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It’s A Metric That Apparently People Really, Really Want To See

A report from KQED in California. “The Jasper is a high-rise, luxury apartment building in San Francisco’s Rincon Hill neighborhood near The Embarcadero. A one-bedroom apartment here costs more than $4,000 a month — at least, for now. Like many other high-end apartment complexes in San Francisco, the Jasper’s management is offering up to one month of free rent to prospective tenants right now because of the weakening market.”

“‘If you go on Craigslist, you’ll see at least four weeks — often six weeks — free rent,’ said Bay Area property manager and landlord Carlos Carbajal. ‘I’ve never seen anybody giving that much free rent as an incentive the whole time I’ve lived here, since 2003.'”

From Socket Site in California. “Having jumped to a 9-year seasonal high last week, the number of homes on the market in San Francisco has since ticked up another 5 percent to 870, representing 45 percent more inventory than at the same time last year. At a more granular level, the number of single-family homes listed for sale in the city (270) is now running 40 percent higher than at the same time last year while the number of condos (600) is currently 49 percent higher.”

From Slate on New York. “According to Compass, the brokerage where Brian K. Lewis works, the market in New York City hit bottom around April 12. 5 East 17th Street, $14,950,000, Four bedrooms, four bathrooms. Q: There was a major price reduction. Are you generally seeing a lot of price reductions because of COVID?”

“A: I can tell you the story on that one. We had a buyer. It was in contract. The asking price was $17 million, and before COVID the buyer failed to close. Let’s not forget, when the story’s told, that in New York City we have been slowly coming down in prices since at least 2016. I don’t want anybody to rewrite history and say it was all great and then COVID. In 2017, you were getting $17 million for that loft, and pre-COVID you were not getting that unfortunately, even though I think it’s worth $20 million. But the sellers adjusted the price after this buyer failed to close.”

The Real Deal on Florida. “Brown Harris Stevens Miami broker Mark Zilbert teased a new feature on his website called ‘The 100 Biggest Price Drops’ late last week. Over the past two weeks, some sellers in Miami-Dade cut prices by nearly 50 percent, suggesting more price adjustments are on the horizon as showings begin to resume and brokers get back to the office. The report looked at all homes and condos priced at $500,000 and up that have dropped prices since May 11.”

“‘It created a massive surge in traffic,’ Zilbert said. ‘It’s a metric that apparently people really, really want to see.'”

“Between May 11 and Tuesday, May 26, the property with the biggest price haircut is the four-bedroom, three-bathroom house at 410 Southwest 27th Road in Miami. The 2,286-square-foot home is now asking $1.06 million, down 47 percent from $1.99 million earlier this year. It’s been on the market for 136 days. Similar homes in the neighborhood are priced closer to today’s asking price.”

“‘Many, if not most, of these properties are decent deals, but the massive price drop is more a reflection of adjusting an unrealistic listing price down to one that is closer to market value,’ he said.”

From Bisnow on Massachusetts. “Multifamily rental inventory has tripled in some places in Boston, a sign that many renters have left their homes over the first two months of the coronavirus pandemic. Across greater Boston, apartment inventory is up 58% from 2019, according to Multiple Listing Service Property Information Network data pulled by real estate agent David Bates. Back Bay’s inventory nearly tripled, rising from 102 available units to 290, while the South End and Beacon Hill’s inventories more than doubled.”

“It may get worse before it gets better. Landlords are doing what they can to retain existing tenants, including keeping rents the same or even lowering them, but some of the units that are available may not even be listed yet. ‘Several landlords have told us they are holding off giving out their inventory because they believe pricing may be better in late May or June,’ Boston Pads CEO Demetrios Salpoglou wrote. ‘Some landlords are even avoiding contacting their tenants about renewals until mid-May to see what transpires in the market.'”

“Bates wrote that a ‘sizable Boston landlord texted me that he was experiencing ‘lots of lease breaks,’ and that may be one reason that apartment listings between April 20 and May 20 are up from 1,417 to 1,859, a 31% increase. Further muddying the multifamily waters in the Boston area is the future of its typically reliable renter base of college students.”

