Linking ≠ endorsement.
↑ Where Cities Are Growing Faster Than Their Suburbs – CityLab
Where is growth happening in America: cities or suburbs? For much of the last half-century, growth was a suburban phenomenon. But over the past decade or so, many have noted the comeback of cities and the urban core—a phenomenon Alan Ehrenhalt dubs “the great inversion.” In fact, the question of where growth is centered—in cities or suburbs—has emerged as one of the great dividing lines in the debate over urban America’s future.
…I decided to dig in a little further to the where and the what of urban and suburban growth over the past year (2012 to 2013 only), comparing both metrics to overall metropolitan growth.
↑ Biggest Wealth Fund Forms New Real Estate Group – Bloomberg
Norway’s $890 billion sovereign wealth fund, the world’s biggest, is seeking top executives for a new real estate group that will invest almost $10 billion annually in properties over the next three years.
↑ Commuters living within an hour of London save £400k on house prices | This is Money
Commuters who choose to spend an hour on the train to London are saving themselves almost £400,000 on the price of their house by not living in the capital.
Telecommuting will continue increasing, and getting work done while on the train is wise.
↑ U.S. economy a world beater because of 5 factors – Newsday
The post is completely optimistic. We have some countervailing comments.
The Fed’s actions propped up failed banks. It did that so the banks’ assets could slowly rise in price again. Banks have kept Real Estate Owned (REO) dribbling onto the market to that end. The downturn has been extremely long on account of all of this.
If the Fed hadn’t taken the approach it did but rather the government had taken over the failed banks, as it has so often in other cases, employment would not have plummeted. Furthermore, the jobs being created are still not paying nearly enough and are too part time.
It is true that the US has been wiser than other economies by not turning completely to austerity measures; however, we could have avoided austerity measures entirely.
Lastly, the stock market was not nearly Ben Bernanke’s focus to the extent suggested by the article. People who’s focus is on the equity markets consistently overstate the Fed’s focus on equities. The Fed, itself, stressed and still stresses employment, which it knows doesn’t come as much from rises in equities as from other actions. Also, the stock market is likely in a bubble right now (we think so) and will pop (strong to severe “correction”) perhaps sooner than later.
↑ California toughens enforcement of water violations – Water & Drought – The Sacramento Bee
California’s water cops on Wednesday approved emergency drought regulations aimed at forcing water users to act swiftly when told to stop diverting water from streams.
↑ Ypsilanti Township to purchase 15 foreclosed, blighted properties in neighborhood stabilization effort | MLive.com
Habitat for Humanity homeowners have contributed more than $2 million to the local tax base through property tax payments.
In recent years, Habitat renovated 27 homes in the Gault Village neighborhood and says property values have increased so much that they can no longer afford homes there and are concentrating resources in other areas.
↑ Clinton County to sell delinquent properties – Local News – Press-Republican
State of New York
PLATTSBURGH — Clinton County will sell 51 properties at its tax auction July 23.
The properties are being sold after the county foreclosed on them for nonpayment of back taxes.
↑ Butte considers problem of derelict properties
BUTTE — Butte-Silver Bow officials say the recent collapse of a dilapidated building could be the impetus needed to spur leaders to deal with derelict properties.
↑ ekathimerini.com | Key steps for real estate development
The government has taken a series of legislative initiatives in recent weeks that hold the potential to spark a host of investment moves in the property market and the development of holiday resorts around Greece.
↑ 30-Year Mortgage Rates Lowest In One Year; 15-Year Mortgage Rates Drop, Too | Mortgage Rates & News from The Mortgage Reports
…since the Fed’s withdrawal began, mortgage rates have done nothing but drop. The average 30-year mortgage is down by close to one-half percentage point since January; and many lenders now quote rates in the 3s.
One reason is that mortgage origination volume is lower in 2014, and there are fewer mortgage bonds to purchase. Therefore, the Federal Reserve’s purchases as a percentage of all new MBS issuance has remained relatively high.
A second reason is that foreign investors are buying MBS as quickly as they can be sold. There’s been evidence of global economic weakness and mortgage-backed securities have provided a “safe haven” for investors looking to shield against risk.
The result is lower mortgage rates for U.S. consumers.
↑ Build We Won’t – NYTimes.com
…everyone from progressive think tanks to the United States Chamber of Commerce thinks we need good roads. Yet the combination of anti-tax ideology and deficit hysteria (itself mostly whipped up in an attempt to bully President Obama into spending cuts) means that we’re letting our highways, and our future, erode away.
