Merry Christmas to All

Have a wonderful Merry Christmas

and a Happy New Year from

Greg Randall and all the folks

at Windsor Hill Publishing

The Latest and Confusing Housing Reports

Trying to track the ups and downs of the housing market is like handicapping the various races for president. Whose up, whose down, and why—place your bets, chumps. It’s all a jumble of meddling politicians, social correctiveness (the new politically correct), flat interest rates, job migration, oil prices, NIMBYism, millennials, boomers, college debt, and Fannie-Mae and Freddie-Mac (who do control the loan market – look HERE).

The following articles are some of the more interesting articles of the last few weeks that deal with this whole “roof over my head” issue. Remember that the days of “market rate” housing are gone; in some areas more than a third of a home’s cost (and more) can be attributed directly and indirectly to local entitlement and underlying land costs. To believe that the housing market responds to the supply and  demand theories of the last century are well, so last century.

Apartments:

Who’s really renting? Good discussion HERE on the renters that are populating the new apartment complexes.

Labor:

The Wall Street Journal noted that one of the biggest problems in the housing construction is labor – seems that when those Mexicans went home they took their abilities with them – they have not come back (HERE for a different look). 

Also HERE,  for a take on the impact of this shortage of construction workers.

Housing Starts UP and DOWN – Whatever

It seems that every week we get hit with the latest in housing stats from somewhere – and even during the same week they have different conclusions. Take your pick:

Here’s the New York Times’ take: U.S. Housing Starts Increasein September:  

And the Wall Street Journal: Home Construction Rebounds AmidSurge in Multifamily Units:

Next month they will both print some form of a retraction.

And HERE'S what the impact is on housing stocks.

And Home Prices Keep Rising – One Reason:

If you have to provide one subsidized unit (affordable) for every ten approved units, isn’t it fair to believe that every one of those free-market units is now more expensive? I assure you the builder is not going to eat the difference no matter how big his heart. Affordable housing hurts everyone, but it wrong to believe that – GO HERE on Portland, Maine’s latest move (Portland, Oregon did something like this years ago). 

And in San Francisco they are still leading from the rear, HERE:

And it’s not YOUR fault:

When it comes to buying the consumer has no clue, they can’t make correct and appropriate decisions, obviously we need the government to step in, or so says Noble Prize winning economist, Robert Shiller HERE . 

But then again there are few other economists that would argue his point – i.e. Ludwig von Mises for one.

And it’s not your fault either – Part 2, 

Apartment builders should have thought about the THIS change:

And now we have to think about the new paradigm: On-Line Shopping. Where do apartments store and then deliver packages to their tenants? Should new homes have more secure exterior package drop-offs - HERE?

Stay Tuned . . . . . .

Blue Highways - On The Road Again - Part 2

As I said last week, my wife and I have often discussed over the years of traveling the roads of the western United States. Lord knows, I’ve done the LA-San Diego to San Francisco trip maybe thirty times, even the SF to Phoenix interstate dance a few times. Twenty-five years ago we went north to Portland and Bend, Oregon. But the real west, the old west of cowboy lore and Injuns and pioneers and mountains has eluded us – and what about the new West – they were all there to be seen. And we, for forty-five years, had been very remiss.

Leg Three:

Utah and Arizona

Last week’s post followed the Randalls from the Bay Area north to Sun Valley, then Montana, Yellowstone to Jackson Hole, with our midway stop being Park City. After Park City we wound through Salt Lake City. Now, for a Californian (and like most Californians it seems) no one gives Salt Lake much of a lick, but as we drove south on I-15 (one of our few interstate legs) I was stunned by the growth around Salt Lake and Provo. It all reminded me of the Bay Area as it wraps around the southern end of San Francisco Bay.

3,700 Miles

The last time I drove through Salt Lake City was in 1969; sure I’d dropped in at the airport a time or two while in transit, but never directly through the town or the region. Today it is not a town but a huge and thriving metropolis. Since the 1950s the population of the region has grown 308% from 500,000 to now over two million. Its growth fills the valley from north of Salt Lake City south to beyond Provo. A couple of reasons why: good jobs (highest rate of growth in U.S.), average home price of $204,756, condos in the $160,000 range, and two bedroom apartments rent for $1200. It’s a two and three story urban complex, and with little imagination it reminded me of San Jose. It is, like portions of Idaho (Twin Falls, Idaho Falls), something to watch – homes are affordable, good air, spectacular scenery, and stable economies can lead to great things.

