The Glut Of Supply Is Showing Up
A report from Bloomberg on California. “Landlords counting on downtown Los Angeles as a cash machine may be in for the same bout of pain as their counterparts in Manhattan, where a flood of supply has started to drive down rents. More than 4,000 new apartments are forecast to hit the Los Angeles market this quarter, according to CoStar Group Inc., as the first wave of as many as 30,000 in the next three years. Much of the construction is concentrated downtown, where it’s easier to build than in other parts of L.A., and almost all the new apartments will be at the higher end of the market. The glut of supply is showing up in flattening growth and concessions, such as six weeks of free rent, said CoStar analyst Steve Basham. These economics are similar to those of the Manhattan real estate market, where last month the median rent declined 2.7 percent from a year earlier as demand fell short of supply.”
From Patch Brooklyn on New York. “The average Brooklyn apartment got cheaper for buyers and renters alike at the end of 2017. The borough’s average home sale price for the last three months of 2017 dipped about 4 percent from 2016 to $853,000, according to a Corcoran report. A slowdown at the most expensive end of the Brooklyn market drove the price drops, the reports suggest. The trends in Brooklyn mirror a similar drop in Manhattan housing prices at the end of last year.”
“Brooklyn rents ‘had become so overpriced in terms of rent, that they were due for a correction,’ RentCafe’s report says.”
From the Denver Post in Colorado. “Thousands of new apartments continued to pour onto the market in metro Denver last year, pushing down rents and pushing up vacancy rates to their highest level in seven years, according to the Denver Metro Apartment Vacancy and Rent report for the fourth quarter. Metro Denver absorbed 11,821 new apartments last year, up from 11,056 in 2016. That represents the most in records going back to 1981, although the 1970s had years with more robust construction.”
“‘These are the largest years on record in the survey, and I am told we would need to go back to the 1970s to find numbers of this monster magnitude,’ Ron Throupe, associate professor of real estate and construction management at the University of Denver’s Daniels College of Business, said in his report.”
“Denver had an estimated 21,541 vacant units at the end of last year, the most since 2009, when the recession was weighing on the economy. Vacancy rates haven’t been this high in about seven years and in markets with heavy new construction, the rate is much higher. Castle Rock reported a vacancy rate above 25 percent and in northwest Denver it was above 30 percent in the fourth quarter. With so much new supply coming, apartment developers need net migration to hold up. There are signs, however, that higher housing costs and congestion are motivating more people to leave the region.”
The Pittsburgh Post Gazette in Pennsylvania. “Apartment rents have soared so high in some of the hottest Pittsburgh communities that it has become cheaper in many cases to buy a home rather than rent. That’s especially true in the East End, where luxury apartments in Bakery Square, Lawrenceville and East Liberty have multiplied in recent years. Ben Atwood, an analyst for Costar Market Analytics, told members of the Apartment Association of Metropolitan Pittsburgh last week buildings that opened up in 2017 have a cumulative vacancy rate of about 40 percent. The majority of new buildings were high-end apartments where the cost of a two-bedroom unit could run more than $4,000 a month.”
“‘The problem that you are about to have is the Downtown area is about to add about 1,000 more new units over the course of 2018,’ Mr. Atwood said. ‘That is going to expand the inventory pool by close to 14 percent in one year alone. I don’t think there is much of a way to sugarcoat this,’ he said. ‘I don’t think that vacancies are going to stay close to what they are now, and I don’t think rents can grow in an environment like that. Vacancies for new units are three times higher than for older buildings, which suggests that the Pittsburgh multifamily market is overbuilt.’”
From The Oklahoman. “Last year was a pleasant surprise repeat for metro-area apartment investing, a longtime multifamily broker said. Again. Interest rates fell and capitalization rates stayed low, keeping demand high and prices up in 2017, said Mike Buhl, owner of Commercial Realty Resources Co. in Norman. A capitalization rate — or cap rate — is a percent measurement used to gauge investment risk and value by dividing a property’s purchase price by its net operating income.”
“The higher the cap rate, the lower the risk and the lower the property value; the lower the cap rate, the higher the risk and the higher the property value. So, the lower cap rates are, the better for sellers. ‘You look at the employment rate for Oklahoma City. The economy is doing very well here when you compare it to other parts of the country,’ he said. ‘On cap rates, although they’ve been trending downward, they’re still very reasonable — and the market offers a lot for investors here.’”
“Most of the sales increase was for older apartments, those built before 1980; Buhl counted 5,500 units sold. Fewer than 1,900 units of 1980-present apartments sold, he said. ‘What that means is that investors are less choosy about the properties they buy and the prices they are willing to pay,’ the report said.”
“The other main attraction of older, stable apartments has to do with financing, Buhl said. ‘If a property has a good historical occupancy over 90 percent,’ he said in his report, ‘then it will qualify for (government) agency financing, which offers the best combination of maximum loan proceeds and attractive interest rates.’ Some of the sales in 2017 were financed with loans as low as 4 percent with 30-year amortization, 10-year maturity dates, and interest-only payments in the beginning year(s). Freddie Mac continues to be the leader, making more permanent loans on apartment properties than any other type of lender.’”
From The Daily News in Washington. “In 2008, real estate developer Larry Wood had just started a townhouse development in West Longview when the recession hit and the housing market tanked. He was forced to declare bankruptcy and abandon the project. As the market recovered, Wood got back on his feet and bought back the project two years ago. ‘Banks are willing to work with people (again). It’s easy to be successful because it’s an easy market,’ Wood said. ‘But it makes me sad. I can do well just targeting the higher end, and I see a need for the higher end. But I also really see a need for these affordable townhomes and (other projects).’”
“Nearly a decade after the market crash, Longview developer Chuck Bond’s new 20-unit Copperwood Apartments, is the only apartment complex built in Longview since 2006, according to the city. Bond’s Copperwood project opened in October. To recoup his investment, Bond said, he would have to charge $1,295 a month for the new, 960 square-foot apartments. However, after a slow start to leasing out the units, Bond said he had to drop rents by $200 a month. The complex filled up in a month. Yet Bond said rents will probably have to creep back up to $1,295 for him to profit off the $2 million investment.”
From the Villages News on Florida. “Construction of a large mixed-use project on farmland across from Pinellas Plaza along County Road 466A could begin this summer. Wildwood commissioners voted Monday night to extend the project’s planned development ordinance for a year upon the request of a Sarasota engineering firm. The ordinance, which required that construction begin within two years, expired Jan. 11.”
“Last March, Wellstone Living applied for a permit to grade the property and complete a drainage plan so utility construction could begin. The former owner, WholeLife Properties, announced in December 2015 that the planned development on 154 acres would include more than 700 homes and apartments. The first phase, scheduled to begin nearly two years ago, included 400 luxury bungalows expected to rent to adults age 55 and older on three-year leases for $3,000 to $4,000 a month. An apartment building of up to six stories also was planned.”
“The project was delayed when WholeLIfe Properties filed for Chapter 11 bankruptcy protection in June 2016 after a lender’s letter threatened foreclosure on property the company owns in McKinney, Texas.”
‘Denver had an estimated 21,541 vacant units at the end of last year, the most since 2009, when the recession was weighing on the economy. Vacancy rates haven’t been this high in about seven years and in markets with heavy new construction, the rate is much higher. Castle Rock reported a vacancy rate above 25 percent and in northwest Denver it was above 30 percent in the fourth quarter.’
Oh dear…
‘With so much new supply coming, apartment developers need net migration to hold up. There are signs, however, that higher housing costs and congestion are motivating more people to leave the region.’
Waiting for that to start in Florida. I sit in traffic every morning and can’t fathom someone seeing that mess and saying, “yeah, let’s move here.”
The thing is, it’s like that everywhere. But people think that living in tropical Florida is exotic. From what I have experienced, it’s just hot and humid half the year, so that would kill it for me.
Anyway, there’s a reason about 40 million live in California, even though the traffic jams, crime and cost of living are insane: the weather. I will admit that is the one thing I miss.
And they flock elsewhere and create the problem all over again…
‘Landlords counting on downtown Los Angeles as a cash machine may be in for the same bout of pain as their counterparts in Manhattan, where a flood of supply has started to drive down rents’
‘These economics are similar to those of the Manhattan real estate market, where last month the median rent declined 2.7 percent from a year earlier as demand fell short of supply’
Uh, Rental Watch:
‘demand fell short of supply’
And last week we read Seattle has new towers half empty. Golly, this shortage thing has really blown up in your face, huh? Got crow?
The half empty are in South Lake Union area. They are hoping to fill up with the kids out of college getting their first jobs at Amazon, Google or FB
And last week we read Seattle has new towers half empty.
New towers half empty—and don’t forget the huge number of projects still coming out of the ground!!
How many times have I said that places like downtown LA, SD, etc. are in for a world of hurt given the amount of construction in these locations?
And that this development is in large part driven by large investors (who will only invest in “gateway” locations)?
What about typical suburban locations where there was rampant overbuilding in 2004-2007?
We are at a time where there is overbuilding in select locations (driven by certain players in the capital markets), but not overbuilding generally (like there was in 2004-2007–driven by many players in capital markets).
We still aren’t building enough GENERALLY. That doesn’t means we aren’t building enough in every market.
BTW, a huge amount of local supply being added is leading to significant decreases in local rents.
Yet, according to you, supply/demand has NOTHING to do with prices.
