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Housing Starts, Permits Smash Expectations On Surge In Rental Construction
The serial extrapolators will be pleased... and the talking heads will now proclaim this as clear evidence that the cold-weather dysphoria has abated and its blue skies for real estate from here... Housing Permits back over 1 million homes SAAR (and biggest jump in a year) to new 6 year highs and Housing Starts back above 1 million SAAR near last year's highs. However, there is one major caveat - almost the entire surge was led by an almost 40% spike in multi-family units as the 'rental nation' grows ever stronger. Multi-family accounted for almost 30% of all starts - the highest in over 4 years as single-family starts rose a dismal 0.8%. Not exactly the "but housing inventories are so low and they must builder more homes" kind of growth that the headlines will crow about...
Starts "fixed"
Permits "fixed"
As multi-family starts spike almost 40%...
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need to replace all the homes burning in CA.
No, the burning homes are mansions, the data in question here is related to ghetto construction.
The gubmint originally built the projects for welfare recipients to live in for free, and then tore 'em down and replaced 'em with garden apartments to allegedly lower the crime rate there. Now the Millennials can move out of their parent's basements and rent in the new projects under construction.
Progress!
Can we see the non rigged - Oops! the non seasonally adjusted number?
No.
I thought the bladkstone's of the world were done with this. who is behind it?
Moar importantly that 2.5% 10yr line in the sand gets held for a while longer.
Belgium?
Yep it appears that, from now on, whenever anything is utterly insane, dangerous and illogical -- its "Belgium".
It's all BoooYaaahhhh until they enact "Rent Control."
YTikes!
multi-family units...
we call those ghetto's but maybe there's something lost in translation...
New American Dream: A cable-ready rental cubicle in a souless salt box building.
If you've got a 35 year-old kid living in your basement, you're probably happy to see all this rental construction.
...and all US futures turn Green.
Hey, in the "new normal" bond prices and equities can both go up...
(there is no spoon neo)
We are never going down again. Ignore all BS from lying HF managers and slanted PE folks. I mean, for fuck's sake.. Leon Black was telling people to "sell everything not nailed down" June 2013. People who listened probably sold TO HIM so he could claim insane returns last year. These clowns have no honor.
Unfortunately, the rent is still too damn high!!
I never understood this fascination with home starts. Much like manufacturer of socks makes socks builders build homes. If the socks don't sell they wind up in tj maxx or worse. They won't discuss if the homes don't sell and I'm pretty sure tj maxx while having a home goods section doesn't have the space for actual homes.
Because once a home is built, it is counted in GDP calculations. Whether it sells or not doesn't affect GDP. That's why it's called Gross Domestic Product and not Gross Domestic Sales.
Sock manufacturers don't employ more than a million Americans at an industry average wage over $28/hr.
http://www.bls.gov/iag/tgs/iag236.htm
Amazon. Click-to-buy.
Economic growth at its best.
I was unaware that a permit was required to pitch a tent in Obamaville.
You get shot in NM without one
Pitch your tent in Burneyville, NV. BYOG (bring your own gun).
Pitch your tent in Burneyville, NV. BYOG (bring your own gun).
Futures are fixed! Maybe no dip to buy today.... just buy. See? despite all the stories and hokus pokus, they will never, ever, ever let it go red for very long.
Lumber futures up $3 for July, down $2 for September.
By type of housing, starts in buildings with at least five units rose 43% in April to an annual pace of 413,000.** It’s worth noting that apartment starts had a wide confidence interval of plus-or-minus 36%**. Meanwhile, starts for single-family homes eked out a 1% gain in April, rising to an annual rate of 649,000.
There was a similar picture for building permits, which are an indicator of future projects. Overall permits rose 8% in April to an annual rate of 1.08 million, the fastest pace since June 2008. Data details show that last month’s jump was led by apartments, with permits for buildings with at least five units rising 22% to an annual pace of 453,000, while permits for single-family homes rose less than 1% to an annual pace of 602,000.
In addition to tough weather, the housing market has been hit in recent months by dropping affordability that curbed buyer demand. It’s clear that home builders are concerned. The most recent monthly reading on builder confidence showed they are the most pessimistic they’ve been in a year.
I would not bust out the party hats on this report.
I drove around the new hood next to us last weekend and noticed two houses now "For Lease" when they already had been sold. I asked the builder what happened and he said when they got their 3.6% tax assessment and saw the number they freaked out and "Just Walked Away."
