Podcast appearances and mentions of kathy fettke

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Best podcasts about kathy fettke

Latest podcast episodes about kathy fettke

Real Estate News: Real Estate Investing Podcast
The Building Blocks of a Recession-Proof Investment Property

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Sep 24, 2022 12:46


With recent rate hikes and Federal Reserve Chief Jerome Powell saying there are several more to come, investors should expect a recession right around the corner. Some say we are already in one, and that could be true, except that unemployment is still very low, job creation is high, banks have high reserves and corporations are sitting on lots of cash. Retail sales are strong and consumers are still spending. Plus the Fed is planning to continue raising rates, which is not what they do during a recession. They lower rates in a recession. This tells me the economy has been racing at full speed, while the Fed is stomping on the breaks. That sounds like a volatile ride, and Powell admitted it could be a hard landing. Investors need to be wearing their seat belts, and maybe a helmet and pads. 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. If you haven't recession-proofed your life yet, you better get on it. This means cutting back on unnecessary expenses, sticking to a budget and saving money so you have plenty of cushion. I was at a real estate conference in yesterday, and it seemed that a lot of people were not fully aware of how much the economy is changing and will change over the next year. Last year's strategies may not work today. In fact, strategies from the last decade may not either. Real estate investors should take an audit of their portfolios and make sure they have plenty of reserves for potential vacancies. After all, Powell is planning to wipe out a million jobs, at least. With that said, times like this can offer some of the best opportunities for investors. We are seeing it already, as there is far less competition in the market. That's why I've launched a single family rental fund in North Texas where job growth is not slowing down. The Biden Administration wants chip manufacturing to come back to the U.S., so chip manufactures are headed to North Texas to build their factories, along with many companies escaping high tax/high regulation states like California. You can find out more about the massive job creation in North Texas, and our new fund at https://www.GrowDevelopments.com. It's a Reg D 506C.When buying property in today's market, I stick with four building blocks that I've found to be resilient in any economy. Let's call them the legs of a chair. (1)Job GrowthThe first leg is “job growth.” Today, it's not too difficult to find markets with job growth. This year, companies created an average of 450,000 new jobs every month, compared to less than half that amount during the decade before the pandemic. There are now more than 11 million job openings. As investors, it's important that we understand where those jobs are. It's also important that the metro area be well diversified with employment opportunities, and not dependent on just a handful of industries that could be affected in a downturn. According to John Burns Real Estate Investing, the top 5 markets that have had the highest growth of high paying jobs are Las Vegas, Dallas, Jacksonville, Austin, and Atlanta. Metro areas that have more high paying jobs today than before the pandemic are Austin, Dallas, Jacksonville, Raleigh-Durham, and Tampa.When you are looking for a place to buy investment property, make sure the job growth we are seeing at the national level is also happening at the local level, because… where there are jobs, there will also be population growth.Population GrowthThat leads us to the second leg of the chair: “population growth.” Right now, there's a whole generation of young people, the largest in U.S. history, ready to settle down, start families, and buy homes, or rent if they can't afford to buy.This generation is also highly educated and good with technology, so many can work remotely. That's something to take into consideration when you are looking at migration patterns. You can check migration reports from U-Haul and Atlas Van Lines to see which metros are attracting the most newcomers. Texas and Florida have been at the top of that list.You can also see which metros are losing more people than they are attracting. Those are the metros you might want to avoid. Lately, we've seen a lot of movement from the Northeast to the Southeast, and from the West Coast to the Northwest or further inland, like Arizona, Colorado and Texas.AffordabilityThe third leg of our chair is “affordability.” Home prices have surged, along with interest rates, making it tough for first time home buyers to afford a home so they are forced to rent. Landlords can provide housing that is affordable to these want-to-be homeowners, solving one of the biggest problems today. In order to find property that a renter can afford, be sure to understand the average income of the area. Rent should be 3-4 times less than monthly incomes. You can determine home-buying affordability by comparing the average mortgage payment to the average income of the area. Income should be 3-4 times housing costs to be considered affordable. If affordability is way out of whack, we can expect a price correction in those markets.Every metro area has different insurance and tax rates, so be sure that the property you plan to purchase cash flows after all expenses. And again, have plenty of reserves in place for potential vacancies and repairs. I like to set aside 6-12 months rent in reserves. On older homes, I use 7-10% of rents set aside for potential repairs. If you want to be extra cautious and the property hasn't been updated, set aside funds for new roofs, plumbing, electrical and HVAC systems as they can be pricey when it's time to replace them. Newer homes generally don't need as much repair, especially if you have a home warranty.Infrastructure GrowthThe fourth leg of the chair is “infrastructure growth.” As much as I love cash flow, I like appreciation even more. After all, if you purchase a rental property for $200,000 and put 20% down, that's $40,000 invested, plus closing costs. If the property increases in value by 5%, that's $10,000 or 1/4th of your down payment. You have loan pay down, cash flow and tax deductions on top of that! Appreciation is speculative, as we have no idea if prices will continue to rise. However, if a metro area is investing heavily in its growth, you can expect there will probably be future appreciation. If new freeways, hospitals, and schools are being built, the city planners are expecting growth. Generally, values increase over time in the "path of progress."For example, when we bought properties in Rockwall, Texas in 2005 and 2006, this was technically the top of that market cycle. We were still happy to buy properties, even though we were paying close to retail, because they cash flowed. More importantly, we knew there was high job and population growth nearby - in fact, the highest in the country. Additionally, we knew a new freeway was being built nearby, making the commute to those jobs much faster. Texas hadn't been know for appreciation at all at that time, and we weren't buying for appreciation, but we also expected prices could rise due to all the growth. Sure enough, we paid between $120,000 and $150,000 for new homes in Rockwall. Today they are worth 3 times that.Investing in cities that are investing in themselves is an important part of the formula, especially in today's environment. Beware of cities that are losing jobs and losing population. Finding a Rental PropertyOnce you have found a market with all four legs of the chair, and you want to find an investment property, consider working with an agent who specializes in real estate investment properties. They will understand the rental market better than a retail agent. Even better, work with someone who owns rental properties in the area. They will really understand rental demand, cap rates and what to look for in a rental property vs retail.Types of Rental PropertiesSome properties perform better than others during a downturn. Single-family rentals or SFRs have been extremely popular in recent years, especially during the pandemic. Many people moved out of apartments in search of stand-alone homes because they wanted more space to go outside and to work from home. Now, higher home prices have left many potential buyers still wanting a single-family home, even if they have to rent it. With supply still half of what it should be to meet demand, rents will likely stay strong. However, returns on short-term rentals is starting to decline. This may be partly due to the increase in supply vs waning demand. You'll also pay more for management, cleaning and maintenance. Local rules and fees for short-term rentals can also present a challenge.Multi-unit buildings have traditionally performed well during recessions, because rents tend to be more affordable than single family homes. There's also an advantage to financing a multi-family property because you will have more income-producing units with just one loan. However, the LTV's requirements today are much lower so prepare to put more money down, and definitely have plenty of funds in reserves.Condos will be the least expensive to purchase, and thanks to the homeowners association, will be easier to maintain. The HOA might place more limits on what you can do with the property, so you need to check the rules ahead of time. Be aware that HOA fees can be high, wiping out cash flow. They can also be harder to finance. Older condo units may have deferred maintenance, so be sure to check the HOA minutes so you don't get stuck paying an extra assessment. HOA's should have plenty of reserves on hand to cover maintenance issues.Storage facilities tend to do well during downturns, as people may need to downsize but don't want to sell their things. Mobile home parks and RV parks seem to cash flow well in any economy.That's a very short list of reasons to consider one type of rental over the other. They key to making any of them work is finding good property management, especially if those rentals are located far from where you live. If you are new to investing, leave the property management to the pros. Otherwise, you might have some big learning lessons along the way. Every city has different landlord laws, so if you do self manage, make sure you know the rules. Financial AnalysisOwning rental property is a business, and must be treated like a business. Good financial book keeping is imperative. This is why owning rental property is somewhat passive, but not completely. You have to pay attention to your investments and make sure you have the right loans, insurance and property management in place. Many people are simply too busy with their own businesses or jobs, which is why investing in a fund can give you the same benefits of tax savings, cash flow and appreciation, but someone else does the work for you. That's why we created our North Texas fund. You can find out more about that at GrowDevelopments.com. If you want more information on how to build your own real estate portfolio, visit newsforinvestors.com. You'll find in-depth articles that will help teach you how to invest in real estate. You'll also find data on various markets and other resources to help you get started.And please remember to subscribe to our podcast, and leave a review!Thank you! And thanks for listening. I'm Kathy Fettke.Links:1 -https://www.youtube.com/watch?v=IXtWrY35dG02 -https://www.bankrate.com/mortgages/how-to-establish-a-rental-property/

Real Estate News: Real Estate Investing Podcast
Fed Chief: Housing Market Is Headed for a “Correction”

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Sep 23, 2022 3:38


The Federal Reserve followed through with its plan for another rate hike this week. Fed officials hiked short term rates by three-quarters of a percent. Fed Chief Jerome Powell also reiterated his determination to bring inflation levels back down to 2% with more rate hikes and warned that the housing market is headed for a “correction.”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. Powell said after the September policy meeting: “Our expectation has been we would begin to see inflation come down, largely because of supply side healing. We haven't. We have seen some supply side healing but inflation has not really come down.” (1)Fed Hikes Short-Term RatesThe Federal Open Market Committee raised the Federal Funds rate to a range of 3 to 3.25%. It's the third consecutive .75% rate hike and brings the overnight lending rate to the highest it's been since early 2008.The central bank started raising rates in March from a level that was close to zero. Fed officials say they plan to continue to raise rates until they reach a “terminal rate” of 4.6%. That would be a range of 4.5% to 4.75%. They are expecting to raise the funds level another 1.25% this year with two rate hikes. That leaves one quarter point rate hike for next year.Personal Consumption Index GoalThe FOMC is hoping that rate hikes will push the Personal Consumption Expenditure index or PCE down to 5.4% this year, and the core rate to 4.5%. They aren't expecting to get inflation down to a target rate of 2.1% until 2025.Powell says: “My main message has not changed since Jackson Hole. The FOMC is strongly resolved to bring inflation down to 2%, and we will keep at it until the job is done.” He believes that a recession is possible, but that no one knows for sure if this will take place, or how significant it will be. (1)Shelter Costs A Big Part of InflationHe did warn that the fight against inflation, which has made homeownership unaffordable for many Americans, will likely lead to a housing market correction. Shelter costs have been a key component of the recent inflation run-up. That includes both the purchasing of homes and paying rent. Powell said that home prices have been rising at an unsustainably fast level, and that created a big imbalance between supply and demand. He said: “For the longer term what we need is supply and demand to get better aligned so housing prices go up at a reasonable level, at a reasonable pace, and people can afford houses again.” (2)Shelter Inflation Will Be Slow to FallBut he doesn't expect that to happen quickly. He says: “I think that shelter inflation is going to remain high for some time. We're looking for it to come down, but it's not exactly clear when that will happen. It may take some time. Hope for the best, plan for the worst.” Which is why the central bank is now hiking rates aggressively.As for the GDP, and a slower economy, Fed officials revised their GDP estimate for this year to just .2% and 1.8% for next year.We'll be reporting on how this will further affect the housing market, and specifically which markets will feel it the most, in upcoming episodes.To read more about this, check for links in the show notes at newsforinvestors.com. While you are there, please sign up for a free membership to RealWealth.com. You'll find hundreds of podcasts, webinars, and articles on a wide range of topics that include the housing market, the economy, and real estate investing. And please remember to subscribe to our podcast, and leave a review!Thank you! And thanks for listening. I'm Kathy Fettke.Links:1 - https://www.cnbc.com/2022/09/21/fed-rate-hike-september-2022-.html2 - https://www.cnbc.com/2022/09/21/real-time-updates-of-the-federal-reserves-big-rate-decision-and-powells-press-conference.html

How Did They Do It? Real Estate
SA527 | The Potential Wealth From Real Estate Assets in the Path of Progress with Kathy Fettke