But we see example after example of this being the case:
NYC, Denver, LA
And, the opposite is also true. In markets where there is little supply being added, rents are rising.
Sacramento rents are up about 8% year on year, and there are few apartments being built there.
Coincidence? Or Econ 101?
And when you step back and look at the nation as a whole, we are not building enough housing, and so OVERALL we have prices/rents rising faster than they should.
It ain’t rocket science.
large investors (who will only invest in “gateway” locations)…
Apparently we have quite a few of those gateway locations around here on the road to nowhere.
Rental Watch: BTW, a huge amount of local supply being added is leading to significant decreases in local rents.
Yet, according to you, supply/demand has NOTHING to do with prices.
I think surely supply and demand has everything to do with prices. It certainly did with tulip bulbs. However, to determine whether one is in a bubble, one has to look at the type of that demand: is it for consumption (i.e. use of the product, for owning or renting) or for speculation (sale of the product for more later)?
The inability of people to see bubbles going forward is based on the inability (more likely unwillingness) to break out demand types. I’m sure real estate agents know the nature of the demand, but they’re not going to say anything that suggests a bubble to a Fed pollster. They’re not an academic agency, they’re association of salespeople whose mission is advancing the interest of those salespeople.
So, the Fed and academia blithely continue, shrugging helplessly. But economists are modern day oracles - they’re paid to make predictions. So they predict based on the data they can measure and they’re right, right up until they’re wrong.
There’s that saying, “When you can’t measure what’s important, what you can measure becomes important.”
‘a huge amount of local supply being added…the nation as a whole, we are not building enough housing’
So which is it? You refer to this shortage of construction like it’s an article of faith. I’ve heard it from the REIC before, in 2005, just before everybody was oversupplied. And now city after city is getting hammered by oversupply and gluts. Just like before. There’s no shortage of land, no shortage of housing. If LA can be overbuilt, any place can.
There’s that saying, “When you can’t measure what’s important, what you can measure becomes important.”
That’s a pithy aphorism, I’m going to tuck that one away for safe keeping and recycle later. It reminds me of this one that I’m fond of:
“Not everything that can be counted counts, and not everything that counts can be counted.”
OneAgainstMany: That’s a pithy aphorism, I’m going to tuck that one away for safe keeping and recycle later.
I saw it in Ken Burns’ Vietnam documentary. McNamara was a brilliant guy and he was SecDef 61-68. He wanted numbers. Body counts. Villages pacified. He got em. They looked like America was winning. But they were meaningless. Plausible but meaningless. The numbers always looked good and guided his thinking. But he didn’t understand war. He couldn’t measure chaos, brutality, national will, national psyche, pride, motivation, corruption, the ability to endure.
It is absolutely possible for there to be oversupply in some markets, and undersupply in others.
It’s that simple.
If you make overly aggressive assumptions about the number of people who can afford very expensive housing, you can very easily oversupply markets that have SOME of those types of consumers–even in places like LA. Because, as you rightfully point out, there is no shortage of land if you can simply create more via “airboxes”. It’s simply a question of cost.
We are in a broadly undersupplied market (building 1.2MM units per year), but are oversupplying certain markets with expensive units, and dramatically undersupplying most markets with affordable housing.
The important question is “why aren’t we building more units of affordable housing”?
The best answer that I can come up with is that when you add together all the hard and soft costs, it is simply too expensive to do so–even when land is cheap.
So which is it? You refer to this shortage of construction like it’s an article of faith. I’ve heard it from the REIC before, in 2005, just before everybody was oversupplied.
This was at a time when we were building 2MM units per year, with RISING vacancies–and rents that weren’t completely crazy. The “shortage” was due to the Casey Serin’s of the world buying more than one home.
We are now building 1.2MM units per year, with relatively low vacancies (generally), and generally rising rents.
With 25 million excess empty and defaulted housing units in the US, there is no need to build more.
Castle Rock was the hottest real estate market in Colorado.
It seemed that everyone who was working at the Tech center, Littleton, the AF bases or Lockheed Martin was buying or renting a place there.
25% vacancy there?
The light at the end of the tunnel is…
The Denver city-data forum will block you from discussing this.
But why?
Does C-D only allow real estate sunshine pumping?
Two of their moderators are RE agents
And very likely funded by lying realtors.
Didn’t we just read a few days ago, that the city of Denver was going to subsidize rents for certain people? Maybe they should instead just let the market forces work and allow rents to fall to more affordable levels? Or does the city prefer to use taxpayer $ to subsidize the developers by keeping the rents high?
Denver is a sanctuary city, free everything for everybody.
Keep in mind that only the City of Denver is proposing subsidies. The suburbs are not. And plenty of new rental units are in the burbs.
They only have money for 500 units. There are thousands sitting empty and thousands more on the way.
It won’t make a dent in the supply.
…And I read a report that many Millennials are looking to leave the urban life for more lawn and rooms to have kids.
If you don’t want your kidz playing where there are used needles all over the playground then Denver isn’t for you
And you can cross Seattle off the list as well, for the same reason.
If DC area Millenials want a lawn like Denver Millenials do, they are in for a rude awakening. Anything under $450K is either a condo or townhome with massive HOA fees and block’s walk to the common area, or a 1950-1980 ugli-ranch SFH on a street full of DACAs, anchors, and white vans.
Hey…..
) - this was a mere 35 years ago - NOW - 60,000 + and growing each year. Estimated population is to be 100k in the next 10 years. Already on water restrictions, already ripping out lawns in favor of xeriscape and more and more straws in the creek to water the masses. West of I-25 is an area called “The Meadows” - it is now a slurry of 1/4 acre shacks with a hospital, schools and rec centers. East of I-25 you have the original main drag of CR with attending niceties (something that I like alot) but then you head over by me east of the old town and man o man the houses and development. I guess I am part of the problem having just moved back here from Chicago less than 2 years ago , right?
I live in Castle Rock and the number of homes being built around me is just amazing - if one were to look over the hill at this development called Terrain - south of CO 86 and east of Founders Pkwy - it is just insane - and the cost of these shacks is enough to make my eyes glaze over.
This town when I was growing up was a small gas stop / burgh with no more than 6,000 folks (cattle included
I-25 during rush hour is a nightmare anymore. When it snows or rains - I go nowhere these days unless necessary. TPTB have not had been inclined to keep up with the influx of folks - many roads are as they were when I left in the mid-80’s with no improvements - and the improvements that are being made are obsolete the moment they open up.
I could go on and on - but the bottom line - I don’t know how this can continue at the rate it is going at the moment. Cost of housing is high given cost of health insurance, food, utilities etc. I just don’t know how folks with young ‘uns are making it.
Links to Terrain here….
http://www.terraincastlerock.com/location
https://www.denverpost.com/2014/06/13/in-castle-rock-residents-at-master-planned-terrain-like-their-intimate-scale-bigger-lots-and-small-town-events/
http://www.terraincastlerock.com/the-homes
It’s like that in a lot of cities. Just wait until Amazon inflicts one of these places with 25000-50000 jobs…
Castle Rock is a borderline Denver exurb. It’s about 20 miles south of Littleton and about 35-40 miles from downtown (just as far as El Longmonto)
“With so much new supply coming, apartment developers need net migration to hold up. There are signs, however, that higher housing costs and congestion are motivating more people to leave the region.”
Like NYC, metro Denver is a place that would have no problem filling those units — at the right price. Price, that’s the problem.
a general observation from ShP
Doesn’t it seem like bearish stock market news is so prevalent out there?
Its almost like they are trying to keep the bears in the game with this stuff to keep taking their money.
Climbed a wall of worry for years. shorts kicked in the s@ck constantly. constant supply of buying.
any thoughts?
“any thoughts?”
The higher the price goes the closer to the top it gets.
Funny how that is.
The higher the price goes, the higher the likely future top gets.
any thoughts?”
Equity is where its at until it isn’t but then if the market crashes you’ll probably lose your job anyway..
When in doubt stay all in the market
try not to be a wage donkey for your whole life, save your money until you make more in the market than you do at wage donkey work
Seven years of a real estate scam.
And it started in the magically year of 2009
++++++
Ataris Bassist Michael Davenport Accused Of Running $27 Million Real Estate Fraud Scheme Using Craigslist
MFI Miami - January 2018
Michael DavenportMichael Davenport was arraigned federal court in today in the Southern District of Illinois. Davenport is the former bassist for turn-of-the-century pop-punk stalwarts The Ataris.
The government is accusing Michael Davenport of multiple counts of wire fraud and one count of mail fraud.
American Standard allegedly defrauded roughly 100,000 people of $27 million. Furthermore, the scheme operated from approximately January 2009 through at least October 5, 2016.
American Standard placed ads on Craigslist stating that certain houses were available for sale or rent at very favorable prices.
Potential customers called in response to these ads. American Standard salespeople would convince them to purchase American Standard’s list of houses for $199.00. The “list” contained more information about the property. The salespersons also said that the houses on the American Standard list were in “pre-foreclosure.”
American Standard employees told customers they could purchase the houses by simply taking over the mortgage payments.
After the customers paid the $199 fee they learned that the houses on the list were not available for purchase. Customers also discovered that a substantial number of the properties were fictional.
‘I don’t think there is much of a way to sugarcoat this’
Sugarcoating is what “analysts” like Costar do. Until their clients are fooked that is.
