Weekend Potpourri: Here is a collection of recent articles I did not discuss in depth but is worth a quick look.
‘McMansion’ Era is Over
CNBC proclaims Death of the ‘McMansion’: Era of Huge Homes Is Over
In its latest report on home-buying trends, real-estate site Trulia declares: “The McMansion Era Is Over.” Just 9 percent of the people surveyed by Trulia said their ideal home size was over 3,200 square feet. Meanwhile, more than one-third said their ideal size was under 2,000 feet.
“That’s something that would’ve been unbelievable just a few years back,” said Pete Flint, CEO and co-founder of Trulia. “Americans are moving away from McMansions.”
The comments echoed those made in June by Kermit Baker, the chief economist at the American Institute of Architects.
“We continue to move away from the McMansion chapter of residential design, with more demand for practicality throughout the home,” Baker said. “There has been a drop off in the popularity of upscale property enhancements such as formal landscaping, decorative water features, tennis courts, and gazebos.”
Commercial Real Estate Prices Tank in June
Bloomberg reports Retail Spaces Lead Drop in U.S. Commercial Property
Aug. 19 (Bloomberg) — U.S. commercial real estate prices fell the most in almost a year in June as the economic recovery showed signs of faltering, Moody’s Investors Service said.
The Moody’s/REAL Commercial Property Price Index dropped 4 percent from May, the company said today in a report. The decline was the biggest since July 2009, and pushed the gauge down 0.9 percent from the start of the year.
“We expect property prices to remain choppy for some time as commercial real estate markets and the broader economy continue their slow recovery from the recession,” Moody’s researchers said in the report.
The Moody’s index is down 41 percent from its 2007 peak, having gained 4.2 percent from the seven-year low set in October.
The value of malls and shopping centers fell almost 11 percent in the second quarter, the biggest drop of any commercial property type tracked in the Moody’s index. Apartments and offices values both gained about 4 percent, while industrial properties dropped 2.9 percent.
Half of Shanghai, Beijing Flats Are Vacant
Bloomberg reports At Least Half of Shanghai, Beijing Flats Are Vacant
At least half of the apartments in Shanghai and Beijing are empty, the China Daily reported today, citing an online investigation by volunteers conducted in 100 Chinese cities.
About 51 percent of Shanghai apartments, 66 percent of Beijing flats and more than 70 percent of units in Hainan are vacant, according to the survey, based on counting the number of apartments observed to have no lights on at night. It was conducted on more than 1,000 real-estate projects and was organized by news website Sina.com., according to the report.
“Investors and speculators are the owners of the vacant houses” as they wait to sell their properties at an appropriate time, said Lu Qilin, a Shanghai-based researcher at Uwin. “It’s important for the government to introduce more measures to curb speculation.”
Anyone who thinks China does not have a property bubble is in Fantasyland.
Late Mortgage Payments Spike
YahooFinance reports Late mortgage payments spike in 2Q vs year ago
The rate at which U.S. homeowners fell behind on their mortgage payments remained stubbornly elevated in the second quarter.
In the three months ended June 30, the number of mortgage holders 60 days or more behind on their payments was 6.67 percent, credit reporting agency TransUnion said Tuesday. That’s a big jump from 5.81 percent in the second quarter of last year, and well above the historical norm of 1.5 percent to 2 percent.
One positive sign is that the statistic reveals a slower rate of increase from the pace seen a year ago.
Watch what happens when home prices start sinking again.
Paychecks in Vernon Rival Bell, California
The Los Angeles Times reports Hefty paychecks for Vernon officials rival those in Bell
The ex-city administrator who now serves as a legal consultant earned seven figures in each of the last four years, records show. Others in Bell’s neighboring city got $570,000 to $800,000 last year.
Vernon City Council members are paid $68,052 each year, far greater than in most cities in Los Angeles County, according to a Times survey.
Vernon has long been dogged by accusations that it is a fiefdom run by a family that has held sway over the town for generations.
