Buyers Are Setting Their Sights Lower
A report from the Buffalo News in New York. “Amid record prices and crowded open houses, Western New York’s booming housing market has hit an unexpected stumbling block for many buyers: they simply can’t find homes to buy. Sales in July fell 9.1 percent from the prior year, according to the Buffalo Niagara Association of Realtors, and even pending deals dropped. Activity came back up in August, with a 5.7 percent gain in transactions. However, that was still much less than the 10 prior months, when sales grew at double-digit rates of as much as 60 percent from year to year.”
“After more than a year of go-go homebuying across the region, the region may just have become a victim of the very factors that drove months of frenetic activity in the first place. ‘Prices are increasing to the point that it is denying buyers an opportunity to buy,’ said David Weitzel, an agent at RE/Max North in Amherst.”
From Bloomberg. “Home prices in New York’s Hamptons fell the most in almost three years as buyers in the beachfront towns sought out less-expensive properties and shunned the middle of the market, priced from $1 million to $5 million. Homes in the area, a second-home mecca favored by Wall Street executives, sold for a median of $825,000 in the third quarter, down 13 percent from a year earlier, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the biggest annual decline since the fourth quarter of 2013.”
“Buyers in the towns and hamlets on Long Island’s South Fork are setting their sights lower as yearly bonuses for New York City’s financial employees — the lifeblood of the Hamptons market — are poised to disappoint in 2016. Incentive pay at hedge funds may fall 5 percent to 15 percent this year because of lackluster returns, while bonuses for fixed-income sales and trading may fall 10 to 15 percent, according to an August report by compensation consultant Johnson Associates Inc.”
“‘Wall Street is not having a banner year and I don’t think there’s an expectation that compensation for this year will be higher than last year,’ Jonathan Miller, president of Miller Samuel, said in an interview. ‘I do think there’s just a little bit more caution.’”
The Village Voice. “On the heels of new legislation that will penalize anyone who advertises entire apartments on the home-sharing service Airbnb for less than thirty days at a time, the company valued at $30 billion summoned a few of its hosts and held a small protest outside of Governor Cuomo’s New York City office Wednesday morning, claiming that the governor and New York state legislators were helping to make the city’s affordable housing crisis even worse.”
“Michelle Yates, a Bed-Stuy resident for eighteen years, who has previously worked in the construction and real estate industries, is encouraged about the changes she’s seen in her neighborhood — which has seen its white population increase sevenfold. ‘People are losing their homes because they pulled money out of their homes thinking it was an ATM while sitting on a high-interest mortgage. It has nothing to do with Airbnb. Nothing to do with real estate prices. I don’t believe any of that,’ Yates told the Voice, in response to the counterprotesters chants that Airbnb was hurting minority communities.”
“Assemblywoman Linda Rosenthal, who championed the new legislation, was on hand to shout against Airbnb. ‘More than 50 percent of the units rented out on Airbnb are illegal — that’s why Airbnb is freaking out,’ Rosenthal told reporters. ‘Not because they care about New Yorkers, because this has been illegal since 2010. They’re freaking out because their bottom line has been challenged.’”
From DNA Info. “The management company taking over the Red Square rental building on East Houston Street slashed the salaries of doormen and maintenance workers by roughly 30 percent — and several staffers said they were given ultimatum to either accept the lower pay on the spot or not come back.”
“Residents at the 250 E. Houston St. apartment complex received letters on Oct. 20 announcing the purchase by 250 Houston Investors, LP under the management of Dermot Realty Management Co., along with a host of upgrades coming to the building, such as apartment renovations and added amenities pledging to ‘[elevate] your living experience.’”
“But the change comes at a price for longtime workers at the residence. A maintenance worker who did sign the new contract said he felt he had no choice. He accepted the impromptu demotion, from the position of super to sweeping and mopping floors as a porter, which cut his $18 hourly pay down to $11. ‘They threw us in a room and said, ‘Sign this or you’re fired,’ the employee recounted. ‘They said, ‘You don’t do maintenance no more.’ They took the keys off my key chain. They said, ‘You just sweep and mop.’”
“Two longtime doormen said they received similarly steep pay cuts — from between $17 and $19 per hour down to $12 per hour — which they accepted due to a lack of other options. One doorman said he felt ’stuck,’ explaining he and his colleagues ‘had no choice.’ ‘We have families,’ he said. ‘How can we take care of them?’”
