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Don’t get caught off guard by market crashes that can take all your money down with them. And don’t miss out on markets where you can build wealth practically overnight. Real Estate News for Investors with Kathy Fettke is the premiere source for savvy real estate investors who want the edge. Stay up…

Kathy Fettke: Real Wealth Network


    • Jan 14, 2022 LATEST EPISODE
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    Latest episodes from Real Estate News: Real Estate Investing Podcast

    The Lumber Price Roller Coaster

    Play Episode Listen Later Jan 14, 2022 4:24

    Lumber prices are surging once more. You might remember when they hit a staggering level last spring. They aren't back up to that level yet, but this new surge is, again, adding thousands of dollars onto the price of a new home and making homes that much less affordable.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.The National Association of Home Builders reports that lumber prices have almost tripled over the last four months. That's adding more than $18,600 to the price of an average new single-family home, and about $7,300 to the market value of a multi-family home. The multi-family price hike translates into about $67 dollars a month more that tenants have to pay in rent for a new apartment. (1)Lumber Price Look-BackThe lumber price roller coaster began at the start of the pandemic when sawmills shut down in step with the Covid lockdown. Back then, most people thought that the housing market would suffer as COVID spread, and that home construction would grind to a halt. But it was just the opposite.Housing demand began to soar and sawmills couldn't ramp back up fast enough. According to the NAHB: “The slow reaction by sawmills, combined with a massive uptick in demand from do-it-yourselfers and big box retailers during the pandemic resulted in lumber prices peaking at a record-shattering $1,500 per thousand board feet in May 2021, before beginning a gradual decline through late August.”The NAHB says lumber prices have gone back up 167% since August, to more than $1,000 per thousand board feet. But it isn't just a matter of saw mill response. The NAHB lists several reasons including supply chain disruptions, a doubling of tariffs on Canadian lumber imports, and an unusually damaging wildfire season in the Western U.S. and Canada.NAHB ResponseThe NAHB says it is working with the White House, Congress, and lumber producers to help resolve those issues, and bring prices back down to earth. NAHB actions include a letter to Commerce Secretary Gina Raimondo last month about the doubling of Canadian lumber tariffs. It was signed by 84 members of Congress, and asked that the U.S. resume negotiations with Canada on a new trade agreement for lumber.It says the association leaders also met with Canadian officials at the embassy in Washington, D.C. to emphasize the need to restart negotiations. In early December, the NAHB sent a letter to President Biden in support of a new trade agreement. The NAHB would like to see immediate action in three areas. Those include: The removal of tariffs for lumber and other building materials such as steel and aluminum from China. The elimination of bottlenecks at seaports that are preventing the free flow of goods and materials. And, solutions to delays in transportation by trucks and trains. The NAHB says it's important to address the price issue for all construction materials, and not just lumber. It says the average price growth for home construction materials was about three times the rate of inflation in 2021.The situation isn't hurting builders. As the Wall Street Journal points out, they have no trouble raising prices to cover their costs. Layman's Lumber Guide analyst, Matt Layman, says: “They know they can pay $1,500 for two-by-fours. They didn't like it, but it didn't hurt them.” (2)Without the kind of intervention that the NAHB is advocating, analysts expect to see prices climbing higher through the winter as builders ramp up for the spring season. Many are loading up on as much lumber as they can for fear that prices will climb even further.If you want to learn more about what the NAHB is doing, and how you can express your opinion on what needs to be done, look for a link in the show notes at newsforinvestors.com.You can also join RealWealth, for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://nahbnow.com/2022/01/latest-wave-of-rising-lumber-prices-adds-more-than-18600-to-the-price-of-a-new-home/2 -https://www.wsj.com/articles/sky-high-lumber-prices-are-back-11639842879

    The Real Estate News Brief: Buying vs. Renting, New Upfront FHFA Fees, WeWork Founder's New Focus

    Play Episode Listen Later Jan 12, 2022 6:00

    In this Real Estate News Brief for the week ending January 8th, 2022... we'll look at the cost of buying vs. renting, new FHFA fees for jumbo loans and second homes, and the WeWork/WeLive founder's new focus on apartments.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week. The Federal Reserve released the minutes of its December meeting with details about a more aggressive tapering plan and interest rate hikes. Fed officials plan to begin the tapering process after the first rate hike, which is generally expected to be in March. They are predicting the need for “three” quarter-percent rate hikes this year and another three next year. Possibly, two more after that. That would be a total of 2% if all eight rate hikes go into effect. (1)The number of people applying for state unemployment benefits rose last week, but it's still extremely low. The Labor Department says there were 207,000 initial claims. Continuing claims were also slightly higher. They rose 36,000 to 1.75 million which is still below pre-pandemic levels. (2)The U.S. unemployment rate is now “close” to pre-pandemic levels. It dropped to 3.9% in December from 4.2%. Before Covid struck the U.S., it was 3.5%. This is largely due to businesses offering incentives like signing bonuses, higher wages, and better benefits, to attract workers to a surplus of open positions. (3)The worker shortage has also given Americans more confidence in quitting jobs they don't like and finding better ones. This trend is showing up in the “quits rate” which represents the number of Americans quitting their jobs. The quits rate rose from 2.8% to 3% in November. That represents a 370,000 increase to a record 4.5 million. (4)Turning now to real estate, new numbers on construction spending show an increase. The Commerce Department says they are up .4% for November, at a seasonally adjusted annual rate of $1.63 trillion. When you break that down into sub-sectors, residential construction was up .4% while non-residential construction was flat and office construction was down 32.1%. (5)Mortgage RatesMortgage rates moved higher for the start of the new year. Freddie Mac says the average 30-year fixed-rate mortgage rose 11 basis points to 3.22%. The 15-year was up 10 points to 2.43%. Freddie Mac's chief economist, Sam Khater says these rates are the highest since May of 2020. He says: “With higher inflation, promising economic growth and a tight labor market, we expect rates will continue to rise.” (6)In other news making headlines…Fees Rise for Larger Second-Home LoansThe FHFA is raising up front fees for second-home loans, and those that exceed conforming loan limits. Those fees could add close to another 4% onto the cost of a loan for a second home, and as much as .75% to the cost of a jumbo loan, if they are bought by Fannie Mae or Freddie Mac. (7)The National Association of Home Builders has come out against the fee. It says that a second-home loan of about $300,000 with a loan-to-value of 65% will cost an additional $4,875 because of that fee. NAHB chairman, Chuck Fowke, says: “With the nation in the midst of a housing affordability crisis and many more workers electing to telework, this is exactly the wrong time for federal regulators to be raising fees on homeownership and second homes.”The new fees take effect on April 1st.Buying vs. RentingIs it cheaper to rent or to buy? According to ATTOM Data Solutions, homeownership is still the better choice in most of the country. A new study shows that it's more affordable in 58% of the counties that were tracked by researchers. (8)The study compared median-priced homes to the average rent for a three-bedroom rental property in more than 1,000 counties. Researchers also looked at wages which have been rising slower than home prices but faster than rents. But that dynamic is changing.ATTOM's chief product officer, Todd Teta says: “The trend is slowly shifting toward renters, which could be a major force in easing price increases in 2022. Prices can only go up by so much more before renting becomes financially easier.”WeWork Founder Buying Up ApartmentsThe man who wanted to transform the work world when he co-founded “WeWork, is now working on a plan to “shake up the rental housing industry.” According to the Wall Street Journal and realtor.com, Adam Neumann has purchased more than 4,000 apartments in desirable real estate markets across the country. (9)He told the Journal: “Since the spring of 2020, we have been excited about multifamily apartment living in vibrant cities where a new generation of young people increasingly are choosing to live, the kind of cities that are redefining the future of living.” Neuman left WeWork in 2019, after raising more than $10 billion for the company. He also launched a shared-living network of buildings with rentable rooms called WeLive, but that was shut down when he left the company. The cities where he's purchased apartments include: Miami, Atlanta, Nashville, and Fort Lauderdale, among others.That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.cnbc.com/2022/01/05/fed-minutes-december-2021.html2 -https://www.marketwatch.com/story/u-s-unemployment-claims-rise-slightly-to-207-000-but-still-near-52-week-low-11641476186?mod=economy-politics3 -https://www.marketwatch.com/story/coming-up-u-s-jobs-report-for-december-11641561153?mod=bnbh_mwarticle4 -https://www.marketwatch.com/story/job-openings-tick-lower-in-november-11641309446?mod=economy-politics5 -https://www.marketwatch.com/story/construction-spending-has-solid-gain-in-november-led-by-residential-building-11641222772?mod=economic-report6 - http://www.freddiemac.com/pmms/7 -https://nahbnow.com/2022/01/fhfa-to-impose-hefty-upfront-fees-on-second-home-purchases/8 -https://magazine.realtor/daily-news/2022/01/06/homeownership-still-more-affordable-than-renting9 -https://magazine.realtor/daily-news/2022/01/06/wework-co-founder-seeks-apartment-empire

    The Real Estate News Brief: Single-Family Investor Hot Spots, Insurance Price Hikes, Top Searches on Zillow

    Play Episode Listen Later Jan 9, 2022 5:40

    In this Real Estate News Brief for the week ending January 1st, 2022... investor hot spots for single-family homes, insurance premium price hikes, and Zillow's list of most popular search areas.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic NewsWe begin with economic news from the last week of 2021. The year closed with fewer people asking for unemployment benefits. Initial jobless claims were down to 198,000, which is close to a 50-year low. Continuing claims also dropped. Government figures show they were down by about 140,000 to 1.72 million people. The numbers reflect a labor shortage and companies that are not eager to lay anyone off because it might be difficult to replace them. According to MarketWatch, economists are predicting the labor shortage will continue in 2022, but will not be so pronounced. (1)Pending home sales for November were down for a third month in a row. The National Association of Realtors says they were down 2.2% from October. That's more than the .8% drop in pending home sales that MarketWatch had forecast. On a year-over-year basis, they were down 2.7%. NAR'S chief economist, Lawrence Yun, blames the dip on a tight supply of homes which continues to push home prices higher. He also expects to see higher inventory levels in 2022 which will help slow the price growth. (2)The latest report from the S&P CoreLogic Case-Shiller 20-city price index shows an 18.4% year-over-year gain in home prices for October. The national index shows a 19.1% annual gain. Both are slightly “lower” than they were in September. But some cities are showing extremely strong price growth, such as Phoenix. Year-over-year home price growth there is 32.3%. Tampa and Miami are also very high due to the strong housing market in Florida. (3)Mortgage RatesMortgage rates moved slightly higher, but the average 30-year fixed-rate mortgage is still hovering slightly above the 3% level. Freddie Mac says it rose 6 basis points last week to 3.11%. The 15-year was up 3 points to 2.33%. (4) Freddie Mac's chief economist, Sam Khater, says: “Mortgage rates have been effectively moving sideways despite the increase in new Covid cases.” (5)In other news making headlines…Investors Want Single-Family HomesThe buying spree continues among investors who are snapping up single-family homes, and it's not just the more affordable areas they are interested in. According to CoreLogic, California is experiencing a rebound in single-family homes that are purchased by investors. (6)CoreLogic economist, Thomas Malone, says: “After a decade of moving away, investors are coming back to California.” He says: “The California rise is likely due to large investors, who seem less deterred by the high prices found in the area.”Those California metros include the Silicon Valley region and San Francisco in the North, and the Los Angeles area and the counties of Riverside and San Bernardino in the South. Other metros attracting investors are Atlanta, Phoenix, and the McAllen-Edinburg-Mission region of Texas down near the Southern tip of the state. Las Vegas, El Paso, Memphis and Salt Lake City are also attracting a large share of investors.Insurance Premiums Are ClimbingThe cost of homebuilding materials and climate change risks are turning into higher insurance premiums, and that's giving some property owners sticker shock. The Insurance Information Institute says that premiums are up about 4%, with an average annual premium of $1,400. Realtor.com reports a warning from insurance companies, that premiums will be going even higher. (7)Realtor.com says the cost of rebuilding a home is going up because of higher prices for building materials in general. But, it says, homeowners with the biggest increases are those in disaster-prone areas. Chief economist of the National Association of Home Builders, Robert Dietz, says that building material prices are pushed higher after a natural disaster for six to nine months, while people are, of course, scrambling to rebuild their homes.Most Searched for Real Estate in 2021 The rise of remote work has put a popular vacation area in the spotlight. According to page views on Zillow, South Lake Tahoe was the most popular city last year. Zillow says it catapulted into the number one position because of a high number of page views for each listing – about 5,500! (8)Calabasas in the Los Angeles area ranked as the most popular small town. But it isn't your typical small town. Calabasas is known for having many celebrity residents with homes that are valued at an average of $1.5 million. California's Big Bear Lake also attracted a lot of page views, which Zillow ranked as the most popular vacation town. Other hot spots include Newport, Oregon as the most popular beach town; Tempe, Arizona as the most popular college town; and Lavallette, New Jersey, as the most popular retirement community.That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/jobless-claims-drop-to-198-000-and-stick-near-52-year-low-amid-labor-shortage-11640871335?mod=economic-report2 -https://www.marketwatch.com/story/pending-home-sales-slide-as-buyers-grow-more-cautious-11640790608?mod=economic-report3 -https://www.marketwatch.com/story/the-pace-of-home-price-growth-is-slowing-but-buyers-arent-catching-a-break-11640700715?mod=economic-report4 -http://www.freddiemac.com/pmms/5 -https://magazine.realtor/daily-news/2021/12/30/year-end-mortgage-rates-at-3116 -https://magazine.realtor/daily-news/2021/12/27/investors-continue-buying-sprees7 -https://magazine.realtor/daily-news/2021/12/28/homeowners-experience-sticker-shock-on-insurance-premiums8 -https://www.zillow.com/research/tahoe-zillow-most-popular-2021-30479/

    A Record-Breaking Year for Housing!

    Play Episode Listen Later Jan 5, 2022 5:51

    2021 was a record-breaking year for housing and real estate. Redfin compiled a list of 10 housing records that we experienced last year. And some of these themes are expected to continue into 2022.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.It's been an unusual year to say the least. It was the second year of the pandemic and one where many Americans have changed where and how they live because of the COVID-19 and a surge in remote work. That has also changed the kind of homes they buy and rent.Redfin Chief Economist, Daryl Fairweather, says: “The ongoing pandemic, including its seismic effect on the U.S. economy and the way Americans live and work, has made 2021's housing market anything but typical.” He says: “Remote work, low mortgage rates, a shortage of building materials and wealth inequality that has allowed an influx of affluent Americans to buy vacation homes, to name just a few factors, have come together to create a historic year for real estate. Buyers paid more for homes, bought sooner than they planned, searched outside their hometowns or all of the above.” (1)Redfin's List of 2021 Housing RecordsLet's take a look at Redfin's list:1 - The national median home price hit an all-time high of $386,000 in June. That's a 24.4% year-over-year increase. Home prices have been going up all year, thanks to a lack of inventory and strong demand. Low mortgage rates have also helped fuel that price growth. Redfin says that home prices are higher than pre-pandemic levels in almost all parts of the nation.2 - Inventory levels hit a record low in June when there were just 1.38 million homes for sale. That was 23% lower year-over-year. The problem has gotten worse because of high demand, homeowners deciding to refinance at low rates instead of selling, and new construction that isn't keeping up with the need for homes.3 - Homes are selling more quickly than ever before. Redfin says the typical home spent just 15 days on the market in June and July. In June of 2020, the median number of days on the market was 39. Buyers have been snatching up homes as fast as they can. Many do so without seeing the homes in person.4 - Sellers were also taking advantage of the situation. More than 60% of them accepted offers within two weeks, which is an all-time high.5 - More than 56% of the sold homes went for more than the listing price. That's almost 30 percentage points higher than 2020, and a new record. Redfin says the average home sold for 2.6% over the list price. Almost three quarters of all Redfin agents say their buyers faced competition.6 - The 30-year fixed-rate mortgage went as low as 2.65% in January. That's the lowest ever, and is one reason for the home-buying and refinancing frenzy that we've been seeing.7 - Investors have been busy buying almost one out of every five homes on the market. That's 18.2% of the purchased homes and 11.2% more than the year before. Total dollars spent by investors was a record $63.6 billion in the third quarter compared to $35.7 billion during Q3 2020.8 - Demand has almost doubled for second homes. It was up 91% in January, mostly due to a surge in remote work. Instead of working at home, employees have been enjoying their work hours at beach homes and mountain cabins.9 - Almost a third of Americans wanted to move to a new city this last year, thanks to remote work and the ability to work from wherever. Many workers left expensive cities in search of more affordable areas.10 - Luxury home prices hit new records. The median sale price for a top tier home was 25.8% higher year-over-year, or a little over a million dollars. Mid-priced home were up 16% and affordable homes were up 13.2%.This data is food for thought as we head into the new year, and start mapping out our investing strategy. Mortgage rates are expected to move higher which will slow down price growth a bit. But home buyer demand is expected to remain high along with supply chain issues that are interfering with home construction. And for those who can't buy a home, they will very likely be looking for a single-family rental so they can live like a homeowner.One economist, Logan Mohtashami, lead analyst for Housing Wire, actually believes rates could decrease in 2022. To find out why, I've invited him to be my guest on my 2022 Housing Forecast this Thursday. You can sign up for that at newsforinvestors.com. It's free to join and then you'll get access. I interviewed Logan on my other podcast last Spring, and based on the great reviews, I'd say you won't want to miss this webinar. He's been eerily accurate with his predictions, which have often been the exact opposite of what you see in headline news. Again, you can sign up for the free webinar at newsforinvestors.com. You can also join RealWealth, for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.worldpropertyjournal.com/real-estate-news/united-states/seattle/real-estate-news-top-10-housing-trends-of-2021-redfin-2021-housing-data-housing-records-set-in-2021-daryl-fairweather-12865.php

    The Real Estate News Brief: Year-End Optimism, Surge in Home Sales, SFR Investor Pay Raise

    Play Episode Listen Later Dec 31, 2021 6:25

    In this Real Estate News Brief for the week ending December 25th, 2021... why consumers are feeling optimistic about the economy, the latest surge in home sales, and which investors are getting a nice pay raise.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week and a busy Christmas holiday. There's now just one week left to the year, and economists say the economy is showing signs of strength despite the current COVID-19 surge. Last week, the number of Americans filing for unemployment benefits held steady at just over 200,000 applications. That's below pre-pandemic levels, which were averaging about 220,000 per week. The number of people already collecting checks shrank a bit, to 1.86 million, which is slightly higher than the pre-pandemic level of 1.7 million.Although the holidays could be skewing those numbers somewhat, Rubella Farooqi of High Frequency Economics feels they are heading in a good direction. She said in a MarketWatch report: “The data can be noisy during the holidays, but filings continue to trend down on strong demand for workers amid a labor shortage. The risk now is from new virus variants which are forcing businesses to voluntarily close in response to rising infections.” (1)November ended with an inflation rate of 5.7%, as the nation deals with the Covid-19 Omicron variant. That's up from 5% in October and the highest level we've seen since last summer when the Delta variant was surging. (2) But inflation doesn't appear to be impacting consumer confidence this time around. Consumer spending rose .6% in November (3) and the Conference Board's index was up several points for December.Conference Board President, Steve Odland, says consumers may feel less concern at this point, because it appears the Omicron variant is not as dangerous as Delta. He said on CNBC's Power Lunch last week: “Part of that may be simple Covid fatigue… but also Omicron is less lethal than prior versions and I think that's giving people more confidence all the way around.” (4) Real estate continues to be one of the strongest parts of the economy. New home sales hit a seven-month high in November. They were up 12.4% to a seasonally adjusted annual rate of 744,000. That's up from 662,000 in October, although that was heavily revised from about the same number we're currently getting for November. So the November number could change. But economists say the housing sector is strong with a median sales price of $417,000. That's a new record high. They are also expecting price growth to slow when the Fed starts raising interest rates next year, to control inflation. (5) Existing home sales were also strong in November. The National Association of Realtors says they were up 1.9% to a seasonally adjusted annual rate of 6.46 million. That's a 10-month high, and the third month in a row that they've increased, despite the inventory issue. NAR says inventory levels were down 13% compared to November of last year, but surveys done by Redfin.com show a rise in the number of homeowners planning to sell in the early part of next year. (6)Mortgage RatesAnd homebuyers can still get a screamingly good mortgage rate. Freddie Mac says the 30-year fixed-rate mortgage was down 7 basis points last week to 3.05%. The 15-year was down 4 basis points to 2.3%. (7)In other news making headlines…Single-Family Rental Rates Rent growth for single-family homes is turning into a generous pay raise for investors. The latest report from CoreLogic shows that rent levels were up 10.9% year-over-year in October and that vacancy rates are at 25-year lows. (8) CoreLogic economist, Molly Boesel, says it's the sixth month in a row that rent growth has hit a new high for single-family homes. She says it's rising in lock-step with higher home prices, and that: “Rent growth this October was more than three times that of a year earlier.” And last year was a good year because of the Covid migration to the suburbs and single-family homes.The metros showing the highest growth rates are Miami with a 29.7% year-over-year increase, Phoenix with a 19.3% increase, and Las Vegas with a 16.5% increase. The best rent growth has also been for higher-priced rentals. 2022 Homebuyer StrategiesHigh home prices have left many wannabee homebuyers in the rental market, but realtor.com says they are optimistic about their ability to buy a home in the coming year. The survey shows that more than a quarter of those shoppers were unable to buy a home and that many are planning new strategies for 2022. (9)Among those strategies are plans to make all-cash offers or larger down payments if possible, making offers above the asking price, and writing home seller love letters which are currently frowned upon and illegal in the state of Oregon. 22% of those surveyed say they plan on going over their budget for a home, and 13% plan to make an offer on a home they haven't seen in person.That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/first-time-jobless-claims-unchanged-at-205-000-in-week-ended-dec-18-11640266598?mod=economic-report2 -https://www.marketwatch.com/story/coming-up-latest-read-on-the-feds-favorite-inflation-gauge-11640265116?mod=economic-report3 -https://www.marketwatch.com/story/coming-up-latest-read-on-the-feds-favorite-inflation-gauge-11640265116?mod=economic-report4 -https://www.cnbc.com/video/2021/12/22/the-conference-board-survey-shows-inflation-concerns-down-from-13-year-high.html5 -https://www.marketwatch.com/story/new-home-sales-surge-in-november-11640272086?mod=mw_latestnews6 -https://www.marketwatch.com/story/existing-home-sales-rise-for-third-straight-month-in-november-11640185309?mod=bnbh_mwarticle7 -http://www.freddiemac.com/pmms/8 -https://magazine.realtor/daily-news/2021/12/21/rental-rates-for-single-family-homes-triple-from-20209 -https://magazine.realtor/daily-news/2021/12/20/first-timers-reevaluate-devise-plan-to-compete-in-2022

    Is Solar Power Getting More Expensive in California?

    Play Episode Listen Later Dec 27, 2021 5:25

    Solar advocates are sounding the alarm on proposed changes to California's rooftop solar program. The changes would reduce the savings that solar customers enjoy, and potentially add a new monthly fee to connect to the grid. Regulators say reforms are necessary because non-solar customers are paying too much to maintain the grid, but solar supporters say the changes will discourage people from installing solar and make it difficult to meet California's green energy goals.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.The California Public Utilities Commission released the proposal on Monday, December 13th. (1) There's a long list of changes that include a reduction in the discount consumers would get for installing a solar system. That would increase the amount of time it takes to recoup the cost of the system. The break even window would expand to about double what it is now or about ten years.New Fees, Reduced Sell-Back AmountsThe proposal also includes a monthly Grid Participation Charge of $8 per kilowatt of installed solar. If you have an 8 kW system, for example, you'd be paying an extra $64 a month to hook up to the grid. The fee would be imposed on solar customers so they could pay their “fair share of the cost of maintaining the grid.”New solar customers would also get paid a lower amount for any excess electricity they produce and sell back to the utilities. That wouldn't impact existing customers right away. They'd be able to continue with their existing rate structure for the first 15 years of their system. After that, they would transition from net metering to net billing which pays less for any excess energy produced.Net billing has been highly criticized as a disincentive for solar adoption because many consumers have relied on the money they get from producing excess electricity to help pay for their systems. Solar costs have come down but for many people, solar is still too expensive.Incentives for Residential Storage BatteriesRegulators are hoping the new rules will encourage the installation of residential storage batteries so that solar customers can keep the excess energy they produce, and use it during peak hours in the evening. Peak hours are between 6 and 9pm.If solar homes are getting a wholesale price for the excess energy they produce during the day, and are charged full price for energy they need during the evening, they end up paying the difference. If they install a storage battery, there's no extra cost. Regulators say much of this proposal is to address the strain on the grid during those peak hours, after the sun goes down.Long List of ChangesThere are several other items that the CPUC is proposing that include an Equity Fund to help provide community solar in low-income and disadvantaged communities, new rules that would allow oversized residential solar systems to accommodate future needs for vehicle and appliance charging and electrification, and a change in the way that solar customers are billed from yearly to monthly, possibly because of that proposed monthly grid participation fee.The state's three main utilities support the proposed changes. Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison, along with the CPUC, say the savings that solar customers are currently getting are so big that they are not paying their fair share of the grid's operating costs. The solar industry and advocates say the changes will make it difficult for California to reach a goal for zero-carbon emissions by 2045.Will This Hamper Clean Energy Goals?Susannah Churchill for Vote Solar told the Associated Press that the proposal will “move us backward on clean energy and block many Californians' ability to help make our grid more resilient to climate change.” (2) The rooftop solar program was launched in 1995 to encourage more people to “go solar.” According to the solar industry, 1.3 million California homes now have solar. That's more than any other state in the U.S. Plus, a California law enacted last year, requires that all new homes have solar.The CPUC changes would be phased in over four years for new customers, but if they take advantage of a $3,200 discount on a residential storage system, they'd transition into the new rate structure right away, which pays less for the excess energy that's produced. But they'd get that big discount on an energy storage system.CPUC Commissioner Guzman Aceves says this proposal is all about distributing the cost of maintaining the grid in a way that doesn't unfairly impact non-solar customers, and transitioning to a solar system that uses the sun to produce electricity during the day, to one that can also produce electricity after the sun goes down. That can be done if more people install storage batteries.The CPUC is taking public comment on this proposal and could vote on it by the end next month. If it's approved, the new policy would take effect four months after a final decision.If you'd like to read more about this topic and how you can submit comments to the CPUC, you'll find links in the show notes at newsforinvestors.com.You can also join RealWealth, for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.cpuc.ca.gov/news-and-updates/all-news/cpuc-proposal-aims-to-modernize-state-decarbonization-incentive-efforts2 -https://apnews.com/article/science-business-environment-and-nature-california-utilities-1bc5070157e0fb4f0c216f8b1dd1daee

    The Real Estate News Brief: New Conforming Loan Limits, Surge in Tappable Equity, Building Inspections with Drones

    Play Episode Listen Later Dec 18, 2021 6:04

    In this Real Estate News Brief for the week ending December 11th, 2021... new FHFA conforming loans limits, tappable equity at a record high, and where drones may be used to inspect buildings.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic News We begin with economic news from this past week, including a report that shows inflation has hit a 39-year-high. The government reported a .8% increase in consumer prices last month. That puts the yearly rate at 6.8% which is more than 3 times the Federal Reserve's 2% target. Higher prices for gas, motor vehicles, housing, and food account for most of the increase. The Fed expects inflation to fall below the 3% level by the end of next year. Some economists expect it to take longer. (1) The latest unemployment report shows that initial claims dropped to just 184,000. That's the lowest level since 1969. The government adjusts the numbers for seasonal employment so they may be skewed somewhat, but as MarketWatch reports, they are extremely low and economists expect them to go even lower as the economy continues to strengthen. There's also a worker shortage so many employers are hesitant to let people go. (2) Even if they aren't firing workers, there's been a surge in the number of people leaving or switching jobs. As MarketWatch reports, almost 39 million people have quit their jobs this year. That includes a record 4.4 million in September. Economists expect the year to end with a record-high quits rate. Some are calling this trend “The Great Resignation.” (3)Consumer sentiment turned positive in December, although many Americans are still worried about inflation. The University of Michigan index rose to 70.4. That's up three points from the November reading, but down about 10 points from a year ago. (4)Mortgage RatesMortgage rates are still close to the 3% level. Freddie Mac says the average 30-year fixed-rate mortgage was down one basis point to 3.1% last week. The 15-year was also down one point, to 2.38%. (5)In other news making headlines…Conforming Loan Limits Move HigherThe Federal Housing Finance Agency released final figures on conforming loan limits for 2022. For most of the nation, the maximum amount will be $647,200.The maximum moves above the baseline amount for more expensive areas like the San Francisco Bay Area, Los Angeles, New York City, and others. The highest amount rises to almost a million dollars in those pricier locations, to $970,800. That's 150% above the baseline amount. (6)New Record High for Housing Prices Home prices are a moving target and continue to move higher although price growth has slowed down a bit. Redfin says the median home sale price rose to a new high during the four-week period that ended on December 5th. It says the median price is now $360,250. That's 14% higher than it was a year earlier, and 30% higher from December of 2019. (7)The average sale-to-list price ratio was 100.5%. That means the average home sold at .5% over it's listing price. That's only the average. In 43% of the transactions, homes sold for more than the listing price. In 31% of the sales, sellers accepted an offer within one week of the homes hitting the market.Tappable Equity SurgesSkyrocketing prices are giving property owners a lot of equity. Black Knight says total U.S. home equity was up $250 billion in the third quarter to a total of $9.4 trillion. That's 32% higher than the same time last year. AND it's almost 90% higher than it was right before the housing market collapsed into the Great Recession. (8)Black Knight's data and analytics president Ben Graboske says: “That works out to nearly $178,000 available in tappable equity to the average homeowner with a mortgage before hitting a maximum combined loan-to-value ratio of 80%.”Average mortgage debt is now down to 45.2% thanks to higher prices. That's giving consumers and investors more tappable equity that can be used for other purposes such as home improvements or the purchase of investment properties. Building Inspections with Drones?Drones could be the next great tool for New York building inspectors. They usually perform their inspections using binoculars and cameras from the street, and sometimes from the roofs of other buildings. Construction Dive reports that the city may soon authorize the use of drones for those inspections. (9)Officials say they could “yield more detailed results and greater safety, as well as greater efficiency and documentation.”That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/coming-up-u-s-consumer-price-index-for-november-11639142278?mod=home-page2 -https://www.marketwatch.com/story/jobless-claims-sink-43-000-to-184-000-lowest-since-1969-11639057122?mod=mw_latestnews3 -https://www.marketwatch.com/story/people-quit-jobs-at-slightly-slower-rate-in-october-11638976546?mod=econo4 -https://www.marketwatch.com/story/coming-up-december-umich-consumer-sentiment-11639147437?mod=economic-report5 -http://www.freddiemac.com/pmms/6 -https://www.fhfa.gov/DataTools/Downloads/Pages/Conforming-Loan-Limits.aspx7 -https://www.redfin.com/news/housing-market-update-record-high-price-record-low-inventory/8 -https://www.blackknightinc.com/black-knights-october-2021-mortgage-monitor/?9 - https://www.constructiondive.com/news/new-york-city-inches-toward-drones-for-building-inspections/611185/

    Federal Crackdown on All-Cash Real Estate Deals?

