Monday, 21 October 2024

I've worked at Google, Amazon, and Uber. These are 3 common mistakes I see when people apply for tech jobs.

Alexandria Sauls sitting down in chair
Alexandria Sauls worked at Amazon, PayPal, and Uber before joining Google. Now she has a career services side business called No Ceilings.
  • Alexandria Sauls worked at Amazon, Uber, and PayPal before landing a job at Google.
  • Now, she has a career coaching business on the side and gives résumé reviews and mock interviews.
  • Sauls told BI about the mistakes she sees from applicants, like leaving out their impact on résumés.

This as-told-to essay is based on a conversation with 33-year-old Alexandria Sauls, a Google employee who runs a career coaching side business called No Ceilings. It has been edited for length and clarity.

My break into tech was through a career fair on campus. Amazon was hiring a massive group of people in operations, so that's how I got my opportunity.

I was then able to land jobs at Uber, PayPal, and Google through cold applying through LinkedIn or on the company website. Typically, within the next 24 to 72 hours I would see that someone from the company had viewed my profile. From there, we kicked off the interview process.

I officially started my career service business, No Ceilings, in 2022 and I've helped over 100 clients, primarily with résumés and mock interviews. I've helped people across Big Tech companies as well as smaller tech companies. I have some people who just need some tweaks and some looking to fully pivot.

These are the red flags I see in the application process.

Don't: Steer away from the question

I recommend responding in a very concise way. Sometimes when you don't understand the question and nerves are there, you can kind of go full throttle and then you're like, "Wait, I don't know if this is actually answering it."

I learned the "Star" format at Amazon and I've used this same format of responding at every company since. "Star" stands for situation, task, action, and result, and it really allows you to keep yourself on track by stating the problem you were trying to solve, the specific actions you took to get there, and then making it a full close-out with that result.

It helps the interviewer because they can go through their notes and understand what you did. Your ability to communicate concisely also plays a huge role in how they see you in the business.

I typically recommend the STAR format for behavioral questions, but you'll also get those types of questions like, "How did you go about putting together a strategy?" Although you're not giving the response in the same format, you'll think about the process you did as if it were a behavioral question.

Don't: List responsibilities without impact

The biggest drop-off that I see is some people listing just their responsibilities, like "I generate weekly reports" or "schedule X number of meetings."

When I do a sweep of my clients' résumés, I ask probing questions in the doc, like, 'Do you have project examples, or what was the impact?' Once I get that fuller picture, I'm like, 'Wait, you solved a very complex problem that you put in as "I deliver weekly reports."'

Writing it that way doesn't really give a full picture of the projects they worked on or communicate their compelling impact. Each bullet should be the "R" of the "Star" format: "result." So you should make sure those verbs and words align with the job description and that result.

When you're looking at your résumé, ask if it's showing all of your awesomeness. If not, go back and revise some more. But I can guarantee there are ways to tell more of that full picture.

Don't: Repeat your résumé when asked for an intro

"Tell me about yourself" is such a big question, but I tell people it should be a little mix of personality and a clear understanding of why you're applying for that role.

It's not a walk-through of your résumé — they have the documentation. I typically recommend saying the university you went to if you recently graduated and then talking about the industries you've been in, what kind of projects you worked on, and what led you to apply for that role.

Usually, that will keep you within three minutes or less.

Gray areas: Small talk with interviewers and résumé format

When it comes to small talk, you don't want to give your full life story. But I do like to say I'm originally from Houston and have been living in New York City for the last five years with my husband and our puppy Kygo. Usually, I try to keep it light.

I've had a mix of interviews for one role where someone was super formal, and then the next two were more casual. You really have to adjust to the vibe of the person and know that each person will differ.

With résumé format, I don't have a super strong opinion. I still go for the generic black-and-white résumés and always tell people to focus more on the keywords and content than the layout.

In terms of page number, people say try to keep it under two pages if you have less than 10 years of experience. But the résumé I applied to with Google was definitely two pages because I wanted to get some good examples. You wouldn't want to compromise on including relevant certifications, for example, just because it's over a page.

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Sunday, 20 October 2024

What you should consider before applying to multiple jobs at the same company simultaneously

Graphic of job resume document out from laptop. Hands holding cv resume papers
Concurrently applying to multiple jobs at one company might raise concerns for a recruiter, but you can try to frame it as strong enthusiasm for the company's mission.
  • It can help to cast a wide net when you're applying for jobs.
  • But how many jobs can you apply to at a single employer without appearing desperate?
  • Experts say you can simultaneously apply to multiple jobs at one company, within reason — if your skills genuinely align with them.

When you're searching for a job, it's a given that you're applying to multiple positions. But how many of those can be at the same company?

Faced with fierce competition in the job market amid wider industry layoffs, it's an important question for applicants to consider as they pound the virtual pavement and sift through a company's openings.

We asked career experts for their thoughts on when you can submit multiple job applications to a single employer — and what you should keep in mind when you do.

Cynthia Pong, executive coach, speaker, and founder of Embrace Change, a career coaching and training firm, said it's fine to apply to multiple roles simultaneously "if there's genuine alignment between the position and your skills, background, and interests."

