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We All Wonder, Is This Going To Be The Beginning Of The End?

A report from Bisnow on California. “New efforts by the Trump administration to penalize California for its housing crisis are misguided and off base, several CRE experts told Bisnow. Experts told Bisnow that while calling the skyrocketing rate of homeless on the streets in San Francisco and Los Angeles a ‘disgrace’ wasn’t exactly incorrect, Trump’s approach is reductive, shortsighted and unnecessarily punitive. A lack of affordable housing, restrictive zoning and municipal laws about conduct are prone to exacerbating homelessness, even in some of the nation’s most liberal enclaves.”

“‘The least expensive stuff is becoming more expensive because it is being bought, renovated and leased to individuals that previously wouldn’t have looked at it,’ said Panoramic Interests owner Patrick Kennedy, who develops in S.F. and Oakland. ‘These flophouses in Oakland are suddenly being renovated and rented to techies. It’s going to continue to get worse because we’re woefully underproducing entry-level housing in the Bay Area.'”

The Huffington Post. “Ashley Shannon can fit all her earthly possessions into a suitcase and a duffel. The 23-year-old got rid of nearly all her stuff when she moved from Kansas to Los Angeles after college. For much of the past year, Shannon has lived at an upscale hostel called PodShare, paying $1,000 a month ― less than half the average cost of a one-bedroom apartment in the city ― for a bunk in a large room occupied mostly by other young people. For that, she gets free utilities, basic toiletries, coffee and food staples like peanut butter and ramen noodles.”

Starcity, another well-known co-living brand, renovates old hotels and office buildings in LA and San Francisco and offers private rooms that range from $1,300 to over $2,000. ‘Those numbers might sound high,’ CEO Jon Dishotsky told HuffPost, but they’re well below the average rent on a studio apartment in these pricey cities.”

“But for all the ‘win-win’ tone of the marketing, critics say the new trend for co-living is simply a new way of repackaging a very old concept of shared housing in order to take advantage of the housing crisis and people’s growing sense of disconnection. ‘Co-living is purely a new way for developers to squeeze profit from an already broken housing market,’ Hannah Wheatley, a researcher on housing and land at the New Economics Foundation, told The Guardian.”

The Santa Maria Sun. “What do you do with an apartment complex that historically has been a center for drug dealing, gang activity, assaults, rapes, and murders in Lompoc for the last four decades? That question was answered at a council meeting on Sept. 17. Lompoc has an abundance of low-income housing projects. In August 2018, city officials notified the California Tax Credit Allocation Committee that they had several concerns with a proposal to add just 40 low-cost units to the inventory in the city.”

“This developer plans to spend $300,000 per unit to upgrade this property; that will likely produce well-appointed apartments like those low-income units built over the last few years here in the city. They will have all the bells and whistles that we associate with market-rate condo units. When you think of this project, consider this if you own a home: Can you afford to spend $300,000 to upgrade your digs? I don’t know of many people who can.”

The Marin Independent Journal. “Marin’s numbers diverged from the Bay Area overall, where August home sales hit a nine-year low point for an August, dropping 5.7% to 7,247, down from the 7,682 sales in August 2018. Median prices also dipped across the Bay Area, to $810,000, down 2.4% from $830,000 in August 2018. arry Crotty, a broker with Coldwell Banker Residential Real Estate in Greenbrae, added that two factors have led to Marin’s more balanced market, improving the landscape for buyers: higher inventory, and a rise in average days on the market.”

“‘Inventory has increased through most of 2019 due to home price appreciation over the past eight years,’ Crotty said. ‘Sellers may be believing the market has peaked and now is the best time to sell. An increase of inventory means more selection for buyers to choose from and less urgency to write an offer due to that increase in supply.'”

“Likewise, the bump in days on the market has led to list price reductions, Crotty said. ‘List price reductions (are) making a home more affordable and buyers more hopeful when negotiating a purchase,’ he said.”

