What I'm Reading Leading the Pack: Millennials were supposed to be the generation that spurned home ownership. Instead, they now make up over half of all home purchase applications as the group enters prime household formation years. The generation accounted for 67% of first-time home purchase mortgage applications and 37%...
December 13th – Tipping Point
What I'm Reading Tipping Point: China Evergrande has defaulted on the debt it owes to global investors, according to Fitch Ratings. Evergrande has already said it would “actively engage” with its foreign creditors to come up with a plan for restructuring but any such plan will require the blessing of...
December 10th – Stretching Out
What I'm Reading Stretching Out: Multifamily investors are increasingly stretching their holding timeframes - sometimes by 2-3x. This is being driven by both a dearth of product coming to market that makes redeployment of capital difficult and a desire to obtain fixed rate debt with inflation surging. WealthManagement.com Bubbling Over:...
December 9th – Dwindling Reserves
What I'm Reading Dwindling: American balance sheets have been historically strong during the pandemic era, thanks largely to infusions of government cash. The infusions boosted consumer spending, helped pay off debts and reduced the urgency of employment. According to Moody's Analytics, those excess savings are dwindling among many working and...
December 8th – Tailwind
What I'm Reading Tailwind: The US apartment market continues to strengthen with strong rent growth and occupancy at all time highs. RealPage FWIW, this is exactly what should logically be expected to happen in an environment with strong household formation demographics and an increasingly tight homebuying environment - Marginal buyers...
November 19th – Perfect Disguise
What I'm Reading Narrative Shift: Distressed debt funds are rebranding themselves as "opportunistic credit" as they come to the realization that distressed opportunities don't really exist at the moment. WealthManagement.com Turning Point? North American sublease office sector inventory declined for the first time since the pandemic began. Cushman and Wakefield...
October 20th – Max Capacity
What I'm Reading Max Capacity: Prologis, the world's largest logistics warehouse operator has announced that their facilities are effectively full. Freight Waves This begs the question: even if (HUGE IF) running port operations 24/7 increases capacity, where do all of those goods actually go once they leave the ports complexes...
October 12th – Held Back
What I'm Reading Trailing Indicator: Soaring home prices mean that more appraisals are coming in below contractual sales prices, causing deals to collapse. The fact that it often takes a couple of months to close these transactions means that comps, which appraisers rely heavily upon, tend to lag. While painful...
September 22nd – Spooked
What I'm Reading Spooked: With $300 billion in outstanding debt, troubled mega-developer Evergrande has been dubbed the "Chinese Lehman." After expanding for years, the company has been scrambling to pay suppliers, and warned investors twice in as many weeks that it could default on its debts. If this were to occur,...
September 10th – Putting This to Bed
What I'm Reading Putting This to Bed: In total, 1 million forbearance plans will expire between now and the end of 2021. There is a vocal contingent that has been predicting a wave of foreclosures for months. However, I am virtually certain that this won't happen as almost all of...