What I'm Reading Not So Fast: The Biden Administration's $3.5 trillion budget proposal is in limbo after West Virginia Senator Joe Manchin came out strongly against it in a Wall Street Journal OpEd, raising inflationary concerns. Wall Street Journal Speed Bump: The US construction industry's recovery from the lows of...
August 25th – Back to the Future
What I'm Reading Back to the Future: With investors craving yield, Wall Street firms are once again diving into the private-label mortgage market, originating and packaging loans outside of the GSE framework. Despite the recent surge in volume, private level securitizations still make up a mere 4% of the market. ...
July 21st – Legal Remedy
What I'm Reading Roll the Dice: Escalating material prices have made it challenging for contractors and manufacturers to bid on jobs, with owners sometime finding themselves paying out of pocket to cover overruns. Wall Street Journal Opt Out: Some workers are beginning to look for legal remedies that allow them...
July 20th – Diverted
What I'm Reading Diverted: Money is pouring into real estate funds but investor strategies are different in the past. Historically, downtown office towers were prime targets for institutions, as the size of the assets allows them to deploy hundreds of millions of dollars at once. But now, the long-term stability...
June 22nd – Scapegoat
What I'm Reading Wishful Thinking: Public pension funds are pouring money into alternatives thanks to low yields (and the fact that they still haven't lowered absurdly high return expectations). However, merely investing in alternatives doesn't necessarily generate higher returns. This quote from Jason Zweig sums it up perfectly: "The message...
June 18th – Pile Up
What I'm Reading Pile Up: SKW Funding and Bain Capital have formed a JV targeting $1.3 billion of acquisitions and loan originations on troubled assets over the next several years. The money targeting distress keeps pouring in despite a lack of actual distress. Consider this yet another reminder that fundraising...
June 17th – Hold The Line
What I'm Reading Holding the Line: The bid/ask gap between buyers and sellers of property types impacted by the pandemic is closing, with buyers mostly meeting seller demands. However, substantial gaps still exist in some markets. Sellers refusing to meet buyers' expectations on price over the past year is a...
June 16th – Called It
What I'm Reading Called It: About a year ago, there was a lot of handwringing over what would happen to the millions of homeowners in forbearance once accommodations expired. I pointed out (on the old blog) that we wouldn't see any meaningful distressed sales because borrowers were equity rich. Instead,...
June 15th – Round Trip
What I'm Reading Out of Balance: A recent study by LendingTree found that median housing costs were lower for renters than for homeowners with a mortgage in all 50 of the largest US metro areas. Lending Tree Backed Up: The primary driver of the inflationary spike that we are currently...
June 10th – Leap of Faith Part 2
One Big Thing Yesterday, I wrote about multifamily development getting more speculative because of uncertainty about cost inflation. Today, let's take a look at the for sale housing market. If you want to get an insider's view of housing, Bloomberg's Odd Lots Podcast with Zonda's Chief Economist Ali Wolf from...