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I Don’t Think This Overbuilding Is Going To Go Away As Fast As People Think

A report from Multi-Housing News. “‘It’s a great time to be a quality sponsor,’ Stephen Rosenberg, CEO of Greystone, told Multi-Housing News. ‘Right now, the market is extremely frothy and awash with capital. While Greystone hasn’t loosened its underwriting standards to compete, there is a concern that risky loans from other lenders may enter the market and defaults could rise, impacting the sector as a whole.'”

From KVUE in Texas. “Thomas Ingle first noticed it in the fall: rent prices leveling off in West Campus and especially in the Downtown area. The licensed real estate broker also owns Apartment Pros, a company that helps people find available apartments so he keeps track of rentals on a daily basis. Ingle said this is the first time in years he has seen rent go down. ‘A lot of people assume every time there’s a new luxury property, that means rents go up somehow,’ he said. ‘This is bad for the people trying to get something cheaper but the reality is the more places there are, even the nice ones, the more availability there are.'”

“Grey Huffines is a University of Texas senior, told KVUE’S Jenni Lee about the great deal he got at his place on 23rd Street in West Campus. He thinks more development means better deals. ‘It’s good because rent will finally go down ’cause now that there’s so many buildings … like my rent last year was like $1,000 and some change and it dropped like $350 because people weren’t resigning leases, so that’s a great thing,’ Huffines said.”

“In Downtown, Ingle showed us an example at The Bowie, where he said a 448-square-foot studio usually goes for around $1,800. But just a couple of months ago, the price for the same space was $1,338. ‘We get messages whenever we advertise the lowest rents in around Downtown and people a lot of time don’t believe us,’ Ingle said. ‘I’ll have people messaging me, ‘these prices don’t exist.’ l have to send proof they do.'”

The Dallas Morning News in Texas. “North Texas apartment renters took a holiday during the final months of 2019. Net leasing slowed to a crawl, with only 168 additional apartment units occupied during the fourth quarter. While renters didn’t show at the end of 2019, there was no slowdown in new rental units hitting the market. Almost 6,000 new apartments opened their doors in D-FW during the fourth quarter. And for all of 2019, 22,688 rental units were added to the North Texas area, according to RealPage. That made D-FW the top U.S. market for new rental units, with almost twice as many apartments completed as the No. 2 construction leader, New York City, which had 10,262 new units during 2019.”

“‘Ongoing construction totals 42,987 units, remaining at about the level seen for quite a while,’ said RealPage chief economist Greg Willett. ‘That’s again the most future supply coming anywhere across the country, with Washington, D.C. (32,171 units), in the second position…The luxury properties in the construction-heavy northern suburbs likely won’t be able to push rents at the levels recorded of late.'”

The Greater Baton Rouge Business Report in Louisiana. “With fewer developments coming online in 2020, those looking to rent should begin putting an absorption dent in the oversupply that’s been plaguing the Baton Rouge market, ending a several-year pattern of declining occupancy rates. But make no mistake: It’s still going to be a renter’s market. Baton Rouge already has 4,600 vacant units on the market—nearly double what the area historically absorbs over a 12-month cycle. Not included in the vacant tally are the 2,429 units that have been proposed so far for 2020.”

“‘If we continue to pour new units in a market that isn’t growing at the pace of population, then we’re going to get a hangover,’ says Wesley Moore, an appraiser with Cook, Moore & Associates. Much of the oversupply problem can be traced to LSU-area student housing. While 9,000 beds have been added to that market since 2010, LSU’s enrollment has gone up by only 3,300 students—nearly half of whom study online—over the same period.”

“Where that catch-up might begin this year is in the high-end submarket. But luxury developments like The Heron—which has had to ramp up the concessions it offers residents since recently joining the downtown mix—reveal a softening market. ‘We definitely don’t need to add more units,’ says Moore.”

From Real Estate Weekly on New York. “A new report from PropertyShark analyzing multifamily sales recorded in the month of November in Manhattan, Brooklyn, the Bronx and Queens, shows the city’s multifamily slowdown is ongoing. The PropertyShark report found that city-wide sales volume was down 60 percent year-over-year to $412 million from November 2018’s $1.04 billion. At the same time, sales activity dropped, too – just 71 transactions closed this November. And the size of traded properties was also smaller. While NYC’s multifamily sales activity contracted 30 percent year-over-year, unit volume fell at more than twice that rate, plunging 65 percent.”

