Real estate investors are great for repeat and referral business—if you’re the right type of real estate agent. Hear how to be an investor-friendly agent on this podcast with James Dainard. James is a co-host on BiggerPockets’ On the Market podcast, and he’s been in this industry for over a decade. On today’s show, James shares what Realtors can do to service investors, where to find investment opportunities right now, and why all agents should niche down for more deals.
Listen to today’s show and learn:
James Dainard’s start in real estate [3:04]
Starting a real estate business in a very bad market [4:52]
About Heaton Dainard Real Estate [7:36]
Some of the best real estate clients: real estate investors [9:01]
The Austin real estate market and opportunities for agents [11:04]
How to start working with investor clients [12:05]
Why market adjustments have such a major impact on land values [17:10]
Real estate trends in Oregon and Washington [18:17]
Buyer clients chasing affordability [21:07]
Paying attention to the economy to find better business opportunities [24:15]
James’ recent real estate investments [27:47]
Educating your buyer clients [31:11]
How to find prospective sellers in a shifting market [33:03]
Why you should write your own real estate scripts [36:58]
Advice for brokers and real estate business owners [40:40]
Niching down for more deals [41:37]
About BiggerPockets’ On the Market Podcast [45:02]
James Dainard
As a Managing Principal of Heaton Dainard Real Estate, James is responsible for the development and execution of corporate strategies, marketing, and property acquisitions.
James has been actively investing in multifamily and single-family units in the Puget Sound region for over 12 years and has lead his team to over 3,000 transactions. His over a decade of experience investing in multi-family and single-family units in the Puget Sound region has guided Heaton Dainard to more than 131 million in sales volume from 265 transactions in 2021. James has received multiple awards and recognition for his role in growing Heaton Dainard into one of Washington’s Fastest Growing Private Companies for 2013, 2014, 2015, and 2016. Puget Sound Business Journal also recognized James as a 40 under 40 honoree.
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It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.
Travel demand between Asia and the U.S. is roaring, and United Airlines is looking to get on board.
The Chicago-based carrier announced an expansion of its Pacific schedule this winter, taking advantage as demand surges following broad reopenings across Asia.
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United will start with a brand new route between San Francisco International Airport (SFO) and Manila Ninoy Aquino International Airport (MNL) in the Philippines, with daily service beginning Oct. 29.
With the new route, United will become the only U.S. airline to fly between the contiguous U.S. and the Philippines, although it’s actually the airline’s second route to Manila. United already flies daily to Manila from its Micronesian base at Guam International Airport (GUM) on Boeing 737-800 aircraft.
The flight from SFO, on the other hand, will operate on United’s largest aircraft, the Boeing 777-300ER. That aircraft is equipped with Polaris business class seats and a premium economy cabin, giving passengers options for the nearly 7,000-mile flight.
Landing gear in the kitchen? Touring United’s renovated Chicago headquarters in the Willis Tower
While no U.S. airline currently flies to the Philippines, Philippine Airlines flies from Manila to GUM, SFO, Honolulu’s Daniel K. Inouye International Airport (HNL), New York’s John F. Kennedy International Airport (JFK) and Los Angeles International Airport (LAX).
United also announced two other new routes, including the restoration daily service from LAX to Tokyo Narita International Airport (NRT) starting on Oct. 28. United previously operated that route before shifting it to Tokyo’s Haneda Airport (HND). The new Narita route will exist alongside the Haneda flight, making for two daily departures from Los Angeles to Tokyo. The airline will use a 787-10 to Narita.
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Finally, the airline will begin flying from Los Angeles to Hong Kong International Airport (HKG) with daily service starting Oct. 28, complementing an existing route from SFO. That flight will be operated with a Boeing 787-9 Dreamliner.
More from TPG: The best credit cards for United Airlines flyers
As part of the announcement, the airline also said it would add a second daily flight between SFO and Taoyuan International Airport (TPE) in Taipei, Taiwan, using a Boeing 777-200ER.
The new service comes several months after United announced a substantial expansion of its South Pacific and Oceania network. With the new routes, United says it will fly to 15 different transpacific long-haul destinations this winter — more than other U.S. carriers.
The expansion and associated demand comes on the tail of a similar boom in the transatlantic market. It saw more demand than airlines could keep up in 2022 and this summer following the closed borders of 2020 and 2021.
