Don’t call it a comeback, Good demographics and low mortgage rates have been here for years, Rockin’ the bubble boys Puttin’ the bears in fear
That’s a reference to the song “Mama Said Knock You Out” from L.L Cool J. I have used this in other articles and interviews, which runs in line with my big macro take that what drives the housing market are mortgage rates and demographics. So, you shouldn’t be surprised about what I am writing today.
Today, purchase application data confirmed what I needed to see to justify that we should get a positive total existing-home sales year in 2020. Yes, as crazy as it sounds, we can do this for the existing home sales market in 2020.
I wanted to see at least 20 straight weeks of double-digit year-over-year growth on average to make up for the nine negative weeks we saw due to COVID-19. Those nine negative weeks came at a crucial time for the MBA purchase application data as it was right in the data line’s heat months. So, we had a lot of work to do to get back to the point where we can go positive, but it happened.
The MBA report shows the year-over-year growth for the last eight weeks has been +21%, +22%,+25%,+6%, +40%,+28% +33% and +27%. As you can see in the chart, these last eight weeks have created enough demand to move the total volumes higher than we would see during the heat months, which is during the second week of January to the first week of May. Since this data looks out 30-90 days, it’s enough demand to help the existing home sales market, which is still a negative year to date, to be positive for the year. The only thing that can stop this is some non-economic events at this stage since we are in October.
Also, throwing this out there. What happened to the ‘we have no homes to buy’ crowd, and the idea that credit is getting too tight? It looks like credit is getting tighter on the surface, and that we have no homes to buy. However, both ideas are incorrect, as I have been talking about all year. Once demand picks up, sales will pick as we have plenty of homes to buy to get sales back positive. I have also tried my best all year to try to debunk the tight credit thesis, which is a common fairy tale these days. More on that here.
While the Bubble Boys were talking smack that we were in trouble and the Forbearance Crash Bros were snarling at us, king demographics and low mortgage rates showed these kids who was really in charge. However, jobs are not done; let’s get 2020 into positive territory to show these overrated rookies who are the real bosses.
The new week begins with bond yields at the highest levels since 2007 in what has been a broadly linear uptrend since late July. Up until that point, rates had been holding in a narrow range for months more than 50bps below current levels. If the Fed was/is “data dependent,” and if the most recent NFP/CPI reports were arguably bond-friendly, why has the trend been so unfriendly?
Data has indeed mattered, but the bond market’s strategic shift has mattered more. In early July, markets returned from the Independence Day holiday to find a hawkish Fed Minutes release on Wednesday and a glut of unfriendly data on Thursday (including that ADP that came in at 497k). This culminated in the first of two “apprehensive and defensive” sell-offs highlighted in the chart below.
In both cases, the selling pressure was driven by data and the Fed in the run up to NFP. In both cases NFP helped calm the bond market’s nerves with CPI solidifying the friendly bounce in the following week. In the most recent example, the post-CPI resolve lasted only a few hours before bonds were blasting back toward the previous week’s highs. At the time, losses were exacerbated by Treasury supply concerns and foreign central bank selling in China/Japan.
Fed policy is hurting long-term rates due to the yield curve. Short-term rates are now high enough to hold mostly flat. Until now, stronger data was able to do more to push Fed rate expectations (and 2yr Treasury yields) rapidly higher. Higher rate expectations + the reality of tighter policy were like offsetting penalties for longer-term rates, thus allowing them to remain in a range. But with the Fed shifting gears on short-term rates, bond market influences have a more direct impact on longer-term rates–all at a time when supply is increasing, foreign governments are selling, and the Fed is saying it’s fine cutting short-term rates in the future while continuing to shrink the balance sheet.
To all of the above, add the fact that other economic data suggests the economy continues to chug along. Some of the data suggests things are quite a bit stronger than expected. The balance of all the available econ data adds general pressure (i.e. it supports the strategic shift to higher rates).
Last but not least, there is buzz around the topic of the “neutral rate” or “R-Star” moving higher (the imaginary level of the Fed Funds Rate that keeps inflation and growth in a balanced homeostasis). Some of the proponents of said buzz think Powell will discuss this Friday in Jackson Hole. While a discussion wouldn’t be a surprise, it would be a surprise if Powell were to say something about it moving higher. If anything, there’s an opportunity for Powell to put some of the rumors to bed by reiterating recent Fed communications regarding the absence of any change in the R-Star outlook. At the very least, that would let us know how much this sentiment has affected the uptrend in yields recently.
