Search This Blog

Sunday, March 31, 2019

Mortgage rates plunge at the fastest pace in a decade as growth fears resurface

Rates for home loans tumbled, as investors snatched up safe assets in the wake of a Federal Reserve policy announcement that took markets by surprise.
The 30-year fixed-rate mortgage averaged 4.06% in the March 28 week, mortgage guarantor Freddie Mac said Thursday. That was a 14-month low, and 22-basis point slide was the biggest weekly decline since June 2009. The popular product has managed a weekly gain only twice during 2019.
The 15-year adjustable-rate mortgage averaged 3.57%, down from 3.71%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.75%, down nine basis points.
Fixed-rate mortgages take their cue from the yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +0.00%  , which has slumped to 15-month lows as investors grow increasingly itchy about the prospect of slowing global growth.
Lower borrowing costs are obviously good for would-be homebuyers. But rates aren’t the housing market’s only headwind. There’s still very little inventory of homes in the areas where people want to live, in the price ranges they can afford. And mortgage lending remains tighter than before the housing crisis, even as Americans have accumulated more student debt and lower down payments.

The housing industry is, slowly, adapting. One example: home builders are increasingly constructing houses for rent, rather than for purchase by owner-occupants. The data in the chart above comes from economists at the National Association of Home Builders, who have tracked the trend across several decades.
Even with the increase, the share of single-family homes constructed for rentals purposes is only 5%, well below the share of all rental units that happen to be single-family homes. NAHB Chief Economist Rob Dietz pointed out in a research post on the topic that “as homes age, they are more likely to be rented.”
The median age of existing homes is now 37, NAHB calculated last summer. That suggests the supply of homes that could be converted to rentals remains elevated, although they’re more likely to require remodeling to keep them energy-efficient and habitable.
Posted by at No comments:

No temporary walls allowed: Using sound-dampening curtain room dividers

Looking to convert a one bedroom into a two bedroom, create a nursery out of a dining alcove, or cordon off an office area?
You should know that creating a new bedroom requires a new Certificate of Occupancy from the New York City Department of Buildings. If a room is less than eight feet along one dimension, or lacks a window, it won’t be considered legal for a bedroom. And even if you have the space, in some cases, your building may have rules against putting up room dividers.
So what are your options if you need to carve out a room and want to stay on good terms with your building? Bookshelf walls are one temporary option for dividing rooms, but they won’t help you cut down on noise. For that, you might consider sound-dampening curtain room dividers.
The material used in a curtain room divider is thicker than standard curtain fabric and manufactured to absorb sound. While not completely sound proof–you will hear the same kinds of sound that would travel through a thin wall—they can help cut down on noise somewhat better than the hard surfaces of other temporary room dividers, like bookshelf walls.
A curtain room divider has two sides—that’s what differentiates them from regular curtains, which may have a fabric bleed or a rough surface on the back. They’re typically thicker and heavier than regular curtains.
“When privacy is less of a must, but a flex space is needed, curtain dividers are a quick and easy option,” says Betsy Helmuth, owner of Affordable Interior Design, who recommends treating it as a visual element. She advises to allow for enough fabric—it should undulate when you open or close it—to prevent gaps.
Helmuth recommends a neutral color like tan or gray and avoiding white or cream, which would easily show dirt. If using a pattern, Helmuth cautions against anything too busy.
From bespoke to budget, here is a rundown on function, design, types, cost, and installation methods of curtain room dividers in New York City.

NY City Blinds

NY City Blinds specializes in luxury custom-designed treatments. A manager there said the store does many acoustic curtains, which are popular because they can be used again when a renter or owner moves. He recommended velvet as especially sound proof.
NY City Blinds uses three layers of fabric in its curtain room dividers. The middle lining absorbs noise and also is useful in retaining heat in the winter and cool air in the summer.
Curtains are typically installed all the way around the room in order to block the most sound. For a 15-by-20-foot room with a 10-foot ceiling, the price is roughly $5,630. This is inclusive of designer visit, fabric, installation and a one-year warranty. NY City Blinds also manufacturers straight divider acoustic curtains, which do not go all the way around the room. Prices will vary depending on room size and fabric selection.

