Shari Olefson's Tumblr

I am the first woman Director of The Carnegie Group think tank, the Author of several books, a TV News Commentator, Speaker, Advocate, and Lawyer (not always in that order) With over thirty years in the finance and real estate industries.

[shariolefson]

Presidential Debates...Then and Now

Earlier this week we saw the first Presidential debate of this election cycle.  The next debate in less than two weeks away. But there's a long history of debates we can all learn from.

The concept of debate dates back to ancient Greece and Rome.  The heyday of political debate in the U.S. lasted from when our country was founded through much of the 19th century.   Originally debate on the floor of legislatures directly informed decisions on policy.    Debaters focused on particular questions and limited the audience they were addressing.  These settings imparted a natural discipline to the speeches given within them, encouraging substance.   Eventually these debates left legislative venues and took to the road and public but remained way more focused than what we see today.  Think about some of the more famous debates in our nation’s history.  For example, when Lincoln and Douglas debated back in 1858 for a senate seat.  That was a series of daylong exchanges in various towns.   Whereas in modern televised debates, a candidate often has just 90 seconds for an answer, those debates gave each speaker 90 minutes for a single response – the same amount of time the entire debate required earlier this week!  Audiences stood all day to listen.  Debates today are still supposed to inform us on the candidate’s positions on issues but I'm not so sure they do or at least that's not what we seem to focus on today.  

But back then audiences were much smaller, statements were much longer and specific, and of course the debates weren't televised.  Those are differences that virtually changed the entire composition of debates. The Nixon-Kennedy debate was the first televised on back in 1960 and is said to be the reason Kennedy won, because he translated better to television viewers.  People who listened on radio actually thought Nixon won.  Optics began factoring in and mattered.  When he ran again in 1968 against Humphrey, Nixon refused to do TV debates and won.  But even then, televised debates didn't become the norm until 1976 when Carter debated Ford.   2008 is when technology took another step and voters began submitting questions to the candidates on YouTube.  More recently Facebook, Snapchat and other technology's been used including live viewer tweets we saw during this recent debate.   These changes impact how the candidates play the debates and how we perceive them.  Some experts back in 1960 said televising the debates would have dangerous implications and even corrupt the process.   Maybe they were right.  The impact of social media remains to be seen.  

These changes and our correlating attention span (cause or effect?) are specifically impacting today’s Clinton-Trump debates, begging the question how we, as viewers and voters, can we remain vigilant and focused on what matters in terms of what take away?

For starters we can leverage technology and watch the on-line fact checkers as we watch the debates.  According to most the candidate’s (and in particular Mr. Trump) arguments are littered with incorrect facts, certainly a trait we don’t need in the Oval office.  Back when debates still lasted days, the public for the most part obtained their information from transcripts published after the fact.  Nowadays, we can instantaneously access these transcripts on-line.  And doing so can be tremendously helpful for anyone who wants to peel away the drama and posturing and read what the candidates actually said.  Are they answering the questions specifically, eloquently and with focus?  Or instead responding to questions they wish they’d been asked?   Perhaps the biggest change is that we now have a woman debating.  Countless psychological studies show that men and women alike subconsciously attribute female candidate facial expressions and demeanor as internal emotion, but male candidate facial expressions and demeanor as a response to the situation.  In the context of debate, that oftentimes translates to a woman making stern-looking facial movements being perceived as angry or upset, but a man who looks the same way, being perceived as focusing on the important matters.  

“Manterrupting,” the phrase being used to describe Trumps forty some-odd interruptions of Clinton (in comparison to Clinton’s on interruption of Trump), is, likewise, consistent with the research.  Even school aged boys are show, in study after study, to interrupt women and girls eight times more than girls interrupt boys.  

Women who violate these and other gender expectations are generally subconsciously perceived as unlikeable and, sometimes even unpredictable or untrustworthy.   Most of us recognize gender stereotypes when they’re blatant. But when stereotyping is subtle like this, almost all of us unknowingly succumb.   To test yourself, take a moment to think about how you would perceive Trump if he behaved like Clinton.  And vis-a-versa.   And check out this video https://youtu.be/qo7ViPCYI-0

#2016debates #debates  #trump  #clinton #donaldtrump #hillaryclinton #makeamericagreatagain #strongertogether

[shariolefson]

On This Week of It’s One-Month Anniversary, Where Is Pokemon-Go Going Next...?

    This week marks one month since the release of the smash hit game Pokemon Go and some interesting trends, bound to impact even those of us who don’t play, are already emerging.   For those of unfamiliar with Pokemon Go, here’s the one minute overview… The game uses Augmented Realty or AR which, unlike virtual reality, superimposes digital information into a real environment.   In a nutshell, the goal of the game is to capture all 150 “pocket monsters.”   You do that by going to locations (called Poke Stops) designated on a smartphone map, aim your phone’s camera at the monster you see thru your lens, and then swipe a Poke Ball (you get 50 for free when you start) towards the monster to capture it.  To make the game more interesting, you can find free tools at Poke Stops or buy tools to help you, such as Poke Balls, Lures (which last about 30 minutes and increase the number of creatures that appear), Eggs (which hatch into Pokemon when you walk between 1 and 6 miles), or Incense (which attracts Pokemon for 30 minutes).   And you can battle for dominance at designated Gyms.  The app itself is free, they make money when you buy things like Poke Balls for $1. What’s also interesting is how the game has evolved.   Remember,  video games became popular with home based play stations back in the 1970s and 1980s.   The original version of Pokemon, played on portable Game Boy device,  became  popular in 1998. The game was based on the creator’s childhood interest collecting bugs.  Not only was it portable, but you could connect with other players by a cable.  And it was a “casual game,” meaning you could put it down and pick it up later in the same place where you left off.   But this new AR version, takes things to a whole new level. When it first came out, there was a big deal about Pokemon Go safety.  People were using it while they drove, not watching where they were walking, and such, and that’s still an issue, both physical safety and cybersecurity.  A warning does pop up in the opening window. The use of geolocation technology and the fact that the game physically brings you to new places can, and has, translated not only to potentially dangerous situations, but to players committing illegal trespass and endangering themselves and others by playing while walking or even driving.  Some businesses are posting sign allowing access for only paying customers.  And some places, the Holocaust Memorial in DC, for example, have asked the developer to not use their location as a game site. When it comes to cybersecurity, by downloading the App, you’re agreeing to the developer using your smart phone location, data and access, including to emails and photos.  Remember, these games generally make money on the back-end by selling information about you.   That means it important to read the permissions and terms of use (which you can find in your phone Settings under Apps) and, particularly, what are they collecting and how are they sharing or using it.   Finally, the hackers are also going nuts over this game’s popularity.  In fact, the there’s already been a fake Android version which can take over your device and steal information.   That means it’s important to download the game only through Google’s official Play Store. Flip side is the game is bringing people to new places or maybe helping folks learn something new about the places they’ve already been.  And it’s getting people outside.  In fact, to use the Egg feature, where you can hatch your own Pokemon, you need to walk between 1 and 6 miles.   One unexpected ting we’ve seen this past month is a surge in customer engagement, foot traffic and business at the locations included as Poke Stops.  This uptick has been better for certain businesses, for example coffee shops, cheap food places and candy stores, than others, which makes sense when you think about the audience.   But players report actually choosing where they’re going to eat, for example, based on a restaurants proximity to a Poke Stop.  This, at a time when foot traffic is down by almost 10% from last year.   Businesses are already able to buy Lures to get players into their shops.   For about $10 you can keep people coming to your business for hours.  And the developer has indicated that it will be accepting sponsorships to make certain businesses or locations appear more prominently in the game.  We may also see items, brand or even celebrities embedded into the game.  This has the potential of really blurring the lines between the online verses bricks and mortar experiences.  Perhaps we’ll eventually see AR being used to customize store signs and sales displays for each of us.   AR and VR, together, are expected to grow into an $80 billion industry by 2025.  More technology coming. Microsoft working on AR headset called HoloLens.  Others working on smart phone adds-ons of sensors and software.  People reluctant to wear a computer on their face.   It’s not only for the big guys.  Even though it’s not allowed, individual players have found a business selling their high Pokemon ranking, an estimated $1 billion industry.   Other are offering to help novice players collect Pokemon for a fee. And where there’s money there are lawyers.  In fact Palm Beach County, we saw one of the first Pokemon Go lawsuits filed just last week.  The suit, filed against the developer, was based on alleged deceptive, unfair, unconscionable trade practices under the Terms of Service Agreement, essentially claiming that, because it gives developer expansive rights to collect and use player data and the right to unilaterally alter or terminate the Agreement, it is an illusionary and unenforceable contract.

