Signs Of Impending Fallout
A report from Bloomberg. “Apartment owners with properties in San Francisco and New York tumbled after landlord Equity Residential said new leases in those cities — two of the most expensive U.S. rental markets — are falling short of revenue expectations. Equity Residential, the largest apartment REIT by market value, on Wednesday lowered its revenue forecast for the second time this year, citing continued weakness in New York and a recent slowdown in San Francisco. The company said rates on newly signed leases aren’t meeting its projections because of an increase in supply.”
“In the West Coast city, where rents climbed 11 percent last year, about 5,100 new units — the most in 26 years — are expected to be listed for rent in 2016, data from Reis Inc. show. In Manhattan, 5,675 apartments will be added to the rental inventory, according to brokerage Citi Habitats. San Francisco effective rents in the first quarter were unchanged from a year earlier at an average of $2,492, according to Reis. A slowdown in the city’s technology industry has also been affecting the market, said Ryan Severino, director of research at the real estate data company.”
“‘Supply has been exceeding demand recently,’ Severino said. ‘Job growth in tech year-to-date is about half of what it was last year.’”
“The REIT in April cut its expectations for revenue growth because of New York weakness. The company’s forecast reduction halfway through that heightened rental period suggests its rates are missing the mark, said Jonathan Miller, president of appraiser Miller Samuel Inc., which tracks the New York rental market. ‘This is the peak leasing season,’ Miller said. ‘I would find it hard to believe that there’d be any meaningful improvement from the current conditions.’”
From Miami Today in Florida. “The Miami condominium market is relatively stable and holding its own compared to countywide statistics, experts say, despite a decrease in transactions from this time last year and a small drop in the year-to-date price per square foot. Data of waterfront condos showed that compared to the first quarter of 2015, the first quarter of 2016 saw a sizeable 36% drop in transactions and a 1% increase in average living area. The average price of a waterfront condo dropped 14%, with the average price per square foot dropping 15% from $834 to $711.”
“According to Integra Realty Resources, the 2016 year-to-date average price per square foot for downtown Miami condominiums is $441 – down 3% from 2015. Downtown, often considered the ‘face and brand of Miami,’ is a very important indicator for stability, said Anthony Graziano, senior managing director of Integra Realty Resources. ‘It’s the canary in the coal mine.’”
The Texas Tribune. “Thousands have been laid off. Tax collections are plummeting. Many are on the brink of homelessness. Rows of drilling rigs and white company trucks sit idle — there’s no telling for how long. And, yet, amid the worst oil bust in decades, the energy capital of West Texas hasn’t slowed down much.”
“If the signs of impending comeback are all around, though, so too are the ones of fallout. Pawn shops are bustling, and several fancy, new pickup trucks slapped with ‘for sale’ signs can be seen sitting on the side of the road. While housing costs have decreased significantly since then and availability is no longer an issue, officials say people who have been laid off, had their hours cut or taken lower-paying jobs are struggling to stay in their homes. Midland, which had the highest median home prices in the state in 2014, is still one of the most expensive places to live in Texas, said Jim Gaines, chief economist at the Texas A&M; Real Estate Center, while noting the entire state is considered affordable.”
“The median home price in the Midland, which topped $280,000 in mid-2014, had fallen to $205,000 last month, according to the Permian Basin Board of Realtors. Average rent has decreased from about $1,200 per month for a 1-bedroom in 2014 to $900 per month now, said Rhonda Lesley, the head of the Permian Basin Apartment Association. Still, she said she recalls a time before the boom when average rent was more like $500. Apartment occupancy, which reached almost 100 percent in 2014, has fallen to 80 percent, she said.”
“Juan Carlos Pacheco, a Child Protective Services worker in Odessa who struggled to find affordable housing during the boom, said he and his co-workers are worried about the state eliminating a $1,000 monthly housing stipend it put in place to offset housing costs during the boom and boost recruitment. If that happens, he said, ‘we’re going to be facing a different problem because people are not going to be able to afford to be here.’ Pacheco said he bought a house in December 2014 and paid more for it than he wanted to, but still considers himself ‘not a miracle, but … lucky.’”
From Globes on New York. “The worsening slowdown in the Manhattan luxury housing market is having a negative impact on the results of US developer Gary Barnett’s real estate company, Extell. Five months in to 2016, the company has not sold a single one of the 60 apartments in the One57 apartment high-rise, its flagship project.”
“Extell’s first quarter reports show a $30 million loss, compared with a $49 million net profit in the corresponding quarter last year. The company’s free cash flow was a negative $79 million, following a $429 million negative cash flow in all of 2015. Since the beginning of 2015, the company has been financing itself by taking on debt (including $148 million raised in Israel last year), giving it a $296 million positive cash flow from financing activities over the past 15 months.”
“In response to the reports, IBI Investment House real estate analyst Yaniv Saylan emphasized that Extell needs financing like we need air to breath. ‘Things will get worse before they get better,’ Saylan writes, ‘The cash is running out, and the company needs capital quickly. As of now, the controlling shareholder has not begun the process of selling properties, and is still investing capital in development of projects.’”
‘The median home price in the Midland, which topped $280,000 in mid-2014, had fallen to $205,000 last month, according to the Permian Basin Board of Realtors. Average rent has decreased from about $1,200 per month for a 1-bedroom in 2014 to $900 per month’
As I’ve been following the Midland newspaper closely, it should be noted this $75,000 drop hasn’t been reported. What good is a statistic if it’s not revealed?
Around 6 months ago, I found the local papers’ article and saved it. Only to return a couple days later and they had deleted the part where a local pizza shop manager said delivery personnel who had left to work in the oil field we now returning to seek delivery jobs again.
‘Pawn shops are bustling, and several fancy, new pickup trucks slapped with ‘for sale’ signs can be seen sitting on the side of the road. While housing costs have decreased significantly since then and availability is no longer an issue, officials say people who have been laid off, had their hours cut or taken lower-paying jobs are struggling to stay in their homes’
‘Pacheco said he bought a house in December 2014 and paid more for it than he wanted to, but still considers himself ‘not a miracle, but … lucky.’
I’d bet the seller who unloaded that shack to you 6 months into the oil bust considers you a miracle Juan. A bag holding miracle.
Hi .. I have a simple question for you guys. A friend of mine bought a 2 family home in Boston near MIT w/ his brother in law back in 2006. They paid around 600,000 or so and only put down 30,000 (15k each). I asked how that investment is going .. He told me amazingly well. He says the home is worth at least 800k now and brings him in $5500 per month in rental income. He said the mortgage w/ taxes is around $3800 a month leaving them around $1700 month in profit. Mind you all this BEFORE the bubble popped. He said he was thankful for the bubble because otherwise he wouldn’t have been able to put down such little money. Also this was approved as a first time home for both of them. He also said location is everything and to not listen to all the noise about the economy and so forth ..