The Shade Company‎

The Shade Company manufactures made-to-order soundproof curtain room dividers. Its designers will bring fabric swatches to your home and provide free style consultations. Their fabrics range from traditional to contemporary and they have an array of hardware options to customize your room divider design.
For an 8-by-10-foot room with a 10-foot ceiling the price for a soundproof curtain room divider would be about $2,500, and a 15-by-20-foot room with a 10-foot high ceiling would be about $3,500.

RoomDividersNow

RoomDividersNow sells readymade soundproof room divider curtain kits and is recommended by Helmuth. The kits include curtains, installation equipment, and set up instructions. There are also instructional videos on their website.
Installation options include ceiling track, tension rod, free standing, and hanging room dividers. The End2End Room Designer Kit (shown above) starts at $250 and the Infinite Room Divider Kit (shown top) starts at $160. Both are drill-fee options. The curtains are made of 100 percent polyester.

Curtains only

If you’re buying curtains separately, you’ll likely need to find someone to install them. You can book a handyman via Handy, TaskRabbit or other providers. (Check out Brick Underground’s “Best Handyman companies in NYC.”)
Arthur Zelenkov, director of business development at Set Up NYC, a handyman service provider, estimates an installation can range from $130-$380.
If you’re willing to purchase hardware separately, these affordable divider options are machine washable, have five-star Amazon customer reviews, and come in several sizes.

Deconovo Privacy Room Divider Curtain, $86

This thermal-insulated blackout curtains is 15-by-9-feet and is 100 percent polyester.

Rose Home Fashion Room Divider Curtains, $80

These will make your room look like a hotel room, in a good way. They are 100 percent polyester.
Posted by at No comments:

Saturday, March 30, 2019

Illustrated guide to New York City architecture

Few places are as comfortable with architectural variety as New York, a city that has always reinvented itself, but never thrown away its past. As a result, it boasts one of the liveliest mixes of structures in the world, many of which are marquee examples of their eras.
Here are 15 of the Big Apple’s many building styles, covering the course of more than 300 years. (And that’s not even including today’s design movements, which we’re still trying to figure out.…)

1. Colonial/Neo-Colonial

You probably imagine cities like Boston and Philadelphia when you think of colonial architecture—traditional, European-influenced structures built (or made to look like they were built) during the period between 1600 and 1800. But New York, a major colonial power back in the day, still boasts its fair share of these buildings, particularly in lower Manhattan. Common features include stone, brick, or wood cladding; pitched roofs; and symmetrical designs. Like most styles, colonial experienced waves of revival, notably in the 1870s and 1930s; there are also many variations, including Georgian, Federalist, Cape Cod, and French colonial.
NOTABLE EXAMPLES: 726 Madison Avenue (Morrell Smith); 1130 Fifth Avenue (Delano & Aldrich); St. Paul’s Chapel (Thomas McBean); St. Mark’s-in-the-Bowery (Ithiel Town); American Academy of Dramatic Arts (Stanford White), Gracie Mansion (John McComb Jr.).

2. Neoclassical/Greek Revival

Reviving the ordered classical forms and motifs of ancient Greece and Rome, neoclassical buildings are known especially for their heavy massing, regimented geometries, and dramatic, temple-like columns. Worshipping scale and proportion, neoclassicism flourished in New York in the early 19th century, when fashions turned toward a restrained, glorified ancient past, and soured on the excessive forms of baroque and Rococo. It was largely employed in civic and office architecture, but it can also be found in the austere mansions and townhouses of the Upper East Side and in quainter townhouses in places like Gramercy. A lighter (and later) version, Italianate, can be found in many of the city’s brownstones.
NOTABLE EXAMPLES: Federal Hall (Alexander Jackson Davis), Brooklyn Borough Hall (Calvin Pollard), 14 Wall Street (Shreve, Lamb & Harmon).