Let me be contrarian: Get ready, because mortgage rates are going to rise in 2021. Now before you respond, just read the rest as to why.
The Mortgage Bankers Association in its most recent forecast sees two things that stand out. First, 2020 will prove itself to be the second biggest mortgage year in history. Topping $3 trillion will put it only behind 2003 in single family mortgage production history.
Second, the MBA joined the GSEs and other economists who forecast a significant drop in mortgage production in 2021, with most estimating declines in the range of $700 – $800 billion year over year.
Some will try to argue, “but wait, Powell said the Federal Reserve would keep rates low for the foreseeable future! You must be wrong.” There is a difference here. Yes, the Fed will likely keep short rates low, but mortgage rates and some longer-term Treasuries likely won’t enjoy the same ride.
Here are the reasons why upward pressure on mortgage rates could stall the refinance wave and cut overall national originations volume in 2021:
1. The Fed: The Federal reserve is the single biggest buyer of agency mortgage backed securities (MBS) in the world. According to the Urban Institute, “In March the Fed bought $292.2 billion in agency MBS, and April clocked in at $295.1 billion, the largest two months of mortgage purchases ever; and well over 100 percent of gross issuance for each of those two months. After the market stabilized, the Fed slowed its purchases to around $100 billion per month in May, June and July. Fed purchases in July were $104.6 billion, 35 percent of monthly issuance, still sizable from a historical perspective.”
The question is what happens after a covid vaccine and a normalization of economic activity which is expected next year. The Fed is already being very careful not to commit to MBS purchases after the end of this year, a lack of commitment very different to their clear stance on fed funds. If the fed continues to slow or stop, something which is inevitable, the supply imbalance will force rates higher as MBS prices drop in search buyers to take up the excess.
2. The Debt: The national debt is now at 100% of GDP, the highest level since WWII. Per
CBO’s September paper, “By the end of 2020, federal debt held by the public is projected to equal 98% of GDP. The projected budget deficits would boost federal debt to 104% of GDP in 2021, to 107% of GDP (the highest amount in the nation’s history) in 2023, and to 195% of GDP by 2050.”
The CBO’s projections for the U.S. deficits looking forward and the mounting debt load threaten the nation’s ability to do many things, as the majority of spending will be to mandatory expenditures that include interest on the growing debt load. Inflationary pressure will result from the need to finance these deficits through new issuance of treasuries, thus putting upward pressure across the stack of interest rates, a far different outcome than what the Fed may do to keep short rates low.
3. The GSE Capital Rule: The FHFA just closed off the comment window on the proposed capital rule for Fannie and Freddie. This rule is a critical component to FHFA’s plan to release the GSEs from conservatorship. The proposed rule is considered onerous by many with the consensus view stating in comment letters that rates would rise between 20-30 bps. Former Freddie Mac CEO Don Layton, former Arch MI CEO Andrew Reppert, and Fannie Mae each stated the same in their comment letters.
4. The Adverse Market Fee: This arbitrary add-on for most refinance mortgages from the GSEs of 50 bps equates to roughly an increase in rate of .125. This goes into effect on Dec. 1 of this year.
5. Release from Conservatorship: FHFA Director Calabria is working feverishly to release Fannie and Freddie from conservatorship and moving at a pace to lock in as much of this as possible quickly given the risk of an administration change. There have been outcries from MBS investors, including some of the largest buyers.
As reported, in a letter to Mark Calabria, director of the Federal Housing Finance Agency, PIMCO said freeing the companies by executive fiat would be interpreted by investors as an end to the government’s guarantee of the MBS. “That would boost mortgage rates and force some investors to sell the bonds,” the PIMCO executives said. Investors would demand a higher return for the increased risk. “Mortgage rates will increase, homeownership will likely suffer and the national mortgage rate will no longer exist,” the executives wrote.
For those in the mortgage industry, it doesn’t take all of these things to result in the forecasted 700-800 billion drop next year. Frankly just the slowing of MBS purchases and the implementation of the capital rule alone would do it. In fact, MBA’s forecast of the volume decline assumes only the slightest increase in mortgage rates, remaining in the low 3% range next year. In my conversations with economists, the view is that we will end the year with a good first quarter in 2021 simply based on year end overflow.