    Play Episode Listen Later Dec 14, 2021 4:37

    Real estate investors who pay cash could face more scrutiny from the federal government. The Treasury Department is proposing new regulations on shell companies, like LLC's, as a way to crack down on money laundering through real estate deals.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Government's Plan to Stop Money LaunderingDeputy Secretary of the Treasury, Wally Adeyemo, discussed the government's plan to fight corruption at the Brookings Institution. He addressed the issue by saying: “Corruption thrives in the financial shadows--in shell corporations that disguise owners' true identities, in offshore jurisdictions with lax anti-money laundering regulations, and in complex structures that allow the wealthy to hide their income from government authorities.” (1)Adeyemo is proposing that countries around the world join this effort to separate the bad actors from the good ones, because many shell companies are perfectly legitimate. It's a recognized strategy to put your residential rental properties, and other kinds of properties, inside something like an LLC as a way to limit any legal liabilities or potential lawsuits to just one property, and not your whole portfolio.But it's also possible to set up a shell company, and to use that company to purchase expensive properties with dirty money. That's what the Treasury Department is targeting.Three-Pronged ApproachAdeyemo wants to tackle this problem in three different ways:1 - He wants to improve transparency by forcing certain types of U.S. and foreign companies that are registered in the U.S. to disclose their beneficial owners, which are the people who actually run the companies. He's implementing this effort under the Corporate Transparency Act which allows the Financial Crimes Enforcement Network to build a central registry for this information. One particular area of concern is the real estate market and all-cash deals that don't require the disclosure of the buyers who may be hiding behind a shell company. Adeyemo is soliciting public comment on the best way to address this problem.2 - He also wants to use the new information to improve the investigation and prosecution of any illegal activity, including money laundering, bribery, embezzlement, and extortion, and tax evasion. He says: “Today, the top 1 percent of earners in the United States underpay their taxes by more than $160 billion each year, depriving every other American of the money we need to invest in things that benefit the whole country, like roads, childcare, and education.” Enforcement might include sanctions, as well as criminal law enforcement.3 - The third leg of his strategy is “partnership.” He wants to expand the effort to allies and partners around the world as well as the private sector, and civil society groups. He says the U.S. can't address corruption without an international effort. As an example, he says “more than 40% of global payments are conducted in euros or pounds.”Impact on Real Estate InvestorsSo what does all this mean for investors who buy and sell residential rental properties inside an LLC? It could mean that the title companies will be required to file reports that identify the beneficial owners of those properties. This is already the law in 12 U.S. cities for transactions over $300,000. That includes Boston; Chicago; Dallas-Fort Worth, Texas; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle.According to realtor.com, the new regulations would expand the disclosure requirement from coast-to-coast. They may also include the purchase of commercial property as well as residential. (2)Some people say the new rules are long overdue. Attorney and anti-money laundering expert, Ross Delston, told Bloomberg: “I'm not sure where the U.S. Treasury has been for the last decade or two, but give them credit for attempting to address a gap that has festered for years and has resulted in the U.S.A. being the money laundering haven of choice for the world's corrupt politicians.” (3)If you'd like to read more about this topic, you'll find links in the show notes at newsforinvestors.com.You can also join RealWealth, for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://home.treasury.gov/news/press-releases/jy05162 -https://magazine.realtor/daily-news/2021/12/07/white-house-seeks-increased-oversight-on-all-cash-deals3 -https://www.bloomberg.com/news/articles/2021-12-06/biden-eyes-shell-company-real-estate-purchases-for-tighter-rules

    The Real Estate News Brief: $2 Trillion Milestone, Suburban Appeal, Retail Rebirth

    Play Episode Listen Later Dec 10, 2021 5:35

    In this Real Estate News Brief for the week ending December 4th, 2021... the $2 trillion real estate milestone, the homebuyer's search for suburban homes, and the brick-and-mortar store comeback.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week. Pending home sales surged higher in October. The National Association of Realtors says they were up 7.5%. That's substantially higher than the .7% predicted by MarketWatch economists. Contract signings were higher in all four U.S. regions, but the Midwest had the biggest gain of 11.8%. (1) Home price growth has cooled off a bit. The S&P CoreLogic Case-Shiller 20-city price index shows a 19.1% year-over-year gain in September. That's a half a percent lower than it was in August, which is not much of a decline. Craig Lazzara of the S&P DJI says that housing prices continue to show remarkable strength. He describes the change of pace as “deceleration.” (2)The weekly unemployment report shows that initial claims jumped back above the 200,000 mark. Just two weeks ago, the number of applications hit a 52-year low of 194,000. It could be that some people decided to wait until after Thanksgiving to file for their benefits. (3) The U.S. jobless rate has fallen again, from 4.6% to 4.2%. MarketWatch reports that almost 600,000 people rejoined the workforce in November, and the participation rate of 61.8% is now the highest it's been since the beginning of the pandemic. (4)If we look at job growth for the construction industry, builders added 31,000 positions last month. Specialty contractors created the most with 13,000 new positions. Civil and heavy engineering accounted for the rest. First American economist Odeta Kushi says: “It was a strong month for construction.” (5)Mortgage RatesMortgage rates didn't move much this last week. Freddie Mac says the 30-year fixed-rate mortgage was up just 1 basis point, to 3.11%. The 15-year was down 3 basis points, to 2.39%. (6)In other news making headlines…$2 Trillion in Real Estate Deals for 2021?Real estate transactions could hit a huge milestone this year. CoreLogic says they topped $600 billion in the second quarter. That's after $750 billion in transactions for the first quarter. Researchers say if the trend continues, we'll hit the $2 trillion mark by the end of the year. (7)CoreLogic economist, Thomas Malone, says it's a combination of high home prices and the migration to bigger homes in more expensive areas. He says: “The value of transactions has skyrocketed despite sales volumes continuing a relatively normal growth trend.”The report also shows that if you look at the last four quarters from the second half of 2020 to the first half of 2021, real estate transactions have already hit the $2 trillion mark. CoreLogic says the total value for that time period was $2.25 trillion.Suburbs Are Not Losing Their AppealThe desire for a home in the suburbs is still going strong, even as many people return to the cities. Realtor.com says that 62% of the online home views in September were for suburban homes while the other 38% were for urban areas. (8)Realtor.com's chief economist, Danielle Hale, says the pre-pandemic suburban vs. city dynamic is changing because of remote work options and high rents in the city. She says: “The price premium is shrinking between notoriously expensive urban housing and suburban for-sale homes, typically known for more bargains.” Inventory levels also reveal the difference. They were down 13% annually in September for suburban areas and only 8% for cities.More Stores Opening Than ClosingE-commerce may have disrupted the retail environment and put a lot of brick-and-mortar stores out of business. But now, the opposite appears to be happening. According to a new analysis by the IHL Group, there are more store openings than closures for the first time in four years. And many of those new openings are due to e-commerce websites wanting a brick-and-mortar presence. (9)As reported by the Wall Street Journal, Levi Strauss is one example. The clothing company plans to open 100 U.S. stores over the next five years. Dick's Sporting Goods is another example, with plans to open more than 800 stores under several brand names. And of course, there's e-commerce giant Amazon which is planning to open its own department stores.For 2021, IHL expects that 4,361 more stores will have opened than were shut down.That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/pending-home-sales-surge-higher-in-october-will-the-new-covid-variant-trip-up-the-real-estate-market-11638198301?mod=economy-politics2 -https://www.marketwatch.com/story/home-price-growth-slows-even-as-the-cost-to-buy-continues-to-hit-records-11638281060?mod=economy-politics3 -https://www.marketwatch.com/story/jobless-claims-climb-28-000-to-222-000-in-thanksgiving-week-11638452207?mod=economy-politics4 -https://www.marketwatch.com/story/coming-up-u-s-jobs-report-for-november-11638537320?mod=economy-politics5 -https://www.housingwire.com/articles/residential-construction-jobs-slowly-return/6 -http://www.freddiemac.com/pmms/7 -https://www.corelogic.com/intelligence/2021-is-on-pace-to-be-the-first-multi-trillion-dollar-real-estate-market/8 -https://magazine.realtor/daily-news/2021/11/29/suburbs-remain-popular-even-as-cities-stage-comeback9 -https://magazine.realtor/daily-news/2021/11/29/first-time-in-4-years-more-store-openings-than-closures

    Today's Factory-Built Homes and Why You Should Check Them Out!

    Play Episode Listen Later Dec 8, 2021 5:13

    Demand for manufactured housing is growing as a way to close the affordability gap. Factory-built homes were once viewed as a low-quality alternative to site-built homes, but that's no longer the case. Factory-built homes are now built to similar standards but they cost less because it's less expensive to build any kind of product in a factory.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Manufacturing housing is enjoying a rebirth of sorts. Factory-built homes were known as “mobile homes” in the 1970s, and there are plenty of them still in existence today. But the newly designed and produced manufactured homes are quite different, according to industry experts.Site-Built vs. Factory-BuiltJim Ayotte is the executive director of the Florida Manufactured Housing Association based in Tallahassee. He recently spoke with the Tampa Times about today's manufactured homes and how they compare to site-built homes. (1)He told the Times that many people have an outdated perception of manufactured homes. He says people will say things like: “Oh, mobile homes, those old things? We don't want those in our neighborhoods. They're not really safe.”But he says the new factory-built homes are built to the similar standards as site-built homes when it comes to “energy efficiency, wind safety and everything else.” Those building codes were upgraded after Hurricane Andrew in 1992, for both kinds of homes. He says: “Today, manufactured homes are built to wind standards that are as high or higher than homes built to the Florida building codes.”Today's manufactured homes also come in “all shapes and sizes.” Depending on the size, some may have porches and/or garages. He says the higher-end manufactured homes are pretty much indistinguishable from a home that was built on location.Manufactured Homes in the Tampa AreaAyotte suggests that anyone interested in affordable homes should check out what you can buy today. And, he says there's plenty of places to find them in the Tampa Bay area. He says that from 2020 to 2021, manufactured home shipments have increased by 18% in Hillsborough County, which is home to the city of Tampa. To the north, in Pasco County, shipments are up 10% and farther north in Citrus County, they are up 26%. To the east, in Pinellas County and the St. Petersburg area, they are up 9%.And the manufactured housing trend is growing. He says there are nine home-building plants in Florida that have increased production by 30% over the last two years. And, he says, every one of them is backlogged.Like all home builders, they are running into supply chain issues right now, but Ayotte says that manufactured home builders buy their materials more efficiently and more cost-effectively. He says that prices are coming back down, but they never come down quite as fast as they go up.He says, currently, the average price for a manufactured home in Florida is about $101 to $102,000. That's up from about $84,500 in 2019. Those prices are without the cost of the land, but they still represent a big savings.When you do a cost comparison between site-built and factory-built homes, Ayotte says there's typically a 20% price difference. But he also emphasizes that the price difference isn't due to a difference in quality. He says it's because factory-built homes are built more efficiently.Improved Loan Access for Manufactured HousingThe Federal Housing Authority is also trying to make it easier for homebuyers to get loans for manufactured homes. The agency recently issued new guidelines for its Title I loan program which provides loans for home improvements along with loans for manufactured homes.HousingWire reports that the FHA consolidated 120 separate policy documents so lenders won't have to sort through them all. It also updated some policies associated with the purchase of manufactured homes. One of the updates will permit a sales comparison approach to appraisals, for example. Another will expand allowable income sources for borrowers. (2) Manufactured homes could also make good rental homes, at a lower price point. In California, where state laws allow for Accessory Dwelling Units on single-family properties, homeowners can buy pre-made cottages to put in their backyards. And then of course, rent them out. The potential is there for not just affordable housing, but affordable rental housing.If you'd like to read more about this topic, you'll find links in the show notes at newsforinvestors.com.You can also join RealWealth, for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.tampabay.com/news/real-estate/2021/12/01/as-florida-house-prices-climb-demand-increases-for-manufactured-homes/2 -https://www.housingwire.com/articles/fhas-manufactured-housing-loan-program-gets-a-facelift/

    “Adaptive Reuse” and Why It's an Investment Opportunity

    Play Episode Listen Later Dec 6, 2021 4:46

    A lot of the nation's empty commercial space is being put to good use. A recent report by RentCafe shows a huge surge in the conversion of vacant commercial buildings into apartment complexes. This so-called “adaptive reuse” trend began more than a decade ago, but accelerated substantially this past year, especially for the conversion of unused office space.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.A recent report by RentCafe says that, by the end of this year, developers will have created 20,100 residential units within old commercial buildings. Add that number to the 12,000 units created last year, and the decade kicks off with a total of 32,000 apartments created by converting commercial buildings into apartment homes.Decade-Long TrendAccording to RentCafe, it's a trend that began in 2010 with 5,200 conversions. Back then, hotels were the most popular kind of building to convert into apartments. Old factories and office buildings were also popular, but not as much as hotels.There was a steady increase of conversions each year through 2017, which logged about 15,500 conversions. The numbers fell in 2018 through 2020, and blasted off again this year, especially for the conversion of old office buildings. RentCafe says that 41% of the units created during that last two years were formerly used for office space.It's been a good opportunity for developers and investors, because adaptive reuse is less costly than ground-up construction, especially with supply chain issues that are holding up new projects. It's also a more earth-friendly option.Lower Environmental ImpactNorth Carolina city planner, Emil Malizia, told RentCafe: “Perhaps the most compelling reason to choose adaptive reuse for apartments versus new apartment construction is the lower environmental impact, especially if demolition is involved.” He says: “Adaptive reuse mitigates climate change; demolitions and new construction do not.”Cost SavingsThe cost savings are also impressive. Malizia says that adaptive reuse can lower construction costs by as much as 30-40%, so long as the cost of the site and the building is not a lot more than a piece of undeveloped land. And right now, it might even be easier to secure an old building than a plot of land, especially if the current remote work trend continues. Companies are changing the way they do business, thanks to the pandemic, and reducing the number of private offices they maintain. Unused Office SpaceAs CNBC reports, office vacancy rates remain high in many U.S. cities, so building owners have been scrambling to put them to use. And we're likely to see even more office space becoming available. A PwC survey says that about a third of the executives are expecting their office space needs to decrease over the next three years, because of remote workers. (2)Although many renters fled from their city apartments during the pandemic, city life is bringing them back. And these commercial space conversions are providing a convenient option for returnees who want to live downtown, in or near the business district.Because there is typically less housing in areas with a lot of office buildings, these conversions also offer a prime “location.” And when you have that, the opportunity for developers and investors can be lucrative.Top Cities for ConversionsWhile this trend is surging in the U.S., it's also happening more in some cities than others. For 2020 and 2021, the city with the most conversions was Philadelphia. Developers created almost 2,000 new apartments through adaptive reuse. Washington, D.C.; Cleveland; Chicago; and Los Angeles were next on that list. They all had more than 1,000 conversions over that last two years. Other cities with a lot of conversions were Alexandria, Virginia; Detroit, Pittsburgh, Kansas City, and New York City.You can see the RentCafe report by following a link in the show notes at newsforinvestors.com. You can also join RealWealth, for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.rentcafe.com/blog/rental-market/market-snapshots/adaptive-reuse-apartments-2021/2 -https://www.cnbc.com/2021/11/24/a-record-number-of-office-buildings-turned-into-apartments-this-year.html

    The Real Estate News Brief: Atypical Winter for Home Sales, Investor Buying Spree, Love Letter Lawsuit

    Play Episode Listen Later Dec 1, 2021 6:20

    In this Real Estate News Brief for the week ending November 27th, 2021... the winter forecast for home sales, what investors are doing with their money, and who's suing lawmakers over real real estate “love letters.”Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week, and a Fed that's growing more concerned about inflation. Central bank officials still believe that prices will rise more slowly next year, but they are acknowledging that inflation pressures could last longer than they anticipated because of labor and supply chain shortages. These issues have pushed the yearly inflation rate to a 32-year-high of 6.2%. If you recall, inflation was close to “zero” about a year ago. The situation could prompt the Fed to begin the tapering of its bond-buying program “before” the end of this year. It has been buying $120 billion in Treasurys and mortgage-backed securities as an economic stimulus. (1)High prices are not preventing consumers from spending money. They have extra cash to spend from pandemic savings along with higher wages and bigger paychecks. That pushed consumer spending up 1.3% in October. According to MarketWatch, about half of the increase is due to inflation, so spending is up about .7%. (2)The latest unemployment report shows the number of people applying for state benefits is now “below” pre-pandemic levels. The Labor Department says initial applications dropped to 199,000 the week before Thanksgiving. That's the lowest level since November of 1969. The number of continuing claims also dropped to a pandemic low of about 2.05 million. (3)New home sales continue to rise. They were up .4% in October, according to the Commerce Department. The median price of a home is now $407,700. That's a new record high. The report also shows that builders are pumping new homes into the market. The supply was up 3.3% to a 6.3-month supply. (4)The sale of existing homes also rose in October, because of high demand, but buyers are still dealing with a lack of supply and higher prices. According to the National Association of Realtors, sales were up .8% between September and October, to a seasonally-adjusted annual rate of 6.34 million. That's also 5.8% lower than the year-ago numbers. (5)Despite the low unemployment figures and the amount of consumer spending, consumer sentiment has now dipped to a 10-year low. The University of MIchigan index dropped from 71.7 in October to 67.4 in November. Consumers are mostly concerned about inflation, and a lower standard of living because of those higher prices. (6)Mortgage RatesMortgage rates held steady last week. Freddie Mac says the average 30-year fixed-rate mortgage is 3.1%. The 15-year is up 3 basis points to 2.52%. (7)In other news making headlines…Cold Winter, Hot Housing MarketThe typical winter slowdown for home sales is probably not going to happen this year. Economists from realtor.com and the National Association of Realtors expect strong demand to continue right through the holidays into next year. (8)Realtor.com's Danielle Hale says the demand continues and that “sellers can expect to see plenty of buyers” while NAR's Lawrence Yun expects “more sales compared to pre-pandemic winters going back all the way to 2006.”In addition to this persistent demand for housing, supply chain issues have delayed some buyers who will continue to search for their dream homes this winter. The limited inventory will also give seller's an incentive to put their homes on the market.Investor Buying SpreeInvestors are also very busy. Redfin reports that investor purchase activity for residential property is up 80% in the third quarter compared to a year ago. It says that investors bought 18% of all the homes sold in Q3, and spent a record $64 billion. If you translate that into the number of homes purchased by investors, the total was a record 90,215 homes. Almost 75% of them were single-family homes. That's also an all-time high. (9)Redfin Senior Economist Sheharyar Bokhari says: “Increasing home prices fueled by an intense housing shortage have created opportunities for investors to reap big profits.” Average monthly rents were up almost 11% year-over-year in September. That's the fastest rent growth in at least two years.Which cities are attracting most of the investor activity? Atlanta; Phoenix; Charlotte, North Carolina; Jacksonville, Florida; and Miami. You can see the full list in the Redfin report. We'll have that link in the show notes.Love Letter LawsuitAn Oregon real estate firm is suing state lawmakers over a ban on homebuyer “love letters.” Those love letters typically offer details about the buyers that could lead to a biased decision by the seller. And that could violate fair housing laws. (10)The plaintiffs at Total Real Estate Group are calling the ban “censorship.” They say the ban is based on mere speculation that sellers might sometimes rely on information in these letters to discriminate based on a protected class.” The Oregon law is the first of its kind, and is set to take effect in January.That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/some-on-fed-thought-faster-pace-of-tapering-bond-buys-was-warranted-meeting-minutes-show-11637781873?mod=the-fed2 -https://www.marketwatch.com/story/u-s-consumer-spending-sizzles-in-october-and-its-not-just-all-high-inflation-11637766739?mod=economic-report3 -https://www.marketwatch.com/story/coming-up-u-s-weekly-jobless-claims-11637759464?mod=economic-report4 -https://www.marketwatch.com/story/new-home-sales-inch-higher-in-october-116377673515 -https://www.marketwatch.com/story/existing-home-sales-rise-slightly-as-demand-remains-strong-for-housing-11637593477?mod=economic-report6 -https://www.marketwatch.com/story/coming-up-umich-consumer-sentiment-survey-11637765079?mod=economic-report7 -http://www.freddiemac.com/pmms/8 -https://magazine.realtor/daily-news/2021/11/24/yun-expect-an-unseasonably-hot-winter-for-home-sales9 -https://www.redfin.com/news/investor-home-purchases-q3-2021/10 -https://magazine.realtor/daily-news/2021/11/22/brokerage-sues-oregon-over-ban-on-buyer-love-letters

    The Real Estate News Brief: 2022 Home Price Forecasts, Single-Family Rent Growth, Record Starts for BTR

    Play Episode Listen Later Nov 23, 2021 5:11

    In this Real Estate News Brief for the week ending November 20th, 2021... home price forecasts for next year, single-family rent growth, and a new record for build-to-rent home starts.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week. The number of people applying for unemployment keeps dropping. Last week, just 268,000 people applied for state benefits. That's getting close to pre-pandemic levels which were in the low 200,000's. The number of people already getting state unemployment benefits is also lower. That number dropped to a total of 2.08 million. (1)Home starts were down slightly in October as builders struggled with supply chain issues and a labor shortage. They were down .7% from the previous month, but compared with October of last year, they were up slightly. Single-family starts were down the most, with a 3.9% decline. But there's a strong demand for housing, and builders are preparing for a much faster pace of construction. Permits rose for all types of buildings, with a 2.7% increase for single-families, an 8.2% increase for buildings with two to four units, and a 6.5% increase for larger multi-families. (2)Although builders are dealing with a lot of challenges, they are feeling confident about the market because there's such a huge demand. According to the National Association of Homebuilders, the level of confidence among builders is the highest it's been since last May. It's up three points for November to a reading of 83. (3) Mortgage RatesMortgage rates rose back above the 3% mark. Freddie Mac says the average 30-year fixed-rate mortgage is up 12 points to 3.1%. The 15-year is also up 12 points to 2.39%. (4) Economists are blaming the increase on inflation, and are forecasting higher rates over the next few months. The National Association of Realtors senior economist, Nadia Evangelou, expects the housing market to slow down next year as more homes hit the market at higher prices with higher mortgage rates. (5)In other news making headlines…Where Are Home Prices Going?Zillow just published a new forecast for 2022 home prices. It is predicting that prices will rise 13.6% between October of this year and October of next year. In September, Zillow had predicted a 11.7% increase. Both those figures are lower than the rate of price growth for this year. They were up a record 19.9% between August of 2020 and August of this year. (6)Zillow researchers say: “The strong long-term outlook is driven by our expectations for tight market conditions to persist, with demand for housing exceeding the supply of available homes.”As Fortune reports, not everyone agrees with Zillow's forecast. Goldman Sachs expects 2022 prices to rise another 16%, while Fannie Mae is expecting a lower 7.9% growth rate. CoreLogic is only expecting a 1.9% overall increase in prices, and the Mortgage Banks Association says it'll be more like 2.5%. Single-Family Rents Move HigherAs you can see, home price forecasts are all over the map, but they all expect strong demand for housing to continue. And that's pushing rents higher for single-family homes.CoreLogic's single-family rental index for September shows that national rents are 10.2% higher year-over-year. Miami rents have gone up the most. Those rents are up 25.7% with rents for high-end homes rising the most. Phoenix is second on that list, followed by Las Vegas, Austin, San Diego, and Dallas. (7)John Burns Real Estate Consulting also tracks single-family rent growth. It shows that new lease effective rents were up 6% year-over-year in September. Phoenix was at the top of that list, at 14%. (8)Single-Family Build-to-Rent StartsThe housing shortage is motivating a lot of developers and investors to bring more build-to-rent homes to the market. According to the National Association of Homebuilders, housing starts for those homes hit the highest level ever in the third quarter. Construction has been ramping up, with 47,000 build-to-rent starts over the last year. (9)Builder.com says that's a 17.5% increase over the previous four quarters. It says: “With the onset of the Great Recession and declines in the homeownership rate, the share of build-to-rent homes increased in the years after the recession. And while the market share… is small, it has been trending higher.”That's it for today. Check the show notes for links and more info on these topics. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/jobless-claims-drop-to-pandemic-low-of-268-000-as-labor-shortage-forces-businesses-to-avert-layoffs-11637242500?mod=economic-report2 -https://www.marketwatch.com/story/new-home-construction-slows-as-builders-grapple-with-supply-chain-headaches-11637157193?mod=economic-report3 -https://www.marketwatch.com/story/home-builders-are-growing-more-confident-as-americans-demand-more-housing-11637075714?mod=economic-report4 -http://www.freddiemac.com/pmms/5 -https://magazine.realtor/daily-news/2021/11/19/inflation-drives-mortgage-rates-over-36 -https://fortune.com/2021/11/18/zillow-changes-2022-real-estate-outlook-what-to-expect-from-home-prices-next-year/7 -https://magazine.realtor/daily-news/2021/11/17/property-owners-see-big-opportunities-in-single-family-rentals8 -https://www.realestateconsulting.com/the-light-bsfri-new-lease-effective-rents-up/9 -https://www.builderonline.com/data-analysis/single-family-build-to-rent-starts-reach-highest-quarterly-volume_c

    Is the 4% Rule Outdated?