From CBS San Francisco.”A new report shows home sales in the Bay Area have dipped to a 9-year low. The data from CoreLogic reports a total of 7,247 new and existing houses and condominiums were sold in Alameda, Contra Costa, Marin, Napa, Santa Clara, San Francisco, San Mateo, Solano and Sonoma counties in August 2019. In August 2010, at the zenith of the great recession, 6,698 homes were sold in the Bay Area.”

“‘All prices have to get capped at some point and there will be winners and losers,’ said Karen Kircher of San Francisco. ‘As a renter then I’ll be a winner,’ she added.”

“‘I don’t see any indication that the market is on the precipice of a big downturn,’ said Mary MacPherson of Compass Real Estate. ‘We all wonder, ‘is this going to be the beginning of the end, the beginning of a cooling?’ I really don’t think so. We only have a couple hundred more listings right now active than we normally have on the market. And we always have at least 2,000 buyers active in the market at any given time. We have about 900 active listings. That’s still not enough to meet our supply and demand issue. So no, I don’t think so. By next year, who knows?'”

The Orange County Register. “Uncertainty over everything from political fighting in Washington to the trade war with China and Brexit are undermining business and consumer confidence, said CAR’s Chief Economist Leslie Appleton-Young. ‘People are worried about everything, and you kind of wake up and wonder who’s tweeting what now?’ Appleton-Young said. ‘There’s not really a clear economic policy coming from the White House, so there’s just a lot to feel anxious about. … People are getting a little bit worried, and it shows up in how people view the housing market.'”

“For example, a recent Google consumer survey found that a little over a fifth of Californian consumers think now is a good time to buy a home and fewer than half think it’s a good time to sell — even with the big drop in mortgage rates and a strong economy, Appleton-Young said. ‘We have very high prices,’ Appleton-Young said, ‘so there’s only so much lower (mortgage) rates can do.'”

“But home prices that are roughly double the national average are causing many residents to move out of state, particularly first-time buyers, Appleton-Young said. Nearly a third of sellers who plan to buy another home said they intend to buy out of state, according to the association’s latest State of the Housing Market study. That’s the most since 2005.”

This Post Has 44 Comments
  1. ‘We all wonder, ‘is this going to be the beginning of the end, the beginning of a cooling?’ I really don’t think so’

    If it is Mary, you’ll have to:

    Yip-yip-yip-yip-yip-yip, bmm
    Sha-na-na-na, sha-na-na-na-na, ahh-do
    Sha-na-na-na, sha-na-na-na-na, ahh-do
    Sha-na-na-na, sha-na-na-na-na, ahh-do
    Sha-na-na-na, sha-na-na-na-na
    Ahh, yip-yip-yip-yip-yip-yip-yip-yip
    Mum-mum-mum-mum-mum-mum, get a job

  2. ‘People are worried about everything, and you kind of wake up and wonder who’s tweeting what now?’ Appleton-Young said. ‘There’s not really a clear economic policy coming from the White House, so there’s just a lot to feel anxious about. … People are getting a little bit worried, and it shows up in how people view the housing market’

    Sounds like Leslie needs a safe space.

    1. ‘One of Harry Culver’s first slogans when promoting his new town was, “All Roads Lead to Culver City,” with the implication that everyone could get there. The truth, however, was quite different.’

      ‘Figure 1 (at right) shows an early ad inviting people to tour the city, which announced: “See this model little white city, scarcely a year and a half old.”[v] The usage of “white city” was both blatant and subtle racism.’

      ‘In addition to the obvious implication, it also invoked the White City at the Chicago’s World Columbian Exposition in 1893. Both the fair and the White City within it were criticized by the black press at the time for being “the white American’s World’s Fair,”[vi] and are understood today to have “embodied white supremacy.” Black Americans were excluded from decision-making positions, confined to menial tasks, and the only official “black” presence at the fair was a group of African “cannibals” on the midway.[vii]’

      ‘In November 1914, the entire Harry H. Culver Company’s sales force of “seventy men” performed in a large minstrel show to raise money for a church in Culver City.[ix] Minstrel shows were a grotesque racist caricature of black people typically staged mainly by white men in blackface performing skits, dancing the cakewalk, playing music and buffooning in ways that ridiculed black people and reinforced white supremacy.’

