Opening Comments
Picture of the Day-Crocodile Eating a Zebra
Travel Nightmare-Delays, Cheese Whiz, Lost Luggage…
Quick Bites
Markets/Fed, JPM on Markets, Inflation:
Wholesale Prices, Used Cars, Infrastructure, NYC Garbage
Wall Street Bonuses Increasing, China & Germany Slowing
DeSantis Immigration Policy
Serial Pick Pocket NYC, Trump Rally
Mark Meadows Jan 6th Probe, US Political Divide
Other Headlines (expanded crime examples)
Virus/Vaccine
Data-Significant Deterioration, but Recent Flattening-Charts
Omicron is Gaining Steam
1st Omicron Death in the UK
Real Estate
My General Comments-CRAZY High End Stories Continue in Florida
Citadel to Florida?
Economists on US Housing Market
Record US Homeowners Equity ($9.4 Trillion)
NY Multifamily Construction Bill in the Works
Opening Comments
Thank you for all the support on the podcast. The feedback was positive, but did receive some constructive comments to improve it. In hindsight, the staking discussion should have been at the end. In future podcasts, I will keep it shorter and be sure to have more banter. Unfortunately, the open rate of the podcast itself was lower than it should be based on the open rates of the report and the feedback from those who watched it. Some readers could not find the link. The podcast was meant to be informative, and I believe there are big takeaways from it. Please watch it and if you are a beginner, skip from 5-20 minutes during staking, as everything else is relatively straightforward. The implications are serious. Below, the picture of “Podcast” is the link to the video. Rewind it to start it at the beginning. I am not sure why Youtube starts it at 20 minutes. PICTURE BELOW IS THE LINK to the CRYPTO PODCAST.
With the holidays, I plan on potentially taking some down time if the news cycle allows. I have been writing this with almost no breaks and could use a little rest. These pieces are fun and hopefully the readers enjoy them, but take me a long time to research, write, and edit. The connections I have made have been fantastic and appreciate the support. Now go and watch the podcast!
The pandemic has taken away so much from everyone. I am a social person and enjoy seeing friends at holiday parties. There is party I love in NYC this weekend and I purchased a plane ticket, but may not go given the recent spike in data. I hate that COVID may take away another thing I enjoy.
Today begins preparation for a Thursday morning colonoscopy. My mother died of complications from colon cancer and due to the pandemic, I am two years overdue. Let this be a reminder to the Rosen Report readers to be sure not to put off preventative screenings any longer.
Picture of the Day
I am always amazed by nature and survival of the fittest. This crazy picture shows a massive crocodile eating a zebra in Kenya. The link has some remarkable nature photos of animals.
Travel Nightmare-Delays, Cheese Whiz, Lost Luggage…
It has been many months since I wrote about the horrific travel for my son’s golf. It seems my demented readers get a laugh out of my travails. What is wrong with you people? Who likes to laugh at another person’s pain?
As mentioned in my last note, I took my son, Jack, to Memphis Sunday night for a golf lesson. Our flight was delayed out of Miami and left at 5:30pm. I am pretty sure the Miami International Airport is one of the worst in the country. Thankfully, Jack speaks Spanish, as I do not believe they allow English to be spoken at the airport- despite the fact that it is in the USA.
The flight was full, and I sat next to a young couple (dating, not married) who were in Florida for a friend’s wedding. Unfortunately, behind us were two young women who sounded as though they were sorority sisters. I was trying to sleep as I had a long night ahead. The conversation sounded something such as this: “My God, its like, my like wedding was like the most beautiful… EVER. Like, my bridesmaids’ dresses were like totally awesome because they were shimmering gold. Like everyone like loved the cake. You know, my mom is like really into cake, so we like ordered the most beautiful five layer cake ever. Like you know, everyone like loved it. Like the band was like amazing.…” The conversation based on the word, “like” did not stop and despite the fact that I kept giving the ladies my Manson Lamps (evil stares) through the seats, nothing deterred this very thoughtful and informative wedding discussion, which was about as fun as listening to nails on a chalkboard. I did not sleep and considered jumping out the window at one point, but my loyalty to my readers brought me back from the edge.