Did the bubble re-inflate in this situation? How much of a role has location played? I just don’t get it .. he bought the house during the bubble and has made out really well all these years.
Doubtful.
He said he was thankful for the bubble because otherwise he wouldn’t have been able to put down such little money.
Yes—and absent the bubble, he also would not have been able to refinance at ~3%. What would his carrying-costs have been without ZIRP?
Also this was approved as a first time home for both of them.
Sounds like mortgage fraud.
“Juan Carlos Pacheco, a Child Protective Services worker in Odessa who struggled to find affordable housing during the boom, said he and his co-workers are worried about the state eliminating a $1,000 monthly housing stipend it put in place to offset housing costs during the boom and boost recruitment. If that happens, he said, ‘we’re going to be facing a different problem because people are not going to be able to afford to be here.’”
______________________________/
State workers need a housing stipend … to live in Odessa?
I’ve never been to West Texas. My knowledge of that part of the country comes entirely from the book “Friday Night Lights.”
Like the article several weeks ago about the Oil Execs getting free membership to a high class country club in Midland - you need a way to entice people to stay in that s**thole of a city/state/region.
Around 6 months ago, I found the local papers’ article and saved it. Only to return a couple days later and they had deleted the part where a local pizza shop manager said delivery personnel who had left to work in the oil field we now returning to seek delivery jobs again.
Orwell was a true visionary.
They are circling the wagons, just like in Alberta. Somebody probably complained about the pizza thing and they pulled it. I know someone with family in Midland and was told people are defaulting left and right.
I have heard this same thing about the Balkin oil area. People leaving behind cars unpaid for.
Heh. Isn’t that the truth. Down the memory hole!
It’s hitting Fort Worth too. How these people think the Metroplex is immune is beyond me. Oklahoma is circling the wagons too. Very quiet newspapers on housing these days. Much different from the “which zip code has the most million dollar houses” stuff from 6 months ago.
And since now we all get our news online, the memory hold is just a keystroke away. Modern Winston Smiths don’t even have to destroy old harcopy.
Google cache is your friend.
Equity Residential (EQR) -NYSE
66.37 Down 2.84(4.10%) Jun 1, 4:00PM EDT
52wk Range: 61.90 - 82.39
http://finance.yahoo.com/q?s=eqr
It’s been reported that San Francisco has 62,000 condos in the pipeline. Like Tokyo, if San Francisco can be over built, any place can.
leases aren’t meeting its projections because of an increase in supply ???
Or maybe because of tenant exhaustion…You can only squeeze so hard for so long until you meet resistance..They have now found it…The question now is how far does it correct…
On a local note, I spent the Holiday four 4 days with a group of business owners in the trades…All are having their best years ever, and have work on the table that takes them well into 2017…All said they could not find additional qualified help that would allow them to take on more work. One said they have stopped bidding work because they cannot staff it.
I spoke to a guy who is moving into one of the new apartments in SF next week. He was able to negotiate a lower than market rent (about $400 off per month). He was pleased to get the “deal”.
To lease up these units, new owners will cut deals with new tenants. The calculus isn’t complex. It costs money to own an apartment building, and it costs money to carry the debt on the apartment building.
Early on landlords will “buy” occupancy through rent concessions to defray the fixed costs of ownership.
Once the lease-up has occurred there will be less incentive to cut the deals…and then we’ll see where the new equilibrium lies. In the meantime, as an existing apartment owner it will be difficult to raise rents when others are giving concessions.
1 to 100 of 2500
https://sfbay.craigslist.org/search/sfc/apa
1 to 100 of 332
https://sfbay.craigslist.org/search/sfc/apa?query=1+month+free
1 to 100 of 209
https://sfbay.craigslist.org/search/sfc/apa?query=2+months+free
‘We’ve got thousands of units coming online this year, on top of many new communities that have opened in the last couple of years. That should mean competition is increasing, at least in the short term. Which is good for renters, not so good for owners.’
‘A quick check of Craigslist shows incentives for some communities: At Acclaim Cos.’ new project in Redwood City, called Locale at 488 Winslow St., one ad was offering a month of free rent and a “Brand New 48″ Samsung Smart TV!!!”
‘Such sweeteners are normal for new buildings seeking to lease up units for the first time, but as my colleague Roland Li explored in a timely story this week on the San Francisco market, it appears that owners are upping their incentive game.’
To put the 5,000 units in context…there are approximately 250k units in buildings that have 2 or more units in SF, so THEORETICALLY, 5,000 should be absorbed pretty easily over time.
Adding 2.5% to the multi-family stock in a market that is highly occupied is a big bite, but digestible.
HOWEVER–A BIG HOWEVER, a large number of the 250k units are rent controlled (with lower rent), or owner-occupied, so, the 5,000 units represents a much LARGER percentage of higher rent units. Are they adding 5% to the higher rent housing stock? 10%? That’s a big number and could be tougher to digest.
One thing to put into the thinking in SF is that I believe that there are a lot of overcrowded apartments in SF–I haven’t seen any data, but anecdotally, I hear stories of people doubling and tripling up because they can’t find a place to rent. My neighbor is an example.
As some of these rent concessions become more known, it wouldn’t surprise me if some of the new tenants in the new buildings come from overcrowded units (ie. not a net new occupant to the city, or a net new job needed).
New Samsung 48″ TV - $599.99
http://www.samsung.com/us/video/tvs/UN48J5500AFXZA
Basically it’s a rent reduction of $50 a month…
‘We’ve got thousands of units coming online this year ??
It takes a very long time to get to a turn the key in the lock stage…On big projects, its minimum 3 years…The first year is spent getting entitled…Almost all the time the land deal is tied to getting to the approved entitlement…Once there the land deal is typically closed…Thats a huge step for these developers because at this point it is really go/no go decision time given the cost associated with entitlement and the cost of the land..
What I am trying to say is that the developers are all in basically two years before you turn a key in a lock on a door…How the hell can someone know for sure what the hell the market will be like that far out…My thinking is its the big enchilada’s that are involved…Life companies etc…They look at the pro forma and probably say I can accept half that rate of return so if the market softens were still okay…
What difference does it make that they broke ground 3 years ago on more excess empty inventory?
