Landmark Links October 19th – Cushioned

Must Read: Based on the historical relationship, months of supply could increase 50% before we start seeing housing prices decreases (as opposed to a slowing rate of price increase that we have been experiencing) – per Calculated Risk.  See Also: The next housing downturn will be a lot different than the prior one was:

In a typical housing cycle, the forces of rising prices and rising building lead to oversupply, then slowdowns or declines in both. The cycle is driven in part by interest rates—low rates push prices and building higher and then higher rates drive them down.

This cycle is much different in part because building never really took off in this expansion, even though prices recovered in many markets.

Construction workers, land developers and home builders left the industry after the last crash, stymieing new-home construction, which remains even now around the same level as in some prior recessions. In addition to labor shortages, higher materials costs and increased land-use regulations also held back construction.

Instead of oversupply, the U.S. experienced the worst shortage of homes for sale in at least three decades, driving up prices even more and locking first-time buyers out of the market.

Some argue that a recession might be good for the housing market because it will slow home-price appreciation and improve affordability.


End of the Line: The end of the easy money era appears to be upon us as the Fed continues to hike its way out of what was easily the longest period of accommodative economic policy in history.  However, what happens next is anyone’s guess.

Shocking if True: America’s largest trucking company is combating a driver shortage by raising wages….and it’s working.

Storm Clouds: Heightened trade tensions, ongoing geopolitical concerns, tighter financial conditions that affect many emerging economies, policy uncertainty, historically high debt levels, rising financial vulnerabilities and limited policy space, which could further undermine confidence and growth prospects are making global economic leaders nervous.

Contrarian Call: Is the US yield curve steepening experienced over the past few weeks already over?


Seconds: Startup real estate platform Cadre is launching the world’s first online secondary market for trading of private real estate investments.

Too Damn High: Nosebleed rents, an e-commerce boom and landlords’ aversion to short term leases have resulted in a whopping 20% vacancy for Manhattan street retail. (h/t Steve Sims)

Out of Focus: It’s almost as if the Harvard Business Review is openly trolling open office plans.  After publishing research proving just how bad they are for productivity over the summer, the publication has now taken to posting tips on how to stay focused if you are stuck in an open office See Also: Panasonic is selling human blinders to help people stuck in an open office hellscape avoid becoming distracted.


The Great Divide: California is becoming more feudal, with ultra rich lording over an ever-declining middle class and it has everything to do with not building enough housing to keep up with demand.

More Bang for Your Buck: New, relatively high-end but reasonably-priced developments and a hip food scene are enticing some middle-income workers in and around San Diego to move to Tijuana. where the cost of living is far more affordable.


Vultures Circling: NYC taxi medallions, once viewed as an investment nearly as safe as an annuity are being scooped up by hedge funds on the cheap as a distressed asset with prices having fallen by as much as 85% from the peak.

RIP: Microsoft co-founder Paul Allen used the incredible wealth that he generated from technology to transform his hometown of Seattle.  From real estate re-development to sports, the modern version of the region is his legacy.

Shots Fired: Nouriel Roubini is not a fan of blockchain:

Blockchain has been heralded as a potential panacea for everything from poverty and famine to cancer. In fact, it is the most overhyped – and least useful – technology in human history.

On the Rise: Instacart (my favorite delivery platform) is now valued at $7.6 billion – up from $4.35 billion just six months ago.  The optimism is at least in part due to the fact that the grocery service is becoming viewed as brick and mortar retailers’ best ally in the fight against e-commerce in general and Amazon in particular.

Chart of the Day

Percentage of apartment completions that are high-end.  I actually would have guessed that the west coast would be substantially higher. (h/t Steve Sims)

Source: Globe Street


Tastes Like Chicken: A high school student brought cookies baked with her grandmother’s ashes to school and shared them with other students.  Perhaps the most remarkable part of this story is that it did not take place in Florida.

Throw Down: A dispute over who got to dance for a favorite regular customer led to a stripper brawl at a strip club in Ohio.

Til Death Do Us Part: A sex doll manufacturer in the UK is now offering to make replicas of deceased lovers.

Landmark Links – A candid look at the economy, real estate, and other things sometimes related.

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