We headed south down US 191, through Price, Utah and to Moab. Spectacular red stone bluffs, deep canyons, and high open desert led to some of the most bizarre rock formation around Moab – a decidedly touristy spot that straddles 191 south of I-70. Well worth the trip. It’s here, in this geologically wonderful region, where many of the National Parks are located: Arches National Park, Canyonlands National Park, Upper Cathedral Valley, Capitol Reef National Park, Glen Canyon National Recreation Area and dozens of study areas, and national forests. We stopped in a small town on a high plateau, Blanding, for the night. The country surprised me; this was ranch and cattle country, great fields of alfalfa and grazing land—no desert here. Actually quite beautiful.

My goal for the trip was Monument Valley and its incredible red sandstone buttes. This is not a National Park but lies totally within the Navajo Nation reservation. These buttes and adjacent formations reach over a 1,000 feet above the valley floor and were one of film director John Ford’s favorite movie sets (Stagecoach, My Darling Clementine, She wore a Yellow Ribbon, to name a few).

From there we headed to Page, Arizona. A relatively new city built to support the construction of the Glen Canyon Dam (1957). This is the gateway to the Glen Canyon National Recreation Area and Lake Powell. Strange but interesting town of 7,000 that sits on a mesa above the surrounding Arizona desert at 4,300 feet above sea level. A few films were made in the area, most notably the disastrous Edgar Rice Burroughs Mars movie, John Carter. We spent one night, found a good Italian restaurant, relatively cheap gas, a Denny’s breakfast (sorry, no Barsoom Martians), and then on to the North Rim of the Grand Canyon.

A left-turn at Jacobs Lake and then a 45 mile drive down a 2 lane cul de sac (longest I’ve driven) takes you to the North Rim of the Grand Canyon. This drive, surprisingly quiet and picturesque, passed an area that, like Yellowstone in 1988, experienced a forest fire in 2006 that has changed thousands of acres of fir and pine forests. Significant regrowth is occurring.

Not much can be said about the Grand Canyon. Its your usual mile deep hole in the ground, ten to twenty miles wide, and layers of rock that can take you back a billion years. As I said—not unusual—but spectacularly fantastic nonetheless. At North Rim your view of the canyon is a thousand feet higher than the south side. There are fewer crowds and there is a sense of intimacy with this wonder, where on the south there are far more crowds. This is a must on anyone’s visit to the region.

Leg Four:

Arizona, Nevada, and California

One of the stranger places we ran into was on a stretch of I-15 (the interstate between Salt Lake and Las Vegas). What the devil is St. George, Utah? Wikipedia says there are more than 150,000 people in the metropolitan region, mostly white, mostly Mormon. It sits in the middle of nowhere (with spectacular scenery though). Why it is one of the fastest growing urban areas in the United States makes you scratch your head. It is hot and very dry. Its leading industry is tourism (or the flow through of tourists), why else live here, not sure. Butch Cassidy and the Sundance Kid was filmed near here. The chunk of I-15 heading south into Arizona and Nevada is one of the most incredible pieces of highway engineering I’ve ever seen (and scariest).

It was about this time we made a change in plans; after Las Vegas (another mile deep canyon in the middle of the desert), for a day of R&R we were then on to Mammoth and Yosemite in California. We changed our minds and after two weeks of mountains and desert we wanted to see water—so after stopping for a day in Vegas we headed almost due west to Carmel and Monterey, California. Just one note about Las Vegas, it is as much a state of mind as a place. To be honest, after what we had seen the previous two weeks, we were bored with the place.

We’ve driven north and south in California many times, Highway 99, I-5, and Highway 101, but never directly east to west from Barstow to Bakersfield to Paso Robles. While the physical geology is not as impressive as Idaho, Wyoming, and Utah, it does have some of the greatest agricultural lands in the west. But even here you could tell the drought was taking its toll. The land, even for September, looked drier and stressed. We took state Highway 46; if you have a chance take this road. It is quintessentially California: farm land, cotton, nut crops and what I assumed was more than twenty square miles of pistachios – now that is a lot of nuts. Then on through the mountains and down into the “other” vineyard region of California – Paso Robles. In many ways even more dramatic than Napa and Sonoma.

