More Of A Supply Problem Than A Demand Problem
A report from the Seattle Times in Washington. “Rents are dropping significantly across the Seattle area for the first time this decade, as a flood of new construction has left apartments sitting empty in Seattle’s hottest neighborhoods. The biggest rent decreases were mostly in the popular Seattle neighborhoods that are getting the most new apartments. Rents dipped more than 6 percent compared with the prior quarter in First Hill, downtown Seattle, Belltown, South Lake Union and Ballard, along with Redmond and the Sammamish/Issaquah area.”
“More apartments are sitting empty — particularly throughout downtown Seattle — giving renters more negotiating power over landlords. And even more new apartments are set to open in 2018, leading analysts to suggest the rental market will keep cooling. Among the brand-new buildings in South Lake Union, about one-third of apartments are sitting empty. And in the core of downtown, about two-thirds of newly opened apartments are vacant. Overall, there are 24,500 apartments under construction now across King and Snohomish counties. There are an additional 35,000 units in the pipeline.”
“The city of Seattle is getting more apartments this decade than in the prior 50 years combined.”
The Journal Sentinel in Wisconsin. “By June, Milwaukee’s first new apartment high-rise in six years will open — with another under construction. But three other upscale apartment towers in the downtown and east side area remain on hold, as the developers continue to assess the market and seek financing. There have been concerns about the number of new higher-end apartments being developed throughout the greater downtown area outstripping demand.”
“The Milwaukee area’s apartment vacancy rate of 7% will likely rise to around 7.5% to 8% by the end of 2018, said Richard Aaronson, CEO of Atlanta-based Atlantic Realty Partners, which last year opened two large mid-rise apartment developments in Milwaukee and Wauwatosa. ‘Absorption is going to need to catch up,’ said Aaronson.”
From Bisnow Washington, DC. “D.C.’s apartment market finished 2017 with rents falling for the third consecutive quarter as the ongoing supply boom has created heated competition among landlords. Rents for Class-A multifamily properties across the District fell 3.9% from the end of 2016 to the end of 2017, according to Delta Associates, bringing the average Class-A rent to $2,491 per month. This stretch represents the first time since 2009-10 that D.C. rents have declined for three straight quarters.”
“The drop in rents coincided with the delivery of 4,789 Class-A apartment units across the District in 2017, a 45% increase from 2016. The rapid pace of supply growth is expected to increase even more this year, with Delta projecting the completion of 5,972 units in 2018. ‘The issue in the District is more of a supply problem than a demand problem,’ said Delta Associates President Will Rich.”
“The rent drop was most pronounced in the Northeast D.C. submarket, which experienced a 7.9% decline in rents year over year. The submarket includes Ivy City, Edgewood, Brentwood and Brookland but not NoMa or H Street, neighborhoods Delta separates into their own category. Concessions such as free months of rent, which are factored into the effective rent numbers Delta reports, have become common in the Northeast D.C. submarket as vacancy rises, Rich said. ‘Vacancy is the highest in that submarket of all the ones we track. It’s about 10%, which is fairly unusual.’”
The Real Deal on New York. “The rental market was facing all kinds of headwinds as the year came to an end. The share of rentals offering concessions set records in Manhattan, Brooklyn and Queens, according to a report from Douglas Elliman, even accounting for seasonality. In Manhattan, the share of apartments with concessions offered was at 36.2 percent, 37 percent higher than last December, and in Brooklyn, it more than tripled since last year to 46.1 percent of the market. Concessions were offered at 48 percent of new development rentals.”
“‘This is still an important tool to protect face rents, to put on the best face so to speak,’ said Jonathan Miller of appraisal firm Miller Samuel and author of the report. ‘They’re fighting a battle against the oversupply, so they’re putting out all the stops.’”
“Queens saw the biggest slides in rents, with a 3.5 percent year-over-year drop to $2,750, and a 5.6 percent drop in net effective rents, settling at $2,649. Both Brooklyn and Queens showed declines in luxury rents and number of leases. ‘This is a precursor for what we’re going to see for most of 2018, largely because all markets have a lot of rental units coming in to them,’ said Miller, who expects concessions to remain elevated.”
From Bloomberg. “TruAmerica Multifamily is teaming with Blackstone Group LP to acquire apartment buildings in Denver and Seattle for $126.5 million. The deal, which marks the Los Angeles-based real estate investor’s first transaction with the private equity giant, encompasses 635 units at two communities, one in each city, TruAmerica said in a statement. The buildings, while about 94 percent occupied, have barely been renovated since being constructed about 30 years ago, giving the new owners an opportunity to improve the properties and collect the upside.”
“‘The value-add opportunities available at each property are highly attractive,’ Zach Rivas, director of acquisitions at TruAmerica, said in the statement.”
“Apartment values soared to records during the past decade as U.S. households turned to renting in the wake of the financial crisis. More recently, gains in coastal cities like New York and San Francisco have slowed amid a glut of construction of high-end rentals. Smaller cities such as Denver are still poised for growth, according to data provider Axiometrics.”
