Boomers back in charge

From Bank of America:

The Great Migration continues

The rise of Boomers as the main homebuyer

The latest Home Buyers and Sellers Generational Trends report from the National Association of Realtors found that for the first time since 2014, Baby Boomers overtook Millennials as the generation with the biggest share of homebuyers. From July 2021 to July 2022, 39% of surveyed homebuyers were Baby Boomers, followed by 28% of Millennials and 24% of Gen X (Exhibit 6).

The rise of Baby Boomers as the primary homebuyers can be attributed to three main reasons. First, as this generation retires, they move closer to family and friends. Second, demand for smaller homes increases as their children move out. Last but not least, Baby Boomers hold the greatest wealth across generations at $73 trillion in 4Q 2022, eight times that of Millennials (Exhibit 7). In the current environment of high home prices and interest rates, Baby Boomers are better equipped financially for home purchasing. In fact, only 49% of older Boomers (68-76 y/o) financed their home purchase in 2022, compared with 93% of those aged 33-42 y/o, according to the same National Association of Realtors report.

Given the importance of Baby Boomers in the housing market, where are they moving to?

The generational breakdown of Bank of America internal data suggests Baby Boomers’ migration patterns over the past few years have been different from other generations. Specifically, while Austin continues to attract inward migration overall, the number of Baby Boomers in the city has declined over the past year. The exodus of the group with the most cash could have added to the downward pressure on Austin’s home prices over the last year.

Las Vegas, Phoenix, Tampa, and Orlando are among the most popular destinations for Baby Boomers, according to Bank of America internal data (Exhibit 8). Note that the pace of migration slowed for Vegas and Phoenix over the past year, but was relatively unchanged for Tampa and Orlando. In our view, this could partly explain the still resilient home price appreciation in Tampa and Orlando relative to other cities.

Alternatively, Baby Boomers, similar to other generations, are leaving some of the largest cities in the US, including the Bay area, New York and Seattle (Exhibit 9).

Millennials will likely drive home buying in the longer term

Source: Bank of America internal data

For Millennials, the most popular destination for domestic migration is Austin, with the number of Millennial customers up 16% in 1Q 2023, relative to three years ago, which led other cities by a wide margin. Cleveland, Tampa, and Dallas each saw a 6% increase in Millennial population over the past three years.

In the near term, many of this cohort are staying on the home buying sidelines. A recent Bank of America Global Research survey found that increasing concerns about affordability are the top reason many Millennials are staying out of the housing market. But hopeful buyers who may be waiting for the market to cool are still forging ahead in their own way. In a separate Bank of America 2023 Homebuyer Insights Report, over half of respondents who are not planning to purchase a home in the near term are still actively scrolling through real estate marketplace apps.

This means that demand for home purchasing will likely return when we move past the current housing cycle, especially in the case of younger Millennials, who are entering prime home buying age. In 1Q 2023, the home ownership rate for those younger than 35 years old was 39%, 23 percentage points lower than that for 35–44-year-olds.

This entry was posted in Demographics, Economics, National Real Estate, NYC. Bookmark the permalink.

54 Responses to Boomers back in charge

  1. Fast Eddie says:

    Baby Boomers hold the greatest wealth across generations at $73 trillion in 4Q 2022, eight times that of Millennials (Exhibit 7).

    And they did it with no safe rooms and no edible crayons.

  2. Fast Eddie says:

    Note that the pace of migration slowed for Vegas and Phoenix over the past year, but was relatively unchanged for Tampa and Orlando. In our view, this could partly explain the still resilient home price appreciation in Tampa and Orlando relative to other cities.

    I presume the bleeding heart progressives from the northeast are okay living among the deplorables? Or, maybe they’re finally realizing blue city grift is too much to bear any longer and are exiting.

  3. grim says:

    Hit or Flop?

    Apple’s $3500 AR/VR headset

    My vote? Flop.

