Leveraging FOMO

So… big disclaimer…I know absolutely nothing about real estate or economics. I say this because this post is a brain dump while I work my way through these two topics in the context of small town New Zealand. If anyone can help me understand this better please take note of how little I know (and how much I have to learn!) and send me an email – adam@adamhyde.net (i’d love your take on it).

At the moment there are record highs for real estate around the country. All this when some smart folks that know a lot more about this than me (Westpac Bank) had predicted a downturn in prices due to COVID.

So, right now prices are high and it seems this is due to a decrease in listings combined with all time low lending rates (due to the reserve bank trying to stimulate the economy). At the same time we are sliding deeper into a recession.

What I also see, anecdotally, is the following:

  • real estate agents stoking the high expectations of resale prices and fear of missing out (FOMO), which I guess at the end of the day is their job. However, it does seem to me to be contributing to a little despondency and panic in the buyers.
  • some panic buying. I saw one bidder upping their bid at auction (with no one pushing against them) by almost 100k on a property that eventually sold to them for 1,070,000 NZD. The buyer was worried about being outbid and so went up twice with no one bidding against them.
  • stories abounding about ‘outside money’ (from Auckland or rich NZers returning home) but net immigration is down 90% (see these eye opening graphs – there is no one coming in with bags of cash).
  • when attending auctions it seems to me that all the bidders are older locals.
  • a couple of absurd buys at well above value are forcing the market to speculate that the elevator is going up faster than usual.
  • 3 houses here in Raglan *did not sell* at auction (they don’t mention this in the articles).
  • bidding at auctions is tentative and shy.

It looks all the world to me that older NZers, with all their money in a (possibly) freehold house somewhere close are leveraging their capital to buy a second property. The interest rates are low so they aren’t making any money on their savings, they can borrow money cheaply, and they have the capital in their existing home (and the values are going up) they can leverage to get to the minimum 20% (soon 30%) mortgage contribution required by the banks.

So they really don’t have to put any money in. They only have to worry about repayments.

To me that explains the high rates.

But also, I don’t think these people necessarily feel so comfy doing this. They aren’t used to it. I think its a bit of a panic of shy folks. If I were to pull out my emotional thermometer at these auctions I would say the reading would be ‘tentative or ‘fragile’. Bids are slow, no aggressive moves. Some bidding battles going slowly up by $1000 a bid.

Where does it go from here? Well, I don’t trust someplace where you hear everyone saying ‘it can’t go down’ and ‘you have to get in now!’.

I don’t know the market lingo to really know what it means but I think its ‘over heated’.

What does that mean for buying a house now? Well…for starters, I think the raising of minimum deposits in March 2021 (from 20% to 30% for investment properties) won’t effect it much as these folks have the capital.

Right now it feels like a bit of a sugar rush but in a lumpy market. Some places selling crazy high, some around what you expect, some not at all. How long will it last? No idea.

My big question is – how is the economy going to effect all this? What happens when low interest rates fuel real estate purchases during a recession?

It seems general wisdom is that interest rates will remain low for some years. But can folks keep up the payments if their personal financial well being becomes less healthy due to the recession? Are these folks (mostly around retirement age) effected by this? No idea.

One factor tho is COVID. NZ has been very conservative with COVID and instituted restrictions that many other countries have avoided because of the slowdown effect on the economy. Health before wealth is the mantra here. But that also means that NZ will not be letting folks into NZ anytime soon. Why would we after we have enjoyed such freedoms while the rest of the world has been through dark times. Life here is ‘normal’. The Government got in on a landslide largely because of this. So, we will open up slower as the vaccines are distributed around the world. The rest of the world will get going but NZ is not going to change anything fast. We will see even more folks leave NZ while we still have immigration flow limited by the total number of available quarantine beds.

I think this will mean our economy isn’t going to get any external boost anytime soon…

I don’t know what this means for real estate. My naive musing is that it will point to housing prices slowing mid 2021 as more folks leave NZ (counter to the belief that this is utopia), maybe prices will go down if folks that can’t make repayments due to large loans and a long recession put properties back on the market. I don’t know. Dangerous to bet on it, so if you know any better please educate me!

Added a CommittChange Donate Button

Added a donate button to Cabbage Tree Labs and it’s child projects (Pagedjs, Wax, XSweet). Generally, I don’t like the donation model but I do know there are folks that want to find a way to support what we do.

So, if you want to support these projects financially and have heaps of spare cash laying around think about a donation. If you don’t have HEAPS of cash then I recommend saving your money 🙂

https://www.cabbagetreelabs.org/

Hewlett Packard Book Sprint Update

This book just released (hosted by Hewlett Packard, includes folks from Netflix, VMWare etc):

book_cover

This book presents the SPIFFE standard for service identity, and SPIRE, the reference implementation for SPIFFE. These projects provide a uniform identity control plane across modern, heterogeneous infrastructure. Both projects are open source and are part of the Cloud Native Computing Foundation.