The second quarter may start off well, but the general sense is that by the third and fourth quarters the market will reflect the impact of coupon burn out and any of these events above beginning to take shape. One thing for certain is that the Fed does not like being in this deep, we saw that following QE activities during the Great Recession.
As MBA’sFratantoni states in his recent Housing Wire article, “2020 has been a banner year for mortgage originators and the millions of households who have benefitted from record-low rates through refinancing. The industry will enjoy this boom for a while longer, but our expectation is that the refi wave is cresting.”
“Make hay while the sun shines” is an old expression. The sun is clearly shining on our industry this year. But it’s important for mortgage banking executives to not misread the statements of Chairman Powell as a commitment to anything more than short rates. The rally you are experiencing this year is due to interventions in the market due to a pandemic recession. Normalization will take out buyers, eliminate the supply “short,” and inflation will ultimately do its thing on rates just enough to cut the market by 25%-30% in 2021 and a bit more in 2022.
Planning ahead for that environment is critically important as market contractions will reduce spreads as well as volume. Thinking about the appropriate right sizing and forward-looking market strategies now will separate the winners from the rest.
A handful of closely followed mortgage rates grew over the last seven days. The average 15-year fixed and 30-year fixed mortgage rates both increased. The average rate of the most common type of variable-rate mortgage, the 5/1 adjustable-rate mortgage, also increased.
As inflation surged in 2022, so too did mortgage rates. To rein in price growth, the Federal Reserve began bumping up its federal funds rate — a short term interest rate that determines what banks charge each other to borrow money. By making it more expensive to borrow, the central bank’s goal is to reduce prices by curtailing consumer spending.
During its July 26 meeting, the Fed initiated a 25-basis point (or 0.25%) hike to its federal funds rate, marking its 11th increase in the current rate hiking cycle. The most recent increase could have an impact on mortgage rates, but experts say the markets may have already factored it into rates.
Current mortgage rates for August 2023
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The Fed doesn’t set mortgage rates directly, but it does play an influential role. Mortgage rates move around on a daily basis in response to a range of economic factors, including inflation, employment and the broader outlook for the economy. A lower inflation rate is good news for mortgage rates, but the potential for additional hikes from the central bank this year will keep upward pressure on already high rates.
Rather than worrying about mortgage rates, though, homebuyers should focus on what they can control: getting the best rate they can for their financial situation.
30-year fixed-rate mortgages
For a 30-year, fixed-rate mortgage, the average rate you’ll pay is 7.39%, which is a growth of 5 basis points from one week ago. (A basis point is equivalent to 0.01%.) The most frequently used loan term is a 30-year fixed mortgage. A 30-year fixed mortgage will often have a higher interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. You won’t be able to pay off your house as quickly and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to minimize your monthly payment.
15-year fixed-rate mortgages
The average rate for a 15-year, fixed mortgage is 6.65%, which is an increase of 6 basis points from the same time last week. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a larger monthly payment. But a 15-year loan will usually be the better deal, if you can afford the monthly payments. These include usually being able to get a lower interest rate, paying off your mortgage sooner, and paying less total interest in the long run.
“Mortgage rates have hovered in the 6% to 7% range for the past 10 months. Though home prices have softened slightly nationally, the still-high cost of borrowing means hopeful home buyers have felt little relief,” said Hannah Jones, economic research analyst at Realtor.com.
Staying at a hotel so famous that it’s printed on a country’s currency isn’t something that was on my travel bucket list. In fact, I didn’t even know that such a hotel existed. But it turns out that the Grand Pacific Hotel in the capital of Fiji is famous enough to earn that honor.
While it’s no longer the most luxurious hotel in the country, the Grand Pacific Hotel is still the go-to hotel for celebrities, politicians and business travelers when visiting the Fijian capital of Suva. Here’s what it’s like to stay at this historic hotel.
During my stay in April 2023, the Grand Pacific Hotel still operated as an independent IHG hotel — not flagged as any particular IHG brand. However, the hotel is in the process of joining the InterContinental Hotels & Resorts brand.
