July 12, 2018

Hey, I Gotta Drop My Prices!

A report from Bisnow. “The multifamily market is in the late stages of a prolonged expansion, and capital sources continue to put money into the sector although industry experts say internal rates of return are declining. ‘Capital, especially debt, is extremely available — so is equity, and that raises prices and compresses returns,’ Southlake-based Trinity Private Equity Group principal Doug Gunn said at Bisnow’s Multifamily Annual Conference South. To be sure, plenty of equity is looking for yields and a place to land, Walker & Dunlop Managing Director Stuart Wernick said. He and others spoke on the state of multifamily financing during the conference. ‘There is not only capital here in the U.S. but all over the world,’ Wernick said.”

“Allied Orion Group CEO Ricardo Rivas said the company recently took a Houston property off the market after its best offer fell $1M short of its minimum asking price. ‘What made that decision easier was the availability of debt,’ Rivas said. Because cap rates have been compressed, investors have started to lean toward bridge loans to finance acquisitions and renovations. However, with the slowdown in rent increases, developers will need to be careful as they look at positioning their assets for a future sale as IRRs are coming down as rent growth slows. ‘We can’t pencil in anything over 17 [IRR],’ Rivas said. ‘Unless we are drinking a lot of Kool-Aid, then it’s a 25.’”

From Mansion Global on California. “San Francisco real estate markets are continuing their blistering streak through the second half of 2018, according to Paragon Real Estate Group. Some of the heat is coming from renewed interest in luxury condos flooding the market. Even while many luxury projects don’t list their offerings publicly, the sheer number of construction projects in the pipeline—68,000, by Paragon’s count, are among the evidence of an uptick in demand over the last six to nine months, said Patrick Carlisle, chief market analyst for Paragon. ‘There’s an immense amount of money sloshing around the Bay Area, for that matter, around the country,’ he told Mansion Global.”

From CBS 4 Denver in Colorado. “Denver city leaders launched a new program they say is unlike any other in the country to try and help families find affordable options for housing in the competitive renter market. The program uses vouchers supported in part by employers and apartment complexes. Councilman Kevin Flynn was the only ‘No’ vote. He says he supports programs that help families pay for the cost of rent, but wonders if this is the right approach. ‘If apartment units are vacant and new, in this hot market, that means the rents are too high,’ said Flynn.”

From Reuters on Florida. “Elene Errazuriz had spent nearly three months trying to sell her four-bedroom-house on Key Biscayne. She was surprised at the small number of visitors and the low offers. Some viewers even implied that the house had little value as its elevation is among the lowest in all of Miami-Dade county: just one meter (3.2 feet) above sea level, Errazuriz said. ‘I was afraid I’d have to sell for just the land value,’ she said.

“In mid-June, Errazuriz received an offer on her home, and was hoping to close the sale in a few weeks. But from the original asking price of $1.8 million, the house was contracted for $1.5 million - about 15 percent less. Property appraiser Pedro Garcia said his office could not conclude that lower values were related to fears about sea-level rise, and suggested the cause was likely a boom in apartment complexes being built in luxury neighborhoods.”

The Arizona Daily Star. “Let me paint a totally hypothetical scenario for you, dear reader. A midsize city with a modest architectural history finds itself at a crossroads. One of its few local landmarks — beloved by the entire community — comes up for redevelopment. The city doesn’t seem to be capable of spurring small business development beyond the vape pen economy of cannabis dispensaries, fast food joints and tattoo parlors. They lost interest long ago — assuming they had it in the first place. Let me also warn you, there is a student housing bubble and it’s coming fast. Just look at the flattening number of college aged consumers coming in the next 10-15 years.”

From The Advocate in Louisiana. “Disparate groups across the short-term rental (STR) debate are urging city officials to require people who put their homes on platforms like Airbnb to also live at the property. The city has issued more than 5,000 STR licenses over the last year, and nearly three-quarters of all STRs are for whole homes or apartments. ‘I’m afraid we’ve seen the unintended consequences of short-term rentals run amok,’ said Pat Galloway, adding that her block is empty most weeks unless STRs are booked. ‘What’s a neighborhood without any neighbors?’ she said.”

“Ben Harwood — a developer with more than a dozen STRs in Treme — said he now has vacant properties and projects-in-statis with the recent moratorium and has ‘no idea what’s going to happen.’ ‘It makes me want to sell my properties and move to another city,’ he told the CPC. One group at the meeting shouted, ‘Please do!’”

From the Times Colonist. “With Greater Victoria and Metro Vancouver creaking under the strain of sub-1 per cent apartment vacancy rates and among Canada’s highest rents, it’s eye-opening to look just south of the border at what’s happening in Seattle. The Emerald City – once itself struggling with low vacancies – is now awash with available apartments. Which means rents are falling.”

“In downtown Seattle, the vacancy rate is a whopping 25.7 per cent, according to the Seattle Times. And in newly completed downtown apartment buildings, around 40 per cent of units are currently empty. Seattle has completely flooded the market with new-build apartments in a very short space of time. In the 2015-2019 period, the city has opened or is opening more new apartments than in the previous 50 years combined. But unless we see the kind of supply flood that Seattle has seen – which still seems highly unlikely – it may not be enough to significantly move the dial on vacancy rates and rents in the long term.”

From CBC News in Canada. “First it was real estate sales numbers dropping. Then it was the prices. Now signs are emerging that Vancouver’s sky-high rents could be trending downward, according one local data analyst. Since 2016, UBC-trained data scientist Louie Dinh has been somewhat obsessively tracking the rents for Vancouver homes in his spare time and posting the findings on his blog. Now, for the first time since he started, ‘it does seem like the rents are coming down a little bit,’ he says cautiously.”

