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      Compass Contemplations for Thursday

      DID YOU KNOW? WeWork occupied more than 7 million square feet as of the end of June, about 73% more than it had a year before, CBRE data show.  Yet it is still a small fraction of the total office space in New York City which is roughly 550 million square feet.  WeWork accounted for 6.8% of Manhattan leasing activity in 2018, and 5.2% so far in 2019. Less demand from WeWork would probably lead to a modest increase in vacancies across the New York office market.


      DID YOU KNOW?  Cities with more than 500,000 people collectively lost almost 27,000 residents age 25 to 39 in 2018, the 4th consecutive year that big cities saw this population of young adults shrinks, yet HALF the number that left in 2017 (54,000).  New York, Chicago, Houston, San Francisco, Las Vegas, Washington and Portland, Ore., were among those that lost large numbers of residents in this age group. Los Angeles, Phoenix, San Antonio, San Diego, Austin, Seattle, Denver and Columbus gained large numbers of this age-group. The majority of people in these age groups who leave cities move to nearby suburbs or the suburbs of other metro areas, and there is absolutely nothing terribly new about this trend! (WSJ)

      DID YOU KNOW? A 2017 study of U.S. mayors that found that only 13% said the housing stock fit the needs of their constituents “very well” or “extremely well,” a sentiment that was true in rich and poor cities alike. (WSJ)

      DID YOU KNOW?  There were 22.8 million people worldwide with fortunes of more than $1m in 2018, an increase of 1.1% over 2017. (WEALTH-X)

      DID YOU KNOW? Retail vacancies in New York City doubled to 11 million square feet between 2007 and 2017. Empty storefronts jumped by nearly 50% to 5.8% from 4% during that same period. Rates are the highest in Staten Island at 11%. On average rents rose by 22% and the Upper West Side saw the highest hike at 68%.  (Good Day New York)

      DID YOU KNOW? Lower demand for US lumber due to 25% China tariffs has pushed prices down 20% in August from a year earlier, one rare upside to the US-CHINA trade war. Could this fuel lower building costs?

       

      Compass Contemplations for Sunday

       

      DID YOU KNOW? According to a 2018 report from the Pew Research Center, 19% of American adults live in “upper-income households.” The median income of that group was $187,872 in 2016. The share of U.S. adults considered upper-class varies depending on where you live, Pew noted: In affluent metropolitan areas, it’s much higher than 19%. The metropolitan areas with the largest shares of adults in upper-income households are mostly in the coastal areas of the Northeast and California and tend to be in high-tech corridors, such as Boston-Cambridge-Newton, MA-NH, or in financial and commercial centers, such as Hartford-West Hartford-East Hartford, CT. The metro with the highest share was San Jose-Sunnyvale-Santa Clara, CA, where 32% of adults were considered upper-income. (CNBC)

       

      "Narratives that can periodically surge into epidemics are capable of changing the economy’s direction or of turning small booms and recessions into big ones. The probability that a recession will come soon — or be severe when it does — depends in part on the state of ever-changing popular narratives about the economy. These are stories that provide a framework for piecing together the seemingly random bits of information that one picks up from friends, the news or social media." - Robert Schiller, NYT 

       

      DID YOU KNOW? Here are some interesting stats from the NAPLES, Florida area via NABOR (Naples Area Board of Realtors) (Thanks to Yasmin Saad).

      * Collier County Florida 2017 Population: 372,880

      * # of licensed brokers/agents who are members:  Brokers: 689, Agents: 6,375

      * 96% of users logged in at least once to the SunshineMLS in the last 12 months.

      * # of homes sold in the last 12 months (buyer or seller side):  6,574 Single Family homes closed had a Naples agent on the Listing Side

      914 Land sales closed that had a Naples agent on the Listing Side

      * The total number of sales in the last 12 months: 14,130 closed.

      Compass Contemplations for Wednesday

      WELCOME, WELCOME to Alain Pinel Realtors who over the past 30 years have become leaders in the Bay Area, known for their luxury offering and strong culture. 

      DID YOU KNOW? More than 50% of the executives recently surveyed by KPMG said Silicon Valley will cease to dominate global tech innovation within the next 4 years, as New York, Boston, Beijing, London and other cities continue their evolution into tech innovation powerhouses, citing factors that include an expansion of tech investing in cities and regions outside of San Jose, Palo Alto and Menlo Park, Calif. Their top pick for the next leading source of technology innovation was New York—up from No. 3 in 2018—followed by Beijing, Tokyo and London. Other U.S. cities that ranked in the top 10 were Boston and Austin, Texas. Washington, D.C., placed 13th. 23% named the U.S. as having the biggest global impact on technology, down from 34% in a similar survey last year. (WSJ)

       

      DID YOU KNOW?  Speak to any developer or builder and they will let you know how their costs have risen in the past 12 months: American consumers have been saddled with $69 billion in added costs because of the tariffs the U.S. imposed in 2018, including on $250 billion on Chinese imports as well as levies on steel and aluminum, according to a study released by a quartet of economists working on a National Science Foundation grant. (WSJ)

       

      DID YOU KNOW? About 63% of the world’s wealthiest said they grew richer in 2018, thanks in part to stock market gains and global economic growth. These individuals also expect their wealth to increase over the next year. Confidence was highest in the U.S., where 80% of individuals worth $30 million and more expect to be better off over the next year. Over 47,000 people in the USA are worth $30 million plus. (WSJ) 

       

      DID YOU KNOW?  I have personally never witnessed more creative photography angles than those being used to photograph 220 Central Park South - the uber-tower that houses the USA's most expensive penthouse sale:  all are either blocking out - or photo-shopping out - it's next door neighbor that looms several hundred feet taller.....

