Over-Built, Over-Bought And A Ton Coming Online
A report from Bisnow on Georgia. “A Texas developer is debuting its mixed-use endeavors right next door to the new Mercedes-Benz North American headquarters, a move that could be just the start of a host of new projects in Atlanta for the firm. Dallas-based StreetLights Residential has broken ground on Aria Village, a mixed-use community crowned by a five-story, 355-unit apartment project called The Alastair. StreetLights is pursuing new projects when more than 10,000 new apartment units are already underway in Atlanta. This has led to a flattening of rent growth in the metro area, according to a recent report by Adobo. ‘Some typical hot rental markets across the nation are showing signs of cooling off … with the usually popular markets of Atlanta, San Jose and Nashville all showing decreases in price,’ Abodo Senior Communications Manager Sam Radbill wrote. ‘In Atlanta specifically, prices have declined .09% from October to November, and many experts think that this trend will continue. Many cities have over-built and over-bought and Atlanta, with a ton of new developments coming online, may be one of them.’”
“The issue is something StreetLights Residential, which has numerous developments in Texas as well as projects in California and Phoenix, is keeping an eye on, said StreetLights Residential Senior Vice President of Development Fred Kay. ‘That’s obviously the magic question, is the market overbuilt? We don’t feel like it is,’ he said. ‘Time will tell here, but we’re pretty strong on the market even still.’”
From the Arizona Republic. “Want to invest in a metro Phoenix apartment-building boom? It could cost you as little as $1,000, about as much as a monthly rent payment. Neighborhood Ventures, Arizona’s first crowdfunding real-estate company, recently formed to invest in Phoenix-area apartments. A veteran Valley apartment broker, a multifamily-research expert and a former Wall Street analyst teamed up to create the company.”
“Thomas Brophy, a Neighborhood Ventures partner, is director of research for ABI. When he described the plan to launch a crowdfunding program to buy metro Phoenix apartments, my first question was why now, with so many new rental complexes under construction. He has been saying for the past several months that apartment developers aren’t overbuilding in the Valley — not even in central Phoenix, where it seems as if a new complex is underway or has recently opened at every major intersection.”
“On average, Phoenix-area rental complexes are leasing 24 apartments a month, up from 20 a month last year. And that rate of leasing increased even as 2,600 new apartments opened to renters during the summer. 17,350 apartments are under construction now across the Valley. But the number of new apartment units planned has plummeted by more than half from last year, to 11,700. That means construction on significantly fewer apartment complexes in the near future. That’s a good sign pointing toward a slowdown in building to prevent a boom and bust.”
From the Colorado Springs Gazette. “In the first decline in nearly three years, the cost to rent an apartment in Colorado Springs fell by almost $10 a month during the third quarter, a new report shows. That drop, however, doesn’t necessarily signal tumbling rents or a slowdown in demand for apartments. But it is possible rent increases will cool as more new units are built and competition for renters heats up, said Laura Nelson, executive director of the Apartment Association of Southern Colorado.”
“‘Those that can afford to are going to move into the newest product,’ she said. ‘And that’s going to create maybe more competition to that next layer that’s going to have to do something to attract that renter to fill up their units, which are then going to pull from the next layer.’”
“A flurry of new projects - including some downtown and others on the north and northeast sides of Colorado Springs - will add about 1,000 units to the market over roughly the next six months, Nelson said. Those would be on top of nearly 1,500 apartments added so far this year. Those units should help stabilize rents, Nelson said. But by how much? That won’t be known until the apartments open and renters move in, she said. ‘I doubt that rents are going to drop,’ Nelson said.”
From City Limits on New York. “Nearly 100 apartments that were up for grabs at Pacific Park through the city’s affordable housing lottery a year ago are now being listed on StreetEasy, because not enough of the lottery winners would take them. When asked what caused the vacancies, Ismene Speliotis — executive director of Mutual Housing Association of New York (MHANY), which has run the housing lottery at 535 Carlton Ave. and two other Pacific Park buildings — said all of the empty units are reserved for a specific group of people: those earning the most money.”
“‘I think we should be looking at that income band and understand it, because we don’t want units to go vacant during a housing crisis,’ she said.”
From Indybay.org on California. “Funny how homelessness and the displacement of low income families by inordinate rent increases get turned against each other as issues. They are shunted into separate political domains, though building affordable housing would resolve both. Two years ago, the city of Berkeley admitted that the only real solution for the problem (aka travesty) of low income tenant displacement was building affordable housing.”
“(’Affordability,’ on HUDs standard, means that the maximum rent chargeable is 30% of the tenant’s income). Building ‘market rate’ housing has put the city on a treadmill, huffing and puffing to get housing built, and getting nowhere in terms of resolving the affordable housing crisis. In fact, Berkeley has glutted itself with market rate housing, having fulfilled its requirement under Plan Bay Area. Today, one sees banners on big apartment buildings over a year old still announcing ‘Now Leasing’ and ‘Apartments available.’ Indeed, in the face of this glut, developers are now approaching the Planning Dept. with a demand that they be able to condo-ize.”
From The Real Deal on Florida. “Billionaire Jeff Greene, the dominant real estate investor in West Palm Beach, has pulled back from what was to be the city’s first foray into micro apartments, after concluding that the numbers don’t work. Greene intended to compensate for the small size of the units with first-class amenities, including a pool, a fitness center and a screening room. But that model has a downside. ‘Amenities cost a fortune,’ Greene said.”
From KFYR in North Dakota. “A little relief for renters – according to a new national survey, housing prices are on the decline. Here in North Dakota, the receding oil glut, has opened up a lot of real estate. ‘There’s definitely more vacancies available now – especially with the big apartment complexes, now we’re seeing there’s free rent being offered, and before that, you could barely even find a place,’ said real estate broker associate Kirstin Wilhelm.”