    The eye pass through thing and immersion indicators are oddly unsettling. I completely understand what their intention was, but the way they did it just makes the whole experience weirder and unsettling. What’s the point of the video displayed creepy pass-through eyes? Is this better than just taking the fucking goggles off to interact? The things are huge, nobody is wearing this around the house like a pair of sunglasses. Wager a bet that $1,000 of the $3,500 price tag was to be able to do the creepy eyes. Why!?!?

    I’m glad I sold my Quest 2 before Meta announced their new headset. Got top dollar for that. Tried to do the virtual workplace, virtual monitor with the Meta device, puke-tastic motion sickness by minute 30. Good luck with wearing this for 2 hours trying to work. Quest resolution wasn’t even remotely good enough for virtual monitors – dual 4k isn’t going to be either. You need north of 8k resolution per eye to have usable resolution in your “virtual” displays, unless you make them huge, in which case now you are moving your 120 degrees back and forth to scan a screen – not effective, not more productive, way more motion sickness. I did a VR immersion proof of concept at work last year with my last batch of interns. Sorry, motion sickness is the top complaint, to the point at which our test users flat out refused to use the device after a few days.

    This isn’t a product, it’s a version 0.5 proof of concept and technology exploration.

  4. Juice Box says:

    Same with Zuck’s Metaverse dream and his Meta Quest Pro which is $1500 it will be a massive Billion dollar flop.

    3D makes everyone dizzy, it’s actually called cybersickness and there is barely any content.

    Here is an recent account..

    “I ripped off the headset, afraid I was going to throw up. I shouted for help. My partner found me in the fetal position in a cold sweat on the bathroom floor.

    I had spent just an hour in the metaverse dressing my avatar, making faces in the virtual mirror, and learning to raise my virtual wristwatch to adjust system settings. Now, I couldn’t open my eyes without seeing the virtual grid echoed in the tile floor, demarcating the boundary where I had crossed into unsafe territory.”

    https://www.theverge.com/23663451/vr-meta-quest-pro-aftercare

  5. Fast Eddie says:

    Apple is a cult. The CEO could be anyone with an open, collared shirt and sport jacket. They’re cashing in on reconstituted product. They’re a modern day Sony which muppets still believe is the cat’s meow. Maybe they should go to the other muppet cult facility, Starbucks, grab a bitter $6 coffee and think about it.

  6. grim says:

    Added some more detail about the motion sickness in my post above.

  7. Juice Box says:

    That NYC Heath Dept free vending machine will be a complete flop. It will have all of it’s contents stolen as soon as it’s refilled.

    FDA just made Narcan over the counter, the nasal spray version $50 for two doses. I wonder how you can really administer that if someone is passed out and ODing? The needle would seem to be way more effective. Junkies already know how to inject to so what is the risk?

    Stock is not doing well.

    NYSE: EBS 7.91

    52-wk high 36.14
    52-wk low 7.74

  8. grim says:

    Was thinking the same thing, that box is going to be emptied in minutes.

  9. Bystander says:

    Ed,

    In the best John Houseman voice, “we make money the old-fashioned way..we print it”

  10. Juice Box says:

    Anyone remember those Fukushima nuclear reactors popping their tops a decade ago because there was no more water flow, coolant for the reactors and the steam pressure became critical?

    Well the Russian’s did it they finally blew up the Dam on the Denipro river, one they mined last year, and have flooded downstream. Apparently the explosion came from within the Dam. This may have been a move on their part to protect I gather Crimea from invasion and slow any advances if the Ukrainians make a move.

    Upstream is the world largest nuclear power plant in Europe Zaporizhzhia, it get’s it water from that river basin. If it dries up? Could be a catastrophe.

    Here is a statement from February on the concern over water levels at the at Nuclear Plant.

    “In a statement released yesterday, Energoatom, Ukraine’s nuclear operator, said that the current water level at the reservoir is 13.8 meters, down from its normal 16-meter level, and that further reductions could “become a big problem for the plant.” Energoatom’s president, Petro Kotin, warned that “a level of 12.8 meters will be [an] emergency, and 12 meters will be critical.”

    https://www.newsweek.com/nova-kakhovka-dam-loss-ukraine-river-offensive-impossible-andriy-zagorodnyuk-1804680

  11. grim says:

    Apple is a cult. The CEO could be anyone with an open, collared shirt and sport jacket. They’re cashing in on reconstituted product. They’re a modern day Sony which muppets still believe is the cat’s meow.

