The stock market’s venerable yardstick, the Dow Jones Industrial Average, just made history – crossing 40,000 for the first time.

Yes, this milestone set Thursday, May 16, is only a brief emotional victory for shareholders. Yet it can be seen as a historical milepost for the broader business climate, especially in California.

To honor the moment, the trusty spreadsheet reviewed the Dow’s 5,000-point markers and how California fared in those periods using an economic metric (California unemployment), an interest rate (the average 30-year fixed mortgage), and home prices from the California Association of Realtors.

As we begin our data-filled voyage, let’s note the Dow first crossed 5,000 in November 1995 — back when you could buy the median-priced California single-family home for $176,000.

5,000-point mileposts

Dow passes 10,000 in December 1999: It took the stock index just over four years to double from 5,000 compared with a 28% gain for California homes to $225,000 in the same timeframe. This was an era when the economy broke loose from its early 1990s slumber. California unemployment dipped between 1995 and 1999 to 5% from 7.9% while mortgage rates rose to 7.9% from 7.4%.

15,000 in May 2013: The Dow needed more than 13 years to gain 50% to hit this benchmark vs. an 85% surge for homes statewide to $417,000 in the same period. This extended gap came during the financial rollercoaster ride from the bubble period in the early 2000s bursting into a Great Recession and then the economy’s slow recovery. So, California unemployment was 9.2%, up from 5% at the beginning of this crazy period. Yet, cheap money was one salve: 3.5% mortgages vs. 7.9% in 1999.

20,000 in January 2017: The Dow took under four years to gain 33% to gain the next 5,000 while homes statewide gained 18% to $492,000 as the post-crash rebound continued. California unemployment fell to 5.2% from 9.2%�� as mortgage rates ticked up to 4.2% from 3.5% in 2013.

25,000 in January 2018: The Dow needed just one year to gain 25% for its next benchmark vs. a 7% gain for California homes to $528,000 as the recovery hit full stride. California unemployment dipped to 4.4% from 5.2% while mortgage rates slipped to 4% from 4.2% in 2017.

30,000 in November 2020: The index took just under three years to gain 20% vs. 32% for California homes to $699,000 in the middle of the pandemic’s business wild gyrations. California unemployment surged to 9% from 4.4%�� – but investors cheered historically cheap money such as mortgages hitting 2.8%, falling from 4% in 2018.

35,000 in July 2021: It took the Dow less than a year to gain 17% vs. 16% appreciation for California homes to $811,000 as the pandemic’s economic surge was in full force. Statewide unemployment fell to 7.4% from 9% and mortgages remained cheap – 2.9% vs. 2.8% in 2020.

40,000 in May 2024: The Dow took almost three years to gain 14% vs. an 11% gain for California homes to a record $904,000 in April. The economy struggles to find its new normal as statewide unemployment fell to 5.3% in April from 7.4%. But mortgages got expensive as the Federal Reserve fought and overheated economy – 7% in April from 2.9% in 2021.

Bottom line

So, the Dow is up eight-fold since crossing 5,000 just over 28 years ago. California homes are only five times more expensive.

That’s not the point, though. This stroll down memory lane reminds us that the markets typically need a solid economy for stocks or homes to appreciate. Cheap money is the icing on the cake.

Jonathan Lansner is the business columnist for the Southern California ɫ����̳ Group. He can be reached at jlansner@scng.com

The trade group’s semi-annual conferences are epic; the destinations are glorious; the education is unparalleled; and the networking unsurpassed!

A little background on SIOR: The organization has been around for 80 years, a global office and industrial real estate association. It has 3,900 members in more than 50 countries.

I returned from a spring’s gathering last week, and I’ve now had time to decompress and reflect on what I learned. This column will share some insights.

Industrial technologies

I spent time with industrial real estate brokers from around the United States and the world. One conversation was quite eye-opening.

We learned about the automated storage and retrieval systems, or ASRS for short. This high-tech inventory management system help a logistics provider to be more efficient and timely, requiring fewer employees.

Many in the cold storage space are using ASRS to more strategically manage their inventories. In one instance, an occupant called AmeriCold constructs their new buildings around such a system, and in many cases, they stretch 150 feet in height. To put this in context, that is approximately 12 stories high, and roughly four times the height of the modern concrete behemoths we see being erected in the Inland Empire.

Data centers, which power artificial intelligence, are springing up around the US, as well as chip manufacturing fabs, as they referred to.

The underlying challenge for industrial real estate applications is the acute need for power. Developers of these buildings seek power first and communities that can provide the power, as opposed to the cost of land under which the building is constructed.