At the time my wife and I booked our stay, award nights at the Grand Pacific Hotel cost a steady 30,000 IHG One Rewards points per night. As an IHG® One Rewards Premier Credit Card holder, I received a fourth night free on this stay.
That means my four-night stay only cost 90,000 IHG points. At NerdWallet’s valuation of 0.7 cent per IHG One Rewards point, that’s approximately $630 worth of points.
An equivalent cash booking cost $1,006 total at the time we booked. That means this fourth-night free award booking netted around 1.1 cents per point in value.
The Grand Pacific Hotel is located on harborfront land in the Fijian capital of Suva, surrounded by some of the nation’s most important sites. The hotel is just a few minutes walk from the nation’s seat of power, historic Thurston Gardens and the Fiji Museum.
Directly in front of the hotel, you’ll find Albert Park. This expansive park has hosted dignitaries throughout the years, was the site of the unveiling of the new Fijian flag when the archipelago gained independence from the British and remains a center of Fijian culture.
During our stay, Albert Park constantly bustled with life — from soccer and rugby practices to a cricket tournament featuring teams from all across the island nation.
The Grand Pacific Hotel is located just south of other Suva highlights. The bustling Suva Municipal Market, historic Carnegie Library and shopping streets are all located within a mile.
The Grand Pacific Hotel is the most storied hotel in the country of Fiji — so much so that the hotel is featured on the back of the Fiji $10 bill. Originally opened in 1914, this fittingly named grand hotel has hosted a long list of celebrities. Among the most famous are Queen Elizabeth II during several visits to the once-British colony and Charles Kingsford Smith in his famous “Southern Cross” flight from the U.S. to Australia in 1928.
A display case near the entrance to the hotel displays memoirs of the hotel’s past.
Photos of the hotel’s history line the walls of the original building, with plenty of photos of Queen Elizabeth’s multiple visits fittingly surrounding the so-called Queen Elizabeth Suite.
The hotel maintains a “Wall of Fame” with the many politicians and celebrities who have stayed at the hotel. Next to the Wall of Fame, the hotel hangs a mirror with the label “our most important guest of all.”
Accommodation
The original Grand Pacific Hotel building hosts just 10 so-called “heritage rooms” and suites. These are the classic rooms originally built in 1914 but updated in a 2014 remodel.
However, there’s much more to the Grand Pacific Hotel than just these 10 rooms and suites. A 2014 expansion added the Harbour and Kingsford Smith Wings to the hotel — adding over 100 new rooms. Most of the rooms in the Harbour Wing offer a balcony with an angled view over the pool or harbor.
At the far end of the Harbour Wing are 16 harborfront rooms and suites — eight standard rooms plus eight so-called “Grand Pacific Club” corner rooms.
As a Diamond Elite, I received an upgrade to one of these harborfront rooms, which was dubbed “Daveta” per a sign next to our door.
This harborfront room offered an expansive view of the beautiful — but surprisingly quiet — Suva harbor.
The nice — if a bit plain at first glance — room offered all of the standard amenities you might expect from a hotel room. The king-size bed visibly consisted of two twin beds but was plenty comfortable.
The 42-inch flat-screen TV offered only around a dozen mostly sports-related channels.
A minibar fridge came stocked with around a dozen self-serve drinks. As is customary in Fiji hotels and resorts, the fridge had a carton of complimentary fresh milk for your coffee or tea.
Tucked away in drawers, the hotel provided complimentary teas, French press coffee and even “drinking chocolate” packets.
The closet housed staples such as a blow dryer, safe, laundry bags, hangers, an iron and an ironing board — as well as luxury items, including robes and InterContinental-branded slippers.
The open-design bathroom offered a partially walled shower and refillable Pure Fiji-branded white gingerlily-scented amenity bottles.
Food and beverage
Guests have two options for breakfast: a la carte or a breakfast buffet costing around $20 ($45 Fijian dollars) per person. As an IHG One Rewards Diamond Elite member, I opted for the daily breakfast as my welcome amenity.
Each morning, the buffet breakfast spread was a bit different. However, the expansive buffet always offered more than a half-dozen main dishes — including a couple of vegetarian options and one vegan option — plus fruits, deli meats, cereals, breads, baked goods, salads and juices.
If you want something fresh, you can order from a menu of custom-made egg dishes.