However, it's important to understand how you might be viewed when you throw your hat in for multiple roles at a company at the same time. You might come across as desperate or suggest that you're indiscriminately applying to open positions, including those that don't fit your skillset. It could also inadvertently indicate to recruiters that you're not getting many bites elsewhere.

Farah Sharghi, a career coach, strategist, and former tech recruiter, recommended limiting the number of applications to a single employer to two or three positions in your wheelhouse.

"Applying to too many roles can make you seem unsure about what you're seeking, and most recruiters work on roles that are similar to one another," Sharghi said.

Applicant tracking systems can also quickly show recruiters your application history at a firm.

Gabby Davis, a career trends expert at Indeed, advised waiting at least two weeks before submitting another application to the same employer.

"If you apply too quickly, it may look like an accident or that you lack attention to detail," Davis said. "Especially in a tighter market, some employers may be inundated with applicants and need additional time to sort through applications. After a week or two, the second application can function as a reminder of your interest within the company."

If you do choose to target multiple openings, you should still customize each application based on the role — as you would when applying to a role at a different company.

"When applying for any job, but particularly multiple roles within a company, it's crucial to have updated and tailored résumé and cover letters specific to each role," Davis added.

In an interview, expect that the recruiters will already be aware of your other applications and be prepared to address any questions or concerns they may have. If that happens, frame your concurrent applications as demonstrating a strong interest in the company's mission and values.

Sharghi said you can try something like, "Yes, I've applied to a few positions here because I'm genuinely excited about the company's mission and culture. Each role I've applied for aligns with my skills and career goals in different ways. For this specific position, I'm particularly interested because ..." followed by mentioning specific aspects of the job that appeal to you.

As with any job application, you want to "emphasize your genuine fit and enthusiasm" for the position, Pong said.

Read the original article on Business Insider


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Saturday, 19 October 2024

Venture capital is going to war over the election. Here's the data to prove it.

Keith Rabois, Vinod Khosla, Marc Andreessen, Reid Hoffman
  • VCs are lobbing cash at the presidential election and key congressional races, FEC data shows.
  • While most VCs favored Democrats, a16z's crypto giving dwarfed all other donations.
  • The top individual donor was Greylock partner Reid Hoffman, who pledged support for Kamala Harris.

America is bitterly divided over politics, and the tech industry — once portrayed as a liberal bastion — is no different. Among the sector's investor class, these disputes typically play out behind closed doors, with checkbooks rather than angry social media posts.

This election cycle, investors at the top venture capital firms have plowed tens of millions of dollars into the election, both backing their favored political candidates and just cannily promoting commercial interests.

Business Insider trawled political donation data released by the Federal Elections Commission to see how employees at VC firms have donated by candidates and political entities as the hotly contested race enters its final phase.

The data is limited, focusing only on a subjective grouping of 10 high-profile firms, and cutting off at varying points over the summer. More recent FEC donor data will be released in the days and weeks ahead of the November 5 general election, often the most turbulent time in any cycle.

The sheer volume of donations captured in the FEC filings underscores the significance of the tech constituency in the political arena, how the Silicon Valley elite has embraced politics of late, and just how flooded by money modern American politics has become.

The big spenders

For venture capitalists, talking politics can invite scrutiny — or worse, turn off founders seeking funds for what might be the next big thing. It's part of the reason why many firms won't take positions on political issues or push a candidate on their employees.

While that hasn't stopped individual investors from voting with their dollars, many VC firms are quick to point out that donations do not represent the organization's political stance.

Except when they do.

Andreessen Horowitz, or a16z, is the sole firm in our dataset to make political contributions directly. In this election cycle, it contributed $47 million to groups working to elect blockchain-friendly candidates, including Fairshake, a titanic crypto-industry backed super PAC. The firm is all-in on crypto, investing in Solana and Yuga Labs, and launched a $4.5 billion investment fund focused on this area in 2022.

While the names of the firm's founders, Marc Andreessen and Ben Horowitz, also appear on filings for donations to these groups, a16z says on its website that these contributions come from the firm, not the founders personally. Though the distinction a16z draws between itself and its founders might be slightly artificial, given Andreessen and Horowitz created, own, and named the firm after themselves.

For all the brouhaha about Andreessen and Horowitz putting millions of dollars behind Trump's latest bid for the White House and Horowitz hedging his bets with a planned donation to Harris, the data shows the two are a rare breed among venture investors: relatively bipartisan donors.

Horowitz sent roughly 59% of his personal political contributions to Republicans and a little under 40% to Democrats, while Andreessen more strongly favored Republicans this election cycle, with 64% of his donations.

In the time period covered by the data, a16z even eclipsed Greylock, where outgoing partner and Democrat megadonor Reid Hoffman has personally pumped nearly $30 million in recorded donations into the presidential election and key congressional races.

Investors at Founders Fund, which has backed SpaceX and Palantir, are nearly 100% Republican in donations, though the bulk of contributions came from Keith Rabois, who left the firm in January to rejoin Khosla Ventures. Employees of venerable firm Kleiner Perkins are the opposite, giving almost entirely to Democratic causes, as is the case for Y Combinator, the colossal startup accelerator.

Like Andreessen Horowitz, Sequoia Capital is largely bipartisan. Unlike a16z, its biggest donors are largely split on party lines. Michael Moritz, who left the firm midway through last year and continues to serve as an advisor to Sequoia Heritage, its wealth management group, gives to Democrats, while Sequoia partner Shaun Maguire donates to Republicans.