[shariolefson]

watch the video here https://youtu.be/BotQBwAaK-k

[shariolefson]

How Will the Presidential Race Impact Your Home Value?

For most of us, our home is our single biggest asset and an important source of retirement income. But government policy can have a big impact on whether our home value goes up or down.  Here’s what you need to know about what Clinton and Trump say they will or will not do to help America’s housing and all of our home values.

For starters, Clinton has said that she would use $25 billion of her over $125 billion economic revitalization plan to break these barriers to homeownership for first timers and lower income buyers. Clinton has also discussed government assistance saving a down payment, similar to policies that help folks save for retirement, particularly in underserved communities where folks are earning less than the area median income.  And steps to make rent more affordable since high rent is also preventing folks from saving a down payment.   Another proposal may include, for example, matching up to $10,000.  Clinton’s housing platform also contemplates addressing affordability in general by, for example, easing local barriers and providing more incentives for developers to build affordable work force housing.  Clinton generally defends fair housing laws and the Consumer Finance Protection Bureau, established when the bubble burst to go after banks, Wall Street, pay day lenders and such who rip off consumer.  

Trump has not said much about housing yet. At least no specific policy ideas.  In general, he has said that he wants to cut government spending which would presumably include some of the program’s we just talked about such as housing counseling or incentives for developers to build more work force housing.  He has said that he would dismantle the Dodd Frank Act which created the Consumer Financial Protection Bureau so he’d presumably seek to eliminate that agency as well. He has also said that he would like to eliminate the Department of Housing and Urban Development (HUD) which oversees our nations fair housing laws as well as Fannie, Freddie and FHA, all of which he’d like to reform. Generally speaking he favors scaling back the role of government in housing and, specifically, rules designed to protect the environment that might interfere with housing.  

So which of these platforms is likely to be better for our own home values?  Well, we know that a healthy housing market starts with first time home buyers because those folks create an upward domino effect.  And we know the greatest barrier for first timers is the high cost of housing, saving a down payment and getting financing.  Home equity is still the largest source of retirement and other savings for average Americans, that can be an important safety net keeping folks off of government programs.  

So programs that support that, theoretically support all our home values.  Keeping rent affordable is important for the same reasons. When folks pay too much for rent, they can’t afford to live or certainly can’t save a down payment. Half all Americas renters today are paying more than the recommended third of their income towards rent.  A quarter of them are paying more than half their income towards rent.  

And improving funding for housing counseling is a proven method to reduce defaults.  Particularly with all the discussion to reform Fannie, Freddie and FHA, where most first time buyers and a lot of us in general get our home loans, these are important policy issues because if folks can’t get home loans they can’t buy homes and that puts the value of all our homes at risk.  

The flip side, of course, is that when financing is too easy to get you have problems, government programs cost money, and not everyone should or wants to own a home.   So we need to strike a balance.  At the end of the day, it boils down to what kind of role you believe our government should play in assuring that homeownership is accessible to average Americans.

[shariolefson]

check out the video of this post @  https://youtu.be/12V_4eghJ7I

[shariolefson]

How Will the Presidential Race Impact Your Home Value?

For most of us, our home is our single biggest asset and an important source of retirement income. But government policy can have a big impact on whether our home value goes up or down.  Here’s what you need to know about what Clinton and Trump say they will or will not do to help America’s housing and all of our home values.

For starters, Clinton has said that she would use $25 billion of her over $125 billion economic revitalization plan to break these barriers to homeownership for first timers and lower income buyers. Clinton has also discussed government assistance saving a down payment, similar to policies that help folks save for retirement, particularly in underserved communities where folks are earning less than the area median income.  And steps to make rent more affordable since high rent is also preventing folks from saving a down payment.   Another proposal may include, for example, matching up to $10,000.  Clinton’s housing platform also contemplates addressing affordability in general by, for example, easing local barriers and providing more incentives for developers to build affordable work force housing.  Clinton generally defends fair housing laws and the Consumer Finance Protection Bureau, established when the bubble burst to go after banks, Wall Street, pay day lenders and such who rip off consumer.  

Trump has not said much about housing yet. At least no specific policy ideas.  In general, he has said that he wants to cut government spending which would presumably include some of the program's we just talked about such as housing counseling or incentives for developers to build more work force housing.  He has said that he would dismantle the Dodd Frank Act which created the Consumer Financial Protection Bureau so he'd presumably seek to eliminate that agency as well. He has also said that he would like to eliminate the Department of Housing and Urban Development (HUD) which oversees our nations fair housing laws as well as Fannie, Freddie and FHA, all of which he'd like to reform. Generally speaking he favors scaling back the role of government in housing and, specifically, rules designed to protect the environment that might interfere with housing.  