In contrast to its competitors, United took a risky approach during the pandemic by keeping its entire wide-body fleet rather than retiring any of those larger aircraft to reduce costs. While some planes were put in storage during the peak of the pandemic, the airline could still bring them back into service to maximize the sudden increase of demand following reopenings.
It’s an approach that the airline says paid off. The share of international flights in the airline’s network is 2% larger than in 2019, Patrick Quayle, United’s head of international network planning, said during a conference call on Monday ahead of the announcement.
The key, Quayle said, is trying to grow “responsibly,” capturing demand where it exists and where it’s growing while not overcommitting resources.
In the case of the Pacific, demand has been surging. However, that has varied by region, so the airline is trying to be strategic in how it’s adding capacity.
“Tokyo started off the year a little weak,” Quayle said. “But as Tokyo opened up to global travel, it’s really gone gangbusters.”
Moves by rivals: Sayonara, Narita: The Rise and Fall of Delta’s Tokyo Hub
Notably, the announcements centered around United’s West Coast hubs and excluded Newark Liberty International Airport (EWR), which has been in the spotlight following operational struggles ahead of the July 4 holiday week.
United operates a nonstop flight to Tokyo Narita from Newark. It previously flew to Hong Kong as well.
Quayle said that although the airline was working to shore up its Newark operation and was “not rethinking our international network out of Newark,” it had no plans to add service to Asia from the East Coast hub anytime soon. Quayle said restrictions on flying through Russian airspace create range issues for anything beyond the Northern Pacific, while flights to mainland China remain limited due to ongoing trade tensions.
Nevertheless, the Pacific announcement represents another phase in the reopening and resumption of travel, and with Manila, expansion is back in the skies.
Global real estate investment network iintoo has now acquired the assets of RealtyShares as part of a joint venture. The move increases iintoo’s portfolio from $1 billion to $2.5 billion in assets under management. The purchase catapults iintoo into a market leadership position, which will benefit investors via the company’s disruptive approach to crowd-sourcing real estate investments.
With average annual yields of 16.63%* on average, iintoo has proven its disruptive approach effective. The network of iintoo will reach a community of 200,000 registered investors, offering them the opportunity to access premium, highly vetted deals under the company’s expert management. Eran Roth, CEO of iintoo had this to say about the acquisition:
“This event is a watershed moment for iintoo, the industry and investors. The real estate business has historically been an exclusive club, lagging in technological innovation and accessibility for retail investors, but in the last five years, we have seen significant disruption led by forward-thinking startups. Our platform and approach have allowed individual investors to gain access to premium real estate investment opportunities while providing the industry’s first equity protection program.”
RealtyShares was the second largest online real estate investment platform in the United States before the company stopped taking deals in 2018. At that point, RealtyShares had $400 million in equity from its investors. So, order to oversee RealtyShares’ assets, iintoo has formed a joint venture with RREAF Holdings, LLC to take over management activities for the active investment portfolio.
The former and current investors in RealtyShares will now get access to iintoo’s platform and investment opportunities. Shoshana Winter, iintoo’s Managing Director in the U.S, offered this via the company’s press release:
“The iintoo model has transformed the way people think about and invest their money. Our vision is to take the success we have seen to date and continue to offer new and alternative asset classes to our expanded base of investors. We are confident that our innovative investment platform, our equity protection product** and our data-driven, curated approach to delivering premium investment opportunities will make us a leading brand that investors can depend on as they seek new ways to diversify their portfolios.”
Crowd-sourced funding opens new avenues for financing real estate for property owners and developers as well. The iintoo investment portfolio includes income-generating multifamily properties, commercial real estate, retail, and mixed-use properties, with a focus on projects in developing cities, as they have proven to perform well despite economic downturns. Acquiring RealtyShares pushes iintoo into a leading position in this market category, enabling the company to accelerate its global presence in the years ahead.
* The exit annual yield is equal to the ratio between the total profits from the equity investment (before tax) and the total raise (amount invested by iintoo’s equity investors in the project) divided by the investment term.
Phil Butler is a former engineer, contractor, and telecommunications professional who is editor of several influential online media outlets including part owner of Pamil Visions with wife Mihaela. Phil began his digital ramblings via several of the world’s most noted tech blogs, at the advent of blogging as a form of journalistic license. Phil is currently top interviewer, and journalist at Realty Biz News.
