2 stories that signal top of rental and housing bubble

Discussion in 'Economics' started by S2007S, Sep 28, 2015.

  1. S2007S

    S2007S

    With stories like these its time to admit that the entire rental and housing market is about to witness a dramatic drop, for those who disagree you can keep on disagreeing, thats fine, rents cannot be sustained at these levels, I don't care that its NYC or San Francisco, no this time its not different. These markets are so over heated that even a 20% drop would look like a little blip, its time to admit that this market is about to peak and fall hard.....



    1.

    This chef, who lives in a 100-square-foot apartment, is proof that kids will do anything to live in New York
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    • Sep. 25, 2015
    • Fresh from Madison, Wisconsin, Chef Grayson Altenberg is overjoyed to have found a studio apartment he can afford in pricey Manhattan.
    • average rent for a studio in New York City, as of this March, was $2,108 per month. Altenberg's rent is $1,100.

      There's just one catch: at 100 square feet, it's one of New York's smallest apartments.

      The young chef chose the Upper West Side apartment without windows or a kitchen because it's a five-minute walk to the fine-dining restaurant where he works.

      "I had the option to go west, but there were more opportunities here in New York," he says of the move to the East Coast. "I sacrificed an entire life to be here, to make this happen. I left friends [and] family all behind in Wisconsin ... an entire life that I just picked up and left."

      [​IMG]Sarah Jacobs/Business InsiderBehind the bed is a small shower stall and sink.



      Once in New York, Altenberg worked in different kitchens as an unpaid intern. He says the chef world is a lot like a fraternity, which helped him land a job under Chef Jonathan Benno at the Michelin-starred Lincoln Ristorante.

      "I just showed up at the door and was like, 'Hey, I’m willing to work for free today,'" he says.

      After that day was over, Benno hired him. And then, before he could get famous for his craft, he got famous for his tiny apartment.

      "The Village Voice found me," he says.

      Indeed, the paper posted a story and video tour of the apartment — advertised in the listing as being "so small you can't gain weight once you move in" — to its website and it was picked up by the New York Post, the Today show's website, and numerous real-estate blogs.

      "Even though it was not a great opportunity, I still used it to give myself some press so the world can see that I am here to make it at all costs. I'm not going to back down. I’m not going to let anybody tell me I’m not going to make it," says Altenberg.

      He describes Central Park as the living room of his studio apartment and says cooking on a hot plate doesn't bother him, since he has Lincoln's giant kitchen at his disposal.

      [​IMG]Sarah Jacobs/Business InsiderAltenberg cooks grilled ham and cheese sandwiches, pasta, risotto, and other dishes that don't require high heat on his hot plate.



      As for his typical day, for a 2 p.m. to midnight shift, Altenberg wakes up around 9 a.m., prepares breakfast, and sharpens his knives for an hour. He then walks three blocks to Equinox, which he treats as a second home, where he works out, showers, shaves, uses the Internet, and enjoys the cafe.

      His schedule is the same for 7 a.m. shifts, except the alarm goes off at four and coffee replaces breakfast, but he doesn’t skip the gym.

      "I'm the kind of person that needs to work out before I go in, get the blood flowing ... I really like to be warmed up and ready to go when I hit the kitchen," he says.

      At Lincoln, Altenberg does everything from butchery and cleaning animals to taking care of vegetables. But one of his favorite things to do is teach.

      "Cooking is always learning and teaching, so as soon as you learn something, you should teach it to someone else," he says.

      He works 10-hour shifts five days a week and plans to take on more hours during the busy seasons to get up to a 60-hour workweek.

      [​IMG]Sarah Jacobs/Business InsiderOn the wall opposite his bed is a tiny room with a toilet. The apartment has no windows, but he's able to use a stand-up air conditioner in the summer.



      "It's hard to be the new kid on the block. I came into New York and I didn't really make a quiet entrance — I definitely came in loud. I made a lot of noise, and that gave a lot of people a lot of ammunition to make fun of me for [things] like my living situation."

      Altenberg still has his can-do, Midwest attitude, but now it's combined with the drive and hustle of a newly minted New Yorker.

      This is his time to discover who he is and what kind of cuisine he wants to bring into the world.

      "I want to travel, that's the next step in the plan," he says.


     
  2. S2007S

    S2007S

    2.

    This is a joke!!!