A new concept called mini-grids is appearing around the nation. These systems are encapsulated power, serving a specific site with the juice generated by solar, wind or other forms of renewable energy.

Industrial roundtable

We heard from agents representing Mexico, Tampa, Florida, Atlanta, Georgia, Charlotte, North Carolina, Nashville, Tennessee, Dallas, Texas, Houston, Texas, Rotterdam, the Netherlands, Toronto, Canada, Laredo, Texas, Columbus, Ohio, Indianapolis, Indiana, and Los Angeles.

Curiously absent from this roundup was anyone from the middle part of the West, such as Denver, Salt Lake City and Phoenix.

Certain themes were repeated. Much like Southern California, large-scale inventory between 100,000 and 500,000 square feet has been dramatically over built, and therefore more supply than demand exists.

In buildings larger than 500,000 square feet, a shortage exists. And there is still quite a demand for large boxes. The most robust size range nationally are buildings under 50,000 square feet. Most mentioned power and the lack of a sustainable source as a future challenge.

All of the markets have experienced occupant demand waning as a result of inflation, higher borrowing rates and the exit from inventory after the Covid pandemic. The representative from Los Angeles opined that we are at the bottom in terms of rental rates as rents have decreased 30% to 40%.

He also echoed that 800,000 square feet and larger is a hot size range as well as buildings below 50,000 square feet. The Los Angeles ports are doing a record amount of business.

Third party logistics operators – or 3PLs – are renegotiating leases they originated in 2020, 2021 and 2022.

Finally, some local insurance carriers are requiring electrical panels be replaced in order to lessen the possibility of fire.

It’s very interesting to hear about the successes and struggles of other SIOR brokers around the nation. I’ll look forward, with great interest, to our fall conference, which will be a home game in Hollywood.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.��

Southern California’s unemployment rate hit an 11-month low in April.

My trusty spreadsheet, , found Los Angeles, Orange, Riverside, and San Bernardino counties had a 4.3% unemployment rate compared with 4.8% in the previous month. It’s likely a seasonal dip, as the rate decreased by 0.3 percentage points in April in the pre-pandemic 2015-19 period.

Consider that April’s rate was the lowest since May 2023, but it’s still higher than the 3.9% joblessness seen in April 2023. Unemployment for the region averaged 4.7% in 2015-19.

The four-county tally of unemployed workers was 386,000 – down 50,700 in a month but up 36,600 in a year. The jobless count is 9% above the 424,700 average in pre-pandemic 2015-19.

Increased employment helped to lower regional joblessness.

Local bosses had��7.97 million at work in April – up 23,000 in a month, and up 74,600 in 12 months. Local hiring averaged 22,600 in April in 2015-19. March 2024 saw 23,100 employees added.

The past year’s job growth of 0.9% topped the previous 12 months’ 0.6% increase, but it’s slower than the 2.2% hiring pace throughout 2015-19.

Industry swings

Job changes in key Southern California business sectors, ranked by one-month change …

Health/social services: 1,321,400 workers – up 6,600 in a month and up 67,400 in a year.

Restaurants: 694,500 workers – up 6,000 in a month and up 7,600 in a year.

Government: 1,040,100 workers – up 5,200 in a month and up 28,500 in a year.

Hotels/entertainment/recreation: 264,300 workers – up 2,800 in a month and up 2,500 in a year.

Private education: 218,700 workers – up 2,500 in a month and up 14,200 in a year.

Personal services: 267,500 workers – up 1,800 in a month and up 6,800 in a year.

Logistics/utilities: 799,800 workers – up 1,000 in a month but down 2,600 in a year.

Financial: 356,000 workers – up 900 in a month but down 4,200 in a year.

Information: 219,900 workers – up 700 in a month but down 16,200 in a year.

Retailing: 725,100 workers – up 100 in a month but down 1,400 in a year.

Manufacturing: 565,000 workers – down 1,200 in a month and down 9,800 in a year.

Professional-business services: 1,123,300 workers – down 1,400 in a month and down 19,600 in a year.

Regional differences

Here’s how the job market performed in the region’s key metropolitan areas …

Los Angeles County: 4.58 million workers, after adding 18,100 in a month and growing by 32,600 in a year. Hiring averaged 8,900 for the month in 2015-19. Unemployment? 4.5% vs. 5.2% a month earlier; 4.7% a year ago; and 5.2% average in 2015-19.

Orange County: 1.7 million workers, after adding 2,400 in a month and growing by 21,000 in a year. Hiring averaged 6,920 for the month in 2015-19. Unemployment? 3.7% vs. 3.9% a month earlier; 3.1% a year ago; and 3.6% average in 2015-19.

