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- 1) How Flood Buzz Pro Works
- 2) Behind the credit chip curve, U.S. playing catch-up with Canada, rest of world on card security - City & Region - The Buffalo News
- 3) The Global Economy in 2014 - Slow Growth And Short Tails
- 4) Industrial Investment Hitting On All Cylinders | Industrial content from National Real Estate Investor
- 5) Sober Look: Euro area's persistent credit contraction
- 6) Quantitative Ease by Carola Binder: Tale of Two Housing Markets
- 7) 2014 Outlook: Annus Not-So-Horribilis | Economy Watch
- 8) Top 10 Global Risks for 2014 | EconMatters
- 9) Mortgage Backed Securities Primer
- 10) Local Market Monitor Predicts Growth For 2014, But Flat For 2015 And Beyond | Candy's Dirt
- 11) Sellers Continue to Lose High Ground
- 12) Real Estate Investing Made Easy With The Best Retirement Plan
- 13) State Farm, Farmers, Allstate raising home insurance rates | Dallas Morning News
- 14) Insurers seek 25 percent increase in NC homeowners insurance rates | Real Estate | NewsObserver.com
- 15) Real estate broker: 'We accept bitcoin' | New York Post
- 16) Housing tear-downs on the rise as real estate rebounds - latimes.com
- 17) Low housing supply worries real estate agents, buyers | www.ajc.com
- 18) Rising home prices send China's 'Rat Race' scurrying underground | Reuters
- 19) 'Worst is over' for Hong Kong real estate, says chiu | South China Morning Post
- 20) U.S. House Prices Forecast 2014, 2013 Bull Market to Yield U.S. Economic Boom :: The Market Oracle
- 21) 4 states confirm water pollution from drilling
- 22) Invest In The Disruptors Of The Real Estate Industry - Forbes
- 23) Houston real estate more attractive to global investors - Prime Property
- 24) 2014 real estate predictions for Los Angeles and Orange Counties | AirTalk | 89.3 KPCC
- 25) Simple-minded to expect Hong Kong home prices to fall? Not at all | South China Morning Post
- 26) Bay Area a barometer for new mortgage rules - SFGate
- 27) mainly macro: Monetary versus Fiscal: an odd debate
- 28) Peter Wallison's Housing Bubble | Beat the Press
- 29) Commercial Real Estate Recovery To Accelerate In 2014
- 30) George Soros warns that Chinese slowdown is biggest worry in 2014 | Business | The Observer
- How Flood Buzz Pro Works
What do you think of this little gizmo?
The Flood Buzz™ Pro has two metal prongs on the bottom of each unit. When water comes in contact with the metal prongs, it closes the circuit and sounds an up to 110 dB alarm. Since the Flood Buzz™ Pro comes with an integral battery that lasts for up to three years, all you have to do is place the unit next to any potential leak source. The unit is maintenance free until you replace it.For best performance, Flood Buzz™ Pro should be replaced before the “Replace by” date printed on the chimney. This will also give you reason to call your customers for a service call.
- Behind the credit chip curve, U.S. playing catch-up with Canada, rest of world on card security - City & Region - The Buffalo News
Most real-estate investors have credit cards. This article brings up several security gaps concerning American-issued cards.
"The U.S. market is a much more complicated, robust marketplace than anyplace else on earth," said Jason Oxman, CEO of the Electronic Transactions Association, a trade group for the companies that offer products and services for processing electronic transactions. "The migration to EMV is well under way, but it takes time."
It will also take billions of dollars.
There are 8 million merchants here who will need to upgrade their point-of-sale structure. More than 1 billion credit and debit cards will need to be reissued. Every gas station fuel pump and ATM in the country will have to be modified. And there are countless nagging technical issues to coordinate among the country's 7,000 financial institutions.
"It's a massive undertaking," Oxman said.
Unlike emerging countries in places such as Africa that established their credit systems basically from scratch with EMV — which stands for Europay, MasterCard and Visa — America's credit systems are much older and more long-standing. For a long time, retailers resisted the idea of making the laborious, expensive switch.
- The Global Economy in 2014 - Slow Growth And Short Tails
"Leading economist Nouriel Roubini looks at what the global economy has in store in 2014 and predicts continued slow growth."
... so-called tail risks (low-probability, high-impact shocks) will be less salient in 2014. The threat, for example, of a eurozone implosion, another government shutdown or debt-ceiling fight in the United States, a hard landing in China, or a war between Israel and Iran over nuclear proliferation, will be far more subdued.
