Opening Comments
My last note was entitled, Bal Harbour-Shopping for Billionaires and received a lot of feedback. Some comments from readers after my last report. “Your newsletters are by far the most useful, informative and purposefully entertaining pieces that I’ve read in my 50+ years on earth. Keep up the great work and thank you for sharing.” Another one was “"We did Maria Tash too and I had a meltdown. Literally.” The most opened links were: Eric Trump stumbling in court and the story of hackers helping someone gain access to their crypto account with $235mm in it. My comments on the restaurant, 388 elicited a big response. People loved the Velcro Shoes/Walker angle given the older crowd.
I received my real estate license and hung it at Douglas Elliman after considering a few various real estate brokerage firms. My good friend, Devin Kay, is an agent there. I also had the privilege of meeting with Howard Lorber, President of Vector Group and Chairman of Douglas Elliman last week after a loyal reader (Billy) made the introduction. I am working with Rosen Report readers who want to buy or sell from Miami to Jupiter, Florida and currently have a couple clients looking at high-end homes in South Florida ($8-10mm and $15-18mm). If I do not feel I am the utmost expert on an area, I will bring one in to partner with me. The most important thing is if you work with me, you will get the best attention and the right deal and I have some amazing partners in all the South Florida markets. I can also refer people across the country to friends in various markets. I am very well-versed on the R/E markets and if I can help, let me know. If you think the Rosen Report is valuable info and enjoy it, refer me to your friends both the report and my R/E services. It will be appreciated. As an aside, on the 1st day after receiving my license, I showed 4 homes (3 off-market) to a buyer (loyal RR reader) in the $20mm range. The Power of the Rosen Report.
Two reminders. The first is to please send me story ideas, as I do this alone and there is no way I can find all of them. Many new readers have been contributing a ton, thank you. My long-time readers know the drill. Also, remember, you need to hit, “View Entire Message” on many servers to see the full report. You don’t want to miss the R/E section!
Picture of the Day-Uber Rates by City and NYC is Most Pricey
Markets
3rd Q Earnings Beat
Interesting Economic/Consumer Charts
US Imports/Exports-Great Charts
Art Auctions
High-End Boca Cooling
US Housing Market
Affordability Concerns
Foot Traffic By City
R/E Commission Lawsuit
Pictures of the Day-Uber Rates By City
Long gone are the days of subsidized Uber rides. The good old days when a bunch of car services (Juno, Uber, Lyft, Via…) all competing for your business are no longer. I took Ubers in Boca, NYC, and Houston recently and need to tell you that NYC is the offensively priced Uber capital. I took an Uber 1 mile for $30. I looked at my trips to and from the airport and on a per-mile basis, NYC Ubers were multiples of everywhere else. NYC was $6/mile, while Houston was only $1.48/mile and South Florida between $1.84-$2.59/mile. When I lived on the Upper East Side, I could get an Uber to LaGuardia for $20. I would guess the price is now $50+.
Makoto Time
One of the things I love about NYC is the food and the relationships I have made over the years with chefs, hosts, and the staff at places I ate at regularly. I took my son, Jack, to a place in the West Village, “Upholstery Store,” one night and we sat in the back next to the open kitchen. Unfortunately, the restaurant has since closed. I introduced my children to good food at an early age and my son had a shocking food game for a then 10-year-old. Jack saw the chef walk out of the kitchen and asked if he was Japanese and I said, “Yes, he is from Japan and his name is Makoto.” I had been there and had met the chef a couple of weeks prior.
I asked Makoto to swing by our table and Jack told him about all the restaurants in Japan he wanted to try and Makoto was so impressed, he did not know what to say. What 10-year-old American kid can name 5 Michelin-star restaurants anywhere, let alone in Japan?
Below, Jack is in the kitchen at Le Bernardin (3 Michelin Stars) for his 11th birthday.
Jack asked Makoto about JIRO ONO, the 1st 3 Michelin star restaurant in Japan which is in the subway. As a result, Makoto made us special dishes not on the menu. My son’s, culinary knowledge helped me develop my relationship with a chef due to his love of food. It was a fantastic meal and Jack wanted to go back. I went back with the family constantly, sitting at the table in front of the chef. I would surprise Jack from time to time and tell him we were going to see Makoto tonight and he was preparing something special for us. Jack’s eyes would open wide and he would smile knowing there was going to be an amazing meal. Makoto always took care of Jack and treated him like royalty and the staff knew to hook us up.