I was pleasantly surprised by the quality of the eggs Benedict I ordered a couple of mornings.
On Thursday and Friday evenings, the Grand Pacific Hotel offers tapas complete with a live band out on the veranda.
Thankfully, our stay overlapped with the events and we could enjoy a selection of reasonably priced tapas and local Fijian beer.
Our appetite not quite suppressed, my wife and I split a bowl of kokoda — the Fijian national dish.
Pool
The Grand Pacific Hotel pool is located adjacent to the Heritage and Harbour Wings. This long but rather simple pool is open from dawn to dusk.
Fitness center
The Grand Pacific Hotel fitness center was located next to the spa. Open daily from 8 a.m. to 8:30 p.m., the fitness center has several stationary bikes, treadmills, a rowing machine, free weights and various weight machines.
Spa
The Grand Pacific has a full-service Bliss Spa on-site. During our visit, the spa offered reasonably priced specials including:
60-minute table massage: around $54 ($120 Fijian dollars).
45-minute hot stone therapy: around $61 ($135 Fijian dollars).
30-minute foot massage: around $20 ($45 Fijian dollars).
50-minute pedicure or manicure: around $27 ($60 Fijian dollars).
After a long day of walking around Suva (and then a shower), my wife and I opted for one of the 30-minute foot massages. The therapists adapted to our pressure preferences and provided a wonderful massage.
🤓Nerdy Tip
You cannot charge gratuities to the room. While tips generally aren’t expected in Fiji, you might want to have cash on hand in case you want to tip your therapist.
Wi-Fi
Located in the middle of the Pacific Ocean, the internet in Fiji can understandably be spotty — even at some of the top resorts on the islands.
Thankfully, Wi-Fi was not an issue at the Grand Pacific Hotel. While not particularly speedy, the Wi-Fi was solid throughout our stay. A Wi-Fi speed test reflected download and upload speeds of around 10 Mbps.
Business center
Need a place to get some work done? The Grand Pacific Hotel offers a business center on the ground floor of the heritage building with a couple of computers, a printer, magazines and newspapers.
If you’re considering staying at the Grand Pacific Hotel
Many foreign tourists stick to Fiji’s excellent resorts when visiting the island nation — as my wife and I did on a previous trip and much of this trip.
However, if you want a true taste of Fijian culture, I recommend basing your visit to the Fijian capital at the Grand Pacific Hotel.
(Top photo by JT Genter)
How to maximize your rewards
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Northwestern Mutual Will Help Nearly 2,000 Additional Milwaukee Students Enroll Over the Next Few Years, Advancing Quality Education in the City
Additional commitment of $5.7 million to support 40 Milwaukee-based nonprofits and schools, a bridge loan to Notre Dame School of Milwaukee for expansion of campus, as well as two grants supporting St. Marcus School and St. Augustine Preparatory Academy
MILWAUKEE, Wisc., Aug. 22, 2023 – Northwestern Mutual has long been committed to investing in high-quality education to help close the opportunity gap for Milwaukee-area students. Over the last 25 years, the company has contributed more than $60 million to support these efforts. Today Northwestern Mutual is committing to an additional $5.7 million to support 40 Milwaukee-based nonprofits and schools, which includes a bridge loan to Notre Dame School of Milwaukee and two capital grants to St. Marcus School and St. Augustine Prep. This will help to add an additional nearly 2,000 quality seats to classrooms over the next few years by expanding school campuses.
“Education is a core pillar to the work that we do at Northwestern Mutual. Milwaukee is home to a great number of talented students, and we want to continue to provide them with the foundation for a quality education and opportunities for career advancement,” said Steve Radke, president of the Northwestern Mutual Foundation. “We are thrilled so many additional students will have the opportunity to benefit from the education of these three schools.”
Notre Dame School of Milwaukee, St. Marcus School, and St. Augustine Preparatory Academy are high-performing schools serving students from some of the company’s partner neighborhoods within Milwaukee and recipients of the company’s financial support.
The Northwestern Mutual Foundation is investing in a $2 million bridge loan to Notre Dame School of Milwaukee to help purchase a third campus and increasing the number of high quality education seats, which will serve more than 300 students at the school’s new building over the next few years. The two grants will be issued to St. Marcus School and St. Augustine Prep with $450,000 and $225,000, respectively, adding capacity at the two schools.
