Pointe Apartments. After a public hearing was held, the council voted to approve the amendment on first reading, and on Sept. 19, voted to approve the second reading, 6-1. Gallatin Mayor Paige Brown expressed concern about the ‘overall swell of apartments coming in here.’”

“Although growth is inevitable, Brown expressed concern about the possibility of an over-saturated market down the road. Overbuilding could eventually lead to lower rents and less maintenance on those properties, she explained. ‘Right now these are nice expensive apartments, but that could decline over time,’ she said.”

From Business Den in Colorado. “The standard one bedroom at Archer Tower Apartments in Capitol Hill rents for $1,440 a month, unless tenants plan on listing their unit on Airbnb. Then they get a discount, and get to run a little side-hustle with their landlord’s blessing. The 300-unit building has been telling prospective tenants on Craigslist to ‘reduce your rent with Airbnb!!!’ Commit to listing your one bedroom on Airbnb for 10 days a year, the ad says, and your monthly rent becomes $1,380. Commit to 60 days, and rent drops to $1,075, a 25 percent cut. A similar ad can be found for studios.”

“Most other Craigslist rental ads that mention Airbnb say it’s prohibited. The San Francisco-based online marketplace has had a testy relationship with landlords, who tend to be suspicious of the service, which brings people they don’t know into their units for short-term stays. Earlier this year, Denver-based Apartment Investment and Management Co., one of the country’s largest owners and operators of apartments, sued Airbnb, saying the company helped its tenants violate their leases.”

From Banker and Tradesman in Massachusetts. “Yes, Boston has seen a surge in luxury condo and apartment development over the past few years. But more luxury units are not the reason middle-class families are moving out of the city. Rather, the culprit is a long-term shortage of housing that built up over the ’70s, ’80s and ’90s, when few new apartment and condo developments were built in Boston. The new construction that has taken shape over the last two decades has helped satisfy some of that pent-up demand, and there’s some evidence that it is moderating or even bringing down rents in older units in other parts of the city.”

From the Real Estate Journal. “Rents have risen at differing rates from September to October across the country. In Lincoln, Nebraska, median rents dropped 4.7 percent from September to October, the fourth biggest drop in the country. In fifth place came Lexington, Kentucky, where median rents fell 4.3 percent, just ahead of sixth-place finisher St. Paul, Minnesota, where the median monthly rent of a one-bedroom apartment fell 3.6 percent. St. Louis also appeared on the list of biggest percentage rent drops. The median one-bedroom rent here fell 2.8 percent from September to October, the ninth biggest drop in the country.”

From Crain’s New York. “A group of developers has secured a $215 million loan to finance construction of a 27-story condo tower at 537 Greenwich St. A partnership between Strategic Capital, Forum Absolute and Cape Advisors received the debt from Bank of the Ozarks to help fund the 170-unit tower. Construction loans for high-end residential condo development have been more difficult to secure as concerns have lingered about an oversupply of units. Residential market data for the third quarter depict a buyer’s market in which sellers in Manhattan have had to discount asking prices by an average of 6%. One in three sellers cut their asking price to sell their apartment or townhouse.”

“Bank of the Ozarks has been one of the busiest construction lenders in the city in recent years, pouring hundreds of millions of dollars into development deals as other major lenders have pulled back. In July, however, Dan Thomas, head of the bank’s real estate lending group, suddenly resigned, plunging the company’s stock by almost 12% and stoking questions about whether there are problems in the bank’s portfolio of loans and if it might pull back on lending in the city.”

From The Real Deal on Florida. “Condo developers have been markedly quieter these days, holding off on any new launches as the supply of preconstruction condos slowly gets absorbed in South Florida. Gil Dezer of Dezer Development, for example, hasn’t made moves on his next luxury condo tower in Sunny Isles, which he previously planned to launch earlier this year. He completed Porsche Design Tower last year, where a number of buyers are now looking to flip their units.”

“Behind closed doors, developers and agents are negotiating pricing on a case-by-case basis, insiders tell TRD. And across the region, sellers are finally adjusting their prices, leading to more transactions. In some areas, like Brickell and the barrier islands, the industry is bracing for a flood of new construction to hit the market as projects get completed. Together, Bal Harbour, Surfside and Bay Harbor Islands are already facing more than three years of luxury condo inventory, and that excludes preconstruction units, according to a recent report from Condo Vultures Realty.”