3. Renaissance Revival

Drawing inspiration not from ancient Rome but from its flourish-loving heirs in Renaissance Italy and France, this style often evokes the grand palaces and chateaux of that era, with classical patterns augmented with ornate, expressive elements. It first took off in New York as a way for wealthy citizens to emulate the ostentatious style of aristocratic Europeans, with Fifth Avenue at one point lined almost entirely with neo-Renaissance mansions. A heavier, more restrained version is Romanesque Revival, whose most famous example in New York is the south wing of the American Museum of Natural History.
NOTABLE EXAMPLES: Ellis Island (Edward Lippincott Tilton), City Hall (John McComb, Joseph-Francois Mangin), Flatiron Building (Daniel Burnham), Plaza Hotel (Henry J. Hardenbergh), Carnegie Hall (William Tuthill).

4. Gothic Revival

First launched in England in the 18th century, Gothic Revival took hold in New York in the mid-19th, largely under the influence of the Romantic Movement (a reaction against machinery and mass production) and a reverence for all things medieval. The style features Gothic architecture’s tell-tale pointed arches, complex tracery, and familiar gables, dormers, and turrets, all carried out in stone or brick.
NOTABLE EXAMPLES: Trinity Church (Richard Upjohn), St. Patrick’s Cathedral (James Renwick), Tudor City (Fred F. French), Woolworth Building (Cass Gilbert), Belvedere Castle (Calvert Vaux).

5. Art Nouveau

Rejecting both the rigid formalism of classical revival styles and the mechanized repetition of the Industrial Revolution, Art Nouveau originated in France, but gained popularity in New York at the turn of the 20th century. The style came to New York, and the United States in general, through the wide dissemination of graphic art (magazines, posters, etc.), and through the designs of famed practitioners like Louis Sullivan and Louis Comfort Tiffany. Inspired by natural forms like plants and flowers, it features sinuous curves and intricate decoration, often cast from iron, stone, and glass.
NOTABLE EXAMPLES: Little Singer Building (Ernest Flagg), Decker Building (John H. Edelmann), New Era Building (Buchman and Deisler).

6. Cast-Iron Architecture

This particular style, which refers to any building constructed with prefabricated cast iron, came of age at the end of the 19th century, when industry made iron production quite common. It first gained traction in Europe, and was notably used in London’s majestic Crystal Palace and, of course, the Eiffel Tower. But in New York, its use was focused almost exclusively in Soho—then an industrial neighborhood—where buildings took on eclectic facades (often combining classical forms and intricate ornament) that were lighter, cheaper, and more elegant than the usual granite, marble, and brick. The Soho Cast-Iron Historic District was created in 1973 and includes more than 500 buildings, making it the densest concentration of cast-iron architecture in the world.
NOTABLE EXAMPLES: Haughwout Building (J.P. Gaynor), 448 Broome Street (Frederick Clark Withers), 453 Broome Street, 47 Mercer Street, 429 Broadway.

7. Beaux-Arts

Born at Paris’s École des Beaux-Arts, and bursting upon New York at the turn of the 20th century, Beaux-Arts is yet another ancient-looking historical revival style. But Beaux-Arts structures combine the grandeur and tradition of classicism with Renaissance-inspired—and technologically aided—lightness, uplift, and ornamentation. Innovations like steel-reinforced concrete and large sheets of glass allowed these buildings to be especially cavernous and impressive; the Brooklyn Museum is one structure where this is especially obvious.
NOTABLE EXAMPLES: New York Public Library (Carrère and Hastings), Grand Central Terminal (Warren & Wetmore), Metropolitan Museum of Art (Richard Morris Hunt and McKim, Mead & White), Farley Post Office (McKim, Mead & White), U.S. Customs House (Cass Gilbert), Brooklyn Museum (McKim, Mead & White), Columbia University (McKim, Mead & White), Ansonia Hotel (Paul Duboy).