Every American Airlines plane flies for hundreds of hours, carrying thousands of passengers for miles across the globe. But after a while, even the most reliable aircraft needs a break. For some of them, that break comes at a sprawling 3.3 million-square-foot facility in Tulsa, Oklahoma.
Functioning as its own ecosystem within Tulsa, this facility’s various hangars and warehouses are where the airline’s planes are picked apart. Seats and engines are refurbished. Exteriors are repainted to sport red, white and blue stripes along the tail fins.
These are only some of the many tasks that occur in this spacious, maze-like facility. Hangars upon hangars stretch across the massive property by a National Guard base and an Amazon warehouse.
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“It’s like a city within a city,” Barbara Cruz, a store supervisor at American’s Tulsa facility, said.
Thousands of American planes have gone through Tulsa since 1946, when the Fort Worth-based carrier relocated its maintenance base from LaGuardia Airport (LGA) to the old oil capital following World War II.
The base — a major hub for American’s maintenance operations — now has about 4,800 employees and claims to be one of the largest commercial aviation bases in the world.
At any given time, the facility can hold up to 20 narrow-body aircraft in its hangars; 800 commercial planes pass through it annually.
In 2020, American unveiled plans to invest $550 million in the Tulsa base to construct a new wide-body hangar and make improvements to each building in the facility. The new hangar should’ve begun taking shape in early 2021, but its construction start date was pushed back due to the coronavirus pandemic. It will be able to hold two wide-body (or about six narrow-body) aircraft at a time.
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Despite the renovation delays, the Tulsa base serves as an important destination for many American aircraft. It handles every bit of maintenance for a plane, from cleaning out toilets to inspecting engines.
Boeing 737s and 777s are the jets that primarily make their rounds in Tulsa. The aircraft either go through heavy, routine or unscheduled maintenance in a process that’s similar to surgery.
“We document all the findings,” Ed Sangricco, the managing director at the Tulsa base, said. “We go in, and we fix all those findings. We close the airplane, we put it back together again, and then we check everything — we make sure everything works.”
While the pandemic halted travel and grounded planes worldwide, that didn’t stop the maintenance technicians, engineers, managers and supervisors in Tulsa. American’s aircraft technicians were tasked with maintaining roughly 100 aircraft already at the base to prevent corrosion (and to stop weeds and birds from infesting the crevices of the planes). That meant remote work wasn’t an option for the employees at the Tulsa base.
Airlines received billions of dollars from the federal government during the pandemic partly to keep their fleets in tip-top shape, so they would be ready when travel demand returned.
“Maintenance requirements don’t stop during COVID-19,” Sangricco said.
Related: 6 incredible facts about the Boeing 777
What it takes to maintain a plane
Maintaining a commercial plane is a complicated process. Hearing all the steps to ensure an aircraft is running smoothly — all over the course of an eight-hour tour — was similar to taking a college crash course in physics and engineering.
Aircraft maintenance is heavily governed by the Federal Aviation Administration, which has a set list of requirements and deadlines for every plane component. Every record chronicling the maintenance of an aircraft needs to be preserved to be in compliance with the FAA, according to Roger Steele, a supervisor at the Tulsa facility who specializes in 737 narrow-body maintenance.
So, document holders containing slips of paper that detail every task from the FAA line two walls of an office within a 737 hangar at the Tulsa base.
At the start of a visit, a 737 narrow-body will undergo about 1,200 required tasks — excluding non-routine inspections — before it can fly again.
The Tulsa facility is never quiet. Throughout my tour of the maintenance site, I could hear constant drilling noises and the occasional thunderous engines of a National Guard plane taking off a couple of miles away as Steele explained the ins and outs of narrow-body maintenance.
The 737 I saw in the hangar had already been stripped down, as it was in its fifth day of maintenance. (The crew at American has around 25 days to completely finish work on the plane.)
The seats, the walls and the flooring were completely gutted from the aircraft. All that was left inside were gray insulation bags on all sides, which made the 737 look more like a cave than a plane.
Inside, technicians were already hard at work. One was by the plane’s back door, critically documenting what parts had been affected by corrosion.
While several areas can suffer from corrosion, a plane’s galleys and lavatories are the most susceptible to corrosion and environmental damage, as moisture from toilets and soft drinks wear down the interior.
“What coffee and soda pop can do to an aircraft after humans consume it is very corrosive,” Steele joked.
Once the technician documented the damage, the next step was determining what parts needed reinforcement. One piece of metal in the galley suffered from corrosion, so the technician sanded the area and recorded its remaining structural thickness.