“In South Florida, nearly 48,000 condos have been proposed, planned, delivered or are under construction since the start of this cycle.”

The Dallas Morning News in Texas. “A big chunk of North Texas’ building boom is apartments. For the last few years, the Dallas-Fort Worth area has led the nation in new apartments. More than 100,000 new units have opened their doors in the last four years. And average rents in the area have jumped by almost 30 percent since 2012. While there are still almost 48,000 rental units under construction in the D-FW area, a slowdown in rent growth and soaring building costs are likely to tamp down the hot apartment building market in the coming year.”

But don’t expect a crash in the rental market. ‘We’ve got the jobs that keep churning in this town, and we continue to be underserved in apartments,’ said Bradley Miller, president of builder Encore Multi-Family LLC. ‘Yes, there is a boatload of high-end apartment product coming through the development pipeline. It will be interesting to see what happens with that.’”

“With only 5 percent of the D-FW apartment market vacant, it’s hard to get too worked up about a slowdown. ‘Vacancy rates are still low,’ said Jay Denton with RealPage. ‘Apartment demand is pulling back a little bit because job growth is not quite what it was.’”

The Bisnow on Texas. “Checking off apartment properties as profitable does have its challenges in San Antonio, said Angelique Goodnough, an executive vice president at Roscoe Properties. The challenge for Roscoe, with 13 apartment complexes in the San Antonio area, is twofold: strong candidates for professional management jobs and residents that can easily afford the housing shadow market.”

“Goodnough said 97 multifamily properties have been proposed over the next two years in San Antonio. Several thousand apartment units will be coming online in the next 24 to 36 months. But they will face stiff competition for occupants from the single-family market. The median price of a house in San Antonio is $170K. The median price in Austin is $376K. San Antonio families want larger units in the suburbs, Goodnough said. ‘If you can get a three-bedroom house for $1,500 a month, that puts a cap on what you can get for a three-bedroom that’s well amenitized,’ Goodnough said.”

“Traditional strategies to draw prospects, such as concessions, do not work in a market where the profit margin is as thin as San Antonio, Goodnough said. ‘When you have properties performing with concessions between 8 and 16%, that’s just a race for the bottom,’ she said.”

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Comment by Ben Jones
2017-10-09 09:04:33

‘As Houston’s overbuilt apartment market begins its Harvey-related recovery, developers are promoting the newest batch of luxury apartments.’

‘In January, MetroNational will debut high-end units under construction atop the new Hotel ZaZa in Memorial City. The 133 apartments, independently called The McCarthy, will occupy seven floors of the 17-story building just south of Interstate 10 at Bunker Hill. Rents start at $1,315 for studio units, $1,530 for one-bedrooms and $2,796 for two-bedrooms. The developer is offering of up to two weeks free on certain floor plans.’

‘In the Tanglewood area, Transwestern Development Co. has opened the leasing center for the eight-story Hayworth at 1414 Wood Hollow Drive. The project includes a 2-acre park, concierge services and a resort-inspired swimming pool. The building’s 246 units will range from 934-square-foot one-bedrooms to 2,324-square-foot three-bedrooms. Ten townhouse units spanning nearly 2,000 square feet will also be available. Rents start at $2,495.’

‘They owner is offering a two-month rental concession on a 15-month lease and a one-month concession on a 12- to 14-month lease.’

Comment by Ben Jones
2017-10-09 09:07:07

‘they eventually decided to buy a place instead. Now, they look at their new home as an investment. ‘Even though we are only going to be here a few years we can sell this place and kind of get our money back but rent will be cheaper,’ Greg Hill said.’

This is an example of speculative motivation. Greg doesn’t expect to get his money back, he expects to rake in many thousands. Tax free.

Comment by 2banana
2017-10-09 11:16:17

Historians will note

Much cheaper to rent but the draw of easy money in the greater fool game is very strong.

Comment by Senior Housing Analyst
2017-10-09 09:08:44

Otis, OR Housing Prices Crater 11% YOY


Comment by Professor 🐻
2017-10-09 09:57:17

It’s amazing how many places have cratering prices. And that the MSM perpetually misses the news!