We agree with that.
↑ Bad advice from Basel’s Jeremiah – FT.com
There is indeed an important argument to be had over the right balance to strike between fiscal and monetary reactions to financial crises.
I believe we have relied too much on monetary policy, which does carry with it many of the risks the BIS rightly emphasises. But the notion that the best way to handle a crisis triggered by overleveraged balance sheets is to withdraw support for demand and even embrace outright deflation seems grotesque. The result, inevitably, would be even faster rises in real indebtedness and so yet bigger waves of bankruptcy that would lead to weaker economies and so to further increases in indebtedness.
↑ The Center of the Universe – Blog Archive – 1996 Washington Post article
Michael Johns, 1996:
Perhaps most convincingly, America does have some previous experience with balanced-budget efforts, and it is cause not for celebration but considerable alarm. Without exception, on six consecutive occasions from 1817 until 1930 when government cut spending considerably without simultaneously seeking to stimulate the economy with equally deep tax cuts or other fiscal stimuli, depressions arose. The correlation is a shocking 100 percent. Balanced-budget efforts in America have always preceded national depressions.
…a close look at the relationship between deficits and economic growth in countries around the world reveals that deficit-reduction measures are often followed by downturns in economic growth. Conversely, increases in deficits often accompany economic upturns. In Great Britain, for instance, a reduction in debt from 1989 to 1991 from roughly 44 percent of GDP to 34 percent also witnessed a reduction in GDP during this period from O percent to negative 4 percent. Since 1991, Britain’s public debt has increased to roughly 52 percent of GDP, and economic growth also has risen dramatically to 5 percent GDP in 1995. What such examples demonstrate is that, contrary to the conventional wisdom of balanced budget advocates, there simply is no reason to believe that a balanced budget will enhance economic growth or prosperity, and there is, in fact, good reason to believe that it may do harm.
The 100 percent correlation between previous balanced-budget efforts and national depressions, for starters, needs to be explored further by those who would again lead America down this path. It is likely not coincidental, either, that another, opposite correlation also exists. Periods of significant and sustained economic growth in this country have occurred nearly always in times when the deficit was on the rise.
↑ Why Everyone Is Starting To Freak Out That We Might Be Headed For A ‘Construction Shutdown’ – Yahoo Finance
If the fund dries up, it could have dire consequences for the economy and cost the country hundreds of thousands of jobs, according to some estimates.
These consequences make the fund’s expiration date one of a few deadlines, including the reauthorization of the Export-Import Bank’s charter , that has analysts worried about the economic headwinds coming out of Washington this year.
U.S. Chamber of Commerce (noted for its “conservatism”):
“Some states have decided not to start construction, due to the probable chance that there will be bills they can’t afford and unfinished projects without funding. By failing to improve transportation systems, the conditions of roads will not improve, let alone be maintained. Not only will the population be in danger, but the economic opportunities that highways provide will suffer, too.”
We should spend 10 times what Obama has proposed, and none of it should come from issuing even a single bond but rather debt-free currency.
↑ (In)stability in Special Trade Employment | Eye On Housing
NAHB tabulations of employment data from the Bureau of Labor Statistics (BLS) show that nearly 1.4 million specialty trade (or subcontractor) employees left the industry from 2006 to 2011. In spite of the significant drop in the number of specialty trade employees observed in the BLS data on companies, annual statistics for specialty trade nonemployer firms (one-person firms) have been much less volatile during the same period.
This would reflect much of the “handyman” sector used extensively in smaller maintenance-and-repair projects in the rental-real-estate industry.
How have your handypersons fared? Has it been more difficult or easier to find maintenance staff or contractors?
↑ M6.9 Earthquake Strikes Southern Mexico
At about 6:30 am local time today, a powerful M6.9 earthquake struck near the border of Mexico and Guatemala near the town of Puerto Madero, Mexico, at a depth of 37.3 miles (60 km). At least 30 houses have been damaged or destroyed and 50 houses were evacuated in the region of San Marcos, Guatemala. Two deaths and several injuries have been reported. Landslides, power outages, and disruptions to communications have also been reported in the area.