    Play Episode Listen Later Nov 23, 2021 7:24

    The 4% rule is a well-known withdrawal rate for retirees, but a new Morningstar report challenges the current standard, saying it is now “outdated.” The formula for determining how much you should withdraw from your retirement is complicated however, because every person's financial needs, tolerances for risk, and resources are so different.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Morningstar researchers analyzed the 4% withdrawal rate in a report called: “The State of Retirement Income: Safe Withdrawal Rates.” (1) Their analysis includes forward-looking estimates on portfolio performance and inflation, and determined that the current rate of 4% should be reduced to 3.3%.“The State of Retirement Income”They used a 30-year window of time for their calculations, a 90% probability for success which means there's a 90% chance you will “not” run out of money during your lifetime, and a portfolio that is split between stocks and bonds.Morningstar's Christine Benz says that market conditions have boosted retirement portfolios in recent years, and that retirees may be lulled into thinking they'll get similar results in the future. But she doesn't expect that to happen, which would reduce the amount of anticipated gains, and retirement income.Currently, we have high stock prices, and low bond yields. Inflation is high at the moment but it has been low for a long time, and Morningstar expects inflation rates will settle back down over the long term. Benz told CNBC that, going forward, she expects to see a different set of economic circumstances. (2)According to Benz and the Morningstar analysis, stocks will likely fall to more average valuation levels, while bond yields rise. Based on this possible scenario, she says the withdrawal rate should be reduced to about 3.3%, as a general rule.Safe Withdrawal Rate for RetireesThe “safe withdrawal rate” has changed over the years depending on market conditions, and can be viewed as more of a “range” that is influenced by personal circumstances. Over the last 90 years, withdrawal rates have gone from about 2.4% for someone with all bonds in their portfolio to 6.5% for someone with all stocks. The figures vary a lot depending on your time horizon, and what success rate you choose depending on your risk tolerance. So, a 6.5% withdrawal rate for an all-stock portfolio with a 90% success rate was common from 1975 through 1999. More recently, that withdrawal rate was more like 5.3% for the same stock portfolio and a 90% success rate.Morningstar also points out how you can withdraw more or less depending on the success rate that you choose. For example, if you have a 50% stock portfolio, and want a 100% success rate, you could start with a withdrawal rate of just 1.9%. That's over a 30-year time horizon. If you are not worried about running out of money, and you are okay with a 50% success rate, then you could withdraw 4.7%.Conservative Approach to WithdrawalsThe bottom line: Like the 4% figure, the 3.3% figure is considered “conservative.” It's based on what Morningstar expects to be lower returns in the future, but also follows a conservative approach to withdrawals.But remember, this is supposed to be the “starting rate.” Like social security, you can give yourself a cost-of-living increase each year that raises the amount. There are also other factors and strategies that play into the amount a retiree should withdraw, such as your anticipated life span, your lifestyle and how much money you need to support it, when you plan to start taking social security, other income sources such as pensions or real estate gains and income, and how much you have in your accounts.Some people take a flexible approach to withdrawals, depending on how the market is doing and how their investments are doing. During a down year, you might reduce your percentage and forgo the COLA, for example. As CNBC recommends, a conservative strategy could be your best bet during the early years of retirement because of something called “sequence of returns risk.” That happens when you take too much out of your retirement account at the beginning, and reduce the amount that you are depending on for future gains.Even if you aren't close to retirement age right now, it's always good to think ahead. Going from a 4% withdrawal rate to 3.3% can be a big cut in pay if you don't have a lot of resources. With one million in the bank, a 3.3% withdrawal rate is about $2750 a month. That's about $550 less than a 4% withdrawal rate. This is why so many people look to supplement their retirement income with cash flowing real estate. With rental property, you never have to touch your principle. You can live off the cash flow generated from the rents. Additionally, inflation, based on history, the property would increase in value over time and rents would increase as well, while the mortgage debt decreases every year. If you buy a $200,000 rental property today, with a 20% down payment, you would invest $40,000 plus closing costs. If the property increased in value by a mere 3% each year, you would have made back your $40,000 investment in 7 years. If rents increased 3% every year, you'd be earning an extra $400 per month in cash flow by year 7 -- which is technically "free money" because you've earned your original investment back. Now imagine what the value of the property would be in 15 or 20 years?What if you were able to maximize the amount of investor loans you are able to get, and own 10 of these cash cows by the time you retire? If you start young, you could own all 10 homes free and clear in retirement, while earning cash flow along the way. You don't have to worry about withdrawing money from this retirement account because you aren't tapping into the principle, you are just living off the cash flow. But if you did need more money, you could sell a property or better yet, take out a loan on one of the properties, which would be tax free until you sell. And even when you sell, you can postpone the tax if you do a 1031 exchange. Current law allows your heirs to inherit the property when you die, and the value steps up to current market value -- effectively wiping out the capital gains tax.You can find out why so many people choose real estate to supplement their retirement plan at newsforinvestors.com. You can also join RealWealth, for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.You'll also find a link to the Morningstar report in the show notes for this episode. And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.morningstar.com/articles/1066569/whats-a-safe-retirement-spending-rate-for-the-decades-ahead2 - https://www.cnbc.com/2021/11/11/the-4percent-rule-a-popular-retirement-income-strategy-may-be-outdated.html?recirc=taboolainternal

    Supply Chain Backlog: The Cargo Ship Pile-Up at Ports

    Play Episode Listen Later Nov 20, 2021 4:27

    Supply chain problems continue as container ships pile up at U.S. ports. The number of ships waiting to offload off the Southern California coast just hit a new record. That's despite a new 24/7 schedule to get ships unloaded. There's also a new ‘pop-up container yard' on the other side of the country to help get things moving.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.A record 111 container ships were sitting outside the ports of Los Angeles and Long Beach on November 10th. According to an Insider blog, that tops a previous record set on October 21st for 108 ships. (1)Not Enough Dock WorkersConsumer demand has been surging and there's been an effort to speed things up but there aren't enough dock workers and truck drivers to unload and deliver all the goods. Insider says the size of the backlog is unprecedented.Prior to the pandemic, there may have been as many as 17 ships waiting to unload. And now, it's typical to see more than 100 ships bobbing around offshore, and huge stacks of containers on the docks waiting to be picked up by truckers.Supply Chain Disruptions Task ForceThe White House launched a Supply Chain Disruptions Task Force last June to address the challenges at ports. Task force members met with local government leaders and companies to determine the cause of the bottlenecks and come up with solutions. The Port of Long Beach began the new 24/7 schedule in September. Los Angeles followed in October. According to the White House announcement, it's possible to move goods at the Port of L.A. 25% faster at night. (2)Various companies and unions also agreed to expanded work hours. Some of those companies include Target, Walmart, UPS, FedEx, Samsung, and Home Depot. The commitment from those six companies will make it possible to move an additional 3,500 containers per week, through the end of this year.Shipping Companies Face Big FinesThat hasn't solved the problem however, and shipping firms now face fines if they don't get those containers moving more quickly. Insider reports that the two Southern California ports will begin fining companies $100 a day for each container that's left on the docks for too long. They have three days to move the containers if they are being shipped by rail and nine days to move them if they are going by truck. Those fines are expected to start hitting companies on November 15th.A global logistics company told Insider: “These containers would move if they could, but it's a combination of warehouse space, trucking and labor issues.” American Shipper says, at the beginning of November, there were about 60,000 containers at these two ports for more than nine days, and they could all be eligible for fines.Ports Running Out of RoomThe government is also working on another potential solution with the announcement of a “pop-up container yard” at the Port of Savannah on the East Coast. The port will be able to redirect federal funds from a budget surplus to build the port. It will be a couple hundred miles inland from the coast along a rail line. That will give the Georgia Port Authority more space for containers that are waiting to be picked up. (3)The worst back-ups are in Southern California however. About 40% of the nation's imports reportedly go through those two ports. But smaller ports, like the one in Georgia, are also dealing with ships that are unloading cargo faster than truckers can take it away.The newly approved bipartisan infrastructure bill includes several measures to improve port operations. Among those measures are new grants and new grant flexibility, along with the Port Infrastructure Development Program to modernize ports and shipping routes. The supply chain issues we've been facing have impacted all parts of the economy. As you know, the housing industry has been heavily impacted by a shortage of building materials. That's caused construction delays and higher prices for new homes, as well as material shortages for do-it-yourself homeowners renovating their properties.You'll find more info by following links in the show notes at newsforinvestors.com.You can also find out more about real estate investing at our website by joining RealWealth for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.businessinsider.com/supply-chain-crisis-record-number-of-container-ships-ca-ports-2021-112 - https://www.independent.co.uk/news/world/americas/us-politics/supply-chain-crisis-holiday-shortages-plan-b1954506.html3 - https://sports.yahoo.com/white-house-announces-pop-container-170539918.html

    Amtrak Gets $66 Billion for a Major Expansion & Update

    Play Episode Listen Later Nov 17, 2021 4:49

    Amtrak is about to get a $66 billion upgrade that could open up new real estate markets. The funding is part of the $1.2 trillion Infrastructure Investment and Jobs Act. It's also the largest amount of government funding for passenger rail in Amtrak's entire 50-year history. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Amtrak's CEO Bill Flynn is overjoyed. He had previously laid out a plan for Amtrak upgrades and expansion during the early months of the Biden administration. He told NBC News: “We have a clear vision for how we want to grow our business and reach more of America.” Amtrak Connects USThe plan is a 15-year strategy called “Amtrak Connects US.” It calls for improvements to existing rail service as well as expansion into new cities and rural areas. Amtrak says the expansion will reach a total of 160 NEW communities with upgraded service on at least 20 existing routes. According to NBC News, the Rail Passengers Association has been lobbying members of Congress for several years to get this measure passed. (1) The association's president, Jim Mathews, says the current funding amount is “a down payment on literally decades of underinvestment.” He says: “It's hard to explain to people how little this country has spent on rail. We as a country don't invest enough and it shows.”Major Upgrade NeededThe Northeast Corridor is an example of that kind of funding neglect. That's where Amtrak owns most of its own infrastructure and the experts say it needs updating. The director of a rail transportation program at Michigan Tech University says: “To increase ridership, you need convenience and reliability.” He says he's not sure the Northeast Corridor has either one of those.Part of the upgrade involves a 450-mile corridor from Washington, D.C. to Boston. According to an Amtrak study, that upgrade alone will generate $195 billion in economic activity and create more than 26,000 jobs.Currently, Amtrak connects more than 600 destinations in 46 states, Washington, D.C., and three Canadian provinces. The only two states within the contiguous U.S. are Wyoming and South Dakota.New Amtrak Stations in 10 StatesAmtrak says that more than 10 states will get new Amtrak stations, including Wyoming. That station is headed for Cheyenne, Wyoming and will go south to Fort Collins, Denver, and Pueblo, Colorado. (2)Another new station is headed for Columbus, Ohio, which is one of the nation's biggest cities currently without an Amtrak station. It'll be connected along a route from Cincinnati-to-Columbus-to-Cleveland.Las Vegas, Nevada will also get a new station as a destination from Los Angeles. And a second Southern California route that runs through through Riverside County, will head to a new station in Phoenix. That station will also have a new direct connection to Tucson.A new route through Tennessee will provide train service from Nashville and Chattanooga to Atlanta, Macon and Savannah, Georgia. That will give passengers access to the Georgia coast.There are plans for a new station in Wilmington, North Carolina which will give passengers direct access to several other cities, and bring them close to the North Carolina coast.Other new stations are planned for Rockford, Illinois; Iowa City, Iowa; Duluth, Minnesota; Allentown and Scranton, Pennsylvania; Rockland, Maine; Louisville, Kentucky; Montgomery, Auburn, and Mobile, Alabama; and Baton Rouge, Louisiana.Amtrak plans to connect Houston and Dallas, along with Detroit and Toledo. And there are plans for more rail service across Florida connecting Miami, Tampa, Orlando, and Jacksonville.The timeline for the entire upgrade plan is from now through 2035. Construction Dive reports that Amtrak carried 32 million passengers in 2019 and expects to have an additional 20 million riders from all these new connections. (3) And when there are new ways to connect, there are new real estate markets to explore. If you'd like to find out more about Amtrak's plans for expansion, check the links in the show notes at newsforinvestors.com.You can also find out more about real estate investing at our website by joining RealWealth for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.nbcnews.com/news/us-news/amtrak-ceo-outlines-plans-spending-66-billion-infrastructure-funding-rcna47862 -https://www.amtrakconnectsus.com/wp-content/uploads/2021/06/Amtrak-2021-Corridor-Vision_2021-06-01_web-HR-maps-2.pdf3 -https://www.constructiondive.com/news/amtrak-plans-major-expansion-by-2035-if-federal-infrastructure-bill-passes/608650/

    The Real Estate News Brief: Fed Chair Finalist, Top Property Investing Sector, Adverse Market Fee Bonanza

    Play Episode Listen Later Nov 16, 2021 6:27

    In this Real Estate News Brief for the week ending November 13th, 2021... the two Fed Chair finalists, the top property investing sector, and the billions earned from a pandemic fee on refinancing loans. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week. President Biden is reportedly close to a decision on who he'll nominate as chief of the Federal Reserve. Fed Chief Jerome Powell's four-year term is up in February, and it appears that Biden is now deciding whether to keep Powell or replace him with Fed Governor Lael Brainard. Brainard is considered more progressive than Powell. She's described in a Barron's article as more “dovish on monetary policy and stronger on bank regulation.” Some Fed watchers also believe that Brainard is more in tune with Biden's economic agenda, but Powell has strong support from moderate Democrats and Republicans, which gives him an edge over Brainard. Biden has said he'll make a decision “fairly quickly.” Some believe he'll announce a nomination by Thanksgiving. (1) (2) Whoever lands that job will be tackling inflation, which surged to a 31-year-high this last week. The consumer price index was up .9% in October, according to the government. That raises the annual rate of inflation from 5.4% in September to 6.2% in October, which is more than triple the Fed's target of 2%. It's also the highest rate of inflation since November of 1990. If you eliminate higher prices for food and energy, the core CPI is about 4.6%. That's up from 4% in September. (3)The gauge the Fed watches more closely is the PCE which stands for personal consumption expenditures. That's rising more slowly. The PCE was 4.4% in September and 3.6% for the core rate. October numbers haven't come out yet.Initial applications for state unemployment benefits dropped again. There were just 267,000 new claims last week while layoffs also fell to a record low. (4) Employers have been struggling to find enough workers to fill positions. There are currently 10.4 million job openings and just 7.4 million people listed as unemployed. One result of this lopsided situation: Companies are increasing hourly rates to attract candidates. Data from Indeed.com shows that jobs offering less than $15 an hour are scarce. (5)Consumers are not very happy about the current economic situation. The University of Michigan Consumer Sentiment Index fell to its lowest level in a decade. The November reading was 66.8. That's a drop of about five points from October, and about 35 points lower than the pre-pandemic reading of 101. (6)Mortgage RatesOn a more positive note, mortgage rates dipped below the 3% level this last week. Freddie Mac says the average 30-year fixed-rate mortgage was down 11 basis points to 2.98%. The 15-year was 2.27%. (7)In other news making headlines…Single-Family Build-to-Rent BoomInvestors are clamoring into the single-family build-to-rent market, as demand and rents soar. A new Green Street report shows that investors are earning 8% on average. That is the highest amount among the 18 property sectors analyzed by Green Street. As reported by the Wall Street Journal, the weighted average return for all property sectors is 6.1%. (8)Housing economics consultant, Brad Hunter, says that builders provided almost 100,000 new rental homes in 2021, and that investors have pumped about $30 billion into this corner of the real estate market. The momentum has created a frenzy for land that's suitable for build-to-rent. One builder told the Journal: “You almost have to find the land before it gets put on the market.”GSE Bonanza from Adverse Market FeeRemember the “adverse market fee” on refinancing loans during the pandemic? It was a 50 basis point fee for refi loans backed by Fannie Mae and Freddie Mac, and it earned those two GSEs a bundle!According to the Federal Housing Finance Agency, Fannie and Freddie earned $5.3 billion from that fee. (9) It says the money will cover about 70% of the cost of the GSE's Covid relief programs, such as the moratorium on foreclosures, and forbearance programs that allowed homeowners to skip their mortgage payments. The adverse market fee was in force for about 10 months, starting in October of last year.Opendoor Buys RedDooriBuyer Opendoor will be able to pre-approve applicants in just “one” minute, with the acquisition of online mortgage broker RedDoor. The mortgage company was founded in 2018 and has partnered up with more than 70 lenders. (10)The announcement comes at a time when Zillow has announced the elimination of its iBuying program, and has created doubts about the profitability of the iBuying business. But as HousingWire reports: “Some investors see add-on services… (like mortgages) as a possible way for iBuyers to eventually turn a profit.”Opendoor expanded into the mortgage business in 2019. And it reportedly “smashed through” earnings estimates for the third quarter with 5,988 homes sold. Year-over-year revenue was up 570%. With Zillow out of the picture, Opendoor now has one less competitor. That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. ​​I'm Kathy Fettke. ​​Links:1 -https://www.barrons.com/articles/federal-reserve-powell-brainard-biden-nomination-516367371032 -https://www.washingtonpost.com/us-policy/2021/11/11/brainard-fed-biden-powell/3 -https://www.marketwatch.com/story/coming-up-u-s-consumer-price-index-for-october-11636550300?mod=economy-politics4 -https://www.marketwatch.com/story/jobless-claims-slip-to-267-000-and-touch-new-pandemic-low-11636552204?mod=economic-report5 -https://www.marketwatch.com/story/job-listings-offering-less-than-15-an-hour-are-starting-to-disappear-in-todays-tight-labor-market-116366575806 -https://www.marketwatch.com/story/u-s-consumer-sentiment-declined-in-early-november-to-decade-low-university-of-michigan-2716367302647 -http://www.freddiemac.com/pmms/8 -https://www.wsj.com/articles/building-and-renting-single-family-homes-is-top-performing-investment-11636453800?mod=hp_lead_pos109 -https://www.housingwire.com/articles/fannie-freddie-made-5-3b-from-adverse-market-fee/10 -https://www.housingwire.com/articles/opendoor-buys-mortgage-brokerage-reddoor/

    The Real Estate News Brief: Record High Homeseller Profits, Adding Value with ADUs, Top Destination States

    Play Episode Listen Later Nov 10, 2021 4:58

    In this Real Estate News Brief for the week ending November 6th, 2021… why it's a “banner year” for homeseller profits, how much an ADU will increase your home value, and which states are attracting the most newcomers.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week. The Federal Reserve has announced its “taper timetable.” The Fed is currently buying Treasurys and mortgage-backed securities at a rate of $120 billion a month an economic stimulus. It now plans to reduce that amount by $15 billion per month in November and December, with similar reductions expected next year. If there's no adjustment to the pace of reductions, the tapering process would be complete by mid-2022. Although the Fed believes the economy is strong enough to begin the taper, Fed chief Jerome Powell says: “We don't think it's time yet to raise interest rates.” (1)The jobless rate dipped again this last week. There were only 269,000 initial claims for state benefits and 2.1 million continuing claims. Altogether, 2.67 million people are collecting either state or federal benefits. Before the pandemic, there were just under 2 million people getting unemployment checks. (2)Construction spending was down slightly in September, compared to August. The census bureau says it was down about a half a percent, with a bigger drop for single-family homes. But compared to September of last year, it's up almost 20%. The National Association of Home Builders blames the dip on supply chain issues, higher material coasts, and the labor shortage. (3)That pullback isn't helping the inventory problem. HouseCanary says it dropped close to record lows in September. And it expects the situation to get worse as we head into the next year. Higher home prices are contributing to the problem as fewer less expensive homes are put up for sale. (4) According to the St. Louis Fed, the nation had 6.5 months of supply in August. That dropped to 5.7 months of supply in September. (6)Meanwhile, the homeownership rate hasn't changed over the last quarter. It's still at 65.4%, which is down from a high of 67.9% in the second quarter of last year. If you determine homeownership by age, it's highest for people over age 65 at about 80%. Regionally, the Midwest is the highest at about 71%. (7)Mortgage RatesMortgage rates are backing off a bit from a recent rise. Freddie Mac says the 30-year fixed-rate mortgage was down 5 basis points to 3.09%. The 15-year was down 2 points to 2.45%. (8)In other news making headlines…New High for Homeseller ProfitsHome sellers are realizing some big gains. ATTOM Data Solutions says they are getting almost 50% more than they paid for the home, or about $100,000. That's for a median-priced single-family home or condo. In the second quarter of this year, sellers typically gained about $89,000. (9)ATTOM's chief product officer, Todd Teta, says: “The third quarter of this year marked another period in a banner year for a housing market boom that's steaming ahead through its 10th year.” He says: “For now, the market engine seems to have nothing but high-octane gas in the tank.”ADUs Add Big Value to HomesADUs can also add a lot of value to your home. According to Porch.com. An accessory dwelling unit can add an average 35% onto the sale price. In some cities, such as Savannah, Georgia and Cleveland, Ohio, it can “double” the sale price. (10)They can also generate passive income as rentals, but they are not cheap to build. The Porch.com study says the average cost of an ADU is $180,000. There are about 1.4 million of them in the U.S., according to 2019 information.States Attracting the Most ResidentsA new study on resident migration shows that Florida is the top destination for people looking to move to another state. The LendingTree analysis looked at mortgage loan data for the last year-and-a-half to identify pandemic migration patterns. The researchers say: “The Sunshine State has a long history of bringing in visitors and new residents, particularly retirees, thanks to a mix of affordable housing, no state income tax, and sunny weather.” (11)The analysis also found that Texas has the highest number of people moving “within” the state. Oklahoma and Florida were close behind Texas, while New York had the highest number of people fleeing the state. That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Link: for newsforinvestors.com - https://join.realwealth.com/?utm_content=Real%20Estate%20News%20Podcast&utm_campaign=Join%20for%20Free&utm_term=Description%20Text%20LinkLinks:1 -https://www.marketwatch.com/story/fed-slows-down-bond-buying-says-factors-boosting-inflation-are-expected-to-be-transitory-11635962420?mod=mw_latestnews2 -https://www.marketwatch.com/story/u-s-jobless-claims-drop-to-pandemic-low-of-269-000-as-firms-avoid-layoffs-during-labor-shortage-11636029426?mod=economic-report3 -http://www.mortgagenewsdaily.com/11022021_construction_spending.asp4 -https://dsnews.com/daily-dose/11-04-2021/october-saw-net-new-inventory-levels-drop-once-again5 -https://fred.stlouisfed.org/series/MSACSR6 -http://www.mortgagenewsdaily.com/11032021_homeownership.asp7 -http://www.mortgagenewsdaily.com/11032021_homeownership.asp8 -http://www.freddiemac.com/pmms/9 -https://magazine.realtor/daily-news/2021/11/04/home-sale-profit-margins-hit-10-year-high10 -https://magazine.realtor/daily-news/2021/11/04/study-adus-can-add-35-to-home-s-value11 -https://magazine.realtor/daily-news/2021/11/03/states-with-the-fewest-outgoing-residents

    The Real Estate News Brief: Rent Rebound in Big Cities, Property Tax Bonanza, Smoke Alarm Lawsuit

    Play Episode Listen Later Nov 4, 2021 5:12

    In this Real Estate News Brief for the week ending October 30th, 2021... the rebound of big city rents, the state and local property tax bonanza, and a tragic reminder to check smoke alarms in rentals.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week. The latest report on the GDP shows a big slowdown in the third quarter. The Commerce Department says the economy downshifted from 6.7% in the second quarter to just 2% in the third. (1) The slowdown was expected but the Wall Street Journal had anticipated a beefier 2.8%. Economists say we're experiencing slower growth because government stimulus money is drying up while businesses struggle with supply chain issues and the nation continues to deal with the coronavirus.Consumers are working and spending money however, which keeps the economy on the growth side. Consumer spending was up .6% in September. (2) And, the latest unemployment report shows that new state claims dropped to another pandemic low of 281,000. Existing claims also fell, from 2.48 million to 2.24 million. (3) The unemployment rate is currently at 4.8%. Much of that spending went into new homes. New home sales rose in September despite higher price points. The sales rate grew to an annual rate of 14% while the median price rose to a new record high of $408,800. (4) The sales rate hit a six-month high in September, but it's almost 18% lower than it was a year ago. The sale of existing homes went in the opposite direction. The National Association of Realtors says pending sales were down 2.3% in September, and compared to a year ago, they were down 8%. (5) A tight inventory continues to plague buyers, along with rising prices.According to the latest report from the S&P CoreLogic Case-Shiller Home Price Index, national home prices are up 19.8% from a year ago. (6) For those who can buy, they are making those decisions quickly. The National Association of Realtors says that 86% of homes sold in September were on the market for less than a month. (7)Mortgage RatesMortgage rates continue their slow climb skyward. Freddie Mac says the average 30-year fixed-rate mortgage rose 5 basis points to 3.14%. The 15-year was up 4 points to 2.37%. (8)In other news making headlines…Big City Rents Are ReboundingRents are rebounding in the nation's big cities. Realtor.com says that rents in many cities are now “higher” than they were at the beginning of the pandemic. Rents had dropped as tenants fled to less-crowded areas, but they are rebounding in a big way. (10)Realtor.com's monthly rental report shows that rents in the ten largest U.S. tech cities, are now about 6.3% “higher” than they were when the pandemic first hit. The report says that the annual pace of rent growth for all U.S. rentals is about 13.6% right now. And it says there's no sign of it slowing down.Realtor.com's manager of economic research, George Ratiu, says: “With rents continuing to surge to new highs nationwide, including in big tech hubs, September data confirms the U.S. rental market has moved past the recovery phase and is fully back in business.”Property Tax Bonanza State and local governments have reaped the rewards of higher home prices. An analysis by the National Association of Home Builders shows that property tax collection is now the highest it's been since 2009. (9) That review shows that homeowners paid $703.5 billion from Q3 of last year to Q2 of this year. That's a 13% increase from the previous year. State and local governments rely heavily on property tax. The NAHB says they get about 38% of their revenue from that tax base. Tragic Lesson about Fire AlarmsA story out of Southern California is a tragic reminder to all landlords to make sure smoke detectors are working in all rentals. A fire at a short-term rental in Malibu killed a 22-year-old college student last January, and his father recently filed a lawsuit against the landlords, TripAdvisor, and a TripAdvisor subsidiary for negligence. (11)The lawsuit was filed in Los Angeles by Brad Schneider. It claims his son, Grant, was not able to escape the fire because there were not enough smoke detectors in the home, and the ones that were there were not working. That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/coming-up-third-quarter-gdp-11635423260?mod=economy-politics 2 -https://www.marketwatch.com/story/coming-up-spending-income-and-pce-inflation-for-september-11635509727?mod=bnbh_mwarticle3 -https://www.marketwatch.com/story/u-s-jobless-claims-set-to-hit-new-pandemic-low-of-289-000-economists-predict-11635423655?mod=economic-report4 -https://www.marketwatch.com/story/new-home-sales-soared-in-september-but-is-the-housing-markets-rebound-coming-to-an-end-11635257630?mod=economic-report5 -https://www.marketwatch.com/story/coming-up-pending-home-sales-116354289656 -https://www.marketwatch.com/story/home-price-growth-is-slowing-down-but-that-doesnt-mean-prices-are-falling-11635254340?mod=economic-report7 -https://magazine.realtor/daily-news/2021/10/22/inventory-boost-not-enough-to-satisfy-fall-house-hunters8 -http://www.freddiemac.com/pmms/9 -https://magazine.realtor/daily-news/2021/10/26/property-tax-boom-helps-state-local-coffers10 -https://magazine.realtor/daily-news/2021/10/28/urban-rents-soar-as-cities-recover-from-pandemic-hit11 -https://timesofsandiego.com/business/2021/10/22/father-of-mesa-college-student-sues-tripadvisor-com-landlord-after-sons-death-in-fire/