8. Art Deco

Perhaps New York’s most iconic style is Art Deco, a brash, exuberant movement combining geometric motifs, dramatic historical allusions, and the integration of industrial craft. The movement’s name derives from Paris’s 1925 Exposition Internationale des Arts Décoratifs, but in New York, the style’s emergence echoed the excesses of the Roaring ’20s. Buildings designed in this style often incorporated sleek, showy materials like colorful stone, chrome plating, plastic, stainless steel, and glass block.
NOTABLE EXAMPLES: Empire State Building (Shreve, Lamb & Harmon), Chrysler Building (William Van Alen), Rockefeller Center (Raymond Hood, Harvey Wiley Corbett), Lescaze House (William Lescaze), American Radiator Building (Raymond Hood), General Electric Building (Cross & Cross).

9. International Style

Emerging from the industrial-inspired functionalism of the Bauhaus in Germany, the International Style is characterized by simplified geometries, lack of ornamentation, and exposed structure. The term was coined by New York architects Philip Johnson and Henry-Russell Hitchcock in the catalogue for their 1932 MoMA exhibition on modern architecture, titled “The International Style: Architecture since 1922.” While the style was originally intended for the masses, by the time it took off in New York in the 1950s, it had been co-opted by some of the biggest corporations in the world— Seagrams, Lever Soap, Pan Am—which replaced simple, mass-produced materials with travertine and bronze, not to mention world-class art collections.
NOTABLE EXAMPLES: UN Building (Harrison & Abramovitz, Le Corbusier, Oscar Niemeyer, others), Seagram Building (Mies van der Rohe and Philip Johnson), Lever House (Skidmore, Owings & Merrill), Museum of Modern Art (Edward Durell Stone and Philip Goodwin), MetLife Building (formerly Pan Am; Walter Gropius, Pietro Belluschi, Emery Roth).

10. Brutalism

One of the most controversial architectural styles, Brutalism gets its name not from its raw, blunt characteristics, but from the French term “beton brut,” or exposed concrete. Indeed, this style is all about cement, prized for its weightiness, malleability, and monumentality. Most Brutalist buildings exhibit simple, block-like forms; large scale; and structural innovations like cantilevers and floating masses. Meant to exhibit strength, power, and rawness, the structures themselves often function as ornament or sculpture. For instance, Marcel Breuer’s former Whitney Museum building, with its inverted ziggurat form and sharp, geometric windows, is essentially a piece of abstract art, intentionally standing apart from the prim townhouses in its vicinity.
NOTABLE EXAMPLES: Met Breuer (Marcel Breuer), Bronx Community College (Marcel Breuer), University Village (I.M. Pei).

11. New Formalism

Classicism reared its head yet again in the mid-20th century, with the emergence of New Formalism, a contentious offshoot of modernism that installed Hellenic scale and symmetry as well as abstract motifs into pristine, simple buildings. New Formalist structures in New York were often intended to evoke the idea of the city as the new center of Western culture, with Acropolis-like raised podiums, deep overhangs, heavy grids, and Roman-style arches. The most noted practitioners were Edward Durell Stone, Philip Johnson (whose aesthetic changed several times over the course of his career), and Minoru Yamasaki, who designed the World Trade Center’s original Twin Towers.
NOTABLE EXAMPLES: Lincoln Center (Wallace Harrison, Eero Saarinen, and more), 2 Columbus Circle (Edward Durell Stone), Lenox Health Greenwich Village (Albert Ledner), Stone Residence (Edward Durell Stone).

12. Googie/Space Age

Ignited by the craze for car culture, the Jet Age, and the space race, Googie architecture—named for a John Lautner-designed Los Angeles coffee shop—sets its sights squarely on the future, with upswept roofs, futuristic shapes, dramatic angles, and high-tech materials like steel, glass, and neon. The Jetsons-esque style took New York by storm with the 1964 World’s Fair in Flushing, Queens. Some buildings from that event still stand, including Philip Johnson’s New York State Pavilion and Buckminster Fuller’s World’s Fair Pavilion (now the aviary for the Queens Zoo).
NOTABLE EXAMPLES: New York State Pavilion (Philip Johnson), TWA Terminal (Eero Saarinen), Doubletree Metropolitan (Morris Lapidus), New York Hall of Science (Wallace Harrison).

