Linking ≠ endorsement.
↑ Where Do Landlords Make the Most Money? | Zillow Real Estate Research
…even if homeowners fall short on a monthly basis, they often come out ahead in the long-term after eventually selling their home. In fact, of the top 50 metros analyzed by Zillow, homeowners in several metro areas—such as San Jose—who choose to rent out their homes pay more in mortgage payments than they receive in rental income. However, they more than recover those short-term losses with the long-term gain from home value appreciation when they eventually sell.
To facilitate this comparison, several assumptions were necessary. In particular, we assumed homeowners purchased the property five years ago, in June 2009, with a 30-year fixed rate mortgage, a 20 percent down payment, and an interest rate of 4.5 percent, roughly the rate that prevailed at the time.
Some of you no doubt already understood that what Zillow has represented here is buying at the bottom and then calculating the appreciation after a period of recovery that in some regions of the country, was a full recovery.
If the data were to begin at an average year/month and end on an average year/month and were to exclude the outliers (tech bubble markets for instance), then appreciation figures would be more useful, unless one were planning to time the market. When will the next bust occur, and will you have the cash reserves to capitalize on the opportunity?
That said, for those who study real estate investing and don’t overly gamble but retain a reasonable percentage of equity, real estate investing if managed well, can be a great vehicle for wealth creation.
Thank you, Kevin
"Where Do Landlords Make the Most Money?" https://t.co/wK1gJWqHsY via Zillow Real Estate Research
— Kevin Simpson-Verger (@KevinismyBroker) August 15, 2014
↑ San Diego real estate cools off: Will rest of California follow?
San Diego sales volume fell 18.5 percent in July from a year ago, a far deeper slide than the rest of the state. Prices are still higher than last year, but the gains are easing. The median price of a San Diego home hit $445,000 in July, up 6.6 percent from a year ago. The streak of double-digit annual home price appreciation in much of California ended in June.
↑ [Insurance related] How poor credit costs you on homeowners insurance
California, Massachusetts and Maryland—prohibit insurers from using credit scores in their insurance calculations.
↑ NFHA Links Residential Segregation To Financial Discrimination
the National Fair Housing Alliance (NFHA) released its 2014 Fair Housing Trends Report, “Expanding Opportunity: Systemic Approaches to Fair Housing”. The report highlights how the federal government and nonprofit organizations have increased systemic fair housing enforcement through broad-based approaches and traditional case-by-case practices. The report also peers into housing discrimination on a regional level, drawing connections between the rate of segregation and the level of reported housing discrimination.
↑ Zillow-Trulia Merger: Will It Change How We Buy and Sell Real Estate – Businessweek
Change in the real estate business is inevitable. When buyers are finding homes on their phones, taking virtual tours, and securing loans online, brokers add less value to the transaction. Likewise, sellers can prep their houses and find buyers with a few clicks of a mouse and no longer need to lean as heavily on an agent. As Zillow and Trulia (Zulia? Trillow?) build an even larger audience, they will finally have to push through structural changes into the market, or their commerce-oriented competitors will do it for them.
↑ Exclusive Research: Resident Lifestyle Preferences, An Insight – Multifamily Executive Magazine
Worth reading; packed with info: Joseph Batdorf:
…27,642 apartment residents who spelled out their lifestyle preferences in an exclusive survey by J Turner Research in partnership with Multifamily Executive. This first-of-its-kind industry report, titled “Resident Lifestyle Preferences: An Insight,” highlights the lifestyle desires of apartment residents nationwide.
Our findings cover a broad range of topics critical to rehabbers, including renter’s attitudes, feelings, and behavior regarding homeownership, social life, the environment, health and fitness, neighboring stores, cooking, and more.
“Do not [install] low-flow toilets—it just means I flush eight times instead of one.”
We included that last bit because it made us laugh. We don’t agree with it, but still.
We noted that covered parking and security issues weren’t addressed. We’re also waiting until electrical outlets for recharging cars becomes an issue.
We definitely agree with the noise findings: huge issue! It isn’t just indoor noise either. Loud tenants outside late at night when others are trying to sleep with their windows open for instance can be exceedingly annoying. Then their are the engine revvers and the cars that seem to be constantly competing in stereo wars.
↑ Wis. company ordered to pay $47K over asbestos removal | WashingtonExaminer.com
MADISON, Wis. (Legal Newsline) — Wisconsin Attorney General J.B. Van Hollen announced a judgment on Friday against a Menasha business that allegedly failed to safely remove asbestos from a facility it purchased to renovate.
