From CNBC:
Luxury home prices soar as sellers come back down to earth
The slump in the swankiest sector of the housing market appears to be over, and, ironically, it may be due to a dose of reality among sellers.
Sale prices of luxury homes in the second quarter of this year were up 7.5 percent from a year ago, the first time luxury gains have outpaced the rest of the market since 2014, according to Redfin, a real estate brokerage which defines luxury as the top 5 percent of the most expensive homes sold in each city in each quarter.
While some point to the recent runup in the stock market, the real reason for the luxury recovery may be a shift in the mind of sellers. They were asking too much, and now that they’re asking less, there is more action in the market, in turn boosting prices again.
“There have been several years of a large disconnect between luxury sellers and market conditions, and what we’ve noted in all our research is that sellers are now much more willing to travel farther to meet the buyers,” said Jonathan Miller, president and CEO of Miller Samuel, a real estate appraisal and consulting firm that compiles market reports for Douglas Elliman, a real estate brokerage.
Miller points to a recent $15 million sale of a Brooklyn, New York, home. While the closing price was high, it sold at a 40 percent discount to its original list price, and the home took seven years to sell.
Luxury home sales have been rising steadily, causing the supply of those homes for sale to drop. Sales of homes priced above $1 million jumped 19 percent in June compared with a year ago, according to the National Association of Realtors. That was a much larger sales gain than in any of the lower price points.
The sales surge has caused a decline in the supply of luxury homes. Listings at or above $1 million fell 9.4 percent compared with the same period last year, according to Redfin. Those priced at or above $5 million were down about the same. This after five consecutive quarters of double-digit inventory growth.
“The housing shortage is now affecting the top of the housing market,” said Redfin’s chief economist, Nela Richardson. “Yet despite the strong uptick in prices, the luxury market is not nearly as competitive as the rest of the market. Only 1 in 50 luxury homes sold above list price in the second quarter, compared to more than 1 in 4 homes in the bottom 95 percent.”
Good Morning New Jersey
luxury is the most abused word in the English language.
This blog is so luxurious. The smooth scrolling, the subtle use of color, the tasteful design. The background, that’s bone. The lettering? Silian Grail. My god, it even has a watermark.
A company has a core mission and the act of performing it creates profit. Anything other than that specific action is just a pure cost to the company. So that’s where you get the clichés profit center and cost center.
I learned in business school and also in my career that the absolute most difficult thing to create is revenue. The top line.
One of the worst aspects of government is that they completely do not understand this basic tenets of business in the economy.
Why is that?
Because they have taxing Authority. The most difficult thing that exists in their world is completely a given. That’s why Obama is so hopelessly clueless
The Great Pumpkin says:
August 3, 2017 at 11:38 pm
What if this capital was taken from profit in the name of job creation? Under moderate conditions, good or bad thing for the economy in the short term?…long term?
My position was that of bystander, under the gloomy economic conditions at the time, any job saved was a battle won. But does it carry a long term economic cost?
Curious to hear your take.
“Every single dollar spent on compliance is taken from somewhere (someone) else”
@maggieNYT
POTUS, who tells visitors to WH that he’s never lived in such luxury, told recent golf partners it’s “a real dump”
Did you see the story in the post about the manhattan place that was listed at 125 million andnsold for 44 million? It was a 12,000 square foot unit.
JOBS americans won’t do.
https://www.bloomberg.com/news/articles/2017-08-03/jobs-in-u-s-haven-t-been-this-hard-to-fill-since-2000-chart?cmpid=socialflow-twitter-business&utm_content=business&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social
Unemployment at 16 year low, 450k jobs in 2 months.
If you credit Obama with the economic growth in his term, why would you not simultaneously credit Trump with his?
Otherwise, you need to cede Obama’s gains to Bush.
So which is it?
To me, it’s all irrelevant, as little the presidency controls will impact the economy, it’s all serendipity and coincidence … taking credit for the weather.
209k vs 183k expected, upward revision previous month – blowout.
While 450k in 2 months is not by itself uncommon, what is uncommon is it happening at a 4.3% rate, with low weekly jobless claims.