“‘I think the lower the rent, the better, because it keeps more money in the renter’s pockets, which can be translated to the community,’ said Bismarck Renter TJ Jerke.”
“Wilhelm says another reason for the available apartment surplus – is that more people are buying. Real estate agents say right now buyers have the luxury of being able to shop around since availability is abundant.”
‘On average, Phoenix-area rental complexes are leasing 24 apartments a month, up from 20 a month last year. And that rate of leasing increased even as 2,600 new apartments opened to renters during the summer. 17,350 apartments are under construction now across the Valley. But the number of new apartment units planned has plummeted by more than half from last year, to 11,700′
Uh, you guys are fooked.
‘A flurry of new projects - including some downtown and others on the north and northeast sides of Colorado Springs - will add about 1,000 units to the market over roughly the next six months, Nelson said. Those would be on top of nearly 1,500 apartments added so far this year. Those units should help stabilize rents, Nelson said. But by how much? That won’t be known until the apartments open and renters move in, she said. ‘I doubt that rents are going to drop,’ Nelson said.’
They already dropped Laura. This and other keen analysis is why many billion$ are going poof - let’s build it and see what happens!
So, have to ask, is that 24 net leasings taking into consideration any departures, or 24 new leasings not including the departures in the equation?
I don’t know. The AR is pure RE cheerleader. So it’s notable the main RE reporter is giving the apartment biz the evil eye.
The lesson seems to be that building more apartment units leads to more affordability.
I wonder: would that work with single family housing too?
All else equal, an increase in supply leads to prices falling.
I learned this in Econ 101.
Except during bubble years…increases in supply with crazy finance in place allowed people to turn housing into a giant casino.
Welcome to the bubble years.
‘Greene intended to compensate for the small size of the units with first-class amenities, including a pool, a fitness center and a screening room. But that model has a downside. ‘Amenities cost a fortune,’ Greene said.’
Well Jeff, I’m glad you figured it out. Unfortunately for 99% of the industry, these stupid amenities are exactly what they think is going to save them.
Screening room?
Like to watch movies?
Could be to replace old window screens with new ones…..oh wait, that would be the “re-screening” room.
Here is the important quote:
And other expenses for his micro apartments — a full kitchen, washer and dryer, plumbing, ventilation — are no less than for normal-size apartments.
Yupper, that’s why homebuilders like to build 3500 sq ft McMansions with giant nothingburger rooms like bedrooms and studies and dens and home offices; to blow up the square footage adding much extra plumbing.
This micro-apartment developer fails to mention the primary reason for small units: you can fit more of them into a given plot of land — the largest expense. And has this guy never heard of kitchenettes (two burner stoves etc) and common laundry? You could fit the laundry in the screening room.
Englewood, CO Housing Prices Crater 7% YOY
https://www.movoto.com/englewood-co/market-trends/
Realtors are liars.
And if you ever visit Englewood (which I do often), the Army/Navy surplus store on Broadway there is excellent.
….. and every closing a crime scene.
‘In the commercial real estate sector, there are signs of stress. At a recent Counselors of Real Estate meeting in Montreal, one takeaway was that there is a significant surplus of global capital. It continues to flow to the United States, not because we are doing great, but because the European Union has uncertainty (some say “can’t get out of their own way”) and China is slowing down. On Sept. 30, China stopped all imports of U.S. recycled materials (paper, glass, plastic, metal, electronics). They simply cannot process the volume, which has been as high as $38 billion a year.’
‘So the U.S. benefits from this global imbalance. One newsletter recently reported that “U.S. growth remains decent, if unexciting.”
‘Now, those global investment dollars are not coming to New Hampshire. They go to the large A & B markets (New York City, Chicago, Boston, Miami, Seattle). In those markets, they compete with national and large regional banks. So ultimately, smaller regional banks start looking outside these key markets. For those in Boston, they look outside Route 128 and eventually into southern New Hampshire and Maine.’
‘Thus right now, there is plenty of capital to lend and too few quality properties (or projects) to lend on or to. MillRiver Wealth Management reported in their September “Outlooks” newsletter, “We continue to search for the long-term catalyst that will change the trajectory of the economy out of 2 percent type growth into something higher.”
‘In Montreal, the pundits see two to four years of positive headway. Perhaps with a turndown of one to three quarters, but nothing like 2009.’
This is how QE ultimately creates deflation Janet:
‘there is plenty of capital to lend and too few quality properties (or projects) to lend on or to’
Interesting, there is too much money chasing too few projects. It sounds like the best place to be is the project owner. There is just one problem…. there aren’t enough tenants to fill the projects.
There seems to be a predicament!
‘The assessed value of property in Harvard Square nearly doubled between fiscal years 2012 and 2017, an explosive growth that has contributed to rising rising rents and high turnover among Square businesses.’
‘According to data collected by the City of Cambridge, assessed property values in Harvard Square rose from $1.8 billion in fiscal year 2012 to $3.2 billion in fiscal year 2017. And as property values rise, so do rent rates, according to Michael H. Shuman, an expert on community economics, a trend he said poses problems for local retailers.’
“That increases the demand for property and that increases the rents,” Shuman said.’
‘In the last several months, a string of Square businesses have shuttered or relocated. Family-run newsstand Crimson Corner moved several blocks after 54 years at the heart of Harvard Square, the Quad-adjacent University Wine Shop plans to move later this month after 30 years in business, and Schoenhof’s Foreign Books, Wagamama, and Kaju Tofu House have all shuttered within the past year.’
