Fed Identifies Top Vulnerabilities Facing U.S. Financial System “The Federal Reserve identified elevated asset prices, historically high debt owed by U.S. businesses and rising issuances of risky debt as top vulnerabilities facing the U.S. financial system, according to an inaugural financial stability report released Wednesday. Officials cited potential risks tied to non-financial corporate borrowing, including low premiums demanded by investors in certain business debt, such as leveraged loans and high-yield corporate debt. It also flagged possible concerns in commercial real estate, in which property prices have rapidly outpaced growth in rents.” (Wall Street Journal, subscription required)
Bad News for Renters: Apartments Are Shrinking and Getting More Expensive “Feel like your apartment’s walls are creeping in on you? You may not be imagining it. Since 2008, the average size of a newly-built rental apartment has shrunk by 52 square feet, or 5%, to 941 square feet, a new report from real-estate website RentCafe and data-analytics firm Yardi Matrix concluded. New studios and one-bedroom units have shrunk in size even more in that time span, by 10.3% and 4.2% respectively, while two-bedroom apartments are slightly larger on average. At the same time, new apartments have become much more expensive to rent — the average price has risen 28% over the last 10 years to $1,944.” (MarketWatch)
Suddenly, Luxury Stores Miss Free-Spending Chinese Tourists “There was something missing at the luxury jeweler Tiffany & Co. in recent months: Chinese tourists. For the second time in as many months, a big seller of high-end goods noticed that a particularly crucial demographic of its shopping base had made itself sparse, damaging sales and stoking fears of worse to come. On Wednesday, shares of Tiffany & Co. plunged 12 percent after reporting weaker-than-expected sales in its third quarter. CEO Alessandro Bogliolo said that Chinese tourists have failed to show up, and open wallets up, with the same vigor that they had in the past.” (The Associated Press)
Investing 101: 10 Essential Tips for New Real Estate Investors “Starting out in a challenging behemoth of an industry like real estate may seem daunting at first. With so many factors and risks involved, the simple act of contemplating where to begin can be overwhelming. After all, it’s one of the largest and most regulated sectors of the U.S. economy, accounting for approximately $30 trillion. As with most things in life, however, once you get over the initial hurdle of getting started, opportunities begin to present themselves and everything becomes clearer with time.” (Forbes)
These Are the Most Expensive ZIP Codes in the Country “With the end of the year comes a flurry of reports quantifying the year in real estate. Enter PropertyShark’s annual list of the country’s 100 most expensive ZIP codes, released last week, which looks at median closed sales prices across the US during 2018. It found that California just might be more unaffordable than the Empire State: The former has 82 entries in the top 100. (Silicon Valley alone has an eye-popping 30.) Meanwhile, San Francisco and New York are tied in terms of the priciest city, with nine ZIP codes apiece in the top 100.” (New York Post)
Post selected and compiled by the National Real Estate Investor