Comment by BlackSwanDive
2017-10-09 19:00:58

It appears the top in many west coast markets was 5 or 6 months ago.

Comment by Apartment 401
2017-10-09 09:48:26

Realtors are liars.

Comment by Professor 🐻
2017-10-09 20:28:47

Look long and hard before you accept a work contract from a used home seller.

Comment by Professor 🐻
2017-10-09 09:51:37

‘reduce your rent with Airbnb!!!’

Are all the homes on the planet destined to become part-time hotels?

Comment by Professor 🐻
2017-10-09 09:55:29

The AirBnB we rented in Kona last October may as well have been advertised as The Roach Motel. I’ve never seen so many roaches in a place where I stayed since visiting my sisters’ Austin house in the early 1990s.

Comment by BlackSwanDive
2017-10-09 19:06:08

Gross. That’s why I prefer hotels - at least you know the place will be clean, and if not you can get another room.

Who does the housekeeping for all these Airbnb’s anyway?

Comment by Professor 🐻
2017-10-09 20:32:58

The impression I took was that the owner did a bit of light cleaning when the mood hit her, which doesn’t cut it when Hawaiian cockroaches are on the move.

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Comment by oxide
2017-10-10 07:53:17

To answer your question: yes. All the homes on the planet will become part-time hotels. And why not? It’s all part of the gig/sharing economy.

The only thing people will own, so to speak, is a smartphone and bit-and-byte-based “money” created and stored on some cloudy server sitting in a bathroom in Denver. You summon whatever thing you need from your smartphone app and pay for it with bits: start your day finding a one-day work gig on an app, summon a self-driving car with a pp, use the Hello Fresh app to order a Hello Fresh meal kit, which is delivered at your choice of shared kitchen (also ordered by app),finally, you book AirBnB for the night. Next day you start over again.

Hmmm… sounds like the premise of a negative utopian movie.

Comment by Carl Morris
2017-10-10 09:58:51

some cloudy server sitting in a bathroom in Denver

Nice. :-).

What difference at this point does it make?

Comment by Carl Morris
2017-10-09 10:23:12

Managed to make a real estate agent a little testy over the weekend without even trying. I was in Folsom for work related reasons and also checking out the area in case I move there. Went to a couple of open houses on Saturday. Had a little time to kill before the other open house opened and nobody else was there so I let the agent chat me up. Of course she wanted to know all about what I was looking for and how she could help.

When I told her I was taking classes and would soon be licensed myself, she seemed OK with that. But when she figured out I was in tech and was only doing it to help friends from China buy she couldn’t keep it in. Basically she said that she does it full time and it’s really hard to do well and it frustrates her that just anyone thinks they can come in and do it part time. I was thinking maybe the market has already turned for her…

Comment by Ethan in Northern VA
2017-10-09 12:11:35

Were you just trolling her or are you really trying to move crapshacks to Wealthy Chinese?

Comment by BlueSkye
2017-10-09 12:48:03

Carl has been commenting here a long time Ethan and he’s not trolling.

Comment by Ethan in NoVA
2017-10-09 19:34:29

Yes, I know. But sometimes it’s fun to mess with Realtors. My comment said, trolling her :-)

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Comment by Carl Morris
2017-10-10 10:00:01

Oh OK :-). No, I wasn’t trying to get a rise out of her…I was just answering her question. But now that you put it that way…

Comment by Carl Morris
2017-10-09 13:30:24

Were you just trolling her or are you really trying to move crapshacks to Wealthy Chinese?

I am going to get licensed to help my wife’s friends. Whether it actually results in any sales or not I have no idea. But they all talk big about buying if they just knew somebody they could trust. And I’ll tell them what I honestly think when it comes to that…but there are many possible reasons they might buy anyway.

Comment by Sean
2017-10-09 19:15:42

Basically she said that she does it full time and it’s really hard to do well and it frustrates her that just anyone thinks they can come in and do it part time

I can see how hard it is to attract clients and separate them from the other noise in real estate, but to put up contracts and sit in open houses all weekend? Seriously, it’s not hard at all.

People want house.
House for sale.
People offer money for house.
People talk.
Deal done or deal not done.

Pretty basic. You aren’t curing cancer here.

Comment by Carl Morris
2017-10-10 10:04:40

Pretty basic. You aren’t curing cancer here.