From Bisnow. “NYC’s always been a city of cranes, but never has this been more apparent than today. Development remains strong, and construction spending and employment are hitting record levels. Can developers finance record levels of construction? Is there anything they can do to slow rising costs? GFI Development president Steven Hurwitz says he’s already seen prices begin to cool as the loss of the 421-a has slowed residential development and the frozen land market slows the pipeline.”
“‘Contractors are starting to see that and are growing hungry,’ Steven says. Unskilled labor is much easier to find, and companies have ’staffed up so much that they now have a lot of mouths to feed.’”
Re-posting this from last night:
‘Landlords on Manhattan’s Fifth Avenue are sitting on a record amount of open space as retailers balk at committing to expensive new leases in one of the world’s most prestigious shopping districts.’
‘The availability rate on the famed strip, home to Saks Fifth Avenue and Tiffany & Co.’s flagship store, jumped to 15.9 percent in the third quarter, up from about 10 percent a year earlier, according to Cushman & Wakefield Inc. The rate has climbed steadily this year, surpassing the prior peak of 11.3 percent, set in the fourth quarter of 2014.’
‘The rise of empty storefronts isn’t limited to Fifth Avenue. It’s part of a Manhattan-wide space glut as retailers — buffeted by e-commerce, tepid demand for luxury goods and a strong dollar that’s eroded tourist spending — push back against rents that have soared to records. Leasing costs have increased in tandem with property values in the past five years, outpacing gains in merchandise sales and making it impossible for retailers to run profitable stores at many locations, according to Richard Hodos, a vice chairman at brokerage CBRE Group Inc.’
“Property trades are being based on achieving ever-higher rents, and nobody ever really looks at what retailers can afford to pay,” Hodos said. “In some cases, rents need to come down 30 percent or more for rents to be at levels where retailers are able to make sense of them again.”
‘Retailers that signed leases at high prices in the past several years and are seeking a tenant to sublease their space are also included, according to Steve Soutendijk, an executive director at Cushman. “Tenants that signed at the absolute top of the market are looking to mitigate their exposure,” he said.’
‘Property owners with space to fill are starting to lower their expectations, according to Cushman’s Soutendijk. Asking rents in some of Manhattan’s prime shopping districts, including Soho and Times Square, have declined over the course of 2016, Cushman data show.’
“I think a lot of landlords are ready to make deals,” Soutendijk said. “Everybody understands there is too much space in the market. We are not in a state of equilibrium.”
‘Buyers of real estate during the recent boom years may not have much room to maneuver. To justify paying record prices for buildings — and the debt that financed the acquisitions — owners are under pressure to get the highest rents possible, according to Patrick Smith, a vice chairman of the retail brokerage at Jones Lang LaSalle Inc. “Typically, a building that has been capitalized over the past three years is very rent-sensitive,” he said.’
‘Landlords who hold out for the right tenant can be left hanging on to empty space for years.’
This is all how recessions begin:
‘Can developers finance record levels of construction? Is there anything they can do to slow rising costs? GFI Development president Steven Hurwitz says he’s already seen prices begin to cool as the loss of the 421-a has slowed residential development and the frozen land market slows the pipeline.’
‘Contractors are starting to see that and are growing hungry,’ Steven says. Unskilled labor is much easier to find, and companies have ’staffed up so much that they now have a lot of mouths to feed.’
Right. The land market is “frozen” because site owners won’t sell at a price low enough to make development feasible absent the tax break. All that tax break did was enrich site owners. Now they are holding housing construction hostage to get it back.
Meanwhile, retail landlords are also holding out for too much money, because it’s what they need to meet their pro-formas given that they overpaid for the buildings.
“‘Contractors are starting to see that and are growing hungry,’ Steven says. Unskilled labor is much easier to find, and companies have ’staffed up so much that they now have a lot of mouths to feed.’”
Idiot statement, given today’s business climate. Not buyin’ it. Contractors don’t “staff up”, unless they hire on a few project managers. That’s why they call them “contractors”, they “contract” with subs, they don’t “hire”. It’s all a 1099 wonderland for the grunts.
It says companies have staffed up and don’t need the contractors. I was a controller for a GC that did this. Went on a hiring binge because of all the mostly money losing contracts they had. One day I showed up for work and there were 70 or more guys standing around because we didn’t have anything for them to do. Just before I quit they had a mass layoff. Six months later they were bankrupt. I tried to tell them; you’ve got to bid higher. What good is it to “win” a project if you lose money on it?
“What good is it to “win” a project if you lose money on it?”