‘Atwood, an analyst for Costar Market Analytics, told members of the Apartment Association of Metropolitan Pittsburgh last week buildings that opened up in 2017 have a cumulative vacancy rate of about 40 percent. The majority of new buildings were high-end apartments where the cost of a two-bedroom unit could run more than $4,000 a month’
So it’s your full time job to watch this stuff and you sleep walk into a 40% vacancy rate. Do you really think there are renters at 4k a month?
High leveraged real estate projects at 40% vacancy is certain bankruptcy.
Heck, normal leveraged real estate projects from the “bad old days” at 40% vacancy was certain bankruptcy.
‘The higher the cap rate, the lower the risk and the lower the property value; the lower the cap rate, the higher the risk and the higher the property value. So, the lower cap rates are, the better for sellers’
Most of these “cap rates” are single digits, and exclude cost of financing. This is why the industry is building mountain ranges of negative cash flowing airboxes. You read it here first, years ago. And the recession hasn’t even really started.
$4K a month renters in Pittsburgh? Only idiots.
Here’s what you can buy for $4000/month PITI, in the area near East Liberty. It’s not great, but it’s better than a 2-bed apt.
https://www.zillow.com/homedetails/913-Wellesley-Rd-Pittsburgh-PA-15206/11284095_zpid/?fullpage=true
I’d rather pay an extra $500/month for the small monastery:
https://www.zillow.com/homedetails/2905-Castlegate-Ave-Pittsburgh-PA-15226/2115799618_zpid/?fullpage=true
“Daddy - what is a recourse loan?”
“Why honey, it is what EVERY mortgage is in Canada.”
“OK. Then why are we pouring cement into the toilets?”
++++++
Rate Squeeze in Vancouver & Toronto Housing Bubbles
Steve Saretsky - Jan 22, 2018 - Wolf Street
The Bank of Canada raised interest rates another 25 basis points last week. It was the third time in the past six months. Rates have more than doubled in that time, going from 0.50% to 1.25%. This hike was baked into the economic data, and now it’s getting baked into the debt loads of Canadian households.
Following the announcement, Canadian banks hiked their prime lending rate by an equivalent 25 basis points. The prime lending rate is the annual interest rate Canada’s major banks use to set interest rates on variable-rate loans, lines of credit, variable-rate mortgages, and HELOCs (Home Equity Lines of credit).
This means nearly instantly higher interest payments for borrowers carrying variable-rate mortgages, HELOCs, and lines of credit.
Given the current size of the mortgages, for Vancouver households, a 1% rate increase in their variable mortgage rate would require an additional 9.2% of their income to make the payment, according to Better Dwelling, and for households in Toronto, it would require an additional 8.3% of their household income. In Montreal, it would require an additional 3.2% of their household income:
The BOC’s rate hike will immediately impact the roughly 30% of existing Canadian mortgages with variable rates that adjust nearly instantly. And it will also put pressure on the C$211-billion HELOC phenomenon, whose outstanding balances have surged 500% since the year 2000.
Get this:
‘Two new luxury apartment complexes in San Diego, developed and owned by Sunroad Enterprises, have received $165M in short-term first mortgage debt in a loan originated by Mesa West Capital. The financing was structured in two pieces with Mesa West holding the $145M A-note and New York-based real estate investment adviser Clarion Partners holding the $20M B-note.’
‘Mesa West’s five-year, non-recourse loan is secured by the 253-unit Ariva and the 302-unit Vive on the Park, the two most recent apartment developments’
There’s a bunch of non-recourse lending for apartments and some amount of it is cash-out refinancing.
‘What that means is that investors are less choosy about the properties they buy and the prices they are willing to pay’
‘The other main attraction of older, stable apartments has to do with financing, Buhl said. ‘If a property has a good historical occupancy over 90 percent,’ he said in his report, ‘then it will qualify for (government) agency financing, which offers the best combination of maximum loan proceeds and attractive interest rates.’ Some of the sales in 2017 were financed with loans as low as 4 percent with 30-year amortization, 10-year maturity dates, and interest-only payments in the beginning year(s). Freddie Mac continues to be the leader, making more permanent loans on apartment properties than any other type of lender’
Do we really need to subsidize this?
As said on this blog before.
If real estate is so hot and such a great investment - why the massive subsidies?
why the massive subsidies?
———
Effective lobbyists, and crooked politicians.
same’s been said of automation/robots in manufacturing
If Fannie, Freddie, Ginnie, USDA, VA, FHA were not turning mortgages into government-backed securities, I imagine house prices would plummet astonishingly.
I mean, I still think there would be a bubble due to central bank printing and interventions, but the median price of a house across the US wouldn’t be 315K and there wouldn’t be bidding wars “in every city in America” according to an interview I saw with Redfin’s CEO.
I was going to ask about this, Ben.
What if the construction company/developer is buying the older apartment for the sole purpose of doing value-add fixup and then jack up the rent. Do they still qualify for the government financing, even though they know full well that they are about to jack up to rent to a decidedly unstable level?
The rules change. But I listened to a woman discussing this exact scenario on the radio a few months ago and she said the Dallas area complex qualified for GSA refinancing after a year or two years from purchase (I can’t remember which). At that time they took a bunch of cash out and got a lower interest rate.
When I read the article, I figured that’s why these people are buying the older places: Gonna slap in some new cabinets, etc. then double the rent.
GSE loans usually take a lot longer than a typical escrow….so, usually the GSE loans only come after the rehab is done, rents have been raised, and income has been established.
‘To recoup his investment, Bond said, he would have to charge $1,295 a month for the new, 960 square-foot apartments. However, after a slow start to leasing out the units, Bond said he had to drop rents by $200 a month. The complex filled up in a month. Yet Bond said rents will probably have to creep back up to $1,295 for him to profit off the $2 million investment’
Chuck is headed for bankruptcy, he just doesn’t know it yet.
Q: How does one “recoup his investment” when you are 20% short every month?
A: You have to somehow charge 20% + a make up percentage depending on how long you were short 20% at sometime in the future
Q: What if you can’t do that?
A: Then you lose it all
Q: Why is math so hard?
A; Cheap and easy money, the government guaranteeing every mortgage and real estate always going up
Ben, you’d have to know the area to understand how delusional this guy is with these rents. The local economy is in ruins as is the case with most small PNW logging towns. They’re slowly dying on the vine. Wages are paltry if you can even find work, and the only reason the unemployment levels show so low is because pretty much everybody fell off the radar once bennies ran out.
It is 50 miles from Portland, OR so an outrageous commute but that’s likely the only option for most. These towns are lucky to add a few hundred people in a few years’ time, and they’re mostly equity locusts from the Seattle and Portland metros wanting to bank their large gains but remain in the state near children, etc.
Ben Jones: Chuck is headed for bankruptcy, he just doesn’t know it yet.
Cue the old joke:
Q: “How do you make a small fortune in real estate?”
A: “Start with a large fortune.”
Bradenton, FL Housing Prices Crater 26% YOY As Excess Inventory Floods Market
https://www.movoto.com/bradenton-fl/market-trends/
This shows the opposite of inventory flooding the market. It shows a 99% decrease in available inventory, down from 1,500+ units a year ago to 14 currently. That’s a dramatic change. I wonder what is going on there.
DebtDonkey
Parker, CO Housing Prices Crater 8% YOY
https://www.movoto.com/parker-co/market-trends/
‘An investment fund tied to the nation’s largest apartment manager, headquartered in South Carolina, sold its first property for an undisclosed price last month.’
‘Greystar Equity Partners VIII limited partnership unloaded Avana West Lemmon, a 372-unit luxury apartment home community in Dallas. The buyer was Ohio-based real estate investment firm The Connor Group, which in 25 years has grown to more than $2 billion in assets. The Greystar equity partnership is involved with Charleston-based Greystar Real Estate Partners, LLC, which oversees more than 420,000 apartment dwellings globally valued at more than $80 billion.’
‘the nation’s largest apartment manager…sold its first property’
And Greystar is well-known in DFW as being the worst of the apartment complex owners:
Greystar management complaints
Re downtown LA: “…and almost all the new apartments will be at the higher end of the market”
Meanwhile, nearby, people live in their cars because even if they’re working, they can’t afford rent.
No to mention the thousands living on the sidewalks and by the bike paths, that you get to look at if you can afford a pricey downtown apartment.
“No to mention the thousands living on the sidewalks and by the bike paths, that you get to look at if you can afford a pricey downtown apartment.”
You are applying the wrong spin on this situation. The correct way to view this situation is to regard it as Pent Up Demand.
https://www.google.com/search?q=downtown+los+angeles+homeless&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiCs_Ox1e7YAhUPymMKHSnAC8sQ_AUICygC&biw=1360&bih=651
Are they also building “luxury apartments” in Anaheim? With a view of the homeless tent city? Did anyone notice in the video posted the other day that Anaheim has trash collection dumpsters in the tent city, and that they are actually numbered?
California has really gone to h#ll since I left 20 years ago. It is indeed the most impoverished state in the country.
I noticed the trash collection points. I’m sure there’s some regulation or law on the books there that prohibits camping like that, but rather than enforce it, they encourage it by adding dumpsters.
I guess I’m just mean spirited, but I’ve always been opposed to enabling efforts like needle exchanges, shower buses, water stations for border jumpers etc.
Enforce the laws, round people up, take them somewhere. The city belongs to the taxpayers, it ain’t a public campground.
“Enforce the laws, round people up, take them somewhere.”