How Did They Do It? Real Estate

Play Episode Listen Later Sep 22, 2022 31:26


There are always plenty of opportunities in real estate whichever market you're in, and today, we'll give you reasons why you should always believe in the business despite the economic condition. Kathy Fettke shares her expertise in finding markets with great potential, dealing with your self-limiting beliefs, and investing challenges. Don't miss it, as we'll cover more topics in this episode!Key Takeaways to Listen forWhy you should buy properties in emerging and progressing marketsHow to identify if a property is within the path of progressChallenges of finding trustworthy people in real estateAdvantages and opportunities of being a buyer in today's market condition3 things to do now as a beginner in the real estate investing businessThe importance of shifting your mindset and perspective about moneyResources Mentioned in This EpisodeSA500 | Acquire REAL Wealth by Possessing the Qualities of a Wise Investor with Rich FettkeThe Wise Investor by Rich Fettke | Hardcover & AudiobookU.S. Chamber of CommerceCHIPS and Science ActFree Apartment Syndication Due Diligence Checklist for Passive Investor About Kathy FettkeKathy Fettke specializes in teaching people how to build multi-million dollar real estate portfolios through creative finance and planning. She is passionate about researching and then sharing the most important information about real estate, market cycles, and the economy. Author of the #1 best-seller, Retire Rich with Rentals, Kathy is a frequent guest expert on such media as CNN, CNBC, Fox News, NPR, and CBS MarketWatch. She's the host of two RealWealth podcasts, The Real Wealth Show and Real Estate News for Investors, and co-host of the BiggerPockets “On the Market” podcast. Connect with KathyWebsites: Real Wealth | Grow DevelopmentsPodcasts: The Real Wealth Show |  Real Estate News for Investors | On The Market Connect With UsPlease visit our website: www.bonavestcapital.com and please click here, to leave a rating and review!SponsorsGrow Your Show, LLCThinking About Creating and Growing Your Own Podcast But Not Sure Where To Start?Visit GrowYourShow.com and Schedule a call with Adam A. Adams.

Real Estate News: Real Estate Investing Podcast
The Real Estate News Brief: No Recession In Sight? Home Prices Peaking? Lot Prices Set New Records

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Sep 20, 2022 6:28


In this Real Estate News Brief for the week ending September 17th, 2022... what the job market says about recession, why home prices might be peaking, and how much lot prices have contributed to high home prices.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. Moody's chief economist, Mark Zandy, says “we're not even close” to a recession right now. He spoke at the National Multifamily Housing Council's fall meeting last week. He says it's difficult to even think we're in a recession with such great data on the job market. We've got high job creation numbers, a high number of unfilled positions, a high “quits rate” which means that employees feel confident about quitting one job to find another, and a low number of layoffs. (1)He also says it's likely that GDP numbers will be revised higher, and the average homeowner has about $185,000 in equity with money in the bank. According to Zandi, the only part of the economy that is unhealthy right now is the federal government's debt. But he also says the government has a triple-A rating so he isn't worried about that.One thing he did warn about is the impact of monetary tightening on the housing market because housing costs are a big part of the Consumer Price Index. He says: “The Fed is telling us, ‘We have to raise interest rates,' but this is complicating the situation significantly because now many are having a harder time affording to pay rents. This has or will cause ‘demand destruction' and people will soon have to begin dipping into their bank accounts.”And we did get some big numbers in the latest report on the CPI. The government says the index was up .1% in August, which isn't much, but the core rate was up a worrisome .6%. That's double the increase from July. The Fed considers the core rate a more accurate gauge of inflation because it omits volatile food and energy prices. (2) The annual core rate rose from 5.9% to 6.3% while the overall CPI came down from 8.5% in July to 8.3%.The Producer Price Index also showed al .1% increase in wholesale prices, but the core rate was only up .2%. That brought the core rate down from 5.8% to 5.6%, and the overall rate from 9.8% to 8.7%. (3) Zandi is predicting that inflation will fall to 4% by the end of next year.Consumers are feeling more confident about the economy. The University of Michigan's consumer sentiment survey shows it rose to 59.5 which is a 5-month high, mostly because of lower gas prices. Prices for just about everything else are higher. Consumers are expecting to see a sharp decline in prices over the long term, however. The survey shows they expect to see it drop to 2.8% over the next five years. (4)The big economic news will come from the central bank in the days ahead. Many economists Fed officials to hike the overnight lending rate by a hefty .75% to fight inflation. But some economists say the Fed may go higher than that, with a rate hike of 1%. The last time the Fed raised rates by that much was in 1982. (5)Mortgage RatesMortgage rates rose above the 6% level last week. Freddie Mac says the average 30-year fixed-rate mortgage was up 13 basis points to 6.02%. The 15-year was up 5 points to 5.21%. (6) In other news making headlines...Are Home Prices About to Peak?We could be getting close to a peak in home price growth. Although prices are still rising, the annual rate of growth fell to 11.7% for the week ending September 10th with a national home price median of $435,000. (7)Prices have been growing but slowing at a rate of 15 to 16% in July and 13 to 15% in August. The September numbers represent a substantial slowdown.. Realtor.com's chief economist, Danielle Hale, says: “the rate (of home price growth) took a notable step back this week to the lowest pace since January.” It's also the time of year that home price growth typically slows. In fact, Realtor.com says the best time to buy a home is the end of September. Prices are expected to be about $20,000 lower than they were in June.The latest housing trends also include a 13% drop in new listings, an extra six days on the market, and an average mortgage rate that is now above 6%.Home Lot Prices Still Heading SkywardContributing to high prices for new homes is the cost to purchase buildable lots. The National Association of Home Builders recently issued a report for last year that shows six out of nine census areas hit new records. (8)The NAHB says the national median is now $55,000 per lot with the most expensive lots in New England. They were almost four times as much as the national median, at $200,000. That's mostly due to low-density requirements and larger lots for single-family homes. Lots along the West Coast were the second most expensive with a median of $143,000. Remember, these lots are also smaller than lots in other parts of the country. The Mid-Atlantic had a median of $90,000 and the mountain region had a median of $75,000. The South to South Atlantic and East South Central had the lowest price growth for lots.Declining lot prices were found in a few places including the West South Central, which includes Texas, and the East North Central areas. 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. In addition to becoming part of our RealWealth family, you get access to in-depth rental market data and real estate professionals who can help get you started as an investor. Just click on the “Join for Free” button at the top of our website.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.globest.com/2022/09/19/mark-zandi-says-were-not-even-close-to-being-in-a-recession/2 -https://www.marketwatch.com/story/coming-up-consumer-price-index-for-august-11663070838?mod=economic-report3 -https://www.marketwatch.com/story/u-s-wholesale-inflation-falls-for-second-month-in-a-row-due-to-cheaper-gas-11663159253?mod=mw_latestnews4 -https://www.marketwatch.com/story/consumer-sentiment-climbs-to-5-month-high-but-americans-still-worried-about-economy-11663337724?mod=economy-politics5 -https://www.mortgagenewsdaily.com/markets/mortgage-rates-091620226 -https://www.freddiemac.com/pmms7 -https://www.realtor.com/news/trends/column-weekly-housing-market-update-notable-turn/8 -https://www.globest.com/2022/09/15/home-lot-values-approach-those-of-2005-housing-boom/

Real Wealth Show: Real Estate Investing Podcast
Former NFL Player Shares His Real Estate Success Story!

Real Wealth Show: Real Estate Investing Podcast

Play Episode Listen Later Sep 17, 2022 29:31


How do you transition out of professional football into another wealth-building career? Dean Rogers lived the dream of a pro athlete with a big paycheck, so starting over was not easy. But once he started learning about real estate, he tackled the subject like a pro-football player, and three months later, he did his first deal. That was nine years ago. In this episode, you'll hear how he launched his real estate career, the kind of deals he's done, and some of the mistakes he's made along the way.Dean began his professional life in the NFL with the San Diego Chargers. He backed away from pro-football in 2013, when he realized his health was at risk He transitioned into a 9-to-5 job, but quickly shifted gears into real estate. Since then, he's flipped hundreds of homes, and built a 10-figure real estate portfolio. He's passionate about real estate and loves sharing what he's learned with other new investors. You can connect with him at www.deanrogers.com.Please visit our Learning Center if you'd like to turn your career into a real estate success story. You'll find hundreds of articles, webinars, and podcasts to answer your questions, and help you get started. Click on the “Join for Free” button at the top of our website for full access to all of our market data and resources. And please remember to subscribe to our podcast and leave a review!Thanks for listening. I'm Kathy Fettke and this is The Real Wealth Show.

Real Estate News: Real Estate Investing Podcast
Rent Growth is Cooling Off but Not By Much!

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Sep 16, 2022 4:21


Rent growth is cooling off a bit for both apartments and single-family rentals. New data from Yardi Matrix shows that national rent growth declined slightly in August. That could be a sign of the housing market slowdown, but for landlords who are worried about their ROI - the year-over-year rent growth is still close to 10% for both asset classes. (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. Yardi data shows that average asking rent for single-family homes was down $2 a month in August, to $2,090. The year-over-year growth percentage was 9.5% or about 170 basis points less than July. In July, rents were up an average of $7 a month for an annual growth rate of 11.2%. So you can see, single-family rent growth has pulled back a little, but it's still showing strong growth. (2)(3)For apartments, the average asking rent was down $1 a month in August, to $1,718 with a year-over-year growth rate of 10.9%. That's also 170 basis points lower than July, and is down from an annual rate of 12.6%. In Yardi's most recent report, analysts say: “Rent growth tends to slow in the fall, but this year comes at the tail end of unprecedented increases. The deceleration in August was strongest in many of the markets that have had the most growth over the past two years, a sign that affordability is becoming an issue.” The report says that rent growth could continue “decelerating” for the rest of the year. Among the markets seeing the biggest declines is Orlando, Florida, where rents have skyrocketed. Year-over-year rent growth for apartments was 20.2% in July and dropped to 16.9% in August. Both numbers are well above the national average. Another example, which is also in Florida, is the rent growth for Tampa. It was 17.5% year-over-year in July, and dropped to 14.0% in August. Even some of the pricest rental markets are still seeing rent growth, despite the pullback. San Francisco's year-over-year rent growth was 9.0% in July and dropped to 8.5% in August. In Phoenix, annual rent growth was 13.3% in July, and fell to 9.6% in August. The report also says that rents declined the most for high-end rental housing. In fact, rent growth was negative for high-end rentals in 21 of Yardi's top 30 metros. Apartments.com also reports a slowdown in rent growth for apartments. It says that rents were down .1% across the biggest metros, which is the first time in 20 months that rents have gone down. It says that annual rent growth was 7.1% in August which is down from 8.4% in July. (4)The report says that rents were down the most in Sunbelt cities because rents haveen soaring in those areas throughout the pandemic. Out of 40 markets tracked by Apartments.com, 13 saw rent growth. Orange County, California is at the top of the rent growth list for August, with rents up 1%. Saint Louis, San Diego, Columbus, Cleveland, Salt Lake City, Los Angeles, and Portland were also on the positive rent growth side.You can check for more rent growth data by following links in the show notes at newsforinvestors.com. You will also find tons of information on our website about investing wisely in the real estate market, despite all the challenges we face today. Please hit the join link on our website to become a free member. And please remember to subscribe to our podcast, and leave a review!Thank you! And thanks for listening. I'm Kathy Fettke.Links:1 -https://yieldpro.com/2022/09/annual-rent-growth-rate-falls-as-rents-decline/2 -https://www.yardi.com/news/press-releases/national-average-asking-rents-stopped-growing-in-august-according-to-yardi-matrix/3 -https://www.yardi.com/news/press-releases/multifamily-rent-increases-decelerate-according-to-yardi-matrix/4 -https://www.businessinsider.com/rent-prices-fell-august-first-time-in-20-months-2022-9

Real Estate News: Real Estate Investing Podcast
The Real Estate News Brief: BofA No-Down Loan, Tomo is Offering Appraisal Coverage, Sand in Short Supply