The Real Deal on Colorado. “Since 2015, 12,000 new apartments have been built in Denver and another 22,000 are under construction, according to CoStar Group. Of those apartments, 90 percent are considered luxury units. Denver is trying out a pay-what-you-can program for some tenants. Under the program, the city will pay the difference between what lower income tenants — like teachers, hotel workers, medical technicians and food service workers — can afford to pay and the market-rate rent, the Wall Street Journal reported.”
“A housing expert told the Journal that there are risks in not allowing the market to take shape naturally. ‘What you would hope is that excess supply leads to lower rents. If the city is pumping subsidies in, aren’t they going to be propping up the upper end of the market?’ said Chris Herbert, managing director of Harvard University’s Joint Center for Housing Studies.”
The Dallas Morning News in Texas. “After years of booming construction, America’s apartment-building binge is cooling. Dallas-Fort Worth has already seen a dip in the number of apartments in the development pipeline. At the end of the year, about 30,000 apartments were being built in North Texas. That’s down from over 38,000 in third-quarter 2016, according to RealPage. Even with the decline, D-FW is still the country’s second-busiest apartment building market behind only New York.”
“‘There are a half-dozen spots where we’re concerned that starts could prove a little too aggressive simply because demand has been so strong over the past few years,’ said Robert Dietz, chief economist with the National Association of Home Builders. ‘Dallas tops that list, while other locations we’ll be monitoring closely are Seattle, Denver, Charlotte, Nashville and Boston.’”
“The flood of apartments coming on the market in North Texas is already impacting developers and landlords. Apartment rent increases in North Texas declined from as much as 6 percent in recent years to only 2.9 percent in 2017.”
From KCWY 13 in Wyoming. “Rent, rent, rent can be seen all over Casper Classifieds on Facebook and leasing managers and real estate agents say Casper’s renting market is finally stabilizing. Broker One Rentals Agent, Gary Bryan shared, ‘We’ve seen prices come down over the past, say 2015, 20-16 you saw prices come down in rentals and you’ve seen them pretty stable over the last year.’ Luxury apartments were the hardest hit a few years ago. ‘When the oil down-turn came, a lot of the higher-end apartments definitely took a hit. They were renting to a lot of oil company employees. So they saw a mass exodus and their apartments were pretty empty.’”
‘There are a half-dozen spots where we’re concerned that starts could prove a little too aggressive simply because demand has been so strong over the past few years,’ said Robert Dietz, chief economist with the National Association of Home Builders. ‘Dallas tops that list, while other locations we’ll be monitoring closely are Seattle, Denver, Charlotte, Nashville and Boston.’
You really blew it, huh Bob? A half dozen? Try a few hundred. The DMN actually still goes to the shackbuilder conference in Orland as they did here. Read the bottom of the article where these clowns are saying, “oh north Texas still needs hundreds of thousands of airboxes!” Farking idiots.
Monitoring closely? We’ve been monitoring Denver daily for a year and prices have been falling there for most of it.
Realtors are liars.
HA! Why are you not showing the Movato stats on Denver? Oh, it doesn’t fit your ideas? HA!
https://www.movoto.com/denver-co/market-trends/
Pretty stable market……I am not saying it won’t face some difficulty, just that your “analysis” seems wrong about the last year. HA!
‘I am not saying it won’t face some difficulty’
Yes, afraid to take a real stance, hiding behind statements like this. I’ve been to Denver. There’s nothing special there. It’s gonna crater, hard. Coming to a city near you. And I’m sure you’ll be the first to say you predicted it.
“It’s gonna crater, hard.”
Denver hit bottom in 2007… oh so long ago.
https://imgur.com/a/XT20P
DebtDonkey
Denver, CO 80202 Housing Prices Plunge 8% YOY On Skyrocketing Housing Inventory
https://www.zillow.com/denver-co-80202/home-values/
https://snag.gy/m5EzRB.jpg
“D.C.’s apartment market finished 2017 with rents falling for the third consecutive quarter…”
Ouch.
That’s gonna put a dent in the old rent vs buy calculator.
A little bit of a dent, but not much. The rents that are dropping are in NE Washington, which is “gentrifying,” that is, a sh!thole. And all the dropping rents are grade A. Grade B in the inner burbs are doing just fine.
I’m not so sure that the drop in Grade A will force down rents in grade B. As grade b folks move up to grade a, grade b will have no problem filling the units with younger millenials getting out of mom’s basement. Not to mention that inner burb (prime locations near transit) grade b’s are being emptied and value-added into Grade A. I haven’t seen widespread articles about gluts in Grade B.
It’s all inventory Donk.
You don’t want to live in NE donk. Nobody does if they can afford NW.
It’s Turtles all the way down.
“sh!thole”
Word of the Year nominee for 2018
‘Among the brand-new buildings in South Lake Union, about one-third of apartments are sitting empty. And in the core of downtown, about two-thirds of newly opened apartments are vacant. Overall, there are 24,500 apartments under construction now across King and Snohomish counties. There are an additional 35,000 units in the pipeline.’
‘The city of Seattle is getting more apartments this decade than in the prior 50 years combined.’
Rental watch for years: “We aren’t building enough”
Rental watch recently: “I predicted this glut years ago”
Eat your crow!
“Rents dipped more than 6 percent compared with the prior quarter in First Hill, downtown Seattle, Belltown, South Lake Union and Ballard, along with Redmond and the Sammamish/Issaquah area.”
