What I’m Reading
Dropping the Hammer: In a surprising decision, the First District of the California Court of Appeal upheld approval of a 43-unit residential project following years of NIMBY obstruction, government resistance and numerous court challenges. What’s interesting here is that the court called out CEQA as a “formidable tool of obstruction,” particularly against projects that increase housing density. The precedential opinion is expected to benefit residential projects protected under state laws that impose limitations on a local agency’s discretionary authority to deny or downsize such projects, such as the Housing Accountability Act and Density Bonus Law. Holland & Knight
Long Shadow: Inflation is by far the biggest concern for the majority of Americans right now. FiveThirtyEight
Survival Mode: Rising rates are battering mortgage lenders as volume dries up. Given the macro backdrop it is unlikely that the tide turns anytime soon. Nonbank lenders are particularly under the gun and are laying off staff, selling servicing rights and generally fighting to survive. Wall Street Journal This is so predictable and many of us called it when the big non bank lenders rushed to go public when mortgage volume was soaring and the IPO window was still open. Now those same companies are trading 60-90% below their IPO and have been falling pretty much since the day they went public.
Topping Out: The recent spike in interest rates appears to have topped out for the moment with markets responding more to concerns about an economic slowdown than inflation. That being said, there is are still plenty of economic releases in the que that could reverse this trend. Capital Spectator
Job Hopping: Workers who joined the Great Resignation and left their job for more money are quitting again due to dissatisfaction with new jobs. Insider
Chart of the Day
Home sales and homebuilding are less sensitive to mortgage rates when housing markets are tight.
Source: Nick Timiraos
WTF
Religious Exemption: A trespassing suspect with “his pants opened and genitals exposed” explained to police that he was “doing a chant and was cleansing himself spiritually” when he was discovered at 2:15 AM on the premises of a closed Mexican restaurant because Florida. The Smoking Gun
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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