Like the maintenance process itself, refurbishing an aircraft is anything but glamorous. At the Tulsa base, the majority of hangars and buildings have no air conditioning, leaving most of the workers stuck toying away at engines and aircraft in the sweltering summer heat.
When I toured the site, it was already a muggy 90 degrees, but Tulsa summers can soar well into the 100s during the season’s peak.
For some, the day starts early. Robert Bales, a maintenance technician who works on wide-body half galleys, normally wakes up at 5 a.m. for his 6:30 a.m. shift.
Each technician works around 8 1/2 hours. Much of the schedule, specifically for cabin work, is determined by the crew chief and the needs of the aircraft.
Before someone can start working at the facility as a technician, they must undergo significant training.
Gabriel Figueroa Navedo, another wide-body aircraft technician, said he went to trade school to receive an FAA-issued aircraft technician license. There, Navedo — who first started his career managing reservations and bookings for American — learned extensively about topics like hydraulics and electricity.
However, Navedo said many of those skills do not directly apply to his day-to-day job. Instead, the training provided a general knowledge of planes.
“I like to call it a license to learn,” Navedo said, “because it’s got to cover stuff like small propeller engines, and the FAA doesn’t know if you’re gonna work here, or if you’re gonna be working on your own private plane.”
Related: What it’s really like at flight attendant training
Even the seats and toilets need a makeover
When an aircraft’s seats need refreshing, the plane goes to a different warehouse, where the seats get disassembled. During this process, technicians tend to find all sorts of trash underneath, including gum, candy, pills, credit cards, cellphones and iPads.
“You’re gonna find no telling what,” Brent Strickland, a supervisor who primarily works on Boeing 777s and 787s, said.
Strickland said he has even found false teeth and engagement rings inside the seats.
After removing the various items passengers leave behind, the seats are washed and left to dry. Then, the technicians check the hardware for any damage.
Cushions are changed about every six years, according to Strickland, and it only takes two to three days to completely finish a seat.
It’s not just the seats that need refurbishing during maintenance — the toilets also get picked apart. The waste tanks are cleaned out, and the flushes are inspected by another team of technicians dedicated to toilet maintenance. Strickland described those team members as “another one of those unsung heroes.”
Dee West, a technician, cleaned out a water valve during my tour, closely inspecting the valve under the scope of a flashlight before carefully reassembling the three parts and a spring in the pipe.
“It ain’t no joke,” he said. “It’s gotta be done right.”
One mistake by a toilet technician could be costly for the airline, as each toilet costs $17,000.
Perhaps surprisingly, this area of focus is one of the more desirable on the Tulsa base, according to an American spokesperson. That’s because it’s one of the few jobs workers can do inside an air-conditioned building — providing a reprieve from the otherwise hot and muggy weather Tulsa experiences every summer.
Engines, windows and other plane parts also get a makeover, depending on the aircraft’s maintenance schedule. This includes the fans and combustive parts of the engine, which the staff works on separately in “cold” and “hot” rooms within another hangar, respectively.
Blue lines on the walls demarcate the “cold” parts of the room, whereas painted yellow lines indicate the “hot” area.
Staff members also inspect some parts of the engine by soaking them in a fluorescent lime-green liquid to magnify which parts need to be reinforced.
Whenever parts like the wings and the radome — located at the tip of the plane — need a lift, they are sent to a composite center. There, they get reinforced with materials such as carbon fiber and a honeycomb web made from materials like aluminum.
“[It’s] poetry in motion,” Jody King, a composite repair center crew chief at American’s composite repair center, said when referring to the process of fitting the materials onto parts of the aircraft.
The reason this complex web of maintenance is even possible is because American’s site also has a warehouse containing thousands of parts and stickers. These parts are either shipped to other hangars in Tulsa or to airports and third-party services that need to do maintenance on an aircraft.
Related: Take a look inside Air New Zealand’s unique cabin innovation laboratory
Gearing up to fly again
Before a plane is ready to fly again, the landing gear — the wheels on the plane, in layman’s terms — must be checked, and the exterior must be repainted and rewaxed.
You may not notice the gargantuan size of planes since you typically only see them from afar in the sky or through the windows of an airport. However, were you to see one up close, you’d be struck by the size.
The landing gear alone measures at least 21 feet tall, roughly the equivalent of four people my height (I’m around 5 feet, 4 inches) standing on top of one another.