Punkin’s wage gains, nowhere to be seen.
for the past 8 years y’all said this was fake News as hundreds and hundreds of millions of americans had given up looking for a job.
so now you tell me, is the unemployment number still fake News?
grim says:
August 4, 2017 at 8:48 am
Unemployment at 16 year low, 450k jobs in 2 months.
Wage growth is coming!
““It ticks off all the right boxes,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets. The report shows “an unemployment rate that improves, hourly earnings that move in the right direction, and a wage pie which moves in the right direction.” For an economy growing at a pace of 2 percent to 2.5 percent, “this report fits that narrative perfectly,” he said.”
“Wages were up across all industry groups; overall wages are rising at 2.3 percent three-month annualized pace”
https://www.bloomberg.com/news/articles/2017-08-04/payroll-gain-of-209-000-wage-pickup-show-u-s-labor-strength
This jobs report should stamp out the individuals looking for anything negative to claim a huge correction is coming. Keep on waiting bears, your time is still a way off. There will be a correction, but it will be swift. The real bust they are looking for is not coming till after the coming boom in the 2020’s. Keep waiting.
My argument for regulation was for the specific conditions in financial sector from 2008 – 2011 when 800k financial jobs were lost. I am not insular in thinking regulation does not come at a cost but rather that banks were retaining capital and low rate environment/ world turmoil capped investment growth anyway. I saw a dramatic shift in terms of hiring. Supporting MBS or emerging markets? Goodbye desk and full time support staff in MO and BO. Contractor for Dodd Frank or CCAR? Hello.
120 manufacturing jobs coming to Piscataway. Average wage is $75,000. Congrats to media (NJ Advance) who got the story.
Question for experts: Why is Hudson outperforming on house prices?
Grim another comment in mod. Pls unmod. Tks.
Why is Hudson outperforming? New York City.
Hell, look at the Midtown East Rezoning project in NYC if you don’t think there is insane demand in Manhattan.
Thanks. Love this topic, and your reply provides a lot of food for thought on it.
Chi says:
August 4, 2017 at 8:38 am
A company has a core mission and the act of performing it creates profit. Anything other than that specific action is just a pure cost to the company. So that’s where you get the clichés profit center and cost center.
I learned in business school and also in my career that the absolute most difficult thing to create is revenue. The top line.
One of the worst aspects of government is that they completely do not understand this basic tenets of business in the economy.
Why is that?
Because they have taxing Authority. The most difficult thing that exists in their world is completely a given. That’s why Obama is so hopelessly clueless
“Unemployment at 16 year low, 450k jobs in 2 months.
If you credit Obama with the economic growth in his term, why would you not simultaneously credit Trump with his?
Otherwise, you need to cede Obama’s gains to Bush.’
I’m assuming this is a quip to stir debate.
Bush can lay claim to his ‘gains’ transitioning into Obama’s economy. As unemployment’s fallen for the last seven years, I’m not sure of your point. The lack of any new regulations, added in with the inability to pass any legislation, has kept the economy chugging along nicely.
Grim, I agree. Being close to New York City drives New Jersey real estates values. Smart real estate companies buying dirt lots in Newark for millions. This real estate was worthless for decades. Now seller are multimillionaires. Why? They own land close to New York City.
The End Is Nigh (Ex-Pat Edition):
http://nypost.com/2017/08/04/minorities-make-up-majority-of-harvards-incoming-class/
Newark? Sorry, they’ll kill themselves.
November ballot question on rent control is a lock, it’s going on the ballot, and it’ll be voted.
And in one short day, Newark will have guaranteed that they will not see transformation.
Capping rent increases on renovations will all but guarantee that the developers look elsewhere. If it passes, Bayonne is much more interesting than Newark.
Unless, of course, buildings are delivered vacant, if you get that reference.
http://www.wnyc.org/story/newark-tenants-turn-voters-control-rising-rents/
Grim, smart Newark investors buying dirt to lease to logistics companies, not building housing.
Yeah but that’s not a new trend, that’s half the turnpike.
