Saturday, June 22, 2019

Investors Are Buying More of the U.S. Housing Market Than Ever Before

Investors Are Buying More of the U.S. Housing Market Than Ever Before

Their interest poses a challenge for millennials and other first-time buyers



Strong rental demand, technology that facilitates buying homes online and low interest rates that make other investments less appealing have fueled investor appetite. Shown, a broker’s open house in San Francisco. PHOTO: JUSTIN SULLIVAN/GETTY IMAGES
By
Laura KusistoUpdated June 20, 2019 7:12 pm ET



The share of investor purchases of U.S. homes have climbed to an all-time high, a sign that rising home prices have done little to dampen demand for flipping homes or turning them into single-family rentals.

Big private-equity firms, real-estate speculators and others that buy properties comprised more than 11% of U.S. home purchasers in 2018, according to data released on Thursday by CoreLogic Inc.


The investor purchases are the highest on record and nearly twice the levels before the 2008 housing crash. The investor interest poses a challenge for millennials and other first-time buyers who are increasingly looking to buy starter homes and are forced to compete with deep-pocketed cash buyers.

Big commercial property owners like Blackstone Group LP and Starwood Capital Group began buying thousands of homes out of foreclosure during the housing bust. Many economists credit investors with helping to stabilize the housing market in 2011 and 2012 by buying with cash when prices were low and mortgage credit froze.

But analysts expected those purchases to slow, as the market rebounded and properties could no longer be had for fire-sale prices.
Cashing InPurchases of single-family homes byinvestors are at an all-time high.Percentage of homes purchased byinvestors, by home valueSource: CoreLogic
%OverallLow-priced2000’05’10’1505101520Low-pricedx2011x16.8%

Instead, demand for properties has intensified. While these purchases dipped slightly when the market started to recover in 2015 and 2016, they have rebounded to surpass the previous peak of six years ago.

Strong rental demand, technology that facilitates buying homes online and low interest rates that make other investments less appealing have fueled investor appetite.

SHARE YOUR THOUGHTS

How much do you think professional investors influence home prices or sales activity in the housing market? Join the conversation below.

Investors are an especially powerful force at the bottom of the market, where they often pay all cash. Investors purchased one in five homes in the bottom third price range in 2018, according to the CoreLogic analysis, up 5 percentage points from the 20-year average of less than 15%.

“These are the homes that first-time home buyers would logically be buying,” said Ralph McLaughlin, deputy chief economist at CoreLogic.

Shane Parker, a real-estate agent in metropolitan Detroit, said first-time buyers he works with are struggling to win bidding wars against out-of-state buyers. The locals he works with are becoming more aggressive, putting in escalation clauses and agreeing to pay the difference if properties don’t appraise.

One of his clients, Michael Burnett, a tech writer in Detroit, and his wife are looking for their first home so they can have a treehouse for their young girls. They have visited 25 properties and bid on half a dozen but keep losing out to cash buyers.

The couple recently fell in love with a property they thought had great potential. “It’s ugly on the outside, ugly on the inside, but it can be made beautiful,” said Mr. Burnett, 43 years old.

The house ended up getting a dozen offers, more than half of which were cash, and selling for $40,000 over the asking price of $150,000. “We write letters. You think you’ve composed this great heartfelt, ‘I have a family, see my family,’” he said. “Oh, please…Cash is king.”

Real-estate entrepreneur Gregor Watson’s business has helped boost investor participation. Following the housing bust, he and partners bought more than 6,000 homes across the country and turned them into single-family rentals.

Then he founded Roofstock, a company that enables investors to purchase properties online. The internet has made it easier for smaller investors and foreign buyers to purchase properties they may never have visited. Demand is also shifting toward former industrial cities in the Northeast and Midwest where prices remain low.

Mr. Watson said that many people in San Francisco and New York are priced out of buying homes where they live but are able to purchase an investment property in less expensive cities.

Michael Pickens, 31, who works in tech sales in the Bay Area, and his wife kept losing out in bidding wars to all-cash offers. “It was all cash, no contingency, seven-day close,” he said.