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Sep 15, 2022 7:55


In this Real Estate News Brief, we'll look at economic news from the week ending September 10th, 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.Economic NewsLast Monday was Labor Day, and there were few reports issued during the rest of the week. But Fed Chief Jerome Powell rocked the stock market when he spoke at the Cato Institute. It was a conference on monetary policy, where Powell vowed to fight inflation with more rate hikes, and led economists to believe we'll see another .75-1 basis point hike at the central bank's meeting later this month. It would be the third such rate hike in a row, and would bring the Federal Funds rate into a range of 3.25 to 3.50%. (1)Powell said during the speech: “History cautions strongly against prematurely loosening policy. I can assure you that my colleagues and I are strongly committed to this project and we will keep at it until the job is done.” Fed officials want to get inflation back down to the 2% level. The Consumer Price Index was 8.5% in July. Powell also stated there could be some “pain” in the job market which includes the possibility of layoffs. But despite the rate hikes that have already taken place, the job market is still strong. In my opinion, it's going to take some time to burn off the massive liquidity that Powell injected into the market over the past two years. According the Federal Reserve Bank of St Louis's M2 chart, the amount of money circulating in early 2020 was $15.2 trillion. Today, it's hovering around 21.6 trillion dollars. That's over $6 trillion dollars still more still in circulation.It's like Powell couldn't take his foot off the gas until March of this year, and then suddenly hit the breaks.However, the government does not seem to be slowing down the printing presses, with it's student loan debt cancellation program that could cost up to $1 trillion and now the Inflation Reduction Act that only 1 in 4 of voters believe will actually reduce inflation, according to a recent survey from Morning Consult/Politico. 34% believe it will make inflation worse.A Forbes article state that the federal government had a $2.8 trillion deficit in fiscal year 2021, mostly comprised of Covid-19 relief spending including stimulus checks and emergency rental assistance. The deficit amounted to approximately 13% of GDP and accounted for the second largest deficit since the end of World War II. Deficits over the last five decades have averaged just 3% of GDP. But the brakes haven't hit the labor market quite yet.The latest weekly unemployment report shows that initial jobless claims have dropped to a three-and-a-half month low, which is close to a record low. There were 6,000 fewer applications for unemployment benefits, compared to the week before. They were down to 222,000. The low point was last March with 166,000 new claims. (2)Mortgage RatesAnother pain point related to inflation is the cost of a home loan. Freddie Mac says the average 30-year fixed-rate mortgage was up 23 basis points to 5.89% last week. The 15-year was up 18 points to 5.16%. Freddie says that the rates vary quite a bit from one lender to another so it's wise to shop around. (3) In other news making headlines… Bank of America No-Down LoanBank of America is launching a new program for first-time homebuyers that includes no down payment, no closing costs, and no mortgage insurance. It's called the BofA's Community Affordable Loan Solution, and is designed to expand homeownership opportunities for minorities. (4) Applicants will not have to have a minimum credit score. Instead, they will be able to qualify based on other data, such as payment histories for things like rent, utilities, phone, and auto insurance. Income and home location will also be considered. And they will have to complete a homebuyer certification course that is provided by BofA and HUD-approved counseling partners. Personally, I find it interesting that a no-money down loan would be offered now, so late in the housing cycle. Housing is teetering on a precipice, with some markets already seeing price declines. In my opinion, this is not a wise time to bring on a loan like this, so hopefully the bankers and borrowers will be very careful not to issue these loans in markets that are currently over-priced and potentially repricing. Tomo's Solution to the Appraisal GapFintech mortgage company Tomo is offering a solution to the deal-killing appraisal gap. That's when a borrower is approved for a certain loan amount, and the home then appraises for more than the buyer had planned to borrow.This last week, Tomo announced its new Tomo Appraisal Coverage. Buyers can get the coverage by getting an underwritten pre-approval from Tomo Mortgage. They must also put a minimum of 10% down, and work with a Tomo partner who will run the address through a verification process before an offer is made. (5) Other exclusions include foreclosures, and properties that have health or safety issues, or a Fannie Mae rating of C5 or C6, which refer to property conditions. AND, homebuyers must be purchasing the property as their primary residence, so it's not available for multi-family properties.It doesn't cost anything extra for the coverage, but the loan must meet all the criteria I just mentioned. And it must be a conforming loan.Now “Sand” Is in Short SupplyBuilders have been faced with numerous supply chain issues that have left them scrambling for things like lumber, windows, doors, and metal pipe. Now, “sand” is in short supply. (6)We see sand almost everywhere we look, but builders need a special high-quality sand that is not as easy to find. Stanford University scientist, Eric Lamden, said in one article that sand found in the desert isn't good for construction because the grains have been eroded by wind, making them too smooth for good adhesion. He says: “That is why the tall buildings of Dubai, a desert city, were built with sand imported all the way from Australia – as skyscrapers require extremely high-quality aggregates.”He also says it's unlikely that we'll run out of the kind of sand that's needed for construction, but that regional shortages do occur, causing delays. He says it's also possible to crush rock or recycle old construction materials to get the sand that is needed.That's it for today. Check the show notes for links at newsforinvestors.com. And please remember to hit subscribe, and leave a review! If you haven't joined RealWealth, please hit the join for free button, in the upper right-hand corner of our website. As a member, you have access to our real estate market data and our list of real estate professionals, including experienced investment counselors. Our website also includes hundreds of webinars, articles, and podcasts on everything related to real estate, with a special focus on single-family rentals. Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/powell-says-the-fed-wont-be-distracted-by-politics-as-it-moves-strongly-to-bring-inflation-down-11662644203?mod=newsviewer_click2 -https://www.marketwatch.com/story/jobless-claims-fall-to-3-1-2-month-low-of-222-000-layoffs-still-near-record-low-11662640760?mod=economic-report3 -https://www.freddiemac.com/pmms4 -https://www.prnewswire.com/news-releases/bank-of-america-introduces-community-affordable-loan-solution-to-expand-homeownership-opportunities-in-blackafrican-american-and-hispanic-latino-communities-301614686.html5 -https://www.housingwire.com/articles/tomo-launches-solution-for-the-dreaded-appraisal-gap/6 -https://www.bdcnetwork.com/add-sand-shortage-supply-chain-woes

Rental Property Owner & Real Estate Investor Podcast
EP350 How 6 Months to Live Turned Into 20 Years of Real Wealth and Financial Freedom with Rich Fettke

Rental Property Owner & Real Estate Investor Podcast

Play Episode Listen Later Sep 12, 2022 28:12


Twenty years ago, Rich Fettke learned he had cancer and that he only six months left to live. That news turned out to be wrong, but it changed his life for the better. Since then, he's gone on to create a company with his wife Kathy Fettke called RealWealth a real estate investment group that helps its 60,000+ members improve their financial intelligence, secure passive income, and obtain financial freedom. He's also competed in the ESPN X-Games, holds a record in bungee jumping, and has achieved his own financial freedom. Now he's released a new book under the Rich Dad Advisors Press with a foreword from Robert Kiyosaki himself. The book is called “The Wise Investor: A Modern Parable About Creating Financial Freedom and Living Your Best Life”. Today Rich is going to share some of the lessons and parables from his book, and share some insight on how he was able to get Robert Kiysaki to write the forward. If you'd like to find out more about Rich you can do so through these links: http://www.thewiseinvestorbook.com http://www.richfettke.com http://www.realwealth.com Today's episode is brought to you by Green Property Management, managing everything from single family homes to apartment complexes in the West Michigan area. https://www.livegreenlocal.com And RCB & Associates, helping Michigan-based real estate investors and small business owners navigate the complex world of health insurance and Medicare benefits. https://www.rcbassociatesllc.com

Real Estate News: Real Estate Investing Podcast
Is the Pandemic Housing Boom About to Go Bust?

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Sep 10, 2022 4:51


It looks like the pandemic housing boom is coming to an end. More and more sellers are slashing prices as mortgage rates rise and homes become less affordable for potential buyers. Some analysts are predicting that home values will drop by as much as 20% in markets that have gone up the most. And there are five markets at the top of that list.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 experts are calling these overvalued markets “zoom towns” because they experienced rapid price growth during the pandemic. According to Rick Palacios at John Burns Real Estate consulting, home prices in Boise, Idaho, will be the first to get slammed. Palacios says: “It is the single market that we anticipate actually getting to price declines in 2022.” (1)The Rise of Zoom TownsHe says Boise attracted a lot of new residents during the pandemic because of its lower cost of living and quality of life, but that drove prices sky high. The other four cities on his list of zoom towns that will see sharp price corrections are Austin, Texas; Nashville, Tennessee; Phoenix, Arizona; and Sacramento, California.A Redfin analysis shows that Boise home prices increased 60% over the course of the pandemic, and it's now getting hit pretty hard by the market slowdown. Redfin says in July of last year, 30% of the listing prices were cut. That percentage has now more than doubled to 70% in July of this year.Data collected by John Burns shows that month-over-month prices are falling in Boise. It predicts that Boise will be the first metro to show a year-over-year decline in home prices. But Boise isn't alone.Top Metros for Home Price GrowthAs reported by Fortune, the West is the epicenter of the pandemic housing boom, and is now shifting rapidly. In July, 58% of listings in Denver experienced price cuts along with 56% of listings in Salt Lake City, 55% in Tacoma, Washington, 50% in Phoenix and San Diego, and 47% in Stockton, California. And that's just at the top of the list. (2)Zonda's chief economist, Ali Wolf, says: “The strong demand over the past two years drove up home prices across the country, and it appears the West hit the pricing ceiling quicker than other markets given the particular supply constraints.” In other words, a combination of high demand, bidding wars, and tight inventory pushed prices in this area beyond what homebuyers are willing to pay.Forecast on Home Price DeclinesSo the market is cooling the fastest while inventory is rising in what have been pandemic zoom towns. Moody's Analytics is expecting price declines of 0 to 5% during the slowdown. But it expects declines of 5 to 10% in the 187 markets that it says are “significantly overvalued.” If we have a recession, the declines will be more like 15 to 20%.It's good to remember that we're still seeing year-over-year growth nationally, but it is slowing down every month. And depending on when you bought property, that could be a problem if you currently want to sell that same property. For example, if gains are dropping from 20% in January to 10% in July, and continuing in a downward slide, recent buyers could lose equity if they sell right now. It depends on the market and how much home prices have gone up recently.The markets I previously mentioned are expected to get hit by big price declines, along with others like Miami and Las Vegas. Selling homes in those markets during the current slowdown will likely result in the loss of equity. Those planning to hold on to their homes don't need to worry since they just want a place to live, and values will likely recover over time. The buyers who locked-in low mortgage rates are also in even better shape. You'll find a link to the articles mentioned in the show notes at newsforinvestors.com. If you'd like to learn more about owning single-family rentals, please hit the join link at the website. And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://nypost.com/2022/09/05/us-zoom-towns-will-get-hit-with-falling-home-prices-expert/2 -https://fortune.com/2022/09/04/housing-market-map-home-price-cuts-redfin/

Real Estate News: Real Estate Investing Podcast
Pacaso's New “Good Neighbor” Strategy for Co-Owned Second Homes