Inland Empire: 1.69 million workers, after adding 2,500 in a month and growing by 21,000 in a year. Hiring averaged 6,820 for the month in 2015-19. Unemployment? 4.8% vs. 5.1% a month earlier; 4.1% a year ago; and 5.2% average in 2015-19.

Jonathan Lansner is the business columnist for the Southern California ɫ����̳ Group. He can be reached at jlansner@scng.com

Between your contractual obligations with the seller to perform and your lenders’ rate lock, you just don’t want to delay the day.

Here is a list of common borrower actions or inaction that can slow down a transaction or even completely derail the deal.

—Frozen credit. Make sure your credit report is unfrozen. The lender cannot check your credit when the report is frozen.

—Don’t delay wiring the deposit to escrow. Mortgage originators need a receipt of “earnest money deposit” from escrow in order to submit the loan. Nothing much happens until the buyer has skin in the game.

—Don’t delay signing the initial disclosures. Your lender cannot order an appraisal until you have signed the lenders’ disclosures.

—Don’t delay in providing a credit card to your lender for fee charges. It’s needed for the appraisal to be ordered and will be required for any HOA documents that might be needed.��

—Always pay for an inspection and get it done upfront, even before spending money on an appraisal, for example. If the property doesn’t pass scrutiny, or you are haggling with the home seller late in the game about repair credits, it could delay the home loan closing. You don’t want to lose your rate lock because you aren’t ready to close.

—Avoid quitting your job, getting fired or changing employers in the middle of escrow. Obviously, the loan application must go back to underwriting in order to recalculate the changed income to see if you still qualify.

—Avoid taking out new credit in the middle of escrow. Lenders monitor an applicant’s credit during the loan process. If you have taken on a new car payment or gone out and bought furniture for your new home, the lender will have to review the loan to see if you can still qualify.

—Do not send illegible documents to your lender. Every day, borrowers take pictures of required documents with their phones. Oftentimes, the images are of poor quality. It’s always best to scan and email documents or bring them to your mortgage originator to be copied and returned.

—Do not send incomplete documents to a mortgage lender. For example, if the lender needs all pages of your two most recent months of bank statements, even if the last page is blank, you must send that page in. Send all tax return pages and schedules along with your W-2s and 1099s.

—Undisclosed items: If you own other property, don’t hide it. Lenders have sophisticated intel from research companies that will not only uncover other properties in your name, but also matters like child support judgments, tax liens and the like.

—Not following instructions: For example, the lender might need a letter of explanation from you regarding a source of funds for a large deposit in your bank account (a large deposit is considered more than a work period’s paycheck). Don’t ignore the request. Don’t give the lender a response that is unrelated to the request.

—Mattress money. Down payment funds and closing costs must be sourced, usually from the borrowers’ funds or a gift from a relative, for example. Cash on hand doesn’t work. Remember, the lender is like the secret police for the IRS, only we don’t get paid. Your lender will ask you for the most recent two months of bank statements. If money comes from another source, a source like a paycheck from an employer is no problem.

—Don’t go out of town. Making yourself available by remaining available to answer clarifying questions from the underwriter or being available to sign the loan documents. Don’t go on vacation when you are in the middle of escrow.

—Don’t play shell games with your money. Don’t move your money around from account to account during escrow. It makes it very hard for a lender to source, follow and track. Be sure to provide all bank accounts upfront if money from those funds will be used for your transaction.

—Pay your bills on time. Again, lenders monitor credit during escrow. Besides taking out new credit, you don’t want to hurt yourself with recent late bills, for example.

—Are you short of funds to close? Keep in mind the down payment and closing costs are needed along with escrow impounds, in some cases.

—Employment verification. Lenders must verify your job with either human resources, a supervisor or even a company like the Work Number.

—Homeowners insurance preparedness. It’s getting harder and harder to find coverage, especially affordable coverage in fire prone areas. As soon as you go into escrow, you should be on the phone to learn if insurance is available for this property and pricing out that insurance.

—Get your taxes done and submitted to the IRS. Your lender will audit the tax returns with the IRS. If the IRS doesn’t have a record of what you gave your lender, it creates validation headaches that can and will delay your closing.

Freddie Mac rate news

The 30-year fixed rate averaged 7.02%, 7 basis points lower than last week. The 15-year fixed rate averaged 6.28%, 10 basis points lower than last week.