    Zillow Quits iBuying Business, Unloads Inventory

    Play Episode Listen Later Nov 3, 2021 4:20

    Zillow has officially announced the end of it's iBuying program, Zillow Offers. The announcement comes just a few weeks after the company said it wouldn't be buying any more homes this year. And then there were reports that Zillow would be offloading thousands of homes at a discount.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.The iBuying frenzy has been growing among several competitors including Zillow, Redfin, Opendoor, Offerpad and others. There was a pause in those programs during the pandemic, but the iBuyers were back in full swing this year. And Zillow was one of the more exuberant ones.Home Price ForecastingBut Zillow apparently miscalculated the value of the homes it was buying. The company's financial results show a $304 million write-down for the homes that were purchased for more than it can sell them for. It expects to lose another $240 to $265 million for homes that it is contracted to purchase in the next quarter.CEO Rich Barton told investors: “We've determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility.” (1)Zillow now expects to wind the home-flipping arm of its business down over several months. That includes a 25% reduction in its workforce, which will impact about 2,000 employees.Zillow's iBuying BingeThe company has been on a buying binge. According to the Wall Street Journal, Zillow bought 3,800 homes in the second quarter, and ended the third quarter with an inventory of almost 10,000 homes and another 8,000 homes under contract to buy. It only sold about 3,000 homes, and many were sold at a loss. The Journal says that Zillow also expects to lose between 5% and 7% on the remaining homes. (2)An analyst for KeyBanc looked at the financials for 650 homes in Zillow's inventory. That's about one-fifth of the homes the company owns. As reported by MarketWatch, he found that Zillow was selling two-thirds of them at a discount of 4.5%. Most of the discounted homes that he found are in San Diego; Charlotte, North Carolina; and Las Vegas. (3)Offloading Homes to InvestorsAccording to Bloomberg, Zillow is hoping to sell about 7,000 homes to institutional investors for close to $2.8 billion. The report says they will likely be sold to various buyers, and not as a single sale. (4)Barton founded the company 16 years ago. The iBuying arm of the business is relatively new. Barton wanted to hit 5,000 home flips a month and had predicted, last year, that Zillow Offers could generate $20 billion a year. What Went Wrong?Zillow has been an aggressive player in the iBuying market, offering more than competitors. That won Zillow some homes, but in markets that may have cooled off slightly, the anticipated price growth didn't materialize. It sounds a little like the scenario in 2005 when people thought home prices only go up. Right now, they are still going up, but Zillow apparently miscalculated by how much. The New York Times also reports that the company underestimated the risk of holding homes for too long between a purchase and a sale. (5) Zillow had previously said that labor and material shortages were impacting the business. The company couldn't turn them around fast enough. And that's a huge departure from a relatively risk free business model that Zillow was founded on.Barton and Zillow's CFO, Allen Parker, said in a shareholder letter: “Our aim was to become a market maker, not a market risk taker.” On a more positive note, there will be thousands of homes hitting the market at a discount from the previous sale price, and possibly of interest to investors both big and small.You'll find links to our sources in the show notes at newsforinvestors.com. You can also find out more about real estate investing at our website by joining RealWealth for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.prnewswire.com/news-releases/zillow-group-reports-third-quarter-2021-financial-results--shares-plan-to-wind-down-zillow-offers-operations-301414460.html2 -https://www.wsj.com/articles/zillow-quits-home-flipping-business-cites-inability-to-forecast-prices-116358835003 -https://www.marketwatch.com/story/zillow-stock-dives-after-analyst-highlights-two-thirds-of-homes-bought-are-underwater-116357852934 -https://www.ocregister.com/2021/11/01/zillow-to-sell-7000-homes-for-2-8-billion-after-flipping-flop/5 -https://www.nytimes.com/2021/11/02/business/zillow-q3-earnings-home-flipping-ibuying.html

    Investors Are Buying More, Paying Less than Consumers

    Play Episode Listen Later Nov 1, 2021 4:12

    Investors were busy in the second quarter of this year. They increased their share of purchased residential properties. But even though they bought more than consumers, they spent less. So where are these great deals? The RealtyTrac report has a few answers.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.RealtyTrac published the results of its analysis with data from its parent company, ATTOM Data Solutions. (1) It found that investor purchases accounted for 15.4% of all U.S. residential purchases in the second quarter of this year. That's up 3.9% from Q2 of last year when investors accounted for 11.5% of all home purchases. (2)If you compare Q2 to Q1 of this year, investor purchases were about the same. Although the numbers show a year-over-year increase, RealtyTrac's executive vice president, Rick Sharga, doesn't believe they represent a significant change of course. But, he says they do disprove the idea that investors are gobbling up too much of the inventory. He says: “Historically investors have always accounted for somewhere between 10% and 15% of residential home purchases, and our data shows that this is still the case today, albeit at the high end of that range. But the data doesn't support the ‘Wall Street is buying up Main Street' theme that's been a popular theory for the past year or so.”States Attracting the Most Investors ActivitySo where are investors placing their bets? New Hampshire tops the list, with Delaware, Georgia, Arizona, and Mississippi rounding out the top five. In the second tier is Florida, North Carolina, Oklahoma, Arkansas, and Nevada. Investor share ranges from 23.2% of all purchases in New Hampshire to 18.7% of purchases in Nevada.As for the ten states with the lowest share of investor purchases - Vermont tops that list, followed by Alaska, New Mexico, Montana, and Idaho. The other five states include Oregon, West Virginia, Wyoming, Washington, and Iowa. Investor share of purchases in Vermont are less than 1%, while Alaska is 1.9%. The share increases to about 11% for Iowa.Biggest Investor DiscountsSo what's this about buying more and paying less? RealtyTrac says that in the second quarter, investors paid an average of 29.4% less than your typical consumer. That's on a national basis among 38 states with full reporting data. Investors got a better deal, on average, in 33 out of 38 of those states. For investors, the median price of a home was $205,000. For consumers, it was $290.230.As for the states with the biggest investor discounts, Arkansas was number one. It had the highest investor discount at 76.9%. Michigan was next with a 60% discount to investors. Louisiana and Nebraska were both about 55%. West Virginia and Oklahoma were around 50%.Sharga is quick to point out that investors are not getting special treatment. They are just better shoppers. And, he says: “Another misconception is that investors are overpaying for properties, making it difficult for consumers to compete and artificially driving up prices. But successful investors tend to look for below-market pricing in order to make a profit…” Plus, many buy in cash, which often comes with a discount.In Q2 of this year, 79% of investor purchases were in cash compared to 69% for Q2 of last year. While that figure varies from state-to-state, the report shows that the share was more than 50% in all states, except for Alaska. There's a link to the RealtyTrac report in the show notes at newsforinvestors.com.You can also find out more about real estate investing at our website by joining RealWealth for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.realtytrac.com/newsroom/wp-content/uploads/sites/14/2021/10/Oct-21-RealtyTrac-RE-Investor-Purchase-Activity-Press-Release.pdf2 -https://www.realtytrac.com/blog/realtytrac-investor-purchase-report-fall-2021/

    The Real Estate News Brief: New Rate Hike Timeline, Surge in Foreclosures, & Single-Family Rent Growth

    Play Episode Listen Later Oct 26, 2021 6:07

    In this Real Estate News Brief for the week ending October 23rd, 2021... the Fed's new rate hike schedule, a new wave of foreclosures, and a rent growth surprise for some single-family homes.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week with comments from Fed Chief Jerome Powell. It looks like the timeline for interest rate hikes has been pushed up again. Last month, there was more of a debate as to whether it would happen in 2022 or 2023. Powell indicated that conditions for a rate hike would probably be reached next year. That includes the Fed's goal of maximum employment. The inflation requirement has already been met. That's when inflation remains above 2% for a sustained period of time. Powell also said that now is the time to begin tapering the Fed's bond-buying strategy. Policymakers will discuss a tapering plan next month. Jobless claims fell to a fresh pandemic low last week. There were only 290,000 initial claims for state benefits. Continuing claims also fell. They were down 290,000 to 2.48 million. (2) Millions of jobs are going unfilled, however, which is making it difficult for businesses to meet the demand for goods and services. That's also creating supply chain issues that are driving up prices, and inflation.Home buyers are going full steam ahead to lock in deals before mortgage rates rise any higher. The National Association of Realtors say that existing home sales were up 7% from August to September. That's a seasonally-adjusted annual rate of 6.29 million homes. (3) Part of that increase is due to more inventory, but NAR Chief Economist Lawrence Yun says that inventory was quickly gobbled up. On the other side of the housing supply issue, residential construction was down due to those supply chain issues, and a labor shortage. The government says that September home starts were down 1.6% compared to August, and that permits were down 7.7%. Multi-family permits were down the most. They fell 21% while single-family permits were down just 1%. (4) Despite all the headwinds that builders face, the National Association of Home Builders monthly confidence index shows an increase of four points to a reading of 80. Anything over 50 is positive. Although builders have to keep raising prices, they are encouraged that demand and home sales “remain strong.” (5)Mortgage RatesMortgage rates rose slightly this last week. Freddie Mac says the 30-year fixed-rate mortgage was up four points, to 3.09%. The 15-year was up three points, to 2.33%. (6)In other news making headlines…Foreclosures on the RiseForeclosure filings jumped higher in September, after pandemic-related moratoriums were lifted. ATTOM Data Solutions released its Q3 foreclosure report which shows that foreclosure filings were up 24% compared to August, and 102% from a year ago. (7)Economists have been predicting a spike in foreclosures, but RealtyTrac's Rick Sharga says: “Despite the increased level of foreclosure activity in September, we're still far below historically normal numbers.” He says they are almost 70% lower than they were before the pandemic. And light years away from the number of foreclosures in mid-2009.Foreclosure filings were approaching 600,000 per quarter back then. Currently, there are 45,500 filings for the third quarter of this year.Single-Family Rent GrowthSingle-family rent growth quadrupled in August. CoreLogic says the year-over-year rate of growth was 9.3%, and represents the fastest annual rent growth in 16 years. (8)The single-family category includes both detached and attached units, such as duplexes, triplexes, quadplexes, townhomes, row homes, co-ops, and condos. Rent growth spiked the most for detached homes. Annualized rent growth for attached units was 6.4% while the rent for detached homes rose 11.7%.The city with the highest rent growth was Miami. Rents in Miami were up 21.5%. That pushed Phoenix into second place for the first time in almost three years. Rounding out the top five are Las Vegas, Austin, and Dallas. New Forecast for Top Markets in 2022New forecasts are coming out about next year's hot real estate markets. PwC just released its 2022 Emerging Trends in Real Estate report. The report includes a top-10 list of highly ranked real estate markets for 2022. Several of them are also on our list of recommendations for single-family rentals. Those markets include Tampa/St. Petersburg, Charlotte, Dallas/Fort Worth and Atlanta.PwC is also recommending those cities, and others, for the construction of new homes. If you have been following RealWealth, you know that we have expanded our focus on existing single-family rentals to also include the construction of new rental homes. Our recommended markets include Charlotte, North Carolina; Cincinnati and Dayton, Ohio; Dallas, Texas; Park City, Utah, and several Florida markets.You can find out more by joining RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/feds-powell-says-elevated-inflation-could-last-well-into-next-year-11634917919?mod=economy-politics2 -https://www.marketwatch.com/story/jobless-claims-fall-to-pandemic-low-of-290-000-as-businesses-try-to-avoid-layoffs-due-to-labor-shortage-11634819765?mod=u.s.-economic-calendar3 -https://www.marketwatch.com/story/existing-home-sales-rise-as-some-buyers-are-motived-by-fomo-11634826649?mod=economic-report4 -https://www.marketwatch.com/story/construction-on-new-homes-slows-as-supply-chain-woes-hit-the-housing-market-11634647997?mod=economic-report5 -https://www.marketwatch.com/story/home-builders-grow-more-confident-in-spite-of-continued-supply-chain-headaches-11634565934?mod=economic-report6 -http://www.freddiemac.com/pmms/7 -https://www.attomdata.com/news/market-trends/foreclosures/attom-september-and-q3-2021-u-s-foreclosure-market-report/8 -https://www.corelogic.com/intelligence/single-family-rent-growth-approaches-double-digits/9 -https://fortune.com/2021/10/18/hot-real-estate-markets-2022-outlook-real-estate-buying-a-house/

    Home Sellers Should Plant a Tree!

    Play Episode Listen Later Oct 23, 2021 3:32

    If you're selling your home and you have a green thumb, you might want to plant a tree. Or pay someone else to plant one for you. According to a new survey by Trees.com, some real estate agents believe that just “one” healthy tree can increase property values by 30%.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Trees.com started off as a blog in 1997 which has evolved over time into a shopping site for plants and trees, along with plenty of educational material. (1) The survey was done last month with the help of 1,250 licensed real estate agents, and 78% of them said that poor landscaping has a negative impact on the value of a property.The Value of a Well-Positioned TreeWhen it comes to the best way of upgrading your landscaping, 59% of the agents said “add a tree.” 20% of the agents said that one tree will increase the property value by 30%. That's one in five of the agents participating in the survey. If you do the math on a home that's worth $300,000, 30% of that amount is $90,000!Another 40% of the agents estimated the additional value would be 10 to 20% or $30- to $60,000. The remaining 40% estimated a range of between 1 and 5%. Of course, a lot would depend on the tree, and what it looks like in the yard.Aesthetic CharmWashington-state real estate broker, David North, says that trees can add “aesthetic charm” to a home. He told Trees.com: “A tree is one of the most natural and interesting ways to add color, texture and contrast to any home's yard.” He says: “The natural beauty of a tree can be especially powerful when it distinguishes one property from others, whether by different shape, color, or size.”Ecosystem Upgrade Trees also improve the ecosystem of the property. California real estate broker, Kimo Quance, says they help with “stormwater management, pollution filtering, and soil fertilization. During warmer months, trees are a natural cooling system, providing shade. Then, in colder months, trees that lose their leaves let sunlight filter through to warm the home.” They can also help stabilize soil and prevent mudslides, if there's an incline to the property.Landscaping ElementsThe survey also ranked various landscaping elements, and grass was the most important feature for improving value. It didn't include the estimate value of the grass, but you might surmise that it could rival the added value of trees. Trees were next on the list, followed by flowers, hedges, mulch, and fountains.Hardscaping FeaturesAs for the hardscaping features of a property, the agents ranked decks as most important. After that, driveways were second on that list, followed by an outdoor kitchen, artificial grass, a gazebo, and a firepit.Inside GreeneryThe survey also touched on greenery “inside” the home. 54% of the agents say it's a good idea to have indoor plants as part of the staging, but most of those agents were in the Southern and Western regions of the country. So indoor greenery may be more important in those areas.There's a link to the Trees.com survey results in the show notes at newsforinvestors.com.You can also find out more about real estate investing at our website by joining RealWealth for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke. Links:https://www.trees.com/poor-landscaping-can-decrease-property-value-by-as-much-as-30

    Crypto Mortgage Payment Experiment a Success!

    Play Episode Listen Later Oct 23, 2021 4:06

    It's a big first for cryptocurrency and real estate. The nation's second largest lender says it successfully accepted mortgage payments, in crypto, from a handful of borrowers. It was part of a pilot program by United Wholesale Mortgage that was successful, but is now being put back on the shelf, for a later date.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.UWM announced the good news this last week. It says that it “successfully evaluated and accepted the first-ever cryptocurrency mortgage payment in September and five more… in October.” (1) It was the first time that any U.S. lender has accepted cryptocurrency as a home loan payment.UWM CEO Mat Ishbia said in the announcement: “As we said last quarter, we were going to look into accepting cryptocurrency and test it to see if it's a faster, easier and cheaper solution and thanks to our innovative technology team members, the transactions were successful.” But he also said that: “Due to the current combination of incremental costs and regulatory uncertainty in the Crypto space, we've concluded we aren't going to extend beyond a pilot at this time.”Test-and-Learn ProcessAs it turns out, the program was more of a “test-and-learn” process in preparation for crypto's future use. UWM says it would resume the use of cryptocurrency and blockchain technology once it becomes something that will “propel the organization forward.”The program allowed for the use of three kinds of crypto including Bitcoin, Ether, and Dogecoin. Ishbia told CNBC that borrowers “liked” the idea and thought it was “cool” but ultimately, the program only attracted six people. Ishbia says: “There was not enough demand at the end of the day to really push the envelope too hard.” (2) Investment Tool vs. CurrencyAs CNBC reports, the experiment provides proof that many people view crypto as an investment tool, and not a currency to buy things. At least not yet. Most cryptocurrency users hold on to their virtual coins, hoping for an astronomical return, as some early investors have seen. CNBC calls it the HODL mindset which stands for “hold on for dear life.”According to Coinbase, just one Bitcoin is worth more than $60,000. It was first introduced in 2009, but in the last five years, it has gained about 8,600%. Market cap is $1.2 trillion.Ethereum or Ether has also done well. Current price is about $3,800 per coin with a market cap of more than $480 billion. Over five years, that coin has gained about 27,000% in value.Dogecoin began as a joke and became wildly popular when Elon Musk promoted it in a tweet. It's now worth only about $.25 cents per coin, but that also represents more than 100,000% growth. Market cap for Dogecoin is more than $26 billion.Using Crypto Creates Taxable EventSo there's money on the table for some investors if they want to “cash in.” One problem with doing that however, is that using crypto will create a taxable event. CNBC says the IRS views crypto as property, and the six homeowners who just paid UWM in crypto will likely face a big tax bill.A CoinTracker CPA told CNBC: “The one thing that a lot of people don't realize is that whenever you spend cryptocurrencies to buy a cup of coffee, or any type of consumer item, that triggers a capital gains event.” As for UWM's future plans, Ishbia says the lender will be able to turn the program back on when the demand is there. He says: “We know how to do it now.”You can find out more by following links in the show notes at newsforinvestors.com.You can also find out more about real estate investing at our website by joining RealWealth for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.uwm.com/about-us/media-resources/press-releases/2021/october-14-20212 -https://www.cnbc.com/2021/10/14/united-wholesale-mortgage-ditches-its-plan-to-accept-bitcoin-ethereum.html

    The Real Estate News Brief: Self-Employed Home Loans, Jumbo Loan Surge, Higher Closing Costs

    Play Episode Listen Later Oct 21, 2021 5:47

    In this Real Estate News Brief for the week ending October 16th, 2021… more home loans for the self-employed borrowers, a surge in jumbo loans, and a rise in closing costs.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week. Inflation ticked higher again. The government reports a .4% increase for September, mostly due to higher prices for food, gas, and rent. That raises the yearly rate of inflation from 5.3% to 5.4% which is more than double what the Federal Reserve considers “ideal.” But the Fed pays more attention to the PCE or Personal Consumption Expenditures index which is lower but still more than double the Fed's target. Economists, along with the Fed, say that means prices will probably remain high into next year. (1)Well-known stock investor Cathie Woods has her own theory on inflation. She's the owner of Ark Invest and a collection of stock funds that lean toward more innovative tech companies and start-ups. She told CNBC that the current migration from expensive cities will help keep inflation in check. She says: “The exodus, or the great migration, is from very high-rent areas of the world to much lower rents.” She is moving her own company from New York to St. Petersburg, Florida, to take advantage of a lower cost of living. (2)Consumers don't seem to be that concerned about high prices. U.S. retail sales rose .7% last month. That's after a big gain in August. Economists say Americans have plenty of money to spend from their pandemic savings, and a job market that is paying higher wages. One thing holding them back is a short supply of goods like cars and consumer electronics because of supply chain issues. (3)Initial jobless claims dipped below 300,000 for the first time since the beginning of the pandemic. The government reports just 293,000 new state claims. Ongoing claims also dropped to a pandemic low of 2.59 million. The total number of people collecting benefits from eight state and federal programs is 3.65 million. That's after more than 11 million people dropped off the list last month due to the expiration of an emergency federal program. (4) The “quit rate” jumped higher in August, to the highest it's ever been since the government started tracking the number of people leaving their jobs in 2000. This so-called quit rate was up almost 3% to 4.27 million private-sector employees. That's about double what it was during the early part of the pandemic. This recent spike coincides with a spike in coronavirus cases tied to the delta variant. (5) Mortgage RatesLet's check on mortgage rates. According to Freddie Mac, the 30-year fixed-rate mortgage rose 6 basis points to 3.05%. The 15-year was up 7 points to 2.3%. (6)In other news making headlines...Credit More Available for Self-Employed The credit market is opening up a bit, making it easier to get a home loan. The Mortgage Bankers Association's Credit Availability Index rose 1.5% in September, with most of the growth going to self-employed borrowers. That's great for real estate professionals who are often self-employed. (7)The index benchmark is 100, and the current reading is 125.6. It's the highest it's been since May. The MBA's Joel Kan says: “But, even with increases in seven out of nine months thus far in 2021, total credit availability is still around 30% less than it was in February 2020” which is right before the pandemic struck.Jumbo Loans Surge Due to High Home Prices Lenders are also handing out more jumbo loans because of high home prices. Researchers at Bank of America said in a weekly report that loan originations for jumbo loans are rising to levels we haven't seen since before the 2008 financial crisis. (8)The current limit for a conforming loan is about $548,000. Anything above that is a jumbo loan, although high-priced areas like New York City and San Francisco have higher limits. Several lenders have already announced higher conforming loan limits up to $625,000 for next year.Buyers Paying Higher Closing CostsHigh home prices are also driving closing costs higher. Residential real estate data firm ClosingCorp said the national average for single-family properties was $6,837 during the first half of this year. That includes taxes, and represents a 12.3% year-over-year increase. Without taxes, the national average is up 10.5% to $3,836. For refinancing loans, closing costs are up about 5% to around $2,400. (8)ClosingCorp's CEO, Bob Jennings, says that even though closing costs are higher, they are not going up as fast as home prices, because lenders are holding those costs down. He says: “Although the average home price increased by nearly $45,000, the closing cost, excluding taxes, on property only increased by $400.”That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/consumer-prices-rise-at-5-4-yearly-pace-in-september-and-stay-at-30-year-high-11634129045?mod=inflation2 -https://markets.businessinsider.com/news/stocks/cathie-wood-inflation-exodus-expensive-cities-ark-invest-2021-103 -https://www.marketwatch.com/story/u-s-retail-sales-rise-sharply-again-but-high-inflation-also-means-goods-cost-more-11634302108?mod=economy-politics4 - https://www.marketwatch.com/story/jobless-claims-sink-to-new-pandemic-low-and-fall-below-300-000-for-first-time-in-a-year-and-a-half-11634215581?mod=economic-report5 -https://www.marketwatch.com/story/i-quit-a-record-number-of-u-s-workers-are-telling-their-bosses-11634051980?mod=economic-report6 -http://www.freddiemac.com/pmms/7 -https://www.housingwire.com/articles/lenders-are-courting-self-employed-borrowers-again/8 -https://magazine.realtor/daily-news/2021/10/13/rising-home-prices-lead-to-105-hike-in-closing-costs

    Are You Ready for an Eco-Friendly 3D Printed Home?

    Play Episode Listen Later Oct 17, 2021 5:13

    Technology is taking big steps in the housing industry with 3D printed homes. Developers are pushing them as “cheaper, stronger, and more efficient” than traditional homes, and the idea is gaining ground. With affordable housing in short supply, energy efficiency becoming a mandate, and the threat of more severe weather-events, 3D printed homes could provide a desirable eco-friendly option.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.A husband and wife team are building a 3D printed home in Tallahassee, Florida, that they expect to put on the market next month. It will be a 3-bedroom, 2-bath 1,440 square foot home with an asking price between $175,000 and $225,000. One of the big benefits for this kind of home in a state like Florida is the strength of the building material. Promoters say they will withstand hurricanes and flooding much better than traditional homes. And, they say these homes will also be more resistant to mold, which is a problem in areas with high humidity. Plus, they can be energy efficient, and built more quickly at a less expensive price point.3D Printer Looks Like a Car WashThe process involves a printer that looks more like a car wash but squirts out a cement-like mixture in a back-and-forth motion that's dictated by high-tech computer programs. They come in all sizes depending on the size of the building you want to create. According to the South Florida Sun Sentinel, the printers can range in size from about 10 x 10 feet to 100 x 100 feet and cost between a half million and $700,000. (1)The owners of the company printing the home in Tallahassee, Kyndra and James Light, told the Sun Sentinel: “Make no mistake, these houses are not your average test models.” They claim: “The finished product is far superior in strength, durability, and efficiency.”A 3D-printed home in Riverhead, New York was the first one on the U.S. market. It was listed during the summer for about $300,000. Four other 3D-printed homes in Austin, Texas, were also reportedly ready for occupants over the summer. And a community of 15 eco-friendly 3D-printed homes was supposed to break ground last month in Rancho Mirage, California, near Palm Springs, but developers are working through some regulatory delays.World's First Net Zero 3D Printed Home CommunityDevelopment company, Palari, and construction technology company, Mighty Buildings, are working together on the Rancho Mirage project. Palari claims to be “reimagining” real estate with “innovative and sustainable building strategies.” (2) MIghty Buildings says it will revolutionize home construction with 3D-printing technology. (3) They announced their plan for Rancho Mirage last spring, saying they had secured a 5-acre site and would break ground in September on the world's first 3D printed net zero energy community. (4)According to the Desert Sun, Mighty Buildings had previously built smaller accessory dwelling units with state approval. Co-Founder, Sam Ruben, told the Sun that homes for the Rancho Mirage plan would be larger, with upgraded material that is not yet approved by state officials. He says: “The units we are going to be delivering for Rancho Mirage are utilizing our next-generation material which incorporates fiber reinforcement that adds strength and performance.” Ruben says he isn't anticipating a problem with the approval, and the Palari website says that the Rancho Mirage homes will be ready for delivery in spring of next year.In addition to 1,450 square feet of living space, each home will sit on a 10,000 square foot lot. They will each have a swimming pool, and customizable options such as cabanas, hot tubs, fire pits, and outdoor showers. They will also have solar power for a net-zero carbon footprint, and a mid-century modern design.Other Communities Planned for CaliforniaPalari and Mighty Buildings already have several other projects in the works. The Palari website lists two more for the Palm Springs area including one community in Palm Springs and another in the nearby Desert Hot Springs. Their California project list also includes developments in the San Fernando Valley, the Central Coast, the East Bay, and Napa.You can find out more about those two companies and their plans by following links in the show notes at newsforinvestors.com. The websites for Palari and Mighty Homes provide information on the printing of single-family homes and ADUs. That includes the sale of homes in their planned communities, along with pricing and options. You can also find out more about real estate investing at our website by joining RealWealth for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.sun-sentinel.com/business/fl-bz-3d-printed-homes-florida-outlook-20210917-w2l5ef7xgfhfvjuttqvtbqm46i-story.html2 -https://www.palari.com/locations3 -https://mightybuildings.com/projects/rancho-mirage4 -https://www.prnewswire.com/news-releases/palari-group-and-mighty-buildings-announce-worlds-first-community-of-3d-printed-zero-net-energy-homes-in-rancho-mirage-california-301244886.html

    The New Factory-Built Trend for Your Rental Portfolio!

