Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-64138 Sun, 22 Jul 2018 15:33:59 GMT New York City Will Force Airbnb to Disclose Information on Hosts http://implode-explode.com/viewnews/2018-07-22_NewYorkCityWillForceAirbnbtoDiscloseInformationonHosts.html The law, which passed 45-to-0 in a city council vote Wednesday, is designed to help enforce existing rules banning short-term rentals. Mayor Bill de Blasio has said he supports the bill. Earlier in the day an Airbnb host backed financially by the company filed a lawsuit against New York City, accusing officials of retaliating against him for speaking out in support of home rentals.

Chris Lehane, head of global policy at Airbnb, said the policy will subject innocent hosts to over-policing and violates their privacy. Lehane, a former adviser to President Bill Clinton, lashed out at the council in a conference call with reporters and accused the bill's supporters of putting the interests of hotel owners and unions above regular New Yorkers. "This is a bill that really is designed to benefit the hotel industry," he said.

The debate over Airbnb's role in New York has raged for years, with housing advocates saying short-term rentals contribute to rising rents and gentrification, while the company argues it helps homeowners afford their mortgages. Regulation hasn't stopped the rise of the San Francisco-based company, which is valued at about $31 billion and has faced resistance from local governments practically since it started a decade ago.

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iehi-feed-64131 Thu, 19 Jul 2018 16:24:05 GMT Housing Permits Soften, Starts Plummet http://implode-explode.com/viewnews/2018-07-19_HousingPermitsSoftenStartsPlummet.html iehi-feed-64129 Wed, 18 Jul 2018 22:49:09 GMT Millennial Homeownership Headwinds Worrisome for Future http://implode-explode.com/viewnews/2018-07-18_MillennialHomeownershipHeadwindsWorrisomeforFuture.html UI put some numbers to the demographic and social differences displayed by the generation. First, being married increases the probability of owning a home by 18 percentage points after accounting for other factors. If the marriage rate among that age group in 2015 had bbeen the same as in 1990, Millennial homeownership would be about 5 points higher.

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Yet the researchers also found that even among white households that are married, with children, and even with substantial income, the homeownership rate is 2 to 3 percentage points lower than earlier generations.  Obviously other factors are at play, some of them defined as attitudinal.

The preference of educated Millennials to move to more expensive urban centers has contributed to their lower homeownership rate.  In high-cost cities the housing supply is inelastic and within large metro areas, Young adults additionally migrate to the counties with a more urban environment where prices have increased more than in surrounding areas.  This shift in preference was mostly observed among those who are higher educated. The supply of affordable housing has declined overall during the last decade, but this is especially true in areas where Millennials prefer to live.

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Obtaining a mortgage has become more challenging over the last ten years. The process is unwieldy, and underwriting has not adapted to the unstable and non-traditional labor market and tightening credit standards.

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iehi-feed-64120 Tue, 17 Jul 2018 00:42:01 GMT NYC "Billionaire's Row" Hotel Sells At Massive Loss After 5 Years http://implode-explode.com/viewnews/2018-07-16_NYCBillionairesRowHotelSellsAtMassiveLossAfter5Years.html Arden Group entered contract to acquire the 29-story, 240-key hotel at 120 West 57th Street for $41 million. When the deal closes in the third quarter, New York REIT will have liquidated its entire portfolio, except for a 50.1 percent stake in One Worldwide Plaza. Ark Partners developed the Viceroy in 2013, and that same year, sold the leasehold for $148.5 million to New York REIT. The deal marked the first hotel purchase for the real estate investment trust, then known as New York Recovery REIT.

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In addition to Vicecroy's mounting expenses, the Manhattan hotel market is in a radically different place. The borough saw a slump in RevPAR -- or revenue per available room -- and pricing power, but there appears to be turning around in recent months.

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iehi-feed-64109 Fri, 13 Jul 2018 00:27:45 GMT Report: Michael Cohen Buys $6.7 Million Apartment in NYC http://implode-explode.com/viewnews/2018-07-12_ReportMichaelCohenBuys67MillionApartmentinNYC.html iehi-feed-64107 Thu, 12 Jul 2018 16:26:22 GMT Are NEW Chinese buildings really FALLING DOWN? (VIDEO) http://implode-explode.com/viewnews/2018-07-12_AreNEWChinesebuildingsreallyFALLINGDOWNVIDEO.html iehi-feed-64066 Thu, 28 Jun 2018 17:42:19 GMT NYC Poised To 'Significantly' Crack Down On Illegal Use Of Airbnb http://implode-explode.com/viewnews/2018-06-28_NYCPoisedToSignificantlyCrackDownOnIllegalUseOfAirbnb.html Christian Klossner, executive director of the Office of Special Enforcement for the city, said during the hearing that 20 to 30 percent of Airbnb listings operate with commercial frequency. According to Klossner, the new bill would "significantly" enhance the city's ability to crack down on illegal commercial hosts. Mayor Bill de Blasio is also in support of the legislation.

