Aurelia Butler

Zillow has sold homes in recent weeks to prominent institutional landlords, including rental operations tied to Cerberus Capital Management, KKR & Co (NYSE:KKR). and Tricon Residential, which counts Blackstone (NYSE:BX) Inc. among its largest shareholders.Now, the Seattle-based real estate giant is pursuing larger deals as it works to unload roughly 18,000 homes in the shutdown of its so-called iBuying business. The company agreed this week to sell 2,000 properties to Pretium, a New York investment firm that’s the second-largest U.S. single-family landlord, with more than 70,000 houses. Zillow isn’t alone. Wall Street landlords, searching for properties in the inventory-starved pandemic housing market, have also been tapping iBuying competitors Opendoor (NASDAQ:OPEN) Technologies Inc. and Offerpad Solutions Inc. for purchases. The three companies have sold more than 20% their homes to investors this year, according to an analysis by Bloomberg.“The bigger that number gets, the worse I feel about it,” said Mike DelPrete, a real estate tech strategist and scholar-in-residence at the University of Colorado Boulder. “I get that there are business considerations. Zillow flicking off thousands of houses at a time makes sense as a business. But this is more than business, this is housing.”Read more: Cerberus Leads Wall Street Landlords Finding Hidden Homes to BuyZillow has circulated a list of 9,000 properties to would-be buyers in recent days, though that number is expected to fluctuate, according to people familiar with the sales effort who asked not to be named because the matter is private. Some investors are underwriting bids on the entire portfolio, one of the people said.The homes that Zillow has agreed to sell to Pretium likely commanded a price of close to $750 million, according to a note from analysts at Berenberg Capital Markets. Representatives for Zillow and Pretium declined to comment on the transaction.“We intend to sell our remaining inventory — which represents less than three-tenths of 1% of all U.S. homes sold this year — the same way we always have: By selling to buyers of all types including individuals, families, individual investors, institutional investors and nonprofits,” Zillow said in a statement.  The iBuyer model emerged in 2014 when Chief Executive Officer Eric Wu, the venture capitalist Keith Rabois and others founded Opendoor, seeking to improve the notoriously complex process of selling a home. The company used pricing algorithms to make bids on properties, made light repairs on the homes it acquired and put them back on the market.Read more: Zillow Home-Flipping Bonds Draw Wall Street Deeper Into HousingAs they’ve matured, buying thousands of homes a month, the iBuyers have allowed Wall Street firms to buy properties before they hit the open market, letting landlords jump ahead of regular buyers waiting for inventory to be listed. Bloomberg sifted through tens of thousands of property records from Attom Data Solutions to find homes that the three largest iBuyers sold to corporate or legal entities this year. There were more than 5,800 properties on that list, most of which were acquired by entities affiliated with institutional landlords.Opendoor, the largest iBuyer, sold roughly 3,400 homes to those buyers this year, accounting for more than a quarter of the company’s sales, according to the analysis. For Offerpad, it was 21% of sales; it was 19% for Zillow, not counting the Pretium transaction.Opendoor declined to comment. Offerpad typically sells 10% to 20% of its home to single-family landlords, though it “ebbs and flows based on buying trends,” a representative said in an email.Mounting ScrutinyThe number of homes investors purchase from iBuyers is poised to increase as both groups seek to accelerate growth. It’s also likely to attract greater scrutiny. Politicians on both sides of the aisle are eyeing Wall Street’s role in housing. IBuyers, meanwhile, have also been under the microscope. In September, a TikTok video created by a Las Vegas Realtor that insinuated that the companies were manipulating homes prices went viral.Read more: Wall Street’s Favorite Suburban Housing Bet Is Getting CrowdedThis week, Democratic senators Tina Smith, Sherrod Brown and Jack Reed sent a letter to Zillow Chief Executive Officer Rich Barton that referenced a Bloomberg News story from Nov. 1. The lawmakers asked for information on how many homes his company has sold to Wall Street firms and its plans for selling its remaining properties. A Zillow spokesperson said the company has been in close communication with the committee and is working to provide information about winding down its iBuying business. A representative for Pretium, which was mentioned in the letter, said in a statement that the company “provides a high-quality housing experience through consistent, dependable and attentive service at our well-maintained and affordable homes.”There is new urgency to these questions as soaring home prices shut many potential first-time buyers out of the real estate market.IBuyers argue selling to investors allows them to serve more customers, and helps them gain economies of scale and pass on better prices to homesellers. For single-family landlords, working with tech companies lets them boost supply and satisfy the rampant demand that’s driving up rents.“There’s demand for rental housing and there’s not enough of it,” said David Howard, executive director of the National Rental Home Council, a trade group. “Whatever companies can do to bring more supply online, I think that’s a good thing for rental housing and it’s absolutely good for renters.”©2021 Bloomberg L.P. More