    They are one of the best product development machines that’s ever existed, you’ve got to give them that. They’ve figured out the recipe, and replicate that recipe.

    What I think really irks many people is that Apple has proved that first movers don’t have any actual advantage anymore. It’s no longer a matter of if you came up with the idea, or that you did it first. It’s who did it best that matters now. I think this flips a lot of b-school grads upside down, because it goes against nearly all of history that said, if you did it first, you automatically win. As technology and products have gotten significantly more complex, these simple first mover advantages aren’t as important as they historically were. So while there might be some small advantage, there are still hundreds of missteps you could take that would immediately negate all of that advantage.

    You hear this all the time. X company did it first, Y company had this “feature” two years ago.

    Doesn’t matter. Who did it better? Who made it easier? Who made it understandable? Who provided it in a way that brought the most value or utility? That’s the winner today.

    And that’s Apple’s secret sauce. They don’t give a shit about doing anything first. In fact, the lesson they learned is that the probability of trying to be first in anything carries massive risk of failure. To the extent that you shouldn’t ever try to be first, there’s no ROI there. Instead, be third, but do it better than everyone else. The cost to incrementally improve on an idea is so much lower than the cost to generate a new idea. Spend more on the design, usability, functionality, ecosystem integration – those are things that Apple has shown are critical in product development.

    Lots of people hate them for that.

  12. crushednjmillenial says:

    Second Avenue Subway expansion . . .

    The extension of the route from 96th street to 125th street is now projected to cost $7.7B.

    Biden admin wants to pay $500M towards this, the city wants the feds to contribute $3.4B.

    Projected 123,000 daily riders. If you assume each rider would have paid $5k per year for a car, then that totals $615M/year. Which isnt really the appropraite benchmark against the cost of the system, but whatever.

    Surprised Biden doesn’t just splash the money onto projects like this. Green new deal? Labor unions would be happy?

  13. Juice Box says:

    First internet connected cellphone was 2001 the Nokia 9000…A few years later in 2007 was when Steve Jobs did his magic and built the empire we know today as Apple with the iPhone. We are now as far away from the year 2007 as the year 2040, should be interesting to see who is on top in another decade.

    What is interesting is Apple seems to be willing to break laws, to do it best, not first. Everyone sues them over patent infringements some win some fail, they pockets are so deep they appeal all judgements and many times win. The more interesting ones are like Masimo and their lawsuit over a pulse oximetry patents Apple claims is their technology. Apple may have committed arguably industrial espionage to gain an advantage, the last jury trial was hung.

    U.S. Patent and Trademark Office has been invalidating allot of patents recently from all of the big players in the space. Seems to be a trend to reverse all of the patent filings. It is crazy how many patents these companies file each year. Samsung, Apple, Google etc all file thousands of patents each every year.

  14. No One says:

    Most products that require something worn in front of your eyes have failed to thrive. 3D has failed 2 or 3 times, partly because people don’t want to wear the glasses. Google glass. Pretty much every VR goggle has underperformed sales projections.
    I bought Sony’s PSVR2 earlier this year. Started feeling nauseous within 5 minutes of a driving game. Plus uncomfortable, warm, humid.
    When they can make this stuff as comfortable as eyeglasses, then I can imagine mass adoption.

  15. Fast Eddie says:

    They’ve figured out the recipe, and replicate that recipe.

    It’s like going to a restaurant based on name recognition or past reputation.

    E & V restaurant in Paterson is horrible now and has been for a while. Years ago, they were incredible. But, people still flock to the place for (clot’s description) a pound of red lead. This is Apple. And yes, I get it… do it better than the others or live off past results and reputation. They have a recipe, just like a band like Bon Jovi or Nickelback. Produce a hook, depending on the industry and the muppets will gladly line up.