Grim, dirt lots in Newark selling for $10 million and up. That is new trend. Newark dirt worth priced like Alpine and Short Hills. But nothing like Hudson County residential land ($10 million + per acre). Blog readers need to know this.
Grim,
He’s right. This blog should only be about Hudson county. In fact, rename it so.
Comrade,
This legal?
Listed under qualifications:
“Identify as Black/African-American, Hispanic, and/or Latino”
http://www.mckinsey.com/careers/search-jobs/jobs/jd-diversity-leadership-intern-jdli-9353
Dirt is priced on it’s highest and best use. Dirt in a residential area with a 5 acre minimum zoning might be worth a lot of money, but that doesn’t mean that a 100×100 commercial lot with high traffic frontage isn’t worth significantly more. But that value has to do with use, and revenue potential associated with use drives that number higher.
People forget about highest and best use when they think about dirt. They imagine the value being equal to the current use. So a small shit house on a that 100×100 lot might be worth nearly nothing. But rezoned as retail with some cheap strip shops, and its worth 20 times that.
My old real estate mentor taught me a lot on this. One technique that he suggested, and it was successful, is using a kind of assemblage within specific zoning areas to take non-conforming lots, put them together, and re-use the property for another use entirely. For example, taking run-down residential properties on main-street frontage, combining them, turning them into single commercial properties with signficantly higher value.
Ideal in mixed-use and transitional zoning areas.
But the strategy takes a long time, and takes money to put the assembly together. It usually always requires keeping the properties as rentals in the interim.
Not sure if any of you believe what ZH puts out but food for thought on this am jobs report:
http://www.zerohedge.com/news/2017-08-04/where-jobs-were-waiters-and-bartenders-topped-list
Where The Jobs Were: Waiters And Bartenders Topped The List
We already showed that contrary to the strong headline payrolls print, the sole source of job gains in July was part-time jobs, which rose by 393K in the month, the biggest monthly increase since September 2016, as full-time jobs sunk by 54K. Which is why it should not surprise that of the 209K jobs added according to the Establishment survey, the sector that added the most jobs was the “food services and drinking places”, i.e. “waiters and barenders” category, which added 53,000 jobs, the highest monthly increase since March 2014. There have now been 89 consecutive months without a decline for waiter and bartender jobs, the strongest sector for US employment. Needless to say, these jobs fall within leisure and hospitality, that sector pays the worst wages, an average of $13.35 an hour, and $331.08 a week.
Blue Apron firing 1,270 in Jersey City
Imagine a job listing that asked the applicant to ideally identify as white.
“Needless to say, these jobs fall within leisure and hospitality, that sector pays the worst wages, an average of $13.35 an hour, and $331.08 a week.”
Of course, how much money is made off the books…..I just went to place and paid with a credit card and zero tip, but gave the server cash……
Nomad says:
August 4, 2017 at 12:01 pm
Not sure if any of you believe what ZH puts out but food for thought on this am jobs report:
http://www.zerohedge.com/news/2017-08-04/where-jobs-were-waiters-and-bartenders-topped-list
Where The Jobs Were: Waiters And Bartenders Topped The List
We already showed that contrary to the strong headline payrolls print, the sole source of job gains in July was part-time jobs, which rose by 393K in the month, the biggest monthly increase since September 2016, as full-time jobs sunk by 54K. Which is why it should not surprise that of the 209K jobs added according to the Establishment survey, the sector that added the most jobs was the “food services and drinking places”, i.e. “waiters and barenders” category, which added 53,000 jobs, the highest monthly increase since March 2014. There have now been 89 consecutive months without a decline for waiter and bartender jobs, the strongest sector for US employment. Needless to say, these jobs fall within leisure and hospitality, that sector pays the worst wages, an average of $13.35 an hour, and $331.08 a week.
No wage inflation pumps. It’s simply not coming.
Blue apron has that many employees? I’m shocked.
yes……as long as you do not discriminate against against a protected group…..being white is not protected……being young is not protected (i.e. age 55 and over communities)……..it is the reason that protection for sexual orientation is such a big issue……in the past, you could be fired for being gay and not really have a direct case……
joyce says:
August 4, 2017 at 11:11 am
Comrade,
This legal?