In 2003 or 2004, we were looking at investing in a subdivision in So Cal. The land was surrounded on 3 sides by other raw land.
When I asked the builder what has happening on those parcels of land, the response was something like “oh, other public builders are getting ready to start construction on their own subdivisions, but don’t worry, by the time we get underway, they’ll be done selling.”
Needless to say, we didn’t invest.
My point is this:
Yes, there is a lead time to any real estate project that can be measured in years. HOWEVER, even with that lead time, at the time you make the commitment to move forward, you know (or should know) what other projects are in the pipeline that will be competitive.
The people who invested in SF apartments did so knowing there was lots of other supply that was going to be built at the same time. They knowingly took the risk of leasing at a time where there was lots of other competition. They either:
a) Truly believed that the supply was so constrained that even a large number of units could be absorbed with no problem; or
b) Thought San Francisco was considered so “bulletproof” that they figured that even if the deal went south, they had the “never get fired for buying IBM” defense for their job.
I can see people making the investments for both reasons (”a” is a legitimate reason, “b” is a source of malinvestment).
We are today considering an investment in a development project that has probably an 18 month lead time before we can start collecting rent. Giving me comfort are the facts that 1) nothing is under construction today that would be competitive, and 2) the only other potentially competitive project in the pipeline is at least 2 years behind ours.
If a business plan relies on a market continually being exceptionally strong in light of lots of new supply coming online, I get very nervous.
‘If a business plan relies on a market continually being exceptionally strong’
Not only that, new paradigm strong. Here’s the reasoning I heard; the housing bubble changed everything. People don’t want to own a house. And there’s millennials, they will never own a house. So this thing is going to keep growing indefinitely. Add to that, people that make lots of money and could afford a house will rent. So rents can be way higher, but they’ll want a bocci ball court and rooftop pools. So it can’t be just A, it has to be luxury, A+ with a dog bath. Besides, it doesn’t pencil out any other way because the land costs too much.
It’s all after the fact reasoning. It was plain as the nose on my face as soon as I ran into it. With some digging, I’ve come to believe what’s really fueling it is all the money looking for a place to die.
Buy a lot today, start building next week. And it happens in every town and city across the country every day.
We don’t see eye to eye very often (and I still don’t think it’s land that is driving prices, but that prices are driving land, but that’s a different discussion). That said, I largely agree with you with respect to the “A+” apartments. And I think I noted the apartment glut some time ago as the thing to watch.
The funny thing is, what you describe is Sam Zell’s view…that homeownership is going to be permanently low, and that people will want to live an urban lifestyle, etc. That’s why EQR sold their suburban apartments, but kept the stuff in SF and NYC.
Paradigm shifts rarely occur. Usually when people claim a paradigm shift, it is usually a trend that has been going on for a long time that for one reason or another is exacerbated.
The Millennial effect is the example that comes to mind.
As I think I mentioned yesterday, the Millennial effect is simply an offshoot of the long-term trend for people to start their families later in life, combined with the size of the Millennial generation.
Right now, there are a lot of young Millennials, who, like people a little bit older, are waiting longer to start their families…as such, there are a lot of people who are single, no kids, and want to live in urban cores.
And there might be a large cohort of these folks for a while.
HOWEVER, as Millennials age, they will do exactly what prior generations did…many will end up having children, and looking to move out of apartments and into homes, or more suburban living.
There is also an important underlying trend that is taking place that people are also not putting enough emphasis on (IMHO), and that is the plight of local government pensions. The problem has been building for a long time, and now, with lower yields, it is coming to a head in many places. More and more of local municipalities’ resources are going to pay pensions for retirees, and so they are looking for more and more revenue sources.
The trend I note is the rise of the impact fee.
When combined with politically correct things like “green” building codes, it is getting more and more expensive to build.
So, if you can’t build cheaply, you try to appeal to the higher end consumer. You build bigger, you build nicer, you build something where you believe you can get a premium–and with the Millennial bubble coming through, it looks like it works…until it doesn’t.
I’m focused on supply/demand dynamics, and catering to the largest possible group of consumers.
For that reason, I like supply constrained markets, and I like more affordable products. Nothing is recession proof, but I feel one of those two things will help a project be more resistant to a recession.
Once again youre out discussing issues like permitting, review, estimating, bidding and construction. You’ve already demonstrated you’re completely unfamiliar with them.
Looks like wages need to go up to find the talent.
I rented from them for a number of years. They are not high end yet they are reasonable in amenities and price. I would consider a limit buy at $50.
‘Huge landlord Equity Residential said this week that under performance in its San Francisco portfolio was a factor in a decision to lower its revenue forecast for the second time this year, raising alarms that the city’s white hot housing boom may finally have hit a ceiling.’
“The revision is being driven by continued weakness in its New York portfolio and recent under performance in the company’s San Francisco portfolio,” Equity Residential said in the statement. “New lease rates are not meeting original projections due to new rental apartment supply.”
‘The downgrade is a marked reversal from earlier guidance Equity has provided: Only months ago, the landlord was aggressively bullish on the strength of San Francisco market, telling the Business Times it has seen only positive signs of growth.’
“We haven’t seen a softening in the lease-up of our new developments, despite what some people have portended to be the case,” Corey Warren, vice president of property management at Equity Residential, told the Business Times in March.’
http://www.bizjournals.com/sanfrancisco/blog/real-estate/2016/06/equity-residential-rental-warnings-san-francisco.html?ana=yahoo
Amazing. In San Francisco area even.
‘Only months ago, the landlord was aggressively bullish on the strength of San Francisco market’
This aggressive bullishness is what I’ve been telling you guys. If they can’t see it 3 months ago, what’s the chance they’ll stop building in time? The people in the industry really believe it’s never, ever going to end. They say it, they write it, and one day a guy with 1,000 units came on the radio and said, I just sold half of my apartments and I’ll buy some of you guys out of foreclosure. The people he talked into buying were probably a little pissed.
Yeah same deal 9 years ago they “didn’t see it coming.”
I noticed the S&P finished December 2014 in the 2050ish range, finished December 2015 in the 2040ish range, and is at 2015 today.
The chart of the S&P looks like it did in 2000-2001, which is just steady peak level before a big drop in 2002-2003.
And gold took off.
This time we got $20 trillion in debt instead of say, $4 trillion. Endless wars with no victories, just bloodbaths, less freedom.
No end in site to QE. But the boomers are getting older and more are retiring daily. The young people are passing up starting a household as they work on load debt.
Some Tin Wong. Some Tin Gotta Giv.