So which of these platforms is likely to be better for our own home values?  Well, we know that a healthy housing market starts with first time home buyers because those folks create an upward domino effect.  And we know the greatest barrier for first timers is the high cost of housing, saving a down payment and getting financing.  Home equity is still the largest source of retirement and other savings for average Americans, that can be an important safety net keeping folks off of government programs.  

So programs that support that, theoretically support all our home values.  Keeping rent affordable is important for the same reasons. When folks pay too much for rent, they can't afford to live or certainly can't save a down payment. Half all Americas renters today are paying more than the recommended third of their income towards rent.  A quarter of them are paying more than half their income towards rent.  

And improving funding for housing counseling is a proven method to reduce defaults.  Particularly with all the discussion to reform Fannie, Freddie and FHA, where most first time buyers and a lot of us in general get our home loans, these are important policy issues because if folks can't get home loans they can't buy homes and that puts the value of all our homes at risk.  

The flip side, of course, is that when financing is too easy to get you have problems, government programs cost money, and not everyone should or wants to own a home.   So we need to strike a balance.  At the end of the day, it boils down to what kind of role you believe our government should play in assuring that homeownership is accessible to average Americans.

[shariolefson]

Trump U.  and What Women Need to Know About For-Profit Colleges

The recent release of testimony from lawsuits against Trump U. has reopened the conversation about for profit colleges.  But did you know that women are more likely to be victims of the deceptive practices some of these colleges use than men.  

A few years back for profit colleges wound up on the radar screens of Congress and government regulators largely because of the huge amount of taxpayer dollars being paid to them in government student loans, the number of student complaints, and the number of defaults in repaying those loans.   After investigating it turned out that many were engaging in deceptive high pressure sales tactics (such as promising post-graduation jobs and salaries they were not delivering), predatory recruitment (such as targeting elderly and low income students), charging big price tag tuition, and encouraging students to take on debt they could not afford.   And more often than not, those students don’t even graduate.  For example;

• For profit college students tend to pay more:  Average tuition at a for profit college is $14,737, verses $2,959 at a two-year public college and $8,256 at a four-year state school.

• More students at for profit colleges go into debt: The majority of students attending for profit colleges, about 98.5%, take out loans to do so.  In comparison to about 13% in two-year public colleges and about 43% in four-year public colleges.  

• More for profit college students default on the loans:  Only about 13% of students with government loans attend for profit colleges, but student loan defaults from for profit colleges accounts for about 50% of all defaults.  The likelihood of a student defaulting at a for-profit college is nearly four times higher than at a community college and more than three times higher than at a four-year public or nonprofit college.

• Graduates tend to earn less:   The thing is, some studies show that folks with vocational certificates may earn an average of $900 less after attending a for profit school than before.  While students earning the same certification at a public community college tend to earn an average of $1,500 more than before attending.  Because for profit college students also rack up more student loan debt, they’re hit with a double whammy.  

• But the biggest problem, is that only 22% of full-time students seeking a Bachelor's degree graduate at for profit colleges actually graduate (the numbers even less for part-time students), compared to 55% at public institutions and 65% at private nonprofits.

Trump U. opened 2005 and closed in 2010 and has been plagued by issues similar with some other for profit colleges.  There have been complaints and investigations connected to Trump U., including to Attorney Generals in Florida, Texas, New York, and Illinois.  And then there’s the current law suit in California.  The testimony just released reveals allegations and, some would argue, evidence, of similar problems including high pressure sales tactics including company procedure designed to get students to borrow and max out credit cards (what the Trump U. training guide in evidence refers to as “OPM” aka “other people's money”) and deceiving students by saying that Donald Trump was actually involved in the education and selecting teachers when he was not.    

Women tend to make up the majority of students attending for profit colleges.   63% of for profit students are women, compared with 57% in two-year community colleges and 55% in public four-year schools.  And, by 2025, women enrollment is projected to increase by 17%, compared to male enrollment which is projected to increase by only 11% percent.  

So, in a nutshell, women stand to lose more and need to be all the more vigilant is they’re thinking about a for profit college.  Not all for profit colleges are bad. In fact many offer convenience and flexibility that’s needed in order for some women to even be able to get a degree.  Some of the more popular studies include nursing, auto repair, and cosmetology.  The good ones can be credited for changing the entire face of old fashioned college education.  But the statistics prove that you do need to be careful.  

Since about $30 billion in tax payer money goes to for profit colleges in the form of government student loans each year, new (2014) Federal “Gainful Employment Rules” require schools to maintain at least a 35% student loan repayment rate and limit the amount of debt students can take out for career training programs.   But it’s still up to you to protect yourself.  Fortunately, there are some red flags you can look for.  For example, don’t accept verbal assurances and guarantees including about how many graduates find jobs and how much they’re paid.  Ask to see everything in writing.    And some questions you can ask.  For example, make sure that you understand all costs that will be involved and take time to compare costs with other educational options.  You can normally do this fairly easily on-line.   Don’t forget to factor in graduation rates and how long it takes most students to graduate, which both impact cost.  Student loan default rates will also shed light on how well a school’s graduates fair, since default rates may stem from the combination of high loan balances and difficulty finding employment.  The CFPB offers a great worksheet as part of a “know before you owe” initiative they did at consumerfinance.gov.

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[shariolefson]

The Mass Shooting - Domestic Violence Connection: What Women Need to Know

The tragedies in Orlando and Nice, to mention a few,  have us all concerned about what can happen when guns get into the hands of violent people.   Unfortunately, American women are far more likely to come face to face with someone like that in their own home.  

As women, when we think about the types of situations in which we might come face to face with a violent guy with a gun, we typically envision a dark parking lot or alley somewhere.  But the fact is, 93% of women who are murdered are murdered by someone they know.   And two-thirds of women murdered by guns are murdered by their husbands or intimate partners, not by strangers in dark alleys.    A domestic abuser’s access to firearms alone translates to him being five times more likely to murder his wife or girlfriend.    Domestic gun violence kills over four women every single day!   In fact, 70% of mass shootings happen inside American homes, not in public.  

But when it does come to public shootings like the ones in Orlando or Nice, for example, among the best predictors of future violent behavior is past violent behavior.   Wives and children of domestic abusers are sometimes only the proverbial “canary in the coal mine.”  In a sense, these guys are practicing their violence at home.   It turns out that many of the mass murders we’ve seen over the past few years were domestic abusers.   And in all cases, monitoring the access these men have to guns is, arguably, part of the solution.  

