Erik Schatzker reports the reactions of some of Wall Street's big firms to the experiment of working from home. The coronavirus has shown many white-collar employers just how easy it is to have their employees work remotely. With more people working from home, demand for commercial real estate may be depressed. Schatzker writes: James Gorman is hesitant to make predictions about the future with so much about the coronavirus pandemic still uncertain. One thing is clear, however: Morgan Stanley will have “much less real estate.” “We’ve proven we can operate with no footprint,” Gorman, the … [Read more...]
These Local Small Towns are Gems for Your Retirement
You want to look for a better America for yourself in retirement. Finding a small town can be just right for many retirees who want to slow down and take things easy. The Boston Globe has rounded up a list of the best small towns in New England, including ten that just might be the right place for you. Here they are: A town in Massachusetts made famous by Norman Rockwell is the most charming small town in America, according to Big 7 Travel. Stockbridge in the Berkshires ranked No. 1 on the travel website’s list of 50 most charming small towns in America, released earlier this month. Big 7 … [Read more...]
You Probably Know Exactly Why People Want to Abandon Big Cities
You probably know exactly why people want to abandon the big cities of America. They look at rural states and towns with low taxes and low cost of living, and they see the freedom they expect America to provide. But in the big cities of America, when the government tries to solve problems of high rents and lack of housing, it actually makes them worse. The Wall Street Journal's editors explain how big-city governments are actually hurting their residents with overregulation of the housing market, writing: In a December 2019 working paper, Harvard and University of Pennsylvania researchers … [Read more...]
Trump’s Plan to Finally Privatize the Mortgage Industry
Since the financial crisis, mortgage companies Fannie Mae and Freddie Mac have been languishing on the federal government's balance sheet. The two federally backed mortgage securitization companies were taken into government conservatorship in 2008. Now, Federal Housing Finance Agency director Mark Calabria has been tasked with the almost impossible task of reprivatizing them. I know Mark from his time at the Cato Institute, and I can tell you that he is passionate about this fight. If anyone can do it, it's Mark, but it won't be easy. Congress has been less than helpful to the Trump … [Read more...]
Could This Be the End for the Mortgage Interest Deduction?
For decades the mortgage interest tax deduction has rewarded homeowners at the expense of other taxpayers, but with the 2017 tax reform, much of the benefit for homeowners was eliminated. Most middle class homeowners achieved better tax results by taking the standard deduction, bringing the percentage of taxpayers using the mortgage interest tax deduction down from 21% in 2017 to only 8% in 2018. At Bloomberg, Karl W. Smith suggests the deduction should be eliminated entirely. He writes: After 1986, when Congress eliminated the deductibility of interest on personal loans and increased the … [Read more...]
Luxury Buyers Race to Beat New NYC Taxes
As though New Yorkers weren't taxed enough already, New York City has imposed a new set of transfer taxes on properties selling for $2 million or more. Buyers raced to close their real estate deals to beat the taxes which could be up to 3.15% on deals. The number of luxury deals closed in June was record-breaking. Over $4.8 billion worth of property changed hands. The WSJ's Josh Barbanel reports: As the deadline to beat the tax increase neared, the buying frenzy only intensified. Of the 673 June transactions of at least $2 million, 351 closed in the final seven days. That week alone accounted … [Read more...]
Real Estate: “Foreign Buyers Have All but Disappeared”
For years now major coastal real estate markets have been propped up by foreign buyers. That's changing in the face of slowing global growth. The Wall Street Journal's Laura Kusisto reports: Real-estate agents said the pain from the foreign pullback is palpable when they try to sell high-end condos in Miami and New York or mansions in southern California and Seattle. “Generally speaking, we are in the largest market correction since the Great Recession in New York City,” said Martin Eiden, a real-estate agent at Compass, who has had to cut prices on listings from Midtown Manhattan to … [Read more...]
It’s Getting Harder for a Family to Buy a Home
According to the U.S. Home Affordability Report from ATTOM Data, median selling prices for homes were more than most middle income families could afford. That means, that house prices are outpacing wage increases in America. Bloomberg's Alexandre Tanzi reports: The U.S. Home Affordability Report, released Wednesday by ATTOM Data Solutions, found that median selling prices were too high for average wage earners in three-fourths of the nation’s real estate markets during the second quarter of 2019. At the same time, affordability in four of five markets is starting to improve compared with … [Read more...]
Trade War Cooling Chinese Demand for American Housing?
For some time now Chinese demand for American real estate has accounted for a big part of the buying in some markets. Now, with a trade war escalating between China and the United States, it appears that some Chinese buyers may be pulling back. CNBC's Grace Shao reports: Chinese home buyers last year ponied up much less cash in the U.S. as the trade war continues to escalate between the world’s two largest economies. As President Donald Trump and President Xi Jinping prepare to meet this week, there are worries that decline in spending could extend further. U.S. property sales to … [Read more...]
The Rise of Robo-Real Estate?
Real estate firms Opendoor, Offerpad, and Zillow are developing services that purchase homes, improve them slightly, and then flip them to new buyers using apps to do most of the sales work. In my series Dead or Alive? The Future of Long-Term Investing, I questioned the benefits of using robo-advisors in place of real, warm-blooded, human beings. As I wrote then, what happens in a crisis; "We’ll see how well they do when markets crater and the phone lines light up like a Christmas tree. It’s happened twice already this century, and that’s when it matters most." The question is now, are … [Read more...]
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