“Apartment owners with properties in San Francisco and New York tumbled after landlord Equity Residential said new leases in those cities — two of the most expensive U.S. rental markets — are falling short of revenue expectations.”
What caused the apartment owners to tumble? Were they perhaps jumping off tall buildings?
I caught that too. Usually Bloomberg is better with their editing.
It brings this image to mind:
https://www.flickr.com/photos/stoller/2907411559
Not much sympathy there. Hehe.
“The Miami condominium market is relatively stable and holding its own compared to countywide statistics, experts say, despite a decrease in transactions from this time last year and a small drop in the year-to-date price per square foot.
…
The average price of a waterfront condo dropped 14%, with the average price per square foot dropping 15% from $834 to $711.”
If 15% is a ’small drop’, how big is a ‘large drop’? Especially given massive amounts of leverage used to fund these investments, which greatly amplifies the losses?
The music is fast stopping in South Florida.
…. and Houston and Dallas and NYC and San Francisco And Seattle and Denver.
Seeing a LOT of for sales signs in northern Idaho…
Same here in Seattle.
http://www.denverpost.com/2016/06/01/median-price-of-a-1br-apartment-in-denver-hit-1390-in-may/
Median price of one-bedroom apartment in Denver hit $1,390 in May
Cost to lease increasing at a faster pace than the national average
‘15% is a ’small drop’
The article is trying to make a distinction between waterfront and the rest. You know, sure the trees are burning but the the grass around them is only smoldering.
‘Median price of one-bedroom apartment in Denver hit $1,390′
With the supply of luxury apartments growing (and nothing but being built) the monthly price should go up. This same paper reported on the apartment bubble in Denver not that long ago, complete with incentives and free rent.
Cities are going to get cheap again. Alot cheaper.
I’m certain that at some point renters will push back, even if it means leaving town. But when I talk to young people, all I hear is that rents keep going up and they have little choice but to pay.
As I mentioned not too long ago, my son and two roommates are paying $1450 for a two bedroom place in freaking Greeley. I asked him why they didn’t rent something cheaper, because there are cheaper places. His response was that those cheaper apartments are in “ghetto” locations. I visited his complex, and yes, everyone I saw there was white. And the complex, which is brand new and on the west side of town (closer to the I-25), has almost no vacancies. And my son would rather eat Brillo pads than move back in with us.
That might be true but in any case rental rates are still half the cost of buying at current grossly inflated asking prices of resale housing.
There are some pretty ghetto white folk out there. Listening to the downstairs metheads scream at each other is no fun.
‘The cash is running out, and the company needs capital quickly. As of now, the controlling shareholder has not begun the process of selling properties, and is still investing capital in development of projects.’
Sound like they are living on borrowed time and money as they inexorably slide towards an epic collapse.
Extell needs financing like we need air to breath.
Aren’t these folks supposed to be funding their future projects with the profit from prior successful projects? Back in the day, you had to at least prove you had a shirt before you were allowed lose it.
The article goes on to say they can get another $100 million plus, IIRC from their main lender, to keep not selling through 2017. We’ll see how much these Israelis want to throw good money after bad.
‘Sound like they are living on borrowed time and money as they inexorably slide towards an epic collapse.’
Timed maybe for the first quarter of 2017
Top News
Wed Jun 1, 2016 | 10:00 AM EDT
U.S. construction spending posts largest drop in more than five years
WASHINGTON, June 1 (Reuters) - U.S. construction spending recorded its biggest decline in more than five years in April as outlays fell broadly, which could prompt economists to lower their second-quarter growth estimates.
…
autos-tank
luxury condo-tank
construction spending ?
that’s all there is folks
Have car sales really “tanked”. Sure, they’re down, but they’re still a lot higher than after the 2008 meltdown. I recall that 40% of sales were financed with a HELOC back then. Anyone know what that percentage is today?
It takes time to reach the bottom.
Yes. Auto sales peaked and are headed down.
But - Kermit the Baker sees it differently…..he of AIA economics…..
This is why I don’t belong to the AIA.
http://www.aia.org/practicing/AIAB108853
Housing oversupply stokes fears of Chinese property bust
By China correspondent Bill Birtles
Updated Tue at 1:41am
The Chinese flag flies with the Pudong skyline in the background
Analysts within China are brushing away growing fears that the world’s second largest economy is being engulfed by an expanding property bubble.
Across the country millions of flats sit empty, either unsold or unrented, while prices for new units continue to soar in the big cities.
“I live on the outskirts of Beijing and prices have reached $6,500 per square metre. In some of the better areas here, it’s more than $8,500″, said 25-year-old Beijing resident Atticus Liu.
“It doesn’t matter how many years you work, you still might not be able to afford a home in Beijing.”
Developers are also taking on increasing risk to help fuel what observers worry is an unsustainable construction boom, particularly in the smaller third and fourth-tier cities.
“I don’t know if it’s a bubble but, in the long run, perhaps the trend is slightly worse mainly due to oversupply,” said Deloitte’s chief economist for China Xu Sitao.
…
Deloitte’s chief economist for China doesn’t know whether there’s a bubble? Jesus, maybe people on this blog should apply for his job! The only way to justify that comment is if Mr. Sitao is in China, and believed that telling the truth would lead to his arrest and imprisonment.
It’s probably his job to say there isn’t a bubble.
Nice work, of you can get it.
In 2014 autos added as much as .4 to gdp
,yikes
Pent up demand. What is the typical ratio auto sales add to GDP?
Here it is:
The automotive industry, including dealerships, historically accounts for approximately 3 to 3.5 percent of U.S. gross domestic product. Motor vehicles and parts manufacturers employed, on average, 909,700 people in 2015.
…and this from India:
Automobile Manufacturers (SIAM). With more than 35 automakers, the industry contributes. 7 percent to India’s GDP and …
“Housing’s Contribution to Gross Domestic Product (GDP)”
“Housing’s combined contribution to GDP generally averages 15-18%, and occurs in two basic ways:
Residential investment (averaging roughly 3-5% of GDP), which includes construction of new single-family and multifamily structures, residential remodeling, production of manufactured homes, and brokers’ fees.
Consumption spending on housing services (averaging roughly 12-13% of GDP), which includes gross rents and utilities paid by renters, as well as owners’ imputed rents and utility payments.
“Including owners’ imputed rent (an estimate of how much it would cost to rent owner-occupied units) in GDP has long been a standard practice in national income accounting. Were owners’ imputed rent not included, an increase in the homeownership rate would cause GDP to decline.”
This last part needs repeating:
“Were owners’ imputed rent not included, an increase in the homeownership rate would cause GDP to decline.”
