Lead Story…. We’ve all heard the phrase “drive until you qualify,” made popular during the housing bubble as buyers literally drove further from urban centers until they could afford a home. Could fly until you qualify be next? Unless you have been living under a rock, you’ve probably noticed that rents are going through the roof, despite several projections that they would moderate in 2015. Here’s a fascinating back-of-the-napkin analysis that argues that, if you work in San Francisco – the most expensive market in the US, you might be better off financially if you were to live in Las Vegas, where flights are plentiful and rents are cheap and commute via plane to work.
Black Box: The Federal Reserve system is difficult to understand….and that’s by design.
What’s Left in the Chamber? These are the three weapons that the Fed has left if the economy falters. According to economists, they range from weak to dangerous.
Lost and Found: One of the pervasive issues facing the housing market during the recovery is the lack of skilled construction workers to fill openings, even at ever-rising wages. One popular theory was that many construction workers went to the oil and gas industry when the housing market crashed. However, a new study of Census data by two economists showed that only 5% of construction workers went to the oil patch. Rather, they find that the largest issue affecting the construction industry may be the lack of young workers hired by construction companies during the downturn. Entry level jobs simply went away, young workers went elsewhere and now the industry is paying the price. Big time.
I’ve Heard this Story Before: Home construction is rebounded in September after two straight down months. Once again, the increase was driven by a large increase in multi-family starts, which tend to generate less jobs than single family starts.
…Down By the River: At least one Google employee thinks that San Francisco’s rents are a waste of money…..and he’s doing something about it by living in a van on the Google campus. No word on whether or not there is a river nearby (extra Matt Foley). See Also: Want to pay just $850 per month in rent to live near Echo Park?! Good news: you can. Bad news: only so long as you’re willing to live in a backyard Winnebago behind a triplex.
Back to the Burbs: Millennials are finally buying homes. Surprise, surprise they are headed to the suburbs that so-called “experts” swore they would shun forever. Turns out that they aren’t much different than other generations. They just start life events later. However: bad news for entry level buyers as price gains among the lowest priced homes are now outpacing those in the top tier.
Thanks for Nothing: Congratulations on saving water, citizens of LA! Your reward? Higher water bills.
This Time Will Be Different? Hedge funds are resurrecting everyone’s favorite toxic asset, the lovable Collateralized Debt Obligation or CDO. They swear that it will be different this time though.
Battle of the Boxes: Several weeks ago, we discussed how college mail rooms were struggling with Amazon Prime boxes. Camden Property Trust, the 14th largest US apartment operator is buried in boxes and has had enough. The REIT is no longer accepting delivery of packages and other large landlords might be following suit. Apparently two major trends – the rise of apartment living and a huge increase in online shopping – don’t mix well. In other news, Amazon is planning on hiring 100,000 holiday employees this season to pack boxes which might now be headed for the local post office.
Prince of Patents: Meet the former F student who holds the record for US Patents and helped bring down the Soviet Union.
Back to the Future: The Cubs are now out of the playoffs, meaning that the most famous prediction from Back to the Future II won’t come to fruition. However, there are a stunning number of predictions that the movie got right about 2015.
Chart of the Day
Low priced homes crashed harder than those at the high end. They are now playing catch-up.
I Wonder if Paypal Covers That: someone is trying to sell a 1967 Ferrari for $9MM on eBay.
Since all of the Big Problems Have Been Solved: The City of LA will now allow residents to have up to five cats living in their homes. Cat ladies, apparently have a good lobbyist.
No Leg to Stand On: Thieves stole a human leg out of a truck belonging to an organ donation charity outside of an LA area restaurant by breaking a car window and snatching an ice chest that the leg was in. Detectives aren’t sure if the thieves knew that they were stealing a human body part. The good news is that the perp isn’t armed.
Landmark Links – A candid look at the economy, real estate, and other things sometimes related.
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