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Sep 9, 2022 4:48


Proptech startup Pacaso is taking its public relations strategy to the next level. The San Francisco-based company helps people buy the second home of their dreams with a co-ownership model that has sparked a lot of controversy in some places. While the general perception of Pacaso is a belief that it contributes to the housing crisis, Pacaso is showcasing its model as part of the “solution.”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. Pacaso has caused a dust-up in several places as full-time residents fight back against short-term rentals. Many critics see Pacaso through this lens, but it's not a short-term rental operation.Instead of renting the home out to a stream of different occupants over the days, weeks, months, and years, Pacaso homes are purchased by up to eight buyers and each buyer gets to use the home for a percentage of the year that corresponds to the buyer's percentage of the purchase price. Pacaso manages and maintains the home, but the people who use it are co-owners, who use it on a continual basis. (1)Pacaso as Part of the SolutionThe message that Pacaso is currently trying to convey is that many people own second homes that sit empty and unused for 90% of the year. With the current shortage of available homes, Pacaso points out that the typical second-home approach is wasteful. It says that co-ownership can help reduce that waste by combining the use of up to eight second homes into one home that has as many as eight owners. As Pacaso's vice president of public affairs, Colin Tooze (tooz), said in a press release: "One significant, but less-discussed, contributor to the housing crisis is a wasteful legacy model of second-home ownership. While no company can solve this complex set of problems on its own, Pacaso offers a sustainable alternative that combines multiple families into one luxury home." (2)Pacaso also claims that the co-ownership model provides significant benefits to the community in the form of economic activity that is ten times what you'd get with the typical second home. But Pacaso says it is still working on ways to publicize its value, which is why the company recently announced the formation of a bipartisan government advisory board. Formation of Government Advisory BoardPacaso says it's a priority to work collaboratively with elected officials, and the board will help the company do that more effectively. Among the inaugural members of the board are current and former elected officials from major metros around the country, including:1 - Steve Benjamin (Chair), Former Mayor of Columbia, South Carolina, and past President of the US Conference of Mayors2 - Steve Adler, Mayor of Austin, Texas3 - Michael Hancock, Mayor of Denver, Colorado4 - Danny Perez, Member, Florida House of Representatives5 - Alexis Podesta, Former California Secretary of Business, Consumer Services, and HousingIn a statement issued by the board chairman, Steve Benjamin, says: “Pacaso's innovative second home co-ownership model is a value-add to communities across the United States,” said Steve Benjamin, former Mayor of Columbia, SC and past President of the US Conference of Mayors. “Pacaso consolidates second home demand into fewer homes, taking pressure off of housing inventory for first-time home buyers and middle class families. This is the thoughtful and sustainable approach to housing we need right now, and I'm proud to help advise the company as it works to bring this model to more communities.” (3)Pacaso Reached Unicorn Status in Six MonthsPacaso launched in October of 2020 as demand for second homes skyrocketed during the pandemic. As reported by Fortune, it reached unicorn status just six months later. That means it was worth more than $1 billion in just six months! Tooze told Fortune that he wants Pacaso homes to be good neighbors, and the board will help solve any challenges. He says: “If that helps us be more thoughtful in how we approach solutions that address the needs of the company and communities where we operate, everyone wins.” (4)You'll find a link to the Pacaso articles in the show notes at newsforinvestors.com. If you'd like to learn more about owning single-family rentals in growing markets around the country, please hit the join link on our website. And please remember to subscribe to our podcast, and leave a review! It will help make us more visible on podcast platforms. Thank you! And thanks for listening. I'm Kathy Fettke.Links:1 -https://www.pacaso.com/?utm_source=google&utm_medium=Paid_Search&utm_campaign=IV_G_Brand_Search_Trademark_US&gclid=Cj0KCQjwmdGYBhDRARIsABmSEeMLqsfM0Xrakmhe3TXbxXKnbi-9-xd6FMRwUp8NAWa8l6dQ9Ae0dLsaArCzEALw_wcB2 -https://www.prnewswire.com/news-releases/pacaso-announces-government-advisory-board-301592515.html3 -https://www.pacaso.com/blog/pacaso-government-advisory-board4 -https://fortune.com/2022/09/02/modern-board-pacaso-second-homes/

Real Estate News: Real Estate Investing Podcast
The Real Estate News Brief: Why Rate Hikes Might Backfire, Why We Might See a Big Surge in Inventory, and Elon Musk's Tiny Home!

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Sep 8, 2022 5:34


In this Real Estate News Brief for the week ending September 3rd, 2022... why rate hikes might backfire, why economists are seeing a sharp increase in the housing supply, and what Elon Musk is saying about owning a tiny home in Texas.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. A paper released at the Jackson Hole Summit argues that the central bank cannot control inflation by rate hikes alone. Researchers from Johns Hopkins University and the Chicago Fed authored the report, and say rate hikes could make matters worse without a reduction in government spending. The federal debt is currently at 123% of GDP which is down slightly from early 2020 during the beginning of the pandemic, but it's much higher than it has been since the mid-1940's. As interest rates rise, so does the cost of that debt. (1)The latest reports on the job market, and manufacturing, both show that the economy is still in good shape. It's still growing, but at a slower pace. A report from the Institute for Supply Management shows that new orders and employment increased, and that inflation was down slightly. It says there's one red flag – that some companies have bloated inventories which could put them in a tough spot if the economy slows down any more. (2)Meantime, initial jobless claims dropped to a nine-week low of 232,000 which means there's no sign of any big layoffs. Economists say this is one of the best barometers for economic health. (3) Job openings also expanded to 11.2 million in July. That's up from 11 million in June. The unemployment rate is currently at 3.5%. (4)Home price growth was down in July. The S&P CoreLogic Case-Shiller 20-city index deceased from 20.5% in May to 18.6% in June. The national index was up a seasonally adjusted .3%, but that's the smallest increase in two years. (5)Money spent on residential construction was down .4% in July. Economists expected it to fall because builders have been cutting back on their plans. Year-over-year, construction spending is still up 8.5%. (6)Consumers are feeling much better about the economy, now that gas prices have gone down. The consumer confidence index jumped from 95.7 to 103.2 in August. That's the first time it's gone up in four months. (7)Mortgage RatesMortgage rates are getting closer to the 6% level. Freddie Mac says the 30-year fixed-rate mortgage was up 11 basis points to an average of 5.66%. The 15-year was up 13 points to 3.98%. (8) Mortgage News Daily reports that the numbers from Freddie are way too low. It says the average is more like 6.23%. (9)In other news making headlines…Housing Supply to Increase SharplySome economists expect to see a big increase in housing completions in the coming months. The Calculated Risk blog says that even while housing starts slow down, builders will be finishing up many of the homes currently in the pipeline. That includes single-family and multi-family homes. (10)Bill McBride at Calculated Risk is estimating a 10% increase in completions this year to almost 1.6 million. That's because there's an unusually high number of housing units under construction due to supply chain issues.FSBO Is Not Very Popular Right NowA high number of home sellers have decided to go with an agent, instead of doing the deal on their own. The National Association of Realtors says that FSBOs, which stands for “for sale by owner,” typically rise during hot markets, but the latest Profile of Home Buyers and Sellers shows the opposite. FSBOs were just 7% of home sales last year. That's the lowest percentage in about 30 years. 15 years ago, 12% of sellers decided to go it alone. (11) The report says that sellers are finding value in the hiring of real estate professionals. Among the benefits is the competitive pricing of a home, help with marketing to potential buyers, and negotiating the deal.Elon Musk Does, In Fact, Own a Boxabl CasitaThere's been much speculation as to whether Tesla and SpaceX founder, Elon Musk, had downsized into a Boxabl Casita. We did a news story on this modular home several months ago, and there were rumors about Musk living in one near his SpaceX facility in Texas. In a recent interview, he confirmed the purchase of one of these homes, but said he uses it as a guest house, and not as his primary residence.The basic model is 375 square feet in size and folds up for delivery. It only takes a few hours to set up and costs about $50,000.That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!If you haven't yet joined RealWealth, just hit the “join for free” button on our website. You'll get access to our rental market data, our investor portal, and our network of real estate professionals including investment counselors, market specific property teams, lenders for investors, 1031 exchange facilitators, and more.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.cnbc.com/2022/08/29/fed-rate-hikes-wont-curb-inflation-if-spending-stays-high-paper-says.html2 -https://www.marketwatch.com/story/u-s-factories-expand-again-ism-finds-in-sign-economy-is-still-growing-11662041369?mod=economic-report3 -https://www.marketwatch.com/story/jobless-claims-tumbled-to-nine-week-low-of-232-000-layoffs-still-historically-low-11662035886?mod=economic-report4 -https://www.marketwatch.com/story/job-openings-climb-to-11-2-million-and-show-labor-market-still-going-strong-11661869076?mod=economic-report5 -https://www.marketwatch.com/story/u-s-home-price-growth-continues-to-decelerate-in-june-case-shiller-11661864864?mod=economic-report6 -https://www.marketwatch.com/story/construction-spending-softens-in-july-11662041467?mod=bnbh_mwarticle7 -https://www.marketwatch.com/story/consumer-confidence-rises-for-first-time-in-four-months-on-falling-gas-prices-and-slower-inflation-11661868411?mod=newsviewer_click8 -https://www.freddiemac.com/pmms9 -https://www.mortgagenewsdaily.com/markets/mortgage-rates-0901202210 -https://calculatedrisk.substack.com/p/update-housing-completions-will-increase11 -https://magazine.realtor/daily-news/2022/08/30/fsbos-usually-soar-in-a-hot-market-not-this-time12 -https://www.autoevolution.com/news/elon-musk-confirms-he-owns-a-50000-boxabl-casita-tiny-home-prototype-195285.html

Real Estate News: Real Estate Investing Podcast
Orlando Landlords Sue County Over Rent Cap Proposal

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Sep 7, 2022 4:31


Orlando landlords are suing Orange County, Florida, to challenge a rent cap proposal that's headed for the November ballot. Attorneys for two major real estate groups filed the lawsuit in mid-August and are seeking an injunction to keep it from going before voters. They say the proposal violates state law which bans rent control under most circumstances.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. If the measure is approved, it would not apply to single-family rentals or vacation homes. It would only apply to multi-family units, and cap any rent increases to the rate of inflation as determined by the Consumer Price Index. The ordinance would last one year, and would need to be renewed by another vote to continue.But there's a very high bar that the county must reach to get this approved. According to state law, a city or jurisdiction must prove there's a housing emergency and that rent control would solve the problem before it can impose any kind of rent control.Ballot Measure Approved by Slim MarginIn a 5 to 4 vote, county commissioners approved the ballot measure about a week before the lawsuit was filed. It was discussed and debated four times before it went to a vote. Both tenants and landlords went before the commission to argue their sides of the situation.Tenants cited skyrocketing rents that many say they can no longer afford. Landlords argued that higher tax bills, insurance premiums, and other expenses are forcing them to increase rents.Landlords Say Rent Control Will Make Matters WorseFlorida Apartment Association representative, Amanda White, told the Orlando Sentinel that the proposed ordinance is “fundamentally flawed.” She says: “It is unfortunate that a majority of the Orange County Commissioners disregarded (state) law and instead moved to place this measure on the ballot.”The CEO of the Florida Realtors group, Margy Grant, told the Sentinel: “Studies show that rent control has unintended consequences that can make matters worse.” She says: “A better solution would be to pursue public-private partnerships that result in more affordable housing units.”Orange County Mayor Jerry Demings voted against the proposal, saying it will probably trigger a lawsuit that would be difficult for the county to defend because of the state law. And he was right. The county now faces a lawsuit, and attorneys representing the plaintiffs want to fast track the case to get the issue resolved before the election.Tenants Say They Can't Afford Rent IncreasesAmong the arguments offered by tenants and rent-cap supporters is a 32% average increase in rent over a two-year span, from June of 2020 to June of this year. The average rent went from $1,357 to $1,799, according to rent-tracker CoStar.Tenant advocates also cited a high level of requests for rental assistance in Orange County. It was reportedly more than $200 million in federal, state, and local rental assistance funds, and the most among all of the counties in Florida.This is the first time that a local government in Florida has tried to impose rent control since the state law against rent control took effect. Lawyers arguing against the proposal say: “It is extremely unlikely that the shortcomings of the current residential rental market in Orange County… be deemed the type of dire emergency which must exist before a local government in Florida can adopt an enforceable rent control ordinance.” Of course, this lawsuit is being closely watched by other jurisdictions. A headline in another publication asks whether Miami will be next. The city of Miami Beach does have rent control that was implemented back in the 60's and 70's before the state law was passed. (2)You'll find a link to the Orlando Sentinel article in the show notes at newsforinvestors.com. If you'd like to learn more about owning single-family rentals, please hit the join link on our website. And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.orlandosentinel.com/news/orange-county/os-ne-orange-rent-control-lawsuit-20220817-4bmmdtmq5zbq3e4zj5tij4imti-story.html2 -https://fortune.com/2022/08/20/florida-landlords-try-to-halt-rent-control-initiative/

Real Estate News: Real Estate Investing Podcast
Tenant Groups Push for Federal Rent Regulation

