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We’re A Little Worried About Saturation

A report from 27 East in New York. “A court has ordered the sale of Ponquogue Point, the bankrupt condominium project on Foster Avenue in Hampton Bays that stalled when it was near completion. Construction began in 2014. The launch was announced again in 2015, when the sales center and model homes opened by Manhattan- and Miami-based Zyscovich Architects and Water Mill’s Mabley Handler Interior Design. The sales center phone number has since been disconnected.”

From Forbes on New York. “As the Manhattan sales market continues to slow, developers in the area are seeing a growth in the luxury rental space, and are following through by building rental properties that have condo-level amenities and activities that go beyond a wine and cheese hour. Jordan Sachs, chief executive officer of Bold New York, which is marketing American Copper Buildings and Twenty Broad Street, said there has been a shift in the sales market at certain price points.”

“Bruce Sturman, managing director of The Maxal Group, developer of Harbor 1500 in Weehawken, which boasts central air and views of the Manhattan skyline from every apartment. ‘There’s a segment of the rental market that wants all the accoutrements of ownership. We’ve been condo builders in the past. Market conditions will dictate when you can build a rental product,’ Sturman says.”

From Curbed Boston in Massachusetts. “The median prices for condos and single-families in Massachusetts were both down in July compared with June, off-setting records set during the earlier month, according to new figures from the Massachusetts Association of Realtors. The median condo price was $399,000 in July, a slight drop from the same month a year before and also way off the record $426,165 reached in June.”

The News Press in Florida. “The next wave of new apartments labeled as luxury are on the verge of seeing their first tenants along the Colonial Boulevard corridor in Fort Myers. The new wave piggybacked off a previous one.”

“‘Large projects like this don’t happen predominantly with local investors,’ said Matt Simmons, a property appraiser. ‘Sometimes what happens is you have a bunch of national developers who are looking at the same market fundamentals. They’re sitting in California or New York or wherever. And they say, ‘Hey, look at Fort Myers and Cape Coral. Look at the population growth. We need to build apartments.’ And they’re right. But what gets lost is that two or three or four other developers are looking at the same reports. And they’re all jumping in. Apartments and multi-family are just hot commodities. Everyone wants a piece of it.'”

“‘It’s taking a little bit longer to fill the new communities,’ said Crystal Webster, who manages The Edison. ‘I’m offering two months free rent. Some are offering six months free rent. There are more incentives out there for new residents. Some of the older communities are having to reduce their rent to become more attractive for people.'”

“About 10,000 Lee County apartment units are in the planning or pre-construction phases, with about 1,900 units opening in 2019. Of those, about 260 units — about 13 percent — are classified as ‘affordable.’ Holli Noel-DePold, executive director of the Southwest Florida Apartment Association, said she is working to try and boost that percentage of affordable apartment options.”

“‘We do advocacy in Tallahassee and Washington, D.C., on a frequent basis,’ Noel-DePold said. ‘What we’re already finding, we’re a little worried about saturation. I do know that a couple of proposed projects have been pulled, just to wait and see what’s going to happen. We don’t want what happened in the mid-2000s to happen again.'”

From Globe St on California. “The apartment occupancy rate in Downtown Los Angeles is faltering as new supply comes to market. According to the latest report from the Downtown Central Business Improvement District, apartment occupancy fell nearly 7% year-over-year to 87%. The news isn’t particularly shocking, considering 5,600 units have delivered in the last year. Most experts expected—at least—a temporary rise in vacancy.”

“‘Given DTLA has experienced record deliveries over the past five quarters, including 2,300 residences in quarter one alone, it shouldn’t be a surprise that the occupancy rate is down a bit year-over-year,’ Nick Griffin, executive director of the DCBID, tells GlobeSt.com.”

From City Watch LA in California. “Los Angeles has 110,000 vacant housing units, in part because the rents for vacant apartments are too high for those who are desperate for a place to live, but can only afford low-priced housing. This is what fuels our housing crisis, including homelessness, rent-gouging, over-crowding, and out-migration.”

