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The Merabi Organization Group’s report 2nd quarter of 2018 *Q2*

The MOG’s report 2nd quarter of 2018 *Q2*

Is the Housing Bubble approaching is REAL. MOG’s quarterly internal CRE report & forecast approved and led by Mr. Kambiz Merabi with his LA team of researcher was released on September 14, 2018.

The report shed light on the vulnerability of the 10 Cities that will be on The Brink Of A Housing bubble in 2020.

The classic residential immense bubble and crash of 2008 is receding into history, but CRE is a cyclical, and it is sensitive to the business cycle, such that revenues generally are higher in periods of economic prosperity and expansion or are lower in periods of economic downturn and contraction. CRE/Real Estate is in cyclical industries that can deal with this type of volatility by when times are good for business like last two years when our GDP is up to 4.2%, they move to bigger (Residence, Office, Retail), expand to new branches, paying bonuses and hiring in prosperity and in good times.
* The current U.S. GDP growth rate is 4.2 percent. That means the United States economy grew at a rate of 4.2 percent in the second quarter of 2018. … If growth continues at this rate, it will lead to a boom and bust cycle.
Current U.S. gross domestic product is $20.412 trillion. August 29, 2018*
Or on the other hand, when times are bad economically they prioritize expenses and potentially cut costs that are not essential: like high rental space (Residence, Office, Retail) move to smaller space with lower rent, implementing employee layoffs and cuts to compensate during the bad times.

However, fragments of the chaos it formed and can still be found in many cities. Well as investors, we are looking for these and any signs and follow a cyclical CRE’s trend always. Our LA team of researchers under direction of Mr. Kambiz Merabi and his leadership released their internal report on 9/14/2018.

This report reveals that many places are showing some unnerving signs of housing crisis on the horizon. National home price growth is slowing, and wages could be increasing, but there are still several areas where housing costs are putting a squeeze on consumers’ wallets.

Our recent housing study analyzed more than 50 major U.S. cities to determine which places are suffering from the worst housing troubles. While affordability issues are usually the most obvious sign of an impending housing crisis, this study looked at subtler, underlying indicators, as we use and subscribe to many sources to compare and make an internal predication.

Our report’s analyses information and sources, such as for residential & homes:

• Percentage of homes with mortgages in negative equity
• Total number of homes in negative equity
• Total Number of homes at least 90 days late on their mortgage payment
• Negative equity delinquency rate
• Homeowner vacancy rate and rental vacancy rate
• APT rental vacancy rate and rental vacancy rate
• The city’s economic forecast and GDP
• City’s local Taxes, Corporate & Personal tax

In many major cities across the country, the number and percentage of homes that are “underwater”, which are homes in which the amount owed on the mortgage loan is higher than the market value of the house, have gotten disturbingly high.
Our reports highlight that in Chicago, America’s third-largest city with a population of about 2.7 million, close to 70,000 homes are underwater on their mortgage, amounting to nearly a quarter of homes with a mortgage. And, despite those alarming stats, Chicago isn’t the city in the most potential danger.
The most exposed city, however, is Newark, N.J. The city has significantly fewer homes in negative equity — around 5,000 — but Newark is also a much smaller than Chicago. Consequently, Newark has almost a third of its homes in negative equity, and a quarter of them are at least 90 days late on their mortgage.

We found that many major cities don’t just have high rates of negative equity: Their percentage of homes underwater has increased year over year. Birmingham, Alabama is the prime example, seeing its proportion of underwater homes go from 19% in Q4 2016 to 30% by Q4 2017 — an 11% year-over-year rise.
High homeowner and rental vacancy rates also plague many of these cities. Birmingham has one of the highest rates of rental vacancy (12.7%). Another Deep South city, New Orleans, follows closely behind with an 11.6% rental vacancy rate. It also suffers from high homeowner vacancy too, though Toledo, Ohio is even worse.

Here’s a look at the top 10 cities most in danger, including selected characteristics, in 2020:

10. New Orleans
• Total number of homes underwater: 5,418
• Percentage of homes with mortgage in negative equity: 13%
• Percentage of homes underwater YOY change: 2.4%
9. Cleveland, Ohio
• Total number of homes underwater: 13,656
• Percentage of homes with mortgage in negative equity: 30%
• Percentage of homes underwater YOY change: -1.6%
8. Memphis, Tenn.
• Total number of homes underwater: 14,195
• Percentage of homes with mortgage in negative equity: 17%
• Percentage of homes underwater YOY change: 1.7%
7. Columbus, Ohio
• Total number of homes underwater: 8,908
• Percentage of homes with mortgage in negative equity: 26%
• Percentage of homes underwater YOY change: 3.7%
6. Baltimore
• Total number of homes underwater: 25,313
• Percentage of homes with mortgage in negative equity: 30%
• Percentage of homes underwater YOY change: 5.2%
5. Detroit
• Total number of homes underwater: 4,964
• Percentage of homes with mortgage in negative equity: 38%
• Percentage of homes underwater YOY change: 1.6%
4. Chicago
• Total number of homes underwater: 69,390
• Percentage of homes with mortgage in negative equity: 22%
• Percentage of homes underwater YOY change: -0.7%
3. Birmingham, Ala.
• Total number of homes underwater: 8,411
• Percentage of homes with mortgage in negative equity: 30%
• Percentage of homes underwater YOY change: 11%
2. Toledo, Ohio
• Total number of homes underwater: 12,285
• Percentage of homes with mortgage in negative equity: 26%
• Percentage of homes underwater YOY change: 2.2%
1. Newark, N.J.
• Total number of homes underwater: 4,978
• Percentage of homes with mortgage in negative equity: 32%
• Percentage of homes underwater YOY change: 5.2%

Mr. Kambiz Merabi’s Q2 report Published 8/31/2018 LA, has been released at 10:44 AM PCT, September 14th, 2018.

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