Number-crunching

When a candidate's campaign or other political entity receives political donations, they must report it either quarterly or monthly to the FEC, along with information about the donors, including the donor's employer. The federal agency processes these filings, before releasing them in a searchable format on its website.

The data analyzed for this story cuts off on August 31 for entities that report donations on a monthly basis (including presidential campaigns, national party committees, and some PACs), while the cut-off for entities that report quarterly (including Congressional committees and some PACs) is June 30. (The filing deadline for Q3 data for quarterly filing entities was October 15, but this data isn't yet readily available in full online.)

Business Insider selected 10 venture capital firms to focus on, taking into account fund size and cultural and industry significance. The list encompasses employees ranging from general partners and firm founders to marketers and executive assistants.

The findings should not be interpreted as an exhaustive accounting of all venture capital investors' donations to date, but as a comparative analysis of how some of the industry's most significant players have approached political giving over the summer as the election heated up.

Business Insider divided the recipients into three categories: Democrat-aligned, Republican-aligned, and unaffiliated — a grouping that includes both bipartisan groups like Fairshake and independents like West Virginia senator Joe Manchin, as well as organizations like The Lincoln Project, run by self-described Republicans but in practice supporting Democratic causes.

Hoffman vs. Horowitz

Hoffman, the top individual donor, has developed a reputation as tech's Democratic Party standard-bearer. In this election cycle, records show his efforts include $2 million to help fund an unusual write-in effort for President Joe Biden in New Hampshire, and millions to joint fundraising committees for Harris after Biden dropped out. Hoffman also gave $250,000 to a super PAC supporting Nikki Haley, the last major candidate to challenge Trump for the Republican nomination.

Most donors more closely resemble Hoffman than Horowitz: clearly partisan, with an overwhelming majority of their donations going to support one party.

Vinod Khosla of Khosla Ventures is another of the biggest donors on the Democratic side of the aisle, with more than $3 million in recorded donations during the time period to recipients including the Democratic Congressional Campaign Committee and Harris' presidential campaign. Khosla's giving puts him just above John Doerr, chairman of Kleiner Perkins and architect of cleantech investing, though he hasn't managed funds for the firm in a decade.

Sequoia Capital's Doug Leone is one of VC's most prolific GOP-aligned political donors, giving his almost $3.8 million to the National Republican Committee and other causes.

The vehicle of choice for many of these donations is via super PACs, a controversial political fundraising tool that can raise unlimited funds — bypassing FEC limits on donations to candidates and other committees — but cannot directly coordinate with candidates. Asides from Fairshake, some of the biggest super PACs out there favored by VC investors include Future Forward PAC, a tech billionaire-linked Democrat-supporting group, and America PAC, a right-wing entity founded by Elon Musk.

Investors also gave to several joint fundraising committees, which take money for multiple candidates or organizations. They, too, became favored over the years because a joint fundraising committee allows candidates to rake in cash while sharing the costs of fundraising — think website hosting fees, high-end hotels, and catering for splashy Hamptons fundraisers. The most well-loved committees in our dataset were the Harris Victory Fund and Harris Action Fund, the joint fundraising efforts between the Harris campaign, the Democratic National Committee, and state Democratic committees.

Reached for comment by Business Insider, none of the named investment firms agreed to make employees available for interviews about their political giving. Perhaps, from the donors' perspectives, they don't need to: They're already putting their money where their mouth is.

Have a tip or a story? Connect with Melia Russell via email at mrussell@businessinsider.com or by phone at (603) 913-3085. Reach Rob Price at rprice@businessinsider.com. For sensitive matters, use the Signal app on a non-work device for encrypted messaging.

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Friday, 18 October 2024

3 major hurricanes in the last 13 months did billions of dollars of damage to Florida's farmlands — and that was before Milton

A large fallen tree pins down power lines in Ellenton, Florida, in the aftermath of Hurricane Milton.
A large fallen tree pins down power lines in Ellenton, Florida, in the aftermath of Hurricane Milton.
  • Hurricane Milton's estimated damage to Florida's agriculture could go up to $2.5 billion.
  • That's according to estimates from the Florida Department of Agriculture and Consumer Services.
  • That number puts Milton's estimated damage on par with the total from Hurricanes Helene, Idalia, and Debby.

Hurricane Milton singlehandedly wrecked as much havoc on Florida's agriculture as three other major hurricanes combined, according to new estimates from the state's agriculture department.

Milton, a Category 3 hurricane that made landfall on Florida's western coast on October 9, has severely damaged the state's crops and farming infrastructure, the Florida Department of Agriculture and Consumer Services (FDACS) said.

The department on Thursday said that based on its initial damage assessment, the estimated total losses to the Sunshine State's agriculture industry now range "between $1.5 and $2.5 billion."

The commodities affected by hurricane damage include animal products, citrus and non-citrus fruit farming, field crops, greenhouses, and vegetable farming, per the damage assessment.

The FDACS said in its damage assessment that Milton created "major structural impacts" on cattle ranches. Separately, a majority of the citrus acreage in Florida was situated in counties hit by Milton, which means "significant production losses" from farmers are expected, per the FDACS.