When we landed, I said to the young lady next to me, “Did you get any wedding ideas?” She laughed and suggested she wanted to stab them with a fork in the throat to prevent them from talking.
Despite checking in 1.5 hours prior to the flight, when we landed in Nashville, we waited for Jack’s golf bag and it did not come out. The bag did not make the flight and would arrive three hours later according to the AA employees. How is this humanly possible given we checked in so early? Obviously, not having Jack’s clubs for a lesson are a bit problematic as the only reason we traveled was for golf. We still needed to drive from Nashville to Memphis (200 miles) that night to make the 9am golf lesson on Monday.
We went to pick up our rental car from Avis, and there was a problem. The line was 70 deep, and they did not have me on the preferred list. I finally got to the front of the line after one hour, and they charged me double the rate on my confirmation. At this point, I did not care as we had two hours to kill to wait for the golf bag, and my mood is in a death spiral. We left the airport in search of dinner. Jack picked Bar-B-Cutie Smokehouse over Shoney’s, Taco Bell and McD. The restaurants near the airport are a fry cry from the West Village or even the culinary wasteland of Boca Raton, Florida. The internet rating gave Cutie 4.2 stars out of 5. I am not sure who rated this restaurant with one star, let alone 4.2. It was closer to 4.2 stars out of 1,000. These food critics must have no taste-buds, no sense of smell and stomachs made of cast iron.
Jack was starving, which is not uncommon for a 15-year-old boy. He ordered half of the menu. I figured it was going to be a long night as the golf bag was not due until 9pm and then I had a few hours of driving. I ordered grilled chicken. The nachos were covered in a cheese whiz looking sauce and one bite and I spit it out. My chicken was made of rubber. I was unable to cut it. The middle section is supposed to be nachos, but not sure exactly what it was. The bottom is my uneaten chicken.
If after “eating” at Bar-B-Cutie Smokehouse I was asked to choose between eating there again or spending a weekend at Rikers Island Prison in the violent criminal wing, I am not sure which one I would pick. I fear Rikers would be the safer bet. We ate almost nothing and left. Jack likes to get his dad riled up and talked about how much money I spent, despite not eating. Yes, he knows how to push Dad’s buttons, which resulted in a few dozen curse words.
We are not a big fast food family, yet Jack said, “Dad, just get me a McFlurry please?” I went to the McD drive through and ordered one for him. “Sorry sir, our machine broke and we cannot make any McFlurries,” said the lady inside large drive-thru machine.
“Dad, can you just get me some tacos from Taco Bell instead,” Jack asked. I went to the drive through and the response to my order was, “Sorry sir, we are out of taco shells.” Am I on candid camera right now? How is this possible that Taco Bell has no shells? Supply chain issues? Jack got something else and I did not eat.
We picked up the clubs at 9:20pm and I drove all the way to Memphis while Jack was sound asleep. It was hard to stay awake, but we made it to the room at 12:30 pm.
Jack had a good four-hour lesson on Monday from 9am-1pm, and we were on a 5pm flight direct from Memphis to Miami. We flew the luxury airline, Frontier (no WiFi). Sadly, it was not nice, but I have seen worse in an airline I once flew called, Spirit.
We left the house in Boca at 1:30pm Sunday and arrived back home at 10:30pm Monday. Unfortunately, Jack's father-me-had a post travel meltdown and needed his stomach pumped. If there are any good lawyers on the Rosen Report distribution, I would like to sue Bar-B-Cutie Smokehouse for reckless endangerment, loss of enjoyment of life, and deceit. Do I have a case? I am thinking damages of $100mm would suffice. If any lawyer takes the case, I will do it on contingency and give you 40% rather than the 30% standard take.
Serenity now. When Jack wins his first PGA tour tournament, we will all get a good laugh. Until then, I am just going to cry.