↑ 3 arrested in more than 20 Moore County break-ins – SFGate
SOUTHERN PINES, N.C. (AP) — Three people are in custody after investigators in Moore County say they committed nearly 30 break-ins.
↑ Many flooded basements won’t be covered by insurance | Detroit Free Press | freep.com
We won’t add any editorial comment to this other than to say you should read and plan accordingly.
For many metro Detroit homeowners with water-soaked basements, the aftermath of this week’s flooding has been an unpleasant learning experience in the fine print of their insurance policies.
Oh, and we wouldn’t call it “fine print.” You’ll find that the print isn’t any smaller where the policy excludes things.
A few days ago we mentioned that to help avoid sewer backups like this, install an anti-backup valve.
↑ Sinkhole forces some Greer families to leave homes | CharlotteObserver.com
GREER, S.C. The city of Greer has closed an apartment building after a sinkhole opened behind the complex.
↑ Laura Tyson makes the economic and fiscal case for higher US infrastructure spending. – Project Syndicate
Investment in public infrastructure in the US has plunged to less than 2% of GDP, its lowest level since the federal government started tracking these data in 1992. The American Society of Civil Engineers (ASCE) gives a grade of D+ to infrastructure in the United States, reflecting both delayed maintenance and underinvestment. An estimated one out of every nine US bridges is structurally deficient, and 42% of urban roads are congested, costing the economy an estimated $101 billion a year in wasted time and fuel consumption. Deficient and deteriorating transit systems impose another $90 billion in annual economic costs.
The ASCE calculates that the US needs about $1.7 trillion of investment in surface-transportation infrastructure through 2020 to achieve a passing grade. It projects an investment shortfall of about 50% based on current funding levels.
Most economists agree that underinvesting in infrastructure is economically unwise and fiscally irresponsible.
We agree with all of that but not with the idea of relying upon gas-tax hikes and private investment/loans.
We are shifting to electric vehicles. Gas taxes don’t work well there. Yes, they would help reduce carbon burning, but that’s not the issue here. The issue here is building/repairing infrastructure.
Shifting to a tax based upon miles driven and vehicle weight would just jockey costs around and continue hurting people who make a living driving, getting from one place to another.
The gap is somewhat being made up via general revenues. Why not just fund the needed infrastructure completely from general revenues?
Better yet, why not fund it via Greenbacks (interest-free currency) the way Abe Lincoln funded the Civil War rather than borrowing from foreign banks at 25-30+%?
↑ [Recommended] Facts About Immigration and the U.S. Economy: Answers to Frequently Asked Questions | Economic Policy Institute
The positive view:
Immigrants and the economy
4. How much do immigrants contribute to the economy?
One way to quantify immigrants’ contribution to the U.S. economy is to look at the wages and salaries they earn, as well as the income of immigrant-owned businesses, as a share of all wages, salaries, and business income in the United States. (See Table 1.) For the United States as a whole, immigrants’ share of total output was about 14.7 percent over 2009—2011. Note that this is actually larger than immigrants’ 13 percent share of the population.
↑ Structural Reforms Can Help Japan’s Post-Consumption Tax Blues | iMFdirect – The IMF Blog
Japan’s GDP declined by almost 7 percent in the second quarter, more than many had forecast including us here at the IMF. Many cite the increase in the sales tax this April for this decline. But that is not the full story.
Abenomics needs to stay the course on fiscal and monetary policy
With the consumption tax increase, Japan has taken a first step towards addressing its biggest long-term challenge—reversing the rise of the public-debt-to GDP ratio at over 240 percent of GDP. This and next year’s consumption tax rate increase to 10 percent, would reduce the deficit by about 2 percent of GDP—an important down payment toward restoring fiscal sustainability. Fiscal risks will, however, remain large given the still sizeable future consolidation need of another 6 percent of GDP. To limit the risks of a sudden rise in interest rates, adopting a concrete fiscal strategy beyond 2015 is urgently needed and would afford the government to respond flexibly to downside risks.
Well, as our readers know, we were right that the sales tax hike would seriously slow the Japanese economy.
With all due respect, here we have Stephan Danninger apparently misunderstanding the fundamentals. Stimulus with tax hikes is a tug-o-war. It made no sense and won’t in the future.
Without the tax hikes, the economy would have grown enough to reduce the deficit.
↑ Secular stagnation: Facts, causes, and cures — a new Vox eBook | vox
Coen Teulings, Richard Baldwin:
As Richard Koo argues: “During [balance sheet recessions], monetary policy is largely ineffective because those with balance sheets underwater will not increase borrowing at any interest rate … The government also cannot tell the private sector not to repair its balance sheets … This means the only thing the government can do to offset the deflationary forces coming from private sector deleveraging is to do the opposite of the private sector, i.e., borrow and spend …” Monetary policy alone can only solve the problem at the cost of bubbles and financial instability.