A reminder: Imputed rent is a function of price as determined by the actions of strangers. Get these strangers to go a bit crazy and the GDP numbers will experience a hefty boost.
Magic.
Link …
https://www.nahb.org/en/research/housing-economics/housings-economic-impact/housings-contribution-to-gross-domestic-product-gdp.aspx
Since an increase in the homeownership rate would cause GDP to decline if imputed rent were not included in the calculations then it follows that pricing potential buyers out of the market and forcing them to rent instead would act to boost rental prices, both actual and imputed frental prices, and these boosted rental prices would act to boost the GDP numbers.
So a measure of prosperity, such as GDP, may in fact be a measure of financial distress.
If one were to buy a car a boat or a TV or a lawnmower or anything else that also could be rented instead of bought there would be no expectation that the going rental price for the purchased item would generate year-after-year a sort of income that would go into figuring the nation’s GDP due to its existence and due to what price strangers decide to place on this item, but when the item that is bought is a housing unit then this expectation becomes real.
Another factor to consider …
If a renter decides to become an owner then he ends up, in imputed terms, to becoming both a renter and an owner. He does not relinquish his renter status when he becomes an owner, instead he carries it right along with him.
Now, how weird is that?
Don’t forget parking lots, roads and bridges, car accidents, etc… a huge portion of the economy. Hence the bail-outs and financing subsidies.
‘It’s the canary in the coal mine.’”
Sounds like it may be a good time to sell.
Is it possible any of the leading Presidential candidates might acknowledge the role of foreign real estate investors in driving housing costs out of the reach of U.S. citizens, and take measures to reverse the trend?
No.
“Republican presidential candidate Donald Trump entered a new phase of his campaign when he held his first major campaign fundraiser: a $25,000-per-ticket dinner in Los Angeles.
The reception, held Wednesday at the home of Trump’s friend and fellow real estate investor Tom Barrack, was Trump’s final stop after a busy day campaigning across the Los Angeles area that included a rally and an appearance on ABC’s “Jimmy Kimmel Live.”
…
Trump also made a rare admission on the show, telling Kimmel that he often used aliases to purchase real estate.”
http://www.bloomberg.com/politics/articles/2016-05-26/trump-holds-first-major-presidential-fundraiser-in-l-a
If there are no consequences for taking on extreme leverage and risk doesn’t it encourage a casino like environment in assets?
I was watching tv last night and they are still advertising keep your home ca. It sounded like these people were desperate to give this money away to victims of the last housing bust.
We have really gotten away from sound finances. Right now you really don’t know the real value of much.
They just keep printing money tryn to fill holes.
The only right thing to do is live within your means and hope you’re not holding a bag when it all goes down, again.
It may not be easy to determine how much is too much. I remember Mitt Romney saying that he wanted more risk-taking in America. He never explained that. A few months after the 2012 election I noticed a lot looking at their phones while driving. I wondered if this was the sort of risky behavior that Romney was talking about.
I don’t think what Romney was talking about was levering up balance sheets or driving with your eyes glued to a phone.
I think what he was talking about was risking money on trying new things. Investing in new products, investing in new businesses or expanding existing businesses, etc.
There is lots of cash sitting on sidelines, without much investment in business. While people talk about “risk-on, risk-off” with respect to stock market swings, I think that from a corporate investment standpoint, there has largely been a “risk-off” attitude.
We can debate lots of potential reasons why this is the case, but weak corporate investment seems to be a fact.
‘A core beef between two sides battling over the future of Los Angeles is represented by this question: Does building new apartments, even if they’re decidedly upscale, help alleviate our lack of middle- and low-income units?’
‘Fiscal conservative Jack Humphreville, a frequent critic of City Hall and a supporter of a proposed initiative to tamp down residential development in town, said in an email that our March piece on L.A.’s housing crisis contained “no mention of any actual facts” regarding the benefits of building more high-end units.’
“If they could identify any area of L.A. where luxury housing somehow, sometime drove down housing prices, I am sure they would mention it,” Humphreville wrote. “But they can’t find any data or case studies, so they keep repeating the same empty claim.”
‘The allegation is that new development displaces longer-term, lower-income residents. Organizers of the initiative have even argued that these units create homelessness. There are, of course, anecdotes about planned new structures that aim to replace those that offered affordable rents.’
“Older apartments are being destroyed at a fast pace instead of being preserved, and the City Council has no plan for preserving the older and inexpensive rental housing that acts as the safety net for L.A.’s working class and middle class,” the initiative said in a statement.’
“Does building new apartments, even if they’re decidedly upscale, help alleviate our lack of middle- and low-income units?”
______________________________/
Is this what public debate has come to?
Really, this isn’t new. Private sector has been passing the poor off on the government since the advent of civilization. Now, it looks like they’re starting to pass the middle class off onto the government as well.
Even if these developers couldn’t get financing to convert everything to luxury, they still wouldn’t build affordable units. Why should they? If they build luxury units, the poor will
a. Pay luxury prices by shacking up several incomes in one luxury unit
b. Pay luxury prices by taking income from somewhere else.
c. Convince government to give them government cheese to pay the luxury prices
d. Convince government to build affordable units themselves
e. Live in the street
In each one of these options, the developer is avoiding p-o-ing their shareholders with low profits. The developer either enters the high-profit part of the business or doesn’t enter the business at all.
And it’s not limited to housing. You could make a similar list for food, education, health care, college, etc.
a. Pay luxury prices by shacking up several incomes in one luxury unit
b. Pay luxury prices by taking income from somewhere else.
c. Convince government to give them government cheese to pay the luxury prices
d. Convince government to build affordable units themselves
e. Live in the street
f. move
Move *where,* cactus? That’s the entire point. Luxury units is ALL that’s being built, and at the same time, affordable units actively destroying or renovating the existing units to make them luxury. The goal is to offer ONLY luxury units and make them pay, one way or another.
And the luxury takeover is happening everywhere, even Flyover towns like Augusta. (!) So you can’t even move to another city.
‘Average rent has decreased from about $1,200 per month for a 1-bedroom in 2014 to $900 per month now…she said she recalls a time before the boom when average rent was more like $500. Apartment occupancy, which reached almost 100 percent in 2014, has fallen to 80 percent’
You can move to Midland or Williston ND. There’s no jobs so rent will probably be below $500 eventually. There was that report I posted recently saying Midland had a 700% increase in luxury apartments. You’re right, it’s going on everywhere and the crack up will be just as universal. When it gets to the credit markets, like in the last article above, it will be headline news. I hope it hits while Mel is still in his current office.