Quick Bites
Wednesday, markets rallied sharply post the Fed decision to aggressively cut bond purchases (about time) and expects to raise rates three times next year. I believe this is long overdue and am a little surprised the 10-year Treasury bond yield remains at 1.46% (barely up on the day). The Fed will be buying $60 billion of bonds each month starting January, half the level prior to the November taper and $30 billion less than it had been buying in December. The Fed was tapering by $15 billion a month in November, doubled that in December, then will accelerate the reduction further come 2022.
After that wraps up, probably around March, the central bank expects to start raising interest rates, which were held steady at this week’s meeting. The S&P 500 rose 1.6%, while the Nasdaq jumped more than 2%. The Dow added 383 points. All three were in negative territory for the day before the central bank’s decision. I guess markets feared a more aggressive Fed and even with three rate hikes in 2022, we will continue to be at historic low rates. I suppose my fear is that the Fed is behind the curve and may realize that three hikes is not enough. Crypto rallied with BTC +3.3% and ETH+6%. Oil was +1.2% to $71.6 and natural gas closed at $3.8 or +1.6%.
Marko Kolanovic from JPM is a very impressive research mind and has some strong views as usual. With the arrival of the new omicron variant, it’s fair — and fairly depressing at this point — to wonder if the COVID-19 pandemic might weigh on the economy for yet another year. But it’s not a worry for America’s biggest bank. In a message shared recently with clients, JPMorgan Chase global research leader Marko Kolanovic says, "Our view is that 2022 will be the year of a full global recovery, an end of the pandemic, and a return to normal economic and market conditions we had prior to the COVID-19 outbreak.” JP Morgan is forecasting strong consumer spending and the return of mobility, Kolanovic says. Put those things together and you’ve got a recipe for a serious bounce back in the travel industry.
Wholesale prices increased at their quickest pace on record in November in the latest sign that the inflation pressures bedeviling the economy are still present, the Labor Department reported Tuesday. The producer price index for final demand products increased 9.6% over the previous 12 months after rising another 0.8% in November. Economists had been looking for an annual gain of 9.2%, according to FactSet. Excluding food and energy, prices rose 0.7% for the month, putting core PPI at 6.9%, also the largest gain on record. Estimates were for respective gains of 0.4% and 7.2%, meaning the monthly gain was faster than estimates but the year-over-year measure was a bit slower. Those numbers come with headline consumer prices running at their fastest pace in nearly 40 years and core inflation the hottest in about 30 years. Demand for goods continued to be the bigger driver for producer prices, rising 1.2% for the month, a touch slower than the 1.3% October increase. Any Rosen Report reader knows I have been highly critical of the Fed for being too accommodative for too long. I am not alone. Mohamed El-Erian is a very bright mind on macro matters. He said, “Transitory inflation all is likely Fed’s worst call, ever.” Remember, Bernanke said, “Sub-prime is contained in 2007,” so suggesting this inflation call is the worst call ever is pretty strong. He said, “The fed must quickly, starting this week, regain control of the inflation narrative and regain its own credibility. Otherwise, it will become a driver of higher inflation expectation that feed onto themselves.” I agree with Mohamed. Peter Boockvar slammed the Fed over inflation and blames Fed policy “mistake” for surging housing and auto prices.
This link shows 15 car models where “lightly used” cars sell for more than new. When you have incredible central bank accommodation for years, it has a massive impact on prices. Obviously, supply chain is not helping matters, as there is a wait for new cars. Of course, my Kia Telluride is one of the 15 on the list. Tesla Model Y & 3, Honda Civic, GMC Yukon, Toyota Tundra and others are on the list.
Biden's big infrastructure plan, which was passed last month, promises to create hundreds of thousands of new jobs, many of which won't require a college degree. But it's going to be an uphill battle trying to fill those roles. The $1.2 trillion Infrastructure Investment and Jobs Act includes $550 billion in new funding for roads, bridges, water and climate change mitigation. Such a swell in opportunity is coming at a critical time: overall employment remains below pre-pandemic levels; skilled trades sectors, like construction, are struggling with labor shortages and aging workforces; and a slew of workers cast aside during the pandemic are looking to reenter the labor force. But there's a big kink in this grand plan, labor experts and economists say: There's simply not enough money to educate and develop the hearty stream of skilled workers needed for all those critical roles. I am quite concerned about the impact on wages and ability to hire people to fill the roles required for the infrastructure plan. What will it do to already elevated wages for small businesses? This article talks about how secure jobs are today as employers cannot afford to fire people.