However, Israel is cozying up to China because the US agreed to Russia's brokered deal on Syria and because the US doesn't see Iran as being without the right to peaceful nuclear-energy generation, all the while China is at loggerheads with Japan, a close US ally. China has been pretty bellicose with its statements such as that it could nuke major US cities from China's submarine fleet.
- Industrial Investment Hitting On All Cylinders | Industrial content from National Real Estate Investor
Good news for US manufacturing/employment:
What's been most surprising, however, is the resurgence of manufacturing. Companies are actively looking to expand manufacturing and are researching various markets such as Nashville and South Carolina for land costs and job availability, according to experts such as Colliers, Transwestern and Voit. This interest has led to a few Fortune 500 expansion announcements this month, with Whirlpool moving washing machine production from Mexico to its 2.4-million-sq.-ft. Clyde, Ohio plant, and Electrolux adding 810 new jobs and expanding its headquarters in Charlotte, N.C.
Officials from these cities, and across the country, say they're getting a lot more interest from owners looking to expand or add new manufacturing facilities. Automotive growth is spurring a lot of the activity, as Ford's $1.1 billion expansion of its Kansas City, Mo. Assembly Plant is encouraging suppliers to follow suit, with Grupo Antolin North America recently announcing its plans for a new facility there.
- Sober Look: Euro area's persistent credit contraction
With credit contraction remaining one of the key risks to the fragile economic expansion and inflation running below 1%, many economists are calling for the ECB to take further action ....
- Quantitative Ease by Carola Binder: Tale of Two Housing Markets
Why people will rent:
Here's an economic data series to watch in 2014. The mean home price for homes paid for in cash shot above the mean home price for homes financed by conventional mortgages in the second and third quarters of 2013. (Later data is not yet available, and the 2013Q3 data is still preliminary.) The mean price for a cash purchase was $408,200, compared to $338,900 for a conventional mortgage. These figures refer to new one-family homes. The ratio of number of new homes purchased with cash to number of new homes financed by a conventional mortgage is just above 10%, more than double its value in the mid-2000s, but still below the early 1990s (Figure 2, below).
I will be watching the next few releases of this data with interest, as I think it provides some indication of the uneven nature of the housing recovery, and will be informative about the impacts of tapering. The housing market is rather segmented, and Fed policy has differential impacts on cash-in-hand investors and "typical" households.
- 2014 Outlook: Annus Not-So-Horribilis | Economy Watch
Although the probable expiration of emergency jobless benefits at the start of the year will likely push the unemployment rate down through a further reduction in the participation rate, the Federal Reserve has signaled that the unemployment rate is likely to fall below the 6.5% threshold it has identified.
... with Republicans seeking more spending cuts in exchange for lifting the debt ceiling, which President Obama refuses to negotiate, another fiscal impasse cannot be ruled out.
... when considering the outlook for the euro-dollar exchange rate, the two-year interest rate differential continues to provide useful insight. Investors now accept that reducing the amount of long-term assets purchased by the Fed and a rate hike are two completely separate events, which allows the U.S. 2-year yield to remain anchored. At the same time, the prospects of more liquidity provisions by the ECB, slow growth and low inflation points to a low 2-year German yield.
The US 2-year yield peaked in early September, ahead of when many, though not us, had expected the Fed to taper, at almost 55 bp. By late November, it had fallen to almost 25 bp. Given the risk of a Fed rate hike by late 2015, such a yield on the two-year note seems too low. As yields return toward fair value (37-50 bp), the dollar's descent may slow. However, a significant rally may require even higher yields.
German 2-year yields fell to 5bp in early November amid speculation that the ECB could adopt a negative deposit rate. As an aside, the lower yields German has enjoyed as a result of the crisis, has saved the German government more money than it has actually paid to aid peripheral countries. In any event, the yields rose sharply, back up above the 100 day average (~17 bp) and near 25 bp in early December was closer to the year's high (~38 bp). As yields return to fair value, the euro's appreciation will likely be corrected.
- Top 10 Global Risks for 2014 | EconMatters
This is a good, short follow-up on the Nouriel Roubini article above, which we obviously felt lacked enough geopolitical consideration.
In terms of the type of risk, seven out of the top 10 risks are geopolitical, while only three are financial or economic. So if we look at probability from this perspective, we are more likely to see a war or regime topple before another financial crisis rippling through the world again.
- Mortgage Backed Securities Primer
What is MBS?
Any time you see us write MBS in this blog, or anywhere else for that matter, we're always going to be referring to Mortgage Backed Securities. These are the securities comprised of groups of similar mortgages, also known as "pools." MBS function similarly to other bonds in that have a purchase PRICE and pay the investor back in installments based on the YIELD. The PRICE always refers to the cost of buying $100 of that particular bond. For instance, if the price of a bond is 101.00, then an investor would pay $101.00, and in exchange, would then own only $100.00 worth of that bond. So why pay more or less?