From Multi-Housing News. “Continued volatility in the student housing market is expected due to uncertainty over higher education plans for the upcoming fall semester and may impact more than $13.3 billion in student housing loans packaged in commercial mortgage-backed securities, according to DBRS Morningstar. ‘The Next Falling Domino: Student Housing’ report notes some student housing properties were facing headwinds before the pandemic, including oversupply issues, decreasing international student enrollments and expanding on-campus residency requirements.”

“The delinquency rate for student housing loans increased from 0.2 percent in January 2018 to 3.8 percent in April 2020. The rate increased to 9.5 percent in May. The report also notes there are about $1.14 billion student housing loans that will mature between 2020 and 2021, including about $948 million of which are CMBS loans. ‘Replacement financing during the ongoing pandemic for upcoming maturing loans could pose challenges, as these properties face stressed cash flows and possible value decline,’ according to DBRS Morningstar.”

The Pittsburgh Post-Gazette in Pennsylvania. “What had been a lucrative side business for most is now a patchwork of bookings for the fortunate. Most of those bookings bear the marks of the coronavirus pandemic. ‘When everything started to fall apart, I lost all my bookings in a week,’ said Jan Loney, who lives in Mt. Lebanon. She books guests into two units she owns in Lawrenceville. ‘I had more than $8,000 in bookings through May and a two-month booking further out.'”

“For now, the second-floor apartment in Kristen Frambes’ Victorian home in Ben Avon is empty. With a separate entrance, it had been a nice sideline income for her and her husband, about $20,000 a year. Then they lost all their bookings from March through June. ‘For now, we’re going to leave it listed. If we don’t get any bookings, we may turn it into a [traditional] rental,’ she said.”

“Some Airbnb operators don’t have that luxury. Dennis Vodzak took a double hit with the COVID-19 shutdown. A corporate chef for years, he was making a living as a caterer when he began building a vigorous Airbnb business three years ago. ‘I thought I was going to have a banner year in 2020,’ he said. ‘I made more than $50,000 on my bookings last year.'”

“He rents three units in the historic Day House, a massive Victorian in the Central Northside. He lives in the house, where the units all have separate entrances. He was preparing to open a fourth unit in the building in June. In each of the past three years, he said, he had more than 600 bookings. ‘My last people left on March 14,’ he said.”

“Some hosts still have guests in a holding pattern. One family is holing up in a house on the South Side that Michelle Margittai and her husband operate. Their other unit, a loft above Peter Margittai’s architecture studio, is currently empty. ‘It had been very successful, although we cleaned toilets a lot,’ Ms. Margittai said. The future of both units might be as traditional, longer-term rentals, she said.”

The Houston Chronicle in Texas. “Landry’s CEO and Houston Rockets owner Tilman Fertitta warned of a collapse in the commercial real estate industry as countless businesses are unable to pay rent as they remain closed or are operating at partial capacity. ‘We can’t pay rent if we’re not doing business,’ the Houston billionaire said Tuesday, citing a potential ‘commercial real estate bust’ on CNBC’s Power Lunch.”

The Tahoe Daily Tribune. “There are numerous reasons we believe that commercial real estate is not a good place for most investors at this time. The enormous reduction in employment is leading almost every business to reevaluate their staffing requirements. It is also causing businesses to reconsider just how much office space they really need. So, what does this mean for commercial real estate especially large office buildings, office parks and skyscrapers?”

“Generally commercial real estate is constructed using very sophisticated financial projections for income and expenses. The rapid rise in real estate prices and rents during the past eight years is now being impacted by business closings which lead to vacant storefronts and shortfalls in rental income. Buildings under construction might have difficulty finding commercial tenants to lease the available space.”

“Ultimately there will be an enormous glut of vacant commercial real estate. When this oversupply of office space is combined with a big decrease in demand the results for the commercial real estate market could be catastrophic.”