I became friendly with Makoto and would bring in clients to dine and we were treated as celebrities. One dinner was with my friend who I wrote the piece, “Frenemies” last June. I would get recipes from Makoto and I felt his lobster salad was the BEST in the city. Although he did not give me 100% of the details, I filled in the blanks and created an offshoot of his dish, as I often do after trying food and speaking with the chef. I recently made this meal of homemade lobster salad, homemade chips and sauteed carrots with garlic. If feel slightly short of Makoto’s, but close enough for government work.
I chopped up celery, Italian Parsley, shallot, tarragon, and chive and added, lemon zest and lemon juice with some mayo and Dijon mustard. I steamed 5 lobster tails for 8-9 minutes with shells on, and added ice water to cool them down. I took off the shells and chopped up the lobster into small pieces and then added it to the ingredients above which were chopped in a food processor. I placed in the fridge for a couple hours prior to serving. For the bread, I purchased some high-quality small loaves and melted some butter in a pan and added the bread for 2 minutes on medium heat. I never measured anything, just used judgment. Tarragon is strong; don’t use too much.
I had so many relationships with NYC chefs, I was treated like a king when I went into certain establishments. Yes, NYC has the best food. I just wish the politicians could get their act together on crime, homelessness, taxes, cost of living, traffic, subways, woke mandates and that pesky weather. In the meantime, I am cooking up a storm down South Florida.
As an aside, Makoto works with his wife at their own bakery, Buttermilk Bakeshop in Brooklyn. If you are around, please stop in and let me know how it tastes. Anything Makoto touches is special, so I imagine it is amazing and will try to get there soon. Tell him the Rosen Report sent you. He was so nice to me and Jack, I would love to see him and his wife do well.
Quick Bites
Treasury yields are down sharply (45-50bps) on 10 and 30-year bonds over the past couple weeks. The Fed is likely done raising rates, Bank of Japan kept the negative rate policy, Euro inflation was less than forecast and the US jobs data was softer than expected and all those contributed to the Treasury Bond rally (lower yields). The yield decline has helped buoy stocks giving the S&P and Nasdaq their longest winning streaks in two years. Check out the S&P 500 chart since late October (+6.5%). Oil, on the other hand, has been smashed since hitting $94 at the end of September (now $76) given demand issues in the US & China. Biden, start refilling SPR.
Earnings for the nation’s biggest companies are poised to show their first collective increase in a year, helped in part by strong consumer spending this summer. The members of the S&P 500 are on pace to collectively report a 3.7% rise in earnings for the year’s third quarter, the first such increase since the year-ago third quarter. Revenue is on track to grow 2.3% from a year ago, according to FactSet. I do not see how this is sustainable. The consumer has been more resilient than I expected. Just can’t keep going. Good interactive chart in the WSJ link. Nice graphs/charts.
I have a few charts on the economy/consumer. M2 money supply is contracting at the deepest levels EVER seen. Think of the impact of massively increasing M2 in 2020 and what that did to the market. Now that it is collapsing, there are no consequences? Savings as a % of national income is now contracting. The previous 2 contractions coincided with the: - 2008 Financial Crisis - 2020 Pandemic. US GDP came in at 4.9% QoQ. Much of the growth came from government spending and investments related to the inflation Reduction Act (Stupid Name) and the CHIPS act. Nonresidential private investment was largely negative over the last quarter (3rd chart).
One of my biggest contributors, Mike, sent me some story links that included these charts which I found interesting. The first chart shows the total value of US imports by country and the 2nd chart shows the value of US exports by country. Note the size of the trade deficit with China.
New York’s all-important November auction season begins next week, when hundreds of Impressionist, modern and contemporary artworks—many valued at $1 million or more—are set to hit the auction block at Christie’s, Sotheby’s and Phillips. The three houses’ sales are expected to total roughly $1.9 billion to $2.5 billion. “The market is obviously down,” says Alex Rotter, the chairman of Christie’s 20th century and 21st century art department. “Do I want to say that? No. Do I have to say it to be believable? Yes.” There are some amazing works by Warhol, Rothko, Magritte, Mitchell, Twombly, Johns, Richter, Monet and many others. Given the new world, it will be interesting to see clearing prices. I am leading an art discussion in Miami on November 16th for 3i Members. Good article on the upcoming auctions entitled, “Picasso, Monet and… Ferrari? New York auction houses eye monster sales.”
Israel Headlines
Israel-Gaza war: Assassination attempt on Palestine president Mahmoud Abbas kills one
Pro-Palestinian protesters worldwide call for Israel's elimination
Hamas’ plan worked. Not only did they kill Jews, but they also unleashed hate on the religion on a global basis. I knew people hated Jews, but the global level of disturbing events was something I did not see coming.