The Mortgage Bankers Association reported a .5% mortgage application increase compared to one week ago.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $766,550 loan, last year’s payment was $320 less than this week’s payment of $5,110.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.625%, a 15-year conventional at 5.625%, a 30-year conventional at 6.25%, a 15-year conventional high balance at 6% ($766,551 to $1,149,825 in LA and OC and $766,551 to $1,006,250 in San Diego), a 30-year-high balance conventional at 6.625% and a jumbo 30-year fixed at 6.75%.

Note: The 30-year FHA conforming loan is limited to loans of $644,000 in the Inland Empire and $766,550 in LA, San Diego, and Orange counties.

Eye-catcher loan program of the week: A 30-year jumbo with 30% down at 6% adjustable after five years with one point.

Jeff Lazerson, president of Mortgage Grader can be reached at 949-322-8640 or jlazerson@mortgagegrader.com.

Governance

1. HOA governance is a team sport. It’s different from our career jobs because the board legally controls the HOA, not the president. The president is not the boss but mainly is the Chair and spokesperson, and only has what power the board grants. The president’s vote counts the same as the newest director.

2. An attitude of service is less stressful than an attitude of control. Directors mindful that they serve their neighbors will receive suggestions or criticism with more grace.

3. It is impossible to communicate too much with the HOA membership.

4. You’re not on duty 24/7, so strive to confine your governance work to board meetings and let the manager handle things between meetings.

5. Don’t just ask CAN we, but SHOULD we do something? I’m often asked if the board has the power to do something when the bigger issue is whether it is a good idea.

6. Our present culture unfortunately doesn’t handle disagreement very well. Patience and civility are more important than ever.

7. Town hall informational meetings are essential on major projects or issues, regardless of whether the board legally can proceed without membership support.

Finances

8. Good financial stewardship requires planning and budgeting for actual costs, not hope-for costs. Don’t give the manager a budget target, budgeting on wishes instead of reality. Expect the manager to provide real numbers based on reasonable expectations of costs in the coming year. Artificially budgeting for a specific desired assessment increase may be appealing to members, but it’s not telling them the truth about the costs of running the HOA. Typically, common area maintenance levels and reserve fund accumulation will be the first victims of such short-sightedness.

9. The HOA’s legal obligations are not excused by the lack of funds. The HOA’s basic duty to preserve, protect, and maintain the common areas is not conditional on funding. Would you tell a neighbor that their roof must continue to leak or that an unsafe balcony must stay that way until the HOA can pay for repairs?

10. It may seem unfair to pursue delinquent members going through hard times, but not requiring certain members to pay their share of the expenses is unfair to the other members and violates the board’s duties.

11. Failing to faithfully accumulate money in the HOA’s capital asset reserve account means the HOA is quietly falling into insolvency, as money is not set aside to offset the ongoing deterioration of major assets that is a fact of life. Accumulating those funds prepares the HOA for major repairs when they become necessary, avoiding potentially ruinous special assessments or long-term bank loans.

Legal protections

12. Compliance with all three Business Judgment Rule requirements (acting in good faith, in the HOA’s best interests, and with reasonable diligence/inquiry) is an essential protection for volunteer leaders. Heed your manager’s advice, or the expert they recommend because they are part of your reasonable diligence on most decisions.

13. The corporate process can seem frustrating, but it protects HOA leaders. By documenting the commitments the board makes, you are making them legally bound by the HOA and not the leaders. Decisions must be documented in the minutes. Avoid making individual commitments, promises, or instructions to vendors or homeowners.

Kelly G. Richardson CCAL is a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober LLP, a California law firm known for community association advice. Send column questions to Kelly@roattorneys.com.

Southern Californians need twice the annual income of a U.S. homebuyer to qualify for a typical house.

A $200,800 income is required to buy the region’s $785,000 median-priced, existing single-family home in the first quarter,

My trusty spreadsheet found this mortgage-qualifying standard has grown by $54,800, or 38%, since 2022’s first quarter. That’s when the Federal Reserve started its .

Contrast that required bounty to the $99,600 that house hunters require nationally. Yup, Southern California’s threshold is 101% higher.

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The national requirement has grown, too, up $26,400, or 36%, in two years to buy a $389,400 median-priced US house.

This translates to an incredibly high financial bar for the locals, escpecially when you note that Southern California household incomes are just 16% higher than the nation – $86,000 vs. $74,000.

So Realtor math tells us that only 15% of Southern Californians had the financial muscle to pull off a purchase in early 2024, shrinking from 24% in 2022’s first quarter.

Nationwide, affordability ran at 37% to start this year, down from 47% in 2022.

How’d we get here?