The FDACS added in its Thursday statement that three major hurricanes that hit the state in the last 13 months — Helene, Debby, and Idalia — caused more than $1.5 billion in damages combined.

Florida's commissioner of agriculture, Wilton Simpson, urged the US Department of Agriculture to issue a disaster declaration for counties affected by Milton, which would hasten aid and assistance for impacted farmers.

In a letter to Tom Vilsack, the secretary of the US Department of Agriculture, on Thursday, Simpson said, "We are a major agricultural producer and exporter, with $8.88 billion in agricultural products sold annually as of the latest USDA agricultural census."

"Agriculture makes up one of the largest portions of Florida's $1.2 trillion gross domestic product, and it is critical that this engine of our economy has the resources they need to continue to operate."

He said that the hurricane had devastated livestock, nurseries, crops, and agricultural equipment and infrastructure.

"If immediate action is not taken, we are at risk of losing significant agriculture, aquaculture, and silviculture operations in this region due to circumstances beyond our farmers' control," Simpson added in the letter.

Florida's agricultural industry is a major driver of the state's economy. It has around 44,400 farms and ranches, spanning over 9.7 million acres, per numbers from the Department of Agriculture's National Agricultural Statistics Service.

In 2023, Florida accounted for 20% of the country's orange production, 34% of its watermelon production, and 28% of its grapefruit production, according to the National Agricultural Statistics Service.

According to an October 10 note from analysts from Fitch Ratings, Hurricane Milton has resulted in an estimated $30 billion to $50 billion of insured losses in Florida.

Before the hurricane made landfall, Moody's Analytics estimated that $1.1 trillion worth of commercial property would be exposed to dangerous hurricane winds.

According to an estimate by Moody's Analytics on October 8, more than 235,000 commercial real estate properties in Florida had a greater than 50% chance of being exposed to wind speeds of at least 50 miles per hour.

Milton came just days after Hurricane Helene hit Florida and other southeastern states, leaving more than 200 people dead.

In a report on September 30, Moody's Analytics projected the damage from Helene to be between $20 billion and $34 billion.

Representatives of Florida's Department of Agriculture didn't respond to a request for comment from Business Insider, sent outside business hours.

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Thursday, 17 October 2024

24 major cities where renters can save at least 10% compared to the national median

An apartment building in the evening.
Major US cities saw median rent fall last month.
  • Rent edged lower in September, continuing a long streak of year-over-year declines.
  • Southern cities saw some of the largest dips in rent.
  • Here are 24 real-estate markets where rent is at least 10% below the national median.

Apartment dwellers scored a small but much-needed win on the affordability front in September.

Median rent in the 50 largest US metropolitan areas dipped to $1,743 last month, according to an October 16 report from Realtor.com. That was $10 less than in August and $17 under the record peak from the August before, when inflation was coming off of multi-decade highs.

Realtor.com Sept 2024

Asking prices were lower year-over-year for the 14th straight month, though they were only a few dollars cheaper than in September 2023. Apartments cost less across unit sizes, as studios slid by $34 to $1,442 per month, while one- and two-bedroom setups were both $8 more affordable at $1,623 and $1,930, respectively.

Realtor.com Sept 2024 units

Renting is much more expensive now than it was before the pandemic, as the typical unit's price has risen by $286, or nearly 20%, since 2019. However, Realtor.com economic researchers Jiayi Xu and Danielle Hale pointed out that the same is true of most other goods and services.

"This increase is roughly on par with what has occurred in overall consumer prices (up 22.7% in the 5 years ending September 2024) and pales in comparison to the 50.8% increase in median price-per-square-foot of for-sale home listings in the 5 years ending September 2024," Xu and Hale wrote in their note.

The two continued: "Further, the relative steadiness in rents should translate into slower shelter inflation in the months ahead, alleviating one of the biggest recent drivers of rising prices."

Although rent is down across major US cities, improvements in affordability are far from uniform.

Eight of the 10 real-estate markets with the largest year-over-year drops in rent last month were in the South, led by Nashville's 4.8% drop. Dallas and Denver also each tumbled 4% from 2023.

"While the labor market in the South in areas such as Austin (3.7%) and Birmingham (3.1%) continues to outperform the top-50 average, with much lower unemployment, the rapid growth in new multi-family homes is putting downward pressure on rental prices and cooling the market," Xu and Hale wrote.

Conversely, eight of the 10 metro areas in the Midwest that made Realtor.com's list had higher rent than last September. Chicago and Detroit were the only cities in that region where rent fell. Xu and Hale estimate that a combination of lower starting prices and healthy labor markets likely underpinned that move.

24 cities with cheap rent

Renters hunting for a deal are in luck. Business Insider reviewed Realtor.com's list of the 50 biggest US cities and narrowed it down to the two dozen cities where rent was at least 10% less than the national median of $1,743 last month.

Below are those 24 major US cities, along with each location's median rent in September, the year-over-year and month-over-month changes, and the savings versus the national median rate.