He and his wife decided instead to rent a small apartment in Santa Clara County and buy investment homes on Roofstock in less expensive locales.

They now own homes in Georgia and Tennessee despite never having visited either state.

So-called iBuyers, such as Opendoor, Zillow Offers and RedfinNow, which snap up homes in cash for a fee to help sellers avoid the hassle of putting their homes on the market, comprised less than 2% of investor purchases last year, according to CoreLogic.

The biggest markets for investor purchases in 2018 were Detroit, followed by Philadelphia and Memphis, Tenn., where home prices are still low enough for investors to profit by renting them out. Investors bought nearly half the starter homes in Philadelphia last year and about 40% of lower-priced homes in Detroit, according to CoreLogic.

When Tawan Davis launched a business renting out single-family homes three years ago, he focused on Philadelphia because of the city’s slow foreclosure process and history of disinvestment, he said.

Mr. Davis typically purchases homes for about $75,000 to $90,000, puts an additional $50,000 to $80,000 into renovation and rents them out for around $1,300 a month.

He said he is often welcomed in these neighborhoods because his modestly priced rental properties help act as a bulwark against gentrification. Many of his renters are single and work as nurses or adjunct professors, he said.

“They’d much rather see us than a lawyer from New York,” he said.

Write to Laura Kusisto at laura.kusisto@wsj.com

Appeared in the June 21, 2019, print edition as 'Investors Buy Homes At Unparalleled Rate.'

200 Drums in Bogota

Friday, June 21, 2019

Marinwood CSD Meeting June 11, 2019


Another meeting filled with threats, interruptions and accusations.   The Marinwood CSD director no longer writes reports despite having the largest support staff in the history of the district.  Meeting notes have been suppressed and the CSD operates in secret.   No report on the Marinwood Maintenance Facility that is projected to be the largest capital expense for the CSD in decades.  The board feigns ignorance but the project has been delayed 60 days due to the Hansell Plan lack of compliance with County guidelines.  So far Bill Hansell has been paid 300% of his original estimate.  The Marinwood CSD has become more corrupt, financially irresponsible and abusive of the public trust at any time in its history.

Dixie School District is digging a Deep Hole for Themselves.



From Superintendent Yamishiro on 6/20/19:


There is a construction project at Miller Creek this summer. It is to replace 16 portables with 16 modular classrooms and will be completed this summer. There have been at least two times this spring where details related to the project have been on the Board agenda, but we are aware that this would not necessarily reach the broader community. We received notice to proceed right at the end of the school year (just last week) and tried to reach out with communication to direct neighbors at that time. I am not sure who staff was able to reach. Based on your communication we will try to establish an update link on our website to keep the community informed of progress on the site.


I shared your concerns with our project manager who confirmed that we can build on the site (keep in mind that this is a replacement project for badly outdated portables). As you can tell from the video the portables have been removed and destroyed and we absolutely have to complete this project by the end of the summer, so we cannot delay it. There is follow up happening in regards to your concern about the tree branches and I will get back to you on that. I know this is a quick, basic summary, but I hope it addresses your desire to know more information about the project, whether it was cleared by the proper channels, and that we will follow up on the tree questions/issues.


Thank you,
Jason





To Superintendent Yamashiro two hours later:



I just walked past the site again and discovered a massive excavation next to the Heritage California Bay, The tree is huge with a trunk in the range of 70". I expect the root system was compromised today during the digging.


I asked the workers if they were putting in a pool. They shrugged their shoulders and walked away. The hole appears at least 8 feet deep and is the size of a large residential pool. I wonder if this is a footing or a basement foundation for a large building.


One thing for certain, this is NOT MERELY A REPLACEMENT of existing buildings. This hole indicates something else.


It is frustrating that it appears that this project has not been made public. It seems very unwise. Does the district think that no one will notice? And even today, the responses are lacking in detail. Surely you know the details. You approved them.