Listed under qualifications:
“Identify as Black/African-American, Hispanic, and/or Latino”
http://www.mckinsey.com/careers/search-jobs/jobs/jd-diversity-leadership-intern-jdli-9353
So Rachel Donezal can apply?
joyce says:
August 4, 2017 at 11:11 am
Comrade,
This legal?
Listed under qualifications:
“Identify as Black/African-American, Hispanic, and/or Latino”
http://www.mckinsey.com/careers/search-jobs/jobs/jd-diversity-leadership-intern-jdli-9353
Assembling parcels for development is very risky. Rentals rarely cover the cost of carrying the properties until all the required pieces can be acquired. Zoning ordinances change. The market changes. Huge risk!
MY HEART BLEEDS FOR POOR SOULS WHO CANNOT APPRECIATE A TRUE VISIONARY, A GENIUS, AND THE PRIVILEGE OF SHARING THE PRECIOUS EARTH WITH HIM AS HE WALKS AMONG US AS A LIFE PEER.
TECH
Tesla’s Cash Could Burn in Production ‘Hell’
Ambitious production goals for the Model 3 may prompt a capital crunch and a trip to the debt markets
Tesla aims to boost output to 10,000 Model 3 vehicles a week. It averaged fewer than 2,000 other model vehicles a week last year.
By Tim Higgins
Tesla Inc.’s version of production “hell” apparently means the Silicon Valley electric-car maker will run low on cash later this year as it embarks on an ambitious plan to build its first automobile for mainstream consumers.
Chief Executive Elon Musk reiterated on Wednesday—after announcing a better-than-expected second-quarter loss—that the 14-year-old auto maker faces challenges in learning to manufacture the new Model 3 sedan at much higher volumes than previous vehicles.
“When I said manufacturing hell…I meant it,“ Mr. Musk told analysts on a conference call. ”But we know this—signed up for it, not blaming hell because we bought the ticket.”
Tesla is no stranger to capital crunches as it rolled out ambitious timelines for the production of its vehicles and spent heavily on research and development, equipment and factories in California and Nevada. The company has typically raised equity or issued debt offerings to replenish its stockpile, and Mr. Musk on Wednesday suggested he is thinking about tapping the debt market.
The company finished the latest quarter with $3 billion in cash and plans to spend $2 billion in the second half to make way for the Model 3. While Tesla said its cash and increased revenue during the second half should cover all of its spending projects, analysts raised doubts about that cash cushion. Tesla in the past has suggested the company should always have a minimum of $1 billion on hand at the end of each quarter.
During Wednesday’s call, Ryan Brinkman, an analyst for J.P. Morgan , asked if Tesla expected to generate enough cash to meet such a goal at year’s end. Mr. Musk replied that Tesla has negotiated better payment terms with suppliers and aims to build the Model 3 faster than previous models so the company can sell the vehicles before having to pay the bills for parts. But he noted that having “a cash cushion” for unexpected events is wise.
“We are thinking about debt, but we’re not thinking about an equity raise,” Mr. Musk told analysts.
Deepak Ahuja, Tesla’s financial chief, said the company hasn’t yet tapped $800 million of its credit lines and that it could draw $700 million in tax equity funds and debt from its newly acquired solar business. Tesla finished the first quarter with outstanding debt of $9.67 billion, including long-term notes and capital leases, according to S&P Global Market Intelligence. It raised more than $1 billion through debt and stock earlier this year.
Analysts afterward flagged the prospect of a cash shortage as Tesla boosts capital spending the second half. It “begs the question of whether another capital raise is on the horizon,” Brian Johnson, an analyst for Barclays , wrote in a note to investors. The additional capital spending “will make your eyes water,” Adam Jonas, an analyst for Morgan Stanley , told investors. “Time will tell if they are tears of joy.”
“Another debt offering this year wouldn’t be a shock and neither would a capital raise next year,” David Whiston, an analyst for Morningstar Research, said. “People need to get used to Tesla being heavily reliant on further capital raises to achieve its ambitious growth plans.”