We turned north and almost finished our trip in Monterey (it is 510 miles from Las Vegas - a very long but interesting day). Two days later we were home in the East Bay.

Last Night of Trip - Monterey, California

I hope I haven’t bored you too much with this travelogue, but I recommend this trip. The western United States is a spectacular country with amazing things to see (it will test your knowledge and creative use of superlatives – we often just settled on WOW), to experience, and most of all appreciate. Take the time and just do it.

Stay Tuned . . . . . . . .

Blue Highways – A Road Trip – Part 1

Blue Highway

My wife and I have often discussed over the years of traveling the roads of the western United States. Lord knows, I’ve done the LA-San Diego to San Francisco trip maybe thirty times, even the SF to Phoenix interstate dance a few times. Twenty-five years ago we went north to Portland and Bend, Oregon. But the real west, the old west of cowboy lore and Injuns and pioneers and mountains has eluded us – and what about the new West – they were all there to be seen. And we, for forty-five years, had been very remiss.

A favorite high school author (and still to be sure) was John Steinbeck and when his book Travels with Charley was published in 1962--it became a favorite. It teased me as a teenager about America and the places that were beyond the prairies of the Chicago and Midwest which eventually lead to a solo cross-country jaunt in 1969 to LA and San Francisco. Two years later my bride and I moved from Chicago to San Francisco taking the still, under construction in places, interstate system using I-70 to Denver, south on I-25 to Albuquerque, west on I-40 (some of the old Route 66), and eventually stopping at the Grand Canyon, Las Vegas, and finally San Francisco. That was April 1971.

In 1982 another American highway travelogue was published, and like Steinbeck, William Least Heat-Moon in his Blue Highways, tried to find the true American—who ever they are—by traveling the two lane highways of America, not the high speed interstates. His book, remarkable for its insight, clarity, and humor, again struck a cord in my traveling soul. But for the past twenty-five years Europe and other exotic places called and we answered. The western trip seemed to elude us, “Maybe next year.” Well this was finally the year.

Our goal was a simple clockwise loop, from Walnut Creek to Walnut Creek. This was not to be a camping trip, no sleeping under the stars. My idea of camping includes marble countertops in the bathroom (call me a retired boy scout). At my age crawling out of a sleeping bag is not a pretty sight. But it was also not going to ultra-first class, economy is good if there’s legroom.

Steinbeck along with his traveling companion, Charley the poodle, towed a trailer (now in his Salinas museum) behind a new pickup truck. Heat-Moon drove a green van with a camp stove and portable toilet. Sorry guys – AARP approved hotels were our base line and certainly anything above that was more than acceptable. Our horse was a red Ford Escape with 3000 miles on it when we rolled down the driveway. Our goal was to see as much as we could in seventeen days. The route is posted below.

First Leg:

Nevada and Idaho and Montana

I worked as a consultant to a mining company back in the late 1970s designing a work camp and support housing near a town called Challis, Idaho. I wanted to see what had changed.

We went east through Reno onto Wells, Nevada then north into Idaho and through Twin Falls. The last time I’d been in Twin Falls was the late 70s. The population then was about 25,000 people and agricultural based – the shock of driving through this now very modern upsized town of more than 46,000 was stunning (I’m sure the population was well above that in the surrounding county). Construction and new growth was everywhere – and as we were to find out almost everywhere - there has been tremendous growth in the west during the last twenty-five years. After spending a few days in Ketchum and Sun Valley (where Hemmingway lived from 1935 to 1947 and later died) we headed north into Challis and discovered almost nothing had changed in forty years. It is still a simple main street town, spectacular surrounding mountains, and verdant fields and cattle lands below, all flanking the Salmon River. Its population had gained about 200 people since 1980, now about 1,000 people call Challis home (the Village Inn where our base camp had been set up, was exactly the same).

We headed north into Montana then east to Virginia City, Montana. Montana is Big-Sky country. It’s as open as a when a very young Sacagawea lead Lewis and Clark through the region in 1805, now cattle populates the great expanses of the country and not the Shoshone and buffalo. We stayed south of Butte and west of Bozeman on two lane highways that were in finer shape than California’s and headed south to the old mining town of Virginia City. What we did find were small and seemingly prosperous towns and ranches. The country was, to use an overworked term, awesome. Then on to Yellowstone National Park.