  16. The Great Pumpkin says:

    Not worth getting? I was looking into this. Heard Gran Turismo is really good in vr.

    “I bought Sony’s PSVR2 earlier this year. Started feeling nauseous within 5 minutes of a driving game. Plus uncomfortable, warm, humid.
    When they can make this stuff as comfortable as eyeglasses, then I can imagine mass adoption.”

  17. Phoenix says:

    What is interesting is Apple seems to be willing to break laws, to do it best, not first.

    It’s all about legal. Especially when its not criminal law. The penalty in civil law isn’t enough.

    Social media is becoming the “go to” where legal fails, be it right or wrong.

    Bud Light, Target for example. I don’t think either company cares one bit about those causes, they just want to increase profit, and like good capitalists, don’t care about any of it until it causes a financial loss.

    Watched a video of the popo arresting a woman in NJ of drunk driving. Court system gave her a slap on the wrist, if that. Social media wanted justice, doxxed the heck out of her. Didn’t help she was arrogant, but most seemed to be angry at the lack of justice that was doled out.

    Courts really need to be tribunals as there are too many cases where single judges are either morons or bought/paid for, or have some other agenda.

  18. The Great Pumpkin says:

    MAGA crowd are fake righties. They claim to be all about individual rights, but then they boycott a company for something they don’t agree with? Fake ass conservatives…what happen to freedom?

    “Bud Light, Target for example. I don’t think either company cares one bit about those causes, they just want to increase profit, and like good capitalists, don’t care about any of it until it causes a financial loss.”

  19. Phoenix says:

    Just want to say I thank all of you for your concern about my sex life. Hahaha. If you only knew.

  20. The Great Pumpkin says:

    You are drunk off lemming cool-aid if you care about who Bud Light or Target market to. You are simply a brain washed individual and don’t even realize it.

  21. Trick says:

    PGA to merge with LIV, didn’t see that coming. Maybe let them cross play but not merge.

  22. Phoenix says:

    Eddie,
    Apple does make a good product. I used android for years. Both have advantages and disadvantages. For some things I use one or the other.

    Apple integrates well, but Siri is still far behind Google. Google maps is also superior, as is the hold feature on phone calls, or the screen phone call features. They work excellent on Google phones.

  23. Phoenix says:

    It’s just a distraction to make you forget about the massive ongoing theft that is occurring.

    The Great Pumpkin says:
    June 6, 2023 at 10:02 am
    You are drunk off lemming cool-aid if you care about who Bud Light or Target market to. You are simply a brain washed individual and don’t even realize it.

  24. Phoenix says:

    What about when the state turns you into a non-functioning person? Should you still be “beholden” to them?

    “Either you are a functioning human or not. If so, get your shit done, especially if it is coming for free and you have few other obligations. If not, declare yourself a ward of the State and rely on the rest of humanity to support you and to spoon feed you your support as well. But in doing so you surrender other major privileges and rights. Driving. Voting. Go live like someone’s pet, and you’ll be cared for. Like a pet. Domiciled, clothed, medical, fed.

    No one follows up on my ‘eligibility’ for anything I may require like a job, my own healthcare, discounts and offers, my well being. No one likes IADLs, hell I fucking hate them. But I get them done.

    If you can’t function in society fine. No one should be dying or starving in the streets. But you are fully a ward of the State then.”

  25. Phoenix says:

    Personally, I don’t give one ratz azz about some dam in Ukraine. It’s things like this that need to be addressed before they beat up a Bimmer owning family for money and food.

    “There are, by the latest count, more than 11,000 people living in RVs across Los Angeles County. And that number has been rising. The Covid-19 pandemic forced more people into poverty. Some of the RV dwellers have jobs but either don’t want to pay apartment rent, or can’t afford to pay it, in a city where the average one-bedroom apartment costs around $2,500 a month.”