The builder took them back and instead of putting them on inventory is renting them out. he said landlord costs are extremely high with taxes, insurance, maintenance, etc but at least he can try minimizing the losses.
Taxes and HOAs are due to increase in that area so Rottsa Ruck to him!
As the cost of renting has epxloded, more and more, I like the decision I made in January 2010 to take advantage of the 10-percent first-time homebuyer stimulus program, wherein I traded a soon-to-be $575 a month or higher one-floor apartment for a $510 a month house. With an enclosed backyard. All brick construction. With a built-in garage. And hardwood floors. Everything I wanted in a house.
If you have to play the game, play it well. That's what I've learned. It took me a while, but I learned it.
At least Foxconn provides "free" housing! Gee wiz, we are owned by the 0.01% and they don't even have the decency to pick up the cost of our quarters. Enslaved and paying for the priveledge.
I am very pleased with my NINJA loan. I'm in the process of refinancing to pull cash out, and my 20" spinners for the Escalade are on order.
Living the Dream Bitches
Building the ghettos....gee that's swell.
Po folk living in the 21st century Section 8 projects need and deserve granite countertops.
Now that Aunie Zeituni has passed on to claim her 72 virgins, there's a lovely gov't housing unit up for grabs in South Boston. You don't even need to be here legally. As the Mass legislators say, it's not even illegal to be here illegally any more.
This should work out fine. Just think of all those empty strip malls just waiting for empty apartment complex. Soon we can look like the Chinese. After all I'd rather look at a shinny new ghost town than a decrepit old one.
When it comes to real estate low interest rates at some point becomes a double edge sword, that effects both the value by making it easier to purchase thus driving up prices, and at the same time allowing more building to take place and increasing the supply. Often we reach or exceed demand, this eventually has a dampening effect on rents and people stop buying it as an "investment".
Prices must rise and real estate appreciate more then the natural depreciation from the wear and tear from age or the main driver for owning it vanishes. Oversupply is the bane of real estate and crushes the value of this hard and expensive to maintain commodity. Currently we are in uncharted waters, more on this subject in the article below.
http://brucewilds.blogspot.com/2013/12/super-low-interest-rates-disservi...
I thought that bulldozing 40 square miles of old industrial wasteland around the outskirts of Detroit and returning it to farmland was a good idea but then I heard that Chinese investors were buying up Detroit real estate cheap.Maybe all the poor jobless folks in Detroit will have new ghetto landlords and then they can go cruising run down pothole ridden freeways on the way out of town to beuttiful scenic views.America at its' best after Iraq and Afghanistan.That's if you got some extra gas money for the ol' Cadillac in order to get it off the front lawn.
Looking closer at the data...
http://www.census.gov/construction/nrc/pdf/newresconst.pdf
Looks like most of the growth was int the south. I wonder how much of that is Texas. In my North TX neighborhood, single family homes are selling within HOURS of being listed, many at above asking price. At first I thought this was hedgies, and some is, but of late the buyers have been families. The market is simply flat out hot here. By contrast, starts down in northeast. We're seeing some marked regional differences in the data on real estate.
Everyone gets their own 4x4 cubicle so they can relax (and cry themselves to sleep) after coming home from an 18 hr shift at the soylent green factory.
Probably includes double wides manufactured by uncle Warren.
I live right in in Platte Park in D'never and I can solemnly attest to the vast budding building boom here in this increasingly congested and polluted megalopolis. I wouldn't have believed it possible a few years ago! But perhaps what you fail to realize or perhaps realize all too well considering your obvious partiality to all things shining with the hypnotic shining patina of filthy lucre, is that our cities are rapidly bifurcating into two distinct and opposing regions of economic schizophrenia.
Take Camden or Detroit or Gary for instance and behold the other side of the abysm or even less savory segments of our brave NWO city here, a sight which might be less becoming to your unassailable, Panglossian "best of all possible worlds" utopian paradise. Scratch the surface a little deeper and realize that the vast majority of home purchases are being made here with 60/100% up front cash! or being scarfed down in 10,000 lot tranches by megalithic institutional entities such as Blackstone with 0% interest Fed funny money. Meanwhile millions of foreclosures with hopelessly impaired mortgages clog the balance sheets of the zombie banks counted as "assets".
it is more than apparent we are dealing with a new frontier in so called "home ownership" which along with the present "tapered" Fed backstop of $80 billion in mortgage security acquisition raises some considerable questions as to the nature of not only foreclosure volume but the very nature of "home ownership" in the US. Combined with the vast amount of alleged "shadow inventory" of foreclosures remaining on the major bank's balance sheets, one has to honestly question the ability of such restructuring to sustain and maintain any substantial recovery in the housing markets. "Private-equity firms, hedge funds and individuals are all buying foreclosed or distressed homes to turn into rental properties as prices remain 28 percent below their 2006 peak.