Consider what’s changed recently in a local house hunter’s budget.

The average 30-year mortgage rate fell to record lows when pandemic stimulus was required – averaging 3.8% in 2022’s first quarter. Then, when inflation became the major concern, rates rose to 6.8% in 2024’s first quarter.

So over two years, a borrower’s purchasing power was slashed by 28%. That loss was also compounded by Southern California home prices, which rose 7% in the same period.

Combine rising rates and prices, and you see a typical Southern California homebuyer paying $5,020 monthly, including taxes and insurance, in 2024’s first quarter. That’s up $1,370 since 2022 or 38%.

Oh, and the Realtor math assumes a buyer spends only 30% of their income on house payments – and puts 20% down as part of the purchase. This means a house hunter also must find $157,000 for the down payment.

Who can afford this?

Southern California’s affordability problem translates to shockingly few home sales.

Ponder the lethargic pace of completed local transactions for houses, townhomes and condos, existing and new, as tracked by CoreLogic. In 2024’s first quarter, 37,211 residences were sold in the region’s six counties.

• MORTGAGE NEWS: What’s up with rates? Who’s lending?

That’s 37% below the sales activity seen two years earlier when the Fed began hiking rates.

It’s also the third-slowest-selling quarter in data reaching back to 1988.

And it’s 44% below the 36-year sales average.

Locally speaking

Here’s how the Realtor affordability math plays out across the region, ranked by the county’s required income, plus a snapshot of the sales drop vs. history …

Orange: $349,200 to qualify in the first quarter – 3.5 times what a typical American needs. It’s up $99,200, or 40%, in two years. The median-priced house was $1.37 million. Only 11% can afford to buy vs. 13% in 2022. Home sales in the quarter ran 48% below the 36-year average.

San Diego: $251,200 to qualify – 2.5 times US – up $71,600 or 40% for $981,000 house. That’s 11% affordability vs. 19% in 2022. Sales 46% below average.

Ventura: $227,600 to qualify – 2.2 times US – up $52,800 or 30% for $889,000 house. That’s 15% affordability vs. 21% in 2022. Sales 57% below average.

Los Angeles: $210,400 to qualify – 2.1 times US – up $53,200 or 34% for $823,000 house. That’s 14% affordability vs. 20% in 2022. Sales 51% below average.

• HOW NIMBY ARE YOU? Ponder common objections to new housing.

Riverside: $161,200 to qualify – 60% above US – up $40,800 or 34% for $630,000 house. That’s 20% affordability vs. 28% in 2022. Sales 26% below average.

San Bernardino: $124,800 to qualify – 25% above US – up $33,600 or 37% for $488,000 house. That’s 27% affordability vs. 39% in 2022. Sales 39% below average.

Jonathan Lansner is the business columnist for the Southern California ɫ����̳ Group. He can be reached at jlansner@scng.com

Nearly�� who stayed in an alternative living space rental enjoyed their time there. Alternative living spaces include tiny homes, modular homes, container homes, and converted vans or RVs.

While they’re more popular as a vacation novelty, recent Google Trends data shows searches for information about tiny homes has increased exponentially since 2011.

Sales seem to be largely to the 54% of Americans who want to invest an additional dwelling unit (ADU) or tiny home to rent it out. But nearly 75% think local governments should incentivize ADU and tiny home construction to address housing shortages.

In some communities like and , experiments with tiny homes have started to alleviate their homelessness population.

Why Tiny Homes?

Tiny homes cost a lot less to build and buy than full-size homes, making them more appealing in a difficult and turbulent housing market.

“Affordability is still a major challenge,” says Zillow Chief Economist�� . “Those shopping now should see early-season price cuts on left-over or mispriced inventory. However, that may dry up fast as the weather and housing market warms with the season.”

the price of a averages between $30 and $60,000, but can be as low as $8000. The cost of a typical American home, according to the comes out to about $513,000. That’s a higher price percentage-wise, but nearly 80% savings overall.

Of course, prices vary depending on the size of the home, land costs, permits, etc., but even with a higher per-square-foot price, tiny home costs sound much more affordable, especially to those with lower incomes.

Another advantage of tiny homes is that buyers can customize their homes to meet their needs. While pre-built tiny homes are available, most buyers consult a builder and develop a blueprint tailored to their needs and wishes.

A lot of homeowners embrace the ability to customize their own tiny house trend because of the environmental benefits. According to , a tiny home produces about 2,000 pounds of carbon dioxide emissions every year. In comparison, a standard home produces about 28,000 pounds. Tiny homes are also often built with solar panels, composting toilets, and rainwater harvesting, making them even more eco-friendly.