Funny that the city itself is admitting what AirBnB itself argues: that the overwhelming majority of hosts use it for occasional extra income (e.g., when they themselves travel). Looks like AirBnB is just a convenient scapegoat for an otherwise very messed up real estate market -- "The Rent Is Too Damned High" long predates AirBnB. NYC's government should look in the mirror and ask themselves whether they're really facilitating the development the market demands (you know, that whole "supply" thing)...

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iehi-feed-64065 Thu, 28 Jun 2018 17:36:02 GMT Freddie Mac seeks widespread expansion of 3% down mortgages http://implode-explode.com/viewnews/2018-06-28_FreddieMacseekswidespreadexpansionof3downmortgages.html In San Francisco, you are now considered "low income" if you make less than $117,000 a year.  That makes sense when a standard home sells for $1.5 million.  So now we have Freddie Mac attempting to push 3% down mortgages on a much larger scale since many people are priced out.  What can possibly go wrong?

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You have closing costs and in many cases, there are commissions to pay out once escrow closes. These may range from 3 to 5 percent. So when you purchase a home with a 3 percent down payment, you are essentially putting yourself in a zero or negative equity position from day one if you needed to sell.

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iehi-feed-64013 Sun, 10 Jun 2018 17:38:56 GMT Kanye West to be "one of the biggest real estate developers of all time" http://implode-explode.com/viewnews/2018-06-10_KanyeWesttobeoneofthebiggestrealestatedevelopersofalltime.html The rapper turned designer, entrepreneur and now developer revealed his newly-formed architecture studio's first project, a prefabricated affordable housing scheme, via one of his collaborator's Instagram account this week, according to the Architect's Newspaper.

The public release of the renderings come weeks after West filmed an interview where he spoke about his plans to build a real estate empire. In a lengthy taped conversation between him and radio and television personality Charlamagne Tha God, West said, "I'm going to be one of the biggest real estate developers of all time. Like what Howard Hughes was to aircrafts and what Henry Ford was to cars."

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But it was only last month, via Twitter, that he announced his new venture to bring architectural design in-house: "We're starting a Yeezy architecture arm called Yeezy home," he tweeted. "We're looking for architects and industrial designers who want to make the world better.

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iehi-feed-64008 Sat, 09 Jun 2018 14:29:29 GMT The priciest rentals are also the loneliest http://implode-explode.com/viewnews/2018-06-09_Thepriciestrentalsarealsotheloneliest.html The vacancy rate for the country's most expensive apartments is more than double the rate for lower-priced pads, as builders have flooded the high-end of the market while supply remains tight for more modest product.

The most expensive 10% of U.S. rentals had a vacancy rate of more than 13 percent during the first quarter of the year, according to a CoStar Group study cited by Bloomberg News.

For the rest, the rate was around 6 percent. CoStar's study excluded subsidized rentals and focused on the 54 largest metropolitan areas in the country.

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There are now 537,000 apartments und construction -- the most going back at least to 2000, according to the study. But those units are disproportionately located in expensive submarkets.

"Capital around the world is enamored with U.S. multifamily, and a lot of that is manifesting itself in high-amenity, high-asking-rent" apartments, said CoStar's Michael Cohen. "The market is missing some other opportunities."

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iehi-feed-63997 Thu, 07 Jun 2018 14:04:22 GMT How WeWork became the most hyped startup in the world http://implode-explode.com/viewnews/2018-06-07_HowWeWorkbecamethemosthypedstartupintheworld.html When Softbank first expressed interest in discussing business, Neumann insisted that Son should visit WeWork's headquarters in person. "It wasn't because we were trying to be cheeky," he says. "It was because part of what we do is energy -- and I can't put energy on a piece of paper."

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Not everyone is convinced, however. Some of its critics say that WeWork should be treated like a traditional property company, not a Silicon Valley unicorn. WeWork doesn't actually own most of it spaces, but takes out long leases on buildings, which it then offers out in smaller chunks and on shorter terms. This can be a risky model: serviced office provider Regus (now IWG) thrived in the dotcom boom only to suffer when the bubble burst, filing for bankruptcy protection for its US business in 2003.

"The problem was catastrophically falling rents," IWG CEO Mark Dixon, who founded the company in 1989, tells me later. There was no real fall in demand, he says, but a disjoint in cost base. "If you sign leases that are too long and you're fixed at double the market on your liability side on leases, you basically lose all your margin." Today, IWG remains one of WeWork's main competitors, and, with over 3,000 locations to WeWork's 200, it is much bigger. IWG has been publicly traded since 2000; at the time of writing, it has a market cap of £2.2 billion. Dixon insists that he is not worried about WeWork. "There's no magic ingredient that they have that everyone else doesn't have," he says. IWG launched its first space under co-working brand Spaces, which is closer in style to WeWork than its more formal Regus offices, in 2015. I ask what he makes of WeWork's $20 billion valuation. "Well, it's a great story," he says.