In a word: YIELD. Yield is ...
- Local Market Monitor Predicts Growth For 2014, But Flat For 2015 And Beyond | Candy's Dirt
While Trulia consider's Dallas to be overvalued, Local Market Monitor's report says that the Dallas-Irving-Plano market is actually under-priced in the neighborhood of 12 percent.
That's interesting news from these economic analysts. Local Market Monitor is predicting that home prices will grow 9 percent over the next 12 months, but will top out at 10 percent total growth for 2015 and beyond. Still, the firm considers our fair burg to be "low risk" for investment, and a strong rental market, too. That's good news for all of the multifamily projects slated to come on line this year.
- Sellers Continue to Lose High Ground
With mortgage rates expect[ed] to climb to 5 percent or higher this year, Redfin also asked agents how high interest rates would have to go before the housing market really starts to suffer. The majority—39 percent—said 5.5 percent is the magic number.
"If rates reach 5.5 percent, we'll start to lose entry-level buyers. The ripple effect will reach homes in almost every price point," said Redfin agent Jeff Bale, who operates in Portland.
We think that's high. We think they've already lost some interest. The psych-job that the industry does telling people to get off the fence works on some, but many simply don't have the option to buy even as rates go up just a bit. All-cash buyers are too competitive for them.
- Real Estate Investing Made Easy With The Best Retirement Plan
... Solo 401k ....
- State Farm, Farmers, Allstate raising home insurance rates | Dallas Morning News
AUSTIN — The big three home insurers in Texas are ringing in the new year with hefty premium hikes for their policyholders.
Allstate, Farmers and State Farm have notified the Texas Department of Insurance that they are increasing rates for most current and new customers by an average 6.5 percent to 15 percent to offset projected losses. More than 2 million homeowners will be affected.
The Insurance Department will review the rate hikes. It can reject any increases deemed excessive.
- Insurers seek 25 percent increase in NC homeowners insurance rates | Real Estate | NewsObserver.com
Insurers are asking for another major increase in homeowners insurance rates across North Carolina — an average increase of 25.3 percent.
The increases the industry is seeking vary by territory and are much higher for Triangle homeowners than they have been in the recent past. The industry is seeking a 24.4 percent increase for homeowners in the cities of Raleigh and Durham; and a 32.1 percent increase in the rest of Wake and Durham counties as well as in Chatham and Orange counties.
Insurance Commissioner Wayne Goodwin blasted the industry's request, which overall ranges from a decrease of 2.7 percent in some areas to an increase of as much as 35 percent in some regions along the coast, and urged the industry to withdraw it immediately. Goodwin ultimately would have to approve any rate increase.
Ray Evans, director of the N.C. Rate Bureau, which filed the request late Friday afternoon on behalf of the insurance industry, said the request was driven by higher claims by homeowners in recent years. He also said the industry is playing catch-up on rates because it has consistently in the past obtained much smaller increases than it sought.
- Real estate broker: 'We accept bitcoin' | New York Post
The bitcoin has gained a foothold in one of the hottest business sectors in the country: Manhattan real estate.
Bond New York, a Manhattan-based real estate broker, has started accepting the digital currency for real estate transactions, The Post has learned.
Bond New York believes it is the first real estate brokerage firm to accept bitcoin.
- Housing tear-downs on the rise as real estate rebounds - latimes.com
Anti-mansionization ordinances against the following:
The front-end loader swung to the right and took a bite out of the shingled roof of the quaint cottage. The roar of the engine and crackle of buckling lumber carried down Elm Avenue in Manhattan Beach.
Within 40 minutes, a demolition crew reduced the 1950s one-story to rubble. The 782-square-foot house would be replaced by a 3,300-square-foot Cape Cod.
... pushing Los Angeles to tighten the so-called anti-mansionization ordinance passed in 2008. Critics say it has failed to stop the construction of outsized homes that rob views, block sunlight and alter the character of established neighborhoods.
- Low housing supply worries real estate agents, buyers | www.ajc.com
A new report from Redfin, the real estate brokerage, found buyers in the fourth quarter continued to be frustrated by the slim pickings, were willing to pay more than a buyer's asking price and were willing to settle for less house if it meant winning a bid.
The Redfin survey also found agents were concerned that rising interest rates would limit home sales, with 39 percent believing that if rates exceeded 5.5 percent, sales and home price growth would suffer. Other agents put the threshold at 6 percent.