This Post Has 104 Comments
    1. I recall a wise man saying this a few years ago.

      “AirheadBNB is morphed into 2hr room rentals for hookers and johns. Anything illegal? Use AirheadBNB. And the empty pocketed home debtors in Californica have already established the trend. Washing sheets, disposing condom wrappers and cleaning toilets. Yep…. You’ve really come a long way.

      AirHeadBNB…. poster child for a money losing failed business”

    2. ‘we cleaned toilets a lot’

      A small price to pay to get rich. Much easier than designing circuits or writing code or anything else with math or logic involved. That is until there are no customers and the mortgage company starts sending you nasty letters.

  1. ‘The delinquency rate for student housing loans increased from 0.2 percent in January 2018 to 3.8 percent in April 2020. The rate increased to 9.5 percent in May. The report also notes there are about $1.14 billion student housing loans that will mature between 2020 and 2021, including about $948 million of which are CMBS loans. ‘Replacement financing during the ongoing pandemic for upcoming maturing loans could pose challenges, as these properties face stressed cash flows and possible value decline’

    Is that a lot? Recession proof!

  2. ‘If you go on Craigslist, you’ll see at least four weeks — often six weeks — free rent,’ said Bay Area property manager and landlord Carlos Carbajal. ‘I’ve never seen anybody giving that much free rent as an incentive the whole time I’ve lived here, since 2003’

    This is where we get to media dishonesty. You could have found such free rents for over two years now.

    1. This type of dishonesty has resulted in a gluts of Class A, luxury craps that no one needs or wants.

      1. Yeah like Costar: for ten years, everythings awsum. 2020: we’re getting into distressed real estate.

  3. ‘Over the past two weeks, some sellers in Miami-Dade cut prices by nearly 50 percent’

    I guarantee you somewhere there’s a UHS swearing Miami prices are up.

  4. ‘Let’s not forget, when the story’s told, that in New York City we have been slowly coming down in prices since at least 2016. I don’t want anybody to rewrite history and say it was all great and then COVID’

    It’s been sinking like a turd in a well Brian.

    1. Seems like a diet dependent metaphor. I’ve seen sinkers, and I’ve seen floaters.

      1. I recall an email from many years ago that described the many varieties of them. One was called the “Lincoln Log”

  5. “trillions in printing” by the fed…… yet housing prices continue cratering anyways.

    Oooooph.

    Santa Clara, CA Housing Prices Crater 10% YOY As Defective Appraisals And Mortgages Surface Across The US

    https://www.zillow.com/santa-clara-ca-95051/home-values/

    As one bay area broker admitted, “Housing prices are cratering and have no where to go but down.”

  6. The CDC Slashed the COVID-19 Fatality Rate to a Fraction of Earlier Estimate Used to Justify Lockdowns

    ‘For more sane people, extraordinary claims require extraordinary evidence. Those who have claimed that lockdowns are “the only option” had virtually no evidence at all to support their position. Indeed, such extreme over-the-top measures such as the general lockdowns required an extreme level of high-quality, nearly irrefutable evidence that lockdowns would work and were necessary in the face of a disease with an extremely high fatality rate. But the only “data” the prolockdown people could offer was speculation and hyperbolic predictions of bodies piling up in the streets. But that became politically unimportant. The people who wanted lockdowns had gained the obeisance of powerful people in government institutions and in the media. So actual data, science, or respect for human rights suddenly became meaningless. All that mattered was getting those lockdowns. So the lockdown crowd destroyed the lives of millions in the developed world—and more than a hundred million in the developing world—to satisfy the hunches of a tiny handful of politicians and technocrats.’

    https://mises.org/power-market/cdc-slashed-covid-19-fatality-rate-fraction-earlier-estimate-used-justify-lockdowns

    1. All the shitbag Governors said on camera “we’re gonna go by the data….. we’re going to go by the science.”

      It’s on the record.

      1. go by the science

        You have to know things to have any science. It’s pretty clear that they didn’t know much, and knew that what they were telling us was bogus. To make matters worse, they ignored their own data as the epidemic unfolded.