“Last year there were about 4,500 units listed each month, but that’s risen to over 5,500 units lately, his figures show. ‘Now we are starting to see landlords are pulling back a little bit and saying, ‘Hey, I gotta drop my prices so I can move my unit,’ he says. He’s willing to suggest that declining property sales could be leading many real estate speculators to rent their properties out rather than put them up for sale. ‘Last month, condo sales dropped 30 per cent to match 2012 lows, and detached homes haven’t seen this sort of sales drought since 1991,’ he writes. ‘Recent buyers will likely sit back and rent for the next few years of zero per cent growth rather than sell at a loss.’”

From Domain News in Australia. “Renting a house in some of Sydney’s most expensive neighbourhoods has become cheaper over the year as they compete with newly built apartments on the rental market. The median house rent in Sydney’s inner city dropped 5.5 per cent year on year to $1,040, according to the latest Domain Rental Report. On the lower north shore it dropped 4.5 per cent – or $50 – to $1050. Asking prices for apartments on the lower north shore also fell by 3.2 per cent to $600.”

“‘It’s the first negative year on year movement for houses in the city and east since [the beginning of the data set in] 2014′ said Domain Group data scientist Nicola Powell. ‘The supply is out-growing demand in that particular market. The pace is changing for the rental market, particularly as a cooling sales market in Sydney is giving landlords less reason to increase their rents,’ Powell said.”

“‘It’s definitely a renter’s market,’ said LJ Hooker Lane Cove business development manager Yvette Cherry. She said an influx of units in the Lane Cove area had put downward pressure on asking rents. Figures from the Department of Planning and Environment show multi-unit completions for the year to April were up more than 200 per cent annually. ‘There are two-bedroom units everywhere, there were over 150 just in Lane Cove alone when I last checked,’ she said. ‘For a lot of properties getting re-let, [landlords] have even had to offer price deductions.’”

“An influx of Sydney rental listings over the June quarter was a key factor for easing prices, with the number of houses for rent up 6.9 per cent from the previous year, and units up 16.4 per cent – their biggest annual increase since 2012. ‘We’re seeing building completions peak and seeing a lot of off-the-plan properties sold to investors [in previous years] coming onto the rental market,’ Dr Powell said.”

“Economist Stephen Koukoulas noted falling property prices meant investors who had relied on strong capital growth to get ‘bang for their buck,’ might increasingly be deterred by Sydney’s ‘relatively low rental yield’ and look elsewhere. Domain Group data showed Sydney’s rental yields had remained relatively flat year on year at 3.15 per cent for houses and 3.85 per cent for apartments. Any shortage in rental stock was a long way off, with Mr Koukoulas saying there was still a lot of supply in the construction pipeline. ‘My hunch is that….we could see more of a deterioration in [rental] prices.’”




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122 Comments »

Comment by Ben Jones
2018-07-12 06:04:37

‘The multifamily market is in the late stages of a prolonged expansion, and capital sources continue to put money into the sector although industry experts say internal rates of return are declining. ‘Capital, especially debt, is extremely available ‘

So why would more cash chase diminishing returns? These guys have mistaken available loans for demand. It’s as simple as that. Of course, they don’t really care.

April 19, 2018

From Bisnow on Florida. “‘Palm Beach is completely on fire,’ said Todd Michael Glaser, a high-end homebuilder who made his name in Miami but has lately been concentrating on Palm Beach County. ‘I’ve never seen the amount of $8M to $70M homes as in the last three and a half, four months. It’s staggering.’ It’s not just single-family homes that are hot, but a new wave of high-end condos and mutifamily apartments, especially in downtown West Palm Beach.”

“Kolter Urban President Bob Vail, who is developing the Alexander, said that there is something of an arms race for amenities in the new supply of high-end homes. ‘You see that across the U.S. There are [apartment] buildings in Atlanta, Denver and Dallas that are nicer and more fully amenitized than condominium units, because that’s what it’s going to take to get people to choose that building,’ Vail said. ‘It’s just sort of a differential advantage. It’s really become a race in those more in-demand markets.’”

“Though the market is healthy now, the developers agreed a slowdown is possible as new supply takes time to be absorbed, construction costs rise and actionable sites get harder to find. Low salaries in Palm Beach County mean that not many workers can afford high rents. When an audience member asked whether they were concerned with an economic downturn, Vail responded half-jokingly, ‘Condo developers, we don’t forecast those kind of things, you know what I mean? We’re just go, go go,’ he said. ‘And the faster we go, the faster we get to the closing, and then, I’m not going to say we don’t care, but … ‘ The audience chuckled as he trailed off.”

http://thehousingbubbleblog.com/?p=10407

Comment by Mortgage Watch
2018-07-12 11:02:35

Miami, FL Housing Prices Plummet 13% YOY As South Florida Housing Market Craters

https://www.zillow.com/miami-fl-33135/home-values/

*Select price from dropdown menu on first chart

 
 
Comment by 2banana
2018-07-12 06:05:34

So I have been tracking Farmland Partners Inc. (FPI) for a few years now.

“FPI is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns or has under contract over 166,000 acres in 17 states…”

I do not own any shares.

Yesterday - the stock is down 37%.

They are being sued.

“that Farmland exaggerated revenues “by making loans to related-party tenants who round-trip the cash back to FPI as rent.” The report continues to allege that 310% of Farmland’s 2017 earnings could be artificially inflated and says that, “[w]e found evidence that strongly supports FPI has significantly overpaid for properties”

Don’t know if true and the stock is bouncing sharply today.

But - we have all seen this before in RE…

https://finance.yahoo.com/news/shareholder-alert-bronstein-gewirtz-grossman-183600296.html

And lawyers can’t do math either.

Comment by taxpayers
2018-07-12 08:37:52

farm land has been way high vs crop prices
has to be a scam
good catch
I thought crop prices were heading up?

Comment by rms
2018-07-12 08:59:44

“has to be a scam”

If there’s money involved…

Comment by 2banana
2018-07-12 09:28:59

Kinda reminds me of how “high growth” Boston Market, Enron and Lucent went from flying high to getting crushed.