1. Oklahoma City
Downtown Oklahoma City, Oklahoma.

Median rent: $1,037

Year-over-year change: 1.9%

Month-over-month change: -0.3%

Discount vs national median: 40.5%

2. Columbus, Ohio
Columbus, Ohio.

Median rent: $1,217

Year-over-year change: 1.2%

Month-over-month change: -1.1%

Discount vs national median: 30.2%

3. Memphis, Tennessee
memphis tennessee city skyline

Median rent: $1,227

Year-over-year change: -3.5%

Month-over-month change: -0.2%

Discount vs national median: 29.6%

4. Cleveland
Cleveland city skyline at night.

Median rent: $1,237

Year-over-year change: 0.6%

Month-over-month change: -1%

Discount vs national median: 29%

5. Birmingham, Alabama
Birmingham, Alabama, downtown city skyline.

Median rent: $1,251

Year-over-year change: -3.5%

Month-over-month change: 0.8%

Discount vs national median: 28.2%

6. San Antonio
San Antonio skyline.

Median rent: $1,268

Year-over-year change: -3.1%

Month-over-month change: -0.9%

Discount vs national median: 27.3%

7. Louisville, Kentucky
A street in downtown Louisville, Kentucky.

Median rent: $1,287

Year-over-year change: 2.5%

Month-over-month change: -0.4%

Discount vs national median: 26.2%

8. Indianapolis
Indianapolis, Indiana.

Median rent: $1,318

Year-over-year change: 0.5%

Month-over-month change: -0.5%

Discount vs national median: 24.4%

9. Detroit
Detroit, Michigan downtown skyline

Median rent: $1,328

Year-over-year change: -0.3%

Month-over-month change: 0.2%

Discount vs national median: 23.8%

10. Kansas City, Missouri/Kansas
Kansas City, Missouri.

Median rent: $1,357

Year-over-year change: 0.7%

Month-over-month change: 0%

Discount vs national median: 22.1%

11. St. Louis
The skyline of the city of St. Louis.

Median rent: $1,361

Year-over-year change: 2.6%

Month-over-month change: -0.1%

Discount vs national median: 21.9%

12. Houston
skyline of Houston, Texas

Median rent: $1,375

Year-over-year change: -3%

Month-over-month change: -1.2%

Discount vs national median: 21.1%

13. Cincinnati
skyline of Cincinnati, Ohio

Median rent: $1,393

Year-over-year change: 3.4%

Month-over-month change: 0.9%

Discount vs national median: 20.1%

14. Dallas
A picture of Dallas' skyline.

Median rent: $1,475

Year-over-year change: -4%

Month-over-month change: -0.9%

Discount vs national median: 15.4%

15. Pittsburgh
Skyline of Pittsburgh at dusk.

Median rent: $1,480

Year-over-year change: 1.1%

Month-over-month change: 1.4%

Discount vs national median: 15.1%

16. Las Vegas
Aerial view of Las Vegas

Median rent: $1,493

Year-over-year change: -1.1%

Month-over-month change: -1.2%

Discount vs national median: 14.3%

17. Richmond, Virginia
Richmond, Virginia.

Median rent: $1,512

Year-over-year change: -0.6%

Month-over-month change: -1.4%

Discount vs national median: 13.3%

18. Austin
Austin skyline

Median rent: $1,522

Year-over-year change: -3.7%

Month-over-month change: -0.8%

Discount vs national median: 12.7%

19. Charlotte, North Carolina
a sky-view of Charlotte, North Carolina.

Median rent: $1,536

Year-over-year change: -2.9%

Month-over-month change: -0.1%

Discount vs national median: 11.9%

20. Phoenix
Phoenix, Arizona, Downtown Skyline Aerial.

Median rent: $1,544

Year-over-year change: -3%

Month-over-month change: -1.3%

Discount vs national median: 11.4%

21. Virginia Beach, Virginia
Virginia Beach, Virginia

Median rent: $1,544

Year-over-year change: 0.1%

Month-over-month change: -0.3%

Discount vs national median: 11.4%

22. Jacksonville, Florida
Jacksonville skyline

Median rent: $1,552

Year-over-year change: -2.4%

Month-over-month change: -0.4%

Discount vs national median: 11%

23. Minneapolis
Downtown Minneapolis skyline at dusk with US Bank Stadium in view.

Median rent: $1,555

Year-over-year change: 1.9%

Month-over-month change: -0.1%

Discount vs national median: 10.8%

24. Raleigh, North Carolina
Buildings in Raleigh, North Carolina

Median rent: $1,557

Year-over-year change: -0.3%

Month-over-month change: -0.4%

Discount vs national median: 10.7%

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Wednesday, 16 October 2024

3 reasons rate cuts won't stimulate the economy like they have in the past: Morgan Stanley Wealth Management CIO

Stressed trader
  • The Fed has started cutting rates, but it's not likely to boost the economy much, Lisa Shalett says.
  • The economy is less rate-sensitive than it was during previous rate cuts, Shalett argues.
  • Investors should keep an eye on corporate earnings for clues of a soft landing.

Rate cuts have long been seen as an integral part of the Federal Reserve's monetary policy toolbox to juice up the economy.

However, don't expect rate cuts to save the economy this time around, according to Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.

Investors may have reacted positively after the initial 50-basis-point cut, but Shalett believes rate cuts have already been largely priced in from here on out. Beyond the stock market, several parts of the economy aren't very sensitive to interest rate cuts and won't see much upside either.

Today's economy is facing different challenges than it has in past cutting cycles. In an interview with Business Insider, Shalett shared what to expect — and not expect — from this cutting cycle.