Here is a story about NYC garbage collectors. About 100 New York City garbage collectors and their bosses pulled in salaries of about $300,000 due to a windfall from overtime, a report published Sunday said. The blowout salaries were due to excessive overtime hours because of staffing issues throughout the year. The shortage was blamed on the COVID-19 epidemic. Many of those who saw a jump in pay were retirement-age supervisors, who can use the bump to "fatten their pension." Nearly 100 city Sanitation Department garbage collectors and supervisors hauled in more than $100,000 in overtime last year.
The two Wall Street investment-banking titans dominating this year’s deal making frenzy are opening up their wallets to try to keep their bankers happy -- and ratcheting up pressure on rivals to follow suit. Goldman Sachs Group Inc. may boost its bonus pool for investment banking by about 50%, and JPMorgan Chase & Co. may reach for a 40% increase, according to people with knowledge of their initial deliberations.
There are two separate stories here about China and German economies slowing. China’s economy took a knock last month from an ongoing property market slump and sporadic Covid outbreaks, prompting economists to warn that recent easing measures may not be enough to stabilize growth.
Residential property sales and the area of new housing started by developers both dropped about 20% from a year earlier, pulling down the pace of overall investment spending in the economy. Retail sales growth weakened to 3.9% in November as people stayed home amid renewed virus outbreaks. The charts below are about China.
Germany is teetering on the brink of recession this winter as supply bottlenecks and a wave of new coronavirus cases hobble the economy. Europe's largest economy will shrink 0.5% in the fourth quarter of this year, compared with the third, and stagnate in the first three months of 2022, according to projections published Tuesday by the Ifo Institute for Economic Research. An economy is in recession when it contracts for two consecutive quarters. "Ongoing supply bottlenecks and the fourth wave of the coronavirus are noticeably slowing down the German economy," Timo Wollmershäuser, head of forecasts at Ifo, said in a statement. "The strong post-pandemic recovery that was originally expected for 2022 still hasn't materialized."
I got a kick out of this Post story discussing Governor DeSantis and his plans to spend $8mm to deport illegal migrants who were flown secretly to Florida. DeSantis plans to send them to Delaware, the president’s home state. Biden Air” has been secreting illegal migrants all over the country, not just sending them to White Plains, but to Jacksonville, Fla., Alexandria, Va., Chattanooga, Tenn., Long Beach, Calif., and other destinations far and wide. I am not supportive of the current porous border policy or the secret flights dropping off legal immigrants into states in the middle of the night.
Gary Teasley, 65 — who has been known to wear snazzy outfits, including a long dark fur coat and fashionable hat, during his alleged crimes — is so familiar to cops that they’re on a first-name basis, a source said. I had a discussion with a reader and I want to make a point crystal clear about my position. If you are arrested for a violent act (rape, murder, assault, gangs…) I do not believe you should have bail whether or not you have the means even at bail high levels. Keep these thugs behind bars until the trial. If you are a non-violent first or second time offender, I am fine with bail. If you are a repeat offender as in the case of the above article with over 30 arrests, I believe you should not be out on the streets. On prison reform, I am supportive of improving America’s prisons and this WSJ opinion piece does a nice job of suggesting why it should be done.