  26. leftwing says:

    “But, but what about GS JPM BOA AIG from the financial crisis or Silicon Valley, Republic just a few weeks ago…got plenty of the only welfare that seems to be allowed but they have another name “bailouts”. Are they now ward of the state?”

    Fully on record here repeatedly – as a former fairly senior employee in an adjacent bailout entity – that they should have been allowed to fail…

    Republic did fail. Equity, prefs, bonds all went to zero. Human citizenry were bailed out there.

    My cynical side says Congress and WH won’t let failure happen as (i) protection of a major donor class and (ii) every ‘bailout’ gives the feds more ‘rights’ and therefore control over these entities.

    Banks were handcuffed after GFC under the rationale that Feds could do what they wanted as they ‘bailed them out’. Ditto airlines COVID, still can’t turn CNBC on without some liberal, politician, or our breastfeeding non-binary Transportation Sec’y putting more shit on the airlines since, of course, ‘we bailed them out’.

    Back to my poker table analogy…you think the two best players at the table with the most chips in front of them are battling each other…and you still haven’t figured out you’re the mark….your money gets recycled through the pot, taken, then split. That simple.

  27. leftwing says:

    From yesterday….TY chi, yes ‘skip’, not pause.

    Hear you on earnings management but that has always occurred…GE under Welch was epic….shit hidden all over the place, which is not uncommon.

    For me, I’m more interested in the (untrackable) delta, ie. has the occurrence of these events increased from prior periods. There’s an AI financial use….

    Similarly, can’t tune out the SPX concentration stats…top seven companies are whatever huge percent of movement, etc, etc.

    Fine. But what’s the delta to prior periods? That data point is irrelevant without context…how much more concentrated are we than prior periods? Nifty Fifty? 2000?

    As to Mike W, respect and like him. but I have no ‘call’ here one way or the other, just observation. Consumer does scare me a bit. More than a bit. Also I’m being judicious in my approach as described, especially since I woke up this morning on the very wrong side of an overnight trade that cost me 0.5% of portfolio…not in the game plan…..”The defense department regrets to inform you that your sons are dead because they were stupid.”

    Really fucking pissed on that one as it was outside my lane, and I knew it when I pressed send.

  28. Chicago says:

    Left Neil Dutta guest host on Surveillance this morning between 8-9. I’ll find the podcast later. Bloody fantastic.

  29. leftwing says:

    TY

  30. ExEx says:

    10:30 I think you might be comparing two things that have nothing to do with one another.

  31. The Great Pumpkin says:

    My thoughts exactly.

    “Similarly, can’t tune out the SPX concentration stats…top seven companies are whatever huge percent of movement, etc, etc.

    Fine. But what’s the delta to prior periods? That data point is irrelevant without context…how much more concentrated are we than prior periods? Nifty Fifty? 2000?”

  32. The Great Pumpkin says:

    ‘What we’re seeing is the unfortunate collision of the most rapid increase in interest rates in a one-year period and the realities of how people work.’

    — Gregg Williams at Trident Pacific, a receivership firm

    https://www.wsj.com/articles/interest-only-loans-helped-commercial-property-boom-now-theyre-coming-due-c3754941?mod=hp_lead_pos4

    Just remember who is going to pay for this as they just walk away from their loans. Instead of working from home, you will be on unemployment from home while paying for this CRE mess for years.

    And the sad part….Fed broke it trying to raise the unemployment rate that is pretty much not impacted by the rising rates right now. Keep raising them! Crash it all.

  33. The Great Pumpkin says:

    I just wanted to acknowledge that this was an excellent post.

    grim says:
    June 6, 2023 at 8:47 am

  34. No One says:

    Pumpkin,
    GT7 on PSVR2 looks good. I enjoyed sitting still and looking around the parked car cockpit. Maybe I should have started out in a slow Miata gradually instead of jumping into the advanced races I was doing before buying the PSVR2. Instead I started my usual moneymaker, the Tokyo Expressway: World Touring Car 600 race, and shut it down in about 5 minutes. Also, I was crashing a lot, because the different perspective threw off my timing, and it was a wet track at high speeds with little room for error.
    Note – I wear glasses, and that’s just one extra lens to fit into the mechanism, and which makes it incrementally less comfortable. I don’t generally get motion sickness in cars, trains, etc, by the way.
    I hear that the best way to play with PSVR is to have a fan blowing toward your face. Also maybe chew gum or ginger candy. I also hear there are some games that don’t bother people much.
    I didn’t return my goggles. But I also didn’t bring them from FL to NJ for this summer, so won’t be trying it again till later this year.