The quake was felt strongly in the Mexican states of Chiapas and Tabasco. Authorities in Chiapas said there were no immediate reports of major damage. In Mexico City, buildings and light posts swayed, but no damage has yet been reported. The quake was also felt in El Salvador. The U.S. Pacific Warning Center issued a statement indicating that there was no tsunami threat. It is still in the early aftermath of this event, however, and additional reports of damage may well come in.
↑ Sober Look: Window dressing with the Fed’s reverse repo program
If you are a bank or even a money market fund, you probably want your financials to show the maximum amount of your overnight liquidity placed with the Fed’s RRP rather than with other banks. Your balance sheet looks less “risky” this way. And since most financial reporting is done at quarter end (with mid-year and year-end being the most important dates), you want to place your cash with the Fed on the last day of the quarter for one night and then take it out. And that’s exactly what’s taking place currently.
↑ Should You Buy A Home With Knob And Tube Wiring?
Insurance companies are becoming more reluctant to insure houses with this type wiring due to the fire hazards.
Replacement is the right course.
↑ Typhoon Neoguri still powerful, but not as strong as before | Earth | EarthSky
Neoguri is no longer a super typhoon. Latest update from Joint Typhoon Warning Center reduced current sustained winds to 205 kph — top end of a Category 3.
The large Japanese cities of Hiroshima, Kyoto, Osaka, Nagano, Tokyo and Fukushima are expected to get heavy rains. The worst winds, highest waves and the heaviest rains, however, are expected to be confined to the Kyushu and Shikoku islands.
Fukushima’s nuclear plant couldn’t handle a direct hit.
↑ KDLT.com South Dakota News – Federal Help Sought For Flooding And Tornado
South Dakota’s three members of Congress have asked President Barack Obama to declare a major disaster for three counties hit last month by a tornado and flooding.
↑ Business: Washington Post Business Page, Business News
Wildfires blamed in part on climate change are consuming timber in the U.S. West at such a furious pace that half the Forest Service’s budget is now spent fighting them — up from 21 percent in 2000.
Add in the firefighting of other agencies, as well as state governments, and the bill to taxpayers runs in the billions of dollars each year. And it’s growing fast, driven by an urbanizing West as well as warmer and drier summers.
California, the leading wildfire state, has had more than 2,500 blazes break out so far this year, according to its state firefighting agency.
Anthropogenic global warming due to carbon burning is adding to drought problems.
The warming is being adsorbed by the oceans, but how long will the plateauing continue? Can any geoengineering that’s going on stay ahead of the problem? Is any such geoengineering causing it’s own problems such as adding other types of pollution (unhealthy) to the environment?
↑ AIG Would Divest Units, Halt Policy Sales to Avoid Rescue – Bloomberg
If the sale of assets is insufficient to stabilize AIG, the insurer’s main subsidiaries would eventually be liquidated under the supervision of state and national watchdogs, according to the company’s document.
That’s how the 2008 crisis should have been handled rather than via bailouts and most of the QE.
↑ Colfax schools suffer more than $1 million in damage from twister : Dunn County News
A weak Enhanced Fujita Scale 1 tornado that lasted less than five minutes Friday afternoon caused more than $1 million in damage to Colfax schools and the district’s athletic complex on Friday, Superintendent William Yingst said.
“I’ve got a weather radio in each office — nobody had it, including the National Weather Service,” Yingst said. “One of the lessons here is technology is great, but a tornado can come down in a split second. I’m just thankful there wasn’t a Little League game or something. That was the exact field where the bulk of the debris was…Everything here can be replaced or repaired.”
↑ SIOUX CITY, Iowa: Farmers face damage after floods, some may replant | Business | NewsObserver.com
“We have weeks of fixing fence ahead of us, as dozens of poles were pulled out by the force of the water,” said farmer Jack Kruse, of George, Iowa, in Lyon County.
“Our pasture was all underwater,” Whitlock said. “We have a machine shed, and we lost three push lawnmowers. Everything else, our snow blower, our tiller, I’m sure all that’s all done for.”
↑ Officials: Illegal fireworks spark Portland blaze – Washington Times
Officials say a blaze blamed on illegal fireworks has destroyed a southeast Portland home.
So many people fire off fireworks in the most reckless and thoughtless manner. We don’t know the details concerning what if any safety precautions were taken in this case. Regardless, the use of fireworks there were illegal and obviously for good reason.
↑ 2 Companies Accused of Faking Safety Checks at Building Sites – NYTimes.com
A building inspector visited a scaffolding last summer on East 90th Street in Manhattan, where workers were restoring the exterior of an apartment building. The inspector noticed something amiss in the site’s safety log: The safety manager who had supposedly signed the log that day could not have done so; he had recently died.