From Curbed San Francisco in California. “If this “classic one-bedroom Beaux-Art Deco” apartment in the Outer Richmond seems familiar, it’s because they appeared on Comparisons less than a eek ago. Sometimes previously advertised units make a comeback here on account of a price, but this one-bath, 743-square-foot pad might have set an all-time record by chopping its price mere days after its first appearance, now down to $2,875 from its previous $3,000 even.”

The West Fargo Pioneer in North Dakota. “There was a time North Dakota State University dorms were so full that hundreds of students had to live in hotels. This year, on-campus housing likely will be about 90% full, said Rian Nostrum, university director of residence life. A 10% vacancy rate may seem high, but he says it gives NDSU an option to be more flexible with space for students who don’t want roommates, he said.”

“Vacancy rates for off-campus rentals in north Fargo have increased in recent years, convincing some that Fargo has overbuilt on apartments. June’s rental vacancy rate for north Fargo was 11.6%, compared with a citywide vacancy rate of 8%, according to Appraisal Services Inc.”

From WLFI on Indiana. “Hundreds of students moved into The Hub on Campus on Sunday. While it’s marketed as a high-end, luxury-living apartment, tenants say that’s not what they’re seeing. Tenant Juwon Lee said she feels she was scammed.”

“‘Really you trust these people, they’re so nice over the phone until you get your lease signed they promise you all sorts of things and they send you really nice emails and then you develop this sense of trust that okay, this will be perfect I’m paying for this expensive place but it’ll be good and because of that I’ll be able to be at Purdue and I’ll be very productive and it’ll work out,’ said Lee. ‘But no, then you come here and it would’ve been better if I went somewhere else.'”

“The Hub promised fully furnished apartments and while furniture was in the room, it wasn’t all built. Lee was left without a mattress among many other issues. ‘They really need to shape up,’ said Lee. ‘You have to do better. You can’t put the risks on your tenants who are mostly young students people who don’t know how to deal with these kinds of situations.’

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This Post Has 74 Comments

  1. Yet another luxury student airbox job isn’t finished. I’ve lost count. And another bankrupt condo goes into foreclosure.

    Are we there yet?

  2. ‘Sometimes what happens is you have a bunch of national developers who are looking at the same market fundamentals. They’re sitting in California or New York or wherever. And they say, ‘Hey, look at Fort Myers and Cape Coral. Look at the population growth. We need to build apartments.’ And they’re right. But what gets lost is that two or three or four other developers are looking at the same reports. And they’re all jumping in. Apartments and multi-family are just hot commodities. Everyone wants a piece of it’

    I said in late 2014 this was a bubble. It was the motivation. It has nothing to do with building and renting apartments.

    ‘I’m offering two months free rent. Some are offering six months free rent’

    And they’re fooked…

  3. ‘The apartment occupancy rate in Downtown Los Angeles is faltering as new supply comes to market…Given DTLA has experienced record deliveries over the past five quarters, including 2,300 residences in quarter one alone, it shouldn’t be a surprise that the occupancy rate is down a bit year-over-year’…Los Angeles has 110,000 vacant housing units, in part because the rents for vacant apartments are too high’

    And tens of thousands on the way. That’s some shortage California!

  5. “‘Really you trust these people, they’re so nice over the phone until you get your lease signed they promise you all sorts of things and they send you really nice emails and then you develop this sense of trust that okay, this will be perfect I’m paying for this expensive place but it’ll be good and because of that I’ll be able to be at Purdue and I’ll be very productive and it’ll work out,’ said Lee. ‘But no, then you come here and it would’ve been better if I went somewhere else.’”

    Free lesson for ya!

    2. Check out the pix of that apartment complex. It’s massive. Those rental rates are per bedroom. And some of the bedrooms have no windows.

    3. ‘Really you trust these people, they’re so nice over the phone until you get your lease signed they promise you all sorts of things and they send you really nice emails and then you develop this sense of trust that okay, this will be perfect I’m paying for this expensive place but it’ll be good and because of that I’ll be able to be at Purdue and I’ll be very productive and it’ll work out,’ said Lee.

      That’s adorable. And I bet this precious snowflake thinks that all that free sh*t Bernie Sanders is promising really comes at no cost.

  6. This is why I love this blog …

    “Tenant Juwon Lee said she feels she was scammed.”

    Do tell.