      Upgrade Utopia...A Great Time to Act!

       

      While many buyers in the luxury real estate markets can freeze into a 'wait-and-see' mode when pricing and sales volume drop, those willing to upgrade could experience the ultimate buying opportunity. Here is why:


      1.  Imagine you live in a $4 million home, and the market is down 20%. You'd have to sell that home for around $3,2 million, a loss of around $800,000.  Assuming you are buying a $10 million home that is also down 20%, that home should cost $2 million less, a substantive savings of around $1.2 million net.

      2.  Assume you live in a $4 million home and the markets rise 20% allowing you to sell your home for $4.8 million. Unfortunately, if the market is up 20% across the board, that $10 million home you wish to upgrade to will now cost $12 million.....it will cost you $1.2 million MORE.

      Applying BALANCE SHEET MENTALITY to your real estate needs is always wisest. Your lifetime real estate is mostly not about a single transaction. While we await election results, equity market and rising interest rates clarification, trade-war results, price-cuts, equity market roller-coasters, extreme media sensationalism 24-7 and the true results of the tax bill, opportunity always exists. Always!

       

      Don't Wait to Sell Your House! Buyers Are Out Now

      Dont Wait to Sell Your House! Buyers Are Out Now | MyKCM

      Recently released data from the National Association of Realtors (NAR) suggests that a now is a great time to sell your home. The concept of ‘supply & demand’ reveals that the best price for an item is realized when the supply of that item is low and the demand for that item is high.

      Let’s see how this applies to the current residential real estate market.

      SUPPLY

      It is no secret that the supply of homes for sale has been far below the number needed to sustain a normal market for over a year at this point. A normal market requires six months of housing inventory to meet the demand. The latest report from NAR revealed that there is currently only a 3.6-month supply of houses on the market.

      Supply is currently very low!

       

      DEMAND

      A report that was just released tells us that demand is very strong. The most recent Foot Traffic Report (which sheds light on the number of buyers who are actually out looking at homes) disclosed that “foot traffic grew 10.5 points to 52.4 in March as the new season approaches.”

      Demand is currently very high!

       

      Bottom Line

      Waiting to sell will only increase the competition between you and all of the other sellers putting their houses on the market later this summer. If you are debating whether or not to list your home, let’s get together to discuss the conditions in our market.

      Moving Up to Your Dream Home? Don't Wait!

      Moving Up to Your Dream Home? Dont Wait! | MyKCM

      Mortgage interest rates have risen by more than half of a point since the beginning of the year, and many assume that if mortgage rates rise, home values will fall. History, however, has shown this not to be true.

      Where are home values today compared to the beginning of the year?

      While rates have been rising, so have home values. Here are the most recent monthly price increases reported in the Home Price Insights Report from CoreLogic:

      • January: Prices were up 0.5% over the month before.
      • February: Prices were up 1% over the month before.
      • March: Prices were up 1.4% over the month before.

      Not only did prices continue to appreciate, the level of appreciation accelerated over the first quarter. CoreLogic believes that home prices will increase by 5.2% over the next twelve months.

      How can prices rise while mortgage rates increase?

      Freddie Mac explained in a recent Insight Report:

      “In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

      Bottom Line

      If you are thinking about moving up to your dream home, waiting until later this year and hoping for prices to fall may not be a good strategy.

      5 Ways Tax Reform Has Impacted the 2018 Housing Market

      5 Ways Tax Reform Has Impacted the 2018 Housing Market | MyKCM

      Starting late last year, some predicted that the 2018 tax changes would cripple the housing market. Headlines warned of the potential for double-digit price depreciation and suggested that buyer demand could drop like a rock. There was even sentiment that homeownership could lose its coveted status as a major component of the American Dream.

      Now that the first quarter numbers are in, we can begin to decipher the actual that impact tax reform has had on the real estate market.

      1. Has tax reform killed off home buyer demand? The answer is “NO.”

      According to the Showing Time Index which “tracks the average number of buyer showings on active residential properties on a monthly basis” and is a “highly reliable leading indicator of current and future demand trends,” buyer demand has increased each month over the last three months and is HIGHER than it was for the same months last year. Buyer demand is not down. It is up.

