California Home Hunting
California Home Hunting – The Millennial Home Buyer
This is a very humorous, and unfortunately very true ( especially here in California)Â Â depiction of a young millennial trying to buy his first home.
I’m sure some might think this is true of our current housing market situation in California . . . and it is! but, the overpriced housing market in California has been around for decades! what’s different now, is the fact that due to a shortage of available, and affordable homes in California the situation has been compounded in the last 2 to 3 years.
The last time I was working with a millennial couple looking for a two-bedroom condominium here in San Diego, it took over a year, and three different offers on properties, before we were able to close escrow on their first home.
Now, keep in mind that my first-time home buyer clients were well qualified for their price range, and with help from their folks were putting 20% down. Yet it was very frustrating to find a decent property that did not have multiple offers on it within days of its original listing.
Commercial Real Estate Bubble
Another Real Estate Bubble?
Back in November 2016 I wrote an article about red flags that I saw pertaining to the United States commercial real estate market. If you missed that article here is the direct link: Real estate bubble 2017
Well, just this week I saw another red flag pertaining to the commercial real estate market. Yes, take a look at the photo to the left. I purchased an electronic device last Sunday from Amazon. I ordered it online about 8 o’clock in the morning on Sunday. As you can see from the bag, the online order form showed that it would be delivered between 12 and 2 PM (actually arrived at 12:30 PM) the same day. Now, as a prime member, there was no additional cost for this super quick delivery service.
I didn’t realize it at first, but the experience was so easy and so fast, I now believe that this is a definite danger for the large shopping malls. My article about the real estate bubble that I posted in November 2016 was about real estate limited partnerships (REITS) many of which invest in all types of commercial shopping centers and strip malls. So, for me personally, and I would venture to say probably quite a few other people, when ordering online, not only do you have the convenience and a very competitive price, but think of the time saved from having to go to the mall, find a parking space, fight the crowds and finally waiting at the checkout line before heading back home. Therefore, I really believe that this fast shipping service that Amazon has incorporated and I understand some other big online merchants are looking into, is going to spell big trouble for many shopping malls and thereby the REITS that invest in them.
Real Estate Bubble 2017
Real Estate Bubble 2017 – Another real estate bubble?
Now, don’t get super worried about this because I am not talking about the residential real estate market here. What I’m talking about, is the approximate $11 trillion U.S. commercial property sector.
Moody’s investor services recently issued a warning about the increasing delinquency rate in the commercial mortgage-backed securities (CMBS) market. This report indicated that delinquencies of 60 or more days at increased from 4.6% in 2015 to 5.6% in September 2016.
Another major financial rating institution, Fitch Ratings, in its November report indicated that this sector may be a trouble spot. In particular, this report singled out CMBS backed by apartment buildings as security, and also expressed concern about construction loans.
Another indicator of trouble ahead in the commercial real estate market is the Green Street Commercial Property Index. This well respected commercial property index hit its peak in 2007. Then, after you drop the index bottomed out in May 2009, since then the index has gained 107% and now is actually over its bubble high in 2007 by 26%! Read more 