“More apartments are sitting empty — particularly throughout downtown Seattle — giving renters more negotiating power over landlords.”
Well I’ll be a monkey’s uncle! Yet, the local media was still banging the “housing shortage” drum this month. A shortage and a glut at the same time. That’s a very unique situation, isn’t it?
I forgot the best quote:
“Among the brand-new buildings in South Lake Union, about one-third of apartments are sitting empty. And in the core of downtown, about two-thirds of newly opened apartments are vacant.”
Double wow, that’s a lot of vacant apartments!!
In a sane world - the developers would be bankrupt and the bankers who lent them the money would be unemployed or in jail.
“In a sane world - the developers would be bankrupt and the bankers who lent them the money would be unemployed or in jail.”
I would not disagree. But, since the world is in no danger of becoming sane anytime soon the best and most profitable course to follow is to party on.
‘in the core of downtown, about two-thirds of newly opened apartments are vacant’
But. Urban living. Craft beer. Bocce ball!
Dog wash stations
i cycle past much of this construction going to the gym. A whole bunch of this is apparently trying to get new Amazon, Google workers in the SLU.
But the bars (other than in the Amazon core) are moderately busy - not super busy. SO i am not sure that it is workers in their late 20’s and early 30’s that have a lot of disposable income.
This Seattle Times report is typical. Rents have been falling out there for months, they just didn’t say anything. Or at least I never saw them say anything. Now they’ve got new complexes more than half empty and it’s forced them to admit it.
They are building a mixed (apartment and office) on the old Times complex (close to Denny). A block away - the facade on a second Times building is saved - but the rest of the building is torn down - waiting to start construction.
The Times made a killing on this building spree
FWIW, houses under 200K still sell in one day with multiple offers. But the higher the price, the longer it takes to sell, and as far as I can tell, builders are only building 400K+ houses in my little burg (with a few exceptions in the upper 300’s).
I’ve also noticed something else: those houses aren’t moving anymore. One builder is slapping together 350K duplexes nearby. I think they’ve sold two at most in the first phase. The streets were carved out for phase two since last summer, but they haven’t dropped in the sewer lines yet (the pipes have been sitting above ground since summer) or paved the streets.
I think we are seeing the beginning of the end. Question is: what will the PTB do to prop it up? Will mortgage rates drop? It does seem as though the Trump admin won’t do anything, like special tax credits, etc.
“Eat your crow!”
I suspect, like ABDan, Rental Watch will do all sorts of oral gymnastics rather than admit to being wrong.
More than that, he now claims to have predicted the growing glut. “Everybody knew there was a bubble” rides again!
“…he now claims to have predicted the growing glut.”
Brings to mind all those Housing Bubble denialists who claimed to have called it in the wake of the 2007-2009 financial collapse. No doubt these same folks are currently in denial about Housing Bubble 2.0, and will soon claim they called this one as well.
I miss A-Dan and my daily dose of China cheerleading.
I don’t. It was nauseating to put it mildly.
Daniel A. Crowman never left.
Speaking of China:
http://money.cnn.com/2018/01/12/news/companies/airbus-china-certification-delivery-delays/index.html?iid=hp-stack-dom
The company wanted to sell nearly 200 more Airbus jets to China this week. But Chinese airlines have yet to take delivery of many airliners they’ve ordered from the company even though the planes are built.
Across Airbus’s factories in Germany and France, more than a dozen A320neo and A321neos, some that were ready as far back as last spring, have been in storage awaiting final sign-offs from the Civil Aviation Administration of China. About a half-dozen A350s for Chinese carriers are waiting at its main headquarters in Toulouse in southern France.
It’s obvious that China wants its airlines to fly COMAC airliners, especially since they have a model comparable to the A320 family. Airbus (and Boeing) can forget about selling narrowbodies to China. COMAC is also working on a wide body airliner with the Russians. Once that’s available both Airbus and Boeing should write off the Chinese market altogether.
Funny, how when we do that, we get a finger wagging and are told that we’re protectionists.
I miss the daily opportunity to offer him a heaping helping of crow.
I don’t miss Dan’s China cheerleading, but I do miss the rest of his posts. He wrote well and spoke well and offered good insight, agree or not. Same with a few others. But I understand they required too much moderation.
I am heading to China this month. I’ll give you a firsthand report when I return.
That’s ok, Pinocchio, we’re good.
‘More recently, gains in coastal cities like New York and San Francisco have slowed amid a glut of construction of high-end rentals.’
‘Continuing the trend we first noticed forming at the end of 2016, asking rents for apartments in San Francisco and Oakland ended the year lower than at the start of 2017.’
‘In fact, based on a comparison of nearly 2,400 listings, the weighted average asking rent for an apartment in San Francisco, including one-off rentals as well as units in larger developments such as Avalon’s new complex in Dogpatch, is currently running around $4,000 a month, which is around 4 percent lower versus the same time last year and roughly 10 percent below a peak in the fourth quarter of 2015.’
‘The weighted average asking rent for an apartment in Oakland is currently running around $2,500 a month which is 3 percent lower versus the same time last year and around 15 percent lover versus the summer of 2016.’