Lending money to customers/franchises who then turned right around and used the same money to purchase goods/services from the corporation (hey lookie - lots of revenue) - and this counted as “growth”

What could go wrong…?

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Comment by Mr. Banker
2018-07-12 10:41:29

“The report continues to allege that 310% of Farmland’s 2017 earnings could be artificially inflated …”

Bahahahahahaha … 310 percent? I love creative math as much as the next guy but, seriously, 310%?

 
 
Comment by Ben Jones
2018-07-12 06:09:28

‘How Sam Zell Deals With an Oversupplied Market’

‘Unfortunately, Zell is still quite pessimistic about real estates’ prospects. He thinks there’s so much real estate under construction that a “tsunami of supply” is coming to market, which is why he sold $10 billion worth of buildings over the last couple of years.’

‘There’s oversupply in every subtype of real estate, according to Zell. He’s hiding in cash to ride out the tidal wave since oversupply has killed every other real estate cycle.’

‘What supply? Zell specifically calls out a number of New York developments: Hudson Yards in New York with 14 million square feet. Brookfield with 5 million square feet. Penn Station. Almost 20 million square feet of real estate right there, and Zell just doesn’t see the demand.’

‘It’s not just offices, there’s also an abundance of industrial real estate being built. Mostly warehouses, which everyone thinks they are going to rent out to Jeff Bezos. But what if Amazon doesn’t rent the building?’

‘Even in residential, he notices vacancy rates going up across his portfolio.’

‘Zell isn’t just talking smack. He really acts on his beliefs that the outlook for the U.S. real estate market is bleak. His main concern being too much supply. It may take a year or two for his thesis to play out, but his felllow panelists did little to convince me otherwise. Zell’s solution has been to slowly sell in these good times and build up liquidity to take advantage when the downturn finally arrives.’

Comment by Ben Jones
2018-07-12 06:17:47

‘Even in residential’ like it’s some magical category.

‘Development Pipeline Creates Near-Term Risks for Multifamily.’

‘Multifamily development has ratcheted up in recent years, with more than 600,000 units delivered over the last two years and the same amount to be delivered in 2018 and 2019. Is the industry simply meeting the needs of the growing population or are we overbuilding? ‘

‘A study by Yardi Matrix of demand and supply trends in the top 30 U.S. metros by population over the next five years found that multifamily deliveries may outpace demand in some of the top 30 U.S. metros over the next two years. That should create volatility as some markets and submarkets with outsized development activity experience rising vacancy rates and stagnating rent growth.’

‘In the near term, markets at risk of oversupply include Denver, Seattle, Charlotte, Dallas, Phoenix and Miami, where deliveries are expected to outpace demand. Investors and developers can still find attractive deals in those markets, but submarket and site selection will become even more important.’

‘Most of the metros that are at short-term risk of oversupply have strong economies and healthy multifamily demand, so units coming online should be absorbed by growing populations. Plus, developers will pull back the throttle if occupancy rates wane much.’

‘Our numbers forecast 440,000 units will be delivered in the top 30 metros, while we expect demand for 290,000 apartment units. Supply growth is led by the New York metro; Dallas; Washington, D.C.; Los Angeles; Denver; and Miami, all of which have at least 25,000 units under construction right now.’

‘The results show that the occupancy rate of stabilized apartments in the U.S.—which has dropped about 100 basis points over the last two years to 94.8 percent as of April, per Yardi Matrix—is likely to keep trending downward.’

‘Metros in which supply is expected to exceed demand the most as a percentage of stock include: Denver, Seattle, Charlotte, Dallas, Phoenix and Miami.’

‘Demand will be healthy, but it is not unlimited. Our calculation forecasts demand for 135,000 to 145,000 multifamily units per year in the top 30 metros, which represent about two-thirds of the population and demand in the U.S. The recent trend in deliveries is more than 300,000 per year. If that trend continues, occupancy rates can only be maintained under the most favorable demand and economic scenarios.’

‘Looking forward, the industry needs to find ways to develop housing that is affordable without overbuilding in a way that disrupts business models.’

In other words, put your head between your knees and kiss your a$$ goodbye.

Comment by Apartment 401
2018-07-12 06:44:31

Denver = CRATER.

Comment by Apartment 401
2018-07-12 06:53:01
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Comment by In Colorado
2018-07-12 14:55:16

Any predictions on how many there will be this time next year?

 
 
 
 
Comment by taxpayers
2018-07-12 06:19:46

r the American homes 4 rent REIT etc still buying?
Their balance sheet is still growing

was a slick idea in 2011-12

now? not so slick

Comment by Ben Jones
2018-07-12 06:24:03

’slowly sell in these good times and build up liquidity to take advantage when the downturn finally arrives’

All well and good for him. Lots of people won’t be retiring though.

Comment by Ben Jones
2018-07-12 07:03:59

‘markets at risk of oversupply include Denver, Seattle, Charlotte, Dallas, Phoenix and Miami, where deliveries are expected to outpace demand’

Have you noticed the supply and demanders have gone missing? Jeebus, these cities were the hottest of the hot! New York City is so screwed nobody even mentions it anymore.

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Comment by Mafia Blocks
2018-07-12 07:36:01

Bellevue, WA Rental Rates Crater 13% YOY As Seattle Economy Slows

https://www.zillow.com/downtown-bellevue-wa/home-values/

*Select price from dropdown menu on rental chart

 
Comment by GuillotineRenovator
2018-07-12 16:52:23

Where did Crow Watch go?

 
 
 
 
 
Comment by taxpayers
2018-07-12 06:16:37

I typed in 1st month free” in craigslist and only got 92 listings for N VA , an area of 1.8 million pop.
?
Does this mean it’s a firm market?