“‘Rent regulated buildings with low average rents made up most of the multifamily transaction volume in NYC over the past several years. Buyers who were actively purchasing those assets had a business plan in place that would allow them to move legal rents up by investing in individual apartment and building wide improvements,’ said Matt Fotis, senior director of the National Multi Housing Group at Marcus & Millichap. ‘This created an opportunity where an owner could sell a building for a low return and reinvest in a building with a higher return. Anyone with a rent stabilized property could sell and do a 1031 exchange into something that was producing a much higher yield, so it made sense. Today, things have changed.'”

“In Queens, sales volume tumbled 83 percent and year to date unit volume was down 65 percent. The Bronx was the only borough where price trends were negative in November. The average price per unit came in at $134,142, undergoing a 25 percent contraction year-over-year.”

The Wall Street Journal. “A high-end senior housing facility in Chicago has sold for double its 2012 purchase price, the latest sign that investors are increasingly eager to own properties catering to wealthy retirees. Senior housing development has ramped up in recent years to accommodate the more than 70 million baby boomers who are retired or approaching retirement. But seniors are staying at home longer than developers expected, creating the beginnings of a glut in senior housing and rising vacancy levels at these properties.”

From Senior Housing News. “Expect the winds of change to blow harder than ever through the senior housing industry in 2020. Independent living is not going to falter overnight. It’s a robust sector, with about 11,000 new units opening between 2017 and 2018, according to NIC data. Still, there are already challenges on the horizon. As of Sept. 2019, initial rent discounts in IL were at their highest level, on average, since NIC began reporting this data in 2015.”

“Heading into 2016, a survey showed that relatively few industry professionals believed that a serious oversupply problem was imminent. Even when it became clear that oversupply was a problem, many continued to underestimate its impact. As recently as May 2019, one seasoned leader in the field — Senior Living Communities’ Donald Thompson — warned, ‘I don’t think this overbuilding is going to go away as fast as people think.'”

“He appears to have been prescient, with Ventas already having revised its 2020 expectations in light of unexpected pricing pressures related to new supply.”

From Comstock’s Magazine on California. “The baby boom is now the silver tsunami. By 2030, the state’s over-65 population will almost double from 4.6 million to 8.6 million, according to state figures. But having the right mix of specialized housing for older adults requires investors and policymakers to project years out and make smart bets, given the huge investments required. On that score, the Capital Region may be in trouble. State numbers show Sacramento is on track for a shortage of nursing homes by 2030 and an oversupply of assisted-living facilities.”

“Nursing homes say what’s driving those trends is underpayment for long- term care patients who can’t pay their own way. Their residents fall into three main buckets. One group, paid for by Medicare, stays a short period for acute-care needs, such as follow-up services after surgery. Another group needs long- term care for chronic conditions but pay for it themselves or it’s paid by insurance, such as through a long-term care plan. The third group needs long-term care but doesn’t have the resources to pay, so they’re covered by Medi-Cal.”

“The underfunding of this last group is what nursing homes say drains their ability to stay afloat. On average, 70-80 percent of nursing home residents are Medi-Cal recipients, says Jason Belden of the California Association of Health Facilities. The state’s nursing homes lose about $15 a day on each Medi-Cal patient, according to 2015 data from the American Health Care Association. Facilities make up those losses with patients in the other two buckets, whose rates are higher.”

“For investors, that could be daunting. Belden says it costs at least $40 million to construct a 100-bed facility, about average size. But at current reimbursement rates, the repayment window on that in- vestment is 70 years. ‘We have a lot of our peer nonprofit providers in skilled nursing that are getting out of the business,’ says Sheri Peifer of Carmichael-based Eskaton, which runs a network of skilled-nursing facilities.”

“Comstock’s analysis of state data show that the six-county area jumped 85 percent, from fewer than 13,000 assisted- living beds in June 2015 to almost 24,000 beds in September 2019. Sacramento’s building boom is no anomaly, says Deborah Draves of Folsom-based LookingforCare.com, which connects families with assisted-living services. State data show almost 18,000 units in the construction pipeline for the next 12 months, a boost in supply of nearly 8.5 percent, she says. Nationally, the number of senior housing units built per year grew by 43 percent from 2012 to 2018 compared with 2006 to 2012, according to a report last fall.”

“Draves is skeptical all those units are going to be bought and points to Citrus Heights-based industry analyst Steve Moran, who also expressed skepticism of the idea that rising demand will soak up the new units. Nationally, senior housing occupancy rates are at their lowest level since 2011, according to second-quarter data from the National Investment Center for Seniors Housing & Care.”

“Draves cites several reasons she’s wary. People are waiting longer to move to assisted living: The recession wiped out many people’s equity, and boomers didn’t save as much as their parents, meaning those going into assisted living are older, frailer and have a shorter length of stay. Meanwhile, as competition for new residents has increased, the cost of recruiting them is going up and now is equivalent to the revenue from 6-9 months of occupancy, she says. All of that means lower margins. ‘I don’t know who this glut of available apartments is truly going to be able to serve at current pricing,’ she says.”