        Just as an example, the death rate in NY peaked on April 1, just days after the lockdown. This means the infection peaked and headed down before the lockdown, doesn’t it?

        1. You have to know things “

          True and the science will continue to change as we get more data.
          Problem is, one really sick formerly healthy person makes the headlines and can override the Boring, potentially suspect, data

      2. Things are pretty much opened up now, in correlation with (if not because of) the new data. Conspiracy theories aside, I don’t think you can blame the governors for acting on bad data. It’s been a blizzard of conflicting BS from day one.

        1. “It’s been a blizzard of conflicting BS from day one.”

          Then don’t act on it.

          1. Cuz you see….. governing actually requires that you work and think. It seems these public “executives” don’t have the qualifications necessary to do their jobs.

        2. Things are pretty much opened up now

          My son’s not back in school. He’s not receiving any of his medically necessary services. We received notification today that summer school is continuing via distance learning. Fall is still a big question mark. Kids under 18 are at very little risk. This is not being driven by science.

    2. Wait until you see the dystopian surveillance state of the “New Normal” that the globalists have planned for us.

      If the Democrat Party retakes control of the federal government in November, this country is over.

      1. “…this country is over.. ”

        I tend to agree with your post. I think there is a point when political power can become so destructive that you destroy everything with no ability to return .

        1. Let’s face it, these freaks don’t want normal. These are sick puppies.

          Look at their canadate Joe Biden. The guy looks like a alien with his big head and vacant dark eyes. He has that plastered on to big smile that reminds you of the Joker. Very disturbing mindless and corrupt empty suit Joe Biden is. Add to that he’s way to old. Just shows you that party has gone off the rails.

          But, there is a theory that nut cakes want to come down to earth ,so they keep doubling down until somebody stops them.

      2. What’s the biggest sign of the New Normal to look for here, and how soon after the election would you expect to see it?

        1. The illegalization of cash and replacement of credit cards with a phone based payment system is the biggest one. That and a social credit score system.

          See also: the scene in Idiocracy where the protagonist time traveler from the past freaks everybody out because he is “unscannable.”

          1. What additional info can you get from a phone purchase that you can’t get from a credit card purchase?

          2. The illegalization of cash

            What about all the people without bank accounts?

      1. Just saw this on my news feed: Disneyworld is reopening July 11. I’m sure Newsom will want to keep Disneyland closed well beyond that day.

        Wouldn’t it be cool if they dismantled Disneyland and moved it to Texas? Of course, that will never happen.

          1. Actually, I think the biggest problem is that it would be too close to Orlando. Anaheim has nothing to worry about.

  7. Like many other high-end apartment complexes in San Francisco, the Jasper’s management is offering up to one month of free rent to prospective tenants right now because of the weakening market.”

    You’re going to have to do better than that, greedheads. If you want stable, long-term tenants, you need to get serious with the sawin’ and slashin’.

  8. Let’s not forget, when the story’s told, that in New York City we have been slowly coming down in prices since at least 2016. I don’t want anybody to rewrite history and say it was all great and then COVID.

    A rare non-liar in the REIC.

  9. ‘Several landlords have told us they are holding off giving out their inventory because they believe pricing may be better in late May or June,’ Boston Pads CEO Demetrios Salpoglou wrote.

    And they base this belief on what, exactly?

  10. A Karen in Central Park calls the cops on a black man who requested that she put her dog on a leash (as required in the park). Rather than showing the common courtesy of snapping a leash on her dog, she called the cops on the black guy. Now the financial company where she worked (I am Jack’s complete lack of surprise) has fired her. Hey Karen, maybe next time you could be a decent human being and honor another person’s reasonable and lawful request.

    https://www.vice.com/en_us/article/qj48bm/woman-who-called-police-on-black-man-in-central-park-has-been-fired-we-dont-tolerate-racism

      1. Obviously she asked him not to video record her and it was freaking her out. Calling the cops saying he was threatening her life was beyond bogus.