And these aren’t effective rents, which can double or triple the declines.
“Face Rents”
Catchy isn’t it?
Rents are high due to obama’s QE1/2/3/4, ZIRP, TARP, bank bailouts, nationalizing mortgages and massive deficits.
So you find an affordable house online. Never meet the landlord. He never sends you a key. Tell you the back door is open. You go in and it is OBVIOUS some else lives there…
And you keep moving in????
+++++
SC woman returns from trip to find another family living in her home
Stephen Fastenau - January 12, 2018 - The State
Katherine Lang arrived to her new Beaufort home Sunday to find someone else’s clothes churning in the washing machine and her dishes stored away.
Dogs and a cat roamed Lang’s home, and two women were talking inside. A couch rested on the back porch.
Another family was moving in.
“I was so crushed when I found out it was a scam,” Shepherd said. “… Finding a place to live in Beaufort is hard when you need something you can afford and still raise a family adequately.”
Shepherd eventually wired the scammers $1,150 per a fake lease agreement and was told the keys would be mailed. The suspected scammer then told the victim the delivery driver with the keys had been arrested and the truck impounded.
Shepherd was told the back door was open and that she could begin moving her things in.
“They tell people to send the deposit to a certain address, and people trustingly do that,” Trogdon said. “… People just really have to do their research when they do anything online and find a reputable company — somebody you can verify exists.”
Shepherd also cautioned prospective renters to meet their landlord in person and not deal online.
“obama’s QE1/2/3/4, ZIRP, TARP, bank bailouts, nationalizing mortgages and massive deficits”
nickel time!
Bayside Queens, NY Housing Prices Crater 20% YOY
https://www.movoto.com/bayside-ny/market-trends/
There is a pattern in this community…
They don’t pay property taxes!!!!!
Don’t they know millions of union goons retired in low tax red states depend on them!
++++++
The Look - Somewhere, Away From It All
NYT - Eve Lyons - Jan. 13, 2018
Somewhere on the Olympic Peninsula, which extends from the northwest coast of Washington, a community has chosen to live independent of the public supply of water, electricity and other utilities on which most residents rely. Linked by a diffuse network of shared friends and land, they would be impossible to locate without insider knowledge. Dense forest obfuscates their dwellings — tiny houses, trailers, a landlocked houseboat — often accessible only by dirt roads or footpaths.
Maxfield Koontz, 28, a genderqueer farmer and basketry artist, also points to this history, deflecting the misunderstanding that “rural” and “queer” are incompatible identities. Soft-spoken and elegant, Koontz brought up the Radical Faeries movement. A countercultural organization founded in the late 1970s by Harry Hay, Radical Faeries advocated the formation of rural back-to-the-land queer sanctuaries, many of which still exist.
Koontz’s sweetheart, Ezra Goetzen, 35, lives across the woods in a tiny house, poised on the slope of a lush gully. A transgender/genderqueer psychotherapist who splits time between this tiny cabin and a family home in Seattle…
Sacha Kozlow, 35, is a blacksmith living in a tiny cabin he built, insulated with animal hides. Chewing on a eucalyptus toothpick, his dog draped around his shoulders like a shawl, Mr. Kozlow recounted his upbringing in a cult in rural Montana.
During his youth, he said, cult leaders preached the myth of Atlantis, submerged into the ocean when its people courted homosexuality. Mr. Kozlow’s early years, as a young transgender boy not yet out, evince the cruelty of allegory, the threat at the heart of any “semi-utopia.”
“A transgender/genderqueer psychotherapist”
I have no idea what that means!?
“I have no idea what that means!?”
I’m sure he/she could bloviate for hours, if you wanted to lend an ear.
There is a tendency for psychiatrists to study the field to better understand their own problems.
Inbreeding results in genetic defects, but instead of correcting themselves the tribe tries to normalize their deviancy.
“There is a pattern in this community…
They don’t pay property taxes!!!!!”
Bzzzzzt - WRONG!! “Off-grid” simply means you don’t have power to the property, but you’re not getting a freebie from the county assessor just because of that. This “community” is right outside Port Townsend, WA, and the land is VERY expensive. They show a frost-free hydrant in the picture so they’ve got a drilled well because if they were relying upon catchment they wouldn’t use that. All wells are regulated by the state of WA Dept. of Ecology, so the well is public knowledge and the assessor will increase taxes based upon the cost of that “improvement,” usually in the neighborhood of $20k alone. They’re probably running it off a generator - you can’t rely upon solar in the area.
This has been going on for well over 20 years in the area, and they used to be known as “Trustafarians.” Some woe is me son/daughter of mega-millionaires goes out and buys 20-100 acres of land and starts playing around like life is so hard, but their bank account is quite active. They usually burn out in less than 5 years, lather, rinse, repeat.
“…a community has chosen to live independent of the public supply of water, electricity and other utilities on which most residents rely…”
“…Koontz’s sweetheart, Ezra Goetzen, 35, lives across the woods in a tiny house, poised on the slope of a lush gully. [B]A transgender/genderqueer psychotherapist who splits time between this tiny cabin and a family home in Seattle…”[/B]
“…For many, the decision to leave the grid is born out of economic necessity; urban areas become uninhabitable, as both the resources and the number of people who can afford to have access to them dwindle.”