    “‘Really you trust these people, they’re so nice over the phone until you get your lease signed …”

    😁

    “… they promise you all sorts of things and they send you really nice emails and then you develop this sense of trust that okay, this will be perfect I’m paying for this expensive place but it’ll be good and because of that I’ll be able to be at Purdue and I’ll be very productive and it’ll work out,’ said Lee.”

    Translation: They use what works.

    “‘But no, then you come here and it would’ve been better if I went somewhere else.’”

    Oh, but now you can’t because you signed a lease and this locked you in. You wanted an education? Well, now you are getting one.

    “The Hub promised fully furnished apartments and while furniture was in the room, it wasn’t all built.”

    Details, details.

    “Lee was left without a mattress among many other issues. ‘They really need to shape up,’ said Lee.”

    Bahahaha … they aren’t the ones who need to shape up. Ask yourself this question, Lee: Just who is it that is sleeping on the floor?

    “‘You have to do better. You can’t put the risks on your tenants who are …”

    God’s gift?

    “… mostly young students people who don’t know how to deal with these kinds of situations.’”

    Yep, God’s gift.

    Bahahahahahahahahahahahahahahahahahahaha.

    1. Bahahahaha … here’s a fun thing to do in order to get a student loan …

      What To Do If Your Child Forges Your Name For A Parent PLUS Loan
      https://thecollegeinvestor.com/20981/child-forges-name-parent-plus-loan/

      (snip)

      “Parenthood is full of ups and downs, but throughout it all there is the hope that you’re raising your children right.”

      Slim. There is slim hope that you are raising your children right.

      “That comes with a desire to help set your child up for a successful future. When it comes to college, that may mean taking out Parent PLUS loans to help cover the high costs of higher education.

      “Taking on PLUS loans is a big decision. With high interest rates and essentially no borrowing limit, …”

      No borrowing limit!

      😁

      “… parents can get themselves into trouble easily. Especially when they should be focusing on their retirement savings, parents should think long and hard before taking out loans for their kids’ college education.”

      Wait for it …

      “But what if your child takes that into their own hands? It’s not unheard of for kids to sign up their parents for PLUS loans.”

    2. “… mostly young students people who don’t know how to deal with these kinds of situations….”

      No problem.

      Just charge off all that “luxury” to your student loan.

      Remember, the REIC cares about you!

  8. The Federal Reserve Resistance

    A recent official urges the central bank to help defeat Donald Trump.

    ‘Perhaps you’ve seen former Chairs of the Federal Reserve defending the central bank’s independence and foreswearing all political intentions. Fair enough. But then what are we to make of former Fed monetary Vice Chair William Dudley ’s marker that the Fed should help defeat President Trump in 2020? That’s the extraordinary message from the former, and perhaps future, Fed grandee in Bloomberg.’

    ‘Mr. Dudley seems to be saying the Fed should do nothing to assist the economy even if it heads into recession. Then he goes further and essentially says the Fed should join The Resistance.’

    “There’s even an argument that the election itself falls within the Fed’s purview,” Mr. Dudley writes. “After all, Trump’s reelection arguably presents a threat to the U.S. and global economy, to the Fed’s independence and its ability to achieve its employment and inflation objectives. If the goal of monetary policy is to achieve the best long-term economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020.”

    ‘Wow. Talk about stripping the veil. These columns wondered if Mr. Dudley was politically motivated while he was at the Fed, favoring bond buying to finance Barack Obama ’s deficit spending, urging the Fed to intervene in markets to boost housing, and keeping interest rates low for as long as possible. And now here Mr. Dudley is confirming that he views the Fed as an agent of the Democratic Party.’

    https://www.wsj.com/articles/the-federal-reserve-resistance-11566948536

    3. Obama bent over for bankers at their every whim, so it would come as no surprise that everything was handled in concert. There has never been a more banker-friendly President. It’s ironic that he actually said ““I did not run for office to be helping out a bunch of fat cat bankers on Wall Street,” because that’s exactly what he did.

      2. ‘There has never been a more banker-friendly President.’

        If you exclude Reagan, that might be true.

  9. The growing recession hysteria is the best thing to ever happen to the stock market, as everyone knows that central banks will flood the financial markets with liquidity and buoy share prices skyward in response.

    So by all means possible, back up the truck!