She brought up the legalities of things like mold inspections and such and getting sued if you haven’t CYA. It seems there is some liability and you do have to be careful. But in my limited house selling experience so far in my life I found there were some really good reputable inspectors out there who will get to the bottom of everything. The only issue is that they don’t get enough work because they kill too many deals. But that’s the guy I want for sure as a buyer’s agent.

Comment by ibbots
2017-10-10 06:28:20

The issue is that when somone only does 2-3 deals a year, the other agent on those deals has to hold their hand, do additional work, etc. The 2-3 deal a year agent is usually a PITA timekiller that seasoned agents try to avoid.

Comment by Carl Morris
2017-10-10 10:01:49

That makes sense. But that’s why Keller Williams (the people I’m taking the classes from) want 50% of your first 3 deals if you work for them. Seems like plenty to justify the hand holding required.

Comment by jeff
2017-10-09 10:23:26

Happy Columbus day!

New way of teaching Columbus: Putting him on trial for murder

Amy Graff Updated 10:54 am, Monday, October 9, 2017

Columbus statues vandalized around state

By Robert Koch Updated 12:35 pm, Monday, October 9, 2017

NORWALK — Statues of Christopher Columbus were vandalized in Norwalk, Bridgeport, Middletown and New Haven amid an ongoing national debate about Columbus’ impact on indigenous peoples in the Americas.

On the eve of the holiday honoring the Italian explorer, statues in Bridgeport, Middletown and New Haven were all doused with red paint, while Norwalk’s statue had “FAKE NEWS” emblazoned on its base.

In Bridgeport, where a larger-than-life Columbus stands tall in the Seaside Park looking south toward the sea, the red paint splashed across the head of the explorer was accompanied by “Kill the Colonizer” painted in white at the base.


Comment by aNYCdj
2017-10-09 10:54:17

My hometown South Norwalk CT hmmm didn’t think we had such stupid morons who would deface statutes.

But then again SoNo was billed as an artsy fartsy type cool place to live,

Comment by Apartment 401
2017-10-09 11:14:15

AntiFa needs to get a job and move out of mom’s basement.

Comment by 2banana
2017-10-09 11:19:34

Aztec and Mayan large scale human sacrifice, child sacrifice and slavery is never talked about.

Comment by Mr. Banker
2017-10-09 11:49:13

Don’t forget cannibalism.

Comment by Mr. Banker
2017-10-09 11:55:06

You pukes might want to wiki-up “cannibalism in pre-columbian America”

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Comment by BlueSkye
2017-10-09 12:49:39

The Caribbean was named after them.

Comment by tresho
2017-10-09 14:39:40

Aztec and Mayan large scale human sacrifice, child sacrifice and slavery is never talked about.
Weren’t they the ones who invented Mexican food - made out of real Mexicans?

Comment by Karen
2017-10-09 16:31:52

The official narrative is now that the world was a perfect, peaceful Garden of Eden until Europeans set sail.

Comment by rms
2017-10-09 17:05:45

Genghis Khan would like to have word with you.

Comment by Young Deezy
2017-10-10 07:43:11

Ghengis Khan did nothing wrong.

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Comment by 2banana
2017-10-09 11:14:18

This never happens on HGTV…


Neighbors revolt against tiny houses and say they will destroy property values

Steve Harrison - Charlotte Observer -OCTOBER 09, 2017

“We have been hanging out there for 60 years in Coulwood,” said Robert Wilson, who lives a half-mile from Young’s planned tiny house neighborhood off Cathey Road near Paw Creek Elementary. “All of a sudden this little building started coming up and no one knew what it was. Then it started looking like a house.”

Young’s Keyo Park West would have 56 tiny houses if built out, with the smallest homes – 500 square feet – selling for $89,000. The median home price in Charlotte is about $190,000.

The nearby neighborhood was built in the 1950s. Though only 8 miles from uptown, it’s still a mostly rural area. Homes are appraised at between $175,000 and $250,000.

But Young said neighbors don’t understand his project. While TV shows often celebrate tiny homes on wheels, the Keyo Park tiny homes are built on concrete foundations. He said they are no different than a single-family home…

Young, who is African-American, believes some of the opposition is due to race. The residents near his tiny house are mostly white, and Young said he thinks people are afraid the tiny homes will be bought by black residents.