Escalating Militia Attacks on U.S. Troops Risk Washington-Tehran Confrontation
Number of troops injured in Middle East drone attacks now at 46
How Israel shot down a ballistic missile in space for the first time
The article outlines that Iran gives Hamas $100mm/year and has given them $16bn since 2012. The US continues to give Iran money to fund terrorism.
Hamas leaders worth staggering $11B revel in luxury — while Gaza’s people suffer
Nikki Haley: Peace is not possible with terrorists — Hamas must be destroyed
A lot of Jews I know were staunch Democrats who never would consider voting Republican. Based on the emails, calls and texts I have been receiving, I can tell you that more once die-hard Jewish Dems feel abandoned.
Hamas ‘puts fighters on evacuation lists to stop wounded Palestinians leaving’
US Navy Ohio-class submarine loaded with cruise missiles surfaces for photo in the Middle East
Interesting ramifications of the 2019 order could result in lawsuits to schools that are not protecting Jews. How ironic would it be if some of these schools were to be sued over the treatment of Jews given Jews have donated BILLIONS to many of these institutions?
I have a lot of college kids who read the Rosen Report and many are at the top schools in the country. They are scared and many are hiding the fact that they are Jews.
UPenn alerted FBI to antisemitic threats on campus, school’s president says
Elderly Jewish man dies after confrontation with pro-Palestinian protester at California rally
The Pro-Palestinian protester “stalked” Paul Kessler before the alleged fatal punch. No one has been arrested. Its LA, so expect the person to have no bail and serve no time for a hate crime murder.
Jewish woman stabbed in her home in Lyon, France
A swastika was drawn on her door. No place is safe, but I will not be traveling to Europe near term.
‘We don’t feel safe.’ As antisemitism threat rises, South Florida’s Jews arm themselves
Netanyahu suspends Israeli minister over Gaza nuclear comment
Heritage Minister Amihay Eliyahu was suspended “until further notice,” for voicing the idea of Israel carrying out a nuclear strike on Gaza.
A woman and 3 children are killed by an Israeli airstrike in south Lebanon, local officials say
Obama says both sides to blame for Israel-Hamas conflict: ‘Nobody’s hands are clean’
Other Headlines
Citigroup considers deep job cuts for CEO Jane Fraser’s overhaul, called ‘Project Bora Bora’
Executives will see cuts beyond 10% because of Fraser’s push to eliminate regional managers, co-heads and others with overlapping responsibilities, they said. Citi has been a major disappointment in recent years. See stock returns.
WeWork, once valued at $47 billion, files for bankruptcy
The clown show of Adam Newmann and SoftBank on this deal is truly embarrassing. One article suggests WeWork will break 40 leases in NYC immediately and many others are being considered. Just what NYC needs, more available space.
Datadog stock surges 28% for its best day ever after cloud company beats estimates, lifts guidance
Shares of Roblox pop 15% after company’s third-quarter results beat estimates
Robinhood drops 14% after reporting big declines in trading volume and revenue
Total credit card debt in the US rises by $48 billion in Q3 2023, to a record $1.08 trillion.
This means that total credit card debt is now $300 billion since 2020. The average consumer is now spending $1,600/month on their credit card.
Despite the decline, used cars are +33% since the start of the pandemic.
'Sandwich generation' is in a jam and struggling with caregiving costs, survey shows
The statistics in the article are concerning.
Trump rails against judge, AG’s office during testimony in $250 million fraud trial
73% of Americans say "things are going badly" in the United States, a new record high — YouGov poll
Democrats prevail in Kentucky and Virginia. Ohio protects abortion rights
This is a bad sign for Republicans and a blow to Youngkin.
Fact check: Biden twice repeats his false ‘Joey, baby’ story about a deceased Amtrak conductor
This is the 11th time Biden has repeated this untrue story according to CNN. Call me crazy, Gavin Newsom could be the Democratic candidate. Even the liberal media is calling out Biden and his demented ways.
The girls teeth were knocked out. Does the boy feel good about himself?
Woman dies after taking Ozempic to slim down for daughter’s wedding: ‘She shouldn’t be gone’
Elon Musk unveils Grok, an AI chatbot with a ‘rebellious streak’
An AI just negotiated a contract for the first time ever — and no human was involved
Billionaire Taylor Swift breaks vinyl sales record: These are her biggest milestones from 2023
She is truly untouchable.
I study highly successful people for a living. Here are 11 little habits they practice every day
I do 10 out of 11. Not bad.