Comment by Ben Jones
2018-07-12 06:29:32

‘Developers Concerned About Multifamily Overbuilding In Reston And Tysons Washington DC Multifamily’

‘October 20, 2017′

‘The Fairfax County submarkets of Reston and Tysons, both emerging areas boosted by the opening of Metro’s Silver Line, have pipelines full of new apartment construction. Several top developers, speaking Thursday at Bisnow’s Fairfax County State of the Market, worried they might be building too many rental units.’

‘JBG Smith Executive Vice President of Development Greg Trimmer said apartment rents in Reston are flat, and in some cases slightly negative, due to the amount of new multifamily construction. But he said the problem is worse in Tysons, where millions of square feet of development is underway around its four Silver Line stations.’

“In Reston we’re a little sick, but Tysons is in hospice in terms of the glut of apartments,” Trimmer said. “They’ve way overbuilt.”

“I think there is an oversupply in some places,” Clemente said. “Reston certainly has a number of projects coming online.”

‘Bozzuto Senior Vice President Mike Henehan said Reston is not alone in welcoming a glut of new apartment buildings, and said the supply surge is becoming the “new normal” across the region.’

‘Tysons is the most challenging part of the county to launch new apartment projects right now because of the supply it has already in the pipeline, Begert said. MRP is currently working on an apartment deal and a for-sale condo deal in Tysons, and he said the latter has been much easier to finance.’

“We have an investor excited in the for-sale side, which feels good,” Begert said. “The apartment does not. It’s hard. It’s a great product in a pretty good location, I just think for the investors that we work with, it’s a very hard market to think of as a trader’s market.”

Comment by Ben Jones
2018-07-12 06:32:34

‘We have an investor excited in the for-sale side, which feels good’

A big part of this industry is flipping.

 
Comment by taxpayers
2018-07-12 08:39:36

they’re spending 5 billion + on the silver line
ridership is 40% below projections

Comment by MIke in Carlsbad
2018-07-12 19:49:49

that will change when Amazon moves in.

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Comment by oxide
2018-07-12 08:53:56

The roads can’t handle this number of apartment-dwellers, period.

Comment by Carl Morris
2018-07-12 10:13:03

The roads can’t handle this number of apartment-dwellers, period.

I hadn’t thought about that. But in the dense parts of China the streets have to be almost as wide as the 20 story apartment building blocks and most of the apartment residents don’t even have cars yet.

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Comment by oxide
2018-07-12 10:57:53

I was thinking of China when I wrote the post. Just one skyscraper after another…

It should be interesting to see if Americans, accustomed to cars, can handle car-less living. And I mean really carless, not hubby takes the subway to work and wifey has the car. It’s possible to go car-less if you’re young and strong and you understand that you’re bascially limited to work, home, and grocery store. (and getting a zipcar for everything else)

 
Comment by Carl Morris
2018-07-12 11:08:17

If your apartment is close to a subway stop in a city with a really good subway like Shanghai it’s not too bad. Otherwise no. But these new electric rechargable scooters that you can ride 10 miles and then put in a backpack could be a game changer.

 
Comment by OneAgainstMany
2018-07-12 15:37:35

One fly in the ointment is snowy cities. Overall though, I think electric bikes and electric scooters have real potential.

 
Comment by GuillotineRenovator
2018-07-12 16:54:42

You think anything and everything electric has potential. You seem to ignore the myriad problems and the massive toxic waste it produces.

 
Comment by Oxide
2018-07-12 18:58:06

You can’t carry groceries on a scooter. You can carry groceries on a bike, but it’s not fun in the snow. But you can’t carry a gallon of paint, or a kid. A quick trip to the mall is an all day endeavor. And that’s if you’re healthy.

 
Comment by OneAgainstMany
2018-07-13 09:58:39

A quick trip to the mall is an all day endeavor.

Who goes to the mall these days? Isn’t that why malls are dying all across the country?

To your point, eBikes and scooters are not a panacea, but it’s nothing to dismiss out of hand either. I look at is as one potential solution to mass transport problem (e.g. the last mile problem). When I was in Boston running the marathon, I took the metro everywhere, and Uber a couple of times, and I rented a couple of bikes. The bikes were $1/hr, but they were pitiful. An eBike or a Bird scooter would have been way better.

As for my own situation, I hitched a Thule Burley solo trailer to my Magnum Metro+ eBike and I can do about 50 miles on a charge with my 3 year-old son in the bike trailer. I take this all around the city. I do grocery shopping, and I go to parks. Top speed is 25 mph. It’s very fun, but we don’t get snow, so it works. I worry about inattentive drivers pulling out and hitting us on sidewalks though.

 
 
 
Comment by Mafia Blocks
2018-07-12 09:16:47
 
 
Comment by GuillotineRenovator
2018-07-12 20:13:20

I typed “free” under Washington DC rentals and there were 3,000 hits, which I think is the maximum. Something tells me your numbers are BS.

 
 
Comment by 2banana
2018-07-12 06:17:20

It really is insane how government “helps” families find “affordable” housing…

Well, at least a few families. The votes of the FSA don’t come cheap.

++++

From CBS 4 Denver in Colorado. “Denver city leaders launched a new program they say is unlike any other in the country to try and help families find affordable options for housing in the competitive renter market. The program uses vouchers supported in part by employers and apartment complexes. Councilman Kevin Flynn was the only ‘No’ vote. He says he supports programs that help families pay for the cost of rent, but wonders if this is the right approach. ‘If apartment units are vacant and new, in this hot market, that means the rents are too high,’ said Flynn.”

Comment by Ben Jones
2018-07-12 06:22:41

‘units are vacant and new, in this hot market’

Something doesn’t add up to hot Kevin.

Comment by Apartment 401
2018-07-12 06:47:50

Denver has alot of homeless people.

Not as bad as San Francisco yet but it’s getting there…

Comment by BubblevilleCA
2018-07-12 07:35:24

http://allhomekc.org/wp-content/uploads/2018/05/FINALDRAFT-COUNTUSIN2018REPORT-5.25.18.pdf

Looking pretty bad for Seattle.