‘Paul DeRuzzo, who owns the University Wine Shop, said that an increase in rent during recent lease negotiations with his property owner prompted his plan to move the store. “The rent they were asking for was too high and we went back and forth numerous times and it didn’t look like they were going to agree,” DeRuzzo said. “They didn’t agree to lowering the rent until we were going to move.”
‘DeRuzzo added that he thinks rents in Harvard Square, a brief distance from his store’s location on Mass. Ave., are “absolutely ridiculous.”
“I don’t know how any business can sustain that rent,” DeRuzzo said. “All the people in these neighborhoods are afraid that what happened in Harvard Square is going to happen here, and the rest of the way down the Ave. There’s going to be no small businesses.”
‘Michael Kanter—a leader of small business advocacy group Cambridge Local First and an owner of Cambridge Naturals, a natural health store in Porter Square, said rents in Harvard Square are particularly high. “I think it’s kind of the place to be seen in the area. A lot of businesses don’t really care what they’re paying if they’re big chains, they just want to have a presence there,” Kanter added. “I think that developers see that as a great opportunity.”
Sure they do, that’s why they overpaid for it.
key word,assessed
try selling some
I think taxpayers missed the previous post:
“…..Thus right now, there is plenty of capital to lend and too few quality properties (or projects) to lend on…..”
” Its hard to buy something when you know its in a bubble”.
It takes brass B@lls to resist the herd.
It takes brass balls to not buy something when it’s in a bubble and the herd is going all in.
It takes brass balls”
To sell in the run up and rent
My favorite movie scene with brass balls!
https://www.youtube.com/watch?v=6FWfKoc-MKM
He does a fantastic Trump imitation!
He can’t hold a candle to Darrell Hammond.
It takes Empty Pockets to finance a rapidly depreciating asset at a grossly inflated price for 30 years.
How do you think I feel, early in the process of buying right now in a vHCOL?
I’m buying for the long term, and all the signs say I should be ok (blue chip area, house I want to live in until I die, and an income surge to make it practical), already living in it (renting), and getting a discount to comps.
Yet with all the stuff I’m seeing (here and elsehwere), I can’t shake the nagging feeling that at risk to end badly.
From what I’ve seen over the past few years, our whole economy revolves around this simple act of buying houses at nose bleed prices with mountains of borrowed money. Of course it won’t “end well”, but it will certainly end.
vHCOL. Your choice. Obviously you are committing future income in this adventure. May your tide never recede. The underwater debtor is in a prison of his own construct.
Indeed. I gave some more details here a few weeks ago.
Loan amount is about 1.9x gross income, but income level is only secure for 3-4 years. We could manage ok if/when income levels drop back to historical. The purchase price puts the house somewhere in the 15th to 20th percentile for the zip code (98040) - that is 80-85% of homes are valued/selling for more (currently).
As it always says in the fine print, something unforeseen could happen at any time and derail the best laid plains. The alternatives for us though have significantly less palatable aspects.
MGSpiffy, I did the same thing in 1990. I bought at the top and the value dropped 25% by 1994. Ultimately it has worked out OK, but I prefer to buy at the bottom now. This is not the bottom. If you like the house, you can afford it and you want to control your own destiny now, instead of waiting 5 years for a bottom, buying today can still work for you.
Depends how much you’re paying for the house. Simply do the math. If you’re paying more than production cost ($50/sq ft for lot, labor materials and profit) adjusted down for depreciation, you’re paying too much. Trusting “comps” is like trusting a used car salesman.
And keep in mind housing prices can and do fall in a big way.
Waller WA Housing Prices Crater 10% YOY
https://www.zillow.com/waller-wa/home-values/
It takes brass balls to buy in a downturn when no one else wants to buy anything.
Or perhaps glass eyes. Well at least you have a brass trumpet.
Gamblers live on a roller coaster. They get really high when they beat the odds, but that’s usually not the end of their story.
I should really stop sharing my experiences here. It does appear I’m a bit of a blowhard, but I find this blog so anti-real estate investment, I think it’s important to let readers know there is another side. Buying a home can often be a much better plan than renting. Arguing with success is foolhardy.
DebtDonkey
Mount Vernon, WA 98274 Housing Prices Crater 12% YOY
*Select price from dropdown menu under first chart
Buying a home can often be a much better plan than renting. Arguing with success is foolhardy.
I agree with this. In 2004 and 2005 when all my peers were going crazy, I was like the lone voice in the wilderness. Everyone thought I was crazy for sitting on the sidelines. Then the bubble burst and I was vindicated. But we did buy in 2011 and got a steal of a deal. A condo that was previously priced at $220k for $120k in a good location. What it would take for me to change my mind right now would be A) massive price corrections or B) massive wage increases to increase affordability. I don’t see either of these in the cards right now, so I am a house bear. But I could change, again.
Arguing with success is foolhardy.
True. But it’s important to also acknowledge that the success was very dependent on Fed policy, which can be impossible to predict for outsiders and in this case was not a win/win for the country.
‘Berkeley has glutted itself with market rate housing, having fulfilled its requirement under Plan Bay Area. Today, one sees banners on big apartment buildings over a year old still announcing ‘Now Leasing’ and ‘Apartments available.’ Indeed, in the face of this glut, developers are now approaching the Planning Dept. with a demand that they be able to condo-ize’
That’s some shortage you got out there.
‘over a year old still announcing ‘Now Leasing’ and ‘Apartments available.’
They have no shortage of street people in Berkeley.
It sounds like there soon won’t be a shortage of condos for sale either.