That oddity led New York City officials to investigate, and on Wednesday criminal charges were filed against two companies that provide safety managers at construction sites. The companies, Avanti Building Consultants and NYCB Engineering Group, were accused of hiring unqualified people to pose as licensed site safety managers.
The companies hired people through Craigslist — hairdressers, short-order cooks, musicians, day laborers — to pretend to be safety managers, court papers said.
↑ Stiglitz: I’m ‘very uncomfortable’ with current stock levels
Stiglitz, a professor of economics at Columbia University, said the recent stock market gains are not a sign that we are witnessing a recovery. Instead, we would see the continuation of a “North Atlantic malaise,” he said.
“Remember, labor force participation is at very, very low levels, much lower than before the crisis. Real wage increases have been very weak, well below what they should be if we were having a robust recovery,” Stiglitz said. “There are lots if indicators that suggest this is a weak recovery.”
He also pointed to growing inequality as a reason for the weak recovery in the U.S.
Our points exactly.
↑ Zombie Properties Continue to Linger Nationwide | DSNews
The company considers a zombie property any property that has “started the foreclosure process but never been foreclosed and the homeowner has vacated the property.”
RealtyTrac found that nationally, zombie properties totaled 141,406 in the second quarter of 2014, accounting for 21 percent of properties in foreclosure. All told, one in every five foreclosures has been vacated by the homeowner before the foreclosure has been completed.
↑ FHA 203k Program for Flood Mitigation | realtor.org
The 203k has been used in flooded areas to rebuild homes, and the coalition wanted assurance that the program could be used for mitigation prior to a disaster. In their response, FHA confirms that, “the mitigation of flood risk to an existing home either through relocation or elevation of the existing structure is permitted by the 203k program.”
↑ Calculated Risk: Is Inflation Coming?
…capacity utilization was close to 83% in 1998, and YoY inflation averaged 1.5%.
So I don’t think the first graph is convincing that inflation is “right around the corner”. (the last two graphs are from a small survey and also not convincing).
My view is inflation is increasing a little (as was expected), but is not a concern this year.
↑ Inflation Hysteria Redux – Tim Duy’s Fed Watch
Bottom Line: If you are making a short-term bet on higher headline inflation, primarily you are making a bet on energy and food. That bet is about the Middle East and weather, not monetary policy. I don’t have an opinion on that bet. If you are betting on inflation over the medium-term, primarily you are making a bet on higher core inflation. More to the point, you are betting against the Fed. You are essentially betting that the Fed will not do what it has done since Federal Reserve Chair Paul Volker – tighten policy in the face of credible inflationary pressures. I would think twice, maybe three times before making that bet.
We would not make that bet regardless.
↑ Top-Rated Los Gatos Restaurant Manresa Damaged in Fire | NBC Bay Area
Was it accidental or arson? One of the most acclaimed restaurants in the country is shut down Monday night. Flames quickly climbed up the wall of Manresa Restaurant in Los Gatos Monday morning.
↑ Atlanta Fed’s Altig Talks Economic Rebound – YouTube
A good overview:
In a recent ECONversations webcast, our research director offered his assessment of the economy. He notes it is back on track after a disappointing first quarter, with business investment poised for a rebound.
Hang in there. He does get to the real-estate market.
↑  Dennis Gartman weighs in on US jobs & Austin Fitts on legitimacy of status quo – YouTube
[At 4:55:] Erin sits down with Dennis Gartman of the Gartman Letter to talk about the recent job numbers and the overall health of the US economy. Gartman looks at taxes to see economic activity, and he sees reasons to be positive.
Dennis presents a very interesting mix of optimism and realism he backs up with data. We would, however, like to hear more concerning the demand side versus the supply side of the data he cited.
↑ [Recommended] Zoning for Dollars – YouTube
The timing has never been better to buy properties and rezone them to increase the value. Fortunes have been made rezoning properties to higher and better uses. Join show host Michael Bull as he interviews leading zoning attorneys [Attorneys Julie L. Sellers and Doug Dillard of Weissman, Nowack, Curry & Wilco] on best practices and winning strategies to create value by rezoning properties.
This one is longer than most but well worth it. It starts out slowly but never become frantic while delving into some very interesting aspects of the zoning-application process and more.