Where exactly is this somewhere? Genuinely curious
Outside the city limits. Build a proper tent city if they like to camp so much. Give them jobs to do, cooking, cleaning, emptying trash, breaking rocks, whatever. Have a talent show every Thursday and movie night on a big inflatable screen on Friday after the sun goes down.
And if that option doesn’t appeal then throw them in jail.
Would that just be moving people to land that’s not part of an incorporated city or town, just making the problem a problem for the county cops?
At least we agree it’s a problem.
I’m just the big idea man, I’ll leave it to the smart people on my staff to work out the details.
What’s your plan?
“What’s your plan?”
Send them to Berkeley.
From Wikipedia …
“Today, People’s Park is a free public park. Although open to all, it is mainly a daytime sanctuary for Berkeley’s large homeless population who, along with others, receive meals from East Bay Food Not Bombs. Public toilets are available, and the park offers demonstration gardens, including organic community gardening beds and areas landscaped with California native plants, all of which were created by volunteer gardeners. A wider audience is attracted by occasional rallies, concerts, and hip-hop events conducted at the People’s Stage, a wooden bandstand designed and built on the western end of the park by volunteers organized by the People’s Park Council. Nearby residents, and those who try to use the park for recreation, sometimes experience conflict with the homeless people.”
Photos …
https://www.google.com/search?q=homeless+in+berkeley&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjtkLTb_O7YAhUN-mMKHeRwAD4Q_AUIDCgD&biw=1360&bih=651
receive meals from East Bay Food Not Bombs.
Add that to my short list of enablers above.
What’s your plan?
I haven’t read much about the issue, but I remember hearing about this a few years ago.
Housing First is a relatively recent innovation in human service programs and social policy regarding treatment of the homeless and is an alternative to a system of emergency shelter/transitional housing progressions. Rather than moving homeless individuals through different “levels” of housing, whereby each level moves them closer to “independent housing” (for example: from the streets to a public shelter, and from a public shelter to a transitional housing program, and from there to their own apartment in the community), Housing First moves the homeless individual or household immediately from the streets or homeless shelters into their own apartments. “Rapid Re-Housing” is based on Housing First principles and is considered a subset of the Housing First approach. Rapid Re-Housing differs primarily in the provision of short-term rent subsidies (generally 3–6 months), after which the tenant either pays rent without a subsidy or has access to a Section 8 Housing Choice voucher or the equivalent.
…
The Denver Housing First Collaborative, operated by the Colorado Coalition for the Homeless,[19] provides housing through a Housing First approach to more than 200 chronically homeless individuals. A 2006 cost study documented a significant reduction in the use and cost of emergency services by program participants as well as increased health status.[20] Emergency room visits and costs were reduced by an average of 34.3 percent. Hospital inpatient costs were reduced by 66 percent. Detox visits were reduced by 82 percent. Incarceration days and costs were reduced by 76 percent. 77 percent of those entering the program continued to be housed in the program after two years.
Researchers in Seattle, Washington, partnering with the Downtown Emergency Service Center, found that providing housing and support services for homeless alcoholics costs taxpayers less than leaving them on the street, where taxpayer money goes towards police and emergency health care.[3][21][22] Results of the study funded by the Substance Abuse Policy Research Program (SAPRP) of the Robert Wood Johnson Foundation[23] appeared in the Journal of the American Medical Association April, 2009.[3] This first US controlled assessment of the effectiveness of Housing First specifically targeting chronically homeless alcoholics showed that the program saved taxpayers more than $4 million over the first year of operation. During the first six months, even after considering the cost of administering the housing, 95 residents in a Housing First program in downtown Seattle, the study reported an average cost-savings of 53 percent—nearly US $2,500 per month per person in health and social services, compared to the per month costs of a wait-list control group of 39 homeless people. Further, stable housing also results in reduced drinking among homeless alcoholics.
https://en.wikipedia.org/wiki/Housing_First
Slogan shown in one of the pics at Mr. Banker’s link: “house keys not handcuffs”
@TPP thanks for the honest reply, personally I don’t like that plan. That’s part of the “if they can pay, make them pay, and if they can’t, give it to them anyway” mindset. It actually means that the people that are already paying for their own overpriced crap have to pay more.
Which isn’t really so much about the money as it is the time you have to burn to get said money.
I like a solution that has a built-in incentive to improve your own situation, like living in a tent, just not one that I can see from my car window.
one that I can see from my car window…
Life can take some unexpected turns and the spirit sometimes falters. If one day you are standing without nothing looking at a guy driving by flipping you the bird, and who seems to have everything, I hope you can say “I had that once”.
I hear you BlueSkye. I don’t really have the viciousness in my heart that my previous series comments would seem to indicate. There but for the grace of God go I.
I guess I was going for shock value because watching that video and seeing pictures of tents in the middle of sidewalks and in parks where parents could be taking their kids on an outing but don’t because they don’t want to be hassled - just makes me more mad then it does empathetic.
Not mad at the homeless necessarily, though I gotta think that the decision to plop your tent in the middle of the sidewalk is about the same gesture as the middle finger of the driver going by. More mad at “leaders” that only seem to address problems when the reach some kind of critical mass and nerves are frayed on all sides.
I suppose you’ve got a point there. It’s no so much the fault of the unfortunate that they are well, unfortunate. It’s only that they try to live where we are living, and be seen. The Leaders should not let them sleep in the sight of honest folk with incomes. Even mothers and children! The leaders should do something to remove this visual affront to the better folk. Not sure what that looks like but our Leaders can figure it out.
We have this same problem at my Yacht Club. Joggers, Photographers, poor boaters and even Amish kids with fishing poles think they can just come on in and do their thing. Our Leaders do not tolerate it.
That’s quite the sarcastic leap you made there!
The superior virtue of the homeless. Got it!
Quite the sarcastic leap you made there!
The superior virtue of the homeless. Got it.
For what it’s worth, the housing first approach does seem to work. But it’s incredibly expensive. I think to solve the homeless problem, you’ve got to put people in houses, even if they can’t afford them. If this sounds expensive and to involve lots of government, that’s because it does. I don’t expect everyone to agree with this. Heck, I hardly would have agreed with this myself and I used to think about homeless very differently until I switched careers and became an RN and ended up seeing the revolving door of homeless coming through the ER. I think it’s better to have the government own the housing than to use vouchers. It’s cheaper in the long run.
On option that has been floated around is to house the homeless in the base housing at abandoned military bases. You could put them in base housing, or college dorm-style buildings, or in the basic-training bunk-rooms like you see in military movies. Get them cleaned up: shower shave haircut delouse antibiotics anti-viral anti-fungal etc. Heat and A/C, decent food, lots of good bathrooms. If they are drug addicts, gov could buy the drugs themselves and simply hand them out. Or give treatment and methadone as desired. Basically, it means establishing pre-Reagan institutions. But it’s clear that the experiment isn’t working.
To me the main objective is the get the homeless OUT of the city centers. The land is just too valuable.
Hey Donk
“To me the main objective is the get the homeless OUT of the city centers. The land is just too valuable.”
This is exactly the kind intervention that is needed I think. And, it is actually what is happening in greater Salt Lake City, albeit reluctantly. Our state is incredibly red and dominated by Republicans, but they have recognized that the market isn’t going to solve the problem, nor are charitable organizations sufficient for the problem at hand. The tipping point I think became when downtown businesses in the Rio Grande district were starting to have revenues threatened and were going to relocate or close because of the blight. There were needles lying around everywhere and convention revenue began to get hurt because of the eye sore. It’s kind of sad that this was the impetus to begin to start caring in earnest, but whatever gets the ball rolling is fine with me.
Finally UT legislatures are starting to get their hands around this problem and are finally starting to pour public funds into this type of comprehensive effort. Everything you have mentioned is on the table, including substance abuse counseling, and dedicated safe locations specifically for single woman with children (we often forget how much of the homeless are children).
The homeless problem was dispersed into smaller locations spread out across the valley, but was met with massive local resistance (NIMBYism). It’s kind of exacerbated the problem in some way. It probably needs to remain concentrated in a non-valuable area of the city like you mention to remain politically palatable. But the problems of concentrating the homeless leads to predatory drug dealers and it does sort of create a ghetto effect. If it’s concentrated, it has to be policed and regulated massively. I kind of wonder if it might not be cheaper just to buy homeless people used RVs and give access to shower facilities.
“city centers. The land is just too valuable.”
Got to keep the value of that land as high as possible. What an irony. Those people who can no longer afford a place to live are giving all of you land owners the middle finger.
Dear reddit…
Q: Why are there no attractive homeless people?
A: The real answer to you question lacks humor and is actually very dark and scary.
Jazmin, the HOTTEST Homeless Gurl:
https://www.youtube.com/watch?v=X87nqqjKgmI
the most impoverished state in the country
Yes, yes it is. Lurkers and newbs on this blog deserve daily reminders of this
And just wait for the AI’s and bots to automate most menial jobs. Pretty soon you’ll need a Master’s degree to sell popcorn in Disneyland.
There’s going to be a need for Universal Basic Income fairly soon, at the rate the jobs are disappearing. I don’t know what the end game is, but things are looking pretty ugly for the future.
I don’t know what the end game is, but things are looking pretty ugly for the future.
It’s still the calm before the storm. Retail and fast food are still hiring in my little burg and paying more than minimum wage; but it won’t last.