Marin County Tree Removal fact sheet

Thursday, June 20, 2019

Miller Creek School Construction wrecks Heritage Tree



Miller Creek Middle school has embarked on a major construction project in Marinwood and "forgot" to tell the neighbors.  It involves replacing old portable classrooms but the details are not known.  No construction notices or plans announced this project. This 6/20/19 clip shows a backhoe hacking branches off a heritage California Bay Tree (Umbellularia californica ) in violation of Marin County policy.  The backhoe is also digging on a protected  Heritage Site of the Miwok Tribe who occupied this land for 4500 years until 1820.  It was a Miwok village known as Cotomko 'tca.

I believe the Marinwood community will support a responsible project and construction.  We urge the Dixie School district to halt questionable construction practices that harms heritage trees and a cultural site.  

Open communication will go a long way to bridge misunderstanding.

William Tell Overture by Austrian Harmonica Band

Speak Softly Love (Theme from The Godfather)

Wednesday, June 19, 2019

Al Dugan attacks Marin County Back Room Politics

Arrogant CSD Directors ignore and insult Marinwood People who Care



This 2018 video makes Jeff Naylor looks even more irresponsible and arrogant.  The Maintenance Shed is now 400% of the original budget and the construction site plan is not approved due to non compliance with County regulations. NO INFORMATION has been released about the projected cost or the problems encountered despite Naylor's promise to have more information AFTER the plan has been approved.

It suprises no one from the general public since the problems the CSD is now encountering with the plan were ignored such as the lack of usuable space on the lot for landscaping equipment,  the wasteful drive through design,  the lack of detail concerning the environmental impact and the scope of the facility on the park.   

Bill Hansell, architect and former CSD Politician has produced a plan that will likely never get built for approximately $40,000 cost to taxpayers.  ALL OF THE ERRORS should have been uncovered and dealt with prior to submittal to the Marin County Community Development Department. He should be dismissed immediately because of his cost overruns and non compliance with county regulations.  The Marinwood CSD could have purchased a prefab garage facility FOR LESS than the amount wasted on the Hansell Design.

The arrogance of the CSD is truly stunning.  They are all responsible for this disaster.

Tuesday, June 18, 2019

NY TIMES Opinion and Reaction to "American's Needs More Neighbors"

Americans Need More Neighbors


A big idea in Minneapolis points the way for other cities desperately in need of housing.


By The Editorial Board


The editorial board represents the opinions of the board, its editor and the publisher. It is separate from the newsroom and the Op-Ed section.
June 15, 2019

A new apartment complex being built next to a single-family home in South Minneapolis.CreditBrooklynn Kascel for The New York Times


A new apartment complex being built next to a single-family home in South Minneapolis.CreditCreditBrooklynn Kascel for The New York Times


Housing is one area of American life where government really is the problem. The United States is suffering from an acute shortage of affordable places to live, particularly in the urban areas where economic opportunity increasingly is concentrated. And perhaps the most important reason is that local governments are preventing construction.

Don’t be misled by the construction cranes that punctuate city skylines. The number of housing units completed in the United States last year, adjusted for the size of the population, was lower than in any year between 1968 and 2008. And the problem is most acute in major urban areas along the east and west coasts. Housing prices, and homelessness, are rising across the country because there is not enough housing.

Increasing the supply of urban housing would help to address a number of the problems plaguing the United States. Construction could increase economic growth and create blue-collar jobs. Allowing more people to live in cities could mitigate inequality and reduce carbon emissions. Yet in most places, housing construction remains wildly unpopular. People who think of themselves as progressives, environmentalists and egalitarians fight fiercely against urban development, complaining about traffic and shadows and the sanctity of lawns.

That’s why a recent breakthrough in Minneapolis is so important. The city’s political leaders have constructed a broad consensus in favor of more housing. And the centerpiece is both simple and brilliant: Minneapolis is ending single-family zoning.