As organizations grow their application architectures to make the most of new infrastructure technologies, their security models must also evolve. Software has grown from one monolith on one box, to dozens or hundreds of tightly linked microservices that may be spread across thousands of virtual machines in public clouds or private data centers. In this new infrastructure world, SPIFFE and SPIRE help keep systems secure.

This book strives to distill the experience from the foremost security experts and SPIFFE community members to provide a deep understanding of the identity problem and how to solve it. With these projects, developers and operators can build software using new infrastructure technologies while allowing security teams to step back from expensive and time-consuming manual security processes.

Available under a creative commons license.

https://spiffe.io/book/

epubcheck

Editoria produces only valid EPUB from its export. To validate we run the output against the Daisy consortiums epubcheck. However the publicly available epubcheck linked from Daisy/IDPF is running epubcheck 4.2.1 and it reports errors which are incorrect.

So..we had the problem that Editoria, running the latest epubchecker, was producing valid epubs but the public epubchecker site was reporting errors!

So… we asked the awesome folks at Cloud68 if they would set up an epubcheck 4.2.2 and they did… free to anyone to use:

http://epubcheck.cloud68.co/

And now the results from Editoria look like this 🙂

Image collée à 2020-11-11 20-49

Workflow Sprints

Prepping some docs about Workflow Sprints…here are some excerpts…feedback to adam@coko.foundation appreciated!

What is a Workflow Sprint?

A Workflow Sprint is a new methodology for helping organisations understand and optimise their publishing workflows before making technology choices.

Workflow Sprints do this in a series of facilitated sessions that can occur remotely or in real space. The process was developed by Coko Founder Adam Hyde after he witnessed many publishers (or organisations with publishing operations) making these common mistakes:

  1. Investing in slow and costly ‘requirements research’
  2. Identifying solutions purely in terms of tool features

When facing the challenge of improving inefficient, dysfunctional, or ‘stitched together’ legacy publishing systems we have seen everything! The most common way to start digging an organisation out of this hole is to hire external consultants, or appoint someone internally, to individually interview a wide spectrum of users, construct hopelessly complicated logical diagrams, and make a long bucket list of features that seem to be missing.

After this long, expensive process the work begins to find a tool builder that can rewrite their offer (in terms of an existing tool, or bespoke development) in the language of your requirements document.

Another common approach is to skip the long requirements stage and adopt a new tool quickly that seems to fulfil at least some of the ‘missing features’ and live with the consequences.

We do not advocate either strategy.

Real, ‘future proofed’ solutions that create measurable efficiencies in publishing processes come from first understanding your publishing workflow, and then designing an optimised workflow. Only then can we understand what tools may be required to get you from where you are now to where you want to be.

In other words, process optimisation is not a tool-first process. It must be a workflow-first process. Technology should be a servant to workflow, not the other way around. You must understand the workflow you want in order to understand the tools you need.

A Workflow Sprint is a rapid, cost effective way to help your organisation design better publishing workflows and make sound technology choices.

What Remote Facilitation Looks Like

Some pics from Book Sprints remote facilitation events…I have also started doing Workflow Sprints remotely (more on this in the next post)…the following starts with a cool little vid 🙂

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Facilitation has certainly evolved in the last year or so due to the pandemic. I think the Book Sprints crew do an amazing job of keeping it real and they have mastered the art of efficiency and productivity in this new context.

I also just want to point to an event about facilitation. I sorta also don’t want to point to it. It has a lot of red flags for me in the way it presents itself…it might be more for tired corporate facilitators….anyho… judge for yourself:

https://neverdonebefore.org/

Second Edition of Understanding Power Purchase Agreements

The awesome Book Sprints folks continue to do amazing work.

Updated PPA Book

In July 2019, the U.S. Department of Commerce’s Commercial Law Development Program (in partnership with the African Legal Support Facility) brought together a group of world-class experts to update and refresh the “Understanding Power Purchase Agreements” handbook five years after the original publication. The updated handbook, funded by Power Africa, includes additional insight and case studies on the negotiation of power purchase agreements for both small and large-scale projects, along with new guidance on emerging issues in the African power markets such as commercial and industrial power purchase agreements and cross-border agreements.

The updated handbook was drafted using the Book Sprint method, which allowed our diverse group of contributors from African governments, multilateral institutions, development banks, private developers, procurement consultants, and leading international law firms, all whom contributed their time on a pro-bono basis, to complete the handbook in only five days. Version 2.0 of the handbook is available here in PDF format. The handbook is published under the Creative Commons License. Please contact Mohammed Loraoui with any questions regarding the handbook.

From https://cldp.doc.gov/programs/cldp-in-action/details/2547 (Oct 15,2020)