Not sure whats gonna get taken down faster, the housing market bubble, the rapist/pedophiles in hollyweird, or the muslim brotherhood/deep state mafia.
Still not tired of winning
‘Atlanta Mayor Kasim Reed is urging the board chairman of home finance giant Fannie Mae to resign over a controversial deal that could allow the developer to buy up control over city housing authority land at a fraction of its value.’
‘Reed’s blistering letter to Integral Group co-founder and CEO Egbert Perry questions the developer’s integrity and judgement over the deal with Atlanta Housing Authority, the city’s housing agency for the poor. The agreement gave Integral options to purchase control over an estimated 100 acres of vacant land at what could be a massive discount, with no promise that he would build affordable housing, a March Atlanta Journal-Constitution investigation found.’
‘“Forcing AHA to give up land slated to serve Atlanta’s low-income population in a sale benefiting only your entities while burdening generations of Atlanta residents, is unlawful, unethical and untenable for anyone, much less the Chairman of the Fannie Mae Board,” said the letter.’
‘Perry declined comment through a spokeswoman. Fannie Mae did not immediately respond to requests for comment.’
‘The deal was cut in 2011 under former AHA CEO Renee Glover, who now also serves on Fannie Mae’s board of directors. Perry informed AHA’s current head Catherine Buell of his intent to exercise his options late last year. Perry told the AJC previously that he intends to build market rate housing on the sites.’
‘AHA estimates Integral Group would gain control over $138 million worth of property for about $17 million, but an Integral spokeswoman previously told the AJC that these values are impossible to know because no formal appraisal has been completed.’
‘The vacant land is located at the former Carver, Capitol, Grady, and Harris public housing projects, where land values have climbed since the early 2000s. They have nearly doubled at the Grady and Capitol sites, which are in gentrifying in-town neighborhoods, the AJC investigation found.’
‘Glover joined Perry on Fannie Mae’s board of directors in 2016. Perry joined Fannie Mae’s board of directors in late 2008 and has been chairman since 2014.’
Thanks to the reader who sent this in. I wonder why these things don’t get broader attention?
There has never been any question about the corruption and graft from top to bottom in Fannie. It doesn’t get nearly enough attention. When one crack gets exposed, it’s going to break wide open.
“Still not tired of winning :)”
Me either. It’s a beautiful thing to behold.
I never get tired of winning, and I always - always - win.
Flynn
Donna Brazile.
rumor has it that Tony Podesta was actually arrested yesterday, but part of the deal was media blackout, unlike Manafort.
4-chan alleged Q-clearance source.
That would be amazing.
palmetto, one of ♥PJW♥’s vids posted a headline where antifa met with i*s*i*s to get tips on how to undermine trump? Is that true, or just a conspiracy theory?
As for the arrest, nothing except rumors.
I have no clue on the antifa-isis meeting, didn’t hear that one.
I forgot, though, you’re in an area where you hear some juicy rumors. I heard not just Podesta, but also HRC and Huma.
I read that 4-chan thread, endearingly titled “Breadcrumbs”. Who needs Hollywood when you’ve got Washington?
Still with the crush on PJW? You must be a young’un. The older ladies are all agog over Sebastian Gorka. As one poster over on Reddit said, his voice is a force of nature.
Nah, not really a crush on PJW. I added the ♥ just as an identifier. Yes PJW is good looking but IMO his schtick is getting a little old. (and I don’t like the smoking)
Gorka sends off bad vibes. He comes off as a James Bond villain.
‘Developers hope an apartment building under construction at 5th and Idaho streets will set a new standard for creative neighborhood integration in Boise. But this one also will have something extra: a pocket park — a green space on the west side of the project that will be managed by Boise Parks and Recreation.’
“We’re trying to do more than just benches and or a basketball court,” says 5th and Idaho developer Dean Papè. He envisions a gathering place for “theatrical events, movies, music and other activities that work with the neighborhood.”
‘Rents are not set yet as the building will not be open for a year. “We’re watching market closely and we’ll decide rents then,” Papè said. There will be amenities such as a rooftop deck with an outdoor kitchen and fire pit, and a dog-washing station, but not a gym.’
“We want to make sure they are amenities that people will use over time and not distract from the amenities that already are there, like the YMCA,” he said.’
‘Downtown Boise is going apartment crazy right now. The 5th and Idaho building is just one of several apartment projects underway.’
It’s in every nook and cranny across the US.
Last time I was in Boise, I noticed the huge amount of new condoze under construction downtown. It’s a mania without end. The 2007-2009 episode was merely a blip on the upward traectory of euphoria.
Boise obviously ran out of land since then
Same for Bend Or
There’s unlimited open space in both Oregon and Idaho.
But not drinking water, which comes from underground reservoirs that took millions of years to fill.
“There’s unlimited open space in both Oregon and Idaho.”
That’s the inverse of the “they’re not making any more land” argument. Both of them are specious.
Sure OR and ID have lots of land. But 65% of it is owned by the feds. And of the 35% remaining, a lot of it is not practical to live on.
At some point it gets too far away from downtown Boise to make it attractive. So yeah there is a lot of land 100 miles from Boise, but realistically nobody will pay to live there.
There is a radius around downtown Boise, be it 10, 15, 20 niles where people who live in the Boise area wants to live in. That radius is finite and so is the land inside. Same with Bend.
Not really. Not at all. There is no shortage of land anywhere. Not in NY, SF, LA, Dallas,Tokyo, Paris or London.
Remember…. There is a globe full of land where 95% of it goes undeveloped.
But not drinking water, which comes from underground reservoirs that took millions of years to fill.
Oh yes. I know that this is hard for east coasters to understand, but those aquifers provide a lot of water here out west, and they are quickly depleting. In metro Denver, a lot of that aquifer water is used for watering lawns.