Move *where,* cactus?
Plus if you have a steady job that pays a half decent wage, it could be folly to move.
It is sobering to stop by the computer room at the local public library. The computers (I think there are 60 of them) are always booked solid and about half of the users are migrants checking out Craigslist looking for a steady job. Most don’t find one and move onto the next town.
Time to move out of the ghetto.
‘It is sobering to stop by the computer room at the local public library. The computers (I think there are 60 of them) are always booked solid and about half of the users are migrants checking out Craigslist looking for a steady job. Most don’t find one and move onto the next town.’
I remember you posting about that here on HBB many moons ago. The Horace Greeley crowd and the California Horace Greeley chapters keep believing.
It’s great to pick up and move to somewhere without any contacts or job lined up if you can fit everything you own into a hatchback and you have a year’s worth of living expenses saved up. Also it is an advantage to be a 20-something and can handle sleeping in your car or a legit campground.
“Older apartments are being destroyed at a fast pace instead of being preserved, and the City Council has no plan for preserving the older and inexpensive rental housing that acts as the safety net for L.A.’s working class and middle class,” the initiative said in a statement.’
And there is the ballgame folks.
If you are destroying cheap housing to build expensive housing, how can you possibly claim that it is making lower quality housing cheaper?
If you are building expensive housing IN ADDITION to retaining all existing housing stock, it should result in a few people in the middle priced units moving up, a few people in the lower priced units moving to middle, and a few lower priced units coming available.
With this “historic” boom in apartments, combined with low yields elsewhere, why is it that so many deals wouldn’t get done without Mel Watt guaranteeing the loans?
I spoke with a mortgage broker a few years ago about what would happen if Fannie/Freddie stopped lending on apartments. My pet theory was that cap rates would rise instantly by perhaps 100bps without the interest subsidy of the GSE. And a 100bps move on an apartment that was valued at a 5 cap to begin with would be 20% decline in value.
At the time, I was hoping for a slow death of the GSEs, and wondering what the impact would be on apartment valuations.
The broker surprised me when he said that the non-GSE lenders would provide debt at pretty close to the GSE rates (maybe 25 or 50 basis points higher). They might not provide as MUCH leverage, but they would be similarly cheap.
The reason was that apartments were considered “safe” and so the GSE guarantee wasn’t as valuable as it was for, say, a subprime loan to an individual homebuyer.
In other words, you’re right, apartments would still be built without the GSEs.
Where the borrowed money is sourced is immaterial to the fact that there are millions of excess empty and defaulted houses apartments and condos out there.
Rental Watch, I wonder if what that mortgage broker said is still true. A few years ago, there was still some capacity to shack up and pay the rent, or to forgo some other luxury to pay the rent. But people are getting close to maxing that out.
That figure of 1/3 of Millenials living at home is a yellow flag. In the past, those young people would work a mid-pay (equiv $40-50K) job and tough it out an affordable apartment until they could afford a starter home. But now that luxury is becoming the only option, they are actually better off forgoing the apartment altogether and living with Mom and driving Uber.
I really need to update that list I posted above:
a. Pay luxury prices by shacking up several incomes in one luxury unit
b. Pay luxury prices by taking income from somewhere else.
c. Convince government to give them government cheese to pay the luxury prices
d. Convince government to build affordable units themselves
e. Live in the street/van down by the river
f. Move to dying town for low rent and even lower income.
g. Live with Mom and Dad.
h. Hold out for $x while your condos stay empty.
You are missing an important one (which I believe is very common):
h. Bid up the price of cheaper units, making it more likely that the higher earners in those formerly cheaper units decide to rent a luxury unit.
http://www.motherjones.com/kevin-drum/2016/05/why-are-so-many-millennials-still-living-home
People talk about the HUGE number of people living at home…yes, it’s historically high.
But we are talking about 15% vs. the longer term average of 10%-11%.
Think of the inverse. Instead of 89%-90% of 25-34 year olds living away from mom and dad, 85% are living away from mom and dad. 5% fewer young adults are able to live away from home.
Look at this data:
http://www.census.gov/hhes/families/data/adults.html
Table AD-1
We can debate the “whys”, but the facts on the ground are that:
1. The job market generally sucks (wage growth has been terrible, despite low unemployment rate and the crowing from our fearless leader);
2. Home prices are high in markets where jobs are good;
3. Credit is cheap but tight; and
4. Rents are high and rising WAY faster than inflation, especially in markets where jobs are good.
Is it any surprise that marginally fewer young adults are living away from mom and dad?
The question about GSE subsidized interest rates is really one about risk-adjusted return. Is the government guarantee really THAT important to someone? I think an interesting corollary to the apartment interest rate question is looking at GSE loans vs. Jumbo loans on the residential side.
Jumbo loan interest rates are not very different than conforming loans.
What is different is the amount of required down payment.
So, effectively, to accept a similarly low interest rate, a lender either needs 1) a government guarantee, or 2) a higher down payment.
What the mortgage broker told me before was effectively the same thing. You can get a low rate from a non-GSE lender, but instead of putting down, say 20%, you’ll need to put down 30%.
However rental rates are still a fraction of the cost of buying….. and falling.
Donk if that were the case, there wouldn’t millions of excess empty and defaulted condos, houses and apartments.
‘With homeownership rates continuing to drop, Brinkman Partners hopes to capitalize on millennials and boomers eschewing buying for a more temporal lifestyle. The Fort Collins-based company has proposed building nearly 100 market-rate apartments on 2.89 acres at 3425 S. Shields St.’
‘With vacancy rates less than 2 percent and median rents for one-bedroom apartments at $1,157 and two-bedroom leases topping $1,400, Fort Collins is seeing a building boom in multifamily construction. Fort Collins has more than 2,000 apartments in all stages of the development pipeline.’
‘Fort Collins developer J.D. Padilla recently announced plans to build 180 high-end units on North College Avenue…McWhinney Inc. purchased 12 acres from Foothills owner Alberta Development Partners last year and plans to build 15 three- and four-story buildings along Swallow and Stanford roads. The $92 million project is expected to open to residents in about 18 months. McWhinney’s studio apartments are expected to go for about $1,000 per month, with two-bedroom units fetching nearly $2,000 monthly. If those rates hold, they could be the most expensive apartments in the city.’
There’s that McWhinney guy again.
Chad McWhinney, our own local real estate mogul. So now he’s building apartments at the old Foothills Mall site. I remember when that place would be hopping on a weekend. The last time I was there (about 5 years ago) the place was a ghost town and half the tenants were gone.