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This Post Has 116 Comments

  1. ‘Despite it being one of the most common sayings in real estate, investors still miss the significance of this first and most important step. Making your money when you buy simply means buying “right.” The current bull market makes us all look like geniuses, but as Warren Buffett is quoted as saying, “Only when the tide goes out do you discover who’s been swimming naked.” When the market changes, we will find out who bought wrong. Let’s examine the main principles of purchasing Class B and C multifamily apartment communities the right way.’

    ‘Your conservative rental rate projections should be your worst-case scenario and based on a market correction or recession. In some cases, your conservative rents will be less than what the property is achieving right now. The property should have positive cash flow even with higher-than-normal vacancy, operating expenses and a 100% reassessment of the real estate taxes. If your analysis presents negative cash flow, then you are either paying too much, overleveraging (placing too much debt) or being too conservative and need to reconsider your conservative rents and expenses.’

    ‘What I see in the current market is mind-boggling — investors are placing debt on top of debt on top of debt. The No. 1 downfall of failed real estate investors is overleveraging. Debt is essential to achieve a substantial ROI, but getting too greedy could one day put your investment in jeopardy.’

    ‘We recently sold one of our properties to an out-of-state buyer. During their inspection period, they walked maybe three units and called it a day. We could not believe it. They were passive investors and accepted the inspection without further discussion.’

    https://www.forbes.com/sites/forbesrealestatecouncil/2019/12/26/what-making-your-money-when-you-buy-not-when-you-sell-really-means/#d8dc90b5fd98

    1. Very sound advice. While some leverage does make most investments work better that is certainly more true in a low interest environment. I think that many investors who think they are being conservative are going to get their head handed to them, if the ability of governments to monetize debts goes away and the markets are allowed to dictate interest rates.

    2. Debt is essential to achieve a substantial ROI

      That kind of thinking is how you know it’s a mania. Am I right Jingle?

    3. That’s the definition of dumb.borrowed.money. right there.

      And as we know, dumb.borrowed.money. overpays.

  2. ‘As the apartment market continued to sizzle midway through the decade, few anticipated that investors would remain just as bullish on the multifamily sector as the decade reached its tail end. Yet as the calendar flips to 2020, many investors remain active and hungry and are prepping to raise funds for the next year.’

    ‘When it comes to the type of properties investors seek, value-add remains the hottest commodity. Brokers can get buyers into a frenzied state by labeling a community a value-add asset, even if it’s an older, more difficult deal. They are selling that the prototypical multifamily investment dream still exists: While you might overpay initially, the property will flourish so prominently with completed capital improvements that you’re going to have a home run at the end of the day.’

    ‘As such, everything is being labeled as value-add.’

    https://www.multihousingnews.com/post/multifamily-investment-fundamentals-shift-but-remain-strong/

    1. “older communities, such as those built in the 1960s and 1970s, also attract investors, even if they might be more difficult to operate, renovate or maintain. ”

      Yeppers, because of location location location. In 1970, these cheap apartments were built on the edge of the metro area. 50 years later, that edge of town is now the middle of town, near new office buildings and transit. The value is in the land — more specifically the value is in the shorter commute.

      *sigh* City councils and local governments whine non-stop about a shortage of affordable housing, and yet they allow these shenanigans to go on right under their noses. Instead of building $600K units for the homeless, local gov should be preventing value-add acquisitions. The best way to build Grade B housing is to prevent it from disappearing in the first place.

      1. Not really. “Location” is a realtor marketing term borrowed from the commercial side where it actually applies, and is used to get the sucker to pay far more than the house is worth.

        Unless it’s rented at positive cashflow, an owner occupied house is a depreciating liability that empties your wallet every day it owns you.

  3. ‘Inna Khidekel, partner at Bridge Investment Group: There are a lot of structural issues prohibiting supply. The cost of construction is up around 81 percent this cycle relative to the last. Class B construction has declined from 61 percent to less than 20 percent of new supply. There is an oversupply on the high end of the housing spectrum, despite the fact that over two thirds of the U.S. workforce earns under 80 percent of the Area Median Income. (Meanwhile,) 96 percent of what’s being built requires an income of $75,000 annually.’

    https://www.multihousingnews.com/post/housing-leaders-on-solutions-for-the-missing-middle/

    1. We’ve been talking about this for more than 7 years, and suddenly these a$$ clowns are talking about it.

  4. ‘Self Storage Rents and Inventory Still Out of Balance’

    ‘On a year-over-year basis, street-rate rents declined by 1.7 percent for the average 10×10 non-climate-controlled and 3 percent for climate-controlled units of similar size. Overall, street rate performance was negative in about 75 percent of the top markets tracked by Yardi Matrix.’