Koo is not very optimistic that the most troubled part of the world economy, Europe, will succeed in a policy change: “On the political front, the unfortunate fact is that democracies are ill-equipped to handle such recessions. For a democracy to function properly, people must act based on a strong sense of personal responsibility and self-reliance. But this principle runs counter to the use of fiscal stimulus, which involves depending on ‘big government’ and waiting for a recovery.”
We agree that public-sector spending is what’s needed. We disagree that the funds must be borrowed rather than simply created by Congress per the US Constitution. We also disagree that such governmental spending is incompatible with democracy. In fact, we argue that it’s more democratic provided the elected officials spend on what the people voted them in to accomplish.
Why do you think it is that none of these economists ever discuss Greenbacks?
↑ The Latest Housing Affordability Index
At the national level, housing affordability is down for the month of June due to higher prices and qualifying income levels despite the lowest mortgage rates of the year.
Prices and mortgage rates need to fall, or wages and hours need to rise.
↑ The growing disconnect between GDP and wellbeing | Forum:Blog Forum:Blog | The World Economic Forum
GDP fails to account for changes in a country’s stock of assets, making it difficult for policy-makers to balance economic, social and environmental concerns. Without better measures of well-being — including health, education and the state of the natural environment — policy-makers cannot gain the insight needed to ensure the long-term health of the economy and the individuals who comprise it.
True, but let’s be sure not to become Luddites.
Technological advancements if handled correctly can more than make up the difference so that everyone’s quality of life/living standard can be higher than the highest is now and without doing more harm to the environment but the exact opposite: cleaning it all up.
↑ Housing recovery ‘changing shape,’ hinges on job growth, report says – LA Times
Now that the so-called “rebound effect” is mostly over, price gains in the next couple of years will depend largely on the strength of local job markets, Trulia chief economist Jed Kolko said in the report.
“As prices continue to return to long-term normal levels the rebound effect will continue to fade,” Kolko wrote. “Local housing markets will rely more on jobs and wages to support housing demand and home prices — which is another step on the road to recovery.”
Fannie Mae chief economist Doug Duncan, though, said the fundamentals of the economy — particularly six straight months of solid job growth — boded well for the housing market.
“We have always believed that for the housing recovery to be considered robust, we will need strong and sustained full-time job and income growth,” he said. “If these trends continue, they could lead to some upside in housing in 2015.”
Jed Kolko has that right.
↑ How Risky Is China’s Shadow Banking System?
Yi Wen and Maria Arias:
Including other sources of informal financing,2 the Chinese shadow banking system at year-end 2012 was about 36 trillion yuan, or 69.3 percent of GDP. Trusts and wealth management products, the two largest components, accounted for 14.5 trillion yuan, or 28.1 percent of GDP. For comparison, shadow banking in the U.S. was 170 percent of GDP.
The one thing most people seem sure about is that nobody can be sure about the numbers coming out of China.
This is one of the most optimistic pieces we’ve seen.
↑ American Residential prices first REO-to-rental securitization | HousingWire
American Residential Properties (ARPI) presented itself as the newest player in the REO-to-rental securitization game, when it announced that it was bringing a $342.67 million securitization to the market.
At the time, the offering, American Residential Properties 2014-SFR1, was the third REO-to-rental securitization to hit the market in as many weeks, demonstrating the growing popularity of the asset class.
↑ Europe’s Greater Depression is worse than the 1930s – The Washington Post
Europe hasn’t recovered, because it hasn’t let itself. Too much fiscal austerity and too little monetary stimulus have, instead, put it more than halfway to a lost decade that’s already worse than the 1930s.
It’s a greater depression.
↑ Wayne Co. could reclaim nearly 20K auctioned properties over unpaid bills | The Detroit News
Detroit— A Wayne County judge on Friday gave county officials the authority to take back nearly 20,000 tax foreclosed properties auctioned off to new owners who also didn’t pay bills.
The Wayne County Treasurer’s office said it wants to get tough on tax deadbeats, many of whom buy properties in bulk at the county sale and then milk them for rental income until foreclosed again.
↑ San Jose: Real estate company owners sentenced for $5 million Ponzi scheme – San Jose Mercury News
The founders of a South Bay real estate company who stole almost $5 million from investors in a real estate Ponzi scheme were given lengthy prison sentences.