    4. Dumb question of the day:

      Is the Dow Jones Industrial Average contained to stray not far from a permanently high plateau of 26K?

      It certainly appears so.

    5. This time is not different for the inverted yield curve
      Ron Insana
      Published 6 Hours Ago Updated 1 Hour Ago
      CNBC.com
      – Global interest rates are negative because the world economy is heading toward a synchronized recession.
      – Transportation, banking and small-cap stocks, the last of which are thought to be immune to global economic weakness, are all flashing warning signs of an impending domestic economic slowdown.
      …

  11. Recession hysteria?
    (That’$ good new$ for the World$.Once.Greate$t.Currency!, of the soon.to.bee unUnited Kindom Right?)

    Markets fear a no-deal Brexit, which the Bank of England’s wor$t-ca$e $cenario predicted would see $terling cra$h to parity with the U.$. dollar for the first time in its history.

    Pound plunge$ as Boris Johnson’s bid to suspend Parliament raises no-deal Brexit fears

    Callum Keown | MarketWatch | 8/28/2019

    chao$ (ˈkeɪɒs) noun

    1. complete di$order; utter confu$ion
    2. an ob$olete word for aby$$

    1. China’$ “Belt & Road” $pans the English Channel to the Queen’$ financial vault$

      Exclu$ive: Fake-branded bar$ slip dirty gold into world market$

      Peter Hobon | Reuters | 8/27/2019

      LONDON (Reuters) – A forgery cri$is is quietly roiling the world’$ gold indu$try.

      It is not clear who is making the bars found so far, but executives and bankers told Reuters they think most originate in China, the world’s largest gold producer and importer, and have entered the market via dealers and trading houses in Hong Kong, Japan and Thailand. Once accepted by a mainstream gold dealer in these places, they can quickly spread into supply chains worldwide.

      Gold bars fraudulently stamped with the logos of major refineries are being inserted into the global market to launder smuggled or illegal gold, refining and banking executives tell Reuters. The fakes are hard to detect, making them an ideal fund-runner for narcotics dealers or warlords.

      In the last three years, bars worth at least $50 million stamped with Swiss refinery logos, but not actually produced by those facilities, have been identified by all four of Switzerland’s leading gold refiners and found in the vaults of JPMorgan Chase & Co., one of the major banks at the heart of the market in bullion, said senior executives at gold refineries, banks and other industry sources.

      2. My father,, in 1910, was in China and the far east, and he said you had to be careful with the gold coins, as the Chinese could cut them in half, scrape out the inner gold, and replace it with something else an then put them back together and you could not tell that the coin had been altered.

  12. “You can’t put the risks on your tenants who are mostly young students people who don’t know how to deal with these kinds of situations.”
    I find it funny that she’s well off enough to rent a luxury apartment for college and yet sound so helpless. Well, there’s a first time for everything, honey; deal with it.

    1. Doesn’t the “luxury” Ikea furniture $tuff come with instructions? Isn’t there a you.tube video? … Geez, all.$mart.phone & no brain problem solving skills.

        1. I get a big kick out of fixing stuff. Over the years, I’ve fixed our tv, dishwasher and washing machine (last two LL’s responsibility but small fixes are easier than dealing with workmen). Not too hard to do with youtube.

          1. Generally speaking, the diagnostics part of repair is the most difficult. Changing the parts is the easy part.

          2. diagnostics part
            It’s been simple stuff, true. I’ve added or replaced parts in computers many times successfully but would hesitate to do anything more complex even if I was right about the problem. My old laptop was dying, but me messing with it shoved it into its grave.

      1. On a related note, I’m tired of dealing with those asshats over at C-D.
        They are a lost cause.

      1. Don’t let your child grow up to be a REALTOR.

        If you do, you’ve failed as a parent 🙁

        1. If you see a realtor in your neighborhood, lock the doors and call the authorities immediately.

    2. Geez, 1971- 2019 … 48 years of Federal Defen$e Indu$trial Military Complex budget$ (21+ U$D Trillion$) … & they’re still growing poppie$ in Afghanistan & $ticking oil pipe $traws in the Middle Ea$t $and.

  15. When lux apts go up in Ft. Myers/Cape Coral, you know we are at bubble pop.

    Sell everything other than countercyclical investments and get ready for cash to be king again.

