Economic Conditions - Nashville, TN, U.S., Global

[markhollin]

Tennessee braces for another wave of Covid-19 as case loads start rising again:

https://www.tennessean.com/story/news/health/2021/12/02/omicron-looms-tennessee-braces-another-winter-covid-19/8808555002/
 

[TheRaglander]

2 hours ago, markhollin said:

Tennessee braces for another wave of Covid-19 as case loads start rising again:

https://www.tennessean.com/story/news/health/2021/12/02/omicron-looms-tennessee-braces-another-winter-covid-19/8808555002/
 

My wife and I both had our vaccines and both got "break through" Covid cases.  Her symptons were mild and lasted about 3 days.  Mine felt like the full-blown flu for 2 and a half weeks.  I still don't fully have my scent/taste back yet and I was positive back in September.  Can't imagine what it would have been like if I wasn't vaccinated.  

The narrative needs to change from "get the shot to stop the spread" to "get the shot to stay alive".  Because no matter what we do this thing is mutating and spreading.  

[nashvylle]

5 hours ago, TheRaglander said:

The narrative needs to change from "get the shot to stop the spread" to "get the shot to stay alive".  Because no matter what we do this thing is mutating and spreading.  

Yeah I agree the focus should be that yes you can still get covid after your vaccine, but you won't be in the ICU (most likely).

Praying you have a full recovery!

Edited December 2, 2021 by nashvylle

[Nathan_in_DC]

Yikes... I don't intend to make this too terribly political, but I do wonder how much the impact of the new variant will be since the legislature hobbled the ability of the health departments to respond to this in any meaningful way proactively.

6 hours ago, TheRaglander said:

My wife and I both had our vaccines and both got "break through" Covid cases.  Her symptons were mild and lasted about 3 days.  Mine felt like the full-blown flu for 2 and a half weeks.  I still don't fully have my scent/taste back yet and I was positive back in September.  Can't imagine what it would have been like if I wasn't vaccinated.  

The narrative needs to change from "get the shot to stop the spread" to "get the shot to stay alive".  Because no matter what we do this thing is mutating and spreading.  

I'm afraid that we're at a point where vaccination rates aren't going to get much better than they are without some massive incentives (e.g., you don't get to participate in any public events unless you're vaccinated). 40% of the population has just bought whole-hog into the narrative pushed by some high-profile folks that the vaccine is dangerous and the disease isn't. ANYTHING that goes against that narrative is just shouting into the wind at this point when you're talking to them.

[TheRaglander]

Honestly, big Pharma needs to continue to focus on a "treatment" instead of a vaccine.  The bullseye is changing too much with these variants.  But having something like a Tamiflu that can turn this from "deadly" to "a mild 3 day inconvenience" would be great.  

[Rick Dalton]

That’s already in motion, promising results from Pfizer 

[Licec]

19 hours ago, Nathan_in_DC said:

Yikes... I don't intend to make this too terribly political, but I do wonder how much the impact of the new variant will be since the legislature hobbled the ability of the health departments to respond to this in any meaningful way proactively.

I'm afraid that we're at a point where vaccination rates aren't going to get much better than they are without some massive incentives (e.g., you don't get to participate in any public events unless you're vaccinated). 40% of the population has just bought whole-hog into the narrative pushed by some high-profile folks that the vaccine is dangerous and the disease isn't. ANYTHING that goes against that narrative is just shouting into the wind at this point when you're talking to them.

 

Maybe there should be jail time for these people? Maybe their kids should be taken away? What say you?

Edited December 3, 2021 by Licec

[dmillsphoto]

I say that any further discussion on the topic should occur in the coffeehouse.

[Nathan_in_DC]

New Washington Post article on the proliferation of house-buying by venture capital firms that turn around and rent them out. The articles uses the activities of Progress Residential in buying suburban homes by the dozen in La Vergne, outbidding local buyers and driving up rents and home prices in the process, as a case study for the phenomenon.

Quote

https://www.washingtonpost.com/business/interactive/2021/investors-rental-foreclosure

THIS BLOCK USED TO BE FOR FIRST-TIME HOMEBUYERS. THEN GLOBAL INVESTORS BOUGHT IN.

LA VERGNE, TENN. — The homes on Tammy Sue Lane aren’t fancy. Modest in size and clad in vinyl siding, the houses were priced below $200,000 when most were built about 15 years ago, and for many families in suburban Nashville, they represented a first chance at homeownership.

A corrections officer bought one, and so did a housekeeper and an electrician.

Then some of the world’s wealthiest people bought in.

Over the past six years, 19 of the 32 homes on Tammy Sue Lane have been purchased by a billion-dollar investment venture, part of an unprecedented flow of global finance into the American suburbs. Less than 10 years old, the company has amassed one of the nation’s largest portfolios of single-family houses, becoming the landlord for tens of thousands of families.

The venture, Progress Residential, acquires as many as 2,000 houses a month through the use of a computerized property-search algorithm and swift all-cash offers. Progress executives boast that the company’s efficient management practices have been a boon to their tenants who cannot afford to buy one of the “entry level” homes.