There are connections between the Orlando and Nice murders and domestic gun violence on several levels. Perhaps the biggest similarity is that there have been some laws passed to keep domestic abusers from accessing guns to kill their wives and girlfriends, but there are still loopholes and the resistance to closing them is very similar to the resistance we’re hearing for not keeping assault weapons away from mass murderers, mainly that the Second Amendment grants every American the right to a gun and the only way we can limit that is if we know for sure that a person is buying that gun to use it to commit murder.   The problem, obviously, is there’s no way to know that for certain until after the fact.

For example, on the Federal level, the Violence Against Women Act and Protective Order Gun Ban passed in 1994 prohibits anyone with a restraining order for domestic violence from possessing a gun.   And the Domestic Violence Offender Gun Ban, aka the Lautenberg Amendment, of 1996 bans access to guns and ammunition by anyone convicted of misdemeanor domestic violence, child abuse, or under a restraining order for domestic, as well as knowingly selling or giving a gun or ammunition to these guys.   The Violence Against Women and Department of Justice Reauthorization Act 2005 aka VAWA required states and local governments, as a condition of certain funding, to certify that their judicial administrative polices include notifying domestic violence offenders of federal firearms prohibitions and any related applicable federal, state, or local law.  

On the state level, some states prohibit anyone who’s committed a domestic violence misdemeanor or is subject to a protective order from buying a gun.  A few require them to surrender their existing guns or authorize or require the court to require surrender.  And some allow or require law enforcement responding to an incident to remove guns from a home

Like the challenges we’re now facing with trying to stop more mass shootings, the problems with guns and domestic violence lie in a few key areas:

• First, we can’t possibly know for sure that a gun will be used to kill someone in advance.  Many domestic violence laws only apply after a court gets involved and issues a restraining order, for example.    Yet the greatest danger for violent retaliation is right after a first temporary restraining order is sought.  

• Second, certain terms are very narrowly defined, such as what constitutes domestic violence or who constitutes a victim.   Non-married partners who don’t live together, for example, may not be protected.   And there are virtually no laws to help other family members stop a killer.   We’ve seen situations where family members know there’s a problem, but even if its reported, our laws don’t give them any way to do something about it.  Take for example, the Santa Barbara shooter in 2014.  His mom knew he was deeply troubled and called authorities. They went to the house and the guns he eventually used in a mass murder were right there.  But unless someone has committed a crime or can be involuntarily committed to a mental institution, there’s not much the laws allow you to do.  

• Last, the devil is in the details, many of which are not addressed by the laws.  Studies show that when states ban abusers with restraining orders from buying new guns, domestic murders with guns drop by 25%.  But, when abusers are able to keep the guns they already own, we don’t see these same results.  Moreover, states vary in the duration for removal of firearms with some only doing it for a few days.   And not all states facilitate gun purchase prohibitions or existing gun seizures by reporting to a central database.  

One in four women experience domestic violence at some point.   Better firearm safety laws will help save those lives too.

[shariolefson]

On This Week of It’s One-Month Anniversary, Where Is Pokemon-Go Going Next...?

    This week marks one month since the release of the smash hit game Pokemon Go and some interesting trends, bound to impact even those of us who don’t play, are already emerging.   For those of unfamiliar with Pokemon Go, here’s the one minute overview… The game uses Augmented Realty or AR which, unlike virtual reality, superimposes digital information into a real environment.   In a nutshell, the goal of the game is to capture all 150 “pocket monsters.”   You do that by going to locations (called Poke Stops) designated on a smartphone map, aim your phone’s camera at the monster you see thru your lens, and then swipe a Poke Ball (you get 50 for free when you start) towards the monster to capture it.  To make the game more interesting, you can find free tools at Poke Stops or buy tools to help you, such as Poke Balls, Lures (which last about 30 minutes and increase the number of creatures that appear), Eggs (which hatch into Pokemon when you walk between 1 and 6 miles), or Incense (which attracts Pokemon for 30 minutes).   And you can battle for dominance at designated Gyms.  The app itself is free, they make money when you buy things like Poke Balls for $1. What’s also interesting is how the game has evolved.   Remember,  video games became popular with home based play stations back in the 1970s and 1980s.   The original version of Pokemon, played on portable Game Boy device,  became  popular in 1998. The game was based on the creator’s childhood interest collecting bugs.  Not only was it portable, but you could connect with other players by a cable.  And it was a “casual game,” meaning you could put it down and pick it up later in the same place where you left off.   But this new AR version, takes things to a whole new level. When it first came out, there was a big deal about Pokemon Go safety.  People were using it while they drove, not watching where they were walking, and such, and that’s still an issue, both physical safety and cybersecurity.  A warning does pop up in the opening window. The use of geolocation technology and the fact that the game physically brings you to new places can, and has, translated not only to potentially dangerous situations, but to players committing illegal trespass and endangering themselves and others by playing while walking or even driving.  Some businesses are posting sign allowing access for only paying customers.  And some places, the Holocaust Memorial in DC, for example, have asked the developer to not use their location as a game site. When it comes to cybersecurity, by downloading the App, you’re agreeing to the developer using your smart phone location, data and access, including to emails and photos.  Remember, these games generally make money on the back-end by selling information about you.   That means it important to read the permissions and terms of use (which you can find in your phone Settings under Apps) and, particularly, what are they collecting and how are they sharing or using it.   Finally, the hackers are also going nuts over this game’s popularity.  In fact, the there’s already been a fake Android version which can take over your device and steal information.   That means it’s important to download the game only through Google’s official Play Store. Flip side is the game is bringing people to new places or maybe helping folks learn something new about the places they’ve already been.  And it’s getting people outside.  In fact, to use the Egg feature, where you can hatch your own Pokemon, you need to walk between 1 and 6 miles.   One unexpected ting we’ve seen this past month is a surge in customer engagement, foot traffic and business at the locations included as Poke Stops.  This uptick has been better for certain businesses, for example coffee shops, cheap food places and candy stores, than others, which makes sense when you think about the audience.   But players report actually choosing where they’re going to eat, for example, based on a restaurants proximity to a Poke Stop.  This, at a time when foot traffic is down by almost 10% from last year.   Businesses are already able to buy Lures to get players into their shops.   For about $10 you can keep people coming to your business for hours.  And the developer has indicated that it will be accepting sponsorships to make certain businesses or locations appear more prominently in the game.  We may also see items, brand or even celebrities embedded into the game.  This has the potential of really blurring the lines between the online verses bricks and mortar experiences.  Perhaps we’ll eventually see AR being used to customize store signs and sales displays for each of us.   AR and VR, together, are expected to grow into an $80 billion industry by 2025.  More technology coming. Microsoft working on AR headset called HoloLens.  Others working on smart phone adds-ons of sensors and software.  People reluctant to wear a computer on their face.   It’s not only for the big guys.  Even though it’s not allowed, individual players have found a business selling their high Pokemon ranking, an estimated $1 billion industry.   Other are offering to help novice players collect Pokemon for a fee. And where there’s money there are lawyers.  In fact Palm Beach County, we saw one of the first Pokemon Go lawsuits filed just last week.  The suit, filed against the developer, was based on alleged deceptive, unfair, unconscionable trade practices under the Terms of Service Agreement, essentially claiming that, because it gives developer expansive rights to collect and use player data and the right to unilaterally alter or terminate the Agreement, it is an illusionary and unenforceable contract.