I have yet to see the 2018 report for Santa Cruz, CA but his town has become a Mecca for homelessness / homeless tolerance and resembles an episode of the walking dead 🧟‍♀️ 🧟‍♂️ with homeless camping in the streets, side of the highway, parks, private properties, backyards, you name it. I see rants daily on Nextdoor app about homeless issues like thefts / break ins, squaters, camps popping up, homeless living in rvs/vehicles parked on residential streets (read a rant about an rv with its waste line left open and would dump all the black water / 💩 directly on the sidewalk in front of the persons home).

I keep wondering why anyone would want to live in this town and worse off pay 1m+ for a median home and deal with these transients. Guess it’s the weather…

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Comment by Mr. Banker
2018-07-12 10:48:04

Look for Stockton to become a Mecca for the homeless …

http://abc13.com/finance/town-plans-to-hand-out-money-in-effort-to-curb-poverty/3738830/

Personally I think Stockton is doing the right thing because their actions just might lure some of the homeless away from where I live.

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Comment by In Colorado
2018-07-12 10:56:27

And they will quietly cancel the program when they run out of money.

 
Comment by Mr. Banker
2018-07-12 11:00:39

Bahahahaha … perhaps I should hire some homeless pukes to put up fliers in my town touting the merits of them and their fellow homeless pukes moving to Stockton and promise them that they will get paid for doing so by the city of Stockton.

 
Comment by oxide
2018-07-12 11:00:40

The idea is to create a bottom income level that no one will fall beneath.

It’s a ploy to push a Universal Basic Income. I bet those 100 recipients in the pilot plan will be carefully vetted to make it all look good.

 
Comment by Mr. Banker
2018-07-12 11:06:45

“And they will quietly cancel the program when they run out of money.”

Hence political support for the homeless should be encouraged by everyone (except those unfortunates who reside in Stockton) forcing Stockton to live up to its financial commitments by perhaps (oh, the horror) raising their taxes.

 
Comment by In Colorado
2018-07-12 13:26:29

What taxes can Stockton raise besides sales and hotel taxes? Prop 13 won’t let them raise property taxes in the amounts they need.

I’ve read about billionaires pontificating on the need for Universal Basic Income. Of course, they are silent about how to pay for it, meaning they expect the shrinking middle class to pick up the tab.

 
Comment by GuillotineRenovator
2018-07-12 17:03:01

“It’s a ploy to push a Universal Basic Income.”

I can’t stand the FSA and all the liberal gobblygook going on, but we have a real crisis brewing on the jobs front. Universal Basic Income might become a reality at some point. Automation and the outsourcing of labor is doing real damage. Once people fall off the unemployment rolls, they’re suddenly “not unemployed” anymore insofar as the government’s “official” numbers are concerned.

The massive homeless population is certainly a byproduct of the housing and rent bubble, but it’s also due to the shadow population which isn’t counted by the government as unemployed. A lot of these people are the ones defecating on the sidewalks, drowning their sorrows with any drug they can get their hands on.

 
Comment by Montana
2018-07-12 17:44:00

People underestimate the ability of people to get and keep keep jobs. Somehow. They’re not all engineers or even coders, but they manage, and pool their resources.

Last thing we need is for out of touch elites to mandate a handout for those Others because they’re helpless hopeless, and because automation!!

We got enough crutches in place already. Let em file for SSI.

 
Comment by OneAgainstMany
2018-07-13 10:01:44

Most serious economists view Universal Basic Income as a replacement for all other forms of welfare and safety net payments, which would mean eliminating social security, medicare, medicaid, section 8 housing, food stamps, TANF, earned income credit, etc.

 
Comment by tresho
2018-07-13 11:46:29

Most serious economists view… If that’s the case, any article mentioning UBI had best start with a complete definition of the term, otherwise it’s just propaganda.

 
Comment by CorporateShill
2018-07-15 06:44:00

Wrong! Taxes and government programs rarely end. Sure, “one against logic” because there is never any duplication between gov programs.

 
 
 
 
 
Comment by Mortgage Watch
2018-07-12 06:19:08

San Diego, CA (north park) Housing Prices Crater 8% YOY As Sellers Slash Prices

https://www.zillow.com/north-park-san-diego-ca/home-values/

*Select price from dropdown menu on first chart

 
Comment by 2banana
2018-07-12 06:20:36

Yet no one is declaring bankruptcy.

No one is slashing rents or prices.

There is so much cheap and easy obama/Yellen bucks floating around…

Back in the bad old days of men peeing in men’s bathrooms - a 5% vacancy rate would be cause for alarm. 10% would put you out of business.

+++

“In downtown Seattle, the vacancy rate is a whopping 25.7 per cent, according to the Seattle Times. And in newly completed downtown apartment buildings, around 40 per cent of units are currently empty.

Comment by oxide
2018-07-13 04:28:55

They can restructure their debt longer than you can stay sane, or something like that.

Speaking of restructuring debt, has anyone heard from Greece lately? Weren’t they on the brink of collapse, multiple times? Do they have homeless starving in the streets yet? Haven’t heard anything from the MSM for a while.

Comment by rms
2018-07-13 08:28:59

Last I heard a peanut butter and jelly sandwich and you were ‘da King.

Comment by Carl Morris
2018-07-13 10:14:47

Speaking of restructuring debt, has anyone heard from Greece lately?

Based on the recommendation of somebody…probably somebody here…I bought “Adults in the Room: My Battle with the European and American Deep Establishment” by Varoufakis, Yanis.

If you want the real story of what’s going on, this is the book to get. I had no idea the European Central Bank was just as bad or worse than ours about trying to enslave (certain segments of) their own people. Each restructuring is just a tightening of the shackles and theft of whatever they have managed to produce.

But in hindsight it makes perfect sense. Central bankers are like the “nice” slave owners discussed by Frederick Douglass. They can’t help but be corrupted by the power they possess over other people. The only solution is to never give anybody that much unchecked power over other people.