Maybe those same east coasters are having a hard time understanding why anyone would voluntarily live out west and subject themselves to a water shortage. I’ve been to Colorado:
Not enough to drink and too much sh!t to fall off of. Even when I stood on the ground I felt off balance.
Tons of gentle empty land east of The Squiggle. And it’s not all commie. Go south, or to the OH/PA sticks.
try UTAH , the mountains being in the east and no foot hills is really unsettling for an east coaster
I’ve been to Salt Lake City too. It’s like being in a prison.
“…no foot hills…”
Interesting point. This is because the Wasatch Front came into being by a break in the crust and upward tilting of the block on the western side.
re: 5th and Idaho
Is it just me or does it annoy anyone else when a city has a street named for the state? Idaho St in Boise, ID just seems weird to me. Like Michigan St in Detroit or Colorado St in Denver, etc.
Or maybe I’m just a weirdo? LOL
Would you be less annoyed if Colorado Street was in Detroit, Michigan Street was in Idaho, and Idaho Street was in Colorado?
or Colorado St in Denver
Actually, it’s Colorado Blvd.
Tell that to the Little Old Lady from Pasadena.
https://www.youtube.com/watch?v=D7f9hsFrKUY
Go granny, go granny, go granny go.
Can anyone who understands kindly explain the philosophy of retaining the mortgage interest deduction for some groups while selectively eliminating it for others?
If it’s a bad policy, why not scrap it altogether?
It is easy to explain.
The democrats are the party of the 1%ers and massive wealth inequity.
They will defend their rich donors until the bitter the end.
And they still don’t know why they lost in 2016…
++++++
The Shame of the Mortgage-Interest Deduction
Derek Thompson - May 14, 2017 - The Atlantic
Although about two-thirds of American households own a home, only one-quarter of them claim the deduction, which sometimes gets abbreviated to MID. As Matthew Desmond, a sociologist at Harvard University, explains in a magisterial essay on the MID in the New York Times Magazine, this little fact has played an outsized role in the United States’ yawning wealth inequality.
Federal housing policy transfers lots of money to rich homeowners, a bit less to middle-class homeowners, and practically nothing to poor renters. Half of all poor American families who rent spend more than 50 percent of their income on housing costs. In May, rental income as a share of GDP hit an all-time high. Meanwhile, in 2015, the federal government spent $71 billion on the MID, and households earning more than $100,000 receive almost 90 percent of the benefits. Since the value of the deduction rises as the cost of one’s mortgage increases, the policy essentially pays upper-middle-class and rich households to buy larger and more expensive homes. At the same time, because national housing policy’s benefits don’t accumulate as much to renters, it makes it harder for poor renters to join the class of homeowners.
Gonna be fun watching the mid debate. I’m guessing it ends around $700,000
It will be more fun watching the state and local tax (SALT) debate. If I were a betting man, I’d wager that SALT gets phased out over 3 to 5 years.
For example, 100% deductible the first year, 67% deductible the second year, 33% deductible the third year, and no deducible thereafter (or some variation of a reducing SALT deductible over time).
Do more Democrats or Republicans own homes worth over $500k?
In Seattle, Democrats by far.
In my little part of the Bay Area, I think something like 80% vote Democrat. And homes are very expensive.
2banana This is the best article I’ve seen you post yet, thanks for including it.
However, it is the Republicans that seem to be protecting the 1%:
https://www.nytimes.com/interactive/2015/10/11/us/politics/2016-presidential-election-super-pac-donors.html?_r=0&mtrref=www.google.com
But regardless of industry, the families investing the most in presidential politics overwhelmingly lean right, contributing tens of millions of dollars to support Republican candidates who have pledged to pare regulations; cut taxes on income, capital gains and inheritances; and shrink entitlement programs. While such measures would help protect their own wealth, the donors describe their embrace of them more broadly, as the surest means of promoting economic growth and preserving a system that would allow others to prosper, too.
Several tax deductions/credits have some limit. Child credit is only up to $150K income or so. Interest on student loans has an income limit too. 401k contribution has an $18K annual limit. IRA is $5500. And on and on.
Nothing special about the MID having a cap as well.
And also, your premise is faulty. The MID can be used by everyone equally. There is no penalty for being in one class of tax payer vs another. Everyone whether they earn $50K or $500K a year can deduct the interest on a mortgage up to $500K. There’s absolutely no discrimination in that. Compare that to the child tax credit or the student loan deduction which is discriminatory, in that only some people qualify for it. With the MID, everyone qualifies for it euqally.
No one borrows half a million for the tax deduction, just like no one has children for the tax credit.
No one borrows half a million for the tax deduction, just like no one has children for the tax credit.
I knew a guy who borrowed a million on his paid-for $8MM house because of the rate (said it was the cheapest fixed rate loan he would ever get).
The fact that he only borrowed $1MM strongly implies that the MID played a part in his thinking.
I can’t ask him or I would…he was killed in India a couple of years ago.
Rental Watch - your acquaintance didn’t borrow the $1MM for the deduction. He most likely borrowed it because it was his lowest cost source of capital (after factoring in the tax deduction).
“Rental Watch - your acquaintance didn’t borrow the $1MM for the deduction. He most likely borrowed it because it was his lowest cost source of capital (after factoring in the tax deduction).”
Yes, you are right. He didn’t borrow to get the deduction, be borrowed BECAUSE of the deduction…without the MID, I’m not sure he would have borrowed anything.
He didn’t NEED the $1MM…he was an early employee of a major tech company…his family in India killed him for his money (they were afraid he was going to give it to a child that he and his wife were planning to adopt). I never really found out what happened….details were sketchy.