      1. I was pleasantly surprised when we actually got our 6 month bonus a few weeks ago. Apparently we’re actually doing better this year than we did a year ago which was a cyclical trough for us.

        1. Pay raise
          According to my brother Hormel in GA gave their workers (processing workers) an incremental bonus of $300 in March and $500 in April.
          He has not heard about May yet.

  11. Got this email from my credit union today:

    Get your real estate investment dreams off the ground along Colorado’s Front Range, where the rental market continues to remain highly competitive despite the coronavirus pandemic.

    With our mortgage lending team, better understand how to buy and finance investment properties, plus their pros and cons. We’ll talk through comparing properties and converting a primary residence into a rental. You’ll also learn all about the differences between residential and commercial investment properties, and why owning four properties or less is different than owning five or more.

    Someone’s late to the party.

    1. Hundreds of thousands of unemployed broke millennials whose jobs will not be coming back will be moving back in with their parents in their native states.

      Don’t let the door smack you in the @ss on the way out.

        1. The bill may include:
          Extending anti-eviction protections for people who can show they’re suffering financial hardship from the crisis.

          Yeah, right now getting into hock to purchase an overpriced rental property, from which you might not be able to evict a non paying tenant sounds great to me. While I’m at it I’ll buy a $70K pickup on credit too.

      1. They’re earning $600 more a week with unemployment than their last job paid…won’t be moving back for awhile

        1. You mean they’re getting $600 more a week than they would have normally received from unemployment. For those who were earning a menial wage, it is a bonanza. For everyone else, not so much.

  12. I’m not surprised that these Spinmasters of doom and gloom hyped up this flu bug.

    The real group of saviors are the working class that keeps things going and are productive. The parasites on the productive class know they are useless, therefore they develope a “save them complex” to justify their useless control freaks lives.

    1. “The parasites on the productive class know they are useless, therefore they develope a “save them complex” to justify their useless control freaks lives.”

      Once again, you use what works.

    2. Yep, and every fake “crisis” created by the parasites and their “solutions” just put the working class further behind the 8 ball.

      They should load up the boeing air maxes with nukes and autopilot them into DC and the state capitals when theyre in session passing more bs laws to screw us over, fix a lot of problems.

  13. Downtown Denver is a toilet:

    “Wednesday’s operation was along California Street from 20th to 22nd streets and along 21st Street from Stout to Welton streets. The health department said cleaners also would start work soon on the block bounded by Park Avenue West and 22nd, Stout, and Champa streets. The department cited “unsafe conditions associated with recent and ongoing observations by public health investigators, including piles of uncontained trash, used needles, insects, human waste, and other biohazards.”

    As the health department crews worked Wednesday, a dozen protesters bearing a banner indicating they were members of the Party for Socialism and Liberation struck up a chant:

    “Where are they supposed to go?”

    An unseen woman responded from a window in a nearby high rise: “I don’t care where they go.”

    She added: “They’re filthy.”

    https://denverite.com/2020/05/27/city-to-conduct-another-clean-up-of-homelessness-encampments-in-parts-of-five-points/

    LOL@ the company I worked for a few years ago had the electrical contract for the “luxury” apartment building in the foreground of the article photo.

    1. Where did they end up going? All that mess went right along with them, wherever it is.

      1. “Where are they supposed to go?”

        My answer would be: “To the bus station, where they will be given a one-way ticket to San Francisco”.

          1. “Nevada got spanked for doing that!”

            I remember a mother’s day story where Missouri sent a phat single mom with two dysfunctional kids (one severely autistic), on a one-way bus trip to San Luis Obispo, CA because they couldn’t care for her. In the homeless shelter, an alcoholic deadbeat got her pregnant within three weeks of her arrival. The newspaper thought it was a blessing that the county’s taxpayers could help this poor victim of life. WTF?

    2. “Where are they supposed to go?”

      They should follow the protesters from the Party for Socialism and Liberation home and drop their human waste on the members front lawns or in front of their buildings.