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iehi-feed-63983 Wed, 30 May 2018 22:06:05 GMT Run-up in home prices is not sustainable http://implode-explode.com/viewnews/2018-05-30_Runupinhomepricesisnotsustainable.html Home values have been rising for six straight years, and the gains have been accelerating for the past two years. Unlike the last housing boom, the gains are not driven by fast and easy mortgage money, but instead by solid buyer demand and very low supply. Still, like the last housing boom, some are starting to warn these price gains cannot continue.

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Meanwhile the home price gains are widest on the low end of the market, where supply is leanest. That is why home sales have been dropping most on the low end. Evidence is now mounting that a growing number of first-time buyers are giving up and dropping out of the market altogether. Sales to first-time buyers dropped 2 percent in the first quarter of this year compared with the first quarter of 2017, according to Genworth Mortgage Insurance.

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iehi-feed-63970 Fri, 25 May 2018 21:13:50 GMT Renters Become Majority in More than 20 Major US cities http://implode-explode.com/viewnews/2018-05-25_RentersBecomeMajorityinMorethan20MajorUScities.html iehi-feed-63952 Thu, 17 May 2018 19:41:47 GMT New York eclipses London in ultra-luxury residential sales http://implode-explode.com/viewnews/2018-05-17_NewYorkeclipsesLondoninultraluxuryresidentialsales.html New York City has jumped to second place among the world's most luxurious cities based on residential sales volume. The city surpassed London in a move from third to second place, just behind Hong Kong in the top spot, according to a new report from Christie's International Real Estate...

New York also took second place in trophy sales behind Hong Kong, with seven sales above $50 million, and seven of 24 penthouse sales. The top 10 trophy sales worldwide totaled $1.24 billion, down slightly from $1.32 billion in 2016. New York City's contribution to the list was the the $91 million purchase of the penthouse at 432 Park Avenue which was fifth most expensive sale globally. The No. 1 sale was a property in Hong Kong, called the Peak, which sold for a stratospheric $360 million.

In 2017, the wealth of the world's billionaires grew to $9.1 trillion, according to Forbes, with more than 2,200 billionaires worldwide. If you include those with $500 million or more, that number increases to $11.7 trillion, said Conn. This means there is an incredible amount of capital to be deployed, he added.

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One feature of the market in 2017, and continuing into 2018, is the degree to which it is a buyer's market, said Dan Conn, CEO of Christie's, particularly uber-luxury buyers. "They don't have to go the dance," he said. It's up to sellers to woo them.

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iehi-feed-63946 Tue, 15 May 2018 14:25:46 GMT Trump Indonesia project is latest stop on China's Belt and Road http://implode-explode.com/viewnews/2018-05-15_TrumpIndonesiaprojectislateststoponChinasBeltandRoad.html A subsidiary of Chinese state-owned construction firm Metallurgical Corporation of China (MCC) signed a deal with Indonesia's MNC Land to build a theme park outside Jakarta as part of the ambitious project, the company said on Thursday... The project includes Trump-branded hotels, residences and a golf course, as well as other hotel, shopping and residential developments.

... marketing materials for MNC Lido City refer to the theme park and Trump properties as flagship elements of the development, and corporate filings and internal documents show the Trump Organisation and the president's sons have been directly involved in various stages of its planning.

Negotiations on the Lido deal began before Trump's November 2016 election and subsequent pledge that his family business would not engage in new transactions with foreign governments during his presidency.

Still, "even if this deal is completely and entirely above board, it simply furthers the perception of impropriety" surrounding Trump's business dealings, said Christopher Balding, an economics professor at Shenzhen's HSBC Business School. "Especially with the potential trade war, this is not a good look ... Critics will be entirely right to demand answers."

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iehi-feed-63909 Tue, 01 May 2018 13:23:35 GMT NYC's 90-Story One57 Perks Up Sales With Luxury-Condo Discounts http://implode-explode.com/viewnews/2018-05-01_NYCs90StoryOne57PerksUpSalesWithLuxuryCondoDiscounts.html Four years after completing the 90-story tower -- and setting a New York City record with a $100.5 million condo deal -- Extell Development Co. is still working to sell it out. In the first three months of the year, the firm sold five apartments totaling $73 million, according to a filing on the Tel Aviv Stock Exchange, where Extell sells debt. It was the firm's best quarter at One57, by both unit sales and value, since the end of 2016, according to an analysis of filings and data from StreetEasy.