The wings also feel so vast it almost seems impossible that workers can repaint them by hand in a matter of days; the team uses foam rollers and brushes, according to Jeff Green, a shared services supervisor.
Once the plane completes its maintenance maze in Tulsa, it’s ready to return to the skies and fly to hundreds of destinations. Later, it’ll likely touch down in Tulsa yet again to go through the same routine.
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Average mortgage rates have fallen for the first time in months, new data has revealed.
Data published by financial information company Moneyfacts shows that two and five-year fixed-rate deals have dropped for the first time since the spring.
The average rate on a two-year fixed deal is 6.79 per cent, down from 6.81 per cent. Meanwhile, the average five-year rate has dropped from 6.33 per cent to 6.31 per cent.
The average two year tracker mortgage has remained unchanged, at 6.03 per cent.
It comes after a surprise drop in the rate of inflation, from 8.7 per cent to 7.9 per cent.
The Office for National Statistics (ONS) revealed that the rate of increase had “slowed substantially” to its lowest annual level since March 2022.
Experts have forecasted that the drop means that the Bank of England is less likely to keep interest rates higher for longer, taking pressure off of mortgage holders.
While core inflation has dropped back after May’s 30-year high, it is still well above the Bank’s official 2 per cent target – estimated at around 5.75 per cent.
Less than two years ago, in October 2021, the average rate on a five year mortgage deal was just 2.55 per cent.
Inflation in the UK remains the highest in the G7 group of rich economies. The government said inflation figures were finally “moving in the right direction”. However, chancellor Jeremy Hunt said that “we aren’t complacent and know that high prices are still a huge worry for families and businesses”.
Some financial experts have predicted that the Bank of England could increase the base rate beyond 6.5 per cent by early next year – pushing up mortgage rates and pressure on homeowners.
Mark Harris of the SPF Private Clients mortgage broker said some lenders may start to reduce pricing if inflation continues to fall and swap rates – which lenders use to price their mortgages – begin to ease.
“There is a strong argument for the Bank of England to pause interest rate rises for now, giving the market time to settle down and adjust,” he said.
UK house price inflation in May this year was running at about one-seventh of the levels seen at the end of last summer – around £7,000 below a recent peak seen in September 2022, according to the official figures.
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Housing demand collapsed in 2022, and the homebuilders’ confidence survey looked like a waterfall collapse similar to during COVID-19 and the great financial crisis. However, something changed toward the end of 2022, and the homebuilders are now singing Party Rock Anthem as their confidence levels have increased along with their stock prices.
As we can see in the chart below, the NAHB/Wells Fargo Housing Market Index (HMI) data, which surveys homebuilders, is above 50 again. This means homebuilders are feeling confident enough to issue more housing permits, as we have seen growth in single-family permits the last few months.
The housing market, in general, turned on Nov. 9, 2022. (I go over that more in detail on this episode of the HousingWire Daily podcast.) However, even though the housing dynamics changed, existing home sales aren’t enjoying the growth in sales like the new home sales sector.
On Wednesday we got the housing starts data, and the builders are starting to push growth in single-family permits. Last year, people were talking about a second housing bubble crash, saying the builders had too many backlog orders to issue new permits. What a difference a year makes!
From Census:Building Permits: Privately‐owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,440,000. This is 3.7 percent below the revised May rate of 1,496,000 and 15.3 percent below the June 2022 rate of 1,701,000. Single‐family authorizations in June were at a rate of 922,000; this is 2.2 percent above the revised May figure of 902,000. Authorizations of units in buildings with five units or more were at a rate of 467,000 in June.
The builders are making money, not building homes to address the housing inventory shortage. They’re selling homes at the highest profit possible, which makes sense — it’s their business. Last year, we had the biggest one-year collapse in housing sales, but it didn’t create much active listing growth. Even today, we are near multi-decade lows.
From NAR data:
2007 total active listings: 4 million
2023 total active listings: 1.08 million, down year over year too.
Our demographics for home buying are better in the years 2020-2024 than in the previous decade; sadly we didn’t have enough product for them.
So the builders went to work making deals — they’re very efficient sellers. When they need to, they will cut prices and provide lower mortgage rates than what existing homebuyers are getting to move their product. They have done that as new home sales are up 20% year over year, while existing home sales are down 20% year over.