      ‘Culver’s close associate, Guy M. Rush, while selling houses in a neighborhood located near the current City Hall, was even less subtle with his pre-Christmas ads promising a present and a box of fine candy from Santa to every child who brought an adult with them. Apparently Santa was a racist because the ad (at left) qualified, “Lots and presents restricted to Caucasian race.”[viii]’

      ‘Culver became quite good at these methods. By 1927, as president of the Los Angeles Realty Board (LARB), he delivered a paper at a statewide real estate conference stating “that most responsible subdividers already exercised great control over their subdivisions through private deed restriction and land planning.”[xiv]’

      ‘In that same year he also oversaw the issuing of the following opinion which makes it explicitly clear what he meant. “The Los Angeles Realty Board recommends that Realtors should not sell property to other than Caucasian in territories occupied by them. Deed and Covenant Restrictions probably are the only way that the matter can be controlled; and Realty Boards should be interested. This is the general opinion of all boards in the state.[xv]”

      ‘the realty boards in the state, then, were maintaining “proper restrictions” to segregate the state and to keep white neighborhoods all white.’

      ‘These restrictions were so important to the LARB that, within months of the 1948 Shelley v. Kraemer U.S. Supreme Court decision prohibiting racially restrictive housing covenants, it “announced it had drafted a constitutional amendment guaranteeing the right of property owners to employ racial restrictive covenants.”[xvi] The Culver City realty board was one of “the numerous local branches that endorsed its proposal.”[xvii]’

      ‘Unsurprisingly, the LARB barred blacks from becoming members until the late 1960s.[xviii]’­

      https://la.streetsblog.org/2019/04/05/the-hidden-history-of-culver-city-racism/

    2. “For example, a recent Google consumer survey found that a little over a fifth of Californian consumers think now is a good time to buy a home and fewer than half think it’s a good time to sell — even with the big drop in mortgage rates and a strong economy, Appleton-Young said. ‘We have very high prices,’ Appleton-Young said, ‘so there’s only so much lower (mortgage) rates can do.’”

      “But home prices that are roughly double the national average are causing many residents to move out of state, particularly first-time buyers, Appleton-Young said. Nearly a third of sellers who plan to buy another home said they intend to buy out of state, according to the association’s latest State of the Housing Market study. That’s the most since 2005.”

      So the real culprit is the bubbble high prices? Not trade war LOL

      1. The best time to buy a house is when your hawt wife is ready to ride your best friend’s pony because he’s eager for an even bigger house in a better neighborhood. “You Can Do This!”

    3. Lester Appleton has been chuck full of lies,deceptions and deliberate misrepresentations for years now.

        1. I think Zillow is even a bigger liar. I would love to sell my house for the price they estimate it. I was shocked, I do not trust its estimate so I have not even looked at Zillow for a couple of years but I still was amazed. There are special factors that are driving up prices in my community including but not limited to people fleeing Albuquerque proper due to high crime but I still do not believe it.

          1. The coastal equity locusts with their cash bounty frequently over-pay when the flyover realtors size ’em up and shag ’em extra hard.

          2. “The coastal equity locusts with their cash bounty frequently over-pay when the flyover realtors size ’em up and shag ’em extra hard.”

            Yes, the Albuquerque area was one of the last places last time to have a major move due to housing locusts. Its move was just prior to the crash, the move occurred just after the leading bubble areas were stagnating and even dropping. Maybe history is repeating itself.

  3. ‘A lack of affordable housing, restrictive zoning and municipal laws about conduct are prone to exacerbating homelessness, even in some of the nation’s most liberal enclaves’

    ‘The least expensive stuff is becoming more expensive because it is being bought, renovated and leased to individuals that previously wouldn’t have looked at it…These flophouses in Oakland are suddenly being renovated and rented to techies. It’s going to continue to get worse because we’re woefully underproducing entry-level housing in the Bay Area’

    Translation = we’re a bunch of greedy bashtards.