3 reasons rate cuts won't work

First, companies today are carrying more cash, resulting in stronger balance sheets.

Many also locked in low borrowing rates after the Global Financial Crisis. The average cost of capital for the biggest companies in the index is only 4.2%, according to Shalett. With less debt, and subsequently fewer interest payments, many S&P 500 constituents aren't that exposed to interest rate risk.

Household consumption also points to reduced rate-cut relief. Wealth is disproportionately concentrated across American households, Shalett said, with the top 40% of households driving two-thirds of total consumption.

"For those households with net savings, high interest rates were actually stimulative," Shalett said. High-income households with extra cash on hand benefited from increased interest income in a higher-rate environment.

One example is baby boomers, many of whom live off of fixed incomes in retirement. "For them, lower interest rates are not stimulative. It's actually net reductive to their incomes," Shalett said.

While lower interest rates could potentially spur consumption for lower-income households, this group makes up only a small portion of overall spending, so don't count on that to materially stimulate the economy, she said.

Lastly, the housing market poses a large challenge for the economy, and Shallett doesn't believe rate cuts will be able to improve the situation.

Lower mortgage rates can help housing affordability, but they won't solve the underlying issue of housing inventory undersupply. According to Shalett, the US is about 4 million housing units short, thanks to a lack of construction after the housing crisis.

In addition to a dearth of supply, how homes are financed also poses an issue.

"Forty percent of the entire housing stock of the US is now owned outright with zero mortgage," Shalett said. That means homeowners are disincentivized to sell into a housing market where mortgage rates — while down from earlier highs — are still hovering around 6%. Many of these homes are owned by retired baby boomers, Shalett added.

Another 36% of the housing market has a mortgage locked below 4%, thanks to record-low pandemic interest rates.

"So the fact that mortgage rates are at 6% today doesn't really create an incentive for those people to transact in the mortgage market," Shallett said. "Seventy-six percent of your entire housing market is frozen and is not moved by the rate cuts."

Keep an eye out for corporate earnings

If rate cuts won't significantly kickstart the economy, then what will?

In Shalett's view, the economy's success hinges on increasing corporate productivity. Shalett recommends that investors closely monitor corporate earnings for the upcoming quarters.

Earnings expectations are already quite ambitious for the next year — Wall Street is forecasting 13-14% profit growth in 2025, a tall order in a slowing economy.

However, a productivity-driven rebound isn't out of the question. Companies are still reporting above-average capital expenditures, and government stimulus will boost areas of the economy such as infrastructure and energy. And the promise of AI could also drive productivity gains. All of these factors could lead the economy to a soft landing.

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Tuesday, 15 October 2024

18 cities with reasonably priced homes that will be million-dollar markets in the next decade

San Francisco.
The median price of single-family homes in San Francisco has nearly doubled since 2014.
  • Home prices have soared in the last decade, so buyers get less for their money than they once did.
  • Although home affordability is an issue, property prices will almost certainly keep rising.
  • Here are 18 markets with reasonably priced homes that are set for strong price growth.

Million-dollar houses aren't what they used to be, as homebuyers across the US can attest.

Gone are the days when seven-figure sums are automatically associated with massive homes on picturesque properties. In fact, in some of the nation's competitive markets, $1 million is nothing more than the price of admission to home ownership.

US property values have soared since the financial crisis during a widespread housing shortage that created a home affordability crisis for buyers. The multi-decade-high inflation surge during and after the pandemic also contributed to home-price appreciation.

This housing-market boom is best exemplified by major cities in California, like Los Angeles and San Francisco. The median cost of a home in those markets has nearly doubled in the last decade — from $420,300 in 2014 to $854,800 now and $769,600 to $1,449,000, respectively, according to data from the National Association of Realtors cited by real-estate site Zoocasa.

Most homebuyers will be out of luck looking in the Golden State, which has seven of the 10 priciest housing markets in the US and will soon have four cities where the typical single-family home costs more than $2 million — including San Jose, San Francisco's Bay Area neighbor.

Persistent property-price growth means that home affordability will likely remain stretched, even as mortgage rates recede to lower levels. That means buyers may still have limited options.

"As prices creep up higher and higher, future home buyers may look outside of these large metros if income growth doesn't start to keep pace with the cost of housing," wrote Zoocasa's Mackenzie Scibetta in a mid-October report.

Though many families will be priced out of this market, those who can swing a home purchase may want to consider it before property prices rise even further in the coming decade.

"While rising prices may seem daunting, they also offer the promise of long-term equity gains, providing stability and a solid return on investment down the road," Scibetta wrote.

18 top cities for real-estate investors

No real-estate analyst can predict exactly how much or how quickly home prices will rise, though past gains can be a solid harbinger of what's ahead.

With that in mind, Zoocasa researchers compiled data on single-family home price growth from 40 large US markets dating back to 2014, and then extrapolated them out over the next decade to estimate when cities would see their median home prices breach the $1 million mark.

Factors like interest rates and the economic climate will certainly change, though this can be a solid starting point for buyers or real-estate investors who are comparing markets to buy in.

"While growth rates offer a helpful estimate, they may not hold steady if the market experiences drastic changes," Scibetta wrote. "However, they can still provide a general sense of where prices could head in the future."