    This is what a $350,000 house in San Francisco looks like


    SEPTEMBER 25, 2015, 1:15 PM EDT
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    According to the broker, it’s the cheapest home on the market in San Francisco, and it’s an unlivable shack.

    It is a worn-down, decomposing wooden shack that was built in 1906, and the interior is unlivable in its current condition. The San Francisco house is also selling for $350,000.

    Located at 16 De Long Street in the (slightly) more affordable Outer Mission district, the house’s price is a reflection of the skyrocketing real estate market in San Francisco. Since 2012, the city has seen a 103% increase in median housing prices; this month, that figure stands at $1.35 million.

    According to realtors Brian Tran and Alexander Han, the shack is “the cheapest home listed in San Francisco.”


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    Originally an earthquake shelter, the shack was built in the aftermath of the devastating 1906 San Francisco earthquake. The 765-square-foot unit caught the attention of Tran and Han during a drive around the neighborhood. Upon spotting the vacant house, they found the owner—who had bought the home in 1984 and had moved out in 2008—and asked if she would be willing to sell it.

    “Our job is to look at homes and determine value. This home is really just like any home in that it has so much value despite its appearance,” said Tran. They determined the price in comparison to the neighboring houses; the home is selling for $458 per square foot in an area where the average square foot is $1,066. “To say this home is better than any other home, it’s not.”

    With the influx of tech workers driving up the housing market, along with a strain on the supply of houses to meet demand, it is understandable to brokers here why prices seem so unrealistic. “We have some of the best colleges here, it’s a beautiful city, and everyone wants to live here. All thee factors are a big influence in market today,” said Tran.

    According to Zillow, $350,000 would comfortably fetch a 1,500-square-foot, three-bedroom home in many smaller cities in the U.S., including Cincinnati, Ohio. But in San Francisco, the listing — along with the media publicity — has drawn some prospective buyers to the place, each with different intentions. “A few people love the idea of keeping the history of the home,” said Han. “Some want to come in and tear it down.”

    In both cases, however, Han would definitely advise against moving in too soon. ” The house still needs a lot of work. I would not recommend anyone moving right in. The bathroom is not functioning. The kitchen needs a bit more work. The flooring has a couple of places that are little bit weaker, and needs to be reinforced.”
     
  3. clacy

    clacy

    If landlords can get kids to work 50 hours per week to live in a closet-size room, more power to them.
     
  4. Interesting but those are extreme outliers IMO. On the more commonplace front I do live in South Florida. A year ago you could score a modest house in a "east" neighborhood eg desirable. Today same amount buys you a modest house... other side of the tracks. There are no new industries creating jobs here, so affordability is sacrificed to the price rise. The situation of supply/demand is just about exactly what it was at the peak before the last RE crash in '08-ish. Difference is the leverage is not the same, but, all the nonsense about a tight housing market (eg cramer on CNBC et al) is just that, nonsense. There are a s#!t-ton of foreclosed properties off the market, vacant, somehow held by foreclosing lenders for years off the books depreciating asset considering (opportunity) cost of carry the day prices stop going up... Mystery of non-effective ZIRP solved, eg, where did the cheap money flow to (?) That day is more or less now so what happens next... Let the flood gates open
     
    SunTrader and der_kommissar like this.
  5. Nine_Ender

    Nine_Ender

    It's time you realized that you can't relate to this world and should just shut up about bubbles.
    There is NO bubble in real estate in North America right now, high demand areas are at capacity, developers can't keep up, and immigration is adding even more demand to these areas. That wooden shack you were moaning about will be torn down, the buyers are simply buying the land they want.

    You seem to have an inability to understand anything beyond your little world of making your own hamburgers, bagging a lunch, and small savings accounts.
     
  6. ElCubano

    ElCubano

    Just like some of the shacks on the outskirts of brickell which offer one thing to developers. VERTICAL-NESSSSSSS. The land where capital grill sits on sold to Related group for $120 Mill. It's like 2 arces.
     
  7. Echoing an earlier post, both examples are outliers.

    Real estate is by its nature a regional thing. When things went to crap in 2008 there were regions in the US that had only mild corrections while other regions got creamed.

    NYC is never a good example for typical markets for literally ANYthing including real estate.
     
  8. Banjo

    Banjo

  9. Banjo

    Banjo

  10. Banjo

    Banjo