This article is full of bullshit. These people are actually responsible driving up the cost of land and everything else for the locals of the area.
Trustafarians, LOL
Pedophilia creates a lot of these human basket cases. Certainly these guys were molested as youngsters. And the political class wants to cater to these damaged individuals. It is sad and funny at the same time.
Indeed, and they have to be identified and quarantined to prevent their cancer from destroying society. We’ve let it metastasize too long and now we see their media (((accolytes))) trying to normalize it and their (((judges))) legalize it - to the point of mandating acceptance of their sickness. Are they going to force construction of bathrooms at public facilities for all 64 (or whatever it is now, I’m losing count) genders?
(((Ivanka)))
“by injection”
$2,750 average rent to live in Queens…
BAHAHAHAHAHAHAHAHAHA!
++++++
“Queens saw the biggest slides in rents, with a 3.5 percent year-over-year drop to $2,750,
I only posted this so you would have a chance to click on “Pronunciation” and hear the word pronounced with a British accent.
https://en.oxforddictionaries.com/definition/shithole
Its the word of the year.
Sh#thole Kid was a friend of mine.
https://www.youtube.com/watch?v=KXIKwAe0CwA
Here’s an oldie but goodie:
https://www.youtube.com/watch?v=JuaGK2F1xw8
Comedian / Songwriter Martin Mull Sings I’ve Played Some Shitholes But This Takes The Cake
Could downtown Lake Worth, FL also be characterized as a sh*thole?
“Could downtown Lake Worth, FL also be characterized as a sh*thole?”
I thought it always was.
‘A housing expert told the Journal that there are risks in not allowing the market to take shape naturally. ‘What you would hope is that excess supply leads to lower rents. If the city is pumping subsidies in, aren’t they going to be propping up the upper end of the market?’ said Chris Herbert, managing director of Harvard University’s Joint Center for Housing Studies.’
Spot on Chris. Of course the city only has so much money and this is doomed to be a costly failure. And what are they going to do, fund this forever?
If rents are allowed to fall then the values of properties will fall.
If the values of properties fall then the tax base falls.
Thus in order to support the tax base some of the collected taxes need to go into supporting rents.
That’s a good point. Apartments aren’t valued on comps but rather returns. Those slim cap rates are evaporating and many of these loans are short term.
‘This is still an important tool to protect face rents, to put on the best face so to speak,’ said Jonathan Miller of appraisal firm Miller Samuel and author of the report. ‘They’re fighting a battle against the oversupply, so they’re putting out all the stops.’
Funny how this works.
Weren’t there some posters on this board recently complaining about skyrocketing property taxes?
Collecting property taxes to support rents.
Sound kinda like Big Government Socialism to me.
Dig a hole so that someone else can fill it.
Presto! Job and tax creation.
I remember when the first bubble popped around 2007 my wife and I really wanted to buy a condo. There were all these really nice condo developments going up and we assumed that we would be able to get a really good deal since everything was falling left and right. Well, it turns out that a big portion of these condo complexes were suddenly converted to apartments so that the developers wouldn’t have to realize a loss. Some large home developers started just getting into the business of renting homes and they have continued to this day. I suspect that now that we are seeing an overbuilding of apartments in some markets, maybe we’ll see the reverse where instead of lowering the rents to market clearing price, maybe they will get converted to sell as condos while interest rates are still reasonable low and before prices collapse.
More than once in apartment leases, I’ve seen language that allowed the owners to convert the unit into a condo for sale. They just had to give me 30 days or whatever notice. Then I could buy it or pack up and leave.
“I suspect that now that we are seeing an overbuilding of apartments in some markets, maybe we’ll see the reverse where instead of lowering the rents to market clearing price, maybe they will get converted to sell as condos while interest rates are still reasonable low and before prices collapse.”
That’s exactly what we saw when the prior bubble peaked — we had a word for it, but I’ve forgotten it — apartment-to-condo conversions are a signal that the top is near. It’s the smart money getting out at the top.
“…we had a word for it…”
Condos are the canary in the coal mine.
From the Bisnow piece:
‘George Mason University economist Stephen Fuller has warned that the D.C. Metro area is experiencing a net outmigration in the tens of thousands, a trend that could further exacerbate rent decline in a fast-growing apartment market’
Oh dear…
Where are all those DC folks headed and why? And what effect might this have on the DC property bubble?
Oxide, have any insider insights to share?
“Where are all those DC folks headed and why?”
A possible clue …
https://www.bizjournals.com/washington/news/2017/09/20/more-people-leave-greater-washington-than-move.html
“The rent drop was most pronounced in the Northeast D.C. submarket, which experienced a 7.9% decline in rents year over year.”
Unpossible! DC area rents always go up.
My opinion as a NoVa resident: The same reason why a mass amount of people moved into the D.C. Area after the recession is causing them to move out. Nobody is really from here, so moving out of your hometown for a job in DC is fine during a recession, but when times are good back in your hometown/state and you can land a job after gaining work experience and networking you’ll see folks move back. We did this since sticking around NE Ohio in 2009 wouldn’t have been the smartest career move for my wife. Like an airline hub and spoke system, this is the reason for a mass migration to places like SF, Denver, Chicago etc. from smaller towns.