“We have the most coolest, most eclectic group of people on earth,” Young said about people who have inquired about the homes. “We have 22-year-olds to 72-year-olds. People are moving from uptown, Ballantyne and Pineville. A lot of people think it’s a bunch of young people. But they are people who say, ‘I don’t need all of this.’ ”

There are no income requirements for Keyo Park West, so it’s possible a $100,000 affordable tiny home could be bought by someone earning $80,000 who just wants a simple life.

“People are afraid their property values will drop,” he said. “But a 400- to 600-square-foot home will never be appraised with people across the street. Because of the size, those tiny homes will never be in the same appraisal.”

Comment by Ol'Bubba
2017-10-09 11:54:05

$4,000 non refundable Design/Lot Reservation fee, crappy part of town, …I’ll pass.


Comment by OneAgainstMany
2017-10-09 12:28:35

This is cool. I wish there was something like this where I lived. I would definitely do it.

Comment by BlueSkye
2017-10-09 16:07:51

No you wouldn’t, or at least you shouldn’t. You could have this kind of space first class for a fraction of the cost and no property tax hassle for a small fraction of the cost. RV or Boat.

Comment by scdave
2017-10-09 16:25:07

+1 Skye

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Comment by scdave
2017-10-09 16:27:52

I may add that I do understand the interest. If you can get financing, this could be a no-brainer for many people.

Comment by BlueSkye
2017-10-09 17:25:24

I appreciate it that you get the irony, a generation that thinks less might be cool, but sees nothing wrong with paying large for a stick built garden shed.

Comment by scdave
2017-10-09 17:30:35

but sees nothing wrong with paying large for a stick built garden shed ??

You are showing your ignorance dude. Add in all the infrastructure and land. The Calculate the payment on a 80,000. Loan. Your as bad as HA. Maybe worse.

Comment by BlueSkye
2017-10-09 18:07:05

Dude you write as though illiterate.

I know you want your debt shack to be worth a fortune. Land and infrastructure? I don’t need to calculate $80K debt payments for such stupidity. I have a shack. The land and infrastructure are assessed at $10K. It is possible that the alternate reality that is California is what makes you the poorest state in the country.

Oh, worse than HA. Oh my. I appreciate his grounding in reality, but am sure I don’t deserve this compliment.

Comment by OneAgainstMany
2017-10-10 07:58:24

I wouldn’t want to live in an RV or boat. RVs usually require hookups. The local RV park hookup costs where we live is about the same as rent here. While we are all waiting for the housing market to correct, one has to live somewhere. So this is a reasonable solution to me. Tiny houses without land don’t work very well (see last week’s NYT article on “Where To Park Your Tiny House”). Microhousing might work if it were built in zoned areas.

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Comment by Mafia Blocks
2017-10-10 08:07:46

And dem hookups cost at
least $500k… At least! All that inferstruksure is priceless!

Comment by OneAgainstMany
2017-10-10 15:26:31

We pay $400 month rent (yes, it’s a deal and is way below market rate). Add about $100 for electricity. Hook-ups at the RV park are about $400-$500. Of course, we do live close to Zion’s National Park, so there is a huge RV tourist pull which undoubtedly affects price. But hook-up fees aren’t cheap in many places.

Comment by Mafia Blocks
2017-10-10 15:45:00

Housing my friend.

Westminster, CO Housing Prices Crater 6% YOY


Comment by Ol'Bubba
2017-10-09 12:57:07

“We have the most coolest, most eclectic group of people on earth.”

Uh, did it ever occur to you that your neighbors, who “have been hanging out there for 60 years in Coulwood” don’t want the hipsters (i.e., the most coolest, most eclectic group of people on earth) as new neighbors?

Comment by aNYCdj
2017-10-09 13:47:08

I think it would be doable…1 BR with built-in shelves (instead of Metro Shelving) large closets a eat in kitchen for a full size 4/6 person kitchen table , drawers under the queen/king bed. so maybe 1 dresser instead of 3 or4 flat screen on wall, we are digital today and that requires a lot less space

oh higher ceilings 8′6 or 9′ to make it feel a lot bigger

Comment by Anonymous
2017-10-09 16:36:18

Downsized homes to fit our downsized aspirations and downsized reality (think flat wages).