Interesting data
US delinquencies rate rising 6.54% yoy
# of properties 90 days past due, but in foreclosure are 726k
Yet, total foreclosure starts are down 25.46% yoy
http://investor.bkfs.com/investors/press-releases/press-release-details/2018/Black-Knights-First-Look-at-December-2017-Mortgage-Data-90-Day-Delinquencies-Jump-Again-as-Hurricane-Fallout-Continues/defa
Forgot the link! Also I’m not tech savvy so apologies if this is not in the correct format to post here.
That link doesn’t work, but this may be another version:
https://globenewswire.com/news-release/2018/01/23/1299209/0/en/Black-Knight-s-First-Look-at-December-2017-Mortgage-Data-90-Day-Delinquencies-Jump-Again-as-Hurricane-Fallout-Continues.html
The old hurricane story. Kinda of like the realtor cold weather reason.
The fact remains everyone is putting their mortgage payment on a credit card. Now they’re maxed out.
“The fact remains everyone is putting their mortgage payment on a credit card. Now they’re maxed out.”
😁
I once saw someone at AM/PM grocery shopping with a gas card. No chit.
looks like the price of your solar panels and washing machines is going up. thank you DJT!
If the jobs aren’t here, does a little cheaper washer do much for the economy?
so u want to force people to pay more to buy american?
This globalism mumbo-jumbo has failed. Here’s a secret the fake news media doesn’t want you to know: the Mexican people despise NAFTA and have since the 1990’s.
isnt a tariff basically a sign that u cant compete with their product?
If china sells less stuff to us that means less dollars to buy treasuries?
Is the US market too big to walk away from?
You need one of those magic eight-balls.
http://www.ask8ball.net/
Azhole, if people dont have good jobs, they cant buy a whole lot of stuff, regardless of where its made. Many countries not controlled by (((them))) protect their people and their job market - try selling US goods in China, Japan or S. Korea. With few exceptions, its very difficult. I’ve watched over the last 20 years a lot of the goods I buy get their manufacturing moved abroad with a corresponding drop in quality but little to no drop in price.
But thanks for your let them eat cake sentiments.
obviously u dont know jack sh@t about economics.
Oh my, the $hithouse Poet is an economist!
Please explain; how does a community increase prosperity by sending its wealth outside to buy crap that will get thrown in the trash?
“Azhole, if people dont have good jobs, they cant buy a whole lot of stuff, regardless of where its made.”
Sure they can. Enter Mr. Banker and his dotted-line special…
Exactly. I’ve always bought decent used appliances and never had a problem with the fancy looking crap from Korea that breaks down if someone so much as burps in the vicinity.
These new Chinese appliances come with a 1 year warranty and they are expensive garbage. A person could easily go through 3 washing machines in 10 years.
The price charged will be what the market will bear. Fridge prices didn’t drop when assembly went to Mexico and they began using Chinese compressors that break in just a few years.
Also worth noting: maquiladoras existed long before NAFTA.
And yes, NAFTA wrecked a large part of Mexican agriculture (Mexico imports corn from the US) and Mexican wages never rose.
China and Korea have YUGE trade surpluses with America.
They will lose even YUGER in a trade war.
Trump will win again and win over a bunch of democrats in the process.
“China and Korea”
No such thing as Korea. It’s all part of China now, if indeed it was ever a separate entity to begin with. Just another one of those $hitty partitions that the brits specialize in and hand off to the US. What a joke.
No such thing as Korea.
China does see all of southeast Asia as part of greater China. But none of those countries see themselves as part of China. They hate China like China hates Japan.
True, but in light of recent events, I do think “South” Korea has capitulated. And I think China will allow them somewhat of an illusion of independence, for a while, putting in controls slowly and gradually. Frogs on a slow boil.
It’s really just my opinion, though.
The Brits are guilty of many things but Korea isn’t one of them.
In 1392, the general Yi Seong-gye established the Joseon Dynasty (1392-1910) after a coup. King Sejong (1418-1450) promulgated Hangul, the Korean alphabet, as an alternative to Chinese characters, previously the only system of writing. This period husbanded many cultural and technological advances. Between 1592-1598, Japan invaded Korea, but the Korean Navy, led by Admiral Yi Sunsin eventually repelled with support from Korean resistance armies and Chinese aid. In the 1620s and 1630s, Joseon suffered invasions by the Manchu Qing Dynasty.
Beginning in the 1870s, Japan steadily forced Korea out of China’s sphere of influence and into its own. In 1895, Empress Myeongseong was killed, with Japanese involvement in the assassination. In 1905, Japan forced Korea to sign the Eulsa Treaty making Korea a protectorate, and in 1910 annexed Korea, although international scholars consider neither legally valid. The massive nonviolent March 1st Movement of 1919 manifested Korean resistance to the Japanese occupation. Thereafter the Korean independence movement, coordinated by the Provisional Government of the Republic of Korea in exile, operated mainly in neighboring Manchuria, China and Siberia.
With the defeat of Japan in 1945, the United Nations developed plans for a trusteeship administration by the Soviet Union and the United States, but the Soviet Union refused to cooperate.
http://www.newworldencyclopedia.org/entry/History_of_Korea
Sorry, didn’t mean to mix up the two concepts. Just saying the Brits are masters of the partition and the Korean partition is similar. That thing about the UN, though. Interesting, that. I’ll have to look into it and see who all was involved. Wouldn’t surprise me to discover the fine hand of Britain waving around in the background wot, wot? Blighty never saw a partition it didn’t like, pip! pip!
No doubt the Asian nations were and are perfectly capable of getting into it amongst themselves.
How’s Mr. 007 Christopher Steele doing these days? Any more dossiers in the works?
I do think “South” Korea has capitulated.
Really? I think they are just playing good cop to the USA’s bad cop. Reminding their brothers to the north that they are family and it doesn’t have to be this way.
They capitulated.
China is S.Korea’s largest importer(>60%). Two months ago China stopped buying their goods in retaliation for them getting closer to us and it created an instant Recession in S.Korea. Now they are back in the fold. (It’s similar to the hold that Russia has over east Europe with its pipeline of natural gas in the Winter.)
“looks like the price of your solar panels and washing machines is going up. thank you DJT!”
But they’re not done thanking Obama/
https://www.youtube.com/watch?v=lkh72q6XmY8
AFAIK, NAFTA has not been repealed yet. So you should still be able to buy you Mexican made US brand appliances without tariffs. Those fancy Korean ones or the cheapo Chinese ones (Haier) might cost more.
Haier recently bought GE’s appliance business. I don’t have any experience with them, but they are considered one of the top Chinese manufacturers (along with Huawei and Lenovo)
Yah, Sessions, you old fraud. Should have recused yourself from the AG gig, period. Conveniently “forgot” that you had met with Kislyak on at least two occasions, did you now? Farkin’ the whole DOJ/FBI is in bed with the Russians and has been for years, and “investigating” the only person who wasn’t, DJT. I’d love to have been a fly on the wall for that convo with Mueller. I bet it was a real laff-a-minute.
https://www.zerohedge.com/news/2018-01-23/sessions-interviewed-mueller-russia-probe
Yah, Sessions, friggin’ quit now. And take Christopher Wray, who apparently can’t handle the pressure, with you. The entire DOJ smells like a$$.
Scoop: FBI director threatened to resign amid Trump, Sessions pressure
Attorney General Jeff Sessions — at the public urging of President Donald Trump — has been pressuring FBI Director Christopher Wray to fire Deputy Director Andrew McCabe, but Wray threatened to resign if McCabe was removed, according to three sources with direct knowledge.
Wray’s resignation under those circumstances would have created a media firestorm. The White House — understandably gun-shy after the Comey debacle — didn’t want that scene, so McCabe remains.
Sessions told White House Counsel Don McGahn about how upset Wray was about the pressure on him to fire McCabe, and McGahn told Sessions this issue wasn’t worth losing the FBI Director over, according to a source familiar with the situation.
Why it matters: Trump started his presidency by pressuring one FBI Director (before canning him), and then began pressuring another (this time wanting his deputy canned). This much meddling with the FBI for this long is not normal.
https://www.axios.com/scoop-sessions-fbi-trump-christopher-wray-877adb3e-5f8d-44a1-8a2f-d4f0894ca6a7.html
“This much meddling with the FBI for this long is not normal.”
This much meddling with the country by the FBI for decades is not normal. Shut it down. It’s done more damage to the US than Russia, NoKo and China combined. And how about that Vegas farce? Heckuva job! Eff the FBI. Most of the trafficking of drugs, people, uranium, etc. would end in the wake of shutting down the EffBI.
This guy just quit the FBI. Take a good long look at the picture of this guy, another little tart with a fruity smile and doe eyes. Chief of staff to both Comey and then Wray. Must’ve been love at first sight between him and Comey.
https://heavyeditorial.files.wordpress.com/2017/06/aaeaaqaaaaaaaajpaaaajgqxmde5ytuylte4mtutnda1yy1hotaxlwzhnmfmnzdkm2q0zq.jpg?quality=65&strip=all&strip=all
Hundreds of homeless face eviction or arrest as O.C. clears encampment amid shelter bed shortage
Ray Huey bounced around from North Carolina to Washington state, Oregon, Idaho and Nevada before landing at the homeless camp on the side of the Santa Ana River in Anaheim.