We like it here and would like to stay, but if something else comes up down the line we wouldn’t be opposed to moving out either. Mobility is the key to having career success in the 21st century.
“Mobility is the key to having career success in the 21st century.”
I completely agree with this. The longer I live, the more I realize what a risk it is buying a place. You are tying your personal economic fortunes to the surrounding area. This can be a fine if everything is rosy, and stays rosy where you put down roots. But it literally anchors you to the economic conditions of that area (unless your job doesn’t depend on where you live–a good fortune that is only had by a small sliver of US employees).
I can’t disagree with you, many. I bought because I have a very stable job. Before that I rented for 18 years and was glad I did.
My guess in outmigration is simply large numbers of fed and related retirements. We haven’t heard much about cutting gov employees lately—that’s because agencies have really slowed their hiring while offering buyouts. Thousands of feds —never touched by the recessions— are pretty flush. They can easily cash out and live anywhere. Especially if the kids/grandkids moved away.
They are releasing federalistas into the general population?
Oh nos!
da bear
Genius is 90% mental.
My guess in outmigration is simply large numbers of fed and related retirements. We haven’t heard much about cutting gov employees lately—that’s because agencies have really slowed their hiring while offering buyouts. Thousands of feds —never touched by the recessions— are pretty flush. They can easily cash out and live anywhere. Especially if the kids/grandkids moved away.
I do plan on buying a place eventually. I wish there was some overall metric that told me the percentage of individuals in a given area who own their residence outright. Beside just being a good deal and good construction, I want to know that the people in my local are not stretched to the limits in their financial circumstances. If and when I buy, I would want to tie my fate to people who have the cash flow to weather local economic shocks.
In this day and age, houses should be cheaper due to the fact that people change jobs and locations so much. Buying a house seems almost foolish for most.
Yes, I have mused about overpriced houses vs. the gig economy. Something will have to give, and I suspect the gig economy is here to stay.
“In this day and age, houses should be cheaper due to the fact that people change jobs and locations so much. Buying a house seems almost foolish for most.”
Exactly. I’ve been saying this for years. The lack of economic/financial stability for the vast majority of families should put significant downward pressure on housing. This is yet another sign that housing prices are nowhere near where they should be, absent Fed/govt manipulations.
Exactly. I’ve been saying this for years. The lack of economic/financial stability for the vast majority of families should put significant downward pressure on housing.
I read a few weeks ago that economic mobility reached a post WW2 low:
http://beta.latimes.com/business/la-fi-declining-domestic-migration-20171227-story.html
Despite a long recovery and record streak of job growth, the share of Americans moving to a new location continued a steady decline in 2017, reaching a new post-World War II low, an indicator of a less mobile workforce that reflects both an aging society and economic problems facing younger workers.
The decline marked the fifth straight year in which the share of the population moving dropped. In 2017, the number fell to 11%, according to the Census Bureau. The level was nearly twice as high in 1985, 20%, but has fallen steadily, except for occasional cyclical zigzags, for the last three decades.
For decades, high rates of mobility sharply distinguished the U.S. from other developed economies in Europe and Japan. The decline in mobility is due partly to what has become a less-dynamic and fluid American labor market, some economists believe.
The decline also reflects social and demographic factors such as an aging population and declining birth rates; older people tend to stay put more and starting families often motivates people to go out on their own.
My thesis is that I will have a competitive advantage by retaining my economic mobility. The ability to go where jobs pay well is a boon. It’s much easier to do this if you are living light and not burdened with a mortgage and lots of junk.
It’s hard to be fleet of foot when you are dragging an overloaded debt donkey cart.
I don’t disagree. However, being rooted to one spot can be pretty darn lucrative too. An elderly friend of mine moved to the area 35+ years ago, bought a house, lived heavy frugal, paid it off, and continued to work. He’s a millionaire next door.
Hmmm…..
++++++
Trump Administration Proposing Drastic Cuts to Federal Workforce
Ian Smith - January 20, 2017 - FedSmith
The Hill recently reported that the transition team for incoming president Donald Trump is planning “dramatic” cuts to federal spending over the course of the next several years.
According to The Hill, the proposed spending cuts align closely with the 2017 budget blueprint adopted by the Republican Study Committee and would potentially reduce federal spending by up to $8.6 trillion over the next 10 years.
Federal employees hired since 1984 are entitled to a two-part retirement program, including the Federal Retirement System (FERS) defined benefit plan and a 401k-style plan with up to a 5 percent government matching contribution. Under FERS, federal workers contribute only 0.8 percent of their pay, while the taxpayers contribute 11.7 percent of employees’ salaries. A CBO report found that, on average, federal civilian employees receive 48 percent more in benefits than the average private-sector employee with similar characteristics.
Second, all federal employees would be required to contribute more towards their retirement. The Middle Class Tax Relief and Job Creation Act of 2012 required new federal employees to contribute more towards their retirement. No changes were made for current federal employees.
By limiting new hires to one federal employee for every three that leaves, the overall size of the federal workforce would be cut, however, the president would have flexibility to adjust federal employment in case of a national emergency.
Wow!!! That would make up for the lower revenues due to the tax cuts.