[shariolefson]

Is the Fed's Position on Rates Gonna Mess With Housing?

For sure!  But probably not the way you're thinking.

 When it comes to housing, most of us assume that rising interest rates translate to softening demand and valuations.  But this time, that wont be the case. 

In fact, the exact opposite will play out. rising rates will cause inventory to decline even further, driving values up.  That's good news for investors, but not so good for average folks already grappling with housing affordability.

That's because the same indicators the Fed is watching to time tapering and rate increase also mirror consumer confidence and housing demand.  So, at least in theory, everyone is signing off the same song sheet.  Moreover, the Fed has made it abundantly clear that rate increases will be slow and incremental.  Consequently, we're not seeing home buyers rushing in to beat the rates.  And years of pent up demand continues "penting up."

Notwithstanding the temporary psychological impact we see when rates exceed 4%, 5% and so on, we know that the majority of home buyers ultimately focus more on the amount of their monthly mortgage payment than they do on their actual interest rate.

Of course, higher interest rates mean higher mortgage payments and lower purchasing power, but there are always strategies to mitigate that.  For example, buying down the interest rate (typically seen more frequently as a seller-offered incentive when rates rise), using a larger down payment, or (gasp) buying ales expensive home.

Then there's the fact that, unlike jewelry for example, which we can simply delay buying when the price of gold rises, we all need a place to live.  The alternative to buying a home is renting one.  But here's the rub, rental rates have been rising far faster that interest rates will. Not to mention the other components that typically tip the scale for folks calculating their rent verses own equation, and will still prevail, regardless of interest rate increases of the ilk we're expecting.

We know that housing demand will organically increase by around 1%, or 1.5 million buyers, per year for the next ten years. In addition, aging and obsolete units will need to be replaced.

Yet inventory, which began declining in 2011, remains stubbornly low at 4.5 months supply verses a more healthy 6 months.  So what's ailing inventory?

For starters, hundreds of thousands of units were converted by investors, the likes of Blackstone's Invitation Homes, into scattered residential rentals.  When the bubble burst, single family home construction ground to a halt.

Since then, builders, attracted to higher RIO and lower risk, have focused on higher priced homes and multifamily construction.  Millions are still underwater and unable to sell. And homeowners in general are staying put almost twice as long as they used to. In particular, millions of Baby Boomers are choosing  "aging in place" over selling their homes.

Rather than temper demand, rising interest rates will reduce housing supply even further.  That's because we know that, as rates rise, folks hesitate to sell their homes, as doing so means giving up those low rate mortgages.  Great for the home improvement industry.  Not so much so for housing inventory, which began declining in 2011 and has remained stubbornly low ever since.

These dynamics underscore the importance of tax policy that will keep U.S. housing trades flowing in the coming years, notwithstanding rising interest rates.

For example, the capital gains exclusion allows folks to sell a primary residence and retain $250,000 for single filers and $500,000 for married filers, tax free.  Certainly, the capital gains exclusion is one policy Congress will want to retain, perhaps even increasing the caps, which date back to 1997 and have never been indexed for inflation, in order to increases inventory from the top down.  After all, before a move up seller will consider listing his home, he needs to be confident that he will be able to find another one to move up into.

Extending the Mortgage Forgiveness Debt Relief Act is another example of tax policy that will help improve housing supply as rates rise.  The Act, first passed in 2007, allows folks who are underwater to sell their homes without having to pay income tax on the mortgage debt their bank forgives.  The Act expired December 31.  But with millions still  underwater and  inventory in such short supply, it is still clearly needed.   

[shariolefson]

5 posts!

[shariolefson]

Fixing U.S. Economic Growth Overnight...

Equal Pay Day was yesterday.

We've all read the stats.

When the Equal Pay Act was signed, in 1963, women were paid only .53 cents for every $1 paid to their male co-workers.

Over 50 years later, women are still paid only .78 cents for every $1.

Sadly, even after accounting for the variables, an inexplicable gap, attributable only to gender bias, persists.

But pay inequality is not a "women's pocketbook problem."

It's a national economic disaster.

Because women are the primary breadwinners in 40% of American households (up from 10% in 1963), millions manage to get by on a median 22% less income.  A pay, and corresponding consumer spending, increases to bridge this illegal gap would clearly impact our entire nation's economic growth.

We debate raising the minimum wage and pumping taxpayer money into convoluted government programs, when simply enforcing existing equal pay laws would result in a life-changing raise for almost half of America's workforce.

Our nation's persistent problem with economic growth could, literally, be solved overnight if equal pay laws were simply enforced.

[shariolefson]

This Summer's Prize Souvenir, a Vacation Home.

As summer nears, many of us are thinking about where we will go for vacation. And when we're on vacation, who among us doesn't fantasize, at least for a nano-second, about buying a home in our favorite vacation spot?

How realistic is it nowadays for mere mortals to afford a vacation home.  And does buying a vacation home make investment sense?

Vacation homes aren't just for the rich and famous anymore.  The average vacation home buyer last years earned under $100,000.  And the median vacation home price is actually only around $150,000, less than primary residences.

That's far less than most folks think, but it's mostly a function of the size of vacation homes that have been selling, which has been down simply because so many are townhomes and condominiums, which of course tend to be smaller than single family homes.   We've also seen increases vacation home sales in the Southern U.S. where prices have tended to be more reasonable.

As an investment category,  homes are (obviously) far less liquid than many other investments.  That's doubly so for vacation homes, which are the first asset to go, meaning the last thing most folks will buy from you, if times get tight.  Transactions costs, on both the acquisition and de-acquisition, also requires a longer hold.  But if that fits with your personal investment strategy, by all means proceed to next step. 