This was a big problem in South Florida during the 1990s, although it was more with the subs. They’d low-bid a job and then just stop work when it became obvious there was going to be more money going out than coming in. They’d just walk off the job, go bust and that was that.
I saw it all the time in low-bid Navy ship work. Companies bid as little as possible in hopes of contract growth. Well you get a tightwad engineer in there that actually cares about tax money and finishes the project on budget and they made barely 2-3%.
We need these engineers to run for office….
When 95% of the electorate are stupid, good people don’t run for public office.
‘The top dog in modular carpeting is still trying to piece together a turnaround. Interface (NASDAQ:TILE) reported another quarter of uninspiring financial results after the market close on Wednesday, sending the shares 6% lower at Thursday’s market open. Sales clocked in at $248.3 million for the third quarter, 2.5% below where the results were a year earlier. It’s a less painful showing than the 6% decline it posted in each of the year’s first two periods — and the 9% slide during last year’s holiday quarter — but for the fourth quarter in a row we’re seeing a year-over-year decline in revenue.’
(TILE)
96.00% % of Shares Held by Institutional & Mutual Fund Owners
“96.00% % of Shares Held by Institutional & Mutual Fund Owners”
… i.e., the working middle-class’ retirement.
Schuylkill Mall owner files for bankruptcy; Mall won’t be sold at sheriff’s sale today
http://republicanherald.com/news/schuylkill-mall-owner-files-for-bankruptcy-mall-won-t-be-sold-at-sheriff-s-sale-today-1.2108798
Simply not enough cars in their parking lots. DEAD.
http://robmericle.com/wp-content/uploads/2014/12/SchuylkillMallAerial2.jpg
‘Assemblywoman Linda Rosenthal, who championed the new legislation, was on hand to shout against Airbnb. ‘More than 50 percent of the units rented out on Airbnb are illegal — that’s why Airbnb is freaking out,’ Rosenthal told reporters. ‘Not because they care about New Yorkers, because this has been illegal since 2010. They’re freaking out because their bottom line has been challenged.’
And the landlords and Gubment tax whores aren’t freaking out because airBNB is affecting their bottom line? Lol. So ridiculous these Govt critters.
I would imagine the landlords like airbnb because it reduces available rentals. It’s simply black market. If I was a shareholder in a hotel, which had applied for a permit, gone through the channels and invested in a property, I don’t think I’d be too happy about this.
Or at least gives the landlords the flexibility to mini-lease their vacant unit instead of sitting for months.
Have you ever used AirBnb? I did twice on a cross country road trip. Kinda weird renting a room, but at less than $40, it was Ok for a place to sleep.
We shared our condo with some large cockroaches, but the price was right for our AirBnB accommodations for our recent trip to Hawaii.
I stayed at a hotel recently in Vail and drunken idiots were running up and down the hallway whooping it up half the night. No thanks. Never had that problem with AirB&B.
so who owns your house -the state?
rent it by the hour if you want
The state owns it.
Try missing a property tax payment.
You just rent it.
odd logic.
I guess if my car gets impounded I never really owned it??
odd logic
Do you pay a yearly property tax on the value of your car?
And even if your car’s value goes down the property taxes never go down?
If you miss a single tax payment on that car will a man with a gun come and kick you out of your car and then sell it?
Even if the car is 100% paid off?
Now go back to sleep.
answer: have the money or dont buy.
Wanted: Road Pirate
How “car registration” works.
First two comments:
More like.
If NYS can’t collect taxes on it…
Then they ban it.
Why do you think they killed a black man selling loosies?
The US housing market is supply constrained, sending home prices in major US metros back to levels last seen in the winter of 2007.
Research out of JP Morgan published Thursday indicates that this situation appears unlikely to resolve itself anytime soon.
“Nationwide house price indexes have been pushing steadily higher—real house prices are now 25% above their 2012 trough and at the highest levels on record outside the pre-crisis boom years,” JP Morgan’s Jesse Edgerton writes.
“One might wonder if these high prices reflect growing demand that could soon elicit a wave of construction that would prove our forecasts wrong. We find, however, that high prices are concentrated in markets where supply is constrained by geography or regulation, suggesting there may be little room for additional construction.” (Emphasis added.)
In short, areas seeing home prices rise fastest — think San Francisco, San Jose, and Denver — are not in a position to meet the demand for housing implied by the rise in prices.
“In short, areas seeing home prices rise fastest…”
These are the areas where the poverty level is on the rise. Whether you think prices are going up because of mean greedy sellers or because of over excited buyers, it increases poverty.
