What I’m Reading
Overflow: The red hot housing market coupled with stubbornly high unemployment has ignited a boom in new realtors. However, housing supply – which was already low before 2020 – has been dropping like a rock and there are now more realtors than homes for sale in the US. One would think that this would be the perfect backdrop to see stubbornly high commissions fall. However, that belief only truly exists among those who do no understand how cartels actually function. Wall Street Journal
Can’t Win: San Francisco figured out a way to build new housing for chronically homeless people at roughly half the cost and in half the time by utilizing modular construction. However, it faces opposition from a powerful foe – construction trade unions who won’t be able to wet their beaks due to the offsite nature of modular construction. San Francisco Chronicle
In the Crosshairs: On Thursday, March 11th, President Biden signed “The American Rescue Plan Act,” or the $1.9 trillion COVID-19 Stimulus Package, into law. One aspect of the plan that is making multifamily landlords a bit nervous is that the watchdog Consumer Financial Protection Bureau (CFPB) will likely be involved in implementation of its rent relief measures. However, questions still remain about how far the agency’s jurisdiction extends when it comes to regulation of rental housing. Trepp
Nature is Healing: Retail rent collections are steadily improving. In February, rent collections surpassed 90% among national retailers for the first time since March 2020, when the pandemic began, according to research from Datex Property Solutions. Stimulus and reopening are clearly helping here. Globe Street
Under Pressure: The week wouldn’t be complete without another concerning survey for the office market. This one from CoreNet Global, taken from its worldwide membership found that post pandemic, workers will spend roughly half of the work week at the office and the remaining time either in a home office, remote location or co-working space:
While the office will remain a place for collaboration and teamwork, the overall corporate footprint is expected to be smaller two years from now for more than 54 percent of the companies surveyed. Nine percent project a reduction of less than 10 percent, 31 percent project a reduction of 10-30 percent and 14 percent project a decrease of greater than 30 percent.
Retail (which was already facing headwinds) and hospitality experienced the most acute operating distress over the past year. However, in the long run it may be the office market – which has thus far seen little distress from a default standpoint – that is the most negatively impacted from COVID thanks to changing remote work trends and increasing location flexibility. CoreNet Global
Chart of the Day
Higher mortgage rates are likely to cool US housing activity.
Source: BCA Research
WTF
Packing: A woman who was arrested for DUI in a McDonald’s drive thru was found to have an 8 pack of vodka in her bra because Florida. The Smoking Gun
Fun in the Sun: A forty-something couple was arrested for getting busy mid-afternoon in a crowded park because Florida. The Smoking Gun
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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