    ‘Across the country, projects under construction or in the planning stages accounted for 9 percent of total stock, representing a 20-basis-point increase month-over-month. Metros with considerable development activity include New York City. The city’s new supply pipeline represents 16.8 percent of existing stock, a 60-basis-point increase over the previous month. Job and population growth are fueling the expansion in Orlando, where the percentage of projects underway and in the planning stage increased 50 basis points over the October rate.’

    ‘Due to fear of oversupply, development has slowed in Portland, where projects planned and in the construction phases account for 18.5 percent, down 30 basis points over October. Texas markets such as Austin (7.5 percent of existing stock), Houston (2.9 percent) and San Antonio (4.8 percent) have the lowest inventory of new supply, as heavy deliveries in the past few years are still considerably affecting rent growth.’

    https://www.cpexecutive.com/post/self-storage-rents-and-inventory-still-out-of-balance/

    I’m off to the courthouse.

    1. The outside storage facilities are absolutely loaded with RVs. There are waiting lists for a space. For most of these people, the math is absolutely hideous when you factor in not only the yearly storage costs, but the purchase price, depreciation, insurance, maintenance, repair and the insane costs for campgrounds, RV resorts, etc. You could go on a 5 star vacation once a year for much less.

      1. Not to mention that driving one of those behemoths is a major chore. I just don’t get why anyone would want one.

        1. We’ve rented one a couple of times for fun and because it worked for the particular thing we were trying to do. The family loves it. I don’t mind driving them, to me it’s a fun change of pace.

          But yeah…even the best deals are expensive. And the average deal is ridiculous. And then paying almost $100 to park it at a desirable destination while the low end Marriott property down the road is less than $150 just adds insult to injury. I can’t imagine paying full retail for one.

          I think everybody should do it once just for fun. And I find it perfect when the whole extended family is going camping to just fly into the area and get into one and go join them rather than being in a hotel 20 miles away while everyone else is camping.

          1. But yeah…even the best deals are expensive. And the average deal is ridiculous. And then paying almost $100 to park it at a desirable destination while the low end Marriott property down the road is less than $150 just adds insult to injury. I can’t imagine paying full retail for one.

            You can blame bots and scalpers for a lot of that.

            Can’t Get That Camping Spot? It Could Be Bots

            How Tech Decides Who Gets to Go Camping

            Same problem as with concert tickets, etc – rent seeking and market manipulation.

            As for storing RVs I don’t really get it – if you’re going to get one, if at all possible you would want to keep it on your own property where you can a) keep an eye one it, and b) not pay for the privilege.

            As for it making economic sense to buy one… there’s a usage threshold you need to cross, and most people are just casual users who don’t. In which case it makes a lot more sense to rent. Been thinking of doing just that (renting one) for a trip out to the Gorge to see Dave Matthews Band.

          3. I have a vintage Airstream coach. I use it to take typically two week road trips to visit family or places of interest. I’ve never paid half of $100 for a campsite and usually spending several nights roughing it for free as I make my way nice and easy. I’ve really enjoyed camping along the Blue Ridge Parkway and hitting the beach in S Carolina when the snow is piled high in NY early spring. Not why I originally got it, but it is getting used.

            Aside from that, it’s a cheap but fun guest accommodation for those who visit me, parked behind my studio. Also not subject to real estate tax.

  5. “Nursing homes say what’s driving those trends is underpayment for long- term care patients who can’t pay their own way.

    This problem is only going to get more acute as middle-age wage earners in our oligarch-looted economy are struggling not only with the rising costs of living, but are increasingly being tapped to pay for the care of elderly parents as well as supporting their boomerang kids who are living at home well into their 30s thanks to the disappearance of living-wage jobs and unaffordable housing.

  7. “The baby boom is now the silver tsunami. By 2030, the state’s over-65 population will almost double from 4.6 million to 8.6 million, according to state figures. But having the right mix of specialized housing for older adults requires investors and policymakers to project years out and make smart bets, given the huge investments required.”

    This is a nascent bust. The silver tsunami will flood the senior housing sector, but the structures will long outlive the boomer wave, leading to a Hunger Games competition for new residents from a shrinking demographic base in a couple of decades.

    1. But seniors are staying at home longer than developers expected

      Because Senior’s Living/Progressive Care is the last stop before the marble orchard. We don’t need to rush things.