All of a sudden, he stopped responding to e-mails (very unlike him), so a Google search found an article about his murder from an Indian source.
When he borrowed, he commented to me about how tight credit was at the time, where even though he could show them bank balances of 10x what he was borrowing, with no W-2, no banks would lend. They couldn’t understand why he wanted to borrow anything.
He just wanted the cheap, fixed-rate money.
There’s something VERY weird going on here…
If it’s a bad policy, why not scrap it altogether?
Politics. It’s easiest to soak the rich in the name of fixing bad policy, than soaking everyone who takes the deduction.
There is a ton in the tax code that is bad policy, but everyone wants their free cheese.
The proposed law, when you combine the increase in the standard deduction, and the elimination of the SALT deduction, dramatically reduces the number of people who will take the deduction…even at $500k.
BTW, the law also makes you live in a house for 5 years before you can take the $500k free gain (you can take the freebie once every 5 years, not once every 2 years). That’s also good.
I don’t claim to understand, but the unspoken agreement appears to be that the government DOES pick winners and losers, i.e. the government picks the poor to win (or at least to catch up). That’s why we have a progressive tax system instead of a flat rate, why Medicare starts at age 65, and probably why many of the programs such as affordable housing and tax goodies have income caps.
At a certain point you are no longer considered poor. You are considered rich and therefore you should be paying for the goodies instead of collecting them. At least concerning MID, it appears that the Rs made that demarcation between and poor and rich a little too low for some people’s taste.
Anyone think this will bring down property values?
Maybe they just needed a little more “room to destroy”
Amazingly - the cops can’t release a basic description of the young thugs.
And the fake legacy newspaper can’t ask that question or print the answer.
2banana’s Rule:
Long term democrat rule + public unions + free sh*t army = misery, ruin and bankruptcy.
+++++++++
Halloween horror as woman is left with a broken nose and eye socket after being attacked by TEN teens brandishing wooden bats - the FOURTH time gang have targeted upscale Baltimore neighborhood
UK Daily Mail | November 5, 2017 | Keith Griffith
A woman has been savagely assaulted by teenagers wielding bats and wooden planks, amid a rash of similar attacks in Baltimore on Halloween night.
Baltimore officials say there were at least four similar attacks in the city’s upscale Federal Hill neighborhood on Tuesday night, involving a group of around a dozen young males and females.
Cops have not released any description of the suspects, except to say that some appeared as young as 13.
‘I feel lucky to be alive. It could have been a lot worse,’ the female victim who was beaten and robbed told WMTW.
Dc just had this,but the thugs had rental bikes to ride vs. Ballimer where the bikes have already been stolen
Amazingly - the cops can’t release a basic description of the young thugs.
You must need a description because you want to go and find the suspects. They were all working together, so they’re like a union.
Might want to adjust the meds so you can “tune down” those non sequiturs, lol!
Starting to sound like Pelosi - maybe the soylent green Soros feeds to you minions so you can defend the (((fake))) narrative has gone bad?
It was a little joke, you angry clown. The guy reads something on the internet about a crime somewhere in America and he’s upset that there’s no description of the suspects. There couldn’t possibly be any sensible, good reason for him to care so much about that.
‘It was a little joke, you angry clown’
There’s a song in there somewhere.
Mike if you can’t understand why he is concerned that the media consistently never releases a description of inner city “youths” you are part of the problem.
“The mortgage interest deduction would be cut in half, affecting home buyers in expensive housing markets…”
Which the democrat party will fight tooth and nail to stop.
And they won’t understand why they will lose in a landslide in 2020.
+++++
Here’s what Trump’s new tax plan means if you’re making $75,000 a year
Business Insider via Yahoo - November 3, 2017
Tax reform is moving forward.
The typical American family of four with a household income of $60,000 could save $1,182 a year, according to House GOP leaders.
Someone who earns $75,000 a year could expect annual tax savings of $2,028. That breaks down to $84.50 per paycheck, if you’re paid twice a month.
Most Americans — about 70% — claim the standard deduction when filing their taxes. For those who do, their paychecks will almost certainly increase if Trump’s tax plan passes, thanks to proposed tweaks to the current standard deduction and tax brackets.
In 2017, the standard deduction for a single taxpayer is $6,350, plus one personal exemption of $4,050. The new proposal essentially combines those into one larger standard deduction: $12,000 for an individual, and $24,000 for joint filers. Tax brackets could shrink from the seven we have now to four: 12%, 25%, 35%, and 39.6%.
Under the latest proposal, many deductions would be eliminated, including the state and local income tax deduction and the student loan interest deduction. The mortgage interest deduction would be cut in half, affecting home buyers in expensive housing markets. Taxpayers will still be able to deduct 401(k) savings, however.
Hiv.t.v show has upgrades adding 2 to 1 to resale.
It’s 50 cents on the dollar if you’re lucky
Generally the net from “upgrades” results in zero. 100% loss.
upgrades are bunk in my nabe. just kitchen and flushers no matter how beat up.
Add a bath + sink and walls to basement, add $30K cuz now they can rent to the clan
Coos Bay, OR Housing Prices Crater 18% YOY
https://www.movoto.com/coos-bay-or/market-trends/
Some middle-class Americans would pay higher taxes under GOP bill, despite Trump’s promise
By Heather Long November 4 at 4:43 PM
President Trump promised to cut taxes for the middle class, but some would end up paying more under the “Tax Cuts and Jobs Act,” according to a report released Friday night by Congress’s Joint Committee on Taxation, the official scorekeepers tasked with determining how much any tax legislation would add to the debt and how it would impact the poor, middle class and wealthy.