The average 30-year fixed-rate mortgage in metro Atlanta rose this week to 4.63 percent from 4.54 percent the previous week, according to weekly data from Bankrate. Local rates were slowly catching up with the national average, which was 4.69 percent. The average 30-year rate was around 3.76 percent this time last year.
- Rising home prices send China's 'Rat Race' scurrying underground | Reuters
Zig-zagging left and right through a maze of dark, narrow corridors in a high-rise's basement, 35-year-old kitchen worker Hu has joined the many thousands of Chinese fleeing fast-rising property prices by heading down - down underground.
Hu lives here beneath an affluent downtown apartment building, in a windowless, 4 square-meter (43 square-foot) apartment with his wife. For 400 yuan ($65.85) a month in rent, there's no air-conditioning, the only suggestion of heat is a pipe snaking through to deliver gas to the apartments above and the bathroom is a fetid, shared toilet down the hall.
"It's too difficult to have a house right now," said Hu. "Every basement has people living in it. See for yourself. There are so many of us out there."
- 'Worst is over' for Hong Kong real estate, says chiu | South China Morning Post
The worst is over for Hong Kong's housing market, says Cheung Kong executive director Justin Chiu Kwok-hung, who has a blunt assessment of pundits calling a market correction because of reduced US monetary stimulus: they are "too simple-minded".
"I believe the low interest rate environment will continue into 2015, as the US tapering is being launched in a gradual process," said Chiu, referring to a cut in the Federal Reserve's bond-buying programme.
Any rate rise would be in the order of a quarter of a percentage point to half a percentage point, he said. The low interest rate regime would continue to benefit the housing sector.
- U.S. House Prices Forecast 2014, 2013 Bull Market to Yield U.S. Economic Boom :: The Market Oracle
This is what one calls optimistic.
In my opinion the raging housing bull market of 2013 is merely phase 1 of an engineered feed back loop that will next manifest itself in strong U.S. economic growth during 2014 that is far beyond that which any academic analysts can perceive of today as they obsess over the likes of QE tapering, despite the fact that tapering STILL MEANS continuing money printing and somewhere along these academics seem to have forgotten all about what CHEAP fracking energy means for the U.S. economy. So whilst the foot may have been taken off the accelerator for U.S. house prices during 2014, the gas has already been amply applied towards uplifting the U.S. economy that will make itself manifest during 2014 and which will feed back into the U.S. housing market during 2015.
Tapering has a real world impact upon the ability of people to buy now. We think it was premature.
As for fracking, much of the product is being sold overseas. Fuel prices would need to fall dramatically here in the US to make up for the lack of fiscal stimulus.
In our view, the Fed needs to be extremely careful not to taper too quickly even as it continues to educate the markets.
That said, we'd like to add that the "tapering isn't tightening" mantra is actually irrelevant. Buying MBS and keeping the discount rate low are both QE. Cutting back too quickly on buying bonds would still crash the recovery with or without a rise in the discount rate.
- 4 states confirm water pollution from drilling
In at least four states that have nurtured the nation's energy boom, hundreds of complaints have been made about well-water contamination from oil or gas drilling, and pollution was confirmed in a number of them, according to a review that casts doubt on industry suggestions that such problems rarely happen.
- Invest In The Disruptors Of The Real Estate Industry - Forbes
It's difficult to fathom why an industry sector [real estate] that is so vital to the economic well-being of the country consistently wastes so much of people's time, money and energy.
From the very first open house to the often contentious bidding process to the mountain of paperwork that is typically associated with each closing sale, it's difficult to think of a market that operates more inefficiently. The source of the problem is simple: A lack of an electronic, efficient market.
Though a company creating, developing and overseeing a real estate exchange may seem like a pipe dream, it shouldn't be — it should be the goal. The equities markets work because they are fairly efficient with many players all determining pricing. The same cannot be said about the current state of the real estate market, and the time is right for a company or team of companies to do something about it.
- Houston real estate more attractive to global investors - Prime Property
Houston moved up in rankings of both U.S. and global cities where foreign investors want to put their commercial real estate dollars, a trade group reported.
Among global cities, Houston moved up one notch to No. 4 in The Association of Foreign Investors in Real Estate's annual survey of members. The Bayou City ranked behind London, New York and San Francisco.
- 2014 real estate predictions for Los Angeles and Orange Counties | AirTalk | 89.3 KPCC
This is a good discussion (audio).
David Krohn, Vice President of Property Masters Realty, a real estate firm in Glendale
Chris Thornberg, Principal at Beacon Economics
- Simple-minded to expect Hong Kong home prices to fall? Not at all | South China Morning Post
Tom Holland answers Cheung Kong (see link above) on Hong Kong real-estate going into Fed tapering.