On Wednesday the world learned that the US consumer price index had risen to 6.2 per cent in October — its fastest annual pace since 1990.Inflationistas like Steve Hanke were indignant that US inflation was not a transitory supply chain problem. “Shifts in consumer spending have resulted in broad-based price increases across expenditure categories” because “the incompetent Fed has produced a massive amount of excess money,” he proclaimed. You’d think the news would constitute a fairly disabling blow for “Team Transitory” — those who believe inflation effects are short-term consequences of pandemic-related supply shocks — in their ever intensifying battle against the inflationistas on Twitter.Team transitory won btw. pic.twitter.com/7CEwdC11h7— George Pearkes (@pearkes) October 13, 2021
But no. Team Transitory haven’t given up the ghost yet.What’s more, on Thursday, they had the Bank for International Settlements, by way of their latest bulletin, coming in with some strategic air cover to revive their case.It’s called the “bull-whip” effect.As authors Daniel Rees and Phurichai Rungcharoenkitkul explain, bottlenecks in the supply of commodities, intermediate goods and freight have led to volatile prices and elongated delivery days. But then, in trying to mitigate these problems, supply chain participants inadvertently began building buffers (in already lean networks) exacerbating the problems further.From the bulletin (our emphasis): Anticipation of product shortages and precautionary hoarding at different stages of supply chain have aggravated initial shortages (the “bullwhip effect”), leading to further incentives to build buffers. These behavioural changes have the potential to lead to feedback effects that exacerbate bottlenecks. In this respect, there are parallels between supply chain disruptions and the liquidity stresses in financial markets.A third important background element is the lean structure of supply chains, which have prioritised efficiency over resilience in recent decades. These intricate networks of production and logistics were a virtue in normal times, but have become a shock propagator during the pandemic. Once dislocations emerged, the complexity of supply chains made them hard to repair, leading to persistent mismatches between demand and supply. What the BIS seems to be saying is that the transitory inflation problem is not dissimilar to a temporary liquidity shortage in a financial market, which — in the absence of a level-headed countercyclical entity like a lender of last resort — always stands to snowball into a full-on financial meltdown through feedback loop effects. It’s an argument FT Alphaville also made very early on during the pandemic. To the average hard money fetishist that might sound like an acknowledgment from the BIS that the economy is at risk from falling into a self-reinforcing feedback loop that spirals into hyperinflationary overdrive.But no, what the BIS is saying is this:. . . persistent bottlenecks could also prompt corrective behavioural changes over time, eg by providing incentives for investment to expand capacity. Once bottlenecks begin to ease, the feedback loops could operate as a virtuous circle to mitigate the bullwhip effects. In this way, just as bottlenecks have persisted longer than initially expected, their resolution could also follow more swiftly than currently feared. So it’s all just a necessary market rebalancing. If we survive the storm, we will eventually arrive at an idyllically rebalanced point, characterised by plentiful goods and supply harmony. The market mechanism will deliver us. There is no better cure for high prices than high prices.Hence they say:. . . once relative prices have adjusted sufficiently to align supply and demand, these effects should ease. Some price trends could even go into reverse as bottlenecks and precautionary hoarding behaviour wane. The mechanical effect on CPI could well turn disinflationary during this second phase. Though they do caveat that this is dependent on the situation not triggering an upward shift in wage growth or inflation expectations. The chances of a wage-price spiral are higher if inflationary expectations become unmoored. Marketand survey-based inflation expectation measures have increased in recent months alongside tighter bottlenecks, albeit from very low levels in 2020. It is challenging to identify how much bottlenecks directly contribute to the recent increase in long-term inflation expectations, although the pass-through from short-run inflation expectations to its long-run counterpart has increased (see Boissay et al (2021)). The BIS does