Both Donald Trump and Bill O'Reilly touted huge crowds ahead of their "History Tour." But it kicked off at the FLA Live Arena in Sunrise, Florida, with many empty seats, according to local media. "Massive crowd headed into FLA Live! The Trump/O'Reilly History show starts soon...," O'Reilly, the former Fox host, wrote on Twitter on Saturday. "See you in Sunrise, FL, in a little while and tomorrow, Orlando," the former president said in a statement. "Big crowds!" But the "cavernous" FLA Live Arena had many seats that remained empty, according to the Sun-Sentinel. The top level was closed off and those who had tickets for that area were "upgraded" to the lower bowl, the newspaper reported. I am a little surprised by the attached Newsweek article as Trump rallies tend to be standing room only, with supporters awaiting his every word. Is this a one off-thing or the start of a trend? I see that the Orlando event a couple days later was also not full according to this article. It does suggest the event was “electrifying,” but the pictures show many empty seats again. Despite the less than full crowds, remember Biden played to tiny crowds on a relative basis on many occasions.
As House investigators charge ahead with their probe into the Jan. 6 attack on the Capitol, their focus has shifted to a contentious former colleague they increasingly see as a crucial witness: Mark Meadows. Former President Trump’s ex-chief of staff, Meadows turned over thousands of text messages, emails and other correspondences — sent and received by GOP lawmakers, Trump family members and Jan. 6 organizers — that have illuminated behind-the-scenes events before and during the deadly insurrection. Those messages included shocking pleas from Trump's eldest son, Donald Trump, Jr., and leading conservative superstars at Fox News, all of whom were texting Meadows during the Capitol siege in hopes he could convince the president to talk the rioters into leaving the building peacefully. The link above shows some of the texts with pleas from Don Jr for his father to condemn the Capital situation.
I found this study regarding political polarization concerning. The findings reveal that at this point, extreme polarization becomes irreversible. I feel political polarization is a huge risk in the US and the study’s conclusions are worth reading. The Rosen Report is read by all political parties. I have a mix of Trump loving conspiracy theorists and people who believe AOC is not far enough left. I also have a lot of readers who are more centrist and appreciate my writing to call out both sides. I can tell you from my conversations and email interactions that the political divide is great and growing and the venom is concerning. We are approaching the point of no return and the article outlines it.
Other Headlines
Dogecoin spikes more than 20% after Elon Musk says Tesla will accept it as payment for merch
China Property Plunge Worsens as Shimao Deal Raises ‘Red Flag’
Mortgage refinances fizzle as interest rates resume their climb
Cornell University closes campus as Omicron outbreak spreads at school
For over a year, I have suggested WFH and Work from Anywhere is going to be a major lasting trend.
Former New York Gov. Andrew Cuomo ordered to repay $5 million in Covid book money
Trump suffers big court loss in his bid to keep his tax records secret
A bunch of concerning articles about crime below
Minneapolis crime spills into neighboring towns, 'under attack' by 'mobile' criminals: Mayor
Watches worth $2 million taken in downtown smash-and-grab as retail raiders strike again and again (Chicago)
Chicago dad beaten to death hanging Christmas lights outside home
Retail CEOs say online marketplaces are fueling 'flash mob' robberies. They want Congress to step in
NYC Mayor-elect Eric Adams selects Keechant Sewel as the first woman to be police commissioner
Is this really what viewers want? Is a non-binary 007 going to sell?
The brains of people who say they’ve had a UFO encounter
Everyone loves UFO stories and this one is a bit odd as to those who claim to have encounters have white matter in the brain according to researchers.
Virus/Vaccine
Although the data does not look great, the charts are leveling off. Cases were +46% over the previous two-week period and are averaging almost 122k/day and this is relative to 71k/day in late October. Hospitalizations were +22% and are now at almost 67k relative to 47k in mid-November. Deaths grew quite rapidly and were +40% and are now almost 1.3k/day after a recent low of 918 in late November. By region, the Midwest and West are declining in cases now. However, the Northeast has turned for the worse, while the South is leveling off. The top 10 states are seeing growth between 86-196% in terms of cases over the past two weeks. CT, DC, ME and AL are the largest growth states between 101-196%. Of the top 10 states with the highest case growth, 7 have over 61% (US Average) vaccination rates. For cases per capital, all the highest are in the Northeast or Midwest with WI at 100 out of 100,000 and NH just behind it at 93. For perspective, Florida is among the lowest per capital at 11 despite recent case growth in that state. This NY Times link gives a lot of good data and charts. I did speak with various doctors who are suggesting that some hospitals are filling up and it has been primarily with Delta. The wave is happening just as holiday travel will begin with schools letting out in coming days. Holiday gatherings, travel, dinners, parties… could lead to this wave holding on a bit longer.