With the economy improving and the stock market doing well, vacation and second home sales, which include investment homes, are expected to rise. Moreover, 76 million baby boomers, many of whom plan to buy vacation and second homes to eventually retire to, translates to a high likelihood of strong demand in the coming years.  Already, vacation home sales are up by over 57% last year from the year before.

As with all real estate, the key is buying right.  last year, vacation and second home prices were down by over 11% from the year before.  And this is one segment in which we are still seeing a fair share of distressed sales and opportunity.

Location is key.  The median distance from most vacation and second home buyers' primary residence is 200 miles, and for good reason.  Sticking fairly close to home enables ease of personal use as well as maintenance.  Vacation homes tend to be near beaches, mountains or woods, all areas prone to rough elements and natural disaster aka higher maintenance costs.

Happy vacation home hunting!

[shariolefson]

PIMPING YOUR RIDE: Uber...Brilliant Model or Just Breaking the Law?

Uber is the ride share service, and alternative to taxis and limousines, that’s taken the world by storm.  Now five years old and operating in over 250 markets in 50 countries, Uber has raised about $2.7 billion on projected revenues of $10 billion, placing its valuation at over $40 billion. 

But the company, and in particular, it’s business model and expansion strategy, are generating  uber-controversy.  

Like many parents, I first heard of Uber from my teen-aged daughters. By that time, they’d both been using it for months.   Having hailed more than my fair share of New York City cabs (and telephoned to arrange many in cities where they’re not as prolific), I’m well versed in the pros of those that are well maintained, driven by seasoned pros, and available when you need them, and the cons of those that are not.  And, to be truthful,  I’ve actually wondered why the industry got stuck in time.  

Naturally, my initial response to Uber was concern for my daughters’ safety.  But, as teen-agers are known to do, they assured me that Uber rides are perfectly safe.  

By leveraging wasteful idle resources and technological efficiencies, Uber coats itself in a deliciously trendy blend of kumbaya meets concierge, not unlike what AirBNB and VRBO are doing in the vacation rental space.  

Moreover, Uber provides hard working Americans, burdened by stagnant wages, with a wonderful opportunity to earn extra cash as drivers, making it the virtual poster child for our current infatuation with businesses that “do the right thing.”  

And, let’s face it, we’ve all grown immune to that certain level of risk we know good and well is inherent in our kids’ use of social media, not to mention our own use of online banking and other convenience technologies.   What choice do we have?  Who wants to be the slow, stogy dinosaur? 

Not me.  Not to mention the fact that I’ve never been completely comfortable with my girls riding in taxi cabs anyway.

So I ignored my gut and went with popular opinion, admiring the many virtues of Uber.

It wasn’t until the subject came up again, over Thanksgiving dinner, that I even thought twice. 

This time, my cousin, whose teen-aged daughter recently began user Uber at boarding school, was asking her kid the exact same questions and getting the exact same, eternally optimistic, teen-ager answers.   It occurred to me that maybe my parental concerns about Uber were more than the usual paranoia.  And that I was probably not the only parent who was, perhaps wrongly, assuming someone else had vetted Uber before all our kids began hopping into strangers’ cars.  

So I asked my own kids to take an Uber time-out while I investigated a few things.

Risky Business:  As it turns out, there are safety issues with Uber, as there are with taxis and other public transportation.   And there is a problem with our collective willingness to blindlyignore instinct,endorsing trendy concepts of the Uber genre. But,truthfully, that’s not what surprised me.  

Instead,  I was amazed at Uber investors’ eagerness to support such a risky business and expansion model. The fact is, that Uber’s entire lightning speed, first-to-market-in-every-market growth is largely based on ignoring the law.  If Uber really is the way of the future, boy, are we in trouble.

Having practiced business and real estate transactional law for almost three decades, I’ve built a lucrative career on investors’ concern for comprehensive M&A due diligence, a large portion of which revolves around risk-assessment, the largest portion of which oftentimes consists of carefully confirming a company’s regulatory and legal compliance.  Businesses, products, and services that don’t comport with the law are, obviously, higher risk and investors, as one would logically presume, have historically shied away from such deals (or priced them at a significant premium). 

And then there’s Uber, implementing a deliberate strategy for the sake of rapid expansion, of breaking local laws until stopped, rather than taking the time to first assure compliance.  Essentially pimping rides, brazenly shirking responsibility for the consequences,  and opening in cities, right and left, knowing good and well that they’re doing so inclear violation.  

Think Shark Tank.  What would Mark Cuban do if an entrepreneur contestant gladly admitted that his company was breaking the law in most of its markets?   And there’s no question that Mark would not be the only Shark to quickly say “I’m out.”

State and local governments regulate taxis, limos, and other transportation providers for good reason.  While some laws can be attributed to politics, the need for government budget revenue, or private interests protecting their turf  (for example, minimum number of hours rides and advance reservation times in places like Miami and Las Vegas) the lion’s share exist primarily to protect passengers and the general public, aka, us.

As such, cars and drivers alike are subject to a litany of state and local initial, as well as on-going, inspection and licensing requirements, typically beginning with driver background checks performed by well qualified, disinterested, not-profit-driven, government service providers.  I do not believe that anyone without a personal agenda otherwise, in what has now become the great Uber debate, questions the merits of regulating transportation providers in this manner as a long-time, proven method for assuring safety.

Uber’s position, that it is a technology company,merely connecting drivers with passengers and, as such, not subject to laws applying to transportation companies, conveniently ignores both reality and our safety.   By taking this position, Uber is simply being capitalist at all cost. No big surprise there.  But it’s investors are choosing to ignore significant inherent risks and that speaks volumes about today’s investment culture.

Uber investors, including Goldman Sachs, Baidu, New Enterprise Associates, Menlo Ventures, and Qatar Investment Authority , reflect Wall Street’s (or Palo Alto’s)  willingness to bet on law breakers, against local policy makers and law enforcement, and against the better interest of the general public who just so happen to also be Uber customers.

That’s a significant potential double whammy, first betting that laws will not be enforced and then that we, the general public and Uber’s customers, will not catch on to or care about what’s hiding behind the proverbial uber- curtain. To be more specific, Uber’s strategy of deliberately challenging and then fighting state and local government in market after market is more akin to a sleazy political campaign than a prudent business startegy, leveraging well-known lobbyists and misinformed public sentiment.