Companies including Blackstone Group LP (BX), which has invested more than $5 billion to buy almost 30,000 homes, and Colony American Homes Inc., which owns more than 12,000 properties, are helping to increase prices in areas hit hard by the real estate crash by draining the market of inventory as low borrowing costs and improving employment fuel demand from buyers".http://bloom.bg/1iuPwmV "But although home prices have recovered, the continued presence of larger, cash-rich investors in the market have squeezed out traditional first-time home buyers and homeowners who wish to trade-up. Those investors continue to be the biggest purchasers of foreclosed homes, accounting for 57.6% of all sales in November. The share of distressed properties ticked up in November, explaining some of the heightened investor activity.
But it turns out that investors are making their biggest market-share gains in the conventional housing market. In November, investors accounted for 13.2% of purchases of non-distressed properties based on a three-month moving average. This was up from 10.5% in August." the scope of the systemic housing market failure which began in 2005 and was signified by the unprecedented subsequent insolvency of Fannie May and Freddie Mac and which largely contributed to the injection of $85 billion /month into mortgage backed securities by the FED indicates the extent of our seriously impaired housing markets and lending institutions. What we are dealing with here is a macro-economic phenomenon of gargantuan proportions and consequences not so easily remedied by the simple metrics of supply and demand. after the injection of trillions of dollars by the FED, the housing market has been bouncing on the bottom since 2008 unable to attain the "escape velocity" needed to regain levels similar to home sales of +117,000 units in late 2005.
Indeed the non-annualized home sales which admittedly have risen only marginally from a low of +20,000 in early 2011 to some 40,000 presently are obviously fueled by the large institutional buying to which I have referred and equally significantly on the downside by record and officially ignored unemployment and the creation of a permanent underclass. As you have perceptively suggested, the large institutional buying by funds such as Blackstone and Colony is, on the other hand, fueling a burgeoning rental market as these entities lease out their recently acquired trances of "distressed properties". I believe this is the face of the new American housing. There has been as well a predominant surge in multi-unit housing starts over the availability of single family starts So yes; a permanent shift to renting and growing production of units in clusters of high density urban complexes. And it remains to be seen if the cells in these "hives" can continue to be effectively sold in a rapidly declining economic infrastructure.
"Another very important development is in the housing industry, where it seems nothing new was learned by the major collapse in 2008-09. Blackrock has been buying a large number of distressed single family homes. It has sold a $500 million IOU that is secured not by the homes but merely by the rents on 3,200 of the homes it has purchased. Really, it’s a bad joke, because to quote Yogi Berra, “It’s déjà vu all over again!” The $500 million is being split into tranches where you can own AAA rated paper that pays a mere 1.3% per year down to the “F” portion, which pays a pitifully low 3.8% as long as all the renters meet all their payments. Amazing!"
http://bit.ly/193gGhP
They are building these rental buildings all over the place where I live. 250 - 500 units at a time. There must be ten of these having been built in the last year or so. Apartment buildings galore which looks to me like government subsidized housing complexes. In that same time I've seen only a few single family homes being built.
Just ancedote, but here n Denver there is just an incredible number of high-rise new apartment and mixed-use buildings going up in the downtown area. Where are they going to get the tenants for urban dwelling? Is there a govrernment agency behind these backstops that I'm not aware of, other than bankruptcy court?
I work by Coors Field in Denver and there have to be at least 30 multi-tenant complexes in a 3 mile radius. I don't know the number of units but it is definitely in the 10 thousands. No way they fill this space! Houses are getting offers over asking in many neighborhoods. It is very reminescent of 2006/2007, but I can't imagine who is lending? Would like to know how to pull a Kyle Bass on the multi-tenant buildings, any thoughts? I don't know if these multi-tenant building loans get packaged up in CDS's type instruments, but I would short the hell out of them if they exist.
Rental properties are usually multi-level constructions. Back in the days of the serfs, the serfs worked a piece of land. In the modern day, to save space, the ruling class stack the serfs in multi-level apartments like cages at a puppy mill.
Yet, they'll still manage to squeeze every dollar out of the cardboard and Elmer's Glue shitholes that they call high-rise apartments across the country now.
Social media housing for the new social media generation! Live in a cube to stare at your cube!