I bet there was a great selection of yarn shops though!
Fools rush in.
http://wolfstreet.com/2016/06/01/the-dumb-money-is-finally-buying-new-homes-just-as-the-smart-money-exits/
So the article says demographically and economically housing demand is at historic low levels and falling. Huh, fisrt time I’ve read that here. lol
A comment from the article …
“And that’s just part of a very disturbing trend I see – many businesses these days are getting just plain DESPERATE to maintain their sales by offering ridiculous incentives. One local car dealer advertises constantly on the radio that they will get you into a new car with just $6 down, and more are advertising crap like ‘We’ll make your first two payments’. Furniture and other stores offering not only zero percent, but no payments for the first x months.
To me, these moves are bad for both retailers AND consumers, but this reflects the current state of our economy.”
Ehhhh … those kinds of gimmicks are always present. X months same as cash, no money down, no payments for X month, etc. Has there ever been a time when the sales manager at the car dealership doesn’t say to a lukewarm buyer: “What can I do to get you to take this car home?”
That’s when you know to walk away and stay away until the real price slashing begins.
Why buy it now when you can buy later for a fraction of the cost?
“Fools rush in.”
http://picpaste.com/always_be_closing.jpg
“Third prize is … you’re fired.”
Ha hah! I was just thinking of that last night as I was sitting on the riding mower mowing the neighbor’s field behind my house.
But it means a slightly different thing for me:
Always
Be
Cutting
With my older smart phone.
Always
Be
Charging
“…sitting on the riding mower…”
Stanley Johnson, IIRC.
Davis, CA Housing Affordability Skyrockets As Prices Crater 18% YoY
http://www.zillow.com/davis-ca-95616/home-values/
http://www.multpl.com/
p/e 24 =wow
auto sales down
what’s moving
Does anyone else suspect a correlation between the long lines at the TSA and the advocacy of the 85 buck Pre check program. cart leading horse?
https://www.yahoo.com/finance/news/tsa-85-precheck-program-too-100005102.html
I fly about four times a year. Not sure how much longer I will be considered a frequent flier. The less I fly, the better, because I hate TSA.
Man I miss bits buckets -
this……and the defacto real answer is (No. 9)- men are tired of being screwed by wimins who are looking for an eternal paycheck.
http://www.theburningplatform.com/2016/06/02/8-reasons-why-it-is-so-hard-to-find-someone-decent-to-marry/#more-123619
C’mon, RJ! Find yourself a woman who’s fallen off the carousel and wife her up! What could possibly go wrong?
Spewing my coffee as I read this!!!
LMAO!!!
FAOMs are always waggling that moral finger when trying to explain to themselves why no woman wants them.
And thus you frame this into a binary construct of TradCon shaming vs 3rd wave feminist shaming, of which the Red Pill rejects both.
Read and learn, son, read and learn. There is no “F” in any acronym to describe its adherents, as eating healthy, sleeping sufficiently, moderate or no alcohol intake, and regular cardio and lifting prevent this.
There’s nothing stopping you from being betabux, so have at it…
If you read that list, it would appear that a lot of it could be called trad con.
Yeah it does, and it’s rather clueless as to the contemporary reality of current year.
With a few minor vocabulary tweaks it could be a Salon article.
But whatever “side” you choose to frame the narrative with, the message is the same: the slaves on the plantation trying to convince the runaways to come back.
I read the list, and it sounds to me like a 75 year old/Fox News viewer’s bitch list.
-Nothing about the number of college educated women expanding exponentially. Nothing about how many of these women can do just fine on their own financially, and have more options. One of which is to tell the male “losers” (however they define it) to go pound sand.
-We may bitch about BS that women do, but thanks to having more options, their tolerance of male BS just to be in a relationship has gone down as well. It used to be that women had to put up with all kinds of idiotic behavior, because they didn’t have many options. This problem still exists for men/women with no college degrees.
-Nothing about how a suck-azz economy has put many young people’s career development back a decade or more.
-You can bitch about it, or recognize that things aren’t like 1960 anymore, and we are not going to turn back the clock (what might have been “the good old days” for WASP men won’t necessarily resonate with a 21 year old African-American male).
Of course, a lot of this is offset by the fact that “falling in love” tends to make people stupid.
Exhibit “A” = Me. All kinds of warning signs that I should rethink who I was marrying. That I chose to ignore/sweep under the mental rug.
Exhibit “B” = My daughter’s best friend who just got married after graduating from college (Pharmacist). Their wedded bliss will last until the money starts getting tight (but this is JMO).
“Exhibit ‘A’ = Me. All kinds of warning signs that I should rethink who I was marrying. That I chose to ignore/sweep under the mental rug.”
Robin Williams — ‘The problem is, God gave man a brain and a penis and only enough blood to run one at a time.’
FWIW, I see a lot of “Where have all the good men gone?” articles (like the one above) but never see a “Where have all the good women gone?” stories.
I see articles shaming men for not putting a ring on some single mother’s finger, but never see MSM articles shaming women for being single (never wed) mothers.
This seems to tell me that men aren’t all that interested in getting married these days, but that women still are, regardless of how “strong, empowered and independent” they are. Take a look at the magazine rack the next time you’re in the supermarket. You’ll find that they still sell magazines aimed at brides. I’ve never seen one for grooms.
Also don’t forget the foreign brides. American woman have the luxury of no longer tolerating men’s BS. But a foreign bride will do everything and say nothing, just like the men want.
Of course, the foreign bride is faking it. They don’t come for the man. They come for the green card, the anchor babies, and the eventual chain migration.
Unfortunately, google translate doesn’t do ‘neckbeard’, so your meaning remains opaque.
Rich Alpha males should be able to marry as many women as they want and can afford.
solving 2 problems
1)too many young men without jobs who won’t get married = no kids in the future.
2) Rich Alpha males who marry many women won’t be rich anymore closing the wage inequality gap.
1M dollars for each extra wife the money can go to where all other frivolous tax money goes ( lottery, etc ) government pensions, so I don’t have to pay for them.
sarc
Yup. The only way to do it is be a very rich alpha male and fool the women into thinking you are just a rich alpha male. Hide over half your wealth somewhere else.
#9 Maybe, just maybe you ain’t no prize yourself.
This bout sums it up.
http://wwwtheworldandeverythinginit.blogspot.com/2016/06/obama-takes-victory-lap.html
Yesterday’s tally…..
http://www.chicagotribune.com/news/local/breaking/ct-chicago-violence-shootings-20160601-story.html
And 99% of the mothers of these young black males will vote for Hillary.