    2. “…But seniors are staying at home longer than developers expected…”

      Because their kids are living at home with Mom & Dad and are serving as caregivers. Its the new ‘cool’ thing to do. Mom & Dad receive good care, save money, and the kids inherit the house.

      Of course, the REIC (I am now calling them the Real Estate Industrial CONplex) is in complete denial about this trend because they [the REIC] make no money selling you R/E or services that you don’t want or need.

      1. A move back to multi-generational households (which has been a norm throughout history) is a logical reaction to the changing economic conditions and other situations.

        Investors might be “shocked” to discover that people are, and will continue to be, behaving as rational actors and looking out for their own self-interests.

    3. Do they really think all those retirees will stay in California? If they are healthy, and especially they have a house to sell, I’d expect many, if not most, to leave the state.

      1. My parents aren’t retired yet, but they own a house near the coast in California in an area with great medical resources necessary for ageing with some of the world’s best specialists available. Prop 13 keeps their taxes insanely low (their neighbor, a 40 something who bought 5 years ago, pays 3x more annually despite having a lower valued home!).

        Further, one reason my parents and many others moved to CA in the first place because the weather isn’t too hot, too humid, or too cold. There are few places in the world with nicer weather than the thin coastal strip in California. Why move to Utah or Idaho or Ohio just to save a few dollars on taxes if you already paid your mortgage?

        While people talk a lot of trash about CA on this board, I’d argue the 2-3 mile strip along the coast is still (mostly) nice and the rich established residents will keep it that way. If you bought in 20-30 years ago it’s amazing.

        If you live inland though, yeah, not very nice anymore. I’d bail if I lived in the valley or LA or OC.

        1. rich established residents will keep it that way

          Traffic congestion, Airbnbs and homelessness are ruining the quality of life along the coast.

          1. Where my folks live the police clean up the homeless. Not tolerated whatsoever. Santa Monica is a shithole, but that’s because the police don’t enforce vagrant laws there (and let’s be honest, they didn’t decades ago either).

            Retired people don’t need to drive to work by 9am.

            AirBnB is annoying, but it’s infected every other area in the country with good hospitals (i.e., cities).

          3. @redpilled redhead: My folks don’t live near there. It’s a big state with lots of municipalities. Some attempt good management. Others don’t.

            So take the South Bay. That crap doesn’t fly in Palos Verdes, but up in Santa Monica it’s acceptable. Mileage may vary.

        2. “Prop 13 keeps their taxes insanely low (their neighbor, a 40 something who bought 5 years ago, pays 3x more annually despite having a lower valued home!)”

          This is so wrong and unfair. Prop 13 punishes young people.

          1. Yes prop 13 is wrong. A huge reason I left the state.

            But for people who have it, they’ll enjoy it and vote for it.

        3. I like my yard not to shake and house not to slide downhill and my trees not to be on fire and my electricity not to be turned off to keep my trees from being on fire. Surely that’s worth tolerating a little rain. After all, I don’t need to drive through it to get to work at 9 am.

          2. It’s a big state, so not everywhere has mudslides. Zero mudslides where my parents live.

            Earthquakes are bad, but so are hurricanes, tornadoes, flash floods, extreme winds, severe blizzards… Seriously, what climate in the USA doesn’t suffer from natural disaster issues? Hawaii is the only example I can think of, but then again, they have volcanoes.

            Ohio is cheap, but the climate sucks. It’s not just a “little” rain that causes people to love coastal Southern California.

        4. When I visited San Diego a few years ago in the summer, I was staying on the bay. It was warm but pretty nice. When we drove inland to the far side of the city, the temperature increased by 15 degrees and was quite uncomfortable (~98 F or so). Such a difference some distance made.

          1. In La Jolla, there can be a 10 degrees F difference in summer temperatures on the water versus on top of Torrey Pines Mesa, 1 mile inland.

          2. So true with the temperature differences between a few miles.

            That’s why it’s so obnoxious when people in Palo Alto say Merced should stop using air conditioning. That’s an easy statement when it’s 68F all year outside, a bit harder in the hot-as-hell central valley.

      2. It depends. Some might stay behind for many reasons: they’ve never lived anywhere else, they would leave the kids and grandkids behind, they might in poor health, they might be hoarders who are unwilling to part with their crap so they can relocate, etc.

        I know plenty of people in San Diego who tell me there is no way they would ever leave.

    4. “a Hunger Games competition for new residents from a shrinking demographic base in a couple of decades”

      And I can hardly wait… 🤤

    5. “A high-end senior housing facility in Chicago has sold for double its 2012 purchase price, the latest sign that investors are increasingly eager to own properties catering to wealthy retirees

      The key is spelled out right there — these “investors” are build these not out of any perceived need to take care of an aging generation, but to extract all the “Wealth” from “wealthy retirees” before someone else does it.