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Sep 3, 2022 6:04


Tenant advocates are asking the White House for help in curbing what they call “rent inflation.” A coalition of tenant unions, community organizations, and legal groups is asking the Biden administration to declare a state of emergency and investigate ways to regulate rents. As reported by the Washington Post, these groups want the government to address rent growth with the same urgency as it has with high gas prices. (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. The coalition sent a proposal that would involve six government agencies for an “all-out government intervention” on rent inflation. The Consumer Price Index shows that overall annual inflation hit 9.1% in June, which is a 40-year high. That includes food and energy, which helped drive that number to a record high, along with housing costs.According to data firm Yardi Matrix, the year-over-year rate of inflation for multi-family rents was 12.6% in July. For single-family detached homes, CoreLogic reports that the annual rate was 12.8% in June. And some hot rental markets have seen much higher rates of rent growth, such as Miami with a June year-over-year reading of 35.5% for single-family homes. On economist told the Post that it's important that policymakers address the issue of high prices for necessities. He says: “At this point, we're talking about food, gasoline, and housing.”Call for Immediate ActionJust recently, the Biden administration addressed the high price of gas with a release of oil from the national reserve. Congress was also asked to consider a gas tax holiday, but that hasn't materialized. The coalition says the high price for housing is also an economic crisis and needs the same kind of attention.It wrote in a memo: “We urge the President to act immediately to regulate rents, as part of the Administration's efforts to curb inflation, and as a critical foundation for long term protections to correct the imbalance of power between tenants and their landlords.”The appeal is part of an effort called “Homes Guarantee” which has a website. You'll find a link in the show notes. The main message is: “Everyone living in the United States should have safe, accessible, sustainable, and permanently affordable housing: A Homes Guarantee.” It says that “currently, a team of 75 directly impacted tenant leaders representing over 25 organizations are building our federal campaign with a focus on executive and agency actions to regulate rents and address the rent inflation crisis.”Potential Rent RegulationsIn addition to the emergency declaration, the coalition wants President Biden to convene a cabinet-level interagency task force to identify possible rent regulations. The document mentions enforceable affordability, quality housing standards, and legal representation for tenants facing eviction. The agencies it calls upon to help impose these regulations include the Federal Housing Finance Agency, the Federal Trade Commission, HUD, the Securities and Exchange Commission, The Department of the Treasury, and The Consumer Financial Protection Bureau.High Rents Due to Housing ShortageAlthough there are some landlords who impose unreasonable rent increases, it's not just greedy landlords who are at fault. As the Post reports, one of the big reasons for the high cost of housing is the housing shortage. The U.S. needs as many as five million more residential units to meet demand.The White House has introduced a “Housing Supply Action Plan” which would close the gap in another five years. But that doesn't help tenants right now. The Federal Reserve is the one that is tasked with bringing down inflation, and it's doing that with incremental interest rate hikes which don't target the housing market specifically. The Value of a Good TenantMany of the mom and pop investors we work with at RealWealth know the value of a good tenant and the results of fair rent levels. Although rent increases are often necessary for a rental business to remain in operation, it's not wise or even ethical to impose unrealistically high rents on tenants. We just put together a Conscious Capitalism statement at RealWealth that addresses that issue. Conscious Capitalism refers to a socially responsible economic and political philosophy. At RealWealth, we believe that landlords need to be sensitive to tenant needs, and that above market rent increases do not show sensitivity.They can also lead to highly restrictive rent controls which is what this coalition would like to see at the federal level. If you are a landlord, or even a tenant, you must know that rent control is bad for everyone because it limits what landlords can do to maintain their properties for the tenants' wellbeing. And it discourages landlords from wanting to remain in business, which is bad for the housing supply.As RealWealth Investment Counselor, Joe Torre, said in our Conscious Capitalism statement: “If you try to squeeze every last dollar of rent from them, the good tenants will leave, and you'll be stuck with the tenants who don't have any other options.You'll find a link to the Washington Post article, and the Home Guarantee website in the show notes at newsforinvestors.com. If you'd like to learn more about owning single-family rentals, please hit the join link at the website. And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.washingtonpost.com/business/2022/08/09/rent-inflation-biden/2 -https://peoplesaction.org/wp-content/uploads/2022/08/Federal-Actions-to-Regulate-Rents_V3a.pdf

Real Estate News: Real Estate Investing Podcast
The Real Estate News Brief: Fed Chief's Jackson Hole Message, Inflation Dips in July, Hot Market Regrets for Homebuyers

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Aug 31, 2022 7:13


In this Real Estate News Brief for the week ending August 27th, 2022... the Fed Chief's Jackson Hole message on rate hikes, the July dip in inflation, and why some home buyers say they have regrets. 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. https://podcasts.apple.com/us/podcast/real-estate-news-real-estate-investing-podcast/id1079952715Economic NewsWe begin with economic news from this past week. Federal Reserve Chief Jerome Powell shook things up with some hawkish remarks in a speech at Jackson Hole. His comments triggered a major stock market sell-off with the Dow dropping more than 1,000 points.Powell's speech focused on the central bank's responsibility and resolve to get inflation back down to the 2% level. He said that could include another three-quarter point rate hike at the Fed's September meeting, but Powell said the size of the rate hike will depend on all the totality of the data between now and then. (1)He also warned that households and businesses will feel some pain because of higher interest rates, slower growth, and softer labor market conditions, but doubled down on the need to continue with tight monetary policy for an extended length of time. Some economists believe that means “no” rate cuts in 2023, even if inflation has settled back down. The Federal Funds rate is currently between 2.25% and 2.5% which Powell calls “neutral.” The Fed committee is expecting that rate hikes will bring it close to the 4% level, and it will remain there through the end of next year. But he says the Committee may offer a new prediction at the upcoming September meeting.Powell's speech came just after the latest report on the PCE or personal consumption expenditures index. That's the central bank's preferred gauge for inflation. The report shows inflation was down .1% in July, mostly due to lower gas prices. That brings the annual PCE down from 6.8% to 6.3%. (2) Powell responded to the report saying: “A single month's improvement falls far short of what the Committee will need to see before we are confident that inflation is moving down.”Meantime, the government issued an update on the second quarter GDP. It had initially said the economy contracted .9% but the revision shows it shrank .6%. The main reason for the upward revision is that consumer spending and business investment was stronger than previously reported. Business profits were also positive, after a decline in the first quarter. As MarketWatch reports, they were up 6.1% in Q2. That's good news because when companies are profitable, there's little incentive for layoffs. (3)The weekly jobless report also shows that layoffs remain near record lows. New jobless claims were down to a one-month low of 243,000. They've been as low as 166,000 in March, which is the second-lowest level ever. The summer high point was 261,000, but they've been edging lower since then.Moving on to home sales and the housing market slowdown. New home sales were down in July to their lowest level since January 2016. They fell 12.6% from an annual rate of 585,000 in June to 511,000 in July. Year-over-year, sales are down 29.6%. (4) Although that sounds bad, the housing market has been way too hot for quite some time. The slowdown will help slow home price growth, and bring the market back toward normal. Existing home sales are also down. The National Association of Realtors reports that they fell 1% in July compared to June. But that's less than the 3% drop that analysts polled by the Wall Street Journal had expected. Year-over-year, existing home sales are down 19.9%. NAR's chief economist Lawrence Yun says: “In terms of the current housing cycle, we may be at or close to the bottom in contract signings.” He says the smaller than expected drop is likely reflecting the stabilization of mortgage rates. (5)Mortgage RatesMortgage rates had been bouncing around a bit near the 5% mark, but this last week, they shot up closer to 6%, which may not sound like they are stabilizing. Freddie Mac says the average 30-year fixed-rate mortgage was 42 basis points higher to a rate of 5.55%. The 15-year was up 30 points to 4.85%. (6) NAR economist, Nadia Evangelou, says that higher mortgage rates are hurting buyers more than higher home prices. She says a one percent increase in the mortgage rate is like a 13% increase in home price. (7)In other news making headlines…Homebuyer RegretsThe sizzling hot housing market we've seen in the last couple of years had resulted in a high number of remorseful homebuyers. A survey by Clever Real Estate shows that 72% of buyers have regrets about what they purchased. Of those remorseful buyers, 66% were millennial first-time buyers who were in a rush to settle down and raise a family.About 1,000 people participated in the survey and had bought a home in either 2021 or 2022. 88% of those people said they were up against stiff competition which had an impact on their buying strategy. Many buyers said they increased their budget, sped up their plans to buy a home, expanded their search area, and even decreased the size of the home they wanted, in order to close on a deal. Some said they delayed their plans to purchase.The biggest reason for their regrets is having spent too much money. 1 in 3 buyers paid more than asking price. More than half the buyers bought a fixer-upper and about 1 in 4 regret it. There's a lot of data in this survey. If you'd like to see the full report, you'll find a link in the show notes at newsforinvestors.com.That's it for today. Please remember to hit the subscribe button, and leave a review!If you'd like to find rental properties that will help you build long-term wealth, please hit the “join” button at our website. As a member, you have access to the Investor Portal where you can view sample properties and connect with our network of resources. We can put you in touch with property teams, lenders, 1031 exchange facilitators, attorneys, CPAs, and of course, our experienced investment counselors.Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/feds-powell-in-blunt-remarks-at-jackson-hole-says-bringing-down-inflation-will-cause-pain-to-households-and-businesses-11661522428?mod=federal-reserve2 -https://www.cnbc.com/2022/08/26/feds-preferred-inflation-measure-shows-price-pressures-eased-in-july.html3 -https://www.marketwatch.com/story/gdp-contracted-at-0-6-annual-pace-in-the-spring-11661431779?mod=inflation&mod=article_inline4 -https://www.marketwatch.com/story/u-s-new-home-sales-fall-in-july-the-lowest-level-since-january-2016-11661263938?mod=economy-politics5 -https://www.marketwatch.com/story/u-s-pending-home-sales-slip-again-in-july-11661349838?mod=economic-report6 -https://www.freddiemac.com/pmms7 -https://magazine.realtor/daily-news/2022/08/25/economist-mortgage-rates-hurt-buyers-more-than-home-prices8 -https://anytimeestimate.com/research/american-home-buyers-2022/

Real Estate News: Real Estate Investing Podcast
Big Squeeze on Buildable Lots for New Homes

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Aug 24, 2022 3:09


Buildable lots have been in short supply this year, but data from one real estate company expects that to improve next year. Zonda's New Home Lot Supply Index shows the year-over-year supply has decreased across the U.S. As of Q2, it was down 9.3%, but it doesn't take into account lots under development, which are up substantially compared to last 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. Zonda's chief economist, Ali Wolf, says: “While vacant developed lot inventory tightened slightly in the second quarter, the key number to track going forward is lots under development, which are up 28% compared to last year.” (1)10% Year-Over-Year DeclineThe New Home Lot Supply Index came in at 38 for the second quarter, which represents a 2.2% decline from the first quarter and a 9.3% decline from the second quarter of last year. Zonda says that “nationally, the 2022 data reflects a significantly undersupplied market” and that most major metropolitan areas are experiencing this tight supply.The report says that almost all the top major markets are “significantly undersupplied.” The three areas where lot supply has declined the most on a year-over-year basis are in Jacksonville, Florida; Miami, and Denver. Jacksonville and Miami are also among the three with the tightest lot supply right now. San Diego is the third metro with the lowest inventory.Areas where the lot supply grew the most from Q1 to Q2 include Los Angeles and Orange County at 17%. Boise, Idaho, was also up 15%.Expected Rise in Lot Supply Next YearFinding buildable lots should be easier in 2023 because of the big increase in lot development. Zonda says that 71% of the upcoming lots are in the excavation stage and should be available for development in the first half of next year. Over the last few years, homebuilding activity has been impacted by labor and materials shortages, along with a tight inventory of buildable lots. Now that more lots are in the pipeline, it appears that home buyer demand could impact the pace of residential construction.According to Wolf: “The housing market was moving a mile a minute heading into 2022.” She says: “What we've seen is that consumers have responded to higher home prices and mortgage rates by slowing demand. Housing starts are tied to housing demand, and 87% of the builders surveyed by Zonda anticipate slowing new construction in response to the shifting market.You'll find a link to Zonda's report on lot inventory in the show notes at newsforinvestors.com.Please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.prweb.com/releases/new_home_lot_inventory_remains_tight_in_2q22_zonda_reports/prweb18839151.htm

Real Estate Strategies with Ken McElroy
The harsh truth...they want you poor.