    Play Episode Listen Later Oct 17, 2021 6:45

    Manufactured housing appears to be making a comeback. Boosting the supply of prefab homes is a major part of a new government initiative. Factory-built housing is also getting the attention of real estate investors looking for hard-to-get rental homes.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.The Biden Administration announced its Housing America initiative last month. One component of that initiative is to increase the supply of manufactured homes. Other components include things like down payment assistance, the rehabilitation of existing homes, new loan options for manufactured homes, and collaboration with local governments to reduce zoning limitations. (1)Prefab Homes Gaining New RespectThe manufactured housing component could be a game changer for a market that has so few affordable options. And with improvements to the manufacturing process, prefab homes are losing the stigma they once had for being inferior to site-built homes.In 2020, a HUD report says: “Factory-built housing has undergone many physical changes that have made it more similar to, and in many ways indistinguishable from, conventional site-built housing… Quality improvements in construction and installation practices have increased durability so that the life expectancy of factory-built housing increasingly is comparable to that of site-built or onsite housing.” (2)The Manufactured Housing Institute says essentially the same thing. In a 2021 industry overview, it says: “Today's manufactured homes can deliver outstanding quality and performance at prices that are up to 50 percent less per square foot than conventional site-built homes. These savings allow more and more Americans to own their own homes.” (3) That also applies to investors who might want to buy more affordable rental homes.Cost Savings for Prefab HomesSo what are the price points for manufactured homes compared to site-built homes? The Institute says the average price of a manufactured home is $81,900. If you break it down to price per square foot, that's about $57 compared to $119 for a site-built home. Average size for a prefab home is about 1,450 square feet. The average for a site-built home is 2,500 square feet, so the price of a prefab home is about ¼ the cost of a site-built home.According to rebusinessonline, manufactured housing accounts for about 5.5% of U.S. homes. They also accounted for 9% of home starts last year. That's about 95,000 homes, which is double the number of prefab homes shipped in 2011.Strong Investment ActivityAccording to Chad Hagwood at Lument, investors are paying attention. He said in an interview for rebusinessonline.com: “The market for investment sales is the strongest it's ever been.” He says: “Having been an active participant in this industry for almost two decades. The sales volume, the interest, the activity is unlike anytime I've ever seen.” Lumen provides loans for multifamily, affordable housing, and senior housing. (4)Lument recently produced a white paper on the manufactured housing industry. It begins with comments about the need for affordable homes and the “growing popularity of lower density living” and how that's providing a new option for both homeowners and investors. (5)It says: “The combination of robust cash flow growth, particularly in Sunbelt and Western markets, cap rate compression, and liquidity provided by the GSEs makes a compelling case for manufactured housing community acquisitions and refinances.”In the section about revenue trends, it says the inventory-weighted average rent of $840 for prefab homes in 31 markets compared favorably to other rentals in the same areas. That includes rents of about $1,100 for C+ to B- apartments, and $1,400 for overall average apartment rents.Pros and ConsLet's take a look at the pros and cons of manufactured housing.According to that HUD report: Modular housing construction is faster and takes place in a climate controlled environment which saves time and avoids unpredictable weather events and damage to materials. Due to improvements in design and quality that make manufactured homes more similar to site-built homes, public perception has gotten better (although it still needs improvement). The trend could build quickly as potential homebuyers, renters, and investors learn more about this type of housing.Getting a loan for a prefab home is also getting easier. Last month, the Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac would be allowed to purchase loans for single-section manufactured homes. On the other hand: Builders are concerned about switching to factory-built homes because they'd lose workers they may not be able to get back, if needed. Transportation of modules can be expensive. Pre-construction costs could be significantly higher - as much as 50%. Public perception of manufactured homes needs further improvement to prevent NIMBY attitudes.NIMBY Issue Somewhat NeutralizedThe NIMBY issue has been somewhat neutralized by recent trends in minimalist living. Tiny homes have been popular for people who want to simplify their lives, and the lack of housing has encouraging many homeowners to add small rental units or ADU's to their properties. Legislation in California makes it perfectly legal to do so on any single-family lot that's big enough. There's also some extremely innovative ideas for manufactured housing that are getting the attention of the real estate world.We just interviewed the co-founder of Boxabl on our other podcast, The Real Wealth Show. (6) The Nevada-based start-up has a very unique product that addresses the transportation problem by making the unit “fold-up” for delivery. Once it arrives at its destination, it takes just a few hours to set up. There are also plans to make the smaller “casita” units modular so they can be put together into larger homes. The concept has caught the attention of Tesla and SpaceX founder, Elon Musk, who reportedly lives in one. We'll have a link to that interview and the other reports in the show notes at newsforinvestors.comYou can also learn more about rental investing at our website by joining RealWealth for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.housingwire.com/articles/manufactured-housing-is-key-to-affordable-homeownership/2 -https://www.huduser.gov/portal/periodicals/em/WinterSpring20/highlight2.html3 -https://www.manufacturedhousing.org/wp-content/uploads/2021/05/2021-MHI-Quick-Facts-updated-05-2021.pdf4 -https://rebusinessonline.com/lument-manufactured-housing-communities-garner-investor-interest/5 -https://www.lument.com/wp-content/uploads/2021/08/Lument-white-paper-manufactured-housing-2021.pdf6 - https://www.realwealthnetwork.com/real-wealth-show-podcast/?utm_source=Podcast&utm_medium=Real%20Wealth%20Show&utm_campaign=2020wp-login.php%3Fredirect_to&reauth=1&wchannelid=nnhnv5t81j&wmediaid=gjwh7p0qfp

    The Real Estate News Brief: Higher Conforming Loan Limits, Self-Tour Option for Home Buyers, Eco-Friendly House Hunting

    Play Episode Listen Later Oct 12, 2021 4:37

    In this Real Estate News Brief for the week ending October 9th, 2021... new conforming loan limits, self-touring option for home buyers, and a way to save gas when you're house hunting.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic NewsWe begin with two economic reports, from this last week, on the job market. The one for unemployment shows that initial state claims were down 38,000 to 326,000. Economists say it's a sign of a strengthening labor market. The unemployment numbers keep dropping and are getting closer to pre-pandemic levels, but we're not quite there yet. Before the pandemic, initial state claims were in the low 200,000s. Ongoing benefits were also down 98,000 this last week, to a seasonally adjusted 2.71 million. (1)The number of people collecting benefits from a total of eight state and federal programs dropped dramatically at the start of the month. They went from 11.3 million last month to just 4.17 million. That's mostly due to the expiration of a special federal program to help people hurt by the pandemic.The other job market report shows that 194,000 jobs were created in September. That's far less than a Wall Street forecast for a half a million new jobs. MarketWatch says the numbers are falling short of expectations because of low employment at public schools. The official unemployment rate did drop almost a half a percentage point. It went from 5.2% in August to 4.8% last month. (2)Mortgage RatesMortgage rates are teasing us again. After a brief rise above 3%, Freddie Mac says the 30-year fixed-rate mortgage dipped down two basis points, to 2.99%. The 15-year was down five basis points to 2.23%. (3)In other news making headlines…Average Mortgage Amount Creeps HigherLow mortgage rates can help offset higher home prices, but they aren't totally preventing loan amounts from rising. The average amount that homeowners are borrowing has risen to $410,000. That's according to the Mortgage Bankers Association. (4) The MBA's Joen Kan says: “Applications for larger loan amounts continue to outpace lower-balance loans.” In July, they had risen at an annual rate of 19%. There are more homes coming into the market right now, but inventory is still much tighter than it was a year ago, and that's putting a lot of pressure on prices.Higher Loan Limits for Pricier HomesTwo big lenders are responding to the need for larger loans by raising their conforming loan limit caps. PennyMac and United Wholesale Mortgage announced this last week, that they are raising their caps to $625,000. (5)That's about $75,000 more than the 2021 conforming loan limit of about 550,000 set by the FHFA. The FHFA is also expected to increase that amount for 2022, with an announcement sometime next month.Redfin's New Self-Tour FeatureRedfin is expanding it's “Direct Access” program to 22 U.S. markets. This feature allows buyers to unlock vacant homes with the Redfin app, and tour those homes without an agent. This will give buyers a faster way to look at homes they might want to buy. (6)ADT security is supplying the smart locks and sensors that allow buyers to enter the homes. They also keep track of who's entering and exiting. Once the homes are sold, buyers can keep that equipment.Redfin's Bridget Frey says: “In this hot market, more than a third of homes are finding a buyer within the first week, and buyers are hustling to see new homes as quickly as possible.” Newly added markets for the self-touring feature include: Austin, Boston, Dallas, Denver, Las Vegas, Phoenix, San Francisco, and Orange County California.Google Maps Intros New Eco-Friendly ToolYou might be able to save on gas as you tour all those homes by using Google Maps. The company has introduced a new eco-friendly tool that shows you which route is more fuel-efficient. (7)When the fastest route and the most eco-friendly route have a similar ETA, Google Maps will default to the eco-friendly one. Fuel consumption is estimated according to the incline of the road, traffic congestion, and traffic patterns. That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/u-s-jobless-claims-sink-38-000-to-326-000-in-sign-of-improving-labor-market-11633610565?mod=economy-politics2 -https://www.marketwatch.com/story/u-s-adds-just-194-000-jobs-in-september-as-delta-worsens-labor-shortage-11633697488?mod=mw_latestnews3 -http://www.freddiemac.com/pmms/4 -https://magazine.realtor/daily-news/2021/10/01/average-mortgage-amount-increases-to-4100005 -https://www.housingwire.com/articles/pennymac-uwm-raise-conforming-loan-limit-ceiling/6 -https://www.housingwire.com/articles/redfin-allows-buyers-to-tour-homes-without-an-agent/7 -https://magazine.realtor/daily-news/2021/10/06/google-maps-can-help-you-use-less-fuel

    Build-to-Rent Land In High Demand

    Play Episode Listen Later Oct 9, 2021 4:57

    The build-to-rent trend is creating intense competition for land. There are reports that land brokers are getting a growing number of calls from investor groups who want to build single-family rental communities. And there's a limited amount of suitable tracts of land, so competition is fierce.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Forbes just published an article on this build-to-rent “land rush.” It says that for every veteran buyer, land brokers are getting 50 calls from groups who are new to this residential construction niche.BTR “Land Rush”Because there just aren't enough existing homes on the market to meet investor demand, the build-to-rent trend is gaining traction. And that has off a stampede of sorts, for land. Forbes says that “a site that is well-suited for build-to-rent will typically get between 10 and 25 offers.”This is also a new situation for land brokers. They have traditionally sold to developers who build homes to sell to the public. But now they are catering to investors who want land for single-family rentals.One land broker told Forbes that between 5% and 10% of his land sales today are for new single-family rental communities. And he says that percentage is growing month after month. In fact, he says he expects those numbers to “double or triple in the next couple of years.”And it isn't just the big institutional groups pouring money into this market. The majority of them are smaller lesser-known groups, although the deep pocket investor groups do snag headlines.The Forbes article was written by housing economist, Brad Hunter, who helps investors and builders with site-specific market data and analysis. He says the BTR groups also have different preferences for the kinds of communities they want to build. They range from low-density communities with just 4 to 5 rental homes per acre to high-density strategies with 11 to 12 homes per acre. But he says, a density that's in the middle of that range is most popular.BTR Investors vs. HomebuildersThis BTR “land rush” is creating a lot of competition with traditional homebuilders, because of skyrocketing rental returns. Rents are rising in large and small markets across the country, and that's providing a strong motive for BTR investors.Because they are well-funded, Hunter says that BTR investors are often able to outbid homebuilders. And, they are gaining more traction in markets where rents are rising the fastest. He says demand for BFR land is rising the fastest in bigger metros like Augusta, Savannah, San Antonio, and St. Paul. He also says there's also growing demand in smaller cities St. Cloud, Pensacola, and Port Charlotte in Florida.In addition to a limit on land, local ordinances are holding some investors back because there's just more demand than local zoning laws will allow. Some of that is due to a general bias against rentals and local officials who are worried about how voters will react. Because of a perception that renters won't make good neighbors, the NIMBY syndrome is strong in many areas. Hunter says that perception is changing however, because a lot of today's renters are highly paid professionals who don't want to be homeowners and prefer to rent.Despite those headwinds, demand is there for single-family rental homes. According to Hunter and his company, Hunter Housing Economics, there are five things driving this demand.Top Five Reasons for BTR Demand1 - Household formation rates are pushing past 1.6 million per year2 - Millennials want to raise their kids in the suburbs with good schools3 - High rate of dog ownership and desire for yard space4 - Remote work has created a demand for home office space5 - Home prices are too high for young families to buy their own homesHunter says: “The potential for growth is enormous.” His company sees production ramping up over the next five years, with an increase in BTR starts each year. By 2025, Hunter's company is predicting 180,000 starts, with demand still outpacing production. You'll find links to the Forbes article in the show notes at newsforinvestors.com. You can also learn more about single-family rentals at our website by joining RealWealth for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Link:1 -https://www.forbes.com/sites/bradhunter/2021/09/09/the-built-for-rent-land-rush-is-intensifying-here-are-five-drivers/?sh=16cc3ae5560c2 -https://magazine.realtor/daily-news/2021/09/13/the-race-is-on-for-built-for-rent-land

    New Challenges, New Opportunities for Real Estate Investors

    Play Episode Listen Later Oct 9, 2021 5:55

    Real estate investors have experienced some big swings in the market over the past decade. We've gone from dirt cheap foreclosures after the housing meltdown, to more difficult investing opportunities today. According to a new survey, that's discouraging many small scale real estate investors, but difficult doesn't mean impossible. It means you need to be flexible, adaptable, and smart about your choices.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Real-estate data company RealtyTrac conducted an investor sentiment survey among 300 real estate investors from across the country. (1) It shows that 48% of them feel that the investing environment is worse or even “much” worse than it was just one year ago. And it wasn't that much better a year ago. The same survey shows that 45% felt that way in 2020 during the first year of the pandemic.RealtyTrac defines small scale mom-and-pop investors as those who buy one to 10 properties a year. That includes people who flip homes and those why buy and hold them as rentals. RealtyTrack says 90% of the 19 million single-family rental properties in the U.S. are owned by smaller investors. It also says there are thousands of people flipping homes at a rate of about one a month, although they are facing more competition from iBuyers like Opendoor, Offerpad, and Zillow. Investor Sentiment SurveyThis is the second year in a row for the RealtyTrac Investor Sentiment Survey. RealtyTrac says that last year's survey was evenly split between flippers and buy-and-hold investors. This year, there were more buy-and-hold rental property investors. Researchers say that could be the result of market conditions which are reducing home-flipping returns.Previous research by RealtyTrac's parent company ATTOM Data Solutions shows that the typical gross-flipping profit was $67,000 in the second quarter of this year. That's a 33.5% return on investment compared to a 40.6% ROI for Q2 in 2020. It's also the lowest ROI for flippers since 2011. (2)RealtyTrac's survey found that real estate investors are most concerned about high home prices. That concern replaced lack of inventory as the biggest worry in last year's survey. Lack of inventory is now second on the list of concerns. Investors are also worried about the cost of materials and labor along with competition from regular homebuyers.RealtyTrac's Rick Sharga says: “Investors are more optimistic about the future than they are about current market conditions. But they do worry about inflation -- about 81% of the investors surveyed were concerned about inflation causing material and labor costs to rise, making affordability an issue for prospective homebuyers and renters, and increasing the costs of financing.”The survey also asked investors about their foreclosure expectations once government protections expire. About 30% of them expect foreclosures to return to a historical level of about 1% while 33% expect them to increase, but remain below the levels we saw during the Great Recession. Real Estate Investors Need to Shift FocusThe survey title suggests that “Real Estate Investors Have Soured on the Current Market.” I think a better title might be: “Real Estate Investors Need to Shift their Focus.” At least that's what we are doing at RealWealth.The market is changing, again. It's something that the market will always do, so investors need to be flexible and adapt to new conditions. The last ten or so years have been easy for real estate investors. We had a housing crash and dirt cheap prices. But those prices have been rising for a decade. So what now?Yes, it's harder to get inventory. One of our property providers says that foreclosure auctions have completely stopped so she's trying to build new homes for buy-and-hold rental investors, although that has its own challenges.We are in a new market cycle, so investors need to be more creative. In California, new laws have neutralized the idea of single-family zoning. You can now subdivide a single-family property into a duplex, or even a four-plex if the lot is big enough. Investors could live in one, and rent the rest. Short-term rentals could also work, if local laws allow them.California also allows in-law units or ADUs on single-family properties which is another way for property owners to create rentals. Creative Investing for Today's MarketMore creative investors might want to look at ways to help aging baby boomers who need assisted living, or younger professional who need a place to decompress. One of my friends is now turning high-end homes into rehab centers for individuals who need a get-away place to recuperate. Empty hotels could provide an interesting opportunity for apartment conversions. What should you look for? As you know, homes are selling quickly, but that's not 100%. You can look for higher-priced homes that have been sitting on the market for too long and negotiate the price tag. At RealWealth, our teams are helping builders buy land for the development of single-family rentals. By contributing to these projects at the beginning, we are also able to help builders understand the difference between a rental home and a primary residence in terms of design and materials. You can also learn more about single-family rentals by joining RealWealth for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.You'll also find links to information about RealtyTrac's survey in the show notes. And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.businesswire.com/news/home/20210929005109/en/Real-Estate-Investors-Have-Soured-on-the-Current-Market-According-to-the-Fall-2021-RealtyTrac%C2%AE-Investor-Sentiment-Survey%E2%84%A22 - https://www.attomdata.com/news/market-trends/flipping/attom-q2-2021-u-s-home-flipping-report/

    The Real Estate News Brief: Inflation Frustration, Mortgage Rate Surprise, New Checklist for Homebuyers

    Play Episode Listen Later Oct 5, 2021 5:49

    In this Real Estate News Brief for the week ending October 2nd, 2021... we'll look at inflation frustration for the Fed, a mortgage rate surprise, and a new checklist for today's homebuyers. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic News We begin with economic news from this past week, and new predictions about inflation. Fed Chief Jerome Powell says that inflation has been worse than expected because of supply-chain bottlenecks, but he still expects prices to settle back down next year, once those supply-chain issues are resolved. He said during a forum with central bank leaders: “It's frustrating to see the supply chain problems not getting better, in fact they are probably getting worse.” (1)The annual rate of inflation is about 4.2% right now, according to the Fed's preferred PCE index. The more popular CPI is about the same. It is currently at 4.3%. When you remove energy and food, the CPI is about 3%. The Fed likes to see the inflation rate at around 2%. (2)New jobless claims hit a two-month high this last week thanks to a surge in California and Michigan. The government says new state claims were up 11,000 to 362,000. The California numbers are due to the processing of a claims backlog while the Michigan case load is likely due to a surge in delta infections. (3) Housing is one segment of the economy that hasn't slowed down. The National Association of Realtors reports that pending sales surged unexpectedly in August. NAR says pending home sales were up 8.1% compared with July. Economists had expected an increase of less than half a percent. NAR'S chief economist, Lawrence Yun, says: “Rising inventory and moderating price conditions are bringing buyers back to the market.” (4)Builders continue to run into headwinds because of expensive building materials, and a shortage of labor and land. The Commerce Department says that overall construction spending was flat in August. It says that an increase in public spending was offset by a decline in residential spending. It was down .7% for single-family construction and .8% for multi-families. (5) Meanwhile, home prices continue their march skyward. The S&P CoreLogic Case-Shiller Home Price Index shows a year-over-year increase of 19.7% in July. That represents the fourth month in a row for record home price growth. The 20-city index is even higher with a 19.9% year-over-year reading. (6)There are mixed reports from consumers on the state of the economy. The consumer confidence index dropped several points, to a seven-month low while the University of Michigan Consumer Sentiment Survey rose slightly. (7) (8)Mortgage Rates Mortgage rates for all kinds of loans have risen due to a jump in the 10-year Treasury yield. Freddie Mac says the average 30-year fixed-rate loan rose 13 basis points to 3.1%. The 15-year was also up 13 basis points to 2.28%. (9)In other news making headlines…New Homes Are Bigger with More BedroomsHomes are getting larger with more bedrooms, thanks to a demand for more space. The National Association of Homebuilders says the share of single-family homes with four or more bedrooms rose from 42% in 2018 to 45% in 2020. (10)A desire for multigenerational homes is also driving the increase. The NAHB says about 16% of buyers expressed a desire for that kind of home last year, compared to just 11% the year before.Homebuyers Consider Disaster RiskAnother important consideration for homebuyers is the risk of a natural disaster. According to a survey conducted by realtor.com, three in four homebuyers say they assess the risk of a disaster when choosing a location. (11)Tornadoes have created the most concern, with severe cold or winter storms close behind. Floods come next, followed by hurricanes, earthquakes, wildfires, droughts, and sinkholes. While 39% said they are worried about tornadoes, only 8% said they are worried about sinkholes.Home With More Light Are Healthier Homebuyers may want to consider how much natural light they get in a home, and the benefit of “smart windows.” A new study shows that people who live in a home with smart windows experience less stress and anxiety, and sleep better at night. (12)Smart windows have technology that allows them to automatically adjust the tint, to allow for a maximum amount of light throughout the day. The study was done by the International Journal of Environmental Research and Public Health which tracked people with smart windows, and compared the result to people with standard windows.The result shows a delay in the production of melatonin for people with standard windows. That kept them from falling asleep as quickly, and from getting as much sleep overall. Researchers say the people with smart windows not only slept better, but experienced less stress and anxiety. That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke. Links:1 -https://www.marketwatch.com/story/feds-powell-says-high-u-s-inflation-could-last-into-early-next-year-due-to-shortages-11632938138?mod=federal-reserve2 -https://www.marketwatch.com/story/u-s-inflation-rises-sharply-again-in-august-and-remains-at-30-year-high-pce-shows-11633092039?mod=bnbh3 -https://www.marketwatch.com/story/u-s-jobless-claims-jump-to-two-month-high-amid-surge-in-california-11633005982?mod=economic-report4 -https://www.marketwatch.com/story/pending-home-sales-unexpectedly-surge-higher-as-the-housing-market-paves-the-way-for-a-rebound-11632924670?mod=economy-politics5 -https://www.reuters.com/world/us/us-construction-spending-flat-august-2021-10-01/6 -https://www.marketwatch.com/story/home-prices-rise-at-record-pace-for-fourth-consecutive-month-but-economists-arent-worried-about-the-housing-market-just-yet-11632835548?mod=economic-report7 -https://www.marketwatch.com/story/u-s-consumer-confidence-slumps-to-7-month-low-on-delta-and-inflation-worries-11632838499?mod=economy-politics8 -https://www.marketwatch.com/story/u-s-consumer-sentiment-rises-in-late-september-depressed-optimism-continues-university-of-michigan-2716330983149 -http://www.freddiemac.com/pmms/10 -https://magazine.realtor/daily-news/2021/09/30/more-new-homes-are-being-built-with-4-plus-bedrooms11 -https://magazine.realtor/daily-news/2021/09/28/buyers-consider-disaster-risk-in-purchase-decisions12 -https://magazine.realtor/daily-news/2021/09/24/homes-with-more-daylight-may-improve-moods

    Renters Are Overtaking the Suburbs!