In Anaheim, he found an unlikely collection of homeless people, including many couples. For years, this growing camp has become not just a place to sleep but a community for hundreds, complete with makeshift dwellings and a scattering of dogs.
But on Monday, Orange County officials began clearing out the camp, the final stage in a months-long effort to remove camps along the river that had become a much-debated symbol of the affluent county’s spiraling homeless problem.
“I just love this country, so it’s hard to pick one place to stay,” Huey said. “I guess I have to respect what they’re doing — but no, I haven’t made up my mind where to go next.”
An estimated 4,800 homeless people are in the county. Officials have responded to the rising homeless population by adding 525 beds in the last year or so, with 100 more coming in 2018. But that’s far from keeping up with demand.
http://www.latimes.com/local/lanow/la-me-ln-orange-county-homeless-sweep-20180122-story.html
For years, this growing camp has become not just a place to sleep but a community for hundreds, complete with makeshift dwellings and a scattering of dogs.
For years, Orange County officials haven’t been doing their job.
“I just love this country, so it’s hard to pick one place to stay,” Huey said. “I guess I have to respect what they’re doing — but no, I haven’t made up my mind where to go next.”
Here’s a suggestion (with directions) …
https://www.google.com/search?ei=hYpnWvacApC4jwOLsa2ABQ&q=directions+from+anaheim+to+people%27s+park%2C+berkeley&oq=directions+from+anaheim+to+people%27s+park%2C+berkeley&gs_l=psy-ab.3..33i160k1.9925.13061.0.13714.10.10.0.0.0.0.110.857.8j2.10.0….0…1.1.64.psy-ab..0.9.777…33i22i29i30k1j33i21k1.0.I6SGeYP58AI
East Sacramento, CA Housing Prices Crater 5% YOY As Housing Correction Expands Statewide
https://www.zillow.com/east-sacramento-sacramento-ca/home-values/
Well I am waiting for the California housing bubble to pop in Sacramento, San Diego and other California metros. I don’t see any drop in prices.
January 12, 2018
“There is a rule of thumb among real estate agents that if a property is priced fairly, it should sell in about a month and within 5% of the asking price. A median-priced home in Los Angeles County does indeed sell at or above the asking price within an average of 30 days. Luxury homes, on the other hand, usually go through a multitude of price drops, lingering on the market for months, sometimes even years.”
“One Pacific Palisades home that closed in October originally hit the market in March. The initial price is now scrubbed from MLS records, but after a recorded price change to $7.49 million in April, and a subsequent drop to $6.99 million in July, the home eventually sold for $4.2 million. So unlike the middle of the market, where it behooves buyers to act as quickly as possible, luxury buyers are better served by waiting to see just how low the price will go.”
http://thehousingbubbleblog.com/?p=10311
La Jolla San Diego, CA Housing Prices Crater 7% YOY On Record Low Housing Demand
https://www.zillow.com/la-jolla-san-diego-ca/home-values/
https://snag.gy/m5EzRB.jpg
rent ,schment
which city has the most sidewalk poop per capita?
poopcap index
The great thing about this time of year in the colder cities is that the poop will freeze solid.
Do they call them . . . poopsicles?
I’m here all night, try the veal its delicious!
Re-post of a classic:
http://www.sfgate.com/bayarea/amp/Human-waste-shuts-down-BART-escalators-3735981.php
Probably Mumbai, followed by SF and Seattle in a battle to be, uh, number 2!
The jokes just write themselves, lol. Maybe some enlightened scientist will point out in a study that for every s-hole there is a high incidence of a-holes. SF and Seattle and the rest of the bluetard cities certainly qualify.
I used GoogleMaps/Earth to check out Lagos, Nigeria, which is more populous than New York. Holy crap, pun intended. Every street was lined with open sewer channels on both sides. You had to cross a ramp over the channel to get to a house, or a shop. Of course everything was falling apart.
Yup. Google is the best way to tour those places, no vaccinations required and no diseases upon your return.
China’s Housing Market Is Like a Casino. Can a Property Tax Tame It?
By KEITH BRADSHER
JAN. 22, 2018
NANJING, China — China has tried just about everything to tame a property market in which home prices sometimes jump around like the value of Bitcoin.
Over the years, in one city or another, it has limited mortgage lending. It has tried to halt purchases of homes by people who already own one. It has plowed billions of dollars into building new homes that regular Chinese people can afford.
Many investors snap up homes — in China, they are mostly apartments — hoping to ride a price surge. In the biggest cities, property prices on average have at least doubled over the past eight years. But vast numbers of apartments in many cities lie empty, either because the buyers have no intention of moving in or renting out, or because speculators built homes that nobody wants.
In October, Xi Jinping, China’s president, told the nation that “houses are built to be inhabited, not for speculation.”
Real estate fervor was on display on a chilly recent morning at an apartment complex in the eastern city of Nanjing. Would-be buyers spent the night in tents and under quilts, lined up for a chance to buy. So many cars arrived, according to people who were there and photos that went viral on social media, that traffic seized up for a mile around the sales office.
“There were a lot of speculators,” said Han Changlong, a Nanjing real estate inspector who attended the event. “Some people believe that if they don’t buy now, homes will become more expensive in the future.”
https://www.nytimes.com/2018/01/22/business/china-housing-property-tax.html
“But vast numbers of apartments in many cities lie empty”
I always think about this, whenever I hear about the zillions of refugees all over the world. Seems like China could easily house them all.
It’s obvious that property taxes can help quash speculation in housing. I’ve long thought that one of the reasons why CA housing prices are so ridiculous is because of prop 13. Property taxes add to the carrying cost of the asset, so the higher the property taxes, the less the property should be valued at. We know that home prices and mortgage rates are inversely related, why more governments don’t increase property taxes as a way of scattering rampant speculator has always perplexed me.
I would be much more in favor of a progressive property tax rather than a progressive income tax. Properties can’t pick themselves up and leave as easily as high earners can. If you want to protect your tax base, it seems like taxing property is better than taxing income.
Dude, high property values came first (in the 1970’s with CA’s bubbles and growth restrictions) which caused high property taxes which then led to Prop 13
CA property values were higher in the 70s than the national average, but not near as high as they are now.
Take a look:
https://ww2.kqed.org/news/2017/11/06/the-withering-california-dream-by-the-numbers/
Look at the chart “California vs U.S. median home prices, over time”
In 1970 in the average CA house was 35% higher than the nationwide average. In 2015, the average CA house is about 145% higher. It would seem that prop 13 has done nothing to keep the values in check. Very likely, it has only exacerbated the “houses as store of value” and “financialization of housing” trend.
Or maybe it’s what caused the original price spiking, growth restrictions and job growth (often bubble and stock fueled in the Silicon Valley). If Prop 13 is the problem, why is the same thing happening in Seattle?
Multifaceted problem. Likely there are several contributors. I wouldn’t put all the blame on prop 13. Regs and underbuilding combined with easy money and job growth all have their role to play, that I accept. But fundamentally higher property taxes should dampen some of the appetite for speculation and keep housing for consumption. As Xi Jinping said, “Houses are built to be inhabited, not for speculation.”
They’re already high enough, given housing prices - we have friends whose property taxes are more than our rent, UGH!
In 1970 in the average CA house was 35% higher than the nationwide average. In 2015, the average CA house is about 145% higher. It would seem that prop 13 has done nothing to keep the values in check.
Why would keeping property taxes from rising keep home prices low? Prop 13 actually drives prices higher.
CEQA was passed in 1970.
This law has dramatically reduced development over time. This has had a far greater impact than prop 13 on driving prices higher…but both policies pushed prices higher.
Coastal California zip code(s) have much higher government loan guarantee limits than “flyover country.” As rising prices hit these limits they were raised to allow increased borrowing (speculating).
The Chinese know better than to accept them.
In the biggest cities, property prices on average have at least doubled over the past eight years. But vast numbers of apartments in many cities lie empty, either because the buyers have no intention of moving in or renting out
Because they are all convinced they will double again in the next 8 years. There is no other reason to hold empty (or rented at a pittance) property unless you are also worried your cash and stock might become worthless but real estate won’t. I haven’t gotten the vibe that they are worried.
Goldman issues a warning on bitcoin—and an even bigger warning on Ethereum
Published: Jan 23, 2018 11:09 a.m. ET
Goldman quotes historian on ‘tulip bubble’: ‘Our descendants doubtless will laugh at the human insanity of our Age’
By Ryan Vlastelica
Markets reporter
The chorus of bitcoin bears is growing louder by the day.
The latest to issue a stern warning against the world’s largest digital currency is Goldman Sachs’s investment management division, which wrote that there is “no doubt” that the cryptocurrency’s astronomical rise over the past year “has pushed it into bubble territory.”
The firm added that bitcoin’s “meteoric rise in a short time has dwarfed the rise seen during the dot-com bubble.” They added: “We also believe that cryptocurrencies have moved beyond bubble levels in financial markets, and even beyond the levels seen during the Dutch ‘tulipmania’ between 1634 and early 1637.”
Bitcoin (BTCUSD, +6.40%) last traded at $10,900.77, up 1.2% on the day. The digital currency, maintaining one of its most notorious qualities, has been incredibly volatile in 2018, seeing massive swings on a near daily basis. Over the past year, bitcoin has risen by a factor of more than 10, although it has also dropped significantly. After closing 2016 under $1,000, it subsequently soared throughout most of last year, peaking near $20,000 in December before turning sharply lower.