Comment by Mafia Blocks
2017-10-09 16:56:09

Better yet, downsized prices. Way down.

Coral Gables, FL Housing Prices CRATER 10% YOY


Comment by oxide
2017-10-10 08:05:05

The neighbors are right to be afraid. The neighbors are not discriminating on the basis of race. They are discriminating on the basis of PRICE.

Sure, maybe the tiny house community will have some cool hipsters who could afford $175K but are choosing to live below their means. But most of those houses will be populated by by low-income residents where $80K is the top they can afford. And over time, the hipsters will eventually sell those houses to low-incomers. And yes, it will affect the neighbors house values, much as a trailer park or auto repair shop would.

Comment by Senior Housing Analyst
2017-10-09 12:55:06

Emeryville, CA Housing Prices Crater 19%YOY


Comment by Ben Jones
2017-10-09 13:24:49

‘Checking off apartment properties as profitable does have its challenges in San Antonio, said Angelique Goodnough…Traditional strategies to draw prospects, such as concessions, do not work in a market where the profit margin is as thin as San Antonio, Goodnough said. ‘When you have properties performing with concessions between 8 and 16%, that’s just a race for the bottom’

I’ve been saying a bunch of these apartments are losing money. And San Antonio land isn’t near as expensive as many others.

Comment by Ben Jones
2017-10-09 13:28:14

‘there’s some evidence that it is moderating or even bringing down rents in older units in other parts of the city’

Rents have been falling in the Boston area for about two years.

May 4, 2017

The Dorchester Reporter in Massachusetts. “City housing officials say new data are revealing encouraging trends in the rental market for existing housing stock in Boston neighborhoods. Statistics reviewed by the Reporter show a slight reduction in the cost of rental units housed in older properties as residents who can afford to are moving into new, higher-end units. Across Boston, existing property rental costs dropped by 4 percent during that period, with the median older stock rental price in Dorchester dropping by 5 percent.”

“‘You don’t want any large swings,’ said Sheila Dillon, the city’s housing chief. ‘Because it’s damning. It’s damning to the homeowner who’s just bought… When we see a four- or a five- or a six- or a seven-percent decrease, that’s okay. You just don’t want a repeat of 2009 where you’re seeing big volatility in the market.’”

“Rents in studio and one-bedroom apartments from the older stock dropped significantly. Dorchester studio rents fell 13 percent between 2015 and 2016, averaging $1,400 compared to the citywide six- percent decrease to $1,600. An overall 17-percent rent decline in Dorchester one-bedrooms during that time was driven mostly by rents dropping by 21 percent in the Uphams Corner/Savin Hill area. In 2015, the median rent in the area was $1,650; it fell to $1,300 in 2016.”


Comment by tresho
2017-10-09 14:43:44

Kunstler’s view:

It’s easy to see that the skyscraper boom in Manhattan is going to end in a fantastic real estate bloodbath. It will accompany the general crash of the debt-fueled financialized economy, like the clanking, groaning, musical score of a horror movie. Unlike previous real estate debacles, these scores of skinny condo towers will not recover, even if they are sold in bankruptcy for dimes on the dollar. They may never even become slums. They will simply be uninhabitable cells in decrepitating buildings that can’t be maintained, because the capital won’t be there to enable it and the financing model based on the deconstruction of real estate rights — i.e. condo-ization — will be dead.

The skyscraper bust will also mark the end of the hypertrophy of New York and, eventually, of all mega-cities like it. They’ve exceeded a scale that will permit them to be maintained and repaired, and when financialization founders on its false foundations, there will be nothing left to support that way of life.

Comment by Ben Jones
2017-10-09 15:47:51

‘the skyscraper boom in Manhattan is going to end in a fantastic real estate bloodbath’

Not just Manhattan. Miami, LA,London, multiple cities in Australia.

‘these scores of skinny condo towers will not recover, even if they are sold in bankruptcy for dimes on the dollar’

This is something I’ve wondered out loud here for a while. These safe deposit boxes in the sky aren’t made for regular living. The units are too large, HOA’s too expensive. Sure after bankruptcy, you could refit them, but at what cost?

Comment by Carl Morris
2017-10-09 16:04:27

I thought Kunstler’s point was interesting. Even if they are functional buildings, what happens if the revenue from operating them falls below the expenses of maintaining their functionality? It seems that you would quickly end up with something only useable by squatters that also happened to be mountain climbers.