    Play Episode Listen Later Oct 2, 2021 5:08

    If you've been wondering just how many renters are moving to the suburbs, there's a new report that will give you a really good idea. RentCafe says that, over the past decade, dozens of suburbs have transitioned from a majority of homeowners to a majority of renters. And it's projecting that dozens more will follow in the next five years.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.RentCafe looked at data for 1,105 suburbs in the nation's 50 largest metros, and found that in 242 of those suburbs, renters outnumber homeowners. (1) But of those 242 renter-dominated suburbs, 103 suburbs transitioned to a renter majority in just the last ten years. It also says that 57 more are likely to do so over the next five years.Renters Migrating Toward the SuburbsRentCafe says that: “During the past decade, the migration toward the suburbs developed fast.” It says: “The number of suburban areas where renters are the majority grew by a staggering 69%.” While 103 suburbs transitioned to a renter majority in the last ten years, only four suburbs went in the opposite direction, where homeowners became the majority over renters.Millikin University associate sociology professor, Dr. Kenneth Laundra, told RentCafe that the modern day suburb is much different that the “Baby Boomer fantasyland” it was years ago. He says: “We have reimagined the American dream for a modern, more diverse society where people are having fewer children and getting married much later in life (if at all), and where most good job/career opportunities require one to be flexible.”The Commercial Observer captured the spirit of that idea in a blog about the RentCafe report. The subtitle says: “The American Dream may no longer be about buying a home, but renting one.” (2)That blog pointed out that the largest 50 suburbs gained 4.7 million people in the last ten years, and 79% of them were renters. That brought the approximate total number of suburban renters up to 21 million people, which is an increase of 3.7 million. During that same time frame, homeownership in those same suburbs only went up 3%.Census data also provides an interesting snapshot of the suburban renter demographic. It shows that almost two out of every five suburban residents are renters. That's an average of 39% of the people who live in the suburbs of our largest cities. Most of those renters are Millennials or Gen Zs who are interested in more affordable housing and a flexible lifestyle. The Commercial Observer reports that 55% of suburban renters are younger than 45 years old with a median income of about $50,000.Top Three Metros for Suburban Renter GrowthThe RentCafe report shows that 38% of the transitioning suburbs are found in three of the largest metros -- Miami, Washington, D.C., and Los Angeles. One of the most famous L.A. suburbs is on that list. Due to a steady increase in renters over the last ten years, the data shows that 51% of the people who now live in Beverly Hills are renting their homes. According to RentCafe, the median income in Beverly Hills is about $81,000. The suburb attracting the most renters to the D.C. area is Merrifield, Virginia. RentCafe says the renter population there is 87% higher than it was a decade ago. Of the 103 suburbs that transitioned, Merrifield now has the largest share of renters at 64%. It also has the highest median income at $98,000. In the Miami area, the suburb that has become heavily dominated by renters is Doral, near the airport. The renter population grew 83% there, making it the third-largest area for renters in the nation. RentCafe says that some of its popularity may be due to its rank by Go.Verizon as the third-best small city to start a small business.Rent Growth In Other StatesWhile suburbs in California, Washington, D.C., and Florida captured many of these renters, there are many in other states that experienced rapid growth of their suburban renter population. The share of renters in Maple Heights, Ohio, Southeast of Cleveland, grew by 87%. Eastpoint, Michigan outside of Detroit, is close behind Maple Heights for renter growth at 83%. Among those expected to flip in the coming years, RentCafe says there will be more in California and Florida, but also “quite a few in Georgia, Maryland, Missouri, and Ohio.”If you'd like to see a list of the suburbs that have flipped or will likely flip in the next five years, check for links in the show notes at newsforinvestors.comYou can also join RealWealth for free at our website. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.rentcafe.com/blog/rental-market/market-snapshots/picket-fences-for-rent-100-suburbs-turned-renter-majority-this-decade/2 -https://commercialobserver.com/2021/09/renters-now-rule-the-suburbs-in-dc-miami-and-los-angeles/

    Calling All Landlords! Rentals Needed in Tampa

    Play Episode Listen Later Sep 29, 2021 4:06

    Demand is going through the roof for rentals in the Tampa Bay region, and so are the rents. According to one data firm, the hot housing market and a steady stream of new residents have pushed apartment rents up 22% since the beginning of this year.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Real estate data firm CoStar says that rents are moving higher because of an influx of new residents, and without enough rentals to meet that demand, there are no signs of a rent-growth slowdown. USF Financial Professor Lei Wedge explained the situation to local News Channel 8. (1) He listed four basic reasons that rents are moving higher so quickly. He says:1 - There are lots of people moving to Tampa every day, and when people can't afford to buy, they are “rushing into the rental market.”2 - There are more renters in the market than the supply of rentals.3 - Because “home values are going up like crazy,” investors are buying more expensive properties and charging higher rents for a certain rate of return.4 - Long-time landlords are following suit, and raising their rents to match the higher rents offered by investors.Tampa Bay Home PricesAbout a month ago, Axios wrote about Tampa Bay's hot real estate market. It says home values in this area are “rising faster than any other metro in the country” because inventory is too low to meet demand. Tampa real estate agent, Justin Ricke, told Axios that some homes are getting as many as 30 offers, and that homes are selling almost as quickly as they are listed. He says: “You can put a house on the market Thursday, and if you market it correctly, get multiple offers by Sunday, have a decision by Monday.”Axios says that closed and pending sales were down in July across a five-county Tampa Bay area, including Hillsborough, Manatee, Pinellas, Pasco, and Sarasota Counties. That's according to MLS data. It says if the trend were to continue it could be a sign that the market is cooling off, but the article also points out that “slowdowns are typical for this time of year.”Inventory is also a major factor. Because it is too low to meet demand, there would only be “so much cooling off of the market” as too many people go after too few homes.Tampa Bay's Median Home PriceSo what's the median price for the area? Data from Florida Realtors show the median for that five-county area is $373,000. That's up from around $308,000 in July of last year. The months supply of homes in July was only about “one month” for each of those five counties. That represents a 65% drop in inventory for Manatee and Sarasota Counties, and a 30 to 40% drop for the others.Stats show that homes went under contract in six days or less, on average, and that most single-family homes get the asking price or higher.This climb in home prices and rents is also making it difficult for many people to afford a home or a rental. Ricke says he's getting calls constantly from people looking for an affordable place to live.If you are an investor, wondering how this could play out for you, RealWealth has its own data on the market. Recent posts on the Southwest Florida market include a podcast called: “Demographics & Hot Markets with Our Florida Expert.” That's available under the Learn Tab at newsforinvestors.com.You'll also find a webinar replay on the Tampa area that you can access here as a RealWealth member through the Investor Portal. It's free to join and will also give you access to experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and sample pro-formas for rental properties in markets across the U.S. That's it for this episode. Please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.wfla.com/news/hillsborough-county/tampa-rent-prices-up-22-percent-in-2021-data-shows/2 -https://www.axios.com/tampa-bay-real-estate-market-outlook-home-sales-93f33ec1-30a9-4115-a502-f1728302ecc3.html

    The Real Estate News Brief: Fed Talks Rate Hikes, Tax Change Impact on SDIRAs, Ultra-White Paint as Your AC

    Play Episode Listen Later Sep 27, 2021 6:16

    In this Real Estate News Brief for the week ending September 25th, 2021... what the Fed is saying about rate hikes, tax changes that could deflate your self-directed IRA, and ultra-white paint that could replace your AC.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic NewsWe begin with economic news from this past week, and a Fed meeting on monetary policy. The Fed's senior policymakers are now saying they could raise interest rates sooner than they expected. They had previously anticipated higher rates in 2023, but are now saying they could raise the short-term rate by a quarter point, sometime next year. Higher interest rates will help control inflation which is currently running around 4%, or “double” what the Fed would like to see. (1)New claims for unemployment benefits jumped to a one-month high of 351,000. The surge is due to a backlog of claims in California. They apparently piled up as California worked on new technology to improve efficiency and prevent fraud. Weekly claims had hit a pandemic low in early September of 312,000. (2)Housing starts and new permits were both up in August as builders ramped up their residential construction activity. The Census Bureau reports that housing starts were up 3.9% compared to July, and 17.4% compared to August of last year. Permits were up 6% month-over-month, and 13.5% for the year. But this surge in activity was mostly for the construction of multi-families. (3) Realtor.com reports that multi-family demand is being driven by renters and remote workers who are moving back to the cities. (4) Confidence among builders is also moving higher. NAR says its September confidence index increased one point to 76. That's after a three-month decline. NAR's chief economist Robert Dietz says: “The single-family building market has moved off the unsustainably hot pace of construction of last fall and has reached a still hot but more stable level of activity.” (5) All that construction activity has resulted in an increase in new home sales. The government says new home sales rose 1.5% to an annual rate of 740,000. There's currently a 6.1 months supply of new homes on the market, with a median price of $391,000. (6) Existing home sales were down in August as buyers scoff at high prices and a lack of affordable inventory. According to the National Association of Realtors, sales were down 2% to a seasonally-adjusted 5.88 million. Compared to August of last year, they were down 1.5%. NAR's chief economist, Lawrence Yun, says: “Although there was a decline in home purchases, potential buyers are out and about searching, but much more measured about their financial limits and simply waiting for more inventory.” (7) The good news: inventory is rising. MarketWatch reports that it's up about 16% since a low point last winter.Mortgage Rates Mortgage rates are still idling below the 3% level. Freddie Mac says the average 30-year fixed-rate mortgage rose just 2 basis points last week, to 2.88%. The 15-year was up 3 points to 2.15%. (8)In other news making headlines…Tax Law Changes Threaten SDIRA InvestmentsCongress is considering some tax law changes that could ban real estate deals from self-directed IRAs. The proposals are aimed at the super wealthy who realize enormous gains with this kind of investment, but the changes could potentially impact everyone who uses a self-directed IRA for their real estate deals. (9)Supporters of this legislation say that current rules allow for private-placement deals. SEC rules state that only “accredited investors” can participate in those deals which means those investors must have a net worth of a million dollars or more, or earn more than $200,000 a year. Legislation supporters say that retirement accounts should be used for investments that are available to everyone, like publicly-traded stocks, not just accredited investors.Bill critics say there are many mom and pop investors who are also trying to increase their wealth with these kinds of deals and the legislation would devastate many retirement portfolios for people who are not super wealthy. Michael Hadley of the firm Davis & Harman told MarketWatch: “These accounts belong to retirement savers. They understand the investments they are most comfortable with. We don't believe the government should be picking and choosing.” If this legislation is approved, self-directed IRA holders would have two years to remove those kinds of investments from their portfolios. If you don't like the sound of this proposal, you should contact your representatives in Congress and let them know.Could Ultra-White Paint Replace Your AC? Scientists at Perdue University are working on a way to cool your home with white paint. They say this ultra-white paint can reflect more than 98% of sunlight, and that surfaces coated with this paint are “cooled below the surrounding temperature without consuming power.” (10) Their research shows that the white paint on a 1,000 square foot roof can provide cooling that's equal to the use of 10 kilowatts of power, and that's “more powerful than the air conditioners used by most houses.”The paint has already been listed by Guinness as the whitest paint ever, but it's not yet available to the public.That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/fed-dot-plot-signals-higher-u-s-interest-rates-in-2022-but-powell-warns-its-not-set-in-stone-11632337181?mod=home-page2 -https://www.marketwatch.com/story/u-s-jobless-claims-jump-to-one-month-high-of-351-000-largely-due-to-big-increase-in-california-11632401406?mod=economic-report3 -https://www.marketwatch.com/story/new-home-construction-activity-improves-as-builders-focus-on-high-margin-projects-11632229206?mod=economy-politics4 -https://magazine.realtor/daily-news/2021/09/22/multifamily-construction-booms-single-family-starts-slow5 -https://www.marketwatch.com/story/home-builder-confidence-improves-as-housing-demand-remains-strong-11632146831?mod=u.s.-economic-calendar6 -https://www.marketwatch.com/story/new-home-sales-turn-higher-despite-record-prices-11632493064?mod=economy-politics7 -https://www.marketwatch.com/story/existing-home-sales-decline-as-buyers-hold-out-for-better-prices-more-options-11632320151?mod=economy-politics8 -http://www.freddiemac.com/pmms/9 -https://www.marketwatch.com/story/people-are-upset-will-proposed-ira-tax-changes-targeting-the-rich-hurt-smaller-nest-eggs-1163234897310 -https://magazine.realtor/daily-news/2021/09/20/ultra-white-paint-could-cool-homes-better-than-air-conditioning

    Bye-Bye to Single-Family Zoning in California!

    Play Episode Listen Later Sep 24, 2021 5:16

    It's a big deal in a state where homeowners have fiercely fought any changes to single-family neighborhoods. California Governor Gavin Newsom is catching up on his “to do” list after the recall election, and just signed two important pieces of housing legislation. One is SB 9 which eliminates single-family zoning in most neighborhoods across the state. The other is SB 10 which makes it easier for cities to build multi-family apartment buildings in some areas. (1) Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Senate Bill 9 is especially significant after years of homeowner opposition to previous efforts to increase housing density in single-family neighborhoods. This bill allows for single-family parcels to be split in two, and duplexes to be built on each half, which allows for a total of four units on one lot. The other bill will streamline the approval process for the development of multi-family housing near transit and urban infill areas.The Single-Family MindsetThe bill that ends single-family zoning is especially significant. It's a housing concept that is deeply entrenched in the minds of homeowners and housing codes across the U.S., not just California. The so-called “single-family neighborhood” has created the suburbs as we know them today.Single-family zoning has also been used as a racial barrier for people who can't afford bigger homes with bigger yards. And with higher home prices, the gap is growing between those who can afford to buy homes and those who can't. In California, the median price for a home has gone up more than 21% in the past year to more than $700,000. That's according to Zillow. (2)Those two bills along with Senate Bill 8 are part of Governor Newsom's California Comeback Plan. SB 8 extends the Housing Crisis Act of 2019 to jumpstart more housing production, and the Comeback Plan is a five-point plan to address major issues in a post-pandemic world.California's Comeback PlanThe first leg of that plan is the state's effort to help people hit hard by COVID-19. Other parts of the plan include housing affordability and homelessness, upgrading schools as gateways for opportunity, addressing climate change and making the state more resilient against wildfires, and creating infrastructure that will take the state into the next century.SB 9 and 10 are part of the housing affordability leg. As Newsom says: “The housing affordability crisis is undermining the California Dream for families across the state, and threatens our long-term growth and prosperity.”SB 9 Do's and Don'tsSo what does all this mean for you if you are a single-family homeowner?Currently, the law allows two units on a single-family lot. You can have a stand-alone home along with an accessory dwelling unit no larger than 500 square feet. This new law will allow up to four units on the same amount of land. But there are plenty of guidelines.For example, if someone wants to split their lot in two, each new lot must be at least 1,200 square feet. Properties that have been listed as historic landmarks cannot be altered by this law. Also, any new unit created under this law CANNOT be used as a short-term rental. That's defined as a unit that's rented for less than 30 days, so more than 30 days is okay. (3)According to the Daily Democrat, anyone who wants to build a duplex or split their property to build two duplexes must also plan to live in one of the units for at least three years. That applies to both homeowners and landlords.The law makes it difficult for local districts to deny a valid development application. Local officials can reject a proposal if the project would have a “specific adverse impact” on “public health and safety, or the physical environment” and there are no other options for eliminating that adverse impact. As for size and design, upzoning projects would still need to adhere to local standards. Will It Solve the Housing Gap?Will this make a huge difference in California's housing gap?According to a recent study by the Terner Center for Housing Innovation at UC Berkeley, 5.4% of California's single-family lots could be developed under SB 9. That could potentially create an additional 714,000 homes. But that's still far short of the 3.5 million homes that Newsom wants to create in just another four years, by 2025.If you'd like to read more about this legislation, check for links in the show notes at newsforinvestors.com. You can also join RealWealth for free at our website. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.gov.ca.gov/2021/09/16/governor-newsom-signs-historic-legislation-to-boost-californias-housing-supply-and-fight-the-housing-crisis/2 -https://www.zillow.com/ca/home-values/3 -https://www.dailydemocrat.com/2021/09/18/what-californias-new-sb9-law-means-for-single-family-zoning-in-your-neighborhood/

    The Real Estate News Brief: Inflation Eases, Rents & Building Materials Soar, Mortgage Rates Steady

    Play Episode Listen Later Sep 21, 2021 5:47

    In this Real Estate News Brief for the week ending September 18th, 2021… inflation eases up overall, but rents and building materials soar, while mortgage rates hold steady.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from the past week. Concerns about inflation have eased up a bit. Prices rose at their slowest pace in August since about seven months ago. The consumer price index was up .3% which brought the annual rate down a tenth of a percent to 5.3%. The core rate, which strips out prices for food and gas, was only up .1% to an annual rate of 4%. That's down from 4.3% in June. MarketWatch economists say that could be a sign that the recent price surge is peaking. (1)There's been a lot of debate about the risk of higher inflation and whether it will remain above the 2% mark. The Federal Reserve isn't worried. It expects prices to come back down toward that 2% level sometime next year.Jobless claims rose last week because of Hurricane Ida, but they are still near a pandemic low. The U.S. Department of Labor says initial jobless claims for state benefits were up about 20,000 to 320,000. The pandemic low point is 318,000. Continuing claims also fell to a seasonally adjusted 2.67 million. That “is” a pandemic low. (2)Consumers were spending money in August which is a sign of strength for the U.S. economy. The Census Bureau reports that retail sales were up .7%, although MarketWatch says that higher prices could account for at least part of that increase. (3) The numbers are not as strong as they were in the spring, but consumers are buying different things right now. In the spring, they were stocking up on goods. Now they are spending more on things like restaurants and travel. Retail sales numbers are 15% higher than August of last year.Consumers are expressing a slightly higher level of confidence in the U.S. economy than they did over the summer. The University of Michigan's consumer sentiment survey shows a reading of 71 for September. (4) In August, it was 70.3. MarketWatch says that people are still worried about their financial situations, including higher prices. They are also feeling pessimistic about the purchase of homes, vehicles, and large appliances, which are all in short supply.Mortgage RatesMortgage rates haven't moved much for two months. According to Freddie Mac, the 30-year fixed-rate mortgage went down just 2 basis points to 2.86% this last week. The 15-year dropped a little more. It was down 7 basis points to 2.12%. (5) Freddie Mac says the holding pattern is the result of a slowdown in the economic recovery. But it says other factors are in play, such as increased migration, the remote work trend, the use of automation, and a focus on a more energy efficient economy, which, it says, will probably lead to increased economic growth.In other news making headlines…Rents Soaring in Cities Across the CountryIt isn't just home prices that are shooting skyward. Rents are increasing even faster than home prices. A new Redfin report says that August rents hit a national year-over-year growth rate of 11.5%.That's the first double-digit rate of rent growth ever and represents a median rent of $1,633, or about $169 more per month for renters. (6) If you look at apartments of different sizes, the median is $1,338 for a studio, $1,524 for a 1-bedroom, and $1,828 for a 2-bedroom.Cities seeing the most rent growth are Tampa, Florida; Riverside, California; Miami, Florida, and Phoenix, Arizona. Rents in all four of those metros were more than 25% higher on a year-over-year basis.Lumber Costs Lower, But Other Costs RiseBuilders are getting a break on lumber prices, but the cost for other materials is climbing. According to government data, home building materials have risen 19% in the past year. At one point last spring, lumber prices had topped $1,500 for a thousand board feet, but they have come back down and are now closer to $400. But there's a long list of materials that have gotten a lot more expensive. (7)The National Association of Home Builders says that steel mill products have gone up the most, followed by building paper and building board mill products, asphalt, plastic water pipe, fertilizer materials, laminated veneer lumber, and other materials used frequently by the building industry. Prices for steel mill products are up 81% year-over-year.Those price increases are pushing new home prices higher. In July, the median sales price of a home was $390,500. That's an 18.4% increase from July of last year.That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/surge-in-u-s-consumer-prices-slows-in-august-cpi-shows-11631623600?mod=newsviewer_click_realtime&mod=article_inline2 -https://www.marketwatch.com/story/u-s-jobless-claims-rise-in-latest-week-11631795929?mod=mw_latestnews3 -https://www.marketwatch.com/story/retail-sales-surge-in-august-despite-spread-of-delta-signal-economy-is-still-strong-11631796054?mod=economic-report4 -https://www.marketwatch.com/story/u-s-consumer-sentiment-mired-at-near-decade-lows-university-of-michigan-survey-finds-11631888208?mod=economy-politics5 -http://www.freddiemac.com/pmms/6 -https://www.realtor.com/news/trends/rental-prices-soar-as-pandemic-drags-on/7 -https://magazine.realtor/daily-news/2021/09/10/building-material-costs-continue-to-surge

    The Garage Takes on a New Role Among Electric Vehicle Owners

    Play Episode Listen Later Sep 16, 2021 5:26

    It wasn't too long ago that housing experts were predicting the demise of the garage, because of ride-sharing services like Uber and Lyft, and a desire to live “car free.” Many people have also turned their garages into additional living space. But now, with electric vehicles becoming more popular, EV owners want a place to safely charge their cars overnight and that's making the garage, once again, a more indispensable part of our homes.Hi I'm Kathy Fettke and this is Real Estate News for Investors.Having an electric car is still an expensive purchase for many people, but for those who can afford one right now, it's important to have a convenient and secure way to charge it up. That's not going to be a charging station blocks or miles away. Most people will want a charging station at home, so the car can power-up while they are sleeping. The Wall Street Journal acknowledged this new trend in an article called “Electric-Car Charging Stations Give the Home Garage a Powerful Upgrade.” (1)Powerful At-Home Charging StationsBut it isn't just the importance of “having” a garage. Charging an electric vehicle quickly also requires high-powered outlets and outlets that can charge different kinds of electric vehicles. The Journal reports that EV-owners are installing charging stations that range from “simple, 200- or 240-volt outlets to... elaborate systems that incorporate solar panels and battery walls.”In one example, the Journal cited a bi-coastal family with a 220-volt outlet and charger in Massachusetts, and a Tesla roof tile solar system in California with a Tesla powerwall and 2-foot by 4-foot batteries in California. That's not typical, of course. People who own an all-electric vehicle are also in the minority. Pew Research shows that only about 3% of vehicles in the U.S. are EVs, but we could see a big increase in green-energy vehicles in just the next eight years. An executive order signed by President Biden would increase the use of electric, hydrogen, and plug-in hybrids to 50% by 2030.Nation Need Charging Station NetworkThe biggest obstacles to hitting that goal include the cost of e-vehicles and the lack of charging stations. Having a charging station in the garage is great for local trips, but the nation needs a more robust network of charging stations along public roads and highways.As reported by Axios, the U.S. currently has 104,000 public charging “plugs” for electric vehicles. (2) But only 18% of those plugs will charge your vehicle in an hour or less. Those fast charging plugs are called “Level 3” or “DC Fast Chargers.” Axios cited an analysis by Mobilyze.ai which found that only about 10% of U.S. households have easy access to the plugs that are currently available. An easy access plug would be within a quarter mile from your home. The study counted 18.5 electric vehicles for every available plug. It suggests that one charger is needed for every 10 to 15 vehicles. The distribution of plugs is also uneven, with more plugs in wealthier areas.As more people buy electric vehicles, more plugs will be needed across all communities. Biden's call for the use of electric vehicles also comes with a call for at least a half a million more plugs.Minimum At-Home Charging RequirementMyEV.com says that a garage isn't necessary for at-home charging, so long as you have a dedicated area to park, and an external electric outlet. (3) The outlet might be mounted to an outside wall of the building, or a pole. According to MyEv.com, installation could cost between 500 and $1,200. If it's a 240-volt plug, you'll get a Level 2 charge. Depending on the battery, that could give you a full charge in 8 to 24 hours. Some batteries might only take 4 hours, according to this source. A Level 1 charge would use your typical 100-volt house current, and of course, take much longer to charge.The optimal system would be a Level 3 charge. MyEV.com says a Level 3 charger can bring an EV battery up to 80% of its capacity in just 30 minutes. While a Level 2 charge is still free in many places, a fast charge might cost you about 30-cents a minute. Joining a network could get you a discount. EVgo offers a 10% discount for members with a rate of 31-cents a minute. If you don't want to join a network, check out PlugShare.com for a map of charging stations.Tesla also provides a global network of fast charging stations. (4) With more than 25,000 Superchargers, it claims to operate the largest global, fast charging network in the world.You'll find links to more information in the show notes at newsforinvestors.com. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.wsj.com/articles/electric-car-charging-stations-give-the-home-garage-a-powerful-upgrade-116299163132 -https://www.axios.com/electric-vehicle-charging-stations-equity-1b00f7a6-f87a-4125-9bc0-82399663b345.html3 -https://www.myev.com/research/buyers-sellers-advice/what-if-you-want-to-drive-an-electric-vehicle-but-dont-have-a-garage4 -https://www.tesla.com/supercharger

    Construction Worker Shortage & Vaccine Balancing Act

    Play Episode Listen Later Sep 15, 2021 5:07

    Contractors have been struggling with a worker shortage that began with the Great Recession, and then was made worse by the pandemic. If one worker on the job site gets sick with the virus, the entire project can be stalled for at least 2 weeks. And now, things are becoming even more complicated as more clients are wanting all workers on their property to be vaccinated. But many available workers are pushing back. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Getting the job done has been tough for contractors dealing with supply chain shortages, rising prices for the materials, and permitting issues. Add to it that the number of new coronavirus cases hit a 7-day daily average of 166,000 on September 1st. According to data in the New York Times, the case count has come down a bit since then but is still above 152,000. Some healthcare professionals are predicting another surge this month because of the Labor Day holiday and social gatherings, while others are saying that the Delta variant moves fast and furious and will be gone as quickly as it came.Chicago-based developer, Josh Stark, told Construction Dive that worries about the high case count right now could further impact construction and the slow supply chain recovery that's been haunting the industry. He says that we're seeing suppliers come back online, but if those cases turn into more hospitalizations or deaths, then those businesses might have to shut down again.Vaccine Hesitancy Among Construction WorkersWhile many different companies nationwide are mandating certain precautions for workers, including vaccinations for those who want to go back to work in the office, Construction Dive reports that more than 40% of construction workers say they will not get vaccinated.A construction safety nonprofit out of Maryland called The Center for Construction Research and Training says that vaccine hesitancy among construction workers runs much higher than other occupations. A graph in the article shows most occupations are dealing with a vaccine hesitancy percentage of 15% which is about 25% less than the construction's 40%.This is a problem for contractors who have clients demanding that anyone who steps foot on their property be vaccinated. Kyle Peacock of the San Francisco-based Peacock Construction says he started getting vaccine mandates from his customers in just the last few weeks. He says: “All of our healthcare clients are doing it, but we've also had a couple office tenants that said they're only going to let vaccinated people into their offices.”Job Site Mandates for Vaccinated WorkersThere are some vaccinated workers who only want to work with other vaccinated employees, which is creating concerns about a labor shortage that could worsen in the coming months. Ken Simonson of the Associated General Contractors told Construction Dive that employment levels are already below their pre-pandemic peak in 36 states.An opinion piece in Construction Dive by a New York-based contractor says the industry is already dealing with high prices for materials, appliances that are difficult to find, and a shortage of workers. And now, the construction industry has to add a Covid-problem-solving issue to his list. He says: “Construction workers are, at their core, a hardy, headstrong, self-sufficient group.” And he added that “They leave their homes daily and travel substantial distances, carpooling and ride-sharing. They stop at delis, lumber stores and home goods stores." That makes them more exposed to the potential of catching the virus and spreading it than those working from home.Risk of Further Impact to Worker ShortageThere are many, many strong opinions as to why people should or should not get the vaccine, and why the do or don't want it. We won't go into those reasons here. What's important for real estate investors to understand is how this situation may affect our industry. If 40% of construction workers are not planning to get vaccinated, will there be a further shortage of workers over the next few months or years if more job sites require it? Fewer workers would put more downward pressure on an already short supply because fewer homes could be completed without workers. If demand for housing continues, but supply stays low, prices will likely continue to rise.If you'd like to read more about this issue in the Construction Dive articles, check for links in the show notes at newsforinvestors.com. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.1 -https://www.constructiondive.com/news/contractors-caught-between-vaccine-hesitancy-and-owner-mandates/605434/2 -https://www.constructiondive.com/news/a-call-to-action-for-covid-19-vaccinations-in-construction/605720/

    The Real Estate News Brief: Home Equity Rises, Zombie Foreclosures Fall, Flippers' Hunt for Homes

    Play Episode Listen Later Sep 11, 2021 5:49

    In this Real Estate News Brief for the week ending September 11th, 2021... a record high for home equity, a drop in Zombie foreclosures, and the house flippers' hunt for homes.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic News We begin with economic news from this past week. It was a short week because of Labor Day, with not much economic news after that. The weekly unemployment report shows that initial state claims fell to a new pandemic low of 310,000. The average number of claims before the pandemic was just 90,000 less, at 220,000 per week. (1) Continuing claims were also down to almost 12 million for state benefits and 7 other state and federal programs. That number had risen above 30 million during the pandemic.Last week was also the last full week for many of those benefits. Bank of the West chief economist estimates that 7.5 million people will drop off the unemployment list, and another 3 million will see their benefits cut by $300 a week.Economists are watching to see if the loss of benefits sends more people back to work, and helps ease the worker shortage that many companies are experiencing. They are also expecting a possible rise in claims because of Hurricane Ida. And there are plenty of jobs available. The Labor Department reported an all-time high of 10.9 million job openings in July. It's the fifth month in a row that job openings broke that record. (2)Mortgage RatesMortgage rates are still idling below 3%. The average 30-year fixed-rate mortgage was up just 1 basis point last week, to 2.88%. The 15-year was also up 1 basis point, to 2.19%. Freddie Mac chief economist, Sam Khater, blames it on the current wave of new COVID cases. He says it led to “weaker employment, lower spending and declining consumer confidence.” But he says that lower rates are also giving consumers “more time to find the homes they are looking to purchase.” (3)In other news making headlines...New Home Equity RecordHomeowners are reaping the benefits of higher home values. Black Knight says that housing equity has hit a new record high after surging 40% compared to a year ago. It analyzes equity among mortgage holders, and says the average mortgage holder now has $173,000 in equity. That's up about $20,000 from the first quarter of this year. (4)Black Knight Data Analyst, Ben Graboske, says recent growth is the strongest growth he's ever seen. He also says 98% of the homeowners who are in forbearance have at least 10% equity in their homes. That should help them avoid foreclosure, as foreclosure moratoriums are lifted.Zombie Foreclosures Nearly Non-ExistentHigher levels of home equity, along with the moratoriums, have led to a big drop in zombie foreclosures. That's when a foreclosure process stalls after a homeowner defaults on mortgage payments and abandons the home. The house ends up sitting vacant, in foreclosure limbo. (5)A report from ATTOM Data Solutions on third-quarter vacant properties and zombie foreclosures shows that 1.3 million homes are vacant in the U.S. That's about 1 in every 74 homes. The number of homes that have fallen into zombie status is just 1 in every 13,000 homes for a total of about 7,500 homes.ATTOM'S chief product officer, Todd Teta, says: “Vacant properties in foreclosure, and the resulting potential for neighborhood decay, continue to be a non-issue overall in most of the country.” He says: “But that could easily change over the coming months as lenders are now free to take back properties from delinquent homeowners.” He says the foreclosure issue will depend on individual banks, and how aggressively they pursue foreclosures once the moratoriums are gone.Fixer-Upper Homes Are ScarceWill we see more inventory in the near future as the housing market adjusts to a post-pandemic economy? Right now, it's tough on house flippers and businesses that rely on renovating older homes and foreclosures. There's inventory out there but the competition is tough.According to an ATTOM report, just 2.7% of homes sales were flips during the first quarter of this year. (6) That's the lowest percentage of flips in about 20 years. House renovator, Ed Stock, told the Wall Street Journal that he expects to do just 15 flips this year. In 2014, at the height of the foreclosure crisis, he did 53 flips. He says: “Investors like me, we're like ants on a sugar hill all fighting for the same projects.”It is possible to find inventory however. And it's a whole lot easier when you are part of an investing network, like RealWealth. As a member of our network, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. It's free to join at newsforinvestors.com, and free to make use of our resources. That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/u-s-jobless-claims-fall-sharply-to-post-pandemic-low-of-310-000-11631191386?mod=the-conversation2 -https://www.marketwatch.com/story/job-openings-hit-another-record-high-in-july-11631110730?mod=economic-report3 -http://www.freddiemac.com/pmms/4 -https://www.blackknightinc.com/black-knights-july-2021-mortgage-monitor/5 -https://www.attomdata.com/news/market-trends/foreclosures/attom-q3-2021-vacant-property-and-zombie-foreclosure-report/6 -https://magazine.realtor/daily-news/2021/09/08/flippers-struggle-to-find-enough-fixer-upper-houses