Real Estate Strategies with Ken McElroy

Play Episode Listen Later Aug 23, 2022 50:57 Transcription Available Very Popular


Join Ken and Danille live as they talk about updates to the real estate market and its impact on the US economy. The topic for this live stream is the harsh truth...they want you poor.  Sign up for Monday's Happy Hour with Kathy Fettke by joining Ken's Inner Circle: https://kensinnercircle.com  The two videos Ken mentioned in this episode are linked below. Podcast - Capital Fund One Link - https://youtu.be/e3cdv0ceB_o Podcast - Airbnb Arbitrage Link - https://youtu.be/0zK25SGUwF8 43:56  •  ABOUT KEN: Ken is the author of the bestselling books The ABC's of Real Estate Investing, The Advanced Guide to Real Estate Investing, The ABC's of Property Management, and has an upcoming book: "ABCs of Buying Rental Property: How You Can Achieve Financial Freedom in Five Years." Ken is a Rich Dad Advisor.        Ken offers a wealth of personal experiences, practical advice, success stories, and even some informative setbacks, all presented here to educate and inspire. Whether you're a new or seasoned investor, the information and resources on this channel will set you on a path where you and your investments can thrive.   Ken's company: https://mccompanies.com/  •    DISCLAIMERS: Any information or advice available on this channel is intended for educational and general guidance only. Ken McElroy and KenMcElroy.com, LLC shall not be liable for any direct, incidental, consequential, indirect, or punitive damages arising out of access to or use of any of the content available on this channel. Consult a financial advisor or other wealth management professional before you make investments of any kind. Although Ken McElroy and his affiliates take all reasonable care to ensure that the contents of this channel are accurate and up-to-date, all information contained on it is provided ‘as is.' Ken McElroy makes no warranties or representations of any kind concerning the accuracy or suitability of the information contained on this channel.    Any links to other websites are provided only as a convenience and KenMcElroy.com, LLC encourages you to read the privacy statements of any third-party websites. All comments will be reviewed by the KenMcElroy.com staff and may be deleted if deemed inappropriate. Comments which are off-topic, offensive or promotional will not be posted. The comments/posts are from members of the public and do not necessarily reflect the views of Ken McElroy and his affiliates.     2022 KenMcElroy.com, LLC. All Rights Reserved.   #kenmcelroy #LiveStream #realestateinvesting

Real Estate News: Real Estate Investing Podcast
The Real Estate News Brief: Home Sales Plunge, Rent Increase Impact, Airbnb's Party Ban

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Aug 23, 2022 6:00


In this Real Estate News Brief for the week ending August 20th, 2022... a big plunge in home sales, rent increase impact on tenants, and Airbnb's new anti-party technology.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. https://podcasts.apple.com/us/podcast/real-estate-news-real-estate-investing-podcast/id1079952715Economic NewsWe begin with economic news from this past week, and a big drop in residential construction activity. The Commerce Department says that housing starts were down 9.6% year-over-year in July to their lowest level since early last year. Building permits also fell in July. They were down 1.3% compared to June. (1) HousingWire Data Analyst, Logan Mohtashami, says that homebuilders are pulling back until mortgage rates fall and home-buying activity picks up again. (2)One reason that home builders are pulling back is the cancellation rate among buyers. A survey by John Burns Real Estate Consulting shows that the cancellation rate has more than doubled since April to 17.6% in July. The firm's data also shows a 16% cancellation rate for existing home sales or about 63,000 deals that fell through. (3) Some of the highest cancellation rates are in Florida along with Las Vegas and San Antonio.Why the high cancellation rate? As CNBC reports, there are two main reasons. One is that some buyers no longer qualify for a loan with a higher interest rate. The second is that homebuyers are worried about inflation and the possibility that home values might drop so they are simply walking away from their deals. The situation has rattled home builder confidence. The National Association of Homebuilders monthly confidence index dropped below 50 in August, which is the midpoint between negative and positive sentiment. The last time it fell below 50 was at the beginning of the pandemic. One year ago, it was 75. (4) Homebuilders are describing the situation as a “housing recession.” Existing home sales were also down again, for a sixth straight month. The National Association of Realtors says that sales fell 5.9% in July to a seasonally adjusted annual rate of 4.81 million. If you exclude the pandemic, that's the weakest sales activity since November 2015. Although inventory was up 4.8%, there's still just a 3.3 month supply of homes, and with an average 14 days on the market. (5)The job market remains stable. Initial jobless claims were down a few thousand to a total of 250,000. Economists say the economy has slowed down because of rising interest rates, but there's no surge in lay-offs because the economy is still growing, and companies want to hold on to their employees.. (6) Mortgage RatesMortgage rates dipped a little. Freddie Mac says the average 30-year fixed-rate mortgage was down nine basis points to 5.13% The 15-year was down 4 points to 4.55%. (7)In other news making headlines...Building Material Prices Move HigherThe cost of building materials moved higher in July led by a surge in concrete prices. The National Association of Home Builders says that building materials were up .4%, while concrete prices shot up 2.5%. (8)The NAHB says that ready-mix concrete prices have gone up in 17 of the last 18 months and now costs about 35% more than it did before the pandemic. That's similar to the total price increase for all building materials combined during the same time period.Rent Increase Impact on TenantsInflation is making it difficult for tenants to keep up with their rent payments. Freddie Mac conducted a survey that shows almost all of them have been impacted by higher prices, and that 60% of them have experienced a rent increase in the past year. 40% of those tenants say they are somewhat likely to miss a rent payment while 20% say they are extremely likely to miss a payment. (9)The survey also asked about the size of the rent increases. About a quarter of the survey participants said that rent went up 10% or less. 15% said it went up 10% or more. 11% said rents were more than 20% higher. 6% said the increase was more than 30%.Airbnb's New U.S. Anti-Party TechnologyAirbnb has launched new anti-party tools in the U.S. and Canada. The tools will help identify users who appear to be organizing a party. The technology will look for red flags including any negative reviews on Airbnb, whether the user is local, the length of the reservation, and whether it's a weekend or a weekday. (10)Airbnb has been testing these tools in Australia since October of last year, and has found that they are very effective. The company says there was a 35% drop in unauthorized parties while the pilot program was in effect. The company says this new system is more robust than the “under-25 system” that is currently in place in the U.S. That program is mostly focused on people under the age of 25 without any positive reviews and are booking an Airbnb locally, indicating a possible desire to hold a party with their friends. That's it for today. If you'd like to read more about any of these topics, check the show notes (below) for links at newsforinvestors.com. And please remember to hit the subscribe button, and leave a review!If you haven't yet joined RealWealth, please sign up. It's free and will give you access to our members-only Investor Portal where you'll find data on specific markets, the property teams that we work with, and other resources. Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.census.gov/construction/nrc/pdf/newresconst.pdf2 -https://www.housingwire.com/articles/homebuilders-are-done-until-mortgage-rates-fall/3 -https://www.cnbc.com/2022/08/16/homebuyers-are-backing-out-of-more-deals-as-recession-fears-linger.html4 -https://www.marketwatch.com/story/home-builders-see-housing-recession-as-builder-sentiment-index-drops-further-in-august-11660572142?mod=economic-report5 -https://www.marketwatch.com/story/july-existing-home-sales-fall-for-the-sixth-straight-month-realtors-see-housing-recession-11660831837?mod=economic-report6 -https://www.marketwatch.com/story/jobless-claims-fall-to-250-000-and-signal-labor-market-is-still-strong-11660826638?mod=economic-report7 -https://www.freddiemac.com/pmms8 -https://eyeonhousing.org/2022/08/building-materials-prices-increase-in-june-as-concrete-surges/9 -https://www.multihousingnews.com/60-of-residents-saw-rent-increases-freddie-mac/10 -https://news.airbnb.com/airbnb-introduces-new-anti-party-technology-in-us-and-canada/

On The Market
28: Inflation Falls, Inventory Drops, and Why is Multifamily Such a Mess?

On The Market

Play Episode Listen Later Aug 22, 2022 51:12 Very Popular


Single-family vs. multifamily investing. We can go on this debate for days. Small-time investors favor single-family rentals due to their low barrier to entry and ease of management. Big players and passive investors far prefer multifamily thanks to its scale and ability to bring in some serious cash flow. But, it seems that many multifamily investors have lost their way. For the past two years, buying almost any multifamily property was considered a good investment, but now things are starting to shift.Today we bring you two separate deals, one from Henry Washington and the other from Kathy Fettke. One is a single-family flip, and the other is a “passive” multifamily buy-and-hold. You'll hear why one of these deals got ditched while the other should fetch a handsome return. This top-level analysis can help you debate future deals, as some properties look far better on paper than in real life.We'll also touch on the latest inflation news and an update on housing market inventory. One story shows some hope of the economy recovering, while the other could spell troubling times for investors coming up ahead. In the “News vs. Noise” section, you'll hear exactly why a housing market crash may be delayed a bit longer and how more money could be pumped back into the economy, stimulating sales and boosting buyer activity.In This Episode We CoverDeep dives into two live deals that Henry and Kathy have been presented withThe latest inflation numbers and some promising signs of real economic growthWhy home listings dropped by double-digit percentages and how this will affect the housing marketReal estate syndications and how past successes are putting today's deals in jeopardyAggressive underwriting and why every passive investor MUST vet the deal before they invest1031 funds and using Delaware statutory trusts (DSTs) to limit your tax burden The tell-tale signs of a great rental market in 2022's changing economyAnd So Much More!Links from the ShowBiggerPockets ForumsBiggerPockets AgentJoin BiggerPockets for FREEOn The MarketJoin the Future of Real Estate Investing with FundriseConnect with Other Investors in the “On The Market” ForumsSubscribe to The “On The Market” YouTube ChannelFind an Investor Friendly Agent in Your AreaDave's BiggerPockets ProfileDave's InstagramHenry's BiggerPockets ProfileHenry's InstagramJames' BiggerPockets ProfileJames' InstagramJamil's BiggerPockets ProfileJamil's InstagramKathy's BiggerPockets ProfileKathy's InstagramOur Last Episode on Finding the Perfect Property MarketRedfin Reports Newly-Listed Homes Fall Most Since 2020Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-28Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Real Estate News: Real Estate Investing Podcast
The Real Estate News Brief: Surprise Inflation Report, Mortgage Rate Prediction, Housing Crisis Solution