Learn more about the schools and the company’s support here: www.northwesternmutual-foundation.com
About Northwestern Mutual Foundation The mission of the Northwestern Mutual Foundation is to improve the lives of children and families in need. The Foundation has given more than $400 million since its inception in 1992 and is designed to create lasting impact in the communities where the company’s employees and financial representatives live and work. We accomplish this by combining financial support, volunteerism, thought leadership and convening community partners to deliver the best outcomes. Our efforts are focused nationally on curing childhood cancer, and locally on education, neighborhoods and making our hometown of Milwaukee a great destination. Visit Northwestern Mutual Foundation to learn more.
About Northwestern Mutual Northwestern Mutual has been helping people and businesses achieve financial security for more than 165 years. Through a comprehensive planning approach, Northwestern Mutual combines the expertise of its financial professionals with a personalized digital experience and industry-leading products to help its clients plan for what’s most important. With more than $558 billion of total assets being managed across the company’s institutional portfolio as well as retail investment client portfolios, nearly $35 billion in revenues, and $2.2 trillion worth of life insurance protection in force, Northwestern Mutual delivers financial security to more than five million people with life, disability income and long-term care insurance, annuities, and brokerage and advisory services. Northwestern Mutual ranked 111 on the 2023 FORTUNE 500.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Subsidiaries include Northwestern Mutual Investment Services, LLC (NMIS) (investment brokerage services), broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company® (NMWMC) (investment advisory and services), federal savings bank; and Northwestern Long Term Care Insurance Company (NLTC) (long-term care insurance). Not all Northwestern Mutual representatives are advisors. Only those representatives with “Advisor” in their title or who otherwise disclose their status as an advisor of NMWMC are credentialed as NMWMC representatives to provide investment advisory services.
In the world of sports, only a handful of names can rival the legendary status of Lionel Messi.
Known as the Messi-ah of soccer, the Argentinian athlete has racked up countless achievements and awards, including the elusive World Cup in 2022, which took him 16 years to finally win.
When he’s not busy scoring goals and making defenders question their life choices, Leo Messi is living it up in his seriously swanky mansions and condos. He has a net worth of around $600 million, so it comes as no surprise that Messi would splurge on his homes.
With properties in different parts of the world, many fans wonder – “Where does Leo Messi live now?”
The star athlete has been busy growing his real estate portfolio since 2017, so it can be hard to keep up with his whereabouts. But, as he is currently playing for Inter Miami, he has now settled in Vice City.
And while he’s still keeping things under wraps — until he finds the right mansion to put down roots in Miami — we’ve put together a list of Lionel Messi’s houses and condos in recent years, to give you an idea of the soccer star’s options when it comes to housing.
Lionel Messi bought a couple of million-dollar condos in Miami
Back in 2019, before his MLS move to Inter Miami, Messi dropped $5 million to buy an oceanfront condo unit at Porsche Design Tower in Sunny Isles Beach.
His unit totals 3,555 square feet and has three bedrooms and four-and-a-half bathrooms (swipe for pics).
The 60-story luxury condominium offers ultra-luxurious amenities, including a car elevator that allows residents to drive their cars straight to their apartments, providing privacy for high-profile celebrities and billionaires. Messi reportedly sold his unit for $7 million in 2021.
Later, he purchased another luxe Miami penthouse at the Regalia Residences, just 10 blocks away from his first condo.
Messi decided to go big on the upgrade and purchased the whole ninth floor for $7.3 million.
The four-bedroom penthouse has lots of living space, with floor-to-ceiling glass windows that framed the scenic beach views perfectly. Seven months after he closed the deal, Lionel Messi’s condo was relisted and ended up back on the market.
He lived in a lavish mansion in Barcelona
Prior to his move to the States, Messi’s primary residence was a lavish mansion in Barcelona.
He built the property in the upscale Bellamar neighborhood in Castelldefels. According to reports, he bought the house in 2009 for $2 million and spent millions more on renovations. It is rumored that he bought the adjacent lot as well, just because the neighbors were too noisy and he wanted some privacy.
The mansion features modern architecture and Mediterranean-themed indoors, with hardwood floors and spacious living areas.