    1. I think it’s going to be many, many years before cash is king again. We haven’t even begun to see the new QE and effects it will have.

  17. The Queen just let Boris suspend the parliament. If he achieves Brexit, Trump is ready for a trade deal.

    1. This is a great day for nation-states around the world.

      Gonna be some sad panda globalists at the EU.

      2. Gonna be some sad panda globalists at the EU.

        The Oligopoly media outlets are foaming at the mouth. It’s a beautiful thing to behold.

        1. Who do these commoners think they are?

          “Prince Andrew should, come clean”
          https://www.usatoday.com/story/entertainment/celebrities/2019/08/28/jeffrey-epstein-accuser-virginia-giuffre-calls-out-prince-andrew/2139003001/

          Virginia Giuffre, one of Jeffrey Epstein’s accusers who claimed a court filing she was made to sexually service Prince Andrew, commented on the British royal’s recent statements about the scandal.

          In early 2015, Giuffre accused Epstein and his employees of paying her, when she was 17, to sexually service Epstein, Andrew, Harvard lawyer Alan Dershowitz (then one of Epstein’s lawyers), and others of Epstein’s rich friends.

  19. A Utah Housing Development Is Just The Start of Sonnen’s US Solar Ambitions

    The Verge
    Wolfgang Kerler
    28 August 2019

    “In Herriman, Sonnen sees an opportunity to prove that a virtual power plant (VPP) could solve major energy problems in the US. A VPP is made up of connected solar roofs and batteries so that renewable energy can power the entire complex if the grid loses power.”

    “It’s not that difficult to explain why solar systems with batteries might benefit the consumers who can afford them. “The hurricane or the cyberattack comes, the grid is gone, but you can continue to light and operate your house because you have a storage system and a solar system,” says Ostermann.”

    The first residents of the Soleil Lofts will move in this September, and the Wasatch Group, which is the company building the lofts, says the last building will be completed in 2020. Units in each of the 600 new rental apartments will be outfitted with Sonnen products to power the Virtual Power Plant (VPP).”

    https://www.theverge.com/2019/8/28/20835786/sonnen-solar-vpp-battery-power-renewable-energy-utah

    1. The hurricane or the cyberattack comes, the grid is gone

      It is nice to have you some solar cells and batteries when the Grid is Gone. Ask any Blue Water sailor.

      BTW, when does the hurricane season start in Utah?

      1. BTW, when does the hurricane season start in Utah?

        I don’t know about Utah but in rural Wyoming it’s called “winter”. At my parent’s they still lose power once in a while but it’s way more reliable than when I was a kid. Growing up we lost it for days at a time pretty much every year.

        2. Power outages can occur for lots of reasons. In my experience living in Utah most of my life, it is mostly weather related. No hurricanes, but extreme snowstorms. But also wind that knocks down power lines.

          In any event, I know the management company and I know the lead manager that is heading up this new property. I met him at a Jazz game about 6 months ago. This is going to be a spectacular property from what I’ve seen. It will be very interesting to see this as a template for future multi-family properties.

  20. “‘It’s taking a little bit longer to fill the new communities,’ said Crystal Webster, who manages The Edison. ‘I’m offering two months free rent. Some are offering six months free rent.

    Sorry, Crystal, but if you want me to sign a lease, you need to slash the rent.

  22. Joe is losing it

    Video Appears To Show Biden Forget Obama’s Name

    by Sister Toldjah
    Posted at 3:00 pm on August 28, 2019

    “They invaded another country and annexed a significant portion of it, called Crimea,” Biden said in response, adding, “He’s saying that it was President … my boss … it was his fault.”

    Watch video of Biden’s flub:

    https://www.redstate.com/sister-toldjah/2019/08/28/video-appears-show-biden-forget-obamas-name-calls-g7-summit-g8/

  23. It’s amazing to me how we have fallen as a Nation when you look at Biden even being considered as a viable candidate.

    Why people vote against their own interest is strange, but a strong middle class is the best way to correct all the I’ll gotten gains that resulted from the gutting of a strong middle class in the last 30 years in the USA.

    What else could solve the mounting problem of the USA not being a Country that rewards the productive working class ?

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