The Trump administration says it has a “bright line test” that the president won’t support any tax bill that does not give the middle class relief on their taxes. The “Tax Cuts And Jobs Act” that House Republicans released Thursday appears to violate that vow, at least for some middle-class taxpayers.
The JCT found that the GOP bill would add nearly $1.5 trillion to the debt over the next decade and that, on average, families earning between $20,000 and $40,000 a year and between $200,000 to $500,000 would pay more in individual income taxes in 2023 and beyond.
https://www.washingtonpost.com/news/wonk/wp/2017/11/04/some-middle-class-americans-would-pay-higher-taxes-under-gop-bill-despite-trumps-promise/?utm_term=.74716ee7276e
And the vas majority won’t. See above…
“Most Americans — about 70% — claim the standard deduction when filing their taxes. For those who do, their paychecks will almost certainly increase if Trump’s tax plan passes, thanks to proposed tweaks to the current standard deduction and tax brackets.”
Typical MSM. They’ll find 2 middle class families with an extremely unique situation and then claim Trump is increasing taxes on “the middle class”.
From that super duper right wing rag…CBS News:
Who will win and lose from the tax plan?
“Analysis: These rate brackets would benefit most taxpayers (probably the vast majority), including the “rich.” For instance, folks with modest incomes who are currently in the 10% and 15% brackets would be in the new 12% bracket and probably better off. Many middle-income folks who are currently in the 28% and 33% marginal brackets would be in the new 25% bracket and definitely better off. However, some upper-middle-income folks who are currently in the 33% marginal bracket would find themselves in the 35% bracket under the GOP bill.”
So pretty much everyone making up to $260K will be a winner. Yet WaPo says middle class will lose. LOL. By the way hasn’t the left continually demanded more taxes for those making $250K+? Well here you go lefties, just what you’ve wished for. So why all the complaining?
https://www.marketwatch.com/story/how-the-gop-tax-bill-will-impact-middle-class-and-wealthy-taxpayers-2017-11-03
No, it clearly says “Some middle-class Americans…”
“Middle-class” is too broad of a term, Mike. Middle-class can means anything from two people at Costco scraping by, up to John McCain notoriously saying that the middle class made up to $1 million annual salary.
You missed part of that Marketwatch article:
$260,000 to $999,999: 35% bracket. Under current rules, income in this range would be taxed at 33%, 35%, and 39.6%. Some folks currently in the 33% bracket would be bumped into the 35% bracket. So looking just at tax rates, there would be some losers in this income range, but mostly winners.
So most people between $260k and a million would benefit.
Also:
$1,000,000 and higher: 39.6% bracket. Only winners here, because the threshold for the 39.6% rate would be much higher than under current law. Yikes! A tax cut for the “rich.”
So any notion that this bill represents an increase in taxes on the rich or near rich is nonsense. A small portion of people with incomes over $260k will pay higher taxes. Most will get tax cuts.
Do the math in without the SALT deduction.
You might find folks at $300k better off, but that changes as you go higher. The more you make, the less “better off” you are.
In other words, upper middle incomes might get some relief, but upper income folks get hit hard.
Only winners here, because the threshold for the 39.6% rate would be much higher than under current law. Yikes! A tax cut for the “rich.”
Baloney.
This doesn’t factor in the elimination of deductions (including SALT).
Think of it this way…if you get to deduct 13.3% of your income over $1MM in CA, your effective marginal rate on the last dollar went from 34.3% (39.6%*(1-13.3%)) to 39.6% with the proposed tax law.
This is not “only winners”. Far from it.
What could go wrong taking in a meth head????
“encouraging property owners to lease apartments at more affordable rates to recently homeless individuals”
The insanity of liberals and progressives. Hint: It ain’t their money!
+++++
Oakland Mayor Urges Residents to Take in Homeless: ‘Give Up That Airbnb’
Breitbart | 11/4/17 | Adelle Nazarian
During her annual State of the City address on Thursday, Oakland Mayor Libby Schaaf called on her constituents to open their doors and residences to the city’s homeless, as union workers picketed against her for her administration’s handling of the city’s rampant housing problem. “Give up that Airbnb. Fix up that back unit,” Schaff said, encouraging property owners to lease apartments at more affordable rates to recently homeless individuals, according to the San Francisco Chronicle.
“In Oakland, we don’t step over the homeless we step toward them,” Schaaf said.
The city’s uptick in vagrants is tied to a general gentrification in the Bay Area, stemming from San Francisco, where artists and innovators unable to afford skyrocketing rents have migrated to Oakland.
In May, the Chronicle noted that a survey by Everyone Counts found that the number of homeless persons in Oakland had increased by 25 percent since two years ago.
When the MID is taken away from the fakers and housing prices starting coming down…
Here is one way for those FB in CA, Denver, NYC and NJ to pay the mortgage.
+++
The man who finds treasure, and the secret of happiness, in the trash
Channel News Asia | October 28, 2017 | Derrick A Paulo and Ruth Smalley
The man who finds treasure, and the secret of happiness, in the trash
Not too long ago, he found a box of Essence of Chicken that expired in 2005. After applying the three rules of dumpster-diving, he gulped down a “perfectly fine” bottle. “Expiry dates are for retailers … not for consumers,” he says.
Mr Tay is a freegan, from the words “free” and “vegan”, which the dictionary defines as a person who rejects consumerism and seeks to help the environment by reducing waste, especially by retrieving and using discarded food and other goods.
Or as he puts it: “Freegans are people who spend very little money, and they want to try to rescue and reuse the stuff that people throw away.”
