A questioning of the Biden homebuyer tax credit, growing consumer delinquencies and a new movie epic with a commercial property story. From the wild and wooly world of real estate, here are the Hits and Misses for the week of May 13-17.
Hit: Sparking a Much-Needed Conversation. High-profile real estate investor Grant Cardone has a habit of making provocative comments, and this week his sharp verbiage was aimed at President Biden’s proposed tax credit for first-time homebuyers, which offers $5,000 a year for two years. “Is Joe dumb or does he just think his constituents are?” Cardone posted on X. “Or maybe this is simply the problem with career politicians who have never actually paid bills, run a budget or managed their own money?” The readers on this site had plenty to say regarding Cardone and Biden, which created some rather lively commentary.
Miss: Missing Payments Galore. Earlier this week, the Federal Reserve Bank reported total household debt increased by $184 billion in the first quarter to $17.69 trillion, a 1.1% uptick. The share of mortgages in serious delinquency in the first quarter was 0.92%, up from 0.59% one year earlier, while mortgage balances rose by $190 billion from the previous quarter and was $12.44 trillion at the end of March. But there were worst numbers elsewhere in the economy. Joelle Scally, regional economic principal within the Household and Public Policy Research Division at the New York Fed, warned, “An increasing number of borrowers missed credit card payments, revealing worsening financial distress among some households.” Ouch!
Miss: Really, Mitt? Sen. Mitt Romney didn’t seem to be aware of the New York Fed’s data, as he blithely insisted all was well with the economy during an MSNBC interview this week. “Yes, the economy is strong – there’s no question,” said the Utah Republican. “The economy is doing well and that’s because of the American people. It’s not because of the president or the Federal Reserve – they can mess things up. But the American people pursuing their dreams is what makes America work.” Well, maybe all things are copacetic if you’re someone like Romney with a net worth of $300 million and Swiss bank accounts to accommodate some of that excess cash – but for the rest of the country, bland pep talks don’t help to pay increasingly elevated housing costs or cover the absurdly inflated prices at the grocery store or the gas pump.
Hit: An Unlikely Retail Store. Who says that brick and mortar retail is going the way of the dinosaurs? Next week, the online home goods retailer Wayfair will be opening its first store, a 150,000-square-foot location outside of Chicago. Wayfair CEO and co-founder Niraj Shah told CNBC there were some things that e-commerce can duplicate, noting that consumers “may prefer the in-store experience and getting to work with an associate, or they may want to discuss financing or want design help, and we can provide all of those experiences. We provide them online as well, but sometimes, in-store can be either more pleasurable or more effective.”
Hit: If At First You Don’t Succeed. Kudos to J&D Associates LLC, who provided an excellent lesson of pivoting when an opportunity requires change. According to the Hartford Business Journal, the company invested over $600,000 into the renovation of a historic railroad station in Rocky Hill, Connecticut, with the goal of creating a restaurant that was going to be part of a waterfront redevelopment endeavor. However, due to the pandemic’s impact on the restaurant business coupled with little progress on the waterfront development, J&D Associates admitted their restaurant plan has “become impossible to carry to a successful conclusion.” The company has since come up with a new plan for turning the railroad station into a pair of three-bedroom residential units. Hopefully, this creative reinvention will be able to proceed successfully.
Hit: Coming Soon to a Theater Near You. We rarely talk about new movies on this site, but attention should be given to “Megalopolis,” the $120 million epic from Oscar-winner Francis Ford Coppola, which had its premiere this week at the Cannes Film Festival. “Megalopolis” is being highlighted here it is the very rare movie where commercial property development is central to the story – in this case, the rebuilding of city in a dystopian future, with an architect-planner trying to create a new sustainable environment while a corrupt mayor tries to thwart his efforts. Yes, there is a lot more to the film than real estate, and the review in Variety can explain the film in greater depth. In case you’ve missed it, the film’s trailer is online, and filmmaker Coppola is currently trying to secure a distributor to get “Megapolis” in theaters later this year.
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].
Photo: “Megalopolis,” courtesy of American Zoetrope
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