Yellowstone is worth the visit. I took some good photos of the usual suspects: buffalo and elk, the Old Faithful geyser, mud boils and the forest recovering from the massive fires of 1988. The most traffic we ran into (on the whole trip) was at the entry gate to Yellowstone. One of the funniest incidents were the cars backed up behind a bull buffalo ambling down the main entry road. He was in no hurry and his slow ponderous gate proved it. The town (just outside the entry) is like a cowboy version of Fisherman’s Wharf; I still cringe when I think of it. The scenery and the underlying geology of Yellowstone is very exciting, but for drama and great photo opportunities take your time as you travel fifty miles south to the Grand Tetons and Jackson, Wyoming.

Leg Two:

Wyoming and Utah

While Ketchum and Sun Valley, Idaho seem a tad artificial and pretentious, Jackson (also referred to as Jackson Hole), Wyoming exhibited a warmth and what, to us, felt more like what the modern American west is like. Compact, free parking, good to great restaurants, and high quality galleries, modern conveniences, and an airport that takes in Delta and United flights. Fly fishing is a short drive away, a call will get you guides and float trips to some of the best cutthroat trout fishing in the world (as well as brown, rainbow, and brook trout). These are the drainages of the Madison and the Gallatin and Firehole rivers made famous in a hundred books and movies about trout fishing in the western United States. We will be back, in many ways the trip was worth the discovery of Jackson Hole.

From Jackson we headed to Park City, Utah. While Jackson retained some of the character of the Old West, Park City has all the character of a modern resort subdivision built outside Salt Lake City. But wait, Park City is a modern resort subdivision built 35 miles east of Salt Lake City. The 2002 Olympics made the place and even though there were good winter activities (fueled by Salt Lake and Provo) it was the post Olympic growth of townhome complexes, modern hotels, and professional in-migration that has fueled it’s substantial growth. At over 6,000 feet the air is crisp and dry. The old town is one street (and a hefty climb from one end to the other as well) of the usual shops, restaurants, and even a brewery. It’s no longer mining that drive the economy it’s the tourist and second homes. I think, in time, it will be a big retirement draw as well. Two days was more then enough. But it is the rest of Utah that can take your breath away – for better or worse.

Stay Tuned . . . . . . . .

Top Ten Lists - Again

Every once and a while I take a few minutes and peruse the top ten list of this and that. They are always interesting. Mostly because of the compilers themselves (What were they thinking?) than the list itself. Best places to live, cities with the best grade schools, and those that have the best chain restaurants are fun to read but I can assure you that no one will move just to be on one of these lists. But, it does give a resident of “The best college town in America,” some self-satisfaction knowing someone out there validates their choice.

So here are few to ponder:

America’s Most and Least Expensive College Towns  (CLICK HERE)

I was not surprised that Berkeley Cal was number one. No one can afford to live in the Bay Area. But why Stanford isn’t on the elite list leaves one to wonder about the list's authenticity, housing in Palo Alto is totally insane. The least expensive is Muncie, Indiana. Yes, Muncie. I’m going to Google Earth and find it, I do remember the name from my youth.

America’s Most and Least Expensive Affordable Areas to Raise A Family. (CLICK HERE)

This is an in depth article about living costs in American cities. Interesting for data geeks. But I was shocked to see that New York was listed as the most expensive, shocked I say. What this does show is that where you live does matter. California needs to work on getting to the top of this list.

Here’s a list of the Top 25 Private Home Building Companies. (CLICK HERE)

Where are the healthiest housing markets? (CLICK HERE)

According to this list and the article, out of the top fifteen, seven are in Texas, four in Colorado, and only two in California—the Bay Area to be exact. What is more interesting is the Affordability Rank—why anyone would think of moving to California is beyond me. But for those of us here, have pity, we feel trapped in a gilded prison of drought and Coppertone.

Outside magazine took a pole of its readers and came up with The 16 Best Places to Live in America – 2015. (CLICK HERE)

The list certainly grabs your attention from Chattanooga, Tennessee to Lake Placid, New York. Note: there are no California cities listed – just saying.

And one last fun one:

California finally tops the list, The 10 Most Polluted Cities in America. (CLICK HERE)

In California’s defense, the Fresno-Madera, Ca. region sits in a bowl and with agriculture dominating the economy you get dust and all the usual mix of agricultural byproducts. The rest of America must have its veggies.

Stay Tuned . . . . . . . .