All Politics Are Local:  Take, for example,  Uber’s current battle in Broward County, Florida, where I recently found myself on the receiving end of series of a pro-Uber advocacy campaign emails, not unlike those presumably being launched in countless markets as we speak:

“Hey Shari, The Broward County Commission recently sent Uber a cease and desist letter. We wanted to let you know that Uber will operate as usual, and we plan to continue to provide Uber users like you with access to safe, affordable and reliable rides…”

“…Broward County should stand for innovation, consumer choice and job growth.  If you want continued access to the safest and most affordable rides on the road, email and call the Commission and tell them that #BrowardNeedsUber.”

“Hey Shari, We wanted to provide you with a quick update on Uber in Broward County. We’re continuing to educate the County Commissioners on the need for safe, affordable rides for Uber users like you, and last week’s workshop with the Commissioners was a step in the right direction.  However, on Tuesday, the County Commission will be taking a vote that could prevent you from accessing the Uber you know and love.  That’s why Broward County Commissioners need to see and hear from you! Here are two ways you can help: Join us at Tuesday’s hearing. You’ll have an opportunity to share how you rely on Uber to move around affordably and conveniently, and to ask the Commissioners to ensure you can continue accessing safe, reliable rides.  Email and call your Board of Commissioners today! Tell them why removing access to safe rides in Broward County would be detrimental to you.”

God knows, I’m all for advocacy.  And I actually  believe that the fundamental Uber concept is brilliant and a long time coming.    The traditional taxi model’s become absurd.  Who in their right mind would continue simply driving around, hoping to cross paths with a pedestrian needing a ride,  when there’s an infinitely better, accessible technological solution? 

The problem I have with Uber is two-fold:

First,  even after receiving a cease and desist letter, the company publically announces that it will ignore law enforcement and continue “operating as usual.”  Translation:  Your local government, whose job it is to protect you, is concerned about your safety with the manner in which we’re operating our business, but we are going to ignore the law and their concern so that we can capture this market and generate a profit.  Moreover, the entire process of our contesting your local law is going to be paid for at your expense, with your local tax dollars and resources, which presumably are needed and could, but for Uber, be well invested elsewhere.

Second, I’m a tad offended by the repeat claims to be, not only “safe” and “affordable,” but the safest and most affordable.  Uber safety is the very issue now being hotly contested in virtually every market in which Uber operates around the world and is, in fact, at the very heart of our state and local governments’ concerns. In fact, the company’s own seemingly disparate position begs the question:  If Uber truly aims to be the safest, why has the company consistently refused to comply with state and local laws designed to assure safety? 

To the contrary, Uber repeatedly backs legislation, most recently in Colorado, Illinois, and California,  aimed at loosening requirements.   Moreover, in light of the number of serious criminal allegations by Uber’s passengers against its drivers, any claim to be the safest is, at best, questionable and misleading. In fact, Uber has actually been accused of giving customers a false sense of security following allegations of falsely advertising background checks performed in connection with a $1 “Safe Rider Fee” and referring to its background checks as “industry-leading.”  

Uber’s pricing,which is arguably not as transparent as a taxi’s meter or a limo’s hourly rate, has, likewise, not been without issues.  Uber reportedly uses a blend of time and distance,  pumping up the price during peak demand hours.  The company has been accused of illegally charging fraudulent “airport fees” and calculating rates in violation of state law. Moreover, a part-time Uber driver may not have the road and area knowledge that a full time taxi or limo driver would. Meaning that passengers may be taken on longer routes or stuck in avoidable traffic, likewise translating to higher fees.

As an aside, I find Uber’s reference to “consumer choice,” amusing given that its rapid growth is intended to minimize competitor access to marketplaces, essentially eliminating consumer choice.  This is not unlike strategies we see from Google, Apple, Microsoft and a host of other companies, and a concept we’ve of course come to tolerate as consumers and, as shareholders, admire.

The bottom line is that Uber is very effectively taking advantage of a few of the cracks in the shell of contemporary human nature.  Namely, we’re willing to overlook risk for the sake of convenience and assume that someone else is watching out for us because we simply lack the time to investigate even the most nagging concerns for ourselves.

The Facts:  When it comes to Uber’s actual safety and affordability, here are a few of the more salient facts,you may not otherwise be aware of, from someone who has now taken the time to vet them:

When you sign up for the Uber app you sign an agreement in which you acknowledge that Uber is a technology company, not a transportation company, and waiveliability that Uber might otherwise have.

The company takes several measures to protect passengers. For example:

Uber conducts a three step criminal background check on drivers, seven year history in every county in which a driver reports having resided, seven years (or as far back as the law will allow) at the  Federal and multi-state level, a national sex offender registry check, a lifetime social security trace, a motor vehicle records history  and  then on-going reviews of DMV records. 

Company policy prohibits drivers with a DUI, drug violation or severe infraction or with any history of a hit and run, fatal accident,  reckless driving, violent crime, sexual offense, gun-related offense, resisting or evading arrest, driving without insurance, or a suspended license within the past three years. 

Of course the company has insurance requirements and requires relatively new cars (the average age of an Uber car is five years and cars older than tenyears are not allowed).

And drivers need to maintain a minimum Uber passenger rating, a somewhat mercurial, but potentially improvable process which should certainly not be relied on in entirety.

Notwithstanding Uber’s presumably sincere efforts, noteworthy problems persist.  For example, unlike the due diligence state and local  regulations, Uber’s background checks are performed by private, for profit companies who, along with Uber itself, have an undeniable financial incentive to keepthe time and costs to a minimum.  In fact, Uber background checks have been reported to require an average of days (Uber uses a private company called Hirease with an average turn-around time of 36 hours), while allegedly more thorough government checks, which include finger prints and private government databases such as FBI records, take weeks.  

Moreover, Uber background checks are based on information self-reported by the driver’s themselves and publicly available information.  And because Uber follows its’ own policies, not state and local law, the company can unilaterally change those policies at any time, without notifying anyone. 

Perhaps the most salient fact is that there have been multiple rape and assault accusations againstUber drivers, including in Washington DC, San Francisco and New Delhi.  There’s no doubt that bad things happen in taxis too.  But, in at least some of those instances, the Uber drivers had prior convictions, in violation of Uber’s own policies,  which would have been detected by government background checks.  

As a result, Uber was banned in New Delhi and faces similar challenges in Germany, Spain, France, Thailand, and the Netherlands as well as in several U.S. cities, counties and states including San Francisco, Los Angeles, Portland, Palm Beach and Nevada.

Unlike taxi drivers,  Uber drivers have your first and last name and cell phone number. In scenarios reminiscent of scary stalker movies, complaints have been raised against Uber drivers forinappropriately contacting passengers after their rides.