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Comment by Mafia Blocks
2018-07-13 04:36:02

North Miami, FL Rental Rates Crater 9% YOY As Flood Of Housing Inventory Hits Market

https://www.zillow.com/north-miami-fl/home-values/

 
 
Comment by Ben Jones
2018-07-12 06:47:22

‘unless we see the kind of supply flood that Seattle has seen – which still seems highly unlikely – it may not be enough to significantly move the dial on vacancy rates and rents in the long term.’

‘First it was real estate sales numbers dropping. Then it was the prices. Now signs are emerging that Vancouver’s sky-high rents could be trending downward’

That must be embarrassing.

Comment by Ben Jones
2018-07-12 07:00:26

‘a developer with more than a dozen STRs in Treme — said he now has vacant properties and projects-in-statis with the recent moratorium and has ‘no idea what’s going to happen.’ ‘It makes me want to sell my properties and move to another city,’ he told the CPC. One group at the meeting shouted, ‘Please do!’

That must be embarrassing.

Comment by oxide
2018-07-12 09:00:42

I chuckled when I read that. Good on that guy in the peanut gallery!

 
 
Comment by GuillotineRenovator
2018-07-12 17:36:20

I’m no Warren Buffett fan, in fact I consider him part of the problem, but I like this quote from him:

“When you combine ignorance and leverage, you get some pretty interesting results.”

 
 
Comment by Mortgage Watch
2018-07-12 06:48:13

Lone Tree, CO Housing Prices Crater 8% YOY As Housing Bust Ravages Denver Area

https://www.movoto.com/lone-tree-co/market-trends/

 
Comment by Ben Jones
2018-07-12 06:52:11

‘falling property prices meant investors who had relied on strong capital growth to get ‘bang for their buck,’ might increasingly be deterred by Sydney’s ‘relatively low rental yield’ and look elsewhere. Domain Group data showed Sydney’s rental yields had remained relatively flat year on year at 3.15 per cent for houses and 3.85 per cent for apartments.’

And what are they paying in interest? Fooked!

‘Any shortage in rental stock was a long way off, with Mr Koukoulas saying there was still a lot of supply in the construction pipeline. ‘My hunch is that….we could see more of a deterioration in [rental] prices.’

More fooked! The problem was believing in a shortage in the first place. Oh for the days when Sydney was the hottest shack market on the planet. When was that, a year and a half ago?

 
Comment by Ben Jones
2018-07-12 06:56:18

‘Even while many luxury projects don’t list their offerings publicly, the sheer number of construction projects in the pipeline—68,000, by Paragon’s count, are among the evidence of an uptick in demand over the last six to nine months’

And bay aryans are leaving in droves.

‘In downtown Seattle, the vacancy rate is a whopping 25.7 per cent, according to the Seattle Times. And in newly completed downtown apartment buildings, around 40 per cent of units are currently empty’

Evidence of demand…

 
Comment by Ben Jones
2018-07-12 06:58:34

‘The city doesn’t seem to be capable of spurring small business development beyond the vape pen economy of cannabis dispensaries, fast food joints and tattoo parlors. They lost interest long ago — assuming they had it in the first place. Let me also warn you, there is a student housing bubble and it’s coming fast’

This is Tucson. They’ve overbuilt the downtown student market for years now. And more towers are coming.

Comment by 2banana
2018-07-12 07:09:46

An economy based on selling real estate and vaping accessories to each other…

Comment by BubblevilleCA
2018-07-12 07:37:21

Don’t forget trading crypto…

Comment by Mr. Banker
2018-07-12 11:09:39

Trading crypto, a wonderful way to make a small fortune.

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Comment by Carl Morris
2018-07-12 11:39:33

…from a large one.

 
Comment by Mr. Banker
2018-07-12 13:24:33

Bahahahaha … I KNEW I was gonna get that response.

Just KNEW IT!

 
 
 
Comment by oxide
2018-07-12 11:08:12

For all the talk of the evils of WalMart killing mom and pop stores, ISTM that mom-and pop businesses are doing very well, especially in immigrant-heavy areas. Almost everywhere I go I pass by dozens of tiny strip malls with tiny stores. Ethnic restaurants, international grocery stores, discount stores, nail salons, tiny pizza places, a little Western Union, a laundromat and the like. I see no occasion to ever go into any of these stores, and yet the parking lots are filled with cars during the day. People are spending a cubic buttload money on stuff.

 
 
Comment by rms
2018-07-12 07:38:44

“The city doesn’t seem to be capable of spurring small business development beyond the vape pen economy of cannabis dispensaries, fast food joints and tattoo parlors.”

Looks like ASRS will have to re-crunch their numbers. :)

Comment by Mafia Blocks
2018-07-12 07:42:02

They can join the millions of hopelessly indebted DebtDonkeys crunching on CraterTaters.

 
 
Comment by Mortgage Watch
2018-07-12 11:14:07

Tuscon, AZ Housing Prices Crater 7% YOY As Housing Demand Plummets Nationally

https://www.zillow.com/tucson-az-85704/home-values/

*Select sale price from dropdown menu on first chart

 
 
Comment by Mortgage Watch
2018-07-12 07:10:42

Burke, VA Housing Prices Crater 9% YOY As Fairfax County Housing Bust Accelerates

https://www.movoto.com/burke-va/market-trends/

Comment by taxpayers
2018-07-12 09:17:51

up in 22151, not much but up w 47 day turnover

 
 
Comment by Anonymous
2018-07-12 10:28:05

CNBC has noticed…

“The housing shortage may be turning, warning of a price bubble”

https://www.cnbc.com/2018/07/12/the-housing-shortage-may-be-turning-warning-of-a-price-bubble.html

Comment by taxpayers
2018-07-12 10:52:53

unless the O’lick chick says it it’s fake news

Comment by rms
2018-07-12 12:07:42

Bummed-out seeing the end of her reproductive years.