      2. Have the tax changes affected America’s belief in real estate as a long-term investment? The answer is “NO.”

      Two weeks ago, Gallup released its annual survey which asks Americans which asset they believed to be the best long-term investment. The survey revealed:

      “More Americans name real estate over several other vehicles for growing wealth as the best long-term investment for the fifth year in a row. Just over a third cite real estate for this, while roughly a quarter name stocks or mutual funds.” 

      The survey also showed that the percentage of Americans who believe real estate is the best long-term investment was unchanged from a year ago.

      3. Has the homeownership rate been negatively impacted by the tax changes? The answer is “NO.”

      Not only did the homeownership rate not crash, it increased when compared to the first quarter of last year according to data released by the Census Bureau.

      In her latest Z Report,” Ivy Zelman explains that tax reform didn’t hurt the homeownership rate, but instead, enhanced it:

      “We have been of the opinion that homeownership is most highly correlated with income and the net effect of tax reform would be a positive, rather than negative catalyst for the homeownership rate. While still in the early innings of tax changes, this has proven to be the case.”

      4. Has the upper-end market been crushed by new State and Local Taxes (SALT) limitations? The answer is “NO.”

      In the National Association of Realtors latest Existing Home Sales Report it was revealed that:

      • Sales between $500,000 and $750,000 were up 4.5% year-over-year
      • Sales between $750,000 and $1M were up 15.1% year-over-year
      • Sales over $1M were up 17.3% year-over-year

      5. Will the reforms in the tax code cause home prices to tumble over the next twelve months? The answer is “NO.”

      According to CoreLogic’s latest Home Price Insights Report, home prices will appreciate in each of the 50 states over the next twelve months. Appreciation is projected to be anywhere from 1.9% to 10.3% with the national average being 4.7%.

      Bottom Line

      The doomsday scenarios that some predicted based on tax reform fears seem to have already blown over based on the early housing industry numbers being reported.

      Dreaming of a Luxury Home? Now's the Time!

      Dreaming of a Luxury Home? Now's the Time! | MyKCM

      If your house no longer fits your needs and you are planning on buying a luxury home, now is a great time to do so! Recently, the Institute for Luxury Home Marketing released its Luxury Market Report which showed that in today’s premium home market, buyers are in control.

      The inventory of homes for sale in the luxury market far exceeds the number of people searching to purchase these properties in many areas of the country. This means that homes are often staying on the market longer or can be found at a discount.

      Those who have a starter or trade-up home to sell will find buyers competing, and often entering bidding wars, to be able to call their house their new home.

      The sale of your starter or trade-up house will help you come up with a larger down payment for your new luxury home. Even a 5% down payment on a million-dollar home is $50,000.

      But not all who are buying luxury properties have a home to sell first.

      A recent Bloomberg article gave some insight into what many millennials are choosing to do:

      “A new generation of affluent homebuyers powered by a surge in inherited wealth is driving the luxury-home market, demanding larger spaces and fancier finishes, according to a report heralding ‘the rise of the new aristocracy.’”

      Bottom Line

      The best time to sell anything is when demand is high, and supply is low. If you are currently in a starter or trade-up house that no longer fits your needs and you are looking to step into a luxury home, now’s the time to list your house for sale and make your dreams come true.

      My New Company

      I have recently moved my business to be affiliated with COMPASS.  They are a new hybrid of real estate company that is part proprietary technology company and part traditional real estate firm.  The proprietary technology puts our group light years ahead of those that are relegated to the past, while also providing outstanding personal service to the customer.  This is the combination that I was looking for as my own company's sales vehicle, as I am totally on-board with excellent communication and customer service.  COMPASS provides every high tech sales tool that we were sorely lacking as independent Brokers.  We are proud to be a part of this company and I intend to pass every advantage that we have gained on to our customers.  Welcome to a new era in Boston real estate!

      If You're Considering Selling, ACT NOW!!

      If You're Considering Selling, ACT NOW!! | MyKCM

      Definitely an aggressive headline. However, as the final data on the 2017 housing market rolls in, we can definitely say one thing: If you are considering selling, IT IS TIME TO LIST YOUR HOME!

      How did we finish 2017?

      1. New-home sales were at their highest level in a decade.
      2. Sales of previously owned homes were at their highest level in more than a decade.
      3. Starts of single-family homes were their strongest in a decade and applications to build such properties advanced to the fastest pace since August 2007.

      And Bloomberg Business just reported:

      “America’s housing market is gearing up for a robust year ahead. Builders are more optimistic, demand is strong and lean inventory is keeping prices elevated.”

      And the National Association of Realtors revealed that buyer traffic is stronger this winter than it was during the spring buying season last year.

      The only challenge to the market is a severe lack of inventory. A balanced market would have a full six-month supply of homes for sale. Currently, there is less than a four-month supply of inventory. This represents a decrease in supply of 9.7% from the same time last year.

      Bottom Line

      With demand increasing and supply dropping, this may be the perfect time to get the best price for your home. Let’s get together to see whether that is the case in your neighborhood.

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