Not insignificant is that fact that,  if you have a problem with a  taxi driver, the company telephone number is posted right in plain day light. But with Uber, everything’s done online with no real person to talk to right away should the need arise.  How can that possibly be the safest way to operate from a passenger perspective?

And then there are safety issues for third parties including other drivers and pedestrians. For example an Uber driver hit and killed a six year old earlier this year.  Again, there’s no question that taxi and limo drivers presumably confront similar tragedies.

Uber is facing a secondary set of safety issues as approved drivers pass on jobs to drivers who aren’t even registered with Uber.  And drivers circumvent Uber altogether, simply posting an Uber sign in their car window as passengers, naturally assuming they have been Uber approved, flag them down for rides. 

Needless to say, I’ve had a comprehensive Uber-safety talk with both of my daughters, as I suggest all parents do. And I’ve reported some Uber safety tips here  http://youtu.be/Ifu8iSot35s

Whether you choose to call Uber and its competitors, including Lyft and Sidecar,  technology or a transportation companies, simply assuming that they are safe is a mistake.  As for Uber investors, fasten your seatbelts. You’re in for a bumpy ride. 

[shariolefson]

Gambling Against Terrorists On Office REITS?

Office buildings  have  long been a favored commercial real estate investment sector. Office leases tend to be long enough to afford predictability, while at the same time including standard annual CPI increases as a hedge against inflation. 

But as was the case with housing, the real estate bust took its toll on the nation’s office sector.  Not only in terms of vacancies, which shot up by over 10%, but also in terms of new office construction. 

Except for a  handful of high job growth regions, very few office buildings have been built since 2008.  The good news is that, according to a new Census Bureau report, September’s office construction is up 18% over last year and several of office REITS are already looking more attractive.  

Why should this matter to anyone else?  For starters, it represents 37 billion in annualized construction dollars, which significantly impact local jobs and economies. For perspective, office construction spending hit almost $60 billion in 2008, then dropped to only $21 billion in 2011.  When we talk about jobs and wages that still haven’t recovered, this is precisely what we mean.

 But more importantly, growth in office construction spending signals investor and lender confidence.  It's a lack of confidence from these exact folks that's been holding back a fuller recovery in housing and commercial real estate alike, without which a broader economic recovery just ain't gonna happen. 

So what's left to screw it up?  Glad you asked.  The Terrorism Risk Insurance Act was passed after 9/11, a $30 billion plus insurance event, at a time when no insurer in its right mind would insure office buildings against the risk of another terrorist attack.   Without coverage, lenders of course wouldn't lend and investors took a major time out.  

The Act is set to expire December 31, just six short  (particularly considering the intervening holidays)  weeks from now.  The Act essentially provided a government back stop, increasing private participation  and breathing new life into office building lending, acquisitions, construction and renovations. 

Already insurers are including springing exclusion clauses in policies which would eliminate terrorism coverage if the Act isn't re authorized.   If that happens we can kiss bye-bye to anticipated near term gains in the office sector.   

[shariolefson]

Triple Dip In Home Prices? Give Me a Break!

Suggestions over the past few days that the U.S. is heading towards a triple dip in housing are nothing more than networks vying to fill airtime and analysts in search of their 15 minutes. 

Sure housing appreciation today has slowed to single digits, in comparison to last year’s double digits.   But back then housing was still climbing out of what seemed like a bottomless pit.  Prices were merely recovering to levels that made sense from a horrific drop that did not.  Once all that distressed inventory stopped dragging home prices down, the paper value of everyone’s home shot up.  

It would seem to go without saying that appreciation of that ilk cannot be replicated.   But apparently, it needs to be said, again, to some networks and analysts.  Today’s slow down in home price appreciation reflects the end of an era we’d all like to forget.  It does not foreshadow a drop in home prices.

And the notion that  above average price growth in a very small number of regions, such as California and Texas, will inevitably lead to a nationwide drop in home values is equally absurd.  No doubt unusual influences such as, foreign buyers (and particularly Chinese buyers)  in some California markets, and the combination of robust employment and anemic new home construction in some parts of Texas  have helped drive prices in those areas as much as 10% over where they should be based on fundamentals.  

Limited examples like these absolutely do meet the text book definition of a bubble.   And in limited markets like these there is absolutely a chance that home prices will eventually adjust downward towards alignment with fundamentals.  In truth about 7% of the metros tracked may be overvalued.   But taken as a whole, the rest of our homes are still, on average,  3% under valued.  

The bigger question is how will our homes fare as investments moving forward.  And that answer depends almost entirely on wage and income growth.  Unlike home prices, housing affordability is dropping more rapidly.  In about a third of counties tracked (representing about 19% of that population) housing is already exceeding historical averages for affordability.  

Higher mortgage costs and lower availability have done their damage.  So the next major threat is rising interest rates.   It’s estimated that  if rates rise 0.25%, another 10% of the population in counties tracked will find housing unaffordable.   And  another 4% to 7%  fall out of running for homeownership with each additional 0.25% rate increase after that.    

The other wild card is, once again, investors.  In the unlikely event that investors who have been purchasing scattered single family homes to convert to rentals decided to, not only cut back on those purchase as they have, but to slash prices and essentially dump all of those units back on to the markets at once, the price of homes in those markets and in those price ranges would most certainly be affected and that cycle begun with the 2005 bubble would continue.

Which brings us back to those networks and analysts who would presumably be proudly proclaiming “you heard it first here.”

[shariolefson]

new home construction still in the crapper but not to worry...

Today's new home construction indicators reveal, once again, how deep in the proverbial do-do homeownership remains for average Americans. Permits and starts are both down from lasts month, further entrenching that trend. Single family permits at starts, in particular, are still coming in in the 600,000 unit range, anemic in light of the fact that we've had years of next to no construction and pent up new household demand which, together should be driving builders to build far more single family homes than this. In fact builder stock itself reflects that, what should now be a robust and profitable industry remains stymied. The good news is these indicators collectively reflect a shift in the amount of time it now takes, in a new normal economy and under new normal mortgage lending rules, for first time buyers to prepare themselves to buy a home, not their collective will, desire and intention to buy. These buyers are not going away. Recent surveys reveal that 84% either own or intend to own their homes in the next four years. 75% plan to move, almost half in order to buy a home. When you do the math, that alone would add 21.6 million new households and $1.6 Trillion in home purchases. The bottom line? Today's new home construction drag is largely the result of a shift to older first time home buyers. Ultimately todays continuing pent up demand will translate to more normal levels of home construction and a healthier contribution to the overall economy and GDP in the not too far off future. And perhaps best of all, America's next generation of first time home buyers will be better prepared to,support long terms sustainable homeownership.