Comment by Mafia Blocks
2017-10-09 16:16:37

They get liquidated…… all with the tens of millions of other excess empty and defaulted housing units. It’s the only path forward.

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Comment by Carl Morris
2017-10-09 16:22:15

But in this case I mean what if nobody wants to maintain them even at zero purchase price? Will they tear them down? At least in the case of most normal houses, liquidate means finally just selling them for what the market will bear and at least somebody actually wants them.

Comment by scdave
2017-10-09 16:40:00

nobody wants to maintain them even at zero purchase price ??

Well first off, the HOA maintains them. A operating statement and budget reviews every three years maintain the finaancial integrity of the reserves for replacement and maintenance. Owners are obligated to pay these dues.

So, if you are suggesting no one would buy a unit for “zero purchase price” and only be obligated for the HOA dues I would submit to offer to buy the whole tower under those terms.

Comment by MacBeth
2017-10-09 17:08:36

Carl, I agree and it’s something I’ve brought up before a few times.

Since I have no skin in the game, I don’t care one whiff what happens to the “investors” who built all this unneeded property.

My concern is what happens to the taxpayer when all this empty space needs to maintained or torn down.

Who gets to pay for it since it won’t be generating its own capital? How much of it will become socialized housing (by that I mean NON Section 8)? I mean the real deal - millions of squatters living on the taxpayer dime.

Talk about whistling past the graveyard…

Comment by BlueSkye
2017-10-09 17:20:25

Who gets to pay for it…

The cryin shame is that we’ve all already paid dearly for it, for the reckless lending to build useless crap that has made the cost of living skyrocket for the vast majority.

Comment by palmetto
2017-10-09 18:20:44

Speaking of New Yawk, NYC Foreclosures Surge 79%; Most Since 2009


Comment by MacBeth
2017-10-09 20:06:04

“The cryin shame is that we’ve all already paid dearly for it, for the reckless lending to build useless crap that has made the cost of living skyrocket for the vast majority.”

True, but we may someday soon pay a great deal more.

Who says Miami proper won’t become a barrio? Or the next Havana or Caracas?

Who is going to pay for all the maintenance of deserted residential / commercial properties? For unused roads, sewers and other unused public facilities? Municipalities? Cities? States? With what money?

Who is going to stop the criminal gangs and drug runners that will inevitably arise and carve up territory? With what money?

Comment by snake charmer
2017-10-10 06:53:21

Downtown Johannesburg, South Africa, which Kunstler has visited, has buildings like that, although they aren’t 50 stories tall. The local press is featuring articles on how the area is being reclaimed and slowly gentrified to augment the allegedly scarce middle-class housing stock.

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Comment by da bear
2017-10-09 20:55:30

How do I invest in Controlled Demolition, Inc.?

da bear

Comment by BlueSkye
2017-10-10 09:02:38

They might have “Deconstructor” in their name.

Comment by ibbots
2017-10-10 06:31:01

Kunstler….according to that dude we are all supposed to be riding bikes, growing our own food in a car less society by now.

Comment by Ben Jones
2017-10-10 06:49:15

I don’t know who he is. Apparently he’s following what’s happening in NYC.

Comment by snake charmer
2017-10-10 07:01:53

He never forecast bicycles, as to his thinking, the lack of maintenance on the roads will preclude bike travel. We’ll walk, ride horses, or travel on navigable waterways.

He’s been early on his predictions, as many of us have. And even the most foresighted people are often wrong. But in my view we eventually are going to live in the world he imagines, rather than the world envisioned by someone like Elon Musk or Ray Kurzweil.

Comment by Ben Jones
2017-10-10 07:06:21

Note that in the article I posted the condo tower got financing, even though 60% of what’s been completed is vacant.

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Comment by Mafia Blocks
2017-10-10 07:29:20

He’s s peak oil lie adherent. There’s no greater line of BS than that other than houses are an “investment”.

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Comment by ibbots
2017-10-10 08:12:13

‘the world he imagines’ that’s the thing, his writing resembles pure fiction. His positions on Y2K / Peak Oil and a handful of other issues are interesting to read but very little of what he has forecast has ever come to pass. He’s a sensationalist and it serves him pretty well.