Of the 40 metropolitan areas used in this analysis, Business Insider limited the list to cities that are within 50% of the US median home price, which was $422,100 in the second quarter, according to the National Association of Realtors. That means the cutoff point was $633,150.

Below are 18 cities with homes that cost $633,150 or less in Q2 that are set to be million-dollar markets by the end of 2035, sorted by which will reach the $1 million threshold the fastest. Along with each reasonably priced real-estate market is its median home price and projections for the years ahead, as well as the home price growth rate from 2014 to 2024 that it's based on.

1. Reno, Nevada
Downtown Reno skyline, Nevada, with hotels, casinos, and the surrounding High Eastern Sierra foothills

Median home price in Q2 2024: $620,400

Median home price estimate for 2025: $683,680

Median home price estimate for 2026: $753,415

Median home price estimate for 2027: $830,263

Median home price estimate for 2028: $914,950

Median home price estimate for 2029: $1,008,275

Home price growth rate from 2014-24: 10.2%

Source: Zoocasa, National Association of Realtors

2. Riverside, California
Riverside.

Median home price in Q2 2024: $600,000

Median home price estimate for 2025: $654,000

Median home price estimate for 2026: $712,860

Median home price estimate for 2027: $777,017

Median home price estimate for 2028: $846,949

Median home price estimate for 2029: $923,174

Median home price estimate for 2030: $1,006,260

Home price growth rate from 2014-24: 9%

Source: Zoocasa, National Association of Realtors

3. Manchester, New Hampshire
Skyline of Manchester, New Hampshire with fall foliage. The Merrimack River is in the foreground.