    Los Angeles Reduces Green Energy Goal by a Decade

    Play Episode Listen Later Sep 10, 2021 5:13

    Los Angeles is fast-tracking its green energy plan. The City Council approved a plan for 100% renewable energy by 2035. That's inline with President Biden's goal, and a decade sooner than LA's previous plan. The City Council decision comes after a comprehensive study that looked at everything from greenhouse gas emissions, public health, and cost versus benefit analysis to electricity demand, rooftop solar, and other renewable energy options.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.LA hopes to “set the stage for the country” and the rest of the world with LA100. (1) The transition would create about 9,500 clean energy jobs and cost between 57 and $87 billion, but according to LADWP General Manager Martin Adams, much of the investment would also coincide with infrastructure replacement that is already on the city's “to do” list.He says: “When this study started three-and-a-half years ago… the idea was to be where we want to be by 2045. So we have now shaved a decade off that timetable and we know we have a roadmap that will get us to 100% clean energy by 2035.”Adams says the city is going to “take this very seriously and make this happen.” And Councilman Mitch O'Farrell says that “LA100 is not a utopian gesture. It is a work plan for a world in trouble.”Code Red for HumanityThis comes as California firefighters are once again battling three massive wildfires, and just a few weeks after the Intergovernmental Panel on Climate Change published a report called “Code Red for Humanity.” (2) The report states that global warming is “unequivocally caused by human activities” and warns that the average world temperature will likely hit a dangerous threshold within the next 20 years. That threshold is about 2.7 degrees Fahrenheit hotter than a pre-industrial average and is generally viewed as the hottest that humanity could handle. Climate scientists say average temperatures are already 2 degrees hotter, and we are already seeing the impact of that with more extreme weather-related events and wildfires.LA100 Renewable Energy StudyLos Angeles partnered with the National Renewable Energy Laboratory to complete the study. (3) It shows that LA can hit an 84 to 100% clean energy goal by 2035 with a 76 to 100% decline in greenhouse gases. Results show the economic disruption would be minimal compared to the creation of jobs, economic output, public health benefits, and greenhouse gas reductions. The transition will require the shutting down of gas-operated power plants, and the massive adoption of solar and wind energy along with measures to improve energy efficiency, and energy storage.One big change will be the need for rooftop solar on homes and multi-unit buildings. The report says that the city has more than 13 gigawatts of solar rooftop potential. Private homes and multi-family buildings account for more than half of that potential, but off-site green energy production and energy storage will be needed to supply enough electricity to multi-unit buildings.LA100 Equity StrategiesAnother aspect of the plan is to make sure that everyone shares in the benefits, despite income levels. Policy officials say that will require “intentionally designed policies and programs” to ensure a fair distribution of the green energy benefits. A study on “Equity Strategies” was launched in July. (4) It looks at:1 - Access to these green energy programs2 - Local power grid upgrades3 - Assistance for renter participation in these programs4 - Charging stations for electric vehicles, and 5 - Impacts to housing and transportation, among several other issues.Adams says: “As LADWP expands these programs and adds many more, we must ensure that customers who are impacted by poor air quality, and have the least ability to afford higher electric bills, are able to benefit from the clean energy transformation.”The announcement puts Los Angeles in the forefront of a nationwide effort to address climate change. The LA County website has a chart that shows how many days a year the county hits temperatures over 95 degrees, and a forecast for an increase in those ultra-hot days if we don't take action to slow climate change now. (5) If you'd like to read more about this, check for links in the show notes at newsforinvestors.com. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.dailynews.com/2021/09/01/la-votes-for-100-renewable-energy-by-2035-a-decade-sooner-than-planned/2 - https://www.reuters.com/business/environment/un-sounds-clarion-call-over-irreversible-climate-impacts-by-humans-2021-08-09/3 - https://www.nrel.gov/docs/fy21osti/79444-ES.pdf4 - https://www.ladwpnews.com/ladwp-launches-groundbreaking-la100-equity-strategies-initiative/5 - http://publichealth.lacounty.gov/eh/climatechange/ExtremeHeatNClimateChange.htm

    The Real Estate News Brief: New Foreclosure Bidding Rules, What's a "Normal" Market?, & Renters Who Will Rent Forever

    Play Episode Listen Later Sep 9, 2021 5:46

    In this Real Estate News Brief for the week ending September 4th, 2021... new FHFA rules on the foreclosure bidding process, the for-sale homes needed for a “normal” market, and the renters who don't think they will ever be homeowners.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week. The number of people applying for unemployment has dropped again. The Department of Labor reported that 340,000 people filed for state claims last week. That's a decline of 14,000 from the week before and the lowest it's been since the start of the pandemic. Continuing claims are also down, to a total of 2.75 million, and the total for all 8 state and federal programs is 12.2 million. That's down from 30 million at the peak of the pandemic. (1)More disappointing is the August report on hiring. The Wall Street Journal had estimated an additional 720,000 jobs, but the Bureau of Labor Statistics reported a disappointing 235,000 new jobs. That's the lowest number we've seen in more than a half a year. Job growth suffered the biggest decline in the retail sector. New government jobs were also down, along with jobs in the construction industry. The official unemployment rate is currently 5.2%, but of course that doesn't include people who are not looking for a job. (2)Meanwhile, home prices recorded a third month of record-high price growth. The latest S&P CoreLogic Case-Shiller Home Price Index is up 18.6% in June, on an annual basis. The 20-city index is ever higher, at 19.1%. S&P DJI investing strategist Craig Lazzara says the data is consistent with the hypothesis that the pandemic drove buyers from urban areas to the suburbs. (3)Pending home sales dipped a little in July. The National Association of Realtors says they were down 1.8%. MarketWatch economists had expected a slight increase. NAR's chief economist Lawrence Yun says: “The market may be starting to cool slightly, but at the moment there is not enough supply to match the demand.” (4)Consumers are also feeling more anxious about the economy. The Conference Board says that consumer confidence fell to a six-month low of 113.8 in August. The worry list includes inflation and the spread of the Delta variant, although there's some evidence that Covid caseloads have peaked in some of the hardest hit areas. (5)Mortgage Rates Mortgage rates are holding steady. Freddie Mac says the 30-year fixed-rate mortgage stayed the same this last week at 2.87%. The 15-year was up one basis point to 2.18%. (6) In other news making headlines…New Rules on Foreclosure Bidding ProcessOwner-occupants are getting more time to buy foreclosures before investors are allowed to big on them. The Federal Housing Finance Agency announced that it is extending the amount of time that owners have to view and buy foreclosures from 20 days to 30 days. It's part of the First Look Program first launched in 2009 to help promote owner occupancy and stabilize neighborhoods.The FHFA's acting director, Sandra Thompson says: “Extending the amount of time owner-occupants have to bid on an REO property, without competition, is especially important for neighborhood preservation while the supply of homes for sale is severely limited.”Housing Gap is 1.5 Homes Short of NormalThe housing market needs another 1.5 million for-sale homes to help fill the inventory gap. Analysts at Morgan Stanley say that would get us back to a housing market “normal.” That applies to both the resale market and the building market. (7)Morgan Stanley strategists say that inventory is lagging about three years behind demand. And the number of homes needed could be as high as 5 million, depending on how you add it all up.That imbalance is reflected in the rate of home price growth, although DataTrek analyst Nicholas Colas says: “While house prices are certainly trending above long-run growth rates, they are not yet as elevated as 2005 on an 8-year trailing appreciation basis.”Renters Who Say They'll Always Be RentersMany renters hope to someday buy their own homes, but according to a LendingTree survey, half of them don't think that will ever happen. (8) LendingTree surveyed 2,500 people and 83% said they'd prefer to own their own homes, but 48% said they have doubts about their ability to buy.So what's keeping them from buying a home?More than half said they can't afford a down payment. About a third said home prices are too high or their credit scores are not good enough. A quarter of them said they don't have a stable job right now or they are not sure “where” to settle down. Some of the other reasons include student loan debt and plans to get married first.That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke. Links:1 - https://www.marketwatch.com/story/u-s-jobless-claims-fall-to-new-pandemic-low-of-340-000-despite-delta-surge-11630586480?mod=economic-report2 - https://www.marketwatch.com/story/u-s-adds-just-235-000-jobs-in-august-as-delta-dents-hiring-11630672922?mod=economy-politics3 - https://www.marketwatch.com/story/home-prices-see-record-growth-for-third-straight-month-but-relief-is-in-sight-for-home-buyers-11630416326?mod=economic-report4 - https://www.marketwatch.com/story/pending-home-sales-slide-for-second-month-in-a-row-11630333300?mod=economy-politics5 - https://www.marketwatch.com/story/consumer-confidence-in-the-u-s-sinks-to-7-month-low-on-delta-anxiety-11630419114?mod=economic-report6 - http://www.freddiemac.com/pmms/7 - https://magazine.realtor/daily-news/2021/09/03/fhfa-gives-buyers-wider-advantage-over-investors8 - https://news.yahoo.com/housing-market-needs-15-million-more-homes-on-sale-to-get-back-to-normal-morgan-stanley-211442251.html9 - https://magazine.realtor/daily-news/2021/09/01/survey-nearly-half-of-renters-fear-they-ll-never-own

    Free Airbnb Housing for Afghan Refugees

    Play Episode Listen Later Sep 4, 2021 4:47

    Airbnb is stepping in to help Afghan refugees now pouring into the U.S. It's offering free housing to 20,000 of them with the help of Airbnb hosts. The temporary lodging will be paid for by Airbnb's non-profit arm, Airbnb.org, along with contributions from Airbnb co-founder Brian Chesky and donations made to Airbnb.org's Refugee Fund. (1)Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Airbnb has been helping disaster victims since Hurricane Sandy hit New York City in 2012. Sandy was one of the worst hurricanes in history and displaced thousands of people. At the time, an Airbnb host asked the company if she could offer her place for free to a few of the victims. The idea was well received, and Airbnb quickly coordinated an effort to get other hosts to do the same. More than 1,000 hosts helped out.Housing Help for Disaster VictimsSince then, Airbnb says that hosts have provided temporary accommodations to more than 75,000 people, including victims and relief workers. In 2015, Airbnb helped victims of the Nepal earthquake. In 2016, it was Pulse nightclub shooting victims in Florida.In 2017, Airbnb made its disaster housing help official with the Open Homes program. During that same year, it offered help to victims Hurricane Harvey, Hurricane Irma, Hurricane Maria, and the Mexico City earthquake. In 2018, it began helping people traveling long distances for medical treatment, and provided housing for victims of the Camp and Woolsey Wildfires in California.In 2019, victims of the Australia bushfires received help. And in 2020, Airbnb made it possible for hosts to provide housing for COVID-19 healthcare workers and first responders. It was in December of last year that Airbnb announced the formation of the non-profit Airbnb.org. (2)Chesky Mobilizes Help on TwitterThis year, Airbnb is mobilizing to help Afghan refugees. Brian Chesky appealed for help from hosts on Twitter. He said in a tweet on August 24th: “Starting today, Airbnb will begin housing 20,000 Afghan refugees globally for free.” He also acknowledged hosts by saying: “While we will be paying for these stays, we could not do this without the generosity of our Hosts.” He didn't say how long Airbnb would pay for these stays. An article in Time suggested it would be one to two weeks, while housing organizations find longer-term accommodations for refugees. (3)One of those organizations is HIAS, which stands for Hebrew Immigrant Aid Society. It's a Jewish American non-profit that was founded in 1881 to help Jewish refugees, but has evolved over time. It now provides help to refugees of all faiths and ethnicities worldwide who fear for their lives because of war, persecution, or violence. (4)Cathryn Miller-Wilson of HIAS Pennsylvania told Time that her organization gets a stipend from the U.S. government to get refugees into housing right away. When Airbnb hosts help out, the organization can save some of that stipend and use it to pay for longer-term rentals.Hosts Offer Homes at Charitable RatesAirbnb bookings are made by that host organization after hosts volunteer their properties. They can offer their homes for free, or they can choose charitable rates which are paid for by Airbnb, Chesky, and the Refugee Fund. Airbnb also waives its service fee. Time reports that Uber and Lyft are also helping refugees by donating ride credits to the International Rescue Committee or IRC. Uncommon Goods is also donating $2 each time a shopper chooses IRC when they are checking out. That money will be used to pay for other kinds of support that the refugees may need.If you'd like to learn more about this charitable effort, look for links in the show notes at newsforinvestors.com. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 - https://news.airbnb.com/afghan-refugees/2 - https://www.airbnb.org/about3 - https://time.com/6093393/airbnb-afghanistan-refugees/4 - https://www.hias.org/who/history

    Eviction Moratorium Roller Coaster

    Play Episode Listen Later Sep 3, 2021 5:40

    The eviction moratorium roller coaster continues. The U.S. Supreme Court ruled against the moratorium, saying: “it is up to Congress, not the CDC, to decide whether the public interest merits further action here.” And now, three federal agencies are asking state and local governments to implement eviction moratoriums or extend the ones they currently have.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.The Supreme Court issued an eight-page ruling on August 26th. (1) Realtor associations and landlords in Alabama and Georgia had sued, saying the CDC had gone beyond the reach of its authority.Scotus Rules Against MoratoriumIn the ruling, the justices said: “The moratorium has put the applicants, along with millions of landlords across the country, at risk of irreparable harm by depriving them of rent payments with no guarantee of eventual recovery. Despite the CDC's determination that landlords should bear a significant financial cost of the pandemic, many landlords have modest means. And preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership—the right to exclude.” (2)But they went beyond that saying that rental assistance funding has been made available but very little of it has been distributed. So what's the problem? According to the ruling: “The Government has had three additional months to distribute rental-assistance funds to help ease the transition away from the moratorium.” Congress has also had time to put together new legislation, but has failed to do so. And now the moratorium is set to expire on October 3rd.Where Are the Rental Relief Funds?Why have emergency rental funds not already been distributed as landlords suffer the brunt of the moratorium? We reached out to Director of Business Intelligence, Doug Ressler, at Yardi Matrix about the delay. He told us:“In most of the country: As of Aug. 26, state and local programs had (received) a little more than $5 billion of more than $46 billion in federal rent relief money out the door. Only about 10% of that money has reached renters and landlords. It's slowed from the federal government to states and counties and cities. There are over 500 different State and City programs and procedures. Some are doing a good job. They've gotten more than half the first round of money out the door. Others are having issues and have provided less than 5% of the monies available.”States, Cities Asked to Implement MoratoriumsNow, there's a call for moratoriums at the state, city, and local court levels. (3) The Secretary of Housing and Urban Development, Marcia Fudge, the Secretary of the Treasury, Janet Yellen, and Attorney General, Justice Merrick Garland sent a letter to state and local governments about the eviction moratorium. They say they are working together and with other agencies to “make rental assistance available to households in need.” And they are asking for help in several ways. They want state and local governments to:1 - Enact eviction moratoriums for the rest of the health emergency.2 - Encourage local courts to make it a requirement that landlords apply for Emergency Rental Assistance before they begin eviction proceedings.3 - Prevent eviction proceedings to continue while the ERAs are being considered.4 - Use ERA and other emergency funding to pay for tenant legal representation and eviction-diversion strategies.5 - Help tenants through this whole process.California has already extended its moratorium. According to the Rental Housing Journal, some judges are “slow-walking” eviction cases, while this situation plays out.In a perfect world, rental relief funds would be coming through at a much faster pace, and both tenants and landlords would be getting relief, right now. Evictions are never something a landlord wants to do. But the moratorium strategy is not working -- for landlords. Something else needs to be done to address the issue of back-rent, and continued lack of rent payments from some tenants.It's Time for a New Rent Relief StrategyPresident of the California Rental Association, Christine Kevane LaMarca, feels that legislators are not recognizing the financial burden that's crushing some housing providers. In reference to the extension of California's eviction moratorium, she told the Rental Housing Journal: “The state continues to extend the eviction moratorium with no distinction between residents who cannot afford to pay due to the pandemic and residents who can afford to pay their rent but are using the moratorium to violate their rental agreements.” (4)These moratoriums have been going on for close to a year-and-a-half. President of the National Apartment Association, Bob Pinnegar, told the Journal: “The government must move past failed policies and begin to seriously address the nation's debt tsunami, which is crippling both renters and housing providers alike.”For many landlords, this isn't a problem. They have tenants that are paying rents, especially those with single-family rentals. But for those who are, something needs to be done to make them whole.If you'd like to read more about this, check for links in the show notes at newsforinvestors.comAnd please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.supremecourt.gov/opinions/20pdf/21a23_ap6c.pdf2 - https://rentalhousingjournal.com/u-s-supreme-court-ends-nation-wide-eviction-moratorium/3 - https://rentalhousingjournal.com/governors-mayors-courts-urged-to-stop-evictions-until-emergency-rental-assistance-is-processed/4 - https://rentalhousingjournal.com/california-rental-housing-association-sues-state-over-eviction-moratorium/

    The Real Estate News Brief: Mortgage Payments in BITCOIN, Loan DISCOUNTS for the VACCINATED, & Patio Popularity

    Play Episode Listen Later Aug 30, 2021 5:48

    In this Real Estate News Brief for the week ending August 28th, 2021... which lender will let you pay in Bitcoin, why a Covid-19 vaccine will get you a discount on closing costs, and the rising popularity of patios, for outdoor living.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe have economic news from this past week, but first, big news on the latest federal eviction moratorium. If you haven't heard, the U.S. Supreme Court blocked that mandate after a new legal challenge by the Alabama Association of Realtors and a group of landlords. The plaintiffs argued that the CDC doesn't have the authority to issue this kind of mandate. The justices agreed, saying the policy should've come from lawmakers, and not the CDC. (1) As Newsweek reports, progressive members of Congress are now considering legislation that would reinstate the moratorium, as the nation continues to deal with the pandemic. (2) So the battle continues.Members of the Federal Reserve met virtually for their annual Jackson Hole Symposium, and discussed the need to pull in the reigns on its bond-buying policy. (3) After the meeting, Fed Chair Jerome Powell said a majority of Fed officials, including himself, believe that tapering should begin this year. He has been saying that the economy needs to make “substantial further progress” before the Fed would cut back on its stimulus policy, and he said for the first time in his speech, that that test has now been met. An announcement on “when” tapering might begin is expected in September.Meantime, the inflation rate has now hit a 30-year high, according to the PCE Index. That stands for Personal Consumption Expenditure index. It's the one that the Fed pays close attention to. It was up .04% in July and brings the annual rate of inflation to 4.2%. (4) That's lower than the Consumer Price Index or CPI, which shows an annual rate of 5.4%. (5) Both are much higher than the Fed's 2% inflation target.A revised report on second quarter GDP shows the economy grew at an annualized rate of 6.6%. That's up from 6.5%. (6) The number of new weekly jobless claims rose for the first time in more than a month. The Labor Department says they were up 4,000 to about 353,000 for last week. Claims have been falling overall but have still not returned to pre-pandemic levels of about 220,000 per week. If you add all the people with ongoing claims, the total is about 12 million. That's down from a high of 30 million toward the beginning of the pandemic. (7) On to real estate: New home sales reversed a three-month decline, with a 1% increase for July. If that rate continued for an entire year, the sales total would hit 708,000. Currently, the median price for a home is $390,500. (8)Existing home sales are also higher in July. The National Association of Realtors says they were up 2% to a seasonally-adjusted annual rate of 5.99 million homes. The increase in sales is being attributed to an increase in inventory. The median price for an existing home is now $359,900, or 17.9% more than it was a year ago. (9)Mortgage RatesMortgage rates are still idling below the 3% level. Freddie Mac says the 30-year fixed-rate mortgage was up 1 basis point to 2.87%. The 15-year was also up just one basis point to 2.17%. (10)In other news making headlines…Paying Home Loans with BitcoinUnited Wholesale Mortgage made a big announcement about Bitcoin. It says that it will begin accepting cryptocurrency payments for home loans. UWM is the 2nd-largest lender in the U.S. The plan to accept crypto for payments is the first for the national mortgage industry. (11)Lender Discount for the VaccinatedWhat appears to be another industry first, is an announcement by Neat Loans to offer a discount to borrowers who are vaccinated against Covid-19. It would apply to $500 on closing costs for residential and refinancing loans.The concern is that an unvaccinated person would be more likely to get sick and be out of work, making it difficult to keep up with mortgage payments. Borrowers who are unable to get the vaccine for health or religious reasons, would also qualify for the discount. (12)Patio Popularity is SkyrocketingNew data shows that the popularity of patios jumped another notch higher in 2020. The National Association of Homebuilders reports that the share of new homes with patios rose to 61.4%. It's the first time that number has ever been higher than 60%. At the beginning of the Great Recession, it got as low as 44.8%, but has been continually increasing since then, with a big jump in 2020. It rose from 59.6% to the current 61.4%. You'll also find more homes with patios in warmer Western and Southern states. (13)That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.inman.com/2021/08/27/supreme-court-shoots-down-latest-eviction-moratorium/2 - https://www.newsweek.com/whats-next-eviction-moratorium-progressives-eye-legislation-after-scotus-ruling-16236863 - https://www.marketwatch.com/story/fed-chair-powell-says-he-supports-starting-to-taper-bond-purchases-this-year-11630072826?mod=federal-reserve4 - https://www.marketwatch.com/story/inflation-rate-hits-30-year-high-pce-shows-as-u-s-confronts-major-shortages-11630068319?mod=economic-report5 - https://www.cnbc.com/2021/08/11/cpi-report-july-2021.html​​6 - https://www.marketwatch.com/story/u-s-economy-grew-slightly-faster-6-6-pace-in-second-quarter-new-gdp-figures-show-11629982344?mod=economic-report7 - https://www.marketwatch.com/story/jobless-claims-rise-for-first-time-in-five-weeks-to-353-000-but-still-near-pandemic-low-11629981525?mod=economic-report8 - https://www.marketwatch.com/story/new-home-sales-rebound-despite-prices-hitting-record-high-11629814766?mod=economy-politics9 - https://www.marketwatch.com/story/new-home-sales-rebound-despite-prices-hitting-record-high-11629814766?mod=economy-politics10 - http://www.freddiemac.com/pmms/11 - https://www.cnbc.com/2021/08/19/united-wholesale-mortgage-will-accept-bitcoin-other-cryptocurrency.html12 - https://magazine.realtor/daily-news/2021/08/26/lender-offers-mortgage-discount-to-the-vaccinated13 - https://eyeonhousing.org/2021/08/share-of-new-homes-with-patios-climbs-to-record-61-percent/

    Tiny Homes and the Not-So-Tiny Insurance Costs

    Play Episode Listen Later Aug 28, 2021 4:44

    Tiny homes can be a great option for the minimalist lifestyle and affordability, but don't let the cost of insurance take you by surprise. A new study shows a huge difference in the cost of tiny home insurance depending on where you live and the risks associated with that location. It's still cheaper overall to insure a tiny home than it is a larger home, but insurance will take a bigger bite out of your housing budget if you live in a high-risk area.Hi I'm Kathy Fettke and this is Real Estate News for Investors.Tiny Home Insurance Cost AnalysisValuePenguin did a cost analysis that compared insurance for tiny homes and larger homes across the nation. (1) Tiny homes are generally around 400 square feet in size. ValuePenguin compared those to homes with 2,100 square feet. It found that on a national level, the average cost of insurance for a standard-sized home is 106% more expensive than it is for a tiny home. So tiny home owners are saving money on insurance, but will also be paying more than other tiny home owners if they live in certain states.The analysis found that the most expensive state for tiny home insurance is Oklahoma, due to the risk of natural disasters like tornadoes and severe storms. If you have a tiny home there, it will cost an average of 242% more to insure that tiny home than it would on average in the U.S. That said, ValuePenguin says it will still be 68% less costly to insure that tiny home than it would be for a larger home, in Oklahoma.Tennessee, Kansas, Texas, and Colorado are also among the least affordable states for tiny home insurance. And rounding out the top ten states for high-cost tiny home insurance are Kentucky, Alabama, South Carolina, and South Dakota. But regular homeowners insurance is also expensive in these areas due to the frequency of natural disasters.So tiny home owners may be saving money compared to their big-home neighbors, but not compared to tiny home owners in other low-risk states.Reducing the Cost of Tiny Home InsuranceValue Penguin suggests one way to reduce the cost is to opt for a percentage-based deductible. Choosing a 2% deductible might cost slightly more if natural disaster strikes, but the premiums will be lower than, say, a $500 deductible. It's worth checking those figures if you are in the market for tiny home insurance, and it appears that a growing number of millennials and baby boomers are doing just that.In a tiny home market update by porch.com, it says that millennials are drawn to tiny homes because they are less expensive, offer location flexibility for remote work, and are eco-friendly. (2) Baby boomers also see an advantage to the tiny home as they downsize from long-time family homes, to something cheaper and easier to maintain.Zoning laws are also changing in places like California, to accommodate the tiny home or what is known as an Accessory Dwelling Unit or ADU. And companies like Boxabl are working on the manufacturing of pre-fabricated, fully equipped tiny homes that can be easily transported to their destinations, and set-up within an hour, like pop-up greeting cards. We just did a story on Elon Musk downsizing to a Boxabl casita. It's episode number 1091, if you'd like to check that out.The porch.com analysis also shows where it's the cheapest to buy a tiny home. North Dakota is at the top of that list, where the average tiny home is about $28,000. But if you go by the price per square foot, it's Arkansas at $109 per square foot. North Dakota is fourth on the list for the price per square foot at $150. Boxabl casitas are just under $50,000.You can check out the data in more depth by following links in the show notes at newsforinvestors.com.And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal, where you can connect with a network of resources including experienced investment counselors, rental property providers, property managers, lenders, 1031 exchange facilitators, attorneys, CPAs and more - and they aren't on the referral list unless they come recommended by the members of Real Wealth Network.Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.valuepenguin.com/most-and-least-expensive-states-tiny-houses2 - https://porch.com/advice/state-of-tiny-home-market

    Real Estate Guru Robert KIYOSAKI Recommends BITCOIN

    Play Episode Listen Later Aug 27, 2021 6:27

    Real estate guru Robert Kiyosaki isn't placing ALL his eggs in the real estate basket. He's recommending Bitcoin as a way to protect yourself against the death of the dollar. The Rich Dad, Poor Dad author believes that the dollar is going to fail, and when it does, it will “crash the whole economic system.” (1)Hi I'm Kathy Fettke and this is the Real Estate News for Investors. Thanks for joining me and don't forget to hit the subscribe button for our podcast.Kiyosaki has been tweeting a lot lately about Bitcoin. He just tweeted: “BITCOIN to $50,000. Great news for Bitcoin holders. Bad news for mom and pop. The primary reason I invest in Bitcoin, gold, & silver is because I do not trust our leaders, the Fed, Treasury, nor the stock market. Unfortunately mom and pop who save money do. Take care.”According to Benzinga, he pointed out in an email that “Bitcoin is up over 200% from last year” and that other cryptocurrencies are also up significantly. He asks his readers if that sounds like crypto is dead and says what is going to die is the dollar. He's even suggesting that the whole economy will go down with it.Outside the Economic SystemHe is suggesting that people protect themself with a form of currency, like Bitcoin, that is “outside the economic system.” But he says it's important to choose cryptocurrencies that are decentralized, so they cannot be regulated by any government agencies or officials.His book “Rich Dad, Poor Dad” is well-known among real estate investors. It has been a New York Times bestseller and has sold tens of millions of copies in more than 50 languages in more than 100 countries. The book tells the story of two realities — the rich dad who built wealth as an savvy entrepreneur and real estate investor and the poor dad who struggled at a full-time job and never gained financial security.Hard Assets Will Hold ValueKiyosaki encourages financial literacy, and has recommended hard assets, like real estate, along with precious metals, and now cryptocurrencies. These assets would hold their value if the economy does collapse. As Kiyosaki would argue, they would also hold their value much better during times of inflation. (2) And there's a lot of uncertainty in that department right now. The Consumer Price Index has risen to an annual rate of 5.4%, after another .5% increase in July. (3) If you remove food and energy from the mix, the annual rate of inflation is slightly lower at 4.3%. But that's still well above the Fed's target rate of 2% and the economic conditions driving prices higher have not resolved.If you've gone shopping for food, or a home, or a car, or gas to put in your car, you'll have noticed how much prices have risen. The Fed acknowledges that inflation has been more persistent than it expected, but is still expecting prices to settle back down when things like supply chain shortages resolve, the labor market reaches full employment, and the economy gets back to normal.Dollar vs. BitcoinThe government has been printing a lot of money to keep the economy afloat. According to Kiyosaki and many economists, it's going to be tough to impossible to pay it all back. On the other hand, Bitcoin is limited in supply so it cannot be diluted by making more and more Bitcoin. As the Bicoinist writes “only 21 million BTC can or will ever exist.” That makes it more stable that a currency that can be manufactured at will, like the dollar.This is why Kiyosaki is so big on Bitcoin, and other cryptocurrencies. What's a good buy-in price? I'm not here to give investment advice, but like any kind of investment, you buy on the dips. Right now Bitcoin is rallying off a recent low. It hit a low point of $31,000 in July and is now approaching the $50,000 mark, once again. (4)Real Estate for Financial StabilityI am not personally recommending Bitcoin as an investment. You'll have to discuss that with your financial advisor. I am a firm believer in the value of real estate as a way to build wealth. Like Bitcoin and precious metal, there is a finite amount of real estate in the world. It's a hard asset that might fluctuate in value, but will always be worth something substantial so long as there are human beings on this earth.If you'd like to learn more about that kind of investing, you can join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property proformas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.You'll find links to our sources for this episode in the show notes. And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.benzinga.com/markets/cryptocurrency/21/08/22277486/bitcoin-and-dogecoin-will-rise-as-us-dollar-is-dying-rich-dad-poor-dad-author-robert-kiyos2 - https://bitcoinist.com/why-this-finance-author-advocates-bitcoin-over-gold-and-real-estate/3 - https://www.bls.gov/cpi/4 - https://www.cnbc.com/2021/08/13/bitcoin-just-jumped-above-47000-and-could-be-on-a-straight-path-to-50000-analysts-say.html

    The Real Estate News Brief: Single Family Rent SURGE! Home Prices are UP!