How? Their profit margins are still above pre-pandemic levels, so they have margin to spare, and not every home they sell gets this treatment either. Now you can see why their stocks have done so well. For example, I always reference Toll Brothers‘ stock price since the significant Nov. 9 date.
In this environment, homebuilders have an advantage they didn’t have before, as total active listings were too high, giving people more choices from 2007-2019. Now the builders have pushed down the monthly supply to 6.7 months, almost back to pre-COVID-19 levels, as the chart below shows.
This is why the homebuilders have been so happy lately and why their stocks have done so well. You can add this to the list of things that don’t happen during a housing bubble crash. Last year was a crazy year, and I understand why the usual housing bubble crash people went all in; I mean, it’s year 12 of the housing bubble 2.0 crash!
However, some other people who don’t usually fall for the crash premise joined the party, and as I have stressed for many years, using 2008 housing economic models simply doesn’t work this time. (See my debate last year with a stock trader on this subject here.)
Part of the problem I have seen over the last decade is that everyone is too focused on existing home prices crashing and not the economics of housing. Remember, economics done right should be boring and you always want to be the detective, not the troll.
Eurostar passengers can now avoid UK border checks by having their face scanned
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Some Eurostar passengers passing through London’s St. Pancras International Station will now be able to use a facial verification system instead of manual ticket and passport checks.
The new technology, called SmartCheck, aims to reduce passport and ticket check lines at St. Pancras and is currently being tested for Business Premier and Carte Blanche customers. Eurostar hopes to roll out the technology for more customers if early trials prove successful.
Eligible passengers are directed to use an app before traveling to scan their travel documents and verify their face and ticket. Once at the station, they can use special screens to scan their face before proceeding through check-in.
While SmartCheck will be used to verify passports and tickets, baggage will still be scanned by the security staff. Border officials at your destination will also continue to check passports for now.
Related: How to earn loyalty rewards with European train travel
“SmartCheck in St Pancras International station is a solution for a faster and seamless check-in experience,” Eurostar CEO Gwendoline Cazenave said. “By introducing SmartCheck, we become the first rail travel operator to adopt biometric face verification. This innovation will enhance our customer departure journey, which is crucial to provide Eurostar’s unique travel experience.”
Regular Eurostar travelers will no doubt embrace the efforts to speed up the check-in process at St. Pancras; the station has seen check-in times increase after French border officials introduced additional checks post-Brexit.
While Eurostar is the first rail operator to utilize facial recognition in this way, it’s not the first time that the technology has been used within the travel sector in the U.K. London’s Heathrow Airport (LHR) began testing facial biometric scanners in 2019, before dropping the project when the COVID-19 pandemic hit in 2020.
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Cruise passengers do not get bumped as often as airline passengers do, and you aren’t likely to find out there’s no room for you on the ship during the boarding process the way you might on a flight. But cruises can be oversold or canceled in advance for a variety of reasons.
Cruise lines employ some of the same approaches to inventory management as their airline counterparts, resulting in the ever-dreaded bumps. Plus, ship upgrade initiatives or mechanical repairs may cause changes to itineraries departing within weeks, months or even years.
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But wait, some of us don’t dread airline bumps — we may, in fact, seek them out. Could the same apply to cruising? The biggest difference is that you’ll rarely be able to volunteer to be bumped, though that can happen in some situations. For example, Royal Caribbean overbooked Allure of the Seas earlier this year and contacted passengers to ask if they would voluntarily swap ships or sailing dates to free up rooms.
Whether you get a rare volunteer option or are involuntarily bumped from a canceled or oversold cruise, there’s a chance that you might come out ahead. First, let’s look at the reasons cruise lines bump passengers, then at the kinds of compensation you might expect if you get bumped from a cruise.
Reasons cruise lines bump passengers
Because cruise lines and their passengers have far less flexibility than airlines and flyers, every effort is made to avoid bumping guests that have confirmed cruise bookings — but there are several reasons it can happen.
Probably the most common reason for a cruise bump is maintenance and/or safety. Storms sometimes cause cancellations, and even though cruise lines schedule routine maintenance and upgrades, unexpected problems do crop up between those scheduled dry docks. Think damage from collisions, fires, rogue waves or engine failures — all of which have happened on cruise ships, sending them to the repair dock and resulting in last-minute canceled cruises.