The volatility of the market, along with a lack of regulation, was cited by the Securities and Exchange Commission as reasons why it was unlikely to approve an exchange-traded fund related to bitcoin soon.
https://www.marketwatch.com/story/the-bitcoin-bubble-now-dwarfs-tulips-and-dot-com-stocks-goldman-warns-2018-01-22
Does anyone else besides me find it curious how the U.S. stock market always goes up, while Bitcoin is constantly whipsawed by volatility, up and down?
Curious? That bitcoin has no PPT?
“Victims Describe How Embezzling Bay City Realtor Affected Their Lives”
http://www.mlive.com/news/bay-city/index.ssf/2018/01/victims_describe_how_embezzlin.html
Embezzling Realtor: “First, I want to start out by saying how deeply sorry I am from the bottom of my heart to Miss Westin and her family,” Miller said. “You put your trust in me and I let you down. From the minute this came to light, I was so embarrassed and ashamed and sick over what had happened.”
Why are landlords leaving the market in large numbers?
‘I am crucified to the point that I am considering selling up’: Landlords on why despite soaring rents it can be hard to make the sums stack up with a mortgage
It’s a curious set of circumstances. Rents in the capital have never been higher. Mortgage finance, at least for those who went with a tracker during the boom, is at rock-bottom levels.
And yet landlords, if one line of reasoning is followed, are departing the market in large numbers, bringing with them properties that were previously on the rental market, which are now being sold to owner-occupiers.
And if they haven’t left already, they’re thinking about it, on the back of rent controls, higher taxation and greater compliance costs.
But why should this be so?
https://www.irishtimes.com/business/why-are-landlords-leaving-the-market-in-large-numbers-1.3360363
And Ireland is supposed to be Europe’s upwardly mobile tiger.
My employer has a campus near Dublin. Our colleagues their are paid about half what we get in the states.
Apt 401 and In Colorado - here ya go - time to go house hunting in the Denver area!!!! Linky here……
http://www.5280.com/2017/12/get-1-million-denver/
And having not been on here recently - it still being a relatively new year - Happy New Year to all youse on HBB - keep the comments coming - the news Ben is posting looks like pin will be meeting bubble soon.
Happy 2018, rj! Hope you’re lovin’ not being in Chicago anymore.
So.Very.Glad to be out of Chitown. Love it here in Castle Rock - but man o man seems the whole of the US is moving here. Yikes.
Lots of formerly really cool places all over have been ruined in the same manner. I’m thinking of several towns in Montana at this moment as an example.
I wonder what the Cherry Creek bike path is like these days? When I lived out there it was fine, have the homeless taken it over now?
No not so much the homeless as the junkies and other attendant addicts. Sad state the bike path is in - Frankly I would not be riding alone on certain sections of the path as dusk approaches - it is just eerie down there.
I used to ride that path all the time in my yute from SE Suburbs - went through Wash Park and down along Speer - it is the section from about Corona into the City that is just scary now.
That sounds dangerous. It wouldn’t take much for a used need to pierce a tire. Or to accidentally ingest a grain of fentanyl.
Which brings up a question: why are dealers cutting their heroin with fentanyl? Wouldn’t that kill off their customer base?
From the anecdotes that I’ve come across, fentanyl is much more addictive (and obviously much more potent). So if dealers don’t kill their customer base, it’s much more lucrative because it’s that much harder to quit.
There’s a reason I don’t live in Denver, or even metro Denver. Too stupidly expensive.
Kenmore, WA Housing Prices Crater 21% YOY As Speculators Flood Market With Inventory
https://www.movoto.com/kenmore-wa/market-trends/
Oh cheeze and crackers Housing Analyst! Stop the blatant lying.
Inventory in the Seattle area is at record lows. ANY used house salesperson in Seattle can confirm this for you - they are hurting because there are so few houses available to sell.
Hello my good friend.
Redmond, WA 98052 Housing Prices Crater 7% YOY On Plunging Housing Demand
https://www.zillow.com/redmond-wa-98052/home-values/
*Select price from dropdown menu on first chart
There Are 2 Vacant Investor-Owned Homes for Every Homeless Person in America
By: Carl Gibson
Economy | January 10, 2018
The difference between the greed of the wealthy and the precariousness of American workers is painfully stark when looking at vacant homes.
2016 figures from ATTOM Data Solutions — which publishes comprehensive housing data — show that wealthy investors are buying up more and more real estate as a moneymaking venture while housing prices and homelessness continue to skyrocket across America.
According to ATTOM, 76 percent of all vacant homes in America are owned by investors — amounting to approximately 1.1 million vacant residential investment properties. Many of these vacant homes are in economically distressed Rust Belt cities with high poverty rates, like Detroit, Michigan, neighboring Flint, and Youngstown, Ohio. The states with the highest investment property vacancy rate also have high poverty rates. Michigan leads the pack with 10.3 percent vacancy, Indiana at 9.8 percent, Alabama at 6.9 percent, and Mississippi at 6.6 percent.
Meanwhile, in December of 2017, the Associated Press reported that homelessness increased in America for the first time since 2010 — the height of the Great Recession. 2017 data from the U.S. Department of Housing and Urban Development showed that local counts of homeless Americans reached approximately 554,000 nationwide, which is a 1 percent increase from 2016 (and roughly half of the number of vacant residential investment properties in America today). Approximately one-third of those counted as homeless had no access to nightly shelters and were sleeping on streets, and in vehicles and tents.
https://gritpost.com/vacant-properties-homelessness/
The reality is that there will always be vacant homes. People move and in between tenants, the home is vacant. But that doesn’t mean that a better use of that home is to give it to a homeless person (as is implied by the post).
What really matters is how long the homes are vacant when the landlord is actively looking for a tenant. I suspect that if you took the 1.1MM vacant homes, and asked how many of them were vacant after unsuccessfully looking for a tenant for 3 or 4 months, the number would shrink considerably.
I am in favor of having a vacant surtax on a property, if there was a way to determine true vacancy and assess the tax equitably. Buy a house and live in it, or rent it out. But holding empty properties as financial assets seems to be detrimental to the communities in which real people actually live.
But holding empty properties as financial assets seems to be detrimental to the communities in which real people actually live.
I agree, but there’s no need for more interference in the market. With less interference designed to pump up real estate prices there wouldn’t be nearly as much held off market. Just stop punishing savers and rewarding debt. It will correct itself. But some very rich people will lose a lot of money if you do that…so you’ll have to fight them every step of the way to make that happen.
“I agree, but there’s no need for more interference in the market.”
I’m not sure that things will correct themselves, or if they do, the damage and consolidation of wealth may be so complete as to fundamentally change the social fabric we are in to something which we would cringe at. I tend to view prices this way:
a price system is a complex feat of de facto social engineering, however self-conscious or otherwise the engineering’s execution. It is constituted by multiple overlapping legal regimes and institutions that we have ourselves promulgated, instituted, and contoured. This suggests that the vaunted ‘invisible hand’ that guides price-making market transactions is in fact our hand, which we can exercise deliberately with a view to the right and the good or permit to move zombie-like, uncontrolled, while we gape at it fearfully as if at a drunken all-powerful parent.
In my mind, taxing the very thing we want (and applying the tax equitably to all cases, without prejudice to anyone) is the very thing to move to a “just price” for something as basic as housing:
It is that, first, just social relations tend both to manifest in and to be sustained by just prices, while unjust social relations tend both to manifest in and to be perpetuated by unjust prices; and second, we can accordingly rectify injustice from either side of the prices / social-relations divide. That is to say, we can either rectify unjust prices by changing the social relations that produce them, or rectify those social relations by changing the prices that tend to perpetuate them. Or, of course, we can do both.
https://lpeblog.org/2018/01/10/whatever-happened-to-just-prices/
You lost me there. But I’m confident that if there was no easy money to be made in real estate, it would move closer to a price that you would expect based on its utility rather than speculative potential. And I think less govt interference would be a step in the right direction. I think interference is the only reason it’s so expensive.
Admittedly, that was a bit esoteric. Basically I believe we live in a political economy. We have the price structure we have because of markets and regs. We should use existing regulation and bend it toward a just price. Some element of the “invisible hand” will always be subject to input from the society in which it operates. Imagine if GSE loans could only be made at 20% down and for properties no more than 3x median income for the area. That sort of regs would push the entire industry to be geared to producing affordable housing, more in line with the utility. The difference between us is that you want less government intervention and believe that will correct. I don’t accept that removing government intervention will solve the price problem (it may make it worse). I want to use the existing regs to push towards a “just price”.
I want to use the existing regs to push towards a “just price”.
why did the fairness gawd now become the ‘justness’ gawd? is it because the word ‘fairness’ is starting to earn a negative connotation that liberals want to avoid?
and who should be the arbiter of what a ‘just’ price is?
market prices are never ‘just’. the buyer always feels gouged and the seller always feels cheated. that’s just the way it is and it never goes away.
do you know what the metric of a true ‘just’ price is? it’s when the buyer and the seller agree on a price with no outside coercion.
You need to read the original link if you want to understand the intellectual basis for just price theory.
“market prices are never ‘just’. the buyer always feels gouged and the seller always feels cheated. that’s just the way it is and it never goes away.”
I rarely feel cheated when I exchange money for goods and services. I usually believe I am getting value for what I
spend my life’s resources for. But there are cases when the market breaks down for various reasons and prices and production become uncorrelated.