Outdoors, there’s a large garden, a barbeque pit, a pool, and a small playground for Messi’s kids. To keep himself in good shape, Messi also had a small football field installed on the side of his house.
Messi, along with his wife Antonela Roccuzzo and their three sons, stayed in this mansion for over a decade while he was still playing for Barcelona. It remains unclear if he still owns this property or if he sold it after he switched teams.
Reports say that Lionel Messi also purchased a property near his childhood home in Rosario, Argentina, so he can visit his hometown whenever he wants. Details of this home have been kept secret to protect his family’s privacy.
Leo Messi also has a growing hotel portfolio
Messi doesn’t hold back in his pursuits and this extends to his ventures in the realm of real estate.
He entered the hotel business in 2017 and acquired MIM Hotels, managed by Majestic Hotel Group, run by his brother Rodrigo.
Over the past years, the footballer-turned-hotelier has been adding more properties to his hotel chain. Now, the group owns six hotels with locations in Sitges, Ibiza, Majorca, Baqueira, Sotogrande, and Andorra.
Many football fans can’t help but compare Messi to his rival Cristiano Ronaldo, who also runs a chain of hotels. The two superstar athletes can’t seem to shake off the competition even off the field. Messi, however, leads the business game with his expanding luxury hotel chain.
Loving life in Miami
While there have been no reports on where Leonardo Messi lives in Miami, it looks like he and his family have settled into their new life in the US. They were spotted shopping for groceries in the local supermarket, all in casual clothing, looking cheerful and perfectly at ease.
In an interview, Messi shared how happy he is with his decision to move to the States.
“I came here to play and to keep enjoying soccer which is what I loved my whole life and I choose this place because of all those things,” he said.
“I can tell you that I am very happy with the decision I made and for how my family and I live our day-to-day lives and how we enjoy the city and this new experience and how the people received us from the first day, from the people of Miami and the people of the US in general.”
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LOS ANGELES — Sales of previously occupied U.S. homes fell in July to the slowest pace since January, as elevated mortgage rates and a stubbornly low inventory of homes on the market combined to discourage many would-be homebuyers.
Existing home sales fell 2.2% last month from June to a seasonally adjusted annual rate of 4.07 million, the National Association of Realtors said Tuesday. That’s below the 4.15 million pace that economists were expecting, according to FactSet.
Sales slumped 16.6% compared with July last year. It was also the lowest home sales for the month of July since 2010.
The annual sales decline was steepest in markets across the Northeast and Midwest, where sales slumped 20% or more, the NAR said.
Despite falling sales, competition for a near-historic low level of homes on the market helped drive prices higher. The national median sales price rose 1.9% from July last year to $406,700, marking the first annual increase in prices since January.
The shortage of homes for sale has kept the market competitive, driving bidding wars in many places, especially for the most affordable homes. Roughly 35% of homes sold in July fetched more than their list price, said Lawrence Yun, the NAR’s chief economist.
“At least when it comes to home prices, it looks like the housing recession is already over,” Yun said.
All told, there were 1.11 million homes on the market by the end of last month, an increase of 3.7% from June, but down 14.6% from a year earlier, the NAR said.
Homes listed for sale in July typically sold within just 20 days, with 74% staying on the market for less than a month.
All told, the number of homes on the market at the end of July amounted to a 3.3-month supply at the current sales pace. In a more balanced market between buyers and sellers, there is a 5- to 6-month supply.
The combination of high borrowing costs and intense competition for the most affordable homes on the market is keeping many first-time buyers on the sidelines. They accounted for just 30% of home sales last month, though that was up from 27% in June, the NAR said.
“There’s virtually no inventory at the lower price point,” Yun said.
The latest housing market figures are more evidence that many house hunters are being held back by a persistently low inventory of homes for sale and rising mortgage rates.
The average rate on a 30-year home loan hovered just below 7% last month and has continued climbing, reaching 7.09% last week, according to mortgage buyer Freddie Mac. The average long-term U.S. mortgage rate is now at its highest level in more than 20 years.
High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already unaffordable to many Americans. They also discourage homeowners who locked in those low rates two years ago from selling.
Mortgage rates have been rising along with the 10-year Treasury yield, lenders use to price rates on mortgages and other loans. The yield has been climbing as bond traders react to more reports showing the U.S. economy remains remarkably resilient, which could keep upward pressure on inflation, giving the Federal Reserve reason to keep interest rates higher for longer.