Another advantage of tiny homes is their mobility. can be built on a trailer and moved if the owners want to live elsewhere. For those who want a more mobile lifestyle or consider themselves , a tiny house may be the solution they need. They can work from wherever they can park the house but don’t have to unpack every time they move.

Who’s Buying?

Anything under 600 square feet is generally considered a tiny house. The average size is about 225 square feet. In comparison, indicates that standard houses purchased in 2022 averaged 2,383 square feet. Potential tiny home buyers need to remember this results in smaller , , and living space when compared to a traditional home or apartment.

estimates there were about 10,000 tiny homes in the United States by 2018. Tiny home and ADU popularity shot way up after the Covid lockdowns, but it can be difficult to get firm numbers since many owners may live off the grid and don’t participate in surveys or polls.

Gen Z isn’t as interested in tiny homes as older demographics. Since 2013, — 80% of tiny homeowners were over 30. Forty percent are 30 to 50, and 40% are over 50. Women account for 55% of tiny house owners, and 68% of those with a tiny home don’t have a mortgage. Some 55% of these tiny homeowners also have more savings than the average American.

Many of the units in a typical retiree-oriented mobile home park fall under the definition of tiny homes. Additionally, some traditional homeowners add tiny homes for elderly relatives. These “mother-in-law” units may account for the number of those over 50 who own a tiny house. Tiny houses also offer advantages for those with limited mobility or who are not able to clean and maintain a standard-size home.

The Dark Side

Nothing is perfect, and there are drawbacks, even considering the advantages of a tiny home life. Tiny homes are more expensive per square foot than standard homes, according to . So, while buying a standard home may be more expensive initially, the buyers pay less per square foot.

Another issue is the . Some people can’t live comfortably in such close quarters if they’re living with another person. They need the extra room afforded by a traditional house. Those looking at tiny homes would do well to pause and think about whether they can live with their loved ones in 600 square feet or less.

The lack of space also translates into less storage. Tiny homes don’t offer tons of space to put away personal items. Potential tiny house buyers must consider whether they will sell their personal items or put them in storage — which adds an extra expense. Potential tiny home buyers need to plan what they can bring to their new home and what they cannot. United Tiny Homes proposes the theory that this forces people to live more mindfully since they can’t take it all with them.

One surprising downside to the tiny house revolution is resale value. Selling a standard home price often yields a higher profit than what the homeowners initially paid for it. This doesn’t always translate to a tiny house. Many owners find that they can sell their tiny home, but it may not be for as much as they think.

According to , most of these owners don’t recoup their entire in their tiny homes when they sell. , noting you should consider your tiny home like a travel trailer or RV — the benefit of mobility is also it’s downfall.

Another interesting quirk of tiny houses is that they’re not legal in some states across the United States. Zoning may also be an issue since the tiny home may not meet the area’s building codes for a single-family dwelling. Owners have also been asked to move their homes from properties. Dealing with gray areas of zoning may involve unforeseen fees or legal issues.

If owners have a tiny home built on a trailer, they may have to move it at some point. They will either have to rent a vehicle or buy one that can tow that amount of weight, which incurs extra expenses for licenses, fuel, and maintenance.

The national study, published Wednesday by the University of Illinois Chicago’s Center for Urban Economic Development, asked US employees about their economic wellbeing, including whether they’d skipped meals, went hungry, or were worried about being able to make rent or mortgage payments.

Fifty-three percent of respondents reported that they’d experienced one or more forms of food insecurity in the prior three months, and 48% experienced one or more forms of housing insecurity. Workers who said they took unpaid time off after getting hurt on the job were more likely to report trouble paying their bills, the researchers found.

“It’s not necessarily that Amazon’s an outlier,” said Sanjay Pinto, who co-authored the study with Beth Gutelius. Still, “they’re certainly not taking the lead in creating family-sustaining jobs.”

Amazon has long been criticized for its treatment of employees, especially those who pack and ship boxes in its warehouses. Much of the criticism has focused on injuries that have exceeded the rate of logistics industry peers. Amazon has pledged to make its warehouses safer, in part by automating aspects of the job that require repetitive motions. Pinto and Gutelius examined injuries among Amazon’s ranks in a report published in October before turning their focus to workers’ economic circumstances.

The Seattle-based company is the second-largest private-sector employer in the US behind Walmart Inc. Amazon accounts for about 29% of the US warehousing industry workforce, the researchers estimate. As such, the company plays a leading role in setting pay and working conditions of a sector transformed by e-commerce.