BTW, the military has already drastically changed their retirement system. So makes sense that reforms to the Fed civilian retirement system would be the next step.
I just posted on this. Trump probably won’t make much headway on cutting staff. Agencies have already stopped hiring and attrition is only speeding up without any prodding from Trump. Tons of Feds are 65+ and only still working to subsidize kids, or to get the second wife onto Medicare. They are all one health problem away from leaving en masse.
As for retirement, the pension for 25 years service at $100k is $25k. Make of that what you will.
What is it at 40 years?
The formula for the current system (FERS) is 1% salary * years service * high 3. So 40 years retiring at 100K is $40k/year. In addition, we get a Thrift Savings Plan, with up to 5% match, very similar to private sector 401K.
Couple notes:
1. There is almost NO overtime in gov, so no spiking. I don’t think bonuses count either.
2. To be precise, if somebody had 40 years *today*, they would have been hired under the old system (CSRS). I don’t know the exact figures, but it’s more generous than FERS.
As for retirement, the pension for 25 years service at $100k is $25k. Make of that what you will.”
Not CA firemen thats for sure
Trump is trying to lose D.C. by 99%!
da bear
Seems that DC isn’t the only bubbly housing market experiencing mass outmigration…
http://dailycaller.com/2017/12/26/nearly-450000-people-fled-these-three-deep-blue-states-in-2017/
While markets such as North Texas are trying to digest thousands of new apartment units, nationwide there’s still a shortage of rental housing, according to estimates by an industry trade group.
Caitlin Walter, senior director of research with the National Multifamily Housing Council, estimates that another 4.6 million apartments are needed nationwide through 2030 to keep up with demand.
“That works out to 328,000 units a year,” Walter said. “This demand is spread throughout the country. We have a lot of pent-up demand we still have work through.”
D-FW will need more than 266,000 additional apartments during the next 12 years, Walter said. Only New York City, with a projected demand for 279,000 apartments, will need more.
Where do these guys come up with these numbers!?
Rents are falling for most of 2017 in DC, Miami, SF and Seattle and these folks think demand has no end in sight?
“A housing expert told the Journal that there are risks in not allowing the market to take shape naturally. ‘What you would hope is that excess supply leads to lower rents. If the city is pumping subsidies in, aren’t they going to be propping up the upper end of the market?
This what they are allegedly doing in Greenville, NC.
One very nice complex outside the campus are with according to my son “crazy high rents,” and very high vacancies, has now added section 8 housing. Oh, plus there are 2 huge new apartment complexes going up right next to campus.
For what its worth my son initially found and lived in a very nice but old 1 bedroom very near campus and the bars for $395. (moved out last month to move in with a friend. I wanted him to stay there but…)
Ben has posted articles about Greenville before and it seems over supplied.
Both Greenville NC and SC are oversupplied. Which brings up a point: I’ve posted similar situations in Des Moines Iowa, Oklahoma, Louisiana, Atlanta, Portland OR, too many to list really. And that’s outside the huge debacles building in major metros. Notice no one in the media connects the dots thoroughly. Specifically, this didn’t just happen. I’ve documented this is a super sized mania, which swept the industry in a mad, greed fueled bout of overpaying and overbuilding. Complete with crazy new paradigm ideas to justify what was unjustifiable. And now just as rents have never been higher and the same with the percentage of incomes spent on rents, their model has broken. And if it won’t work at nosebleed rents, there’s only one thing that can happen. Massive defaults, foreclosures and a reset of rents. It’ll be a credit event. We’ll see how this hits the GSE’s.
Does any one know how the city plans to pay for these subsides? (see below)
Denver is trying out a pay-what-you-can program for some tenants. Under the program, the city will pay the difference between what lower income tenants — like teachers, hotel workers, medical technicians and food service workers — can afford to pay and the market-rate rent,
What could go wrong?
City of Denver voters are stupid enough to vote to raise taxes to pay for it (A TABOR requirement). People in the suburbs, not so much.
So happy I live in Arapahoe County and not Dumver.
Bone Chilling Global Warming
http://www.intellicast.com/National/Temperature/Current.aspx
This may be the last opportunity for children to learn what snow is.
And to see a polar bear….in Central Park
FWIW, we’ve had almost no snow this winter on the Front Range, though the temperatures have been average. Today’s forecast 48/29
I am 58 years old and not a scientist, but going back to the 60s when I was a kid in Connecticut through today I have seen cycles come and go with warm, cold harsh lots of snow and mild very little snow winters.
The middle 60s to the mid 70s I remember lots of snow, 73 or so on to the early 80s not so much. Funny thing about those mid 70s to early 80s that didn’t have much snow, they always came with a week to 10 days of frigid temperatures in early January.
The first 1:07 shows one of those early January days.
https://www.youtube.com/watch?v=DHHyJsVIF6Q
its climate change bro
“its climate change bro”
LMAO
That’s because Global Warming didn’t work.
A frosty 60 F here in Vegas!
“A frosty 60 F here in Vegas!