    1. The rent bubble is just another facet of this gem of a cubic zirconia central bank manipulated interest rate ponzi economy. At current GRMs and who would by rental property if you could even eke out 3.5% on a bank CD? Never mind anything close to historic norms.

  4. Experts told Bisnow that while calling the skyrocketing rate of homeless on the streets in San Francisco and Los Angeles a ‘disgrace’ wasn’t exactly incorrect, Trump’s approach is reductive, shortsighted and unnecessarily punitive.

    Let me guess: These “experts” work for progressive think tanks funded by taxpayer dollars to perform “studies” that invariably support Democrat “affordable housing” schemes, i.e. patronage and graft rackets. The compassion industrial complex will not appreciate attempts to deal honestly with the root causes of homelessness and vagrancy.

    1. It’s those and developers. And they wonder why they can’t get anywhere. The article mentions NYC houses 95% of their homeless.

  5. ‘This developer plans to spend $300,000 per unit to upgrade this property; that will likely produce well-appointed apartments like those low-income units built over the last few years here in the city’

    I couldn’t spend $300,000 on an apartment if I tried. Maybe gold leaf or something.

    1. Whose money is being spent ? 300K sounds like the developer is getting government cheese to build affordable apartments, or renovate whatever. They should put them in Atherton not Lompoc.

  6. – “The facts ma’am, just the facts.” – Sgt. Joe Friday, Dragnet series:
    From CBS San Francisco.”A new report shows home sales in the Bay Area have dipped to a 9-year low.”

    – A Realtor ignoring spinning the facts:
    “‘I don’t see any indication that the market is on the precipice of a big downturn,’ said Mary MacPherson of Compass Real Estate. ‘We all wonder, ‘is this going to be the beginning of the end, the beginning of a cooling?’ I really don’t think so.”

    – More facts:
    http://housingbubble.blog/?p=2413
    A report from the San Francisco Chronicle in California. “Bay Area home prices slumped for a sixth straight month in August, according to CoreLogic. Prices year-over-year have now been flat or falling for six consecutive months. From last fall into early this year, inventory grew and price cuts started appearing.

    – Still more facts:
    The Mercury News. “Prospective home buyers abandoned the pricey Bay Area market in August, as home sales dipped to a nine-year, monthly low despite falling interest rates and more choices. Sales of existing and new homes fell 5.7 percent from the previous August and were off more than 20 percent from the month’s historic norms, according to CoreLogic. Residential real estate transactions have dropped for 13 straight months, compared to the previous year.”

    Bay Area new home sales in January hit their lowest levels in at least two decades [twenty years].

    – SF, CA MSA as leading U.S. housing indicator, followed closely by CA as a whole. High-end in ea. MSA leads other market segments as well.

    http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602255.html
    Bernanke: There’s No Housing Bubble to Go Bust
    By Nell Henderson
    Washington Post Staff Writer
    Thursday, October 27, 2005
    “Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.”

    “Facts do not cease to exist because they are ignored.” – Aldous Huxley

    “A great deal of intelligence can be invested in ignorance when the need for illusion is deep.” — Saul Bellow

    “You can ignore reality, but you can’t ignore the consequences of reality.” – Ayn Rand

    “It is difficult to get a man to understand something when his salary depends on his not understanding it.” – Upton Sinclair

    “People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome.” ~ George Orwell [confirmation bias]

    1. Related to this …

      “Stop and think about the last purchase you made. What drove you to buy that product? Most of us would answer, ‘I needed it. Or at least wanted it.’ But beyond this surface level, we rarely think of the ‘why’ behind our purchases. In fact, most of our decisions happen subconsciously.

      “It’s surprising, but it’s because you use a different part of the brain to answer the question ‘why’. The very act of firing the conscious or rational part of the brain leads to vastly different outcomes.”