Nobody wants to have their cruise canceled that way, but neither should you want to board a ship that might be less than seaworthy. The events that cause this type of bump often make the news, possibly alerting you to your potential bump before it happens. That’s small consolation for a canceled cruise, but it might allow you to begin rearranging your travel plans a bit sooner.
Related: Are cruises safe? Here’s what you need to know about cruise ship security and safety
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Behind-the-scenes cruise line maneuvers can cause bumps that rarely make the mainstream news. Fleet changes and charter sales are two of those issues. Luckily, both of these types of cancellations usually provide months of lead time for cruise passengers to make changes to their travel plans.
You’d think dry docks are planned well before a ship’s future itineraries are announced, but don’t be surprised if dry docks for upgrades or maintenance are scheduled after cruises start booking. That recently happened with Royal Caribbean’s Freedom of the Seas, causing cancellations of cruises in December 2024 and January 2025. Early planners were bumped from their trips, including holiday sailings.
Fleet changes happen when a cruise line either feels it can make more money from moving a ship to a different destination or occasionally when a destination becomes impossible to cruise to. Currently, the slow resumption of cruising in Asia (especially China) has caused strings of cancellations and bumps.
Fleet changes can also result from ship sales or even transfers between sister companies (like Carnival Cruise Line taking some of sister brand Costa Cruises’ ships). Occasionally these can be short-notice situations, but not usually.
Charter sales are when the cruise line sells a large block or the entire capacity of a ship to a charter company. These sales are worth millions to the cruise line. They generally avoid charters of ships that are already heavily booked, but it does sometimes happen, triggering a number of cancellation emails.
Then there is the oversell. It’s easy to assume that cruise lines could manage their cabin inventory through their complicated multistaged cancellation policies without the need to oversell. After all, guests who cancel their cruise at the last minute are not given refunds. Why can’t the ship sail with a few empty cabins?
Cruise ships often sail with empty rooms, and most lines use upgrade options to eke out a few extra dollars from unsold rooms at the last minute. But the important factor is that cruisers spend hundreds (if not thousands) on things like drinks packages, spa services, port excursions and specialty dining. Empty cabins don’t generate that additional money, so cruise lines oversell popular sailings as airlines do with flights. They hedge their bets, and sometimes the gamble fails.
Related: How to get a free or cheap cruise ship cabin upgrade
What passengers can expect from the cruise line if they are canceled or bumped
In the case of storm cancellations or emergency maintenance needs that occur pre-cruise, you will likely get a refund of your cruise fare or credit toward a future cruise. In general, cruise lines would rather not give out refunds, so they use bonuses of additional future cruise credits if you choose credit rather than a refund. You will get little assistance for your non-cruise travel arrangements unless those were booked through the cruise line.
Fleet changes generally involve offers to move your reservation to a different ship sailing a similar itinerary, the ship you booked on different dates, or a different ship and itinerary altogether. Again, refunds are the cruise line’s least favorite choice, so you may expect bonus credit if you opt to either move your reservation or accept credit for an alternative cruise. Because this kind of bump usually comes with advance notice, the offer you get may not include huge bonuses.
Celebrity Cruises recently had a fleet-change situation roughly six months out and offered affected guests alternative cruises and as much as $500 toward ancillary travel cancellation or change fees, which might not be enough to cover nonrefundable airline tickets for many destinations.
Related: 6 tips for booking your 1st cruise
Oversold cruises, though still quite rare, can result in enticing options for those who either accept a voluntary bump or anyone subject to an involuntary one. Possibilities include upgraded cabins on the alternative cruises offered, price freezes so your new booking doesn’t cost more, and a longer cruise than the canceled one at the same rate.
The options you are offered could go the other way, though. During one of its recent oversell situations, Royal Caribbean offered those being bumped from its largest class of ships a replacement cruise on a midsize ship. Sure, it was a similar itinerary, but a cruise on an Oasis-class ship is an entirely different experience than a sailing on a Voyager-class vessel.
Related: The 6 classes of Royal Caribbean cruise ships, explained
The good news is that the closer it gets to the oversold cruise, the better the offers are likely to be. The caveat, though, is that you may already have paid for airfare, hotel stays and other pre- and post-cruise bookings that cannot be canceled without paying a penalty.
Does travel insurance help with cruise cancellations or bumps?
Having travel insurance that covers cancellation of the full amount of your travel, including airline tickets and hotel reservations, is always the safest choice on any cruise. Insurance coverage can be tricky, so read all policy details carefully before you choose.