Since hitting a record high in March last year, secondary market prices have slipped back by 4 per cent. What's more, since the middle of last year when the bond market began to price in the prospect of tapering, the yield on US Treasury notes has doubled and now exceeds the yield on Hong Kong property by a whisker.
That means Hong Kong flats are no longer such an enticing option for cash investors. With more attractive assets out there, many potential buyers will decide to put their money elsewhere.
That's bad news for Chiu. The chart is a bit messy, but the relationship is clear enough: when Hong Kong property yields are above the yield on US Treasury notes, as they have been for the past five years, local prices tend to rise (with a slight time lag). When property yields fall below the "risk free" rate, as they did between 1998 and 2002, prices drop.
It might sound like an obscure argument, but it's hardly a simple-minded one.
- Bay Area a barometer for new mortgage rules - SFGate
If the long-awaited mortgage rules that finally take effect Friday will impact borrowers anywhere, it will be in the Bay Area.
The rules will primarily affect jumbo loans, which are too big to be purchased by Fannie Mae and Freddie Mac, and other nongovernment loans. Because of their relatively high concentration here, "San Francisco is ground zero" for judging the impact of the new rules, says Guy Cecala, publisher of Inside Mortgage Finance.
- mainly macro: Monetary versus Fiscal: an odd debate
In its purest form, all fiscal stimulus involves is bringing forward public spending, just as monetary easing encourages the private sector to bring forward their spending. That is bound to be effective in combating demand deficiency. Is the fact that the spending takes place this year rather than in five years time that costly, particularly if the spending is investment like in character?
So I remain mystified where this desire to downgrade the usefulness of fiscal policy at the ZLB comes from. I suspect I am missing something, and would like to know what that is.
You aren't missing anything, Simon Wren-Lewis. You're just seeing what others are missing: the usefulness of fiscal stimulus right now, in sufficient quantities, and targeted at the right/best investments.
- Peter Wallison's Housing Bubble | Beat the Press
Dean Baker sets the record straight as to whether it was the GSE's or Wall Street banks that caused the housing boom/bust.
... the worst loans were securitized by folks like Citigroup, Merrill Lynch, and Goldman Sachs. They weren't securitizing junk mortgages to meet government goals for low-income homeownership, they were doing it to make money. And they made lots of money in these years. In fact, the private securitizers were so successful in securitizing junk mortgages that they almost put the Federal Housing Authority (FHA) out of business. Since the FHA maintained its lending standards it couldn't compete with the zero down payment loans being securitized on Wall Street. It saw its market share fall to 2 percent at the peak of the bubble. Some of us warned about the problem posed by the bubble in low-income communities at the time.
- Commercial Real Estate Recovery To Accelerate In 2014
Jones Lang LaSalle's (JLL) research experts have polished off the firm's crystal ball and it reveals a clear path to stronger performance expectations for commercial real estate in 2014. The firm's top researchers believe the "global real estate disconnect" between buoyant investment markets and more cautious leasing markets that existed during 2013, is narrowing in the United States as the nation's recovery broadly diversifies ahead of many of its global counterparts.
Demographics will play a stronger role in the U.S. office market in 2014, as the millennial generation demands a sense of place and increasingly urban or quasi-urban environments. The suburbs are not dead, but will increasingly diverge further into two markets; choice locations on amenities, transit and with a sense of place will heavily outperform suburban locations lacking those characteristics.
Many industries are now recouping job losses from the recession and this — after occupier downsizes and space considerations in prior years — will create additional demand for commercial real estate. Every new job in a given sector and region produces or typically correlates highly, with other jobs being created in other sectors in that region. These jobs are known collectively as indirect jobs. These jobs in turn have a multiplier effect and thus create additional demand for real estate.
- George Soros warns that Chinese slowdown is biggest worry in 2014 | Business | The Observer
The financial crisis showed the weakness in the idea of becoming the workshop for the world when that world couldn't afford to go on buying. To keep the wheels turning, local authorities and other government agencies were allowed to borrow.
Last year the Chinese leadership said it recognised that plan was flawed, and public sector debt needed to be cut. But when the economy slowed dramatically after borrowing was restricted, the policy was quickly reversed. The subsequent boost looks shortlived, even if China has billions of dollars in foreign exchange reserves to soften any economic blow.
Soros said: "China's leadership was right to give precedence to economic growth over structural reforms, because structural reforms, combined with fiscal austerity, push economies into a deflationary tailspin. But there is an unresolved contradiction in China's current policies: restarting the furnaces also reignites debt growth, which cannot be sustained for much longer than a couple of years."
"... which cannot be sustained for much longer than a couple of years." We agree.