 

[Rick Dalton]

Progress Residential better hope their algorithms have accounted for all risk-factors, growth like that could easily implode. 

[markhollin]

A breakdown of the 2020 U.S. Census stats as they pertain to Tennessee:

https://data.tennessean.com/census/total-population/total-population-change/tennessee/040-47/

[Nathan_in_DC]

23 hours ago, natethegreat said:

Progress Residential better hope their algorithms have accounted for all risk-factors, growth like that could easily implode. 

I was kind of thinking the same thing. A $200,000 investment in a house that is getting $1,800 a month in rent still requires nearly 10 years of rental income just to balance out the initial investment, though you might be able to bring that down to 8 or so years by increasing rents by a few percentage points every year. But, that's not even counting the few-thousand-dollars-a-year in maintenance, property tax payments, refurbishments every 2-3 years when a tenant leaves, and remodels every 5-10 years. And even considering that, $200,000 is the lower end of some of the purchases. This all just screams of an inflated market and a scheme where the top investors that got in early will get out when the company valuation peaks.

[samsonh]

18 minutes ago, Nathan_in_DC said:

I was kind of thinking the same thing. A $200,000 investment in a house that is getting $1,800 a month in rent still requires nearly 10 years of rental income just to balance out the initial investment, though you might be able to bring that down to 8 or so years by increasing rents by a few percentage points every year. But, that's not even counting the few-thousand-dollars-a-year in maintenance, property tax payments, refurbishments every 2-3 years when a tenant leaves, and remodels every 5-10 years. And even considering that, $200,000 is the lower end of some of the purchases. This all just screams of an inflated market and a scheme where the top investors that got in early will get out when the company valuation peaks.

They are certainly borrowing the vast majority of the purchase price, and the cash on cash return makes decent sense I am sure.  I am sure they are counting on some price appreciation, which they will probably get as housing has huge tailwinds the next decade. 

[Mr_Bond]

23 hours ago, Nathan_in_DC said:

New Washington Post article on the proliferation of house-buying by venture capital firms that turn around and rent them out. The articles uses the activities of Progress Residential in buying suburban homes by the dozen in La Vergne, outbidding local buyers and driving up rents and home prices in the process, as a case study for the phenomenon.

 

I would argue that the Federal Reserve's policies have made cheap money available primarily to the wealthy and have contributed to the wealth gap.  Here is a perfect example.  Big investors flush with cash and low interest rates make housing less affordable for those who need it.  When the market drops and the VC firms dump a bunch of houses, it will be another VC firm that buys them in big blocks from the firms in trouble.  These homes may not be owner-occupied for many years.

[smeagolsfree]

Again, please desist from these political rants as it opens a whole can of worms that I nor the other mods want to deal with! It detracts from the discussion, and we don't have time to deal with it. I know where your heart is, but take it to the Coffee House!

[Mr_Bond]

Here's some more details about the Census Bureau information on population movement in 2021.  It would be good to see this on a per capita basis.

https://www.americanexperiment.org/minnesota-lost-13453-residents-to-other-states-in-2021-most-in-more-than-30-years/

[MLBrumby]

Wow!  Louisiana, what's up?!  Also noteworthy: Florida is ahead of Texas in migration... and Tennessee is ahead of Georgia, and not by a little bit. And the net migration to Colorado was surprisingly low.  Tennessee was ahead of traditional magnets like Colorado, Washington and Virginia.  Then there are some very large states hemorrhaging residents. I assume that's partly in response to their mismanagement and unleashed by their COVID responses.  Another surprising thing to me is Virginia lost residents from migration. I assume it will pick up population from births and immigration, but their migration y-o-y was dismal. 

I realize these stats don't include the net of births/deaths, but some things "jump" out. The boom states that led population growth over the past half-century have done so because of migration.  The century before that was from immigration.  This makes the Florida-over-Texas numbers  noteworthy.  Now many of the historical "immigration" states are losing huge numbers to migration. California will probably see its (net) population grow because of immigration, and other states will see their losses amelioriated by it. Unfortunately some appear to be in a downward spiral, such as Illinois, New York, New Jersey, Maryland and Mississippi. Massachusetts lost so many residents last year that it will likely be passed by Tennessee in the next year. 

Here's a wiki table of 2021 population estimates of the states  https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_population 

 

[samsonh]

2 hours ago, MLBrumby said:

Wow!  Louisiana, what's up?!  Also noteworthy: Florida is ahead of Texas in migration... and Tennessee is ahead of Georgia, and not by a little bit. And the net migration to Colorado was surprisingly low.  Tennessee was ahead of traditional magnets like Colorado, Washington and Virginia.  Then there are some very large states hemorrhaging residents. I assume that's partly in response to their mismanagement and unleashed by their COVID responses.  Another surprising thing to me is Virginia lost residents from migration. I assume it will pick up population from births and immigration, but their migration y-o-y was dismal. 