      That people might see or sense this and react by behaving differently has not been considered.

  8. Is Buying a Rental Property with Negative Cash Flow Ever OK?
    https://www.biggerpockets.com/blog/buying-rental-property-negative-cash-flow

    (snip)

    “The first thing to know is that most properties will yield negative monthly cash flow. True story! Why is this? Well, that’s just how the world works. Believe it or not, most properties actually make horrible investments. I’ve heard that upwards of 80 percent of properties are bad investments. To be honest, I believe it.”

    1. Rental properties often make bad investments? But all the smart people on Reddit told me to purchase duplexes and apartments with leverage and have idiot renters pay my mortgage while I just stack equity and retire at 40 with my real estate empire.

      Meanwhile, in Salt Lake, I’m seeing more and more owner/seller duplexes and multi-family homes for sale where the descriptions talk about how it’s a great investment. Curious why anyone would sell such an amazing investment. I sure as heck wouldn’t sell something netting me huge profits with basically zero work.

      2. Growing up, we GenXers were the “birth dearth” and we knew there were few of us. So, looking at the recent demographic chart, I was surprised to see how many GenX-age people there actually are. It’s because the GenX birth death has been filling in with immigrants over the past 20 years.

        At first I was a bit concerned that I would have to compete with them for retirement resources, until I realized that few of them have the money. Some of them are high-pay Chinese who came as super grad students, but most of them are low-skill who will likely just depend on their hordes of offspring in their old age. So yes, it is relative.

  10. Homeless women who took over California home gain support
    https://news.yahoo.com/homeless-women-took-over-california-210525605.html

    (snip)

    “I want to thank Moms 4 Housing for taking that house and for demonstrating that nowhere, nowhere should there be a vacant house anywhere in California when we have the housing crisis that we have,” said Democratic Sen. Nancy Skinner of Berkeley. “And it was totally legitimate for those homeless moms to take over that house.”

    1. and then there’s this

      Raiders’ Josh Jacobs, Who Was Once Homeless, Surprises Dad with New House

      JOSEPH ZUCKER
      JANUARY 7, 2020

      Oakland Raiders running back Josh Jacobs surprised his father with a new house following his rookie season in the NFL.

      Jacobs tweeted Tuesday he had purchased the home and shared his dad’s reaction on social media:

      Blessed just bought my pops a house

      ESPN’s Paul Gutierrez noted Jacobs and his siblings lived out of a car at times while growing up with their father, Marty, in Oklahoma. In an April piece for the Players’ Tribune, Jacobs wrote that his father later lost his job and they “basically lived out of our backpacks, hopping from motel to motel” for two years.

      “There were a lot of times I saw my dad come up with food for us, and he would never eat,” Jacobs said in a November 2018 interview with Bleacher Report’s Adam Kramer. “I always wondered if he ever ate or not, and that’s something that used to really bother me. To this day, I don’t know how my father did it.”

      https://bleacherreport.com/articles/2870196-video-raiders-josh-jacobs-who-was-once-homeless-surprises-dad-with-new-house

    3. I wonder how Nancy Skinner would feel if upon returning from a long trip she should find squatters in her home?

      1. A more accurate analogy would be to ask how she would feel if she went to her vacation home at the shore or in the mountains and found the squatters there. I don’t think she’d be happy either way.

    4. If housing is a “right,” then I will gladly accept a refund for 18+ years of rent. I will also gladly accept a complimentary dwelling to live in now — in fact, I will even allow for a complimentary 1-bedroom condo (no HOA of course), as befits a single woman.

      1. I have a young lefty in-law studying law at Berkeley right now who posted something regarding the “right” to housing. I had a respectful discussion with him about philosophy and where that one came from. He referred back to a UN resolution declaring housing a fundamental human right. I didn’t realize people took UN resolutions seriously but at least now I know where that stuff is coming from.

        2. Even if housing is a right, my idea of “housing” is very basic — something like the dorms I lived in in college. 2-3 to a room, shared bath down the hall, shared laundry. You have valuables, bring a locked trunk. At best, your family can live in a hotel-room style studio apt. You don’t get to just choose which housing you have a right to.

          1. Who pays for/provides this right?

            If you say “the government”, the government doesn’t intrinsically have anything to pay for the labor to acquire the land, raw materials needed, and labor to build the housing. So…who becomes the slave(s) to provide such?

          2. Who pays for/provides this right?

            Ah, the fundamental distinction between negative and positive rights lost among progressives. Positive rights require others to provide you with either a good or service. A negative right, on the other hand, only requires others to abstain from interfering with your actions.