  35. The Great Pumpkin says:

    Q: Doctor, I’ve heard that cardiovascular exercise can prolong life. Is this true?
    A: Your heart only good for so many beats, and that it…don’t waste on exercise. Everything wear out eventually. Speeding up heart not make you live longer; it like saying you extend life of car by driving faster. Want to live longer? Take nap.

    Q: Should I cut down on meat and eat more fruits and vegetables?
    A: You must grasp logistical efficiency. What does cow eat? Hay and corn. And what are these? Vegetables. So steak is nothing more than efficient mechanism of delivering vegetables to your system. Need grain? Eat chicken. Beef also good source of field grass (green leafy vegetable). And pork chop can give you 100% of recommended daily allowance of vegetable product.

    Q: Should I reduce my alcohol intake?
    A: No, not at all. Wine made from fruit. Brandy is distilled wine, that mean they take water out of fruity bit so you get even more of goodness that way. Beer also made of grain. Bottom up!

    Q: How can I calculate my body/fat ratio?
    A: Well, if you have body and you have fat, your ratio one to one. If you have two bodies, your ratio two to one, etc.

    Q: What are some of the advantages of participating in a regular exercise programme?
    A: Can’t think of single one, sorry. My philosophy is: No pain…good!

    Q: Aren’t fried foods bad for you?
    A: YOU NOT LISTENING! Food are fried these day in vegetable oil. In fact, they permeated by it. How could getting more vegetable be bad for you?!?

    Q: Will sit-ups help prevent me from getting a little soft around the middle?
    A: Definitely not! When you exercise muscle, it get bigger. You should only be doing sit-up if you want bigger stomach.

    Q: Is chocolate bad for me?
    A: Are you crazy?!? HEL-LO-O!! Cocoa bean! Another vegetable! It best feel-good food around!

    Q: Is swimming good for your figure?
    A: If swimming good for your figure, explain whale to me.

    Q: Is getting in shape important for my lifestyle?
    A: Hey! ‘Round’ is a shape!

    Well, I hope this has cleared up any misconceptions you may have had about food and diets.

    And remember: Life should NOT be a journey to the grave with the intention of arriving safely in an attractive and well-preserved body, but rather to skid in sideways – Chardonnay in one hand – chocolate in the other – body thoroughly used up, totally worn out and screaming “WOO-HOO, what a ride!!”

    For those of you who watch what you eat, here’s the final word on nutrition and health. It’s a relief to know the truth after all those conflicting nutritional studies.

    1. The Japanese eat very little fat and suffer fewer heart attacks than us.
    2. The Mexicans eat a lot of fat and suffer fewer heart attacks than us.
    3. The Chinese drink very little red wine and suffer fewer heart attacks than us.
    4. The Italians drink a lot of red wine and suffer fewer heart attacks than us.
    5. The Germans drink a lot of beer and eat lots of sausages and fats and suffer fewer heart attacks than us.

    CONCLUSION:
    Eat and drink what you like. Speaking English is apparently what kills you.

  36. The Great Pumpkin says:

    No one,

    Thanks. Appreciate it.

    I was thinking about buying the cockpit rig along with the VR2 to use as a driving simulator for GT7. From what I have read, people claim it feels real, to the point they actually get scared. Wish I knew someone that had it so that I could give it a test drive.

    Heard the Resident Evil game in VR really gives that fear factor when playing.

    Guess, I will give it a shot. Seems to be pretty advanced tech.

  37. ExEx says:

    Big believer in “naps” !