Even Sharks Are Freezing to Death: Winter Rages and the Nation Reels
By KARA MURPHY and JACK HEALY
DEC. 28, 2017
ERIE, Pa. — Shivering, snowbound cities are scrapping their outdoor New Year’s Eve countdowns. Polar-bear plunges are being canceled because of fears of frostbite and hypothermia. Winter-hardened towns are gaping at their new lows: 32 degrees below zero in Watertown, N.Y. Minus 36 in International Falls, Minn.
Record-breaking snowfalls have stranded older and disabled residents inside their homes for days. Cars are buried under mountains of snow, and lethally low temperatures are forcing cities across the Northeast and Midwest to open emergency “warming centers” for homeless residents and people whose furnaces are no match for the cold.
A mass of Arctic air now has much of the north half of the country wrapped in an icy bear hug, and meteorologists expect the single-digit temperatures to stick around for at least another week.
“It’s been hell around here,” said Rick Pakela, 73, a retired welder and maintenance worker in Erie whose family was stranded inside their home this week as the city was buried under five feet of snow.
https://www.nytimes.com/2017/12/28/us/winter-weather-erie-cold.html
My backyard.
Emergency warming centers seem odd to me. If you have no heat or transportation you’d be lucky if you knew your neighbor. Only an idiot has no backup heat plan, but there are plenty of idiots.
Carson City, NV 89703 Housing Prices Crater 5% YOY
https://www.zillow.com/carson-city-nv-89703/home-values/
crowman , thx for the daily dose of bs!
Hey Sh1thouse, how’s life without a HELOC open?
tough back to work.
I’m waiting for the Tampa market to cool off…
Unless something unusual happens, it’ll be a while before the Tampa market cools off, unfortunately. You’ll have to wait until the economic refugees from the Northeast and MidAtlantic slow to a trickle. The Tampa and Jax markets are their go-to havens in Florida. Word’s out about Miami and Orlando.
Interesting thing, though, if you look at the Zillow foreclosures for a number of areas in Tampa Bay, it’s like some weird scheme is going on. People buy at top dollar, can’t make it, go into foreclosure, and then the foreclosures get recycled into the inventory stream. Lather, rinse, repeat. Not to mention the rental market is completely screwed up in the Tampa Bay area. Talk about expensive s–holes!
Milpitas, CA Housing Prices Crater 6% YOY
https://www.movoto.com/milpitas-ca/market-trends/
When is the damn bubble in over-priced condos in downtown San Diego going to burst?
A week from Thursday.
Well what would you do?
We made a mistake’ Hawaii sends false missile alert
BY AUDREY MCAVOY AND JENNIFER KELLEHER
The Associated Press
January 13, 2018 10:22 PM
HONOLULU
A false alarm that warned of a ballistic missile headed for Hawaii sent the islands into a panic Saturday, with people abandoning cars in a highway and preparing to flee their homes until officials said the cellphone alert was a mistake.
Hawaii officials apologized repeatedly and said the alert was sent when someone hit the wrong button during a shift change. They vowed to ensure it would never happen again.
“We made a mistake,” said Hawaii Emergency Management Agency Administrator Vern Miyagi.
http://www.newsobserver.com/news/nation-world/national/article194571794.html
And then there’s this:
“No Clinton Foundation funds — dedicated to Haiti or otherwise —were used to pay for Chelsea’s wedding,” Clinton tweeted Saturday. “It’s not only untrue, it’s a personal insult to me, to Hillary, and to Chelsea and Marc.”
Is Trump truly a stable genius, or do the planets always just sort of naturally align in his favor? I’m stumped. Trump allegedly makes a comment about s-holes, the Dems, RINOS and MSM make a serious miscalculation and blow it up to the heavens, bringing up Haiti and Africa specifically, conflating it with racism, and then the chatter follows about Clinton Foundation involvement with Haiti in particular and also Africa, the old Podesta emails are dragged out:
Chelsea Clinton used Clinton Foundation resources for her wedding — email from top Bill Clinton aid Doug Band https://wikileaks.org/podesta-emails/emailid/52046#efmABYACC …
And the s–tstream reverses and starts spraying the Clintons. And of course, in the face of that denial above, people think “I did not have sex with that woman, Miss Lewinsky!”
So the story begins to change from “Trump is a racist” to “Where’s muh money?”
If Monica didn’t flick her thong would Billy have gone after her? Monica was never an innocent little girl.
How many ladies know how to prep her man’s cigar these days?
There is an old saying about hypocrisy.
“Why do you look at the speck that is in your brother’s eye, but do not notice the log that is in your own eye?”
“Is Trump truly a stable genius, or do the planets always just sort of naturally align in his favor?”
“Maybe its both”
https://www.youtube.com/watch?v=5DcIeVcGLRU
It is a weighted geometric mean of the dollar’s value relative to other select currencies:
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight
Swiss franc (CHF) 3.6% weight
Are any of these currencies backed by anything?
Are any of these currencies backed by anything?
the franc is backed by gold.
the franc is backed by gold.
This gold backing was ended by referendum in the year 2000.
you’re correct. i’d read a few years ago that they’d reduced the backing to around 25%. completely in error. nevertheless, gold-backed fiats have existed in the past and worked.
“the franc is backed by gold.”
What about the Euro?
https://farm5.staticflickr.com/4762/25816205258_8307fbd3f4_o.jpg
Copy that!