"They were all discounted," Extell President Gary Barnett said in an interview. "That definitely has something to do with convincing people that it's time to buy and that they're getting a good value."

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At One57, Extell gave discounts in the quarter ranging from "single digit" percentages to bigger deals higher up in the tower, where the units are pricier, Barnett said. In some cases the developer covered the closing costs. Barnett said the two biggest sales were for about $24 million each. Not all the deals and their exact prices have been filed publicly yet with the city.

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iehi-feed-63905 Sat, 28 Apr 2018 00:28:02 GMT What Will these Mortgage Rates Do to Housing Bubble 2? http://implode-explode.com/viewnews/2018-04-27_WhatWilltheseMortgageRatesDotoHousingBubble2.html If the average mortgage rate rises to 5.2% -- perhaps in the second half of this year -- it will be the highest since 2010. And 5.5% would take mortgage rates back to levels not seen since 2008... But there is a difference between those higher mortgage rates now and the same rates back then: Home prices!

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The pain threshold for the US housing market is at 6% (average 30-year fixed-rate mortgage, as measured by the MBA, conforming, with 20% down)... There may well be a cold-shower effect at around 5% that will sober up some home buyers. But pain will set in at around 6%. People have forgotten what a 6% mortgage feels like though that's still a historically low rate. And they've never had to finance homes at these sky-high prices at 6%. That'll be the new thing. And something will have to give.

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iehi-feed-63900 Thu, 26 Apr 2018 00:25:50 GMT WeWork documents reveal it owes $18 billion in rent and is burning through cash as it seeks more funding http://implode-explode.com/viewnews/2018-04-25_WeWorkdocumentsrevealitowes18billioninrentandisburningthroughcas.html WeWork owes $18 billion in rent. The company has more than 14 million square feet of office space, with suitably massive lease obligations, though WeWork has the option of closing locations if it can't pay those bills. WeWork is burning cash. Revenue from memberships more than doubled last year, to $822 million, but expenses also more than doubled, to $1.81 billion. Net losses came to $934 million, according to Bloomberg.

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The office-leasing startup WeWork plans to raise more funding through a $500 million bond sale, according to the Financial Times. It's the first time the company is raising money from debt investors after it raised billions in venture capital from backers such as SoftBank.

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iehi-feed-63899 Thu, 26 Apr 2018 00:18:45 GMT U.S. Home-Buying Market Taking Sharply-Higher Costs In Stride -- So Far http://implode-explode.com/viewnews/2018-04-25_USHomeBuyingMarketTakingSharplyHigherCostsInStrideSoFar.html The S&P CoreLogic Case-Shiller index showed property values in 20 major U.S. cities climbed 6.8 percent in February, the biggest year-over-year gain since June 2014. Government data revealed a faster-than-projected rate of new-home sales in March and huge upward revisions to the prior two months... Now, with the costs of lumber and other building materials soaring together [on top of higher mortgage costs], buyers are unlikely to see any relief for some time.

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The framing of homes, or putting up roofs and walls, accounts for 15 percent of the cost of construction. A composite measure of the cost of lumber for framing rose 16 percent from December to March ... and it's not just lumber. A Labor Department gauge of prices paid at the producer level for construction inputs -- everything from particleboard and plumbing to concrete and insulation -- was up 5.1 percent in March from a year earlier, the biggest annual advance in nearly eight years.

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So far, neither higher home prices or a four-year high in mortgage costs have been enough to dissuade buyers. Results of the Conference Board's consumer confidence index on Tuesday showed 1.7 percent of the group's respondents in April planned to purchase a new home in the next six months, matching the highest share in this expansion.

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At some point, affordability will become a bigger issue for those wanting to own a home. So far though, consumers are taking higher home prices in stride and builders remain relatively upbeat about the market's prospects.

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iehi-feed-63891 Tue, 24 Apr 2018 00:44:24 GMT Tax Changes Mean Mortgage-Interest Deduction To Find Fewer Takers http://implode-explode.com/viewnews/2018-04-23_TaxChangesMeanMortgageInterestDeductionToFindFewerTakers.html The resulting home mortgage-interest deduction -- once considered a tax break too sacred to touch -- will be used by just 13.8 million taxpayers, down 57%. In 2017, about 12.4% of the tax break went to households with incomes exceeding $500,000, and 36.5% of the benefit went to people earning between $100,000 and $200,000.

Now, 23.9% of the shrunken mortgage-interest deduction is projected to go to households making more than $500,000 with 28.9% of the benefit going to households between $100,000 and $200,000.

Other changes in policy also curb the mortgage-interest deduction, including the cut in marginal tax rates, which reduces the value of every deduction. Homeowners can now deduct interest on up to $750,000 in loans, down from $1m...

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