In January, former Mayor Leonis Malburg was ordered to pay more than $500,000 in fines and reimbursements to the city after his conviction for voter fraud and conspiracy charges, bringing an ignoble end to his lengthy reign as Vernon’s patriarch.
Federal workers earning double their private counterparts
The USA Today reports Federal workers earning double their private counterparts
At a time when workers’ pay and benefits have stagnated, federal employees’ average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds.
Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade.
Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.
The federal compensation advantage has grown from $30,415 in 2000 to $61,998 last year.
What the data show:
•Benefits. Federal workers received average benefits worth $41,791 in 2009. Most of this was the government’s contribution to pensions. Employees contributed an additional $10,569.
•Pay. The average federal salary has grown 33% faster than inflation since 2000. USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education.
•Total compensation. Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers.
Pension Fraud by New Jersey Is Cited by S.E.C.
The New York Times reports Pension Fraud by New Jersey Is Cited by S.E.C.
Federal regulators accused the State of New Jersey of securities fraud on Wednesday for claiming it had been properly funding public workers’ pensions when it was not.
The Securities and Exchange Commission said the action was its first ever against a state, and only its second against any government over the handling of a public pension fund. The first was the city of San Diego. More may be in store; the agency announced in January that it had a special unit looking into public pension disclosures. The S.E.C. has been trying to assume more authority over municipal securities.
The commission settled its suit with New Jersey by issuing a cease-and-desist order, which the state accepted without admitting or denying the findings. No penalties were imposed.
Nor did the S.E.C.’s order name any individual state officials, nor the bond underwriters and other professionals whose job it was to vouch for the state’s financial statements. New Jersey’s largest bond underwriters during the period in question include Citigroup, J. P. Morgan Securities, Morgan Stanley, Bank of America, Merrill Lynch, Goldman Sachs and Barclays Capital.
The S.E.C. said its action was meant to dissuade other governments and their advisers from hiding bad fiscal news in a fog of pension numbers. Actuaries, for instance, have been raising questions about the framework Illinois has laid out for bolstering its pension funds. In New York, California and other places, financial advisers have told lawmakers that benefits could be sweetened at virtually no cost, only to be proved wrong once those benefits were adopted.
“Hopefully, it will send a message to other states or local governments,” Elaine C. Greenberg, chief of the S.E.C.’s municipal securities and public pensions unit, said in an interview.
- No one fined
- No one admits guilt
- Enormous fees were earned by Citigroup, J. P. Morgan Securities, Morgan Stanley, Bank of America, Merrill Lynch, Goldman Sachs and Barclays Capital
Pray tell exactly what message does this send anyone? Greed Pays? The SEC only goes after small fish?
I removed links and quotes from two Las Vegas Review Journal articles because the Journal is on a lawsuit binge suing bloggers: See the LA Times article On the Media: Las Vegas Review-Journal bares its claws
The newspaper has filed lawsuits against more than 30 websites and blogs it says used its works without permission. ….
The rub has been where to draw the line to determine what, exactly, constitutes “fair use.” Stacks of court cases suggest many factors must be weighed — the amount of material reused, the purpose of the reuse (commentary and criticism get wide latitude) and, especially, the U.S. Supreme Court has ruled, the economic effect on the copyright holder.
Media law expert Rex Heinke gave me a crash course on the rules Tuesday, explaining that the courts have drawn no bright lines. The amount of Internet traffic driven to the originating publisher by the reuser has never been deemed a definitive factor in the judgments.
The sad thing about this is any reference from me would bring them traffic they would not otherwise get. However, It is not worth my time to figure out what they think is “fair use”, especially if they give no warnings.
One solution is for bloggers to never reference them. A second solution is to find another article on the same subject and link to that, or simply let the story die.
Clearly this is counterproductive for the Las Vegas Review-Journal and if they are this desperate, it is a sign they won’t survive.
Mike “Mish” Shedlock
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