The 98-question online survey sought out Amazon employees through social media advertising, targeting warehouses and neighborhoods that host company facilities. The researchers also sprinkled in quality checks to weed out responses from people who appeared to be giving inauthentic responses.

A total of 1,484 workers in 42 states gave enough information to be included in the results. For the portions dealing with economic security, the sample size varied between 1,306 and 1,472 respondents. The margin of error was plus or minus 2.5 percentage points. The work was funded by the Ford Foundation, Oxfam America and the pro-labor nonprofit National Employment Law Project.

A third of survey respondents reported using government-funded programs – primarily food stamps or Medicaid – in the last three months. That echoes a 2020 analysis by the US Government Accountability Office, which found Amazon was among the biggest employers of people receiving food assistance in nine states that reported the data.

Amazon didn’t immediately reply to a request for comment made after the survey’s publication early Wednesday. Responding to the publication of the survey’s prior installment, a company spokesperson dismissed the report, saying it was “not a ‘study’ — it’s a survey done on social media, by groups with an ulterior motive.”

Amazon’s median US employee was paid $45,613 in 2023, up from $41,762 the year before, the company said in a filing last month. The company says employees in warehousing and transportation are paid more than $20.50 an hour, on average. The survey, which was conducted between April and August 2023, excluded managers and skews a bit lower: Most respondents reported wages from $16 to $20 an hour.

Some 65% of workers who come to Amazon earn more than they were making at their previous employer, the survey shows. And the same percentage of workers report receiving a raise while working at the company. Moving up the ranks in Amazon’s assembly-line like warehouses is a tougher proposition: Just 13% of workers reported receiving a promotion during their time at the company, survey data showed.

Respondents who joined Amazon from another company were most likely to have previously worked in food preparation and services, sales and manufacturing.

“The story of Amazon is a sad story of the declining expectations of American workers of their employer,” said study co-author Gutelius, a longtime researcher of logistics and warehouse work.

Californians started 2024 with the most challenges in paying their bills on time in nine quarters.

If there’s a must-watch number out there to gauge the financial pulse of the consumer, it’s the . These figures are compiled from an analysis of credit histories from Equifax. So, we’re talking about bill-paying patterns of folks with credit profiles.

Caveat noted, we see that Californians had 1.27% of their balances marked late by 90 days or more. That’s the highest delinquency rate since 2021’s fourth quarter, when the economy was digesting both pandemic business shutdowns and a flood of stimulus dollars. And late payers are also up from 0.96% at 2023’s start.

But before you sound any big alarms, here’s a little perspective: This current pace of tardy payments is well below the 1.87% average of pre-coronavirus 2018-19. Or, what we call the normal days.

Plus, it’s nowhere near the Great Recession’s peak of 12.6% delinquency in 2009’s 4th quarter.�� Or, what we call the worst-case scenario.

And this may surprise you, too: Californians are paying bills far swifter than their national peers and even their economic arch-rivals, Texans and Floridians.

Nationally, 1.83% of bills were plus-90 days late in the first quarter vs. 1.46% a year ago. As with California, early 2024’s late payers are below the 3.07% seen in 2018-19 and the 8.6% peak of 2010’s 1st quarter.

In Texas, 2.53% of bills were plus-90-days late vs. 1.9% a year ago and 3.9% in 2018-19. The peak was 6.2% in 2010’s 1st quarter. And in Florida, delinquency ran 2.56% vs. 1.74% a year ago and 4.1% in 2018-19. That peak ran 18.2% in 2010’s 1st quarter.

So, to varying degrees, the national and statewide patterns are aligned: Skipped bills are rising yet still below pre-pandemic days.

Bunch of debts

What’s likely no surprise is how much Californians owe – a bunch, and that’s primarily due to the state’s expensive housing.

California consumer debts equaled $86,940 per capita in the first quarter, with 80% of that debt tied to mortgages. That’s up 2.2% in a year and 21% in five years.

Compare that with the typical American’s debts: $61,874 – 70% in mortgages – which is up 2.7% in a year and 22% in five years.

The Golden State’s economic arch-rivals have even fewer debts, but borrowing has been surging. Tough question: Is that economic confidence, or is the cash needed to cover unpaid bills?

Texas debts run $57,450 per capita – 65% in mortgages – up 3.4% in a year and 31% in five years. In Florida, it’s $60,590 – 68% in mortgages – was up 5.1% in a year and 32% in five years.

Mortgage making

Since we all suffer some degree of bubble-bursting PTSD, a first question may be: “Are most house payments being paid?”