13. High-Tech

As modernism reached its apex, architects began to fetishize its technical innovations, from cantilevers to ventilation systems to curtain walls. In New York, the ultimate expression of this style is the 59-story Citigroup Center, with its chevron bracing system, sheer glass and metal facade, and behemoth upper mass, which floats over stilts in Midtown Manhattan. Amazingly, the system almost failed, only to be fixed after its engineering flaws were discovered by an engineering student.
NOTABLE EXAMPLES: Citigroup Center (Hugh Stubbins), Hearst Tower (Foster & Partners), Javits Center (Pei Cobb Freed).

14. Postmodernism

Detested until its recent nostalgia-fueled comeback, postmodern architecture developed as a middle finger to the austerity and arrogance of modernism. The populist style included watered-down historical allusions; mismatched, often cartoonish elements; and bright colors. The recent preservation of architectural chameleon Philip Johnson’s AT&T Building at 550 Madison Avenue was a major turning point in the style’s acceptance by architectural historians.
NOTABLE EXAMPLES: AT&T Building (Philip Johnson and John Burgee), Westin Times Square (Arquitectonica), Scholastic Building (Aldo Rossi), Battery Park City (Cesar Pelli, others).

15. Deconstructivism

Sort of like when a child likes to tear down his or her Lego castle, architects are fond of pulling apart their established forms and conventions. So when digital technology began to allow it, architects like Frank Gehry created buildings that looked like they were being mangled and ripped open. The term Deconstructivism came about a little later, with the 1988 MoMa exhibition “Deconstructivist Architecture.” Developer-driven New York took longer than many major cities to adopt the antiestablishment style. One of the city’s earliest examples, Tod Williams Billie Tsien’s American Folk Art Museum, was controversially (and ironically?) torn down in 2014 to make way for MoMA’s upcoming expansion.
NOTABLE EXAMPLES: 8 Spruce Street (Frank Gehry), Cooper Union New Academic Building/41 Cooper Square (Morphosis), IAC Building (Frank Gehry).
Sam Lubell is the author of Phaidon’s Mid-Century Modern Architecture Travel Guide: East Coast USA. 
Posted by at No comments:

NYC says Gowanus rezoning will create 8,200 new apartments

The city is in the midst of rezoning Gowanus, a former industrial stronghold in Brooklyn.
 Max Touhey
A proposal to rezone Gowanus will create some 8,200 new apartments by 2035—making it the largest influx of new units anticipated by a de Blasio administration rezoning, according to city documents released this week.
City planning officials published the Draft Scope of Work for the Brooklyn neighborhood’s rezoning Monday, outlining the environmental impact study it must go through before progressing into the city’s Uniform Land Use Review Procedure (ULURP.) The framework is a plan years in the making to reshape the industrial community with a boom of residential development—including 3,000 units earmarked as permanently below market rate through the city’s Mandatory Inclusionary Housing (MIH) program, according to city documents.
“The Proposed Actions are intended to facilitate development patterns that meet the long-term vision of a thriving, inclusive, and more resilient Gowanus where existing and future residents and workers can participate in civic, cultural, and economic activities and where a wholly unique resource—the Gowanus Canal—can thrive and play an active role in that equitable and sustainable growth,” according to the Draft Scope of Work.
Under the plan, a swath of the low-rise neighborhood would transform into a hotbed of development by boosting density and encouraging mixed-use projects between Fourth Avenue and Smith Street. On several blocks bordering the polluted Gowanus Canal, soaring new residential structures could rise as high as 30 stories and up to 17 stories on part of Fourth Avenue.
The 8,200 apartments the plan is estimated to create far exceed the administration’s second highest total of 6,300 new units projected for the East New York rezoning, which was approved in April 2016. Some 7,200 of those new Gowanus apartments would be created on privately owned sites with approximately 2,000 of those slated as permanently affordable. Conversely, on city-owned land, officials estimate 1,000 new units of below market rate housing.
Overall, the rezoning is expected to create 696,000 square feet of commercial space, 251,000 square feet for community facilities, and generate 6.4 acres of open space (more than an acre of that is parkland.) City officials say the rezoning would lure nearly 18,000 new residents to Gowanus as well as create some 3,100 new jobs.
But the neighborhood would suffer some loses as well, including nixing 104,000 square feet of warehouses, 125,000 square feet of self-storage, and 60,000 square feet of other industrial land—space intended for light manufacturing, for instance. Future analysis will explore the project’s impact on core areas of concern for the city, namely potential residential and business displacement spurred by the proposed rezoning and what the scoping document calls “adverse effects on specific industries.”
The proposed rezoning is coalescing after years of community-driven planning through the Bridging Gowanus initiative led by City Council members Brad Lander and Stephen Levin, whose districts encompass parts of the neighborhood. Lander says he’s optimistic about several components of the proposed rezoning but recognizes that “we still have substantial work to do.”
“The Gowanus Neighborhood Rezoning is an opportunity to build a more affordable, integrated, vibrant, and sustainable community than the one we have today,” Lander said in a statement. “There are understandable reasons for the resistance that people feel to rezonings … But as someone who’s spent my whole career fighting for livable neighborhoods and community-based planning, I genuinely believe we have a chance to get the balance right here.”
Lander wants to see significant investment in the area’s public housing including the Gowanus, Wyckoff Gardens, and Warren Street NYCHA complexes. New school seats, more funds going toward transportation upgrades, and a plan to preserve historic buildings identified by the Gowanus Landmarking Coalition are also priorities for the Council member. Lander also points to the nearby Industrial Business Zone as an area that must be kept in mind for new opportunities to help local businesses thrive.
“I’ll continue pushing, together with community leaders, as the rezoning moves through the public review process,” Lander continued. “We’ve got a long way to go, but thanks to the voices of hundreds of community residents across thousands of hours of community-based planning, the picture is starting to come into view.”
The city will host a public hearing on the draft scope of work April 25 at 4 p.m. in the auditorium of M.S. 51 (350 Fifth Avenue) in Park Slope. Written comments will also be accepted by the city until May 6.
Posted by at No comments:

Kentucky Is Hoping to Become the California of Hemp

The top two hemp-producing states in 2017, Oregon and Colorado, might not surprise you.
After all, both states were among the first to decriminalize, and then to legalize, recreational marijuana. It only makes sense that industrial hemp, a non-psychoactive version of the same plant, would be widely grown in those states. But the number three hemp-producing state might come as a shock: Kentucky.
The Kentucky Department of Agriculture recently released its 2018 numbers for the hemp industry in the Bluegrass State, and things are looking positively rosy. Gross product sales of industrial hemp leapt from $16.7 million in 2017 to $57.75 million in 2018, with $17.75 million going directly to hemp farmers. 3,200 acres were newly approved to grow hemp in 2017; last year, that jumped to 16,100 acres. And it’s only going to get bigger: More than 50,000 acres, and six million square feet of indoor greenhouses, have been approved for the 2019 growing season.
So how did Kentucky, which wouldn’t seem to have much politically in common with Oregon and Colorado, become such a huge player in hemp?
Industrial hemp, which is simply a variety of the cannabis plant grown to have little to no THC, grows well in Kentucky. But then, it also grows well in Canada, and China, and New York and California. The plant isn’t sometimes called “weed” for no reason; there are challenges to maximizing yield, but it certainly isn’t an especially finicky plant to grow. That actually works to Kentucky’s benefit; Kentucky has lots of excellent soil for farming, but it also has a lot of rocky, hilly terrain that most crops don’t like. Hemp, though, can do fine there.
Posted by at No comments:

Two Geysers of Pent-Up Wealth Are About to Erupt

Everything is coming together this year for households to shake off their post-recession fears of financial engineering. The question is whether they will once again embrace debt and leverage.
One catalyst for a wave of spending and borrowing is the potential of a record year for initial public offerings as large numbers of private tech companies like Lyft and Uber finally hit the public markets. Companies are looking to go public not just because the timing is right in the evolution of their companies, or just because market conditions are favorable, but also because to some extent because there’s a herd effect once a few noteworthy companies start to go public.
Employees of these companies will finally be able to unlock the wealth they have that’s been tied up in private tech companies for years. Between the actual IPOs and the expiration of lockup periods months down the road, this will mean tens of billions of dollars of buying power for insiders of those companies. A lot of that will be leveraged as tech workers use their IPO gains as down payments to buy houses with huge mortgages. Significant chunks will go into wealth management and other financial services products. The effect may be concentrated in the San Francisco Bay Area, where many of these companies are located, but there will be second-order effects — like retirees selling their homes to tech workers and moving to cheaper pastures — as well as some employees cashing out and moving to other metros where housing is more affordable.
The second catalyst is the continued plunge in interest rates. The 10-year Treasury rate is now down to levels it hasn’t seen since 2017, and mortgage rates are dropping below 4 percent. This is the perfect environment for the housing market as we enter the heart of the spring buying season, and in their earnings reports this week homebuilders KB Homes and Lennar both said they were optimistic about the impact lower rates would have on the market. More Americans might be willing and able to take out a mortgage, considering that the unemployment rate is lower and wage growth is a fair amount higher than it was when interest rates were at similar levels in 2017.
Those two catalysts could drive up home values. That would have much larger ripples if homeowners revert to an “old normal,” being opportunistic about home equity and interest rates to treat their homes as vehicles for financial engineering.
The balance sheets of homeowners in the aggregate have improved significantly since the depths of the housing bust. Home equity percentage levels are at 16-year highs. While in the early years of the housing recovery, the improvement was mostly in coastal, particularly West Coast, markets, over the past couple years home price appreciation has been most rapid in some of the hardest-hit “bubble markets.” For instance, Las Vegas currently has the fastest home price growth of any market tracked by the Case-Shiller Index, and since the end of 2016 home prices in the Las Vegas market are up 22 percent. A lot of homeowners who may have been underwater or only had a little bit of home equity when interest rates were at current levels in 2017 now have a significant amount of equity they can tap.
If we really are at the end of a cycle of interest rate increases, whether it be for economic or political reasons, it makes a lot of sense for homeowners with equity to start thinking about refinancing or taking cash out of their homes. Sound familiar? It certainly could lead to a return to bubble-era behaviors, with reckless mortgage fraud or using cash-out refinancings to buy boats. But for a lot of households doing a cash-out refi makes a lot of sense. Like with many things, a behavior in moderation can be prudent while excess is what gets you into trouble.
Maybe households have some high-cost credit card debt or need to replace a family car, and by tapping home equity they’re able to restructure their debt or free up cash to buy a car. Depending upon what their current mortgage rate is and how long they’ve been paying their mortgage, they might be able to refinance into a new 30-year mortgage with the same monthly payment as they currently have. The further we get from the financial crisis and as memories of that era fade, the more homeowners will be receptive to these types of scenarios.
Even as a large part of the economic story this decade has been a rise in private tech company valuations and a recovery in home prices, we generally haven’t seen either store of wealth tapped by households. In 2019, we finally may. That could be what allows U.S. economic growth to continue.
Posted by at No comments:

A New View Of Property And Asset Management

The scope and value of residential rental and commercial real estate are enormous. The National Multifamily Housing Council (NMHC) estimates the total value of U.S. multifamily rental properties at nearly $3.7 trillion, and the roughly 15 million single-family homes are valued at an additional $3 trillion, based on Zillow’s median home value. According to S&P, the value of U.S. commercial real estate tops $5 trillion.
Property management and asset management both play critical, albeit different, roles in real estate success. Property managers focus on the operation and maintenance of the property and facilities. They handle service/repair requests (either directly or working with contractors), secure tenants and collect rent, and deal with issues arising from staff, tenants and residents. Asset managers focus on higher-level financial forecasting and cash-flow analysis to assess a property’s financial performance. They also advise on acquisition/disposition decisions and identify activities that can increase the value of a property.
The advent of mobile asset tracking applications, remote monitoring internet of things (IoT) sensors, cloud computing and machine learning promise to reshape and meld aspects of these roles. Through mobile apps and remote monitoring, data will be captured on building system assets (HVAC, lighting, plumbing and security). The data will include descriptive elements such as brand/model number/date of manufacture, metadata about the equipment such as efficiency, capacity, and its ongoing operating performance. This data will be streamed to a cloud repository, where machine learning and predictive analytics will be used to drive preventative maintenance decisions, predict system failures, optimize repair vs. replacement decisions and more.
The impact of these new technologies will be profound. Property managers will increasingly make maintenance/repair/replacement decisions driven by their asset impacts. Similarly, asset management is will become much more granular and leverage data about individual building systems in evaluating total property value.
Some Sample Use Cases
Historically, much of the building system repair/replacement decision making was decentralized. In this environment, local property managers developed their own heuristics (“rules of thumb”) about when to service and when to repair or replace a unit. In some cases, the local property manager simply deferred to a local contractor’s recommendation. The ability to standardize these decisions across the enterprise with a data-informed approach is a game-changer. Increasingly, property managers will rely on algorithms to help make these decisions. And the algorithms themselves will be informed with both an eye toward managing costs and tenant impact as well as an asset management sensibility.
For example, my company has created an iOS and Android app that allows a contractor or facilities manager to capture and upload equipment images to the cloud. The equipment data plate is automatically transcribed using machine learning to extract and standardize equipment metadata such as brand/model number/serial number/date of manufacture. When a repair is contemplated, an actuarial analysis of lifetime repair costs is compared to the replacement cost to determine the more cost-effective approach.
Conversely, asset managers will now augment their 30,000-foot view of a property with details of the individual building systems and components, resulting in a more holistic view of a property. The implications of system health and performance will inform and refine estimates of property value. By analyzing data across an entire property portfolio, machine learning will both standardize and improve the efficacy of maintenance activity.
Evolving Business Models
By viewing the individual building systems as assets, entirely new approaches to their management may evolve.
New specialist firms, well-versed in their clients’ industries and the new technology will leverage these capabilities to outsource more of the program work. These providers will deliver value in ways beyond traditional property management firms. Often, these traditional firms focus on the aggregation of spend with a few vendors to drive economies of scale on MRO. The new breed of specialist will use data science to inform the optimal strategy that drives operational savings and asset impact. The specialists will be uniquely positioned to develop optimal repair vs. replacement decisions, create CAPEX plans that identify the best system replacement candidates, and benchmark performance against anonymized data from industry peers.
And even greater disruptions lie ahead. Many industries are migrating to subscription models, in which the user pays a monthly fee to access use rather than buy the product outright. Software-as-a-service is the most prominent example of the subscription revolution, but other industries such as media (Netflix and Spotify), fitness equipment (Peloton), consumer goods (Dollar Shave Club), and even automobiles (Volvo) are all employing the new model.
But what about building systems? Security systems from companies like ADT, Vivint, Alarm.COM and many others offer a monthly subscription model. Clients may also conclude that owning/managing HVAC/lighting/plumbing systems across a complex property portfolio isn’t a core competency. After all, no one really buys an HVAC system — what they’re buying is 72-degree air. So can a building system subscription model be far behind? Providers such as Redaptive and Sparkfund are already experimenting with subscription solutions in lighting, HVAC and other energy systems.
A key enabler of these new business models will be IoT. IoT will allow third-party owner/operators to remotely detect and even remotely diagnose problems before they occur. Such detection will power predictive maintenance programs that can be done at far lower cost and tenant impact than emergency service calls.
For example, HVAC IoT sensors can be as simple as a Nest, Ecobee or Resideo smart thermostat relaying ambient and set-point temperature and run-time. Alerts can be triggered by the devices themselves (such as when ambient temperature deviates from a preset range) or through advanced analytics conducted on one of the more than 400 IoT platforms currently available.
Conclusion
Property management and asset management are poised for dramatic change. A more holistic view enabled by technological advances will empower companies to both optimize their day-to-day operating decisions and the total value of their properties.  Organizations that embrace these changes will be well-positioned to reap the benefits.
Jeff Wilkins Forbes Councils
CEO & Co-Founder of Motili, Inc., a provider of data-driven HVAC/plumbing repair, replacement and asset management solutions across the US.
Posted by at No comments:
Subscribe to: Posts (Atom)