          4. Once the communists declare housing a “right”, you can kiss the opportunity to live in decent accommodations goodbye in the USA.

            Did you ever see those Soviet style apartments from the USSR era? My Russian teacher, who was from the Old Country, told my class that the appearance of the apartment buildings in the Moscow skyline earned them the nickname “false teeth.”

          5. Once the communists declare housing a “right”, you can kiss the opportunity to live in decent accommodations goodbye in the USA.

            It’s ironic that a neighbor up the hill who lives in a 5,200sf house has been littering Nextdoor with this political position.

    5. “Homeless women who took over California home gain support”

      Watched the news clip…no hotties in there complaining.

  11. Exactly the more you spend to upgrade the apartment and building the more you can increase the legal rent, So that means $5000+ viking stoves, and sub zero freezers in a 6th floor walk up, Imported Italian marble in the entrance of the 100 year old tenement building , video entry system, all to raise the $800 a month rent to over $2000 and decontrol the apartment.

    move legal rents up by investing in individual apartment and building wide improvements,’

  12. “like my rent last year was like $1,000 and some change and it dropped like $350 because people weren’t resigning leases, so that’s a great thing,’ Huffines said.”

    That’s the kind of drop that I am expecting in SE Region IV

    I don’t “like” know exactly what the apartment is but a decent place for $700 – $800 would be a fair price around here for what now is $1,200 – $1,400

    1. That’s the kind of slashing that’s needed out west. The $1,200 apartments used to be $600-$700.

  16. OT demographic/health news:

    “While rates of alcohol-related deaths were highest among men in general, the largest annual increase in deaths was seen among non-Hispanic white women … the greatest increases in binge drinking were reported among women ages 30 to 44 without children”

    https://www.marketwatch.com/story/the-number-of-americans-drinking-themselves-to-death-has-more-than-doubled-2020-01-08

    LOL@ how women were promised they could “have it all.”

    Feminism, Sex and The City, and Tinder created this problem.

    2. “Tinder”

      LOLZ. A lot of those women who used to be super hot and picky in their twenties have now found themselves single and on Tinder for the pump and dump.

  19. I clarify my situation here. I sense some people are scratching their heads.

    My mother put her Encinitas house in a generation-skip trust for my autistic son before her death. It is considered an investment property. We intended to rent it out until such time as we or he could live in it. The likelihood of those scenarios has diminished since her death as the need for a safe and appropriate home for our son grows.

    We currently rent a 40+ year-old dated single-story 4bd/2.5ba ranch home in Poway below market rate. Despite being on 1.33 acres, our rental property has very little useable yard and my son has bolted twice in our six years here to a neighbor’s pool. The last time he bolted, we weren’t sure he was water safe. He had a preschool classmate drown so I’m well aware of the dangers and the horror. I tore my ATFL frantically looking for him. A sheriff’s helicopter thankfully located him in the neighbor’s pool happily swimming naked.

    In the absence of a 1031 exchange, we would likely be purchasing a 40+ year-old dated single-story 4ba/2.5ba ranch home in Poway for roughly $900K. By doing the 1031 exchange, we get more home than we need for the foreseeable future (in order to avoid a 27% tax liability on any boot), minimize our exposure to the real estate market (1 property rather than 2), preserve cash and cash equivalents (no down payment), and do not need to assume more debt. The future mortgage and property taxes are roughly equivalent to what we pay in rent now. An added perk is that the property tax liability is an expense for the trust and the SALT cap is less of a concern for our personal taxes.

    1. Poway has low crime and good schools I lived there for a year after moving from Phoenix AZ. Moved away for a new job a little farther North.

    2. As the father of an autistic son who has improved greatly upon reaching his teenage years, but still not ready to mainstream, I offer my sympathies at the challenges that has added to your family.

      1. Typical children have their challenges too. The additional space we’ll have may also allow us in the future to house 1 or 2 more individuals who cannot live independently. Time will tell. I’ve half-jokingly offered that option to a friend whose daughter has Xia-Gibbs and autism.

      1. You can see it better in pic #22 – opens to the bedroom – doesn’t look like it offers any sun though.

        1. I can’t imagine it being of much use other than locking out a spouse during a fight. Too bad it’s not closer for CrazyHouse to use until her husband comes to his senses.

        2. There would be some sun in the afternoon, though it would be a limited window, as later in the day the sun would set below the trees along Pierce.

          The pink clouds are faked, as the rear side of the house faces south, and sunrise never looks like that around here, though sunsets do occasionally. Photos #34 and #35 are actual morning sun.