The UK is really exploding on cases and had almost 79k cases (record by 11k cases) in the past 24 hours. The Independent Sage group of experts is calling for a 10-day “circuit breaker” for the UK before Christmas to stem the rapid rise of the Omicron variant, noting between now at 25 December there could be five doublings of cases at its current growth rate, meaning the situation could potentially be 32 times worse by then.
The omicron variant is spreading in the U.S. and now represents 3% of Covid samples analyzed in the U.S., according to the Centers for Disease Control and Prevention. However, it may be 13% n NY an and NJ. A week prior, the variant represented less than 1% of samples analyzed by the CDC. The United Kingdom issued a level 4 Covid alert on Sunday, a step below the highest warning level. “Omicron is spreading at a rate we have not seen with any previous variant,” WHO Director-General Tedros Adhanom Ghebreyesus said during a Covid update in Geneva. “The reality is that omicron is probably in most countries, even if it hasn’t been detected yet,” he said. Tedros said vaccines alone will not protect against omicron. He called for countries to use masks, social distancing, proper ventilation and hand hygiene to prevent contagion. The omicron variant infects around 70 times faster than delta and the original Covid-19 strain, though the severity of illness is likely to be much lower, according to a University of Hong Kong study that adds weight to the early on-ground observations from South African doctors.
The suggestion of everything I am reading is telling me that Omicron may explode in the US in coming weeks in the US. However, I am not convinced this is horrible. Although more contagious than Delta, it appears to be less fatal. If it “crowds out” Delta, maybe it is not horrible? Another article I read outlines 5 new symptoms of Omicron: Scratchy throat (as opposed to a sore throat), Dry Cough, Extreme Tiredness, Mild muscle aches, Night Sweats.
Britain has reported what appears to be the world’s first confirmed death from the heavily mutated Omicron variant of COVID-19. There have been initial signs that the new variant causes less severe symptoms than the dominant Delta strain—but, making his announcement of the death Monday morning, British Prime Minister Boris Johnson said that may not be the case.
Johnson & Johnson’s vaccine produced virtually no antibody protection against the omicron coronavirus variant in a laboratory experiment, underlining the new strain’s ability to get around one pillar of the body’s defenses. The vaccine appears to provide some defense against omicron, perhaps via other means such as stimulation of immune cells, according to Penny Moore, a South African virologist. The findings are consistent with other studies that show a partial loss of potency against Covid-19 for a number of vaccines, with J&J’s antibody protection looking particularly weak in the lab test.
Real Estate
The high-end Florida market will not break. A paucity of inventory and demand from the tri-state, Midwest and California wealthy residents fleeing high taxes and woke rules. Manalapan is 10 miles south of Palm Beach Island and just north of Boynton Beach, Florida. A Manalapan, Florida ocean front lot sold 5 years ago for $13.5mm at 1020 South Ocean Boulevard. Two months later, it sold for $14.5mm for the 2 acres of vacant land as the buyer decided not to develop it. A hedge fund manager bought it for the $14.5mm and put in another $13-15mm into it to build the house. Pre-pandemic, a house such as this would sell for approximately $25-30mm. In the past couple weeks, the hedge fund manager was given an unsolicited offer for $97mm and accepted it. My broker friend believes the house is worth $50mm. The $97mm is the price point for Palm Beach Island, not Manalapan. The buyer was from CA and would only consider new construction. I do not think this resets levels for Manalapan to that of Palm Beach, but is indicative of the world for ocean front in South Florida. In a separate story, an ocean front house with a large lot in Highland beach which was bought 4 years ago for $13mm received an unsolicited offer of $50mm. Ocean front, intracoastal or Biscayne Bay properties trade at a massive premium. The ultra high-end has such limited inventory and constant demand. Pre pandemic, high end product sat on the market and now there is just almost no inventory for sale.