Comment by Oxide
2018-07-12 19:21:01

Yup, thigh gap gonna fill in soon. Sorry sweets, blame Darwin.

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Comment by OneAgainstMany
2018-07-12 15:50:34

O’lick chick

LOL!

 
 
Comment by Dave
2018-07-12 12:02:25

My thoughts on that article: Real Estate Reporter from CNBC still spinning the low inventory garbage. No mention of the effects and after-effects of QE infinity by the FED, either.

 
Comment by MIke in Carlsbad
2018-07-12 21:15:17

“Among these unaffordable metros, San Diego posted the largest inventory growth—22 percent year-over-year,” wrote Lee. “Compare that with the same quarter last year, when that Southern California metro registered a 28 percent inventory decrease.”

People know its time to cash out.

 
 
Comment by In Colorado
2018-07-12 10:54:25

The program uses vouchers supported in part by employers and apartment complexes.

So in other words, chicken feed that won’t make a difference. To do that involves sticking it to taxpayers, big time. Unfortunately for pro voucher crowd there’s this thing called TABOR.

Councilman Kevin Flynn was the only ‘No’ vote. He says he supports programs that help families pay for the cost of rent, but wonders if this is the right approach. ‘If apartment units are vacant and new, in this hot market, that means the rents are too high,’ said Flynn.”

Makes one wonder: is this a renter subsidy or is it a landlord subsidy?

Comment by octal77
2018-07-12 11:46:35

“…To do that involves sticking it to taxpayers, …

This scheme tastes like Section 8 for rich people…

Comment by Carl Morris
2018-07-12 13:37:53

Under our current system every bubble has to conclude with a bailout for the rich. Otherwise the system breaks down and the real change begins.

 
Comment by Montana
2018-07-12 18:03:38

Pretty sweet deal if you know how to work the levers. Like all these affordable housing scams.

 
 
Comment by Ben Jones
2018-07-12 13:39:29

‘a renter subsidy or is it a landlord subsidy?’

They didn’t create this scheme until the apartment guys built too much luxury.

 
Comment by Oxide
2018-07-12 19:24:02

It’s an LL subsidy, no wondering needed. They are gonna get their luxe rents and make their investors whole, if they have to squeeze it out of taxpayers and employers and poor renters combined. I’ve been saying that for months.

 
 
Comment by taxpayers
2018-07-12 11:39:48

so is there a city where rents are going up?

Seattle is the last of the Mohegan s ,nes paw?

 
Comment by aNYCdj
2018-07-12 11:42:27

help families find affordable options for housing in the competitive renter market.

First things first Downsize your crap, then start looking at smaller places

Comment by Carl Morris
2018-07-12 13:38:57

First things first Downsize your crap, then start looking at smaller places

That process usually starts with divorce.

Comment by OneAgainstMany
2018-07-12 15:53:13

Also, consider not buying yet another animal.

Comment by Carl Morris
2018-07-12 16:13:14

[Adam Carolla]Have you ever noticed that people who LOVE animals tend to really dislike people?[\]

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Comment by Montana
2018-07-12 18:04:45

Yes, four large dogs is s bit de trop.

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Comment by oxide
2018-07-13 04:37:28

I’ve started disliking dogs more and more. I’ve been to small parties where people bring their dogs, especially big ones. We’ll be having a conversation and the dog will do something and interrupt everyone. Constantly. I feel like the humans are servants to the animal. Not to mention those who bring their dogs to the stores, especially stores with an outdoor section, like flea markets or the nursery at Home Depot and especially farmer’s markets. It’s a business, not a dog park! Thankfully the you-pick farms all prohibit pets or else the place would run wild. (Service animals are technically not pets.)

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Comment by OneAgainstMany
2018-07-13 10:07:09

I’m with you oxide. Dogs are starting to ruin our family gatherings because it’s so hard just to get everyone to travel to one place because everyone has to figure out arrangements for their dog.

Also, I’m noticing an increase in everyone suddenly claiming that their dog is a service animal so that they can get them into lodgings that prohibit animals. This is going to do real damage to the people who genuinely benefit from service animals because a lot of people are bending the rules and looking for exceptions for their animal by abusing the law.

 
Comment by Carl Morris
2018-07-13 10:17:47

(Service animals are technically not pets.)

And that brings up the abuse of the service animals classification. Now everybody with a little money and free time is working on getting their pet classified as a service animal.

 
Comment by OneAgainstMany
2018-07-13 10:22:35

Not sure if you caught this one a few months back Carl:

“United Airlines turned away an emotional-support animal — a proud peacock — at a New Jersey airport this weekend, as airlines have been considering with new guidelines for service and comfort animals.”

“United Airlines said in a statement to NBC News that the peacock “did not meet guidelines for a number of reasons, including its weight and size.” The incident took place in the lobby of Newark Liberty International Airport on Saturday.”

““Customers have attempted to fly with comfort turkeys, gliding possums known as sugar gliders, snakes, spiders and more,” Delta said in the statement. “Ignoring the true intent of existing rules governing the transport of service and support animals can be a disservice to customers who have real and documented needs.””

https://www.nbcnews.com/storyline/airplane-mode/emotional-support-peacock-denied-flight-united-airlines-n842971

 
 
 
 
 
Comment by Mortgage Watch
2018-07-12 11:43:18

North Palm Beach, FL Housing Prices Crater 11% YOY

https://www.movoto.com/north-palm-beach-fl/market-trends/

 
Comment by Mr. Banker
2018-07-12 15:16:26
Comment by Mr. Banker
2018-07-12 15:32:02

Old geezer debt slaves.

https://youtu.be/KpZNyfSkyo4

Comment by Montana
2018-07-12 18:18:41

Gah…in what universe does an American studies MA or sports management degree justify going into long-term debt?

They always show us the fools, then they want us to subsidized them.