  38. No One says:

    Pumpkin,
    Steering wheel and pedals is more fun than controller, even without VR, if you’re really into the racing. It’s possible to modulate the accelerator and brakes and fine steering feel a bit better than the controller. But I only set mine up on some kind of mini-desk, and last used it three years ago.. Haven’t played GT7 using the wheel & pedals yet because it’s kind of a pain to set up in my theater room.
    I’m not a top GT driver, so haven’t ever done the online live races.
    I only played RE2 a long long time ago, it was scary enough without VR.

    I do worry about the long term effect of VR and AR on people’s sanity. Seeing the impossible could definitely further screw up some people already on the edge.

  39. Libturd says:

    “Big believer in “naps” !

    Every day around 4pm I try to squeeze in a 20 or 30 minuter.

  40. Phoenix says:

    Awesome

    The owner of San Francisco’s two largest hotels – Hilton Union Square and Parc 55 – STOPS making payments on its $725 million loan due in November because the crime-ridden city’s ‘path to recovery remains clouded’

  41. Phoenix says:

    Serve and Protect

    New York state trooper charged with manslaughter after shooting an unarmed motorist to death when he refused to get out of his car following a high-speed chase

  42. 1987 Condo says:

    Phoenix,

    you can get better examples than this one with a clear felony evasion, non-compliance, and reaching.

  43. 3b says:

    1987: I understand many of three commercial loans were interest only.

  44. BRT says:

    In Milan Italy, they fry everything in gigantic amounts of butter and don’t have heart disease. This entire fiasco is most likely related to all the unnatural things in our food supply.

  45. ExEx says:

    3:39 Olive oil might be an offset to all the butter. Healthier Mediterranean Diet overall. VS the processed stuff over here.

  46. The Great Pumpkin says:

    No one,

    Thanks! Going to give it a try. Let you know how it goes.

  47. The Great Pumpkin says:

    Like i keep saying, we will all pay for this. A lot of those CRE loans were interest only. Think they won’t walk away…that’s exactly what is going to happen. We all will pay to fix this.

    Phoenix says:
    June 6, 2023 at 2:34 pm
    Awesome

    The owner of San Francisco’s two largest hotels – Hilton Union Square and Parc 55 – STOPS making payments on its $725 million loan due in November because the crime-ridden city’s ‘path to recovery remains clouded

  48. joyce says:

    I only watched the video in the article which was heavily edited. Are there others showing the driver “reaching” for a weapon?

    1987 Condo says:
    June 6, 2023 at 3:06 pm
    Phoenix,

    you can get better examples than this one with a clear felony evasion, non-compliance, and reaching

  49. crushednjmillenial says:

    Pumpkin . . . why are we all going to pay for CRE defaults?

    Anyone holding equity in a commercial real estate project that defaults, just booked a “0”. That’s private, who cares.

    The debtholders are almost all private entities, including substantially holdings by regional banks? Are office space defaults enoguh to bankrupt a large number of them? I don’t think so, because while a regional bank’s balance might hold 30-60% in commercial real estate loans, that’s not just office space, but also warehouses, retail, parking garages, and hotels, etc. Some banks might classify apartment buildings in with these other types of RE, and obviously apartments are hot right now.

    Plenty of the debt will default and the asset (say, a downtown office building) will be liquidated at 50% or lower of the face value of the debt. Sure. But, office space isn’t going to 0% occupancy, it’s just being reduced by 30-40% over the course of the next number of years, as leases expire. Thus, there are plenty of buildings where a workout might make sense rather than a foreclosure.

    On supply and demand, I’d imagine hardly anyone is building a new office tower right now. So, new supply= ~0. Some existing supply is going to go defunct (like, an abandoned mall in the midwest), some existing supply will be re-purposed (there’s a storage facility in Rockland County that started its life as a new office building in 1960; office to housing). On demand = obviously less demand due to WFH, but population is still growing for now.

  50. ExEx says:

    2:34 that’s stupid.

  51. The Great Pumpkin says:

    Crushed,

    Thanks for talking sense to me. You are right, this will pass.

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