Tesla is aiming to boost its production to 10,000 Model 3 vehicles a week by the end of next year after averaging less than 2,000 other model vehicles a week last year.
Mr. Musk said Friday that Tesla has more than 500,000 net reservations for the Model 3 and repeated that new orders wouldn’t be filled until late next year. On Wednesday, he said he had misspoken. Instead, the company recorded a gross figure of 518,000 reservations and a net of 455,000 orders, suggesting 63,000 cancellations.
Mr. Musk suggested that demand isn’t the issue.
“I think this is like inconsequential because with a small amount of effort, we could easily drive the Model 3 reservation over to something much higher, but there’s no point,” Mr. Musk told analysts on Wednesday. It is “like a restaurant and you’re serving hamburgers and there’s like an hour and a half wait for the hamburger. Do you really want to encourage more people to come order hamburgers?”
30 year that is high risk and high reward, assembling parcels like that is very tricky but you need to identify a place where you can really make a killing. It helps if you can get gov’t help or at least an understanding that if you acquire the property you’ll have the support of the local government in changing the use. The logistics properties in Newark is old news most of that stuff was started in the 90’s. Proximity to the port and rail after the somewhat questionable industrial development on the turnpike corridor caused developers to look in places like Newark and Kearny to build facilities as it is always better to be closer to your customers but given the current land use you needed to join parcels and it logistically is a difficult place to develop.
Grim I’m shocked blue apron is a thing at all! The idea is preposterous, for $40 my family of 4 gets a box with some spices, a recipe card, a carrot, a potato and a few pieces of meat. I can make a pretty fantastic dinner for 4 people for $40 or for not much more get take out and not have to cook at all.
I enjoyed BlueApron and the others I used. They are convenient.
We like to cook, but have no time. I like to go out and shop for food, but unique recipes leave me with tons of wasted ingredients.
We cooked for 2, as my kid wouldn’t eat this kind of food. So, for $9 a serving, it was pretty reasonable. It’s good quality, it’s on par with fast food pricing, it’s cheaper than take out.
It’s pretty convenient and fast, I like the exposure to new foods and recipes. There are plenty of recipes we still make that we were exposed to from BlueApron and the others.
Yes, you could cook at home cheaper. We don’t use them today, but I’ll occasionally sign up for a few weeks if they throw in a free week promo or something.
Honestly, you could feed your family for a month for free just going through every home delivery promo offer out there.
Feeding 4 people – the dynamics change a bit, and I agree. Once you are making 4 portions, you tend to use more of the ingredients you are buying. Especially pre-packaged, canned, jarred, etc.
It’s not a bad model, but I suspect it’s not sustainable.
Grim, I ‘m particularly bad. I used to work in a restaurant kitchen so for 4 people I wind up making enough food for at least 10-12 people, and then for the next few day’s I play what can I make this into, meat that is relatively plainly cooked can be decorated in many ways, same goes for vegetables. My whole thing is any kind of cooking implies you have some time, unless the prep work is really all done in the box which then freshness is a concern(you still have cleanup afterwards). What I find with ethnic take out(chinese, turkish, italian, greek, thai, vietnamese, indian) is the portions are so large 2 meals and 2 appetizers feeds 4 people so for approximately $50-$60(avg of $13 per person). If I have time to cook I’ll do it from scratch, if not it’s meat on the broiler or the grill, potatoes or pasta and steamed or roasted vegetables of some kind, and perhaps a salad all of which requires little to no prep and can be made inside 45 minutes or take out. I’d bet they have a lot of churn, there is a novelty to it but I view two kinds of people, those who like to cook and those who don’t. Those who like to cook will eventually cancel the service to explore the wider world of cooking and those who discover they don’t like to cook will go back to take out. i think Amazon/Whole Foods will be more successful with the concept as I don’t think the subscription model works, occasionally people will want to try new recipes and the meal kit is great but I don’t want to subscribe I’ll go pick it up at WF or have them deliver it. I had enough bad experiences with fresh direct and farmigo produce to not trust the meal kit ingredients, I’m old fashioned I like to see my meat and produce before I buy it.
grim,
I cook for 4 every day right now. It’s my primary passion and hobby outside of gardening. At this point, I’ve probably read a few hundred books on food. But the way I do it, nothing goes to waste.