      Then they could put in for a stipend from the Soros funded group that is paying them to protest which would offset the cost of cleaning it up.

  14. Minneapolis is about to burn itself to the ground. Unlike the “Gentle Giant” narrative that our betters sold us about Ferguson, MO this one looks like a straight up police murder.

    “To serve, protect
    And break the n*****’s neck” — Ice Cube

    1. Riots break out when the cases are uncertain, like no one knows exactly what happened, witnesses are unreliable, fail to indict, etc. But if this case is clear cut, then how can anyone sustain a riot?

      Rioters: No justice, no peace.
      Judicial system: OK, how about charge, indict, try, find guilty, toss in jail?
      Rioters: uhhh.. oh. Well then. I guess we can go home now.

    2. I’m waiting on the police body cam footage of the “Gentle Giant” physically resisting arrest. It appears from the available footage that the police went well beyond restraining a forgery suspect. Either way, it looks like a traumatized family is going to be n**** rich.

  15. Colorado is cutting $3B from the state budget.

    The size of the budget shortfall in Colorado is unprecedented — 25% of current spending — and it took the Joint Budget Committee three weeks to make the necessary cuts to balance the budget.

    I believe that is “a lot”.

    “I’m grieving every time I turn a page,” said Rep. Julie McCluskie, a budget writer and Democrat from Dillon, at one point.

    Live by the lock down, die by the lock down.

    Did it never occur to these numb skulls that this was going to happen? That it might have been better to trust people to exercise common sense without crippling the economy?

    But there is a silver lining: the slashed budget will become the new TABOR baseline, meaning that even should we have V recovery the budget can only grow as fast as inflation and population growth.

    https://coloradosun.com/2020/05/22/colorado-state-budget-shortfall-2020/

    1. OK, I’ve seen pools where the barstools are in the water so you can drink while in the pool. But at this house it’s the other way around. The barstools are on a patio and I guess you just sit there and stare at the water level of the pool. Hope the pool wall doesn’t break. The house itself is pretty plain, and looks difficult to furnish.

    1. The first 1:20 does a phenomenal job of describing where this country is and what happens to those who disagree with Soros sponsored groups, the Hollywood puppets, Real journalists, Silicon Valley, the SPLC etc.

    2. Mr Banker,

      I saw the tape real quick because you watch they will take it down. Been noticing authors that I like are getting their stuff taken off the internet because it doesn’t follow the narrative.
      I I have gone back to a good tape from the web only to find it already gone.

      Is this any different than the Book Burning of Hiilter, I ask you?

    3. Well spoken doctor. It’s a shame how much politically correct censorship is going on.

  16. Does it seem like the stock market is fully decoupled from the economic news these days? Every day is a good day in Wall Street anymore.

    1. Dow closes 550 points higher, as investors look past dismal economic data and escalating U.S.-China tensions
      Published: May 27, 2020 at 4:43 p.m. ET
      By Joy Wiltermuth and
      Sunny Oh
      U.S. declares that Hong Kong is no longer autonomous

      Major U.S. stock benchmarks roared higher Wednesday, despite the battered state of the American economy and rising tensions between Beijing and Washington as investors focused on efforts to reopen more states for business.

      How did major indexes fare?

      The Dow Jones Industrial Average (DJIA, +2.21%) advanced 553.16 points, or 2.2%, to finish at 25,548.27, while the (S&P 500 SPX, +1.48%) rose 44.36 points, or 1.5%, ending at 3,036.13. The Nasdaq Composite (COMP, +0.77%) gained 72.14 points, or 0.8%, to close at 9,412.36, staging its biggest intraday percentage comeback since Feb. 28, according to Dow Jones Market Data.

    2. Does it seem like the stock market is fully decoupled from the economic news these days?

      More and more random people seem to be commenting on how there’s a ‘reality for them’ and ‘a reality for the rest of us’. The more they kick the can down the road, the bigger the explosions will be when it finally blows up.

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