A reader told me Ken Griffin (founder of Citadel) gave a speech recently and was bashing Chicago as unlivable. As a result he is considering moving his company to Florida. For this reason and 10 more, I am suggesting the high end from Palm Beach to Miami will remain high for some time. The influx is nowhere near over. NY, CT, NJ, IL, CA…As long as cities and states give poor quality product and charge a premium, the wealthy will continue to run to Florida. I am concerned about the lack of infrastructure down here as the highways, schools, hospitals, restaurants…. cannot handle the inflows.
Interesting Market Watch article on the real estate market and the lack of supply suggesting elevated prices for the near future. My view is a bit more nuanced. I see a potential correction at the lower end with home prices far more reliant on low rates. When a buyer purchases a $250-500k home, they tend to have a mortgage and are more worried about monthly payments to live in the house. At the higher end, buyers are far more likely to pay all or a large portion in cash and be less sensitive to rates. Different economists make predictions in the article. Worth a read. Listen to a just a handful of the stats about the housing market, and it’s easy to see why there’s lots of chatter about whether or not we’re in a housing bubble. While mortgage rate are still holding near historic lows — you can still find 15-year rates near 2% and 30-year rates near 3% — home prices rose 19.5% in September year over year, according to data released by Case-Shiller at the end of November. And the median home price now sits at around $354,000, according to the National Association of Realtors. But a number of experts say we’re not in a housing bubble, and instead are in for a continued rising of prices, though at a more gradual speed. “To most consumers, a bubble in housing or any other investment is a run up in prices that is very rapid and that is relatively shortly thereafter followed by falling prices,” Realtor.com chief economist Danielle Hale says. “In these bubble cases, those who purchased homes or other investments when prices were high may see the value of their homes or other assets remain below their purchase price for years into the future.” But many pros say it’s unlikely we will see a collapse in home prices, because unlike in 2008, there’s not an oversupply of housing, and instead there is an under supply: The National Association of Realtors notes that the U.S. has under built housing by at least 5.5 million units, and Hale estimates that we’re about 5 million units short. In fact, she says we’re so under-built that we’re unlikely to see this change in the next five or six years, even if the current pace of construction were to double. Plus, that is happening at a time when supply chain issues are rampant, making many building materials and labor expensive. “With strong buying demand and under-building limiting the amount of housing supply,” Hale says, “we’re likely to see home prices remain high even if reduced affordability limits the pace at which they can grow.”
This CNBC article outlines the record equity homeowners have today. By the end of the third quarter of this year, borrowers had a record $9.4 trillion in tappable home equity collectively, or an average of $178,000 per borrower, according to Black Knight. That marks a 32% jump year-over-year About a quarter, or 24%, of all first lien mortgages have an interest rate below 3%.
The movement to ban single-family zoning has come to New York. State Sen. Brad Hoylman introduced a bill this week that would allow multifamily construction on almost all residential lots, eliminate parking requirements in cities and villages, and stop larger localities from requiring large lot sizes for homes. The legislation would prohibit cities and villages from setting minimum lot sizes larger than 1,200 square feet. It would also bar them from requiring off-street parking. In cities, landowners could build four-family dwellings on any residential lot, or up to six-family buildings within a quarter mile of a train station. In villages, builders could construct duplexes on any residential lot or six-family dwellings near transit stations. The bill also addresses towns, setting a maximum lot size of 20,000 square feet, or 5,000 square feet if the parcel has access to sewer or water infrastructure. “We need to end the policy of exclusionary zoning that disadvantages lower- and middle-income New Yorkers,” said Hoylman. “The affordability crisis is best addressed statewide.” If Hoylman’s bill gains any traction in Albany, it would face withering pushback from suburban, exurban and rural areas, where apartment projects in single-family areas are usually opposed by local residents. I do not support this bill and feel it would be damaging to real estate prices. I am glad I don’t live in NY anymore.