Leftover meat/pasta/vegetables always gets turned into a frittata, stuffed potato croquette, or stuffed rice ball the next day.
Leftover Carrot/Celery/Onion Trimmings. Meat trimmings (like chicken wing tips and pork chop bones) all go into a bag. That becomes a stock every 2 months.
All left over animal fat is poured through a fine metal coffee strainer and stored in the freezer for deep frying.
Cheese rinds are saved for soups.
Stale bread becomes croutons or bread crumbs.
Sounds like a lot of work but once you get into a routine, it’s effortless.
Plain grilled chicken breast is like the food swiss army knife. you can eat it plain, it can be silced and served with salad, made into fajitas/tacos/burritos/quesadillas, tossed with steamed vegetables and an asian brown sauce, made into a sandwich(tomato, fresh mozzarella, basil, sun dried tomato, olive oil and balsamic), added to a curry(poor man’s chicken tikka masala), put in an frittata, tossed with pasta and vegetables, rubbed with harissa chopped up mixed with stewed veg and chickpeas over cous cous, even added to pizza.
I agree, it seems like an absolute extravagance.
The other benefit is teaching people to cook for themselves. I mean really cook. The recipes can be quite sophisticated, it’s exposure to a broad array of foods you wouldn’t normally cook yourself, and there is significant exposure to proteins that you normally wouldn’t make. I distinctly remember a lamb curry we absolutely loved. Would I have ordered it in a restaurant? No. Would I have looked it up on Epicurious? No. Did it broaden a horizon? Yes.
All I’m saying, there’s some merit there. If it turn someone into a home chef with some passion about it, it’s worth every penny. Pretty sure that most regulars will “graduate” from it, which makes the business model a little challenging.
The other thing that is nice, it makes it really effortless to cook with kids, from scratch. If that’s something that you think might be important to you, the cost of entry is pretty cheap, especially if getting a home cooked dinner on the table every night would be considered a victory for you.
I liked it for infill dinners. Nights where maybe it was a little bit too hectic, no time, where we would normally just default to takeout, at least it was more convenient, and a healthier option.
I do Black Apron. I go to Shoprite, buy a couple steaks and beer and grill them.
In honor of Venezuela’s currency and economic collapse, lets remember this gem from a supposed Nobel Economist.
Despite the high rate of growth, high public spending and increased consumer demand have contributed to inflationary pressures, pushing inflation up to 15.3%, also the highest in Latin America. However, Stiglitz, who won the Nobel Prize for economics in 2001, argued that relatively high inflation isn’t necessarily harmful to the economy.
Joseph Stiglitz
Interesting.
http://www.npr.org/sections/health-shots/2017/08/04/539757759/your-zip-code-can-be-as-important-to-health-as-your-genetic-code?utm_campaign=storyshare&utm_source=facebook.com&utm_medium=social
Blue,
He was not talking about runaway inflation. High inflation and runaway inflation are two different types of inflation. It’s like drinking to a nice buzz where you can’t drive, or drinking to the point where you can’t even stand.
52 comments. 1 for each state
He was not talking about runaway inflation. High inflation and runaway inflation are two different types of inflation. It’s like drinking to a nice buzz where you can’t drive, or drinking to the point where you can’t even stand.
Don’t try to defend his stance. He was wrong on every level. It’s the steps that were taken over the past 10 years that had led to the events you see today. 15% was the warning sign that it’s out of control….and btw…I find it’s laughable that both you and he try to defend a 15% inflation rate. The entire 10 years, the people of venezeula have continually watched their standard of living plummet due to this inflation and if you believe an old opinion for hire like Stiglitz over someone that’s actually from Venezuela…that’s the problem. Ivory Tower economists are either delusional, or corrupt. But it’s nice that you defend someone that was used to expand the “wealth gap” that you supposedly abhor to epic proportions now that everyone in Venezuela has nothing at all.
Costco steaks. That is all. We do ‘Plated’. Good times.