When Martin Shkreli bought up Turing Pharmaceuticals and raised the price of one tablet Daraprim from $13.50 to $750 overnight for a life-saving medication, that was extortionary. There are plenty of other cases of predatory pricing via monopoly, monopsony, or unequal power structures, but that is just one egregious example.
If an advantage cannot in some manner be justified, then exploitation of the advantage will not be justified either. Prices and production should be correlated, not exploitative.
You need to read the original link if you want to understand the intellectual basis for just price theory.
in everyday parlance, there’s very little difference between ‘just’ and ‘fair’. and i have no interest in what that article says. i want to know what you think.
I rarely feel cheated when I exchange money for goods and services.
no matter how faint it becomes, it’s always there.
When Martin Shkreli bought up Turing Pharmaceuticals and raised the price of one tablet Daraprim from $13.50 to $750 overnight for a life-saving medication, that was extortionary.
i’m not going to read the particulars on that, but there are always remedies which could include regulatory review and the courts.
If an advantage cannot in some manner be justified, then exploitation of the advantage will not be justified either.
you need to define what you mean by ‘advantage’.
you know what, you can disregard my reply. this topic isn’t important enough to go round and round about.
you know what, you can disregard my reply. this topic isn’t important enough to go round and round about.
Agreed. Knowing what I know about your point of view, I think it will be safe to say that we will not agree on this point, although we probably will agree on many other points. The intro to the article is this, and it strikes me as pretty much what you think:
in more ‘serious’ company appear to concede that prices can no more be fair or unfair than the number seven can be yellow or green. There are only individual preferences – my wish to pay less, your willingness to pay more – and market prices that all of us ‘take’ and don’t ‘make.’ In this foundationally critical matter, so closely bound up with the way we meet needs in a market economy, it seems we are most (if not all) of us neoclassical economists now.
I should add, I care very little if some non-essential good is fair or not. But when it comes down to items necessary for survival (food, water, shelter, clothing, etc.), I think there is a moral imperative to make sure the market prices are fair/just and not merely what the market will bear.
I had posted this a while back and thought it worth re-posting given salary data on a state by state basis relative to what we are seeing in increasing home values - curious how on a state by state basis the salary data here would overlay the cost of housing data. My gut says there is a huge disconnect between the two.
http://flowingdata.com/2014/07/02/jobs-charted-by-state-and-salary/
ca’s solar industry is under fire from trump tariffs! they think u should pay more for solar panels. lmao
Littleton, CO Housing Prices Plunge 8% YOY On Expanding Mortgage Defaults
https://www.movoto.com/littleton-co/market-trends/
Senate Approves Trump Pick Jerome Powell To Lead Federal Reserve
By MARTIN CRUTSINGER | January 23, 2018 5:55 pm
WASHINGTON (AP) — The Senate has approved President Donald Trump’s selection of Jerome Powell to be the next chairman of the Federal Reserve beginning next month.
Senators voted 85-12 to confirm Powell to lead the nation’s central bank, a post that is considered the most powerful economic position in government.
Powell will succeed Janet Yellen, the first woman to lead the Fed, when her term ends Feb. 3. Trump decided against offering Yellen a second four-year term as chair despite widespread praise for her performance since succeeding Ben Bernanke.
Powell, 64, has served for 5½ years on the Fed’s board. A lawyer and investment manager by training, he will be the first Fed leader in 40 years without an advanced degree in economics. Many expect him to follow Yellen’s cautious approach to interest rates.
Powell, viewed as a centrist, enjoyed support from Republicans and Democrats.
Sen. Sherrod Brown, the top Democrat on the Senate Banking Committee, praised Powell’s tenure on the Fed board.
“His track record over the past six years shows he is a thoughtful policymaker,” Brown said.
“‘His track record over the past six years shows he is a thoughtful policymaker,’ Brown said.”
Bahahahaha … now there’s a statement that says nuthin’.
Wiki: In a July 2017 speech, Powell said that, in regards to Fannie Mae and Freddie Mac, the status quo is “unacceptable” and that the current situation “may feel comfortable, but it is also unsustainable”. He warned that “the next few years may present our last best chance” to “address the ultimate status of Fannie Mae and Freddie Mac” and avoid “repeating the mistakes of the past”. Powell expressed concerns that, in the current situation, the government is responsible for mortgage defaults and that lending standards were too rigid, noting that these can be solved by encouraging “ample amounts of private capital to support housing finance activities.”
noting that these can be solved by encouraging “ample amounts of private capital to support housing finance activities.”
Sure. I wonder if he’s ready to stop competing with that private capital in order to keep mortgage interest rates low and house prices high?
Does Powell honestly believe that a middle-class family raising kids can repay a mortgage at twelve times income?
Happy Tuesday, everyone. Here is an update to my running totals list of purchase price percentage declines mentioned in Ben’s posts for the week. I posted a list going back to Jan 1st last week, but it’s already getting too long to repost every week, so I’ll just do weekly summaries if/when I can, and will perhaps repost the master list once every month or two.
—
Weekly Summary: HBB-Reported Purchase Price Declines
Jan 16-23
> -14% Sydney - Olympic Park and Parramatta / MED, VAL, CON (yoy -Jan 2018)
> -13.5% Greenwich, CT / AVG, PCS, LUX (Q4 2017)
> -13% Dubai (24 mos -Jan 2018)
> -4% Brooklyn / AVG SPR (Q4 2017)
> -3.28% Durango, CO / MED (yoy -Jan 2018)
–
KEY
[Brackets indicate single sales, may not reflect overall market]
(Time range indicated when info available: yoy year-on-year)
Methodology: AVG Average, MED Median, PIX Proprietary Index
Type: SPR Sales Price, VAL Valuation
Specialty: PCA Price Cut Asking, PCS Price Cut Sales
Category: CON Condo, COP Co-Op, DEV New Development, SFR Single Family
Price Bracket: ENT Entry Level, LUX Luxury
n.b. Type of decline, methodology, etc., are only noted when info is available in source material.
San Francisco, CA 94110 Housing Prices Crater 7% YOY On Rising Mortgage Defaults
https://www.zillow.com/san-francisco-ca-94110/home-values/
https://snag.gy/m5EzRB.jpg
Berkeley mayor on Wiener-Skinner housing bill: ‘A declaration of war against our neighborhoods’
New proposed legislation, introduced by Sen. Scott Wiener and co-authored by Sen. Nancy Skinner, that would require California cities to allow denser, taller housing developments near transit hubs and bus lines, has ignited controversy in Berkeley and nationally.
With some limitations, SB 827 would eliminate restrictions on the number of houses that can be built within a half-mile of BART and within a quarter-mile of major bus routes, including Muni and AC Transit. It would also block cities from mandating parking requirements.
Skinner said the bill would help supply much-needed housing in Berkeley and the state.
“In the Bay Area alone, we’ve added thousands more jobs than we have housing units,” she said. “More housing is essential to reduce the pressure that lack of supply is causing in all our communities. And there’s no more logical place for housing than near transit.”
But the bill has drawn strong opposition from many who believe it would deprive cities of their rights to control their own zoning and could also lead to unwanted density. In fact Berkeley Mayor Jesse Arreguín characterizes the bill as “a declaration of war against our neighborhoods.”
http://www.berkeleyside.com/2018/01/22/berkeley-mayor-wiener-skinner-housing-bill-declaration-war-neighborhoods/
The NIMBYs and the YIMBYs are dueling. The winners are the current residents who have seen their dwellings appreciate an ungodly amount. The losers are businesses that have to raise wages to attract labor due to high cost of living. Other losers are displaced residents or those who take on ginormous debt to get on the property ladder.
The key to resolving this stand off is to tie the two fates together, those of homeowners and those of aspiring homeowners. The incentives need to be aligned in some way via a carrot and stick approach with taxes and incentives.
Kailua, Hawaii Housing Prices Crater 24% YOY
https://www.movoto.com/kailua-hi/market-trends/
Senate has an informant talking about the “secret society” of the FBI
https://www.youtube.com/watch?v=pCXpZ57P2HI
Release the memo. Release the texts that were written on taxpayer funded phones and do it now.
Did you hear about the 7 years’ worth of data that the NSA “lost” as well?
When are people going to start waking up in this country?
Yes, ‘never’ is a valid answer.
Owners of luxury London properties are having to knock more than £1m off their house prices to sell them because super-rich overseas buyers are giving the UK a wide berth due to “eye-watering” stamp duty and uncertainty surrounding Brexit.
Mayfair-based property buying agent Garrington said homes in the capital’s most exclusive neighbourhoods have been reduced in price by an average of 9%. In Knightsbridge, the most expensive area, prices have been cut by an average of 12% – £927,000.
Jonathan Hopper, managing director of Garrington, said sellers are having to take drastic action to realise the value of their homes. “There is huge discounting of super prime properties above £5m at the moment,” he said. “A lot are being discounted by 10 or 20%.
https://www.theguardian.com/money/2018/jan/24/want-to-sell-your-luxury-london-home-then-take-1m-off
“I pay $900 a month in student loans.”
Bahahahahahahahahahahahaha.
“I really didn’t understand the magnitude until I graduated.”
Bahahahahahahahahaahahahaha.
She paid some big bucks to get an education and now … and now she is getting one.
Bahahahahahahahahahahahahahahahahahahahahahahahahahahaha.
https://www.youtube.com/watch?v=r7JcHz6ucyI