    Play Episode Listen Later Aug 26, 2021 6:27

    In this Real Estate News Brief for the week ending August 21st, 2021... we'll look at second quarter home prices, a big surge in rents for single-family homes, and a softening demand for vacation homes.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin with economic news from this past week. The Fed released the minutes of its last big meeting in July and acknowledged what many economists have been saying, that the current surge in U.S. inflation could continue into next year. That's mostly due to a shortage of labor and materials as the nation deals with the latest wave of the pandemic.MarketWatch reports that the Fed's July summary mentioned the delta variant six times after not one mention of the virus in June. The Fed previously said that high prices might last a little longer, but in this summary, Fed officials also acknowledged that the “spread of the delta variant may temporarily delay the full reopening of the economy and restrain hiring and labor supply.” And that could put more pressure on prices. (1) On a more positive note, St. Louis Fed President James Bullard doesn't believe that the spread of the delta variant will derail the economy. He told MarketWatch: “The economy has clearly adapted to the pandemic situation.” He says both businesses and consumers have found ways to deal with it. (2)According to published reports, there's growing support among Fed officials to begin the tapering process. The Wall Street Journal says that public statements from those officials suggest an announcement could be made next month, with a reduction in bond-buying activity beginning a month or two later. (3)The latest unemployment report shows that initial claims have reached a new pandemic low. They were down to 348,000 for the week ending August 14th, which supports the idea that the economy will weather this new outbreak. We'll know more next month when many people are expected to return to work as extended unemployment benefits run out, kids return to school, and the coronavirus is hopefully under better control. (4)Supply chain issues are still impacting home builders. The Census Bureau reported a 7% decrease in housing starts last month. Housingwire says the news is not all bad because housing starts are still 12% higher than last year and the number of single-family homes under construction is the highest since 2007. (5)But home builder confidence has dropped. The National Association of Homebuilders say the monthly confidence index fell five points in August, to a reading of 75. That's the lowest it's been in more than a year, mostly because of supply chain issues and high home prices. (6)Mortgage RatesMortgage rates didn't move much last week. Freddie Mac says the 30-year fixed-rate mortgage was down 1 basis point to 2.86%. The 15-year was up 1 basis point to 2.16%. (7)In other news making headlines…Home Prices Up Again in Q2Home prices pushed higher in the second quarter due to overwhelming demand and a short supply of homes. The National Association of Realtors says the sales price for the median single-family existing home was $357,900. That's up 22.9% year-over-year. (8)Looking at metros, NAR says that prices were higher in 182 of the 183 metros it analyzes. And in 94% of those metros, the median price was more than 10% higher. Metros with the strongest price growth have been in the South and West. The top gainer was Pittsfield, Massachusetts which is not in either of those regions. Second and third on the list of gainers was Austin, Texas and Naples, Florida. The only metro that posted a decline was Springfield, Illinois.That said, the overall market has cooled off a bit. NAR's chief economist Lawrence Yun says: “The housing market looks to move from ‘super-hot' to ‘warm,' with markedly slower price gains. Single-Family Rents Push HigherStrong demand for single-family rentals has also continued, and that's pushing rents higher. CoreLogic says U.S. single-family rents are up 7.5% year-over-year in June. That's five times higher than rent growth in June of last year. But rent growth is not the same across all price points with the fastest rent growth at the upper end. (9)Demand for single-family rentals really took off during the pandemic, and it hasn't slowed down. CoreLogic says they are overwhelmingly preferred by would-be homebuyers who have been either priced out of the market or can't find a home to buy.The 7.5% increase includes detached homes, duplexes, triplexes, quadplexes, townhomes, row-houses, condos, and co-ops. If you look at the rent growth for “just' detached single-family homes, it was 10.5% year-over-year in June and just 4.6% for “attached” rentals.Demand Slows for Second HomesThe pandemic also produced a surge in demand for second homes, but Redfin says that trend has died down quite a bit. The real estate website says second-home demand fell 21% in July compared to last year. But it also remains higher than it was before the pandemic. (10)Redfin's lead economist, Taylor Marr, expects a high level of interest in second homes to continue among those working remotely. He said in a statement: “If you build it -- amid a historic housing shortage -- they will come. I expect vacation homes to remain popular as more homes are built.”That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke and this Real Estate News for Investors.Links:1 - https://www.marketwatch.com/story/fed-worries-delta-could-prolong-shortages-and-keep-inflation-high-into-2022-11629314744?mod=the-fed2 - https://www.marketwatch.com/story/marketwatch-interview-feds-bullard-says-delta-covid-variant-wont-derail-economy-11629309073?mod=economy-politics3 - https://www.marketwatch.com/story/fed-officials-nearing-agreement-to-begin-tapering-in-november-wsj-2021-08-164 - https://www.marketwatch.com/story/jobless-claims-drop-to-pandemic-low-of-348-000-in-sign-companies-still-hiring-despite-delta-11629376754?mod=bnbh_mwarticle5 - https://www.housingwire.com/articles/housing-starts-tumble-in-july-due-to-choked-supply-lines/6 - https://www.marketwatch.com/story/home-builder-confidence-sinks-to-lowest-level-in-over-a-year-as-home-prices-soar-11629208832?mod=mw_latestnews7 - http://www.freddiemac.com/pmms/8 - https://www.realtor.com/news/real-estate-news/home-prices-jumped-across-the-u-s-in-second-quarter/9 - https://www.corelogic.com/intelligence/preference-for-detached-properties-pushes-single-family-rents-higher/10 - https://www.inman.com/2021/08/17/demand-for-second-homes-drops-for-second-straight-month/

    Housing Market Still Hot but Buyers Have More Options

    Play Episode Listen Later Aug 20, 2021 4:23

    Transcript00:00:00 Intro Music[Speaker] Kathy FettkeThe housing market appears to be settling down a bit as we head into the Fall. Home price growth is stabilizing and buyers are facing a bit less competition. According to Redfin, the percentage of deals tangled up in bidding wars last month dropped to the lowest level since January. (1) Hi I'm Kathy Fettke and this is the Real Estate News for Investors.Redfin is reporting a steady decrease in buyers submitting competitive bids. Competition peaked in April when 74.1% of the offers written by Redfin agents faced competition. In June, competition dropped to about 66.5%. And last month, in July, only 60.1% of the offers went head-to-head with other buyers. Redfin calls it a bidding war when a buyer faces at least one competing offer.Homebuying Conditions Have ImprovedRedfin says that homebuying conditions have improved over the summer. It says that prices are stabilizing due to an increase in supply. That's giving buyers more options to choose from, and less competition. It's also the end of summer when buyers are typically busy with other things, like getting their kids back to school.Redfin agent, Scott Mercer, from the Sacramento area says: “Competition has started to slow in the last three weeks. We're now seeing five to eight offers on homes instead of 25, and they're coming in $5,000 to $10,000 above the listing price instead of $50,000 to $60,000.” He says they've even started including appraisal contingencies, which many were previously waiving as a way to make their offer more attractive to sellers.Demand Still Outpacing SupplyDemand is still outpacing supply, however, so prices continue to rise but instead of double-digit price growth, we're now seeing single-digit price growth. Realtor.com's Weekly Housing Trends report for the second week in August shows that the median listing price grew 8.6% compared to last year. That's half of what it was in April when the annualized home price growth was 17.2%. (2)Realtor.com expects to see even lower prices as we move into the fall and winter season, but that only means we won't see new record highs. Inventory is still on the low side which helps push prices higher, but there's also an increase in listings. Redfin's Weekly Trends report shows a 3% increase in new listings.It's the 17th time in 20 weeks that listings have gone higher. But the quantity of new listings is still lower than 2019, when the market had a more normal number of homes for sale. So the inventory gap is shrinking but it hasn't gone away. Realtor.com says year-over-year total listings are down 28%.Homes are also selling fast. Time on the market is just 17 days compared to 38 days in 2019.Supply of HomesThe months supply of homes is another good housing market indicator. A report from RE/MAX shows just 1.3 months of supply in July, although inventory rose 4%. That's also 29% lower than it was in July of last year. (3)RE/MAX President Nick Bailey says: “Some buyers have stepped away in light of high prices, seller expectations, multiple offers and intense competition, but new listings are still selling quickly. Clearly, the demand is still there. The market should continue to run hot, especially if interest rates remain low, prices stabilize a bit, and more sellers jump in to take advantage.” (3)That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal, where you can connect with a network of resources including experienced investment counselors, rental property providers, property managers, lenders, 1031 exchange facilitators, attorneys, CPAs and more - and they aren't on the referral list unless they come recommended by the members of Real Wealth Network.Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.redfin.com/news/real-estate-bidding-wars-july-2021/2 - https://www.realtor.com/research/tag/home-prices/3 - https://dsnews.com/daily-dose/08-17-2021/housing-inventory-grows-month-over-month-in-july

    The Real Estate News Brief: Lot Values Are Surging, Renters Get Home Loan Help, and a Tiny Home Design Contest

    Play Episode Listen Later Aug 18, 2021 6:22

    In this Real Estate News Brief for the week ending August 14th, 2021… where lot values are surging, how rent payments can help new home buyers, and a contest for tiny home designs.Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.Economic NewsWe begin today's episode with economic news from this past week. Two inflation reports show that prices are still heading higher. The consumer price index was up .5% in July. That's down from .9% in June which prompted some economists to say that inflation is moderating. But the yearly rate is 5.4% which is the same as June, and well above the Federal Reserve's 2% target. The core rate is a bit lower. That omits prices for energy and food. It was up .4% to a yearly rate of 4.3% which is slightly lower than the June rate. (1)Although the numbers show that inflation is backing off a little, it's still a whole lot higher than it was last year. The consumer price index was running at 1% annually while the core rate was about 1.6%. And… a report on wholesale prices also came out last week, and that's running hot. It shows the cost of goods rose .6% in July, mostly because of higher energy prices. Wholesale food prices were down 2.1% however. The producer price index also has a core rate which strips out food, energy, and trade margins. That was up .9% and boosted the core rate of wholesale inflation to 6.1%. MarketWatch says that's one of the highest wholesale inflation levels in several decades. (2)Economists say inflation could settle back down when everyone returns to work and supply chain bottlenecks are eliminated, but as MarketWatch reports, many feel that higher inflation may be here to stay. Fed Chief Jerome Powell has also acknowledged that inflation could run hotter than the Fed expected for a longer period of time. (3) The latest unemployment report shows that fewer people are asking for benefits, and fewer people are collecting them. The Labor Department says that initial claims dropped 12,000 to 375,000 last week. That's still higher than a pandemic low of 368,000 that occurred last month. But continuing claims were also down and they hit a new pandemic low of 2.87 million. If you tally up all the state and federal programs available, there are a total of 12.1 million people collecting unemployment checks or about 10 million more than there were before the Covid outbreak. (4)One of the more stunning reports from last week is from the University of Michigan. It shows that consumer sentiment took a nose dive in August to a reading of 70.2. That's down from 81.2 in July, and is now the lowest reading in a decade. That means it's lower right now than it was during any other month of the pandemic. MarketWatch economists believe that people are worried about inflation and a virus that may not go away anytime soon. (5)Mortgage RatesMortgage rates did a small u-turn last week. They had been slowly sinking lower, but Freddie Mac says the 30-year fixed-rate mortgage rose 10 basis points. The average is now at 2.87%. The 15-year was up 5 basis points to 2.15%. (6)In other news making headlines...Lot Values Are SurgingLot values are surging. An analysis by the National Association of Builders shows that lot values for single-family homes that broke ground last year, have appreciated 18% to a record high of $53,000. That's close to the lot value record in 2005-2006, before the housing meltdown. Lots were going for $43,000 back then but that's equal to about $55,000 in today's dollars. (7)Lots are most expensive in New England at about $120,000 or more, but due to zoning laws, they are also usually much larger making them less expensive per acre. In the West, the median lot value is $203,000 but those lots are smaller making them the most expensive lots of all. In the Mountain region, the median value is $73,000. In the West South Central region, the median value is about $60,000 which is the least expensive but is also double what they were valued at just eight years ago. New Underwriting Bonus for HomebuyersOn-time rent payments could help renters get a home loan. Fannie Mae announced that rent payment history can be used during the underwriting process. That will help people who don't have enough credit history to qualify for a loan. (8)FHFA Director Sandra Thompson said in a press release: “There is absolutely no reason timely payment of monthly housing expenses shouldn't be included in underwriting calculations.”Lenders will have to get permission from mortgage applicants to check bank statements for rent payments. The new underwriting feature will be available starting September 18th.Tiny Home Design ContestSalt Lake City is holding a contest for the design of tiny homes. The city is soliciting designs for a master-planned tiny home community for the homeless. But all the submitted designs will be put into a library that can be used by homeowners and city officials. (9)The contest is open to both students and professionals. The two winners will each get $1,000. Runners-up will get $500. The deadline to register is September 10th. Submissions are due by October 29th.That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.marketwatch.com/story/u-s-core-consumer-inflation-moderates-in-july-11628686146?mod=economic-report2 - https://www.marketwatch.com/story/u-s-wholesale-prices-surge-again-and-show-inflation-still-rampant-ppi-finds-11628772476?mod=economic-report3 - https://www.marketwatch.com/story/u-s-inflation-is-still-running-high-and-it-doesnt-look-like-it-will-fade-fast-soon-11628344325?mod=article_inline4 - https://www.marketwatch.com/story/u-s-unemployment-claims-fall-to-375-000-and-return-close-to-pandemic-low-even-as-delta-variant-surges-11628772686?mod=economic-report5 - https://www.marketwatch.com/story/u-s-consumers-suffered-a-stunning-loss-of-confidence-in-early-august-u-mich-survey-finds-116288641646 - http://www.freddiemac.com/pmms/7 - https://nahbnow.com/2021/08/lot-values-surge-at-record-breaking-pace/8 - https://nahbnow.com/2021/08/fannie-mae-to-include-rent-payment-history-as-part-of-mortgage-approval-process/9 - https://www.builderonline.com/design/awards/salt-lake-city-offers-cash-prizes-for-tiny-home-designs_c

    Elon Musk Brings Attention to a New Kind of Pop-Up Home

    Play Episode Listen Later Aug 16, 2021 5:46

    Transcript00:00:00 Intro Music[Speaker] Kathy Fettke:The second-richest man in the world has traveled to space and returned home to a 375-foot tiny home. Tesla founder Elon Musk followed through with a promise to downsize his life. He sold off almost all his mansions and physical possessions and recently moved into a tiny pop-up home in Boca Chica, Texas, where his company SpaceX is located.Hi I'm Kathy Fettke and this is Real Estate News for Investors. Thanks for joining me and don't forget to hit the subscribe button for our podcast.Musk's new home is made by Las Vegas start-up Boxabl, which calls the tiny home a “casita.” (1) The 375-square foot space is divided pretty equally into a kitchen, living room, bedroom, and bathroom with spacious nine-and-a-half foot ceilings. Boxable delivers the casita in a large box that can be towed behind a big rig or even a pick-up truck. To be more precise, it folds down to just eight-and-a-half feet wide making it possible to transport within normal shipping parameters. Easy Transport of Boxabl HomesOnce it arrives at its destination, the sides fold down and the walls pop-up to connect to the ceiling and voila, you have a home with plenty of windows, full-sized appliances, a spacious bathroom, lots of storage, and built-in heat and air conditioning. Boxabl co-founder Galiano Tiramani says it can be set up in just one hour. All this for a very affordable price. For the basic casita, like the one Elon Musk bought, you'd pay just under $50,000. (2)Tiramani feels that Boxabl will succeed where other home pre-fabricators have failed because Boxabl solved several problems, such as shipping. You've seen pre-fab homes being slowly and precariously transported as extra-wide loads on top of big rig trailers. When you order a Boxable, it can be transported as a normal-sized load. In addition to truck delivery, he also expects to transport a hundred at a time by train or a thousand by ship.Improved Building MaterialsBoxabl is also developing different manufacturing methods with different building materials. Tiramani says the improvements will make it easier to mass produce these units at a lower price point. He says that home construction is still in the pre-factory stage. They are being built by hand so it's slow and expensive, while just about everything else we buy has been built in a factory. That speeds up the manufacturing process and brings the price down. By solving the transportation problem and improving the manufacturing process.He also says they have re-engineered the units with materials that “outperform on energy ratings, fire resistance, wind resistance, and more.” (3) Those materials are also more compatible with an assembly line manufacturing process. Tiramani says that Boxable is building a huge factory right now in Las Vegas. He expects it to be up and running in 11 months and producing three to five-thousand units a year.Boxabl believes it can change the future of housing by making it more accessible and more affordable without sacrificing quality and durability. The website says Boxabl homes are “obsessively designed to the highest standards of quality, strength, and sustainability to last for generations.” Plans for a Worldwide RolloutFor now, Boxable is targeting the backyard ADU market in California, since new laws have made it much easier for homeowners to put an ADU on their property. But the company has big plans to expand. Tiramani says the company will roll out custom modules that stack and connect to create any kind of building that you can imagine from a small casita to a large multi-family anywhere in the world.Boxabl has drawings on the website showing a variety of these casita-sized units. Instead of a small kitchen in one corner of one unit, you might have a larger family-sized kitchen that's connected to living room, bedroom, and bathroom units. One drawing shows a unit with a staircase that can be used to connect to a unit that is stacked on top to form a second story. A video shows customizable exteriors as well. The Elon Musk EffectGetting Elon Musk on board is a big deal. He's known for living large, but in this case, he's creating a buzz because he's living so small. Curbed reports that Boxable courted Musk for more than a year, hoping that just one tweet from Musk will open the flood gates of enthusiasm for this product. (4) As it stands, Boxable claims to have $1 billion in reservations from 20,000 customers, and 40,000 people on a waitlist. It also claims to have a $10 million contract with the federal government.Boxabl says this concept will save builders time and money, and lower the cost of a home by about 30%. Boxabl says its mission is to significantly lower the cost of homeownership for everyone.Check the show notes for links to the Boxabl website and stories about Elon Musk. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke.00:05:46 End TranscriptLinks:1 - https://www.boxabl.com/2 - https://www.yahoo.com/news/elon-musk-reportedly-lives-50-120800101.html3 - https://www.forbes.com/sites/afdhelaziz/2021/08/11/how-boxabl-is-revolutionizing-affordable-housing-with-its-unfolding-house-with-customers-like-elon-musk-and-1-billion-in-pre-orders/?sh=4bf7e7767d784 - https://www.curbed.com/2021/07/elon-musk-adu-texas-boxabl.html

    The Real Estate News Brief: New Eviction Moratorium, New Opportunity Zone Legislation, and Seller Spy Cams

    Play Episode Listen Later Aug 14, 2021 5:51

    Transcript00:00:00 Intro [Speaker] Kathy FettkeIn this Real Estate News Brief for the week ending August 7th, 2021... another single-family eviction moratorium, legislation to extend Opportunity Zones, and sellers who use spy cams at showings.Hi, I'm Kathy Fettke and this is the Real Estate News for Investors.Economic NewsWe begin with economic news from this past week. The job market picked up speed in July with the creation of 943,000 new positions. Most of those jobs are for leisure and hospitality, but a large portion were also government jobs. According to MarketWatch, July's hiring spree is the largest in about a year. It also helped reduce the unemployment rate from 5.9% in June to 5.4% in July. (1)The weekly unemployment report also shows that fewer people applied for benefits. Initial state claims dropped to 385,000 for the last week of July. That's the lowest number we've since the start of the pandemic. Continuing claims are down to 2.93 million. (2) If you add all the benefits that people are collecting from eight state and federal programs, the total is 12.98 million. For reference, that's still a very big number. Total weekly claims before the pandemic were less than 2 million.Home prices continue skyrocketing. According to CoreLogic, the annual rate of growth hit 17.2% in July. That's up from 15.9% in May. It's also the largest increase in price growth since 1979. (3) CoreLogic CEO Frank Martel says that “home prices have been rising in the mid-single digits for some years now. The recent surge to double-digit price jumps reflect the convergence of exceptional demand and persistent low supply.”Home builders are putting more money into residential construction. The Commerce Department says it was up 1.1% in June to an annual rate of $1.55 trillion. The overall outlay for all kinds of construction was just .1%. (4)Mortgage RatesMortgage rates sank a little bit lower last week. Freddie Mac says the 30-year fixed-rate mortgage was down 3 basis points to 2.77%. The 15-year stayed the same at 2.1%. This is great news for people who need to refinance. The rates are drifting lower in step with the 10-year Treasury yield because investors are worried about the Delta variant of COVID-19. (5)In other news making headlines...Eviction Ban Extension for SFRsThe FHA announced a new eviction ban extension for single-family homes going through foreclosure. The CDC ban expired on July 31st. This new ban extends the moratorium another two months, through the end of September. (6)Under this order, mortgage servicers for FHA-backed loans may continue with a foreclosure process but they can't evict anyone who lives in the home, including owner occupants and tenants.Opportunity Zone ExtensionThe Opportunity Zone program may get an extension past its current 2026 deadline. A group of representatives announced legislation called The Growth and Opportunities Act. California Representative Michelle Steel issued the press release. She says: “The beauty of America is that everyone has the opportunity to build their own American dream. Opportunity Zones are an important tool that give more people the resources they need to grow this dream.” (7)Opportunity Zones encourage investment in distressed communities with tax incentives. There are currently more than 8,760 Qualified Opportunity Zones across the U.S.. This legislation would open the program to new Qualified Opportunity Zones every ten years. It would also restart a tax incentive timeline in January of 2027.Sellers Use Spy Cams for ShowingsNow here's something that might put you on guard next time you go to an open house. A new Lending Tree study says that almost one-third of all sellers use spy cams during a showing. (8)Survey participants offered several reasons for doing it. Almost half said they want to understand what home buyers like and dislike about the home. A little more than a third said they wanted to get information that would be useful during negotiations. And almost a quarter were doing it to spy on their agent, to see what he said about the home. Many were also monitoring their homes for safety reasons. The survey found that owners were using doorbell and security cameras for the most part. Some also used baby monitors and nanny cams.Sellers Taking the Kitchen Sink AND the ToiletsSellers are also doing something else you might not expect. Many are taking fixtures, appliances, and even backyard fruit trees with them. The New York Times reports that expensive toilets are at the top of the seller's “take it with them” list. High-end appliances are also disappearing with the seller. This is mostly happening because of the appliance shortage, and concerns about getting what sellers need for their new homes. (9)One realtor told the Times that people selling a $2 million home dug up a pair of fruit trees for sentimental reasons, and left two big holes in the back yard. Another realtor involved with the purchase of a $15.5 million home had to tell the buyers that the sellers were taking all the kitchen cabinets.Usually, anything “fixed” to the home or yard goes along with the sale.That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.Thanks for listening. I'm Kathy Fettke.00:05:51 EndLinks:1 - https://www.marketwatch.com/story/u-s-creates-943-000-jobs-in-july-and-unenmployment-rate-sinks-to-5-4-11628253659?cx_testId=22&cx_testVariant=cx_1&cx_artPos=1&mod=home-page-cx#cxrecs_s2 - https://www.marketwatch.com/story/u-s-jobless-claims-fall-again-to-385-000-as-unemployment-shrinks-despite-rise-of-delta-11628167412?mod=economic-report3 - https://www.worldpropertyjournal.com/real-estate-news/united-states/irvine/real-estate-news-corelogic-june-2021-home-price-index-hpi-forecast-for-june-2021-frank-nothaft-frank-martell-12650.php4 - https://www.marketwatch.com/story/construction-spending-inches-higher-in-june-11627913458?mod=economic-report5 - http://www.freddiemac.com/pmms/6 - https://www.builderonline.com/money/mortgage-finance/fha-extends-single-family-eviction-moratorium-through-september_o7 - https://steel.house.gov/media/press-releases/rep-steel-introduces-bill-extend-opportunity-zones8 - https://magazine.realtor/daily-news/2021/07/30/nearly-one-third-of-sellers-admit-using-spy-cams-during-showings9 - https://magazine.realtor/daily-news/2021/08/03/sellers-taking-toilets-appliances-with-them

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