If Jeffrey Dahmer was the Democrat Party nominee they’d vote for him.
‘Cuz the party is more like a cult. Hillary could burn down your house and take your first born and they’d still follow.
Jeffrey Dahmer not only took their first born in many cases, but he also ate them
Feel the Bern!!
No neo-cons!!
And 99% of the mothers of these young black males will vote for Hillary.
Many won’t vote at all. Poor people tend to vote less than the non-poor. The one percent likes it that way.
Must be a lot of non-poors in Pennsylvania’s urban areas.
#5 Somehow Mitt Romney won 55 out of the 67 counties in the state of Pennsylvania and still managed to lose the entire state by a wide margin because of the absurd vote totals that Obama ran up in the urban areas.
22 signs of Democrat Voter Fraud in 2012 Election
Posted on November 20, 2012 by Dr. Eowyn
#1 According to the Election Protection Coalition, voters across the United States reported more than 70,000 voting problems by 5 PM Eastern time on election day.
#2 There were 59 voting divisions in the city of Philadelphia where Mitt Romney did not receive a single vote. In those voting divisions, the combined vote total was 19,605 for Barack Obama and 0 for Mitt Romney.
#3 The overall voter turnout rate in Philadelphia was only about 60 percent. But in the areas of Philadelphia where Republican poll watchers were illegally removed, the voter turnout rate was over 90% and Obama received over 99% of the vote. Officials in Philadelphia have already ruled out an investigation.
#4 According to WND, one poll watcher in Pennsylvania actually claims that he witnessed voting machine software repeatedly switch votes from Mitt Romney to Barack Obama
#6 Barack Obama received more than 98 percent of the vote in 10 out of the 50 wards in the city of Chicago.
#7 Prior to the election, voters in the states of Nevada, North Carolina, Texas and Ohio all reported that voting machines were switching their votes for Romney over to Obama.
#8 There were more than 50 precincts in Cuyahoga County, Ohio where Mitt Romney received 2 votes or less.
#9 There were more than 100 precincts in Cuyahoga County, Ohio where Barack Obama received more than 99 times the votes that Mitt Romney did.
#10 Barack Obama also received more than 99% of the vote in a number of very important precincts down in Broward County, Florida.
#11 Wood County, Ohio (which Obama won) has a voting age population of 98,213, but somehow 106,258 voters were registered to vote on election day.
#12 Ten counties in the swing state of Colorado have a voter registration rate of more than 100%.
#13 Barack Obama did not win in a single state that absolutely requires a photo I.D. in order to vote.
#14 In Ohio, two election judges were caught allowing unregistered voters to cast ballots.
#15 Many Ohio voters that showed up at the polls on election day were surprised when they were informed that they had already voted.
#16 In fact, there were reports all over the nation of people being unable to vote because records showed that they had already voted.
#17 According to U.S. Representative Allen West, there were numerous “voting irregularities” in St. Lucie County, Florida on election day…
“American Serfdom: Companies Offer Loans For Living Expenses To Destitute Employees”
http://www.zerohedge.com/news/2016-06-01/american-serfdom-companies-offer-loans-living-expenses-destitute-employees
This is what happens when prices are grossly inflated.
Remember….. Nothing accelerates the economy like falling prices to dramatically lower and more affordable levels. Nothing.
This does not happen to me often but I got another name that price engineering gig offer today. Hiring manager wanted me specifically. But it’s in the line of work I don’t want to be in. Second time in two weeks they called. Thanks for helping my ego but I want that kind of offer in my new line of work.
Golden, CO Housing Affordability Surges As Housing Prices Tumble 11% YoY
http://www.zillow.com/golden-co/home-values/
“Miami’s Condo Frenzy Ends With Inventory Piling Up in New Towers”
http://www.bloomberg.com/news/articles/2016-05-27/miami-s-condo-frenzy-ends-with-inventory-piling-up-in-new-towers
And it’s not just Miami. It’s NYC, San Francisco, Denver, Washington DC, Seattle, Houston, Dallas….
Collectively we all know the crash is coming. Now, how do we profit from it? Why else do we follow it?
got popcorn?
Set a good buy target on a variety of companies. Airlines, autos, trucking, railroads, financial, pharm, box stores, technology. 50% of the high of the last 2 years? 40%? 35%?
Worst case is you still have the principle - your cash.
There are already stocks with double digit percentage off of their highs. AAPL, AAL, TM, DIS.
I think the S&P index (and NYSE and DOW and Nasdaq) are going to dive, but some sectors and companies are already down so they won’t have too much further to drop. There is always a good buying opportunity.
AUY in January. HES also (but I chickened out of HES).
Short apartment REIT’s?
If you short a stock, do you need to pay the dividend?
To be perfectly candid, the dynamics that would scare me about shorting apartment REITs is the following:
1. Interest rates rise;
2. Cap rates rise;
3. Rents needed to justify new development go up (yield requirements go up);
4. Development of new apartments slow;
5. Supply constraints squeeze renters more with higher rents;
6. Owners of existing real estate benefit.
Yes, the dividend yield would go up for the REITs, potentially causing them to fall in value for a time, but apartment renters are on short term rental agreements, so it is easy for REITs to push rents higher if market rents rise.
I wouldn’t buy apartment REITs at current levels, but I don’t think I’d short them either.
You probably can put a buy limit on a REIT ETF.
Should be able to put a buy limit on EQR. It’s a REIT. Sells at $66.20. 52 week high $82.39
$50 is about 60% of its high. Current dividend of 2.02 so the yield is 3%.
Recent before the city council this month in Santa Rosa
buyer paid $540,000 for 5 room 1 bath 1000 square foot home on septic system on one acre, wanted to demolish it and build better home on it
Couldn’t do it as septic field failing, so, in effect, paying about $600,000 for one acre and zoned rural residential.
Installed another septic, $6k.
No $100k ‘hook ups’? No $90k building permits?
Ben Jones, the following narrative for your consideration:
http://www.salon.com/2016/06/02/americas_real_terror_threat_partner/
And when globalists take power, that’s when people start getting put on trains, taken to the camps, gassed with Zyklon B, and their corpses shoved into ovens.
Happy Thursday
“Make America Read Again”
Yakima, WA Affordability Improves As Housing Prices Plunge 7% YoY
http://www.zillow.com/yakima-wa/home-values/
http://www.newjerseyhills.com/mt_olive_chronicle/news/oakwood-village-sold-again-goes-from-holocaust-survivor-to-pakistani/article_95ea6216-6ef7-5262-ab75-54bd00771b21.html