Local governments regulate land use by chopping cities into zones, specifying what can be built in each area. This serves some valuable purposes, like separating homes from heavy industry. But mostly, it serves to protect homeowners. In many cities, including Minneapolis, more than half of the city’s land is reserved for single-family homes.  See full Article HERE.


Read the comments after the article.  Here is an excellent response:

Aaron
Times Pick
I live in Minneapolis. I'm a millennial. I own my home. I oppose this plan completely. There is a large segment of our city that is very affordable, but it's in the black community and the crime rate is high so few want to move there. I'll let you draw your own conclusions on what motivates people in this instance. Speaking of our community members of north Minneapolis -- they asked the council to make major financial investments in their community to make it nicer. The council decided to upzone their homes instead. Who stands to gain from that? There was only one councilperson who voted against airbnb in Minneapolis. That's your government voting against your own interests, Linnea Goderstad, since the council decided it's legal for investors to buy housing stock and airbnb it for profit. Yet she villifies older single family home owners... That photo of Ms Goderstad is in downtown east next to the Minnesota Viking's new billion dollar stadium, which was half paid for through state funds and a sales tax hike on people buying food, alcohol, and lodging downtown. There are homeless people camping in its shadow. Middleclass, older single family home owners are the problem with housing affordability, though, not politicians who give away a half a billion to a sports franchise. Coincidently, my mass transit stop is at the stadium, so I've seen the dense housing stock spring up since I work in a highrise downtown. Very little of it would be considered affordable. Just absurd

Monday, June 17, 2019

An Addiction Crisis Disguised as a Housing Crisis

Homelessness is an addiction crisis disguised as a housing crisis

 Homelessness is an addiction crisis disguised as a housing crisis

Homelessness is an addiction crisis disguised as a housing crisis. In Seattle, prosecutors and law enforcement recently estimated that the majority of the region’s homeless population is hooked on opioids, including heroin and fentanyl. If this figure holds constant throughout the West Coast, then at least11,000 homeless opioid addicts live in Washington, 7,000 live in Oregon, and 65,000 live in California (concentrated mostly in San Francisco and Los Angeles). For the unsheltered population inhabiting tents, cars, and RVs, the opioid-addiction percentages are even higher—the City of Seattle’s homeless-outreach team estimates that 80 percent of the unsheltered population has a substance-abuse disorder. Officers must clean up used needles in almost all the homeless encampments.
For drug cartels and low-level street dealers, the business of supplying homeless addicts with heroin, fentanyl, and other synthetic opioids is extremely lucrative. According to the Office of National Drug Control Policy, the average heavy-opioid user consumes $1,834 in drugs per month. Holding rates constant, we can project that the total business of supplying heroin and other opioids to the West Coast’s homeless population is more than $1.8 billion per year. In effect, Mexican cartels, Chinese fentanyl suppliers, and local criminal networks profit off the misery of the homeless and offload the consequences onto local governments struggling to get people off the streets.
West Coast cities are seeing a crime spike associated with homeless opioid addicts. In Seattle, police busted two sophisticated criminal rings engaged in “predatory drug dealing” in homeless encampments (they were found in possession of $20,000 in cash, heroin, firearms, knives, machetes, and a sword). Police believe that “apartments were serving as a base of operations that supplied drugs to the streets, and facilitated the collection and resale of stolen property.” In other words, drug dealers were exploiting homeless addicts and using the city’s maze of illegal encampments as distribution centers. In my own Fremont neighborhood, where property crime has surged 57 percent over the past two years, local business owners have formed a group to monitor a network of RVs that circulate around the area to deal heroin, fentanyl, and methamphetamines. Dealers have become brazen—one recently hung up a spray-painted sign on the side of his RV with the message: “Buy Drugs Here!”
What are local governments doing to address this problem? To a large extent, they have adopted a strategy of deflection, obfuscation, and denial. In her  #SeattleForAll public relations campaign, Mayor Jenny Durkan insists that only one in three homeless people struggle with substance abuse, understating the figures of her own police department as well as the city attorney, who has claimed that the real numbers, just for opioid addiction, rise to 80 percent of the unsheltered.
The consequences of such denial have proved disastrous: no city on the West Coast has a solution for homeless opioid addicts. Los Angeles, which spent $619 million on homelessness last year, has adopted a strategy of palliative care—keeping addicts alive through distribution of the overdose drug naloxone—but fails to provide access to on-demand detox, rehabilitation, and recovery programs that might help people overcome their addictions. The city has been cursed, in this sense, with temperate weather, compounded by permissive policies toward public camping and drug consumption that have attracted20,687 homeless individuals from outside Los Angeles County.
No matter how much local governments pour into affordable-housing projects, homeless opioid addicts—nearly all unemployed—will never be able to afford the rent in expensive West Coast cities. The first step in solving these intractable issues is to address the real problem: addiction is the common denominator for most of the homeless and must be confronted honestly if we have any hope of solving it.

