What I’m Reading
Chop Shop: Single family rental platforms are increasingly allowing investors to buy shares in homes for as little as $10. The Real Deal IMO, this trend is a governance nightmare waiting to happen. Small investors would be far better served buying shares in Invitation Homes or American Homes for Rent if they want exposure to the space. This not only allows for diversification but also gives the additional layer of safety of a professional management team that has skin in the game.
Everything Must Go: Car dealerships are increasingly closing their doors as car companies increasingly adopt Tesla’s direct to consumer sales model. A lot of these sites will be developed as much needed residential housing as the tend to be in good TOD locations. Wall Street Journal
Fuel on the Fire: The Biden Administration’s proposed infrastructure spending package is going to drive the cost of construction materials and labor higher. New York Times I’ve been writing about this for a while now and glad to see a major outlet finally discussing it. Injection trillions into the construction sector during a labor and material shortage and a housing crisis is going to have some serious negative consequences
Showing Cracks: A third of U.S. consumers who used “buy now, pay later” services have fallen behind on one or more payments, and 72% of those said their credit score declined, a new study published by personal finance company Credit Karma showed. Reuters
Pressure Valve: Mortgage payments for new homebuyers outpaced rent price increases in 25 of the 50 largest metro areas in the United States during August. Globe Street This is occurring despite historically low mortgage rates. The rental market will continue to act as a pressure valve as home prices become even more unaffordable
Chart of the Day
Uncharted Territory: According to Deutsche Bank, 85% of the US High Yield market has a yield below the current rate of inflation.
Source: Bianco Research
WTF
Bling: A desperate-for-attention rapper had gold chain hooks surgically attached to his scalp New York Post
Magic Potion: A woman who tried to steal a fire truck claimed that she did it due to consuming a concoction called “The Elixir of Life” because Florida. The Smoking Gun
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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