The first thing to know is you cannot be reimbursed for your cruise fare from travel insurance if you accept a refund, alternative cruise or future cruise credit from the cruise line. Where it can come in handy is if you had already paid for nonrefundable flights, hotel stays or tours before your cruise was canceled or changed.
I checked the fine print on several policies designed specifically for cruises, and none of the policies I looked at would cover your extra costs like nonrefundable airline tickets or change fees if you take a voluntary bump. Even involuntary bumps due to cruise line fleet changes don’t appear to be covered, and forced cancellations due to an oversell by the cruise line are not listed as covered reasons on any insurance policy I checked.
Related: Cruise travel insurance: What it covers and why you need it
If you were really concerned about cancellations, you could purchase a “cancel for any reason” add-on to your insurance plan. These can be pricey and possibly not worth the cost just to protect against an unexpected bump.
Cruise line cancellations due to mechanical failures would likely be covered under the common carrier clause, but only the amounts for which the cruise line doesn’t reimburse you. If your cruise line offers you $500 toward flight and hotel changes, and you are out $1,000, you can file for the extra $500 with insurance. If the cancellation happens before you leave, you’ll use trip cancellation coverage. If it happens after you have left home, you will file under trip interruption coverage.
Insurance payouts for cancellations due to weather have specific conditions regarding when you paid for the insurance coverage (often it must be 14 days before the cancellation) and whether the storm was named or not at the time you purchased coverage.
Related: The 5 best cruise travel insurance plans
Having a ‘Plan B’ may help you come out ahead on cruise bumps
Just knowing that your cruise could be canceled is a good starting point. Consider that situation when deciding on the rest of your travel plans. Perhaps you want to choose the hotel rate that lets you cancel up until 24 hours before your stay, no matter how tempting the lower, prepaid nonrefundable rate looks. The same goes with airfare.
Also, consider what you might do if your cruise gets canceled or changed. If you do book nonrefundable flights or hotel rooms, are you willing to use them even if you don’t take the cruise you planned? Can you change the dates or destinations? Would you consider booking a trip on another cruise line from the same port on the same dates to salvage your vacation — or would you enjoy a land-based holiday in Florida, Seattle or the area around your intended departure port?
Planning for the unexpected is especially important if your cruise is a one-way trip where you fly into one port and home from another (like some Alaska cruises). Having a Plan B is also crucial if your cruise involves a group or an event like a wedding.
What to do if you are notified of a bump or cancellation
When you are notified of a change in cruise plans, the first step is to read the notice carefully to understand your options. If you booked through a travel agency, call your adviser if they do not reach out first. Have them explain the reason for the bump and any options the cruise line offers. A valued agent may even check cabin availability on other sailings for you before they call.
The cruise line will often offer complimentary replacements on smaller ships or slightly different itineraries. If you don’t have an agent, your next step should be researching your options (including cabin availability) before committing to any of the cruise line’s choices. If you are picky about ship size, where the ship stops or cabin type or placement, you wouldn’t want to swap to the proposed alternative sailing if it wouldn’t make you happy.
Once you get a representative (or your travel adviser) on the line, clarify whether your reimbursement options include bonus future cruise credit or a refund. If you’re not offered the compensation you prefer, it never hurts to ask for it. The cruise line wants to keep you as a valued customer and knows it has inconvenienced you. The greater the inconvenience, the more the line might be willing to give.
Related: Is it better to book a cruise through a travel agent? We say yes
Finally, don’t wait too long to decide. You won’t necessarily know how many passengers are being bumped, but it could be hundreds, all scrambling to rebook something. Even if you’re inclined to wait a full year for a replacement cruise, the dates or cabin you want might fill up.
One of the worst situations I’ve heard of was a group of friends traveling together in six cabins. Half were canceled due to an oversell of the cruise. Handling that kind of bump takes coordination among the travelers, as well as with the cruise line. In theory, the reservations should have been linked, which might have avoided the split, but because the cruise lines don’t share their algorithms for who gets bumped, it’s impossible to know how any situation can play out.
Bottom line
If you cruise often, you might eventually be subject to a cancellation or bump. Being prepared with insurance coverage, refundable travel arrangements and a plan for what to do with your vacation time if it happens to you can make a cruise cancellation far less difficult to deal with.
My family once had a cruise trip canceled by a hurricane. Once we got our refunds squared away, we hit the road for what turned out to be an epic road trip. What’s your backup plan?