Yes, but 0.33% of California mortgage debts were plus-90 days late in the first quarter — up from 0.19% a year earlier. But this delinquency rate is down from 0.52% in 2018-19 and just a sliver of the 13.2% pinnacle in 2009’s fourth quarter.

Again, California outshines the competition.

US mortgage delinquency ran 0.6% in the quarter vs. 0.44% a year ago and 1.05% in 2018-19. The peak was 8.9% in 2010’s first quarter.

Texas’ late mortgages were 0.63% to start 2024 – almost double 0.32% a year ago – but off from 0.79% in 2018-19. Slow-paying mortgages in Florida ran 1% – triple 0.32% a year ago – but were off the 1.71% rate of 2018-19.

Foreclosures, the really troublesome home loan indicator – are a rarity

Going broke

Perhaps the worst cases of skipping bills – bankruptcy filings – also have been rare so far in this economic cycle.

New bankruptcies in California ran at 10 per 100,000 people to start 2024. That’s up from eight a year ago but down from 16 in 2018-19 and 500 at the peak of 2009’s 2nd quarter.

US bankruptcies ran at 15 per 100,000 in the first quarter vs. 13 year ago and 26 in 2018-19. The peak was 240 in 2009’s second quarter.

Texas started 2024 with 14 new bankruptcies per 100,000 vs. 12 in 2023’s first quarter and 22 in 2018-19. Florida had 18 per 100,000 – double nine from a year ago but off from 29 in 2018-19.

Bottom line

US consumers started last year with record low late payments on this New York Fed scorecard, which dates to 2003. Same for Texans and Floridians.

California’s skipped bills hit their bottom in 2023’s second quarter.

So, an uptick from best-ever payment habits seemed inevitable, especially when the Federal Reserve has been hiking interest rates to chill an overheated economy suffering a bad bout of inflation.

Still, increased late payments can’t be ignored. The past year’s surge is something to keep a keen eye on.

Jonathan Lansner is the business columnist for the Southern California ɫ����̳ Group. He can be reached at jlansner@scng.com

Federal Reserve Chair Jerome Powell said the US central bank must be patient and wait for evidence that inflation continues to cool, doubling down on the need to keep borrowing costs elevated for longer.

The Fed chief said recent inflation figures indicate it will likely take more time than previously thought to attain the confidence needed to lower interest rates, echoing comments he made earlier this month.

“We did not expect this to be a smooth road, but these were higher than I think anybody expected,” Powell said Tuesday, referring to the lack of inflation progress in the first quarter. “What that has told us is that we’ll need to be patient and let restrictive policy do its work.”

“It looks like it will take longer for us to become confident that inflation is coming down to 2% over time,” he added.

During the event hosted by the Foreign Bankers’ Association in Amsterdam, Powell described current policy as restrictive by “many, many measures” but noted time will tell whether rates are sufficiently high to bring inflation back to the central bank’s 2% goal. The Fed chief reiterated it wasn’t likely that the central bank’s next move will be a hike.

“We think that it’s probably a matter of just staying at that stance for longer,” Powell said.

US central bankers, including Powell, have expressed disappointment at the lack of inflation progress in the first quarter. Earlier this month, policymakers kept their benchmark policy rate unchanged at a 23-year high, a level Powell said he was prepared to maintain “for as long as appropriate.”

During the moderated discussion between Powell and European Central Bank Governing Council member Klaas Knot, Powell said that he expects inflation will move lower on a monthly basis. However, price figures in the first quarter have tempered his confidence.

“Today was a big exercise in reiterating the previous stance that they don’t expect to be hiking rates and if they need to stay at this level for longer, they will,” said Luke Tilley, chief economist at Wilmington Trust.

Producer prices

The producer price index, a measure of wholesale prices, topped all economists’ forecasts in April, a government report showed Tuesday. That said, several components from the report that feed into the calculation of the Fed’s preferred inflation gauge — the personal consumption expenditures price index — were more mixed.

Powell described Tuesday’s report as “mixed.” The consumer price index for April will be released Wednesday, and economists surveyed by Bloomberg estimate prices rose a firm 3.4% from a year earlier.

The US economy continues to show resilience even with the Fed settling in with higher-for-longer rates. Non-farm payrolls have averaged 246,000 a month so far this year, and unemployment remains low. The April jobs report, however, did show some signs of moderation, with a slower pace of job growth and an unexpected tick up in unemployment.

Powell described the labor market as “very strong” with signs of gradual cooling and re-balancing, in part driven by an increase in labor supply from immigration as well as an easing in demand. He added the labor market is about as tight as it was before the pandemic in 2019.