Happy Monday: We won't get Fooled Again

Happy Monday: Jeev Rangala

Sunday, June 16, 2019

Fable: THE LION AND THE GNAT

THE LION AND THE GNAT

    "AWAY with you, vile insect!" said a Lion angrily to a Gnat that was buzzing around his head. But the Gnat was not in the least disturbed.

"Do you think," he said spitefully to the Lion, "that I am afraid of you because they call you king?"

The next instant he flew at the Lion and stung him sharply on the nose. Mad with rage, the Lion struck fiercely at the Gnat, but only succeeded in tearing himself with his claws. Again and again the Gnat stung the Lion, who now was roaring terribly. At last, worn out with rage and covered with wounds that his own teeth and claws had made, the Lion gave up the fight.
[Illustration]

The Gnat buzzed away to tell the whole world about his victory, but instead he flew straight into a spider's web. And there, he who had defeated the King of beasts came to a miserable end, the prey of a little spider.


The least of our enemies is often the most to be feared.

Pride over a success should not throw us off our guard.

ABAG EXEC DIRECTOR ''REGIONAL GOVERNANCE IS CONSTITUTIONAL



Important video. I would love to hear the rebuttal of Ezra Rapport by a constitutional scholar. No where does he mention the people right to self govern. His justification of "states authority" is positively socialist in concept. It changes our democracy into a authoritarian central planning model. I understand that Ezra Rapport was a lawyer.in his prior life.

I posed the question about how to rebuff Ezra Rapport's argument and received this response from a friend:

There are many arguments for local control but not based on the US Constitution. In the system of federalism, The federal and state governments co-exist as soverigns. The Constitution reserves the powers that belong to the federal government, and these pre-empt any contrary state or local laws. Anything not reserved to the feds belongs to the states to do as they please, as long as not in conflict with the Bill of Rights or other constitutional provisions. In contrast, the state and cities are not separate sovereigns. The cities are subordinate to the state, and derive any and all of their powers from what the state grants. The state has authority to delegate its powers to agencies, and has done so here. This is the constitutional explanation. As used here, I would argue it is bad governance, but it is constitutional.

Here are a few other comments: 


Constitutionally, he is right.

Just like, after the Reichstag fire in 1933, Hindenburg’s Reichstag Fire Decree suspending basic rights and allowed detention without trail, followed by Hitler getting the Enabling Act passed by the new Reichstag to respond to the emergency, and Hitler taking over as sole dictator of Germany after the death of Hindenburg, Hitler became all-powerful in a perfectly legal manner.

Remember the sequence in Star Wars III where Palpatine convinces the Senate to convert the Republic into the Empire with him as Emperor?

Guess what it was based on?

“A republic, if you can keep it.”


And this one:

Rapport may be correct that the state can subdivide into regional agencies, but this does not permit it to do so without democratic representation. Here is the portion of the Constitution, Article IV, Section 4: The United States shall guarantee to every State in this Union a Republican Form of Government, and shall protect each of them against Invasion; and on Application of the Legislature, or of the Executive (when the Legislature cannot be convened), against domestic Violence. 

Article 4 Section 3 of the Constitution HERE