When people tire of poverty, and think there is a better life elsewhere, they migrate.
“We find, however, that high prices are concentrated in markets where supply is constrained by geography or regulation, suggesting there may be little room for additional construction.”
Pretty sure neither North Texas nor Buffalo are constrained by geography or regulation.
Both states are mostly rural. There is land as far as the eye can see.
There are current more construction cranes in Seattle than is any other city in N.A. So I don’t think it’s overly constrained either by geography or regulation.
Trump: Obamacare is a disaster. We must REPEAL & REPLACE.
We all agree, so what is the plan? What are we waiting for if someone has a better program?
I just love the airBNB argument going on across different states. We all know its simply about reduced lodging and sales tax revenue. Affordable housing crisis? HA, when did NYC have affordable housing? the 70s?
In Boston instead of protesting to shut down Uber, taxi driver/unions protested the regulations that prevent them from competing against ride sharing on a cost basis. Genius! The Govt never seems to think of that though.
In Boston instead of protesting to shut down Uber, taxi driver/unions protested the regulations that prevent them from competing against ride sharing on a cost basis. Genius! The Govt never seems to think of that though.
The existence of Uber doesn’t decrease the supply of vehicles and leave ordinary people without the ability to acquire transportation.
AirBnb does exactly that with the housing market. It adds insult to injury in an already bad situation. While I can understand hotel owners protesting, I’m a little less concerned about them than about renters who find themselves with fewer and fewer choices.
I think we would all agree that someone renting their room for the weekend when they are out of town might impact hotel occupancy, but not the average renter (I say “might” because some people wouldn’t travel if it weren’t for cheap accomodations afforded by AirBNB).
So, what you are really worried about are apartments that are not rented to people full time because the owner is renting them out daily via AirBNB.
http://www.mercurynews.com/2016/01/20/study-airbnb-landlords-rent-out-properties-full-time/
So, a third party study shows 2,675 hosts in 12 major US cities that were “full time” landlords. AirBNB disputes the number, but if it were true, you are talking about 225 units per major city that are off the market. Honestly, this is a trivial number–adding these units back to the market would not cause any major metro to go from being “undersupplied” to being “adequately supplied”. It’s a rounding error.
You don’t have to rent an apartment or house full-time on AirBnb for it to affect the rental market. The fact that it is taken off the market for tenants signing a traditional yearly contract does it.
And landlords (in private) admit it. It is real, and it is happening.
I lived in a resort area that was greatly impacted by this. Not a major city; a vacation area. Guess what? Ordinary people live outside of major cities. Shocking, I know.
wtf is flex cash ?
Pulte giving it a pull
If you use Pulte’s mortgage financing, they will give you “flex cash” to cover closing costs and “prepaids.” (what is a prepaid? Upgrades?)
Just another way to lower the price without lowering the price.
Prepaid interest, perhaps?
Prepaids refers to funding escrow accounts for property taxes and insurance.
Tx
You hot soviet,you
Is this the BIG ONE?
Global bond rout sends U.S. 10-year yield to highest close since June
By William Watts
Published: Oct 27, 2016 4:26 p.m. ET
Inflation, fiscal-stimulus expectations drive government debt markets
Bloomberg News/
Speculation that ECB President Mario Draghi, left, and Bank of Japan Gov. Haruhiko Kuroda are running out of ammo helped spark a bond selloff.
Global bond markets sold off sharply Thursday, with the yield on the benchmark 10-year U.S. Treasury note closing at its highest level since June on growing doubts about prospects for further monetary stimulus by major central banks.
Yields pulled back modestly from session highs after a well-received sale of seven-year Treasury notes, but the yield on the 10-year Treasury (TMUBMUSD10Y, +3.37%) ended the day up 5.3 basis points, or 0.053 percentage points, at 1.843% — the highest close since June 1. The 10-year yield has risen 24 basis points this month, but remains down 43 basis points year to date. Yields rise as debt prices fall.
…
janet yellen will buy some more soon. QE4 after election.
Yeah, but she might not be able to announce NIRP with rising interest rates. In fact, horror of horrors, she might have to raise rates.
Trump’s futures are making a big move:
is assange going to dump some bad dirt soon?
Big sh@t show isnt it?