          Doesn’t look like it’s big enough for much more than standing outside for a cigarette, though.

          1. Looks like a serious “cold front” is set to hit the pacific northwest and central northern states early next week.

  22. Does it seem like some gloomsters just don’t get the “everything is awesome” economic picture we currently enjoy?

    1. The Financial Times
      Global economic growth
      World Bank gloomy in spite of easing US-China tensions
      Growth outlook downgrade comes with call for ‘sustained’ fall in policy uncertainty
      Chinese shipping containers are stored beside a US flag after they were unloaded at the Port of Los Angeles in Long Beach, California on May 14, 2019. – Global markets remain on red alert over a trade war between the two superpowers China and the US, that most observers warn could shatter global economic growth, and hurt demand for commodities like oil. (Photo by Mark RALSTON / AFP)MARK RALSTON/AFP/Getty Images
      A stronger recovery in 2020 is only likely if the recent trade rapprochement between presidents Donald Trump of the US and Xi Jinping of China leads to ‘a sustained reduction in policy uncertainty’ © Mark Ralston/AFP/Getty

      Chris Giles in London 7 hours ago

      The easing of trade tensions between the US and China is unlikely to lead to a rapid improvement in the global economy, the World Bank has said as it released a gloomy set of forecasts.

      The development bank downgraded the growth outlook for most countries over the next three years compared with six months ago and said it expects only a minor pick-up in global fortunes this year following the “feeblest performance since the global financial crisis” in 2019.
      …
      The cautious forecasts contrast with financial markets, which have been buoyed since late last year as they anticipated a rapid improvement in global economic prospects after the US and China reached a phase one agreement that is expected to be signed next week.

      The World Bank’s predictions show global growth picking up from 2.4 per cent last year to 2.5 per cent in 2020 and rising gradually to 2.7 per cent in 2022. In each year, these growth rates are 0.2 percentage points lower than the equivalent forecasts that it made last June.
      Bar chart of Year on year change in GDP by date of forecast (%) showing World Bank downgrades 2020 growth projections

      Advanced economies are likely to endure a tough year, the World Bank predicted, with the US growth rate slipping from 2.3 per cent in 2019 to 1.8 per cent in 2020, …

      The World Bank said the US outlook had “decelerated”, with rising tariffs “increasing trade costs” and the uncertainty over its economic relations with other countries weighing “on investment and confidence”.

      Europe’s outlook is even weaker, with the eurozone set to grow by just 1 per cent in 2020 and its industrial sector hit hard.

      The World Bank expects China’s growth rate to slip below 6 per cent this year for the first time since 1990, with further deterioration expected in the years ahead.
      …

      1. further deterioration expected

        Since all growth of production has for a long time been based solely on debt, only a parasite banker would call a slowing a “deterioration”.

    2. This is the kayfabe economy. (Kayfabe is a term from pro wrestling referring to a staged performance.) Everyone knows that it’s fake, but some whose livelihoods depend on it pretend that it’s real.

    1. Sorry, brother. All you can do is keep putting one foot in front of the other, and trust that you’ll see them again in the next life.

      1. That’s what I do and what I hope.

        Thank you

        Don’t mean to be such a downer but after one and two years respectively I still have an occasional bad night.

        On those nights being able to put something out like the post above somehow makes me feel like it might get to them.

        When it happens I am very appreciative of our gracious host for allowing me to do so.

    4. Hey Jeff, remembering your loss.

      16 years ago I lost my father. He was my lifelong best friend. I was explaining this to a coworker. He said simply that he envied me.

      Sometimes, if you squint your eyes just right, you’ll see that you had something that is bigger than the loss.

    1. “My wife and I prayed together and asked God to show us the way. ”

      The implication here is that there is a big mortgage payment coming up. David should have read the Life Instruction Manual that God gave him. It says Don’t go into debt.

      I suspect that if David tells the bank the truth that he’s lost his job they will withdraw the lending and he can avoid the nightmare.

    2. Many years ago I had a girlfriend that got caught-up in the “End of the Cold War” lay-off wave. Her co-worker (crying) had just bought a new “Eddie Bauer” Ford Explored a week earlier.

    3. Nightmare.

      I think they need to think hard about what they would have done without the house. If they were planning to stay in the area anyway even if they lost their job maybe they should go ahead and move in and stop paying later if they have to.

      But if they really would prefer to live somewhere else with that job gone they shouldn’t even move in. Pull out all the stops to undo it and if that doesn’t work call Open Door/Zillow and blow it out now.

    4. If “the move in date is next week,” I’d guess it hasn’t closed yet. If that’s the case, he needs to do everything he can to back out.

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