Median home price in Q2 2024: $568,700

Median home price estimate for 2025: $617,608

Median home price estimate for 2026: $670,722

Median home price estimate for 2027: $728,404

Median home price estimate for 2028: $791,047

Median home price estimate for 2029: $859,077

Median home price estimate for 2030: $932,958

Median home price estimate for 2031: $1,013,192

Home price growth rate from 2014-24: 8.6%

Source: Zoocasa, National Association of Realtors

4. Portland, Oregon
Buildings in Portland, Oregon

Median home price in Q2 2024: $608,500

Median home price estimate for 2025: $657,789

Median home price estimate for 2026: $711,070

Median home price estimate for 2027: $768,667

Median home price estimate for 2028: $830,929

Median home price estimate for 2029: $898,234

Median home price estimate for 2030: $970,991

Median home price estimate for 2031: $1,049,641

Home price growth rate from 2014-24: 8.1%

Source: Zoocasa, National Association of Realtors

5. Portland, Maine
Portland, Maine.

Median home price in Q2 2024: $566,400

Median home price estimate for 2025: $615,110

Median home price estimate for 2026: $668,009

Median home price estimate for 2027: $725,458

Median home price estimate for 2028: $787,847

Median home price estimate for 2029: $855,602

Median home price estimate for 2030: $929,184

Median home price estimate for 2031: $1,009,094

Home price growth rate from 2014-24: 8.6%

Source: Zoocasa, National Association of Realtors

6. Sacramento, California
Sacramento, California.

Median home price in Q2 2024: $555,000

Median home price estimate for 2025: $606,060

Median home price estimate for 2026: $661,818

Median home price estimate for 2027: $722,705

Median home price estimate for 2028: $789,194

Median home price estimate for 2029: $861,800

Median home price estimate for 2030: $941,086

Median home price estimate for 2031: $1,027,666

Home price growth rate from 2014-24: 9.2%

Source: Zoocasa, National Association of Realtors

7. Salt Lake City, Utah
A city with railway tracks in the foreground at large mountains in the background.

Median home price in Q2 2024: $583,200

Median home price estimate for 2025: $635,688

Median home price estimate for 2026: $692,899

Median home price estimate for 2027: $755,260

Median home price estimate for 2028: $823,233

Median home price estimate for 2029: $897,324

Median home price estimate for 2030: $978,083

Median home price estimate for 2031: $1,066,110

Home price growth rate from 2014-24: 9%

Source: Zoocasa, National Association of Realtors

8. North Port, Florida
north port florida

Median home price in Q2 2024: $525,000

Median home price estimate for 2025: $575,925

Median home price estimate for 2026: $631,790

Median home price estimate for 2027: $693,073

Median home price estimate for 2028: $760,301

Median home price estimate for 2029: $834,050

Median home price estimate for 2030: $914,953

Median home price estimate for 2031: $1,003,703

Home price growth rate from 2014-24: 9.7%

Source: Zoocasa, National Association of Realtors

9. Boise, Idaho
Boise, Idaho.

Median home price in Q2 2024: $510,700

Median home price estimate for 2025: $566,877

Median home price estimate for 2026: $629,233

Median home price estimate for 2027: $698,449

Median home price estimate for 2028: $775,278

Median home price estimate for 2029: $860,559

Median home price estimate for 2030: $955,220

Median home price estimate for 2031: $1,060,294

Home price growth rate from 2014-24: 11.1%

Source: Zoocasa, National Association of Realtors

10. Las Vegas, Nevada
Las Vegas, Nevada.

Median home price in Q2 2024: $478,800

Median home price estimate for 2025: $527,159

Median home price estimate for 2026: $580,402

Median home price estimate for 2027: $639,023

Median home price estimate for 2028: $703,564

Median home price estimate for 2029: $774,624

Median home price estimate for 2030: $852,861

Median home price estimate for 2031: $938,999

Median home price estimate for 2032: $1,033,838

Home price growth rate from 2014-24: 10.1%

Source: Zoocasa, National Association of Realtors

11. Austin, Texas
Austin, Texas

Median home price in Q2 2024: $496,500

Median home price estimate for 2025: $537,213

Median home price estimate for 2026: $581,265

Median home price estimate for 2027: $628,929

Median home price estimate for 2028: $680,501

Median home price estimate for 2029: $736,302

Median home price estimate for 2030: $796,679

Median home price estimate for 2031: $862,007

Median home price estimate for 2032: $932,692

Median home price estimate for 2033: $1,009,173

Home price growth rate from 2014-24: 8.2%

Source: Zoocasa, National Association of Realtors

12. Phoenix, Arizona
Phoenix, Arizona, Downtown Skyline Aerial.

Median home price in Q2 2024: $480,400

Median home price estimate for 2025: $526,038

Median home price estimate for 2026: $576,012

Median home price estimate for 2027: $630,733

Median home price estimate for 2028: $690,653

Median home price estimate for 2029: $756,265

Median home price estimate for 2030: $828,110

Median home price estimate for 2031: $906,780

Median home price estimate for 2032: $992,924

Median home price estimate for 2033: $1,087,252

Home price growth rate from 2014-24: 9.5%

Source: Zoocasa, National Association of Realtors

13. Eugene, Oregon
Eugene, Oregon

Median home price in Q2 2024: $469,100

Median home price estimate for 2025: $512,726

Median home price estimate for 2026: $560,410

Median home price estimate for 2027: $612,528

Median home price estimate for 2028: $669,493

Median home price estimate for 2029: $731,756

Median home price estimate for 2030: $799,809

Median home price estimate for 2031: $874,191

Median home price estimate for 2032: $955,491

Median home price estimate for 2033: $1,044,352

Home price growth rate from 2014-24: 9.3%

Source: Zoocasa, National Association of Realtors

14. Raleigh, North Carolina
Buildings in Raleigh, North Carolina

Median home price in Q2 2024: $484,900

Median home price estimate for 2025: $527,086

Median home price estimate for 2026: $572,942

Median home price estimate for 2027: $622,788

Median home price estimate for 2028: $676,971

Median home price estimate for 2029: $735,867

Median home price estimate for 2030: $799,887

Median home price estimate for 2031: $869,477

Median home price estimate for 2032: $945,121

Median home price estimate for 2033: $1,027,347

Home price growth rate from 2014-24: 8.7%

Source: Zoocasa, National Association of Realtors

15. Salem, Oregon
salem oregon

Median home price in Q2 2024: $456,100

Median home price estimate for 2025: $502,622

Median home price estimate for 2026: $553,889

Median home price estimate for 2027: $610,386

Median home price estimate for 2028: $672,645

Median home price estimate for 2029: $741,255

Median home price estimate for 2030: $816,863

Median home price estimate for 2031: $900,183

Median home price estimate for 2032: $992,002

Median home price estimate for 2033: $1,093,186

Home price growth rate from 2014-24: 10.2%

Source: Zoocasa, National Association of Realtors

16. Durham, North Carolina
Durham North Carolina

Median home price in Q2 2024: $477,600

Median home price estimate for 2025: $517,241

Median home price estimate for 2026: $560,172

Median home price estimate for 2027: $606,666

Median home price estimate for 2028: $657,019

Median home price estimate for 2029: $711,552

Median home price estimate for 2030: $770,612

Median home price estimate for 2031: $834,573

Median home price estimate for 2032: $903,843

Median home price estimate for 2033: $978,862

Median home price estimate for 2034: $1,060,108

Home price growth rate from 2014-24: 8.3%

Source: Zoocasa, National Association of Realtors

17. Providence, Rhode Island
Aerial panorama of Providence skyline on a late afternoon.

Median home price in Q2 2024: $504,800

Median home price estimate for 2025: $542,155

Median home price estimate for 2026: $582,274

Median home price estimate for 2027: $625,362

Median home price estimate for 2028: $671,639

Median home price estimate for 2029: $721,340

Median home price estimate for 2030: $774,719

Median home price estimate for 2031: $832,048

Median home price estimate for 2032: $893,620

Median home price estimate for 2033: $959,748

Median home price estimate for 2034: $1,030,769

Home price growth rate from 2014-24: 7.4%

Source: Zoocasa, National Association of Realtors

18. Wilmington, North Carolina
Wilmington, North Carolina

Median home price in Q2 2024: $467,400

Median home price estimate for 2025: $504,792

Median home price estimate for 2026: $545,175

Median home price estimate for 2027: $588,789

Median home price estimate for 2028: $635,892

Median home price estimate for 2029: $686,763

Median home price estimate for 2030: $741,704

Median home price estimate for 2031: $801,040

Median home price estimate for 2032: $865,123

Median home price estimate for 2033: $934,333

Median home price estimate for 2034: $1,009,080

Home price growth rate from 2014-24: 8%

Source: Zoocasa, National Association of Realtors

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