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Comment by Apartment 401
Comment by Ben Jones
2017-10-09 16:20:04

‘The Trump supporter praised Trump for “showing the American people that they do not have to be ruled by … the ‘effete snobs’ and the ‘ideological eunuchs and nattering nabobs of negativism’ who seem to have been in charge of America’s identity and direction for many years,” adding that “Trump’s calling is to encourage ‘we the people’ to rise up and show the ruling class who really rules.”

And da meddel fanger, don’t forget that.

November 8, 2016

Da Meddel Fanger!


Comment by palmetto
2017-10-10 08:11:19

Change di come!

I love that. Change di come, all right. Trump’s got everyone with their head between their legs and their bloomers in a twist, wondering WTF is going on. That alone was worth the vote.


Comment by snake charmer
2017-10-10 07:22:52

Maybe Ms. Reid’s next piece can examine the emotional toll of economic insecurity in a neoliberal economy that turns housing into a bubble-ridden, speculative global commodity.

I’m sure people living in countries that we regularly drone-bomb suffer an emotional toll too.

Comment by Apartment 401
Comment by Carl Morris
2017-10-09 16:23:16

Yeah, you can smell the smoke from San Jose today.

Comment by BlueSkye
2017-10-09 16:23:57

Pot fields may burn. Oh, the humanity.

Comment by scdave
2017-10-09 16:51:30

Pot fields may burn. Oh, the humanity ?

1500 homes burned to the ground and counting. Go ahead. Have your little sick laugh.

Comment by scdave
2017-10-09 16:58:44

And 10 dead.

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Comment by BlueSkye
2017-10-09 17:17:18

You are a uniquely angry little person.

That was the headline on the news aggregator and I thought it more than a bit ridiculous. Sort of like: “Death and even pot destruction may result”. Go ahead and hate.

Comment by BlueSkye
2017-10-09 17:26:39

Oh well, I should have used the sarcasm tag…

Comment by scdave
2017-10-09 17:35:32

Duh. Or more importantly, have some friggen impathy toad.

Comment by scdave
2017-10-09 17:37:41


Comment by BlueSkye
2017-10-09 17:54:20

“impathy toad”

I haven’t run across any of them lately. You have a lot of them in California?

Comment by OneAgainstMany
2017-10-10 08:16:56

Doesn’t seem to be in good taste to make light of a tragedy, whether it burning homes in CA or victims from a mass shooting in Vegas.

Comment by Rental Watch
2017-10-10 16:04:35

So far (and I haven’t looked very hard):

One of my oldest friend’s sister lost her house (she and her family are OK).

A guy I got to know over the prior year lost his home (he and his family are OK).

Hard to imagine how difficult it would be to recover from having a home burn to the ground…thankfully the two folks that I knew very likely were fully-insured, and if not, have the wealth necessary to rebuild.

Comment by Mafia Blocks
2017-10-09 17:08:27

And the used house and mortgage pimps rub their grubby hands with glee.

Comment by scdave
2017-10-09 17:39:21

Sick F-/:

Comment by MacBeth
2017-10-09 20:09:34

It IS sick.

It’s also the truth.

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Comment by Mr. Banker
2017-10-10 03:30:55

Wrong: Inventory depletion. You can’t sell what isn’t there.

Comment by palmetto
2017-10-09 18:24:50

It’s going to be a weird time for the insurance industry, between the hurricanes and the wildfires.

Comment by Senior Housing Analyst
2017-10-09 18:26:00

Carrollton, TX Housing Prices Crater 10% YOY


Comment by azdude
2017-10-09 18:40:19

if my my equity goes up by more than 10 grand from now till the first I’m think I will retire.

Comment by Ben Jones
2017-10-10 07:50:48

Blacksmith Square Partners files for bankruptcy in Saratoga County
Albany Business Review-Oct 3, 2017
Blacksmith Square had received municipal approval for 170 apartments and … “We filed on the eve of the foreclosure sale in order to avoid a situation where the …

Comment by Ben Jones
2017-10-10 08:31:53

Rental rush: pension funds flock to apartment buildings
The Globe and Mail-18 hours ago
Yet, despite that proximity to chaos, demand in the buildings was virtually unchanged, even as companies cut office space and consumers curtailed trips to malls …

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