not comment on the degree to which vaccine mandates might exacerbate labour shortages. Nor does it address the obvious point that monetary authorities have little incentive to discuss their inflationary fears, since addressing the elephant in the room will probably only make things worse.In case any of this is not clear, the BIS’s Hyun Song Shin — who noted in July markets were pricing in a transitory effect — has taken to Twitter to explain it all in the far more digestible medium of Tweets. You can read his thread here.What we think would be useful at this point is comparing and contrasting the relative timelines Team Transitory and Team Inflation are using as their comparative bases. Otherwise, on a long enough timeline, hasn’t every inflationary period in history been transitory?Go figure. More

Caretaker Prime Minister Mark Rutte’s cabinet is expected to decide on Friday on measures following the recommendation of the Outbreak Management Team, broadcaster NOS reported.The government often follows the expert panel’s recommendations.Steps under consideration include cancelling events, closing theatres and cinemas, and earlier closing times for cafes and restaurants, the NOS report said. Schools would remain open.After a partial lockdown of around two weeks, entrance to public places should be limited to people who have been fully vaccinated or have recently recovered from a coronavirus infection, according to the advice.Even as infections spike to record levels, many developed countries have taken the view vaccine rollouts mean lockdowns are unnecessary.Britain is relying on booster shots to increase immunity and to try to avoid overwhelming its healthcare system.The Netherlands has so far provided booster shots to a small group of people with weak immune systems. It will start offering them to people aged 80 years and older in December, while extra shots will eventually be available for anyone older than 60.Despite an adult vaccination rate nearing 85%, hospitals in parts of the Netherlands have been forced to scale back https://www.reuters.com/world/europe/dutch-hospitals-urge-new-measures-covid-19-cases-near-record-2021-11-09 regular care to treat COVID-19 patients.Last month, roughly 56% of Dutch COVID-19 patients in hospitals and 70% of those in intensive care were unvaccinated or only partially vaccinated. Unvaccinated COVID-19 patients in Dutch hospitals had a median age of 59, compared to 77 years for vaccinated patients, data provided by the Netherlands’ Institute for Health (RIVM) showed. Last week, the Netherlands re-introduced masks and expanded the list of venues that require a “corona pass” that demonstrates vaccination or a negative test result, to gain access.New coronavirus infections in the country of 17.5 million have roughly doubled in the last week to more than 400 per 100,000 inhabitants, and are as high as in the worst weeks of December last year. More

(Reuters) – Companies in North America added a record number of robots in the first nine months of this year as they rushed to speed up assembly lines and struggled to add human workers.Factories and other industrial users ordered 29,000 robots, 37% more than during the same period last year, valued at $1.48 billion, according to data compiled by the industry group the Association for Advancing Automation. That surpassed the previous peak set in the same time period in 2017, before the global pandemic upended economies.The rush to add robots is part of a larger upswing in investment as companies seek to keep up with strong demand, which in some cases has contributed to shortages of key goods. At the same time, many firms have struggled to lure back workers displaced by the pandemic and view robots as an alternative to adding human muscle on their assembly lines.”Businesses just can’t find the people they need – that’s why they’re racing to automate,” said Jeff Burnstein, president of the Association for Advancing Automation, known as A3.Robots also continue to push into more corners of the economy. Auto companies have long bought most industrial robots. But in 2020, combined sales to other types of businesses surpassed the auto sector for the first time – and that trend continued this year. In the first nine months of the year, auto-related orders for robots grew 20% to 12,544 units, according to A3, while orders by non-automotive companies expanded 53% to 16,355.”It’s not that automotive is slowing down – auto is up,” said Burnstein. But other sectors – from metals to food manufacturers – are growing even faster. John Newman’s company is one of them. Athena Manufacturing, which does metal fabrication for other manufacturers in Austin, Texas, now has seven robots, including four installed this year. It bought its first machine in 2016. Newman said robots have helped Athena respond to a surge in demand, including a 50% jump in orders for parts used by semiconductor equipment manufacturers.The machines also allowed Athena to move to an around-the-clock operation for the first time last year, he said. The company employs 250 but would have struggled, he said, to find workers to fill unpopular overnight shifts. More