Repost from the last HBB thread threatening “revolution” if Hillary wins:
http://mobile.nytimes.com/2016/10/28/us/politics/donald-trump-voters.html
Cueing up the Doors’ song Peace Frog with the lyrics “blood in the streets the town of (insert name here)”
And to quote poet, mystic, and drunk Jim Morrison:
“I just wanna get my kicks before the whole sh*thouse goes up in flames”
I don’t have, and never will have children. And I owe your children nothing.
Sent to me today
Picture of Donald Trump wearing a make America Great Again hat looking into the camera giving the thumbs up.
above the picture it reads…
People are being paid to protest my rallies.
below the picture it reads…
I’m not even President yet, and I’m already creating jobs!!!
It’s going to be a very divided country after the elections. Hillary might have a tough time “redistributing the wealth” of the bitter clingers.
http://www.shtfplan.com/headline-news/if-trump-loses-im-grabbing-my-musket-former-congressman-ready-to-go-full-revolution_10272016
Look at the blue line.
The red and blue lines are mirror images of each other in equilibrium. (If not, then there is a pure arbitrage strategy in either buying or shorting shares of both kinds of future…)
What’s interesting is why HRC’s futures just started plunging and Trump’s just started rocketing up.
https://iemweb.biz.uiowa.edu/graphs/graph_Pres16_WTA.cfm
Trump: ‘We should just cancel the election’ and declare me the winner
By Jeremy Diamond, CNN
Updated 6:56 PM ET, Thu October 27, 2016
…
the feds balance sheet is infinite as long as they manipulate the markets to prevent losses.
Once they have a critical mass of upside-down phucked buyers they’ll be able to manipulate asset prices with abandon. Wonder when they’ll appoint an tzar of asset prices?
Obamacare Architect Jonathan Gruber: “Obamacare Is Not Imploding,” “Working As Designed”
October 27, 2016
GRUBER: Look, once again, there’s no sense of oh it just has to be fixed. The law is working as designed; however, it could work better, and I think probably the most important thing experts would agree on is that we need a larger mandate penalty. We have individuals who are essentially free riding on the system. They’re essentially waiting until they get sick and then getting health insurance. The whole idea of this plan which was pioneered in Massachusetts was that the individual mandate penalty would bring those people into the system and have them participate. The penalty right now is probably too low and that’s something ideally we would fix.
http://www.foxnews.com/on-air/the-five/article/2016/10/27/obamacare-architect-jonathan-gruber-obamacare-not-imploding-working-designed
yeah, they want healthy people to pay for all the freeloaders.
This is the DNC business model: producers and taxpayers subsidizing the Democrat’s Free Sh*t Army and overpaid program administrators. Ain’t no new news here.
janet yellen wont raise raise until they can unload their assets at a profit. All this talk is bs to keep the dollar from cratering.
the electorate is so dumbed down they will probably elect another clinton.
More indicators flashing red as China’s housing bubble reaches insane proportions.
http://www.telegraph.co.uk/business/2016/10/26/capital-flight-from-china-flashes-warning-as-property-boom-defla/
If you have problems in your life, listen to this album and it may help sort them out for you. Otis Redding — Live at the Whisky A Go Go (Los Angeles 1966):
https://www.youtube.com/watch?v=4D_KEKZqtsY
Bonus beats, and something to think about, from circa 1999-200? — The Lilys — And One (On One):
https://www.youtube.com/watch?v=YvK9-3hUGUw
7 Wikileaks Revelations About Hillary Clinton That The Media Is Completely Ignoring
http://www.returnofkings.com/99001/7-wikileaks-revelations-about-hillary-clinton-that-the-media-is-completely-ignoring
billy bush has MO PROBEMZZ
https://www.yahoo.com/celebrity/ousted-today-host-billy-bush-selling-nyc-townhouse-for-8-25-million-222018002.html
Just saw Norah O’donnell of CBS Morning Propaganda say 5 days to the election with the biggest smile on her face I have ever seen, it sent shivers up my back.
NBC CAUGHT PREPARING HILLARY VICTORY RESULTS BEFORE ELECTION
Pre-election “results” conditioning public to accept rigged Hillary “victory”
Kit Daniels - NOVEMBER 2, 2016
A NBC station was caught posting election results showing a Hillary Clinton victory days before the election, fueling concerns that the mainstream media is conditioning the public to accept a rigged election favoring Hillary.
Political activists discovered a hidden web site for WRCB out of Chattanooga, Tenn. showing election results with Hillary Clinton securing 343 electoral votes and 42% of the popular vote.
WRCB could not be immediately reached for comment.
http://www.infowars.com/nbc-caught-preparing-hillary-victory-results-before-election/