What I’m Reading
Its Going Down: The MBA is out with its 2021 market outlook for housing. The big news here is that they are projecting a major slowdown for the mortgage lending industry with refinances falling a whopping $1 trillion – from $1.97 trillion to $971 billion – thanks to a moderate uptick in rates, with purchase mortgages up slightly. That’s still a healthy volume, but well off of 2020’s numbers. As a result, lenders are likely overstaffed. Seems like a great time to bring a non-bank mortgage lender public…… The Basis Point
Pay Up: CRE insurance rates are rising and its not due to COVID (at least not yet). Instead, it is a result of unfavorable lawsuit settlements and a low interest rate environment where insurers are struggling to generate returns to match up with their liabilities. Globe Street
Alternative Funding: If CRE lending hits a rough patch next year, it could open the door for an alternative funding mechanism that has yet to catch on in scale – blockchain tokenization of buildings. Bisnow
Scrap Heap: Traffic at ship demolition facilities is surging thanks to an influx of cruise ships and cargo vessels used to haul raw materials and cars. Owners of those ships are selling their vessels for scrap in an effort to shore up pandemic-damaged balance sheets. Wall Street Journal
Mutual Agreement: Facing the possibility of another two years of divided government, Democrats and Republicans are eyeing a familiar topic as a possible area of bipartisan compromise under the incoming Biden administration: infrastructure. Wall Street Journal
Pushing Back: The California Retail Association is losing patience with the state’s latest COVID shutdown and asking for evidence that retail shopping actually results in spread of the virus. Many of these businesses are already on the ropes and having to shut down during the profitable holiday season may be the final crippling blow. The Real Deal
Chart of the Day
This is one of the more interesting charts that I’ve seen in a while, especially with regards to renters in Class C buildings (green line). I’m assuming that the first spike was likely due to CARES Act and enhanced UI but what is driving the second spike that started in August / September?
Source: RealPage
WTF
Make it Rain: Yankees closer Aroldis Chapman is suing a former financial advisor, claiming that he secretly drained money from his bank account and spent it on a $1 million home for an exotic dancer, luxury cars and plane tickets. (h/t David Landes) NJ.com
Bacon Bad: A woman (allegedly) punched a police officer who was trying to impound her pet potbelly pig due to multiple complaints from neighbors because Texas. NY Post
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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