So much pressure on kids today to get straight As, perfect Board Scores, excel in sports, music, debate, language, chess… I have a 16 and 17-year-old and agree with the advice in the article. Kids need to enjoy life and everything cannot be so serious. Between sports, guitar, Spanish, singing lessons, guitar lessons, piano lessons, tennis, tutors, ACT/SAT prep…you can drive yourself crazy. There needs to be fun time.
The 12-year-old girl was awarded the top prize out of 65,000 students.
Harvard has a secret back door for ultra-rich kids with lousy grades
Education Department Investigating Harvard, Yale Over Foreign Funding
Officials accuse schools across U.S. of soliciting funds from foreign governments, companies known to be hostile to the country
‘Holy Grail of shipwrecks’ to be exhumed off Colombia with $20B sunken treasure
The ship sunk in 1708 and is believed to be filled with gold, silver and emeralds.
'We're losing': Ukrainians reel from war chief's stalemate warning
Real Estate
Although high-end homes in sought-after Miami and Palm Beach Island remain elevated with limited inventory, I am seeing additional pressure in other South Florida markets. Let’s look at high-end Boca Raton. My community of Royal Palm now has 39 homes officially listed with many more “off-market listings.” When I moved down in 2017, there were 71 homes for sale and it got down to 4 in December of 2021. Inventory is building, homes are staying on the market longer, carrying costs are rising and I feel the slowdown in high-end sales will lead to price reductions in the coming months. The last real new home sale over $20mm closed in June at $22.6mm for a house originally listed at $35mm. Huge lot, waterfront, amazing house, great builder. The market has only weakened since then and too many homes are asking too much in my opinion. One offsetting factor is the season is here and more people come down pushing showing traffic up which should lead to a pickup in transactions. As more volume happens in the coming months, I will be updating you on the developments.
Concerning Bloomberg article entitled, “The US Housing Market Has Become an Impossible Mess.” Americans with cheap loans don’t want to sell. Those without homes can’t afford to buy. Will anything budge? The Federal Reserve Bank’s aggressive tightening since last year has driven the interest rate on a 30-year mortgage close to 8%, the highest point in almost a quarter century, adding some $1,100 to the monthly payment on a $400,000 loan. That might be manageable if higher rates led to lower prices. But the impact on supply is even more drastic because of the so-called lock-in effect: Homeowners are unwilling to let go of cheap mortgages they got when rates were scraping bottom. This has resulted in the least affordable housing market since the 1980s, with sales approaching record lows. Mortgage rates fell back to 7.6% according to this article.
Home prices have become so prohibitive in the U.S. that even rich, young Americans are ditching the dream of homeownership … for now. The average monthly mortgage payment on a new home is now 52% higher than the average apartment rent, according to a report from the Wall Street Journal (WSJ), based on data from real estate firm CBRE. On top of those extortionate borrowing costs, house prices are so high today that prospective buyers need an annual income of almost $115,000 just to afford a median-priced U.S. home. That is almost $40,000 more than what the typical household earns. The WSJ worked out that someone taking out a new 30-year mortgage on a $430,000 home, with a 10% down payment, would have to pay $3,200 every month — a shocking 60% more than if they’d bought the exact same house three years ago. Apartment rents have only gone up by 22% over the same period. The nationwide median rent currently sits at $1,353 per month, according to November rental market data from Apartment List. Check out the chart below showing mortgage applications.
Foot traffic in New York City’s business districts is still down 33% from what it was before the COVID-19 pandemic — one of the lowest recovery rates in the country, a new survey reveals. The University of Toronto’s analysis measured the number of visitors, including shoppers and tourists, plus residents and workers in the so-called “downtown” or business/tourist districts in major cities in the United States and Canada. Lower Manhattan, including the Wall Street financial district, and Midtown, featuring Times Square, were considered the Big Apple’s “downtown” district for the study. Researchers measured foot traffic through mobile phone presence, comparing March to mid-June in 2023 to the same period in 2019. Other major cities that recovered most or considerably more foot traffic from the pre-pandemic period compared to the Big Apple include Miami (92%), Nashville (88%), Atlanta (85%), Los Angeles (83%) and San Diego (80%).
I thought this Fortune article about the ramifications of the R/E commission lawsuit was interesting. Home buyers and sellers had a big week. Significant changes to how—and how much—they pay real-estate agents became more likely after a $1.8 billion verdict on Tuesday against the National Association of Realtors and large residential brokerages.
Rosen Report™ #629 ©Copyright 2023 Written By Eric Rosen