That was when he started giving food away, to his wife and parents first, his neighbours next and then his friends, by starting the Facebook group Freegan in Singapore, which has close to 330 members now.
“I’ve also managed to reduce my living expenses and impulse buying,” she said. Her monthly expenditure, inclusive of transport and bills, has been halved from S$800 to S$400, “sometimes even dropping to S$300”.
His monthly spending has dropped from S$2,000 to S$1,100, comprising S$500 on his mortgage, S$200 on insurance, S$200 on a long-term savings plan and S$250 “on everything else” – transport, utilities, Internet and mobile. His one “luxury”: S$50 on his pets.
He says: “Since I became a freegan and gradually adopted this way of life, where I use very little money and end up with a lot of savings, (money) is no longer a trigger for me.”
https://t.co/mZKNB6tue9
Oxide- some state retirement plans
The Great College Loan Swindle
How universities, banks and the government turned student debt into America’s next financial black hole
By Matt Taibbi
11/03/2017
Rolling Stone
Americans don’t understand the student-loan crisis because they’ve been trained to view the issue in terms of a series of separate, unrelated problems.
It’s a multiparty affair, what shakedown artists call a “big store scheme,” like in the movie The Sting: a complex deception requiring a big cast to string the mark along every step of the way. In higher education, every party you meet, from the moment you first set foot on campus, is in on the game.
In rehabilitation, Martish’s $8,000 loan, with fees and interest, ballooned into a $27,000 debt, which she has been carrying ever since. She says she’s paid more than $63,000 to date and is nowhere near discharging the principal. “By the time I die,” she says, “I will probably pay more than $200,000 toward an $8,000 loan.” She pauses. “It’s a scam, you see. Nothing ever comes off the loan. It’s all interest and fees. And they chase you until you’re old, like me. They never stop. Ever.”
And that’s the other thing about lending to students: It’s the safest grift around.
http://www.rollingstone.com/politics/features/taibbi-the-great-college-loan-swindle-w510880
😁
“Kids who walk into financial-aid offices are often not told what signing their names on the various aid forms will mean down the line. A lot of kids don’t even understand the concept of interest or amortization tables – they think if they’re borrowing $8,000, they’re paying back $8,000.”
This generation of kids has got to be the dumbest generation ever.
Ah, the poetry …
“‘By the time I die,’ she says, ‘I will probably pay more than $200,000 toward an $8,000 loan …’”
Bahahahahahahahahahahaha …
“She pauses. ‘It’s a scam, you see. Nothing ever comes off the loan. It’s all interest and fees. And they chase you until you’re old, like me. They never stop. Ever.’”
Bahahahahahahahahahahahahahahahahahahaha.
“This generation of kids has got to be the dumbest generation ever.”
Doesn’t seem to be a lot of sound advice coming from their parents either.
“By the time I die,” she says, “I will probably pay more than $200,000 toward an $8,000 loan.”
Sounds illegal.
“he borrowed for tuition”
“immediately got a job in his field, as an English teacher.”
“But he graduated with $35,000 in debt, a big hill to climb on a part-time teacher’s $18,000 salary.”
Yada yada yada
“Today, he pays $471 a month toward “rehabilitation,” and, like countless other borrowers, he pays nothing at all toward his real debt, which he now calculates would cost more than $100,000 to extinguish. “Not one dollar of it goes to principal,” says Nailor. “I will never be able to pay it off. My only hope to escape from this crushing debt is to die.”
Pukes work, lenders reap. God’s Plan.
Two steps are involved here:
Step 1: Dumb ‘em down.
Step 2: Profit.
Many thanks go out to No Child Left Behind.
Bahahahahahahahahahahahahahahaha.
and NOT ONE of them HELOC’d or refinanced the home 10 years ago to pay off their student debt before foreclosure
Or None of them sold the parents inherited house to pay off the debt either.
How come no Democrats or anyone in the MSM gave two shytes when Obamacare increased health insurance premiums by thousands a year? But someone will lose $1K or $2K in mortgage deductions in NYC and it’s suddenly the end of the world?
+1000
+1e13
The two reporters at the core of these reveals really, really need some extra security. The people who competed to amass these fortunes are not going to simply shrug and say, ‘You got me.’
Ref:
1) https://www.bloomberg.com/features/2017-hijacking-of-brillante-virtuoso/
2) https://www.theguardian.com/world/2017/oct/16/malta-car-bomb-kills-panama-papers-journalist
Millions of Leaked Files Shine Light on Where the Elite Hide Their Money
By Michael Forsythe
Nov. 5, 2017
New York Times
It’s called the Paradise Papers: the latest in a series of leaks made public by the International Consortium of Investigative Journalists shedding light on the trillions of dollars that move through offshore tax havens.
The core of the leak, totaling more than 13.4 million documents, focuses on the Bermudan law firm Appleby, a 119-year old company that caters to blue chip corporations and very wealthy people. Appleby helps clients reduce their tax burden; obscure their ownership of assets like companies, private aircraft, real estate and yachts; and set up huge offshore trusts that in some cases hold billions of dollars.
The New York Times is part of the group of more than 380 journalists from over 90 media organizations in 67 countries that have spent months examining the latest set of documents.
As with the Panama Papers, the Paradise Papers leak came through a duo of reporters at the German newspaper Süddeutsche Zeitung and was then shared with I.C.I.J., a Washington-based group that won the Pulitzer Prize for reporting on the millions of records of a Panamanian law firm.
https://www.nytimes.com/2017/11/05/world/paradise-papers.html
Big doings going on.
May God bless DJT and keep him safe.
grossly leveraged stawks and homes comprise our bubble economy. working is for folks in sweat shops overseas.