I realize these stats don't include the net of births/deaths, but some things "jump" out. The boom states that led population growth over the past half-century have done so because of migration.  The century before that was from immigration.  This makes the Florida-over-Texas numbers  noteworthy.  Now many of the historical "immigration" states are losing huge numbers to migration. California will probably see its (net) population grow because of immigration, and other states will see their losses amelioriated by it. Unfortunately some appear to be in a downward spiral, such as Illinois, New York, New Jersey, Maryland and Mississippi. Massachusetts lost so many residents last year that it will likely be passed by Tennessee in the next year. 

Here's a wiki table of 2021 population estimates of the states  https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_population 

 

Hot take: much of the movement has to do with two things. 1. Young people moving home in 2020 because Covid made the large cities less inviting. 2. Boomers continued retiring to sun belt locations.

The large coastal states will be fine and will continue to generate outsized GDP. We need to catch up. 
 

Rental numbers show NYC bouncing back quickly, and I would anticipate California changing zoning rules will help with some of their affordability issues. 
 

Cities continue to gain in population, both in TN and nationally, and I anticipate that will continue. In TN we need to focus on education and incubating our own businesses in addition to trying to get corporate relocations.

 

 

[tragenvol]

Let's not forget, climate as a catalyst.  Have you ever been to Minnesota or "the north country" in New York in February?  B...R...U...T...A...L!

[Rockatansky]

On 12/16/2021 at 11:30 AM, Nathan_in_DC said:

I was kind of thinking the same thing. A $200,000 investment in a house that is getting $1,800 a month in rent still requires nearly 10 years of rental income just to balance out the initial investment, though you might be able to bring that down to 8 or so years by increasing rents by a few percentage points every year. But, that's not even counting the few-thousand-dollars-a-year in maintenance, property tax payments, refurbishments every 2-3 years when a tenant leaves, and remodels every 5-10 years. And even considering that, $200,000 is the lower end of some of the purchases. This all just screams of an inflated market and a scheme where the top investors that got in early will get out when the company valuation peaks.

Don't forget that in the current environment that $200k house will soon be $250k, then $300k. That's a lot of equity the owners can borrow against.

[Mr_Bond]

On 12/28/2021 at 6:28 PM, MLBrumby said:

Wow!  Louisiana, what's up?!  

Based on my earlier analysis, the main reason Louisiana is losing population is... J... O... B... S.  There are better job opportunities in other states, primarily in the South.

I have a little perspective on this.  I'm from Mobile, AL, and have family and friends there and in NOLA.  My wife is from the Mississippi Gulf Coast and has family in NOLA.  The Crescent City has not yet recovered from the population loss incurred from Hurricane Katrina in 2005, usually referred to as the Katrina Diaspora.  Unless you or your family have lived through a major hurricane, you may not be able to appreciate the long lasting effect it can have.  Here we are 16+ years later and Katrina is still influencing company moves, retirement home location decisions, vacations, and the mood of the residents.  I just spent a week in Pass Christian, MS, and walked past the Camille memorial several times (The Pass was in the eye of Camille in 1969 and the storm is listed as the second most powerful to ever hit the U.S.).  The storm surge in The Pass from Katrina was 27.8 feet.  The Mississippi Gulf Coast was devastated by both storms.  It's hard to rebuild when the next Cat 5 hurricane could be just a few years away.

http://camille.passchristian.net/memorial____gulf_coast.htm

[Nash_12South]

Stories in the Nashville Post and Business Journal that the Tennessean will cease a printed Saturday edition. Not a huge loss, but it still bums me out. The printed/online version of the Tennessean is already so bad in that nothing that happens after about 2pm, on any given day, makes the next day's edition. Not great for sports. I've always wondered why the online version of the (printed) paper could be a hybrid of the online feed.  I've entered old fogeydom. 

[MLBrumby]

I agree.  Just ranted about it in Nashville Bits and Pieces, and I don't even live there. Gannett is garbage.  May as well just stop printing all editions... the damn thing is printed 200 miles away in Knoxville! 

Edited January 12, 2022 by MLBrumby

[markhollin]

How the labor shortage is hampering Middle Tennessee's construction boom:

https://www.tennessean.com/story/money/2022/01/13/labor-shortage-middle-tennessee-construction-boom/9106843002/

[Mr_Bond]

Time to dust off this thread.  US GDP in Q1 2022 contracted.  If we get two consecutive quarters of negative growth (don't you love that phrase?!), we will officially be in a recession.  However, I can tell you that we are already there.  Trucking activity tracks almost exactly with realtime GDP and the demand for trucking has dropped significantly.  Here is an explanation of spot rates versus contract rates:

https://www.freightwaves.com/news/what-is-the-difference-between-trucking-contract-and-spot-rates

Shipping volumes are dropping:

https://www.freightwaves.com/news/cass-the-freight-cycle-has-downshifted-with-a-thud

Spot rates are dropping fast during the early summer when they would normally be peaking:

https://www.freightwaves.com/news/truckload-van-spot-rates-are-falling-even-faster

Earlier in May, the spot rate including fuel dropped below the contract rate without fuel.  Many companies are renegotiating their trucking contracts in a downward direction.

 

So, how will Nashville fare during this recession?  Have we seen any drop in development activity?