      Go here to read more …

      The Magical Science Of Storytelling: How To Connect With Your Audience
      https://www.scenicroad.com/2018/03/art-and-science-of-storytelling/

  7. Thornburg!!! You son of a… you told me to buy now, prices to the moon Alice!

    ‘Sellers may be believing the market has peaked and now is the best time to sell. An increase of inventory means more selection for buyers to choose from and less urgency to write an offer due to that increase in supply.’”

    BEST TIME TO SELL!!!! Sell sell sell

    “Likewise, the bump in days on the market has led to list price reductions, Crotty said. ‘List price reductions (are) making a home more affordable and buyers more hopeful when negotiating a purchase,’ he said.”

    BEST TIME TO BUY TOO??? buy buy buy

  8. “… in mean time I burry special magical statue in your yard”

    Here …

    “ST JOSEPH HOME SELLING KIT: This religious figurine features a realistic depiction of Joseph, legal father of Jesus and patron saint of workers. A Catholic tradition is to bury St. Joseph in order to improve home sales.
    “HOUSE SELLING MIRACLE: Suitable for selling homes, apartments, businesses, properties overseas and difficult to sell properties.”

    Amazon.com: St. Joseph Statue – Home Seller Kit – Part Catholic Tradition Burying to Improve Home Sales – Patron Saint Workers Statue, Holy Christian Decoration Gift, 3.5 inches in Height: Home & Kitchen
    https://www.amazon.com/St-Joseph-Statue-Tradition-Decoration/dp/B075K4XBG2/ref=asc_df_B075K4XBG2/?tag=hyprod-20&linkCode=df0&hvadid=247699055514&hvpos=1o2&hvnetw=g&hvrand=14159890398720053924&hvpone=&hvptwo=&hvqmt=&hvdev=t&hvdvcmdl=&hvlocint=&hvlocphy=9031072&hvtargid=pla-420081302115&psc=1

    IMPORTANT NOTE: Be very careful in positioning the statue when you are burying it. One desperate seller positioned his statue incorrectly which resulted in the house across the street being sold instead of his own.

    (Word has it that the house zcross the street that was sold wasn’t even listed for sale and the the listed owners had to be forceably removed from the premises the very day escrow was finalized.)

    1. 😂. True story!

      (Word has it that the house zcross the street that was sold wasn’t even listed for sale and the the listed owners had to be forceably removed from the premises the very day escrow was finalized.)

  9. I am waiting for prices in downtown, midtown, and east Sacramento, California to drop and inventory to increase. Seems like the wealthy bay area people are fleeing east to Sacramento and driving up prices here.

  10. I don’t think the Founding Fathers of USA envisioned that the “government worker” would become this much of a special interest group. The idea of the public servant with limited government has been replaced with government jobs that has exceeded the private sector.

    Trump seems to want to prop up the private sector job sector who has been gutted for years. The private sector use to be a lot bigger than the government worker sector, especially when this Nation was the most productive.

    So, big government is a special interest group in itself. The big medical cartel price fixing monopoly is another example of a industry that is taking too much of the monthly paycheck of most people.

    This push for bigger government with government handing out free stuff to the winners is really corrupt.

    Notice how Warren wants to give a bunch of benefits to the industry she was part of and has a pension from ,being teaching. She wants to pay off school debt to keep the price high with colleges.

    The government backing school loans just served to create a gouging school industry, that didn’t deliver on good paying jobs.

    It’s just all a racket. When government sticks it’s nose in any kind of industry, than corruption will follow.

    1. “The government backing school loans just served to create a gouging school industry, that didn’t deliver on good paying jobs.”

      State governments are saddled with huge pension obligations to their former workforce, and Wall street didn’t deliver on their 8% returns. The states have been forced to pump money, that would have gone to their public college systems, to bolster their pension investment shortfall. The “college rescue” arrived in the form of increased federal student loan guarantees.

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