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Aug 18, 2022 5:11


In this Real Estate News Brief for the week ending August 13, 2022… a surprise inflation report, how that might impact mortgage rates, and a solution for the housing crisis involving women and immigrants.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 report on the Consumer Price Index, or CPI, shows a bigger-than-expected decline in July. According to the Labor Department, the annual rate of inflation dropped from 9.1% to 8.5%. Economists surveyed by Dow Jones had expected a reading of 8.7%. The decrease was mostly due to a big drop in gas prices. The core rate, which omits prices for fuel and food, was also better than expected at 5.9%. (1)Producer prices also put on the brakes in July. That index was down .5% after a 1% jump in June. As reported by Market Watch, it's the first drop in producer prices since April of 2020. (2)Jobless claims were up by about 14,000 to a total of 262,000 new claims for the week. There's been a slow increase in applications as the Fed tightens its monetary policy and companies tighten their belts, slightly. Stuart Hoffman at PNC Financial told CNBC: “The rise in initial claims since early April is a cool breeze blowing over a hot labor market.” Continuing claims also rose to a total of about 1.43 million. (3)Consumers are feeling a little better about the economy because of falling gas prices. The University of Michigan's Consumer Sentiment Index was up four points to 55.1 in August. MarketWatch reports that lower gas prices have put consumers in a better mood but they are still concerned about the cost of things like food and rent. (4)Mortgage RatesMortgage rates also jumped back over 5% last week. Freddie Mac says the average 30-year fixed-rate mortgage rose 21 basis points to 5.22%. The 15-year was 4.59%.Freddie says: “Although rates continue to fluctuate, recent data suggests that the housing market is stabilizing as it transitions from a surge of activity during the pandemic to a more balanced market.” (5)In other news making headlines…NAR: Mortgage Rates May Have Topped OutThe latest inflation reports have led some economists to believe that we won't see mortgages go much higher than they are now. The Chief Economist for the National Association of Realtors, Lawrence Yun, believes that the worst of the situation is now behind us. (6)He said in a realtor.com blog: “If there is a sustained decline in gasoline prices and more production of apartments and single-family homes, consumer prices will pull back, encouraging the Federal Reserve policy to be less aggressive.” And that: “Mortgage rates will fall.”Auction.com: Foreclosure Spike ExpectedForeclosure activity is expected to increase over the next 12 months, as pandemic-related protections expire for seriously delinquent homeowners. The information comes from a survey by Auction.com with dozens of clients. (7)The survey shows that nine in 10 mortgage servicers are expecting more foreclosures. 74% expect a “slight increase” while 15% expect a “substantial increase.”The expected foreclosure rate is below historical averages nationwide but some clients expect 30% or more of their delinquent inventory to end up in foreclosure. The survey shows that the loans most likely to foreclose are government-insured loans and properties in the Midwest.Women & Immigrants to the Rescue!Getting more women and immigrants interested in the construction industry could help solve the housing crisis. Home builders have been dealing with a severe labor shortage, and a Harvard researcher told members of Congress recently, that the industry could expand its workforce by promoting the industry to women and immigrants. (8)Harvard's Christopher Herbert says the industry is “overwhelmingly male” and needs more women on the job. He also pointed out that 20 years ago “we built two million homes a year… and a lot of that was through immigration.” Currently, about 25% of workers are immigrants although some states, like California and Texas, have a much higher percentage. About 11% of construction workers are women.That's it for today. If you'd like to read more about any of these topics, check the show notes (below) for links at newsforinvestors.com. And please remember to hit the subscribe button, and leave a review!If you haven't yet joined RealWealth, please sign up. It's free and will give you access to our members-only Investor Portal where you'll find data on specific markets, the property teams that we work with, and other resources. Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/coming-up-u-s-july-cpi-data-due-at-8-30-am-eastern-11660132986?mod=mw_latestnews2 -https://www.marketwatch.com/story/u-s-producer-prices-moderate-in-july-11660221842?mod=bnbh_mwarticle3 -https://www.marketwatch.com/story/u-s-jobless-claims-move-higher-in-latest-week-continuing-recent-trend-11660222483?mod=economic-report4 -https://www.marketwatch.com/story/falling-gas-prices-buoy-consumer-sentiment-temper-inflation-expectations-11660313127?mod=newsviewer_click5 -https://www.freddiemac.com/pmms6 -https://magazine.realtor/daily-news/2022/08/11/yun-slowing-inflation-suggests-mortgage-rates-have-topped-out7 -https://www.housingwire.com/articles/expect-a-foreclosure-spike-in-the-coming-months/8 -https://www.marketwatch.com/story/the-solution-to-the-labor-shortage-in-construction-more-women-and-immigrants-says-harvard-researcher-11657823746?mod=real-estate-construction

Real Estate News: Real Estate Investing Podcast
Construction of New Homes Stalls in July

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Aug 17, 2022 2:47


New home construction plunged in July, according to the Commerce Department. The reports shows that housing starts fell 9.1% in July to a seasonally adjusted annual rate of 1.45 million. That's down from a revised 1.6 million in June, and the lowest level of new home construction since the start of the pandemic in 2020. (1)I'm Kathy Fettke.Single-family construction was down even more, at 10.1%. Permits for new homes were also down 1.3%. But the regional numbers are wildly different, with the Northeast seeing a 65.6% increase in total housing starts. The other three regions account for the big drop.Builders say more homebuyers are canceling contracts because of high prices for homes, mortgages, and the cost of living in general. One in five says they have reduced their home prices in the past month to limit contract cancellations.The Commerce Department says the average cost to build a home has gone up almost 38% since January of 2020. That, along with rising mortgage rates, and supply-chain issues that cost both time and money, are discouraging many homebuyers.The National Association of Home Builders Chairman Jerry Konter describes the current market as a “housing recession.” But Chief Economist for the National Association of Realtors, Lawrence Yun, says there is a silver lining. With inflation showing signs of a peak, and mortgage rates potentially stabilizing around 5%, he expects renewed buyer activity – especially given the demand for housing and the shortage of homes. (2)Yun says: “Homebuilders are naturally very cautious about rising unsold inventory during the construction phase. But those completed homes are finding buyers within three months.”He also sees less uncertainty in the housing market as supply chain issues ease up for things like lumber and appliances. Rapidly rising rents are also providing strong incentives for the construction of rental housing. You'll find a link to the Commerce Department report in the show notes at newsforinvestors.com.Please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke.Links:1 - https://www.census.gov/construction/nrc/pdf/newresconst.pdf2 - https://magazine.realtor/daily-news/2022/08/16/builders-concerned-about-sudden-pullback-in-new-home-market

Real Estate News: Real Estate Investing Podcast
CubiCasa Announces Free Floor Plan Creation Tool

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Aug 17, 2022 4:51


A Finnish company is hoping to give U.S. home buyers something they've been craving! Real estate software company CubiCasa just launched a product in the U.S. that produces a FREE floor plan that sellers can put into for-sale listings. According to the National Association of Realtors, it's something that just 10 to 15% of U.S. listings include right now, but it's third on a list of desirable listing features!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.Clear Capital purchased CubiCasa last September, so it's now a subsidiary of Clear Capital, but it operates independently. CubiCasa says on its website that it's the market leader for this kind of software in its home country, and is already being used in more than 170 countries around the world. With its introduction into the U.S., it says it's one of the major players here and will help revolutionize the home-buying experience. (1) Market Properties More Effectively with Floor PlansThe president of CubiCasa, Jeff Allen, says: “By offering a free version of our mobile scanning technology in the U.S., we're helping potential buyers make more informed decisions, while empowering agents and sellers to market their properties more effectively.” He also says: “It's time the U.S. caught up” with the rest of the world. (2)CubiCasa says it has already provided more than one million floor plans to homeowners and sellers internationally. It operates with the use of an app on your smartphone. After putting in your location, you point the camera towards the lower part of the walls where they intersect with the floor, and record the layout as you walk around the home.There are specific instructions for doing it properly, such as how you hold the camera, what part of the interior you should be recording, and how you should walk in and out of spaces. After you are done collecting all the visual information, the sketching technology takes about 24 hours to produce a finished floor plan.You can also pay a small amount to have additional features incorporated into the floor plan, such as kitchen cabinets, bathroom features, furniture and appliances. If you want your floor plan produced more quickly, it costs an extra $10 to get it within six hours.Do Floor Plans Violate an Architect's Copyright?CubiCasa says the app will accurately calculate the square footage of a home, and that this will improve the quality of property data and inspection reports. Although floor plans are quite common in real estate markets around the world, they've been more of a niche market here. And there has been some question about potential copyright violations.In Missouri, the architects at Designworks Homes sued Columbia House of Brokers Realty over the use of floor plans in listings. The case evolved from the listing of a home in 2010 and a floor plan produced by the sellers. When the architects discovered the use of the floor plan, they sued for copyright infringement.Last year, they won their case in a lower court, but the Realty appealed to the Supreme Court. NAR also filed an amicus brief in support of the Realty, arguing that the ruling misrepresents federal law, puts decades of a legal precedent at risk, eliminates a long-standing practice in the real estate market, and makes many homeowners vulnerable to lawsuits if they have used floor plans to sell their homes in the past. (3)Supreme Court Rejects Floor Plan CaseThe Supreme Court declined to review the case however, saying the two sides have not presented compelling reasons to do so. But more recently, the Seventh Circuit ruled against the same architectural company in another lawsuit. It affirmed a lower court's ruling against the plaintiff saying that a floor plan must be “virtually identical” to the architect's drawing to be considered a violation of the copyright.NAR says that “many homebuyers rely on floor plans in real estate to decide whether to purchase a residence, and their ability to secure financing for that transaction is often contingent on an appraisal that requires the reaction of a floor plan.” (4) Homeowners also make floor plans to help them decide on where they want furniture or how they want to renovate a home. Plus, many jurisdictions also want to see a floor plan before they approve a renovation project.The legal dust-up has apparently settled enough so that CubiCasa feels confident about launching in the U.S. If you want to check it out, you'll find links in the show notes at newsforinvestors.com.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links: 1 -https://www.cubi.casa/about/2 -https://www.housingwire.com/articles/this-app-lets-homeowners-generate-floor-plans-of-their-homes-for-free/3 -https://www.nar.realtor/newsroom/nar-asks-supreme-court-to-protect-consumers-from-lawsuits-when-making-floor-plans-of-their-homes4 -https://www.nar.realtor/newsroom/nar-asks-supreme-court-to-protect-consumers-from-lawsuits-when-making-floor-plans-of-their-homes

Real Estate News: Real Estate Investing Podcast
Highlights: 2022 Housing Report from JCHS

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Aug 12, 2022 5:35


Housing costs have surged over the last year or so, but a new report shows that demand is still strong due to several factors, and that pricing pressures may ease up in the months ahead. The Joint Center for Housing Studies at Harvard University just released its annual State of the Nation's Housing report, and I'd like to share some of the highlights.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.Home Price AppreciationNationwide home price appreciation hit 20.6% in March of this year. That's up from 20% in August of last year. The data shows record-high appreciation in 67 of the top 100 markets, and the rest were also up by at least 9%. Harvard researchers say higher home prices are keeping about 4 million renters from buying their own homes, and that increases demand for rental housing. (1)Those who can qualify for a home often can't find one in their price range. They are also competing with investors who have increased their share of moderately-priced homes. Single-Family Investor SalesResearchers say investors have moved aggressively into the single-family rental market and account for 28% of the SFR homes sold in the first quarter of this year. That's up from 19% in the first quarter of last year. From 2017 to 2019, the average was about 17%.Investors have been focusing on markets with rapid price appreciation. In Atlanta, the investor share of home sales was 41% in the fourth quarter of last year. In San Jose, California, it was 38%. In Phoenix, 36%, and in Los Angeles, 34%.Demand & Rent GrowthAs demand rose for rentals, so did rents. The report shows they were up 12% nationally in the first quarter. Rent growth was more than 20% in several metros. The hottest markets were in the South and West, but some coastal areas saw big gains because rents had fallen so much during the pandemic. Single-family rents have gone up faster than apartments mostly due to demand. That's the result of remote workers who want more space at home. CoreLogic shows that year-over-year rents were up 15% nationally as of March. The biggest gains were in Miami at 39% and Cape Coral at 28%, but Phoenix and San Diego were also mentioned with rent growth of 18 and 17% respectively.Strong Household FormationStrong household formation is contributing to increased demand and higher housing costs. From Q1 of 2020 to Q1 of 2022, new households were forming at an annual rate of 1.6 million. Harvard researchers had predicted an increase of 1.2 million annually from 2018 through 2028, so the current rate of increase is well above the expected amount.Much of the growth is due to millennials making up for previous delays in household formation.Government stimulus during the pandemic and the economic rebound last year also gave many young adults the means to pay for housing. But researchers are also predicting a new slowdown in household formation as the money situation tightens to control inflation. New household formation has raised the homeownership rate .1% to 65.4%.Residential ConstructionThe pace of residential construction is finally picking up. It has been trailing behind household growth for many years, but in 2021, single-family starts hit 1.1 million. That's the first time it's been above 1 million in 13 years. Multifamily starts are also up. They hit 470,000 which is a 30-year high.The big issue for builders has been all the supply chain disruptions. In April of this year, 1.64 million homes were under construction with delayed completion dates due to the supply chain hold-ups. The labor shortage and local land use regulations have also made it difficult for builders. Affordability Crisis & OutlookThe affordability crisis has continued to get worse for both homeowners and renters. In 2020, 30% of households were cost-burdened, meaning they were paying more than 30% of their income on housing. 14% were severely burdened. The figures are worse for renters. 46% were hard-pressed to pay their rent, and 24% were severely burdened. And now, inflation is making things worse.Although low-income families will continue to struggle with housing costs in the near term, the report says the outlook for overall housing demand is mostly positive. A lot depends on whether the Federal Reserve can control inflation, but Harvard researchers say that demographic shifts are favorable, unemployment is low, and wage growth is strong – which all contribute to a positive outlook.You'll find a link to the full report in the show notes for this episode at newsforinvestors.com.Please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1. https://www.jchs.harvard.edu/blog/across-nation-rising-prices-and-increased-interest-rates-limit-access-homeownership

Invest Like a Billionaire - The alternative investments & strategies billionaires use to grow wealth
45. Finding Opportunities in Residential Real Estate feat. Kathy Fettke