Comment by oxide
2018-07-13 04:54:14

There’s also a hidden type of old geezer student loan debt: parents who tapped their home equity to send kiddo to college. And just at the worst time too. Millenials were entering college just at the peak of the housing bubble, so parents who bought homes in the late 80s and early 90s had lots of equity to tap. So they owe mortgage debt instead of student debt. Some might still be underwater, which is why they aren’t retiring.

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Comment by Anonymous
2018-07-13 10:08:06

Borrowing 70K plus for a Sports Management degree ?!?! WTF are these people thinking?

And yes, taking your “core” classes at a cheap community college then transferring is a smart approach.

At least some of the parents shown here are talking about moving to a place with a lower cost of living.

 
 
Comment by rms
2018-07-12 16:41:34

That blonde might find beta bux.

 
Comment by Oxide
2018-07-12 19:36:29

Pathetic, just pathetic. $300k for Chinese medicine? Communications? That’s for football players. A medical assistant can’t find a decent job to pay off $30k? She’s lazy or lying. I had $17 k debt and I paid it off relatively quickly, 15 years ago, making less than $50 k. This debt crisis has been going for 10+ years and they can’t figure this out? This is red meat for Dave Ramsey.

 
Comment by Anonymous
2018-07-13 09:50:19

$300K student debt for studying Chinese Medicine ?!?!

 
 
Comment by Ben Jones
2018-07-12 15:19:49

Uber has terminated its self-driving car operators in Pittsburgh

https://qz.com/1326155/uber-has-terminated-its-self-driving-car-operators-in-pittsburgh/

Comment by OneAgainstMany
2018-07-12 15:55:20

Seems like the company is still going forward on self-driving, but with more skilled staff:

“The company plans to replace these jobs with about 55 “mission specialists”—specialists who are trained in both on-road and more advanced test-track operations, and who are expected to provide more technical feedback to self-driving car developers. Uber said affected operators could apply for these positions.”

“Our team remains committed to building safe self-driving technology, and we look forward to returning to public roads in the coming months,” an Uber spokesperson said in an emailed statement.”

Comment by Ben Jones
2018-07-12 16:20:44

“Our team watches videos on their phones while they mow down people who were forced to be crash test dummies by greedy politicians and silicon valley snake-oil salesmen.”

Comment by OneAgainstMany
2018-07-13 10:14:29

Agree that Uber’s self-driving approach is criminal. Hopefully the new CEO will be more conscientious in his approach. Having said that, pedestrians are getting mowed down all the time. In fact, pedestrian deaths are at a 33-year high. Blame distracted drivers, distracted walkers, drunks in the road, increased homelessness, more SUV and truck sales which cause more fatal impacts, and more vehicles in general.

Status quo bias is getting worked up about self-driving tech companies and their inevitable hurdles with road to full self-driving but then not realizing how extremely harmful just plain regular human driving is to human health in the US. We’re killing each other each and every day just by buckling up and getting in the car. If we went back to horses and buggy’s I’m sure road fatalities would go down.

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Comment by Carl Morris
2018-07-13 10:20:27

If we went back to horses and buggy’s I’m sure road fatalities would go down.

Maybe. But pollution would go way up.

 
 
 
 
 
Comment by rms
2018-07-12 15:48:48

Right Now: “Hey, I Gotta Drop My Prices!”

Next Year: “Hey, I Gotta Bring Money To The Closing!”

Comment by Mr. Banker
2018-07-12 15:52:42

Perhaps I can be of some, er, help?

😁

Comment by Carl Morris
2018-07-12 16:14:16

Don’t you think you’ve “helped” enough?

 
 
 
Comment by Neuromance
2018-07-12 17:14:10

Is there such a thing as a cashflow positive primary residence? What would such a beast look like?

Comment by Lt
2018-07-12 18:24:28

A brothel?

Comment by rms
2018-07-12 20:02:56

+1 LMFAO!

 
 
 
Comment by Mr. Banker
Comment by Carl Morris
2018-07-13 10:21:29

I saw that. I can’t think of any greater gift to the Rs.

 
 
Comment by Professor 🐻
2018-07-12 21:13:56

Did China blink?

Comment by Professor 🐻
2018-07-12 21:16:56

I would think that blinking would violate Chinese social norms (always saving face, etc.)?

Cramer argues that this rally is ‘all about China blinking’ in the trade war
- China seems to have blinked in its trade dispute with the United States, CNBC’s Jim Cramer says.
- The “Mad Money” host points to China’s lack of retaliation as the main cause for the stock market’s Thursday rally.
Elizabeth Gurdus | @lizzygurdus
Published 5 Hours Ago
Updated 5 Hours Ago

 
 
Comment by Mortgage Watch
2018-07-13 04:26:55

Springfield, VA Housing Prices Crater 6% YOY As Federal Downsizing Ravages DC Housing Market

https://www.zillow.com/springfield-va-22153/home-values/

*Select price from dropdown menu on first chart

 
Comment by Professor 🐻
2018-07-13 05:24:20

Did your emerging markets stock fund submerge?

The Financial Times
Emerging market investing
Trade disputes hit emerging market equity funds
Outflows for 10th straight week take losses since start of May to more than $17bn
3 hours ago

 
Comment by CryptoNick
2018-07-13 05:35:28

The end is near, and can’t come soon enough, given all the wasted resources on this historic hoax.

City & Business
Bitcoin price LIVE: BTC slumps AGAIN - prices expected to ‘die’ at $43, says expert
BITCOIN is suffering this week after having slumped from $6,743 on Sunday to a low of $6,214 this morning. With the major cryptocurrency in continuous decline, one expert has warned that prices could fall as low as “$43″ as mining costs rise beyond profitability.
By David Dawkins
15:46, Thu, Jul 12, 2018 | UPDATED: 07:37, Fri, Jul 13, 2018

https://www.express.co.uk/finance/city/987658/Bitcoin-price-ripple-cryptocurrency-ethereum-BTC-to-USD-XRP-news

 
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