I mentioned yesterday that the National Association of Home Builders was in Washington looking for their own bailout, and now we have some more details, startling ones at that.
The NAHB wants mortgage rates reduced (subsidized) to as low as 2.99 percent on 30-year fixed-rate conventional mortgages purchased between January 1 and June 30 of this year, followed by rates of 3.99 percent for the latter half of the year.
Additionally, they want the current $7,500 home buyer tax credit bumped up to 10 percent of the home’s purchase price, capped at 3.5 percent of local FHA loan limits.
That would result in a range between $10,000 and $22,000, available to all purchasers, and would come with the elimination of the recapture provision.
The whole plan is being coined as “Fix Housing First,” with the hope it becomes the main focus of the pending stimulus plan bouncing around Washington.
And now for the shocking part: “The excess housing inventory in today’s market is the result of unprecedented foreclosures, not overbuilding. That’s why we support Sheila Bair’s foreclosure relief plan and any common-sense proposal to alleviate the foreclosure problem,” NAHB chief Jerry Howard said in a statement.
So the excess supply of housing inventory is not the result of overbuilding? Hmm…
If I recall, the foreclosures came after years of overbuilding that eventually led to an oversupply and subsequent price depreciation.
Face it; you can’t take a drive for more than 20 minutes in a metropolitan area without coming across a new, sprawling development full of vacant cookie-cutter homes.
And it’s near impossible not to pass a corner where a young sign-spinner is urging you to check out the latest, new development full of “luxury” condos and single-family homes.
So what’s the big plan for the homebuilders? Lower rates to fill up all their vacant, new properties with more families so they can cut their losses and run? How long before that backfires and we’re in an even bigger mess?
Let’s face it; the Internet has led to the demise of many long-standing brick-and-mortar businesses, like the yellow pages, or travel agents, to name just two that come to mind.
And now it appears as if another popular profession is at risk, real estate agents.
Yep, Google finally made a major move in the real estate realm today, announcing a $50 million investment in Auction.com, a well-established website for buying and selling real estate online.
Last year, Auction.com sold over $7 billion in real estate via more than 35,000 auctions. And since 2010, the company has reportedly sold nearly $20 billion in so-called real estate assets.
Google Capital, which was formed just last year, made the investment, giving them a roughly four percent stake in Auction.com based on its $1.2 billion valuation.
As part of the investment, Google Capital will gain a seat on the board of Auction.com, along with a board observer position.
As for what Google plans to do with the investment, partner David Lawee noted in the press release that they think Auction.com can “fundamentally change” how real estate is bought and sold by leveling the playing field for smaller investors.
Lawee also seemed particularly interested in commercial real estate, meaning residential real estate agents probably don’t need to worry, yet.
At the moment, Auction.com is focused primarily on distressed real estate, such as bank-owned homes, foreclosures, notes, land, and commercial property.
So it’s not as if an everyday Joe is going to use Auction.com instead of their neighbor who also happens to be a real estate agent.
Google Real Estate Coming Soon?
At the moment, there isn’t a “Google Real Estate” division at Google, at least not publicly. In fact, some random guy seems to own the domain name GoogleRealEstate.com.
There is a Google Real Estate team, but I believe they focus on Google’s own properties, keeping the Zen for employees by creating beautiful campuses.
And if anything, Google took a step back from real estate in recent years. In 2011, the company pulled real estate listings from Google Maps, citing low usage as a reason, along with other “excellent property-search tools” that were readily available.
So is this another experiment for Google, or the beginning of a major foray into real estate?
After all, companies like Zillow, Redfin, and Trulia are making big money, with two of the three publicly traded and Redfin soon to be.
Could we soon see local real estate listings in Google’s search results, or back on maps? Or something even more robust? Only time will tell, but either way, I don’t see the real estate agent going away anytime soon.
At the end of the day, you need a physical human to help navigate the oft-confusing process, at least for now.
Sure, buyers are doing a lot more of the legwork nowadays thanks to those real estate listings websites, but someone still needs to negotiate and handle the paperwork.
However, major players in the field should be on notice now that Google has pledged a decent chunk of change toward real estate.