Invest Like a Billionaire - The alternative investments & strategies billionaires use to grow wealth

Play Episode Listen Later Aug 11, 2022 45:22


The financial world is changing, and with it comes a lot of uncertainty for investors. But one thing that won't change? The need to maintain your wealth through diversification. In this week's episode, Ben Fraser and Bob Fraser together with Kathy Fettke from RealWealth discuss the potential for damage in the real estate market as a result of inflation and rising interest rates, as well as the importance of diversification when it comes to investing in real estate. Whether you're a novice investor or a seasoned pro, this episode is sure to provide valuable insights. Love the show? Subscribe, rate, review, and share! TheBillionairePodcast.com Read transcription and show notes - https://aspenfunds.us/podcast/finding-opportunities-in-residential-real-estate---feat-kathy-fettke/ Listen on any podcast platform - https://anchor.fm/invest-like-a-billionaire Learn more about Aspen Funds - https://aspenfunds.us/

Real Estate News: Real Estate Investing Podcast
Quick News Update: Inflation Report Surprise

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Aug 10, 2022 2:31


We have a quick news update on today's inflation report. Investors have been waiting anxiously to see if inflation hit a peak in June and is now headed down, prompting the Fed to slow down on rate hikes. Well, we have good news. The report on the Consumer Price Index, or CPI, shows a bigger-than-expected decline in July. It shows that the annual rate of inflation dropped from 9.1% to 8.5%. Economists surveyed by Dow Jones had expected a reading of 8.7%.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 decrease was mostly due to a big drop in gas prices. The report says the gasoline index was down 7.7% which offset a rise in food and housing costs. When you look at the broader category of energy, that was down 4.6% because of a drop in gasoline and natural gas prices, but the index for electricity was higher. (1)The core rate of inflation, which excludes food and fuel, remained the same as it was in June at 5.9%, but that was a better reading than economists had expected. Shelter accounts for about 40% of the core rate and that was up 5.7% on an annual basis.Economists and stock traders had been predicting another .75% rate hike in September to help control inflation. But as CNBC reports, they now believe there's a better chance for just a half point rate hike. (2) Louis Navellier said in his podcast that he believes it could be a 75 basis rate hike still, but that it will most likely be the last one because it's rare to see rate hikes before an election. If that's the case, he's expecting a big stock market rally after September 21st.The Chief Economist at Jeffries, Aneta Markowska, told CNBC: “Things are moving in the right direction. This is the most encouraging report we've had in quite some time.” She also agrees that it will take some pressure off Federal Reserve officials at their next meeting.You'll find a link to the full report in the show notes at newsforinvestors.com.Please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.bls.gov/news.release/cpi.nr0.htm2 -https://www.cnbc.com/2022/08/10/consumer-prices-rose-8point5percent-in-july-less-than-expected-as-inflation-pressures-ease-a-bit.html

Real Estate News: Real Estate Investing Podcast
The Real Estate News Brief: Fed's Next Move, Mortgage Rate Rollback, Single-Family Rent Growth

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Aug 10, 2022 8:44


In this Real Estate News Brief for the week ending August 6th, 2022... the Fed's next move, a mortgage rate rollback for home buyers, and a new all-time high for single-family rents.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. Federal Reserve policymakers say they are “nowhere near” the end of their fight against inflation. Four Fed Presidents spoke out on Tuesday, August 2nd, about their resolve to get inflation back down to 2%. San Francisco Fed Chief Mary Daly said that she is currently seeing a 50 basis point rate hike as appropriate in September, but she says: “If we just see inflation roaring ahead undauntedly, the labor market showing no signs of slowing, then we'll be in a different position where a 75-basis-point increase might be more appropriate.” Comments from the other three Fed Presidents were similar. (1)And then there was a screamingly strong jobs report a few days later. The Bureau of Labor Statistics reported on Friday that hiring in July exceeded expectations. Nonfarm payrolls were up 528,000, and the unemployment rate dipped lower, to 3.5%. To put this in perspective, in the years leading up to 2020 when the economy was robust, job creation was closer to 195,000 per month on average.The unemployment rate is now back to its pre-pandemic level. As reported by MarketWatch, it's tied for the lowest level since 1969. (2) Some economists see the strong jobs report as signs that the Federal Reserve will lean toward a more aggressive rate hike in September. KPMG Chief Economist Diane Swonk said in a CNBC report: “This is hot. For the Fed, this is another 75 basis point hike.” (3)The unemployment report shows a slightly elevated level of new claims. During the last week of July, 260,000 people applied for benefits which is an increase of 6,000 from the week before. The number of continuing claims was also higher by about 48,000. That brings the total number of continuing claims up to about 1.42 million, which is the highest level since April. (4)A new report on home price growth shows that year-over-year prices were up 18.2% in June. On a month-to-month basis, the CoreLogic report says they were up .6% for the 125th consecutive month of higher prices. This is more inflationary news that may convince the Fed to be more aggressive with rate future hikes. However, the report does shows that price growth is slowing down. CoreLogic expects it to drop to 4.3% by next June. (5)Higher home prices also increase homeowner equity. CoreLogic says the average borrower had $280,000 in home equity at the end of the first quarter. That's a gain of about $64,000 over the past year, and a gain of about $125,000 over five years. (6) Those folks expecting a housing crash will have to consider why homeowners with so much equity and low fixed rate mortgage payments would suddenly abandon their homes. Higher home prices are slowing sales, and that's driving up inventory levels, but they are still nowhere they need to be. According to Realtor.com, active listings are about 30% higher than they were a year ago but are less than half of what they were in June of 2019 and about two-thirds of where they were in June of 2020. The good news is that homebuyers have a few more homes to choose from and a little extra time to make a decision, but only a little extra time. The Realtor.com trends report says that homes are spending just ONE extra day on the market compared to last year.(7)New home builders are also experiencing a sales slowdown and higher inventory levels. According to the Federal Reserve Bank of St. Louis, there are more than nine months supply of newly-built homes on the market. However, it can be difficult to gauge new home inventory because many of those homes are experiencing construction delays and not sales delays. (8)Another sign of the housing market slowdown is a sharp drop in construction spending. The Commerce Department reported a 1.1% decrease in June. Private residential construction took the biggest hit. It was down 1.6%. (9) Ironically, the construction of new homes is what's needed to increase supply, yet builders are generally the first to get hit with higher interest rates. A slow down in new home construction could mean continued bidding wars on existing homes in growth markets.Mortgage RatesHome buyers are getting a break right now on their mortgage rates. Freddie Mac says the average 30-year fixed-rate mortgage dipped below 4% for the week ending August 4th. They dropped 31 basis points to an average of 4.99%. The 15-year dropped 32 points to 4.26%. Freddie Mac's Chief Economist, Sam Khater, says: “Mortgage rates remain volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth.” (10)You may be wondering why mortgage rates have gone down when the Fed fund rate is going up. Mortgage rates are generally tied to the 10-year Treasury as mortgage backed securities attract the same type of investor. With the Fed raising rates aggressively, big investors are worried it will create a recession, so they seek the safety of bonds and MBS's. These investors also may believe that we've hit a peak in inflation. Otherwise they would invest in inflationary stocks instead of bonds. In other news making headlines... Single-Family Rent GrowthDemand continues to grow for single-family rentals as more and more potential homebuyers are priced out of the market. And that's pushing rents higher. A new report from Yardi Matrix says the average single-family asking rent rose $23 in June, to an all-time high of $2,071. (11)Rent growth is slowing for both single-family and multi-family rentals. The report says that year-over-year single-family rent growth has dropped 90 basis points, to an annual rate of 11.8%.House Approves Remote NotarizationThe U.S. House approved legislation that would make remote online notarizations possible in all 50 states. The bill will make it easier to close a deal without having the notary and the person signing the agreement in the same room. During the pandemic, agents in many states had to arrange for drive-by closings, with social distancing. (12) The pandemic also inspired almost half the states to allow for remote notarizations. The National Association of Realtors pushed for a national bill to support the demand for virtual sales and closings in all 50 states, even though there's less concern now about pandemic-related safety measures. The bill is now pending consideration in the Senate. That's it for today. Check the show notes for links at newsforinvestors.com. I would also like to share some other exciting news. Within the last few weeks, we hit a big milestone for Real Estate News for Investors. It's been six-and-a-half years since our first news podcast, and we have now posted our 1200th show! We are currently posting two or three podcasts a week for real estate professionals. Set your podcast player to have them automatically downloaded, so you don't miss any! And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.bloomberg.com/news/articles/2022-08-02/daly-says-fed-nowhere-near-done-on-curbing-high-infation-rate2 -https://www.reuters.com/markets/us/feds-daly-34-reasonable-place-get-by-year-end-rates-2022-08-03/3 -https://www.cnbc.com/2022/08/05/jobs-report-july-2022-528000.html4 -https://www.marketwatch.com/story/u-s-unemployment-claims-climb-to-260-000-and-stick-near-nine-month-high-11659616784?mod=economy-politics5 -https://www.corelogic.com/intelligence/u-s-home-price-insights/6 -https://www.corelogic.com/intelligence/podcast-vodcast/oce-monthly/homeowner-equity-reached-record-level-in-early-2022/7 -https://www.realtor.com/research/weekly-housing-trends-view-data-week-july-30-2022/8 -https://fred.stlouisfed.org/series/MSACSR9 -https://www.marketwatch.com/story/construction-spending-fell-sharply-in-june-11659363237?mod=economic-report10 -https://www.freddiemac.com/pmms11 -https://rentalhousingjournal.com/average-rents-rise-to-all-time-high-in-june/?utm_source=Master+Vendors&utm_campaign=a590da3d77-EMAIL_CAMPAIGN_2022_07_20_02_10&utm_medium=email&utm_term=0_4780df7d33-a590da3d77-11392877312 -https://magazine.realtor/daily-news/2022/07/28/remote-online-notarization-is-one-step-closer

Real Estate News: Real Estate Investing Podcast
The Real Estate News Brief: Negative GDP in Q2, Inflation Jumps Again, the Fed's Big Rate Hike

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Aug 6, 2022 6:34


In this Real Estate News Brief for the week ending July 30th, 2022... a negative GDP report, inflation heads higher, and the Fed's latest rate hike. 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 carried out its fourth rate hike this year to slow inflation, and the second increase of .75%. That puts the top end of the overnight lending rate at 2.5%. Higher rates make it more expensive for businesses and consumers to borrow money and that helps slow the economy, and the rate of inflation. (1)The latest reading on inflation was a report on the PCE or Personal Consumer Expenditure Index. That shows a 1% increase in June to a yearly rate of 6.8%, which is the highest since January of 1982. When you eliminate fuel and food, the core PCE is 4.8%. The Federal Reserve considers the PCE to be more accurate than the CPI because it takes into account other variables, such as consumers shopping for different, lower-priced items. (2)Fed Chief Jerome Powell has said repeatedly that inflation is too high, but he said during a press conference after the latest rate hike, that the U.S. is not in a recession despite a second quarter of negative economic growth. The government says the economy shrank at an annual pace of -.9% in Q2. That's after a -1.6% loss of economic activity in Q1. Two consecutive quarters of negative growth is the standard definition of a recession, but thanks to a number of things bolstering the economy, such as a strong job market, many economists, including Fed Chief Powell, don't believe we're there yet. (3) Powell said several times that the central bank will do whatever it takes to control inflation, which may put the U.S. into a recession at some point. He suggested more rate hikes in the coming months but didn't give any forward guidance because the situation is so volatile. The Fed expects short-term interest rates to hit 3.5% by the end of the year. Some economists are predicting a 50 point hike in the next meeting followed by two 25 point hikes. (4)Initial jobless claims had been slowly rising, but were about 5,000 applications lower last week. The Labor Department says they fell to a total of 256,000. Ongoing claims were also lower. They were down 25,000 to 1.36 million. (5)On to the housing market…New home sales fell to their lowest level since the pandemic began. They were down 8.1% in June to a seasonally-adjusted rate of 590,000. The year-over-year drop is 17.4%. Many consumers can't afford a high-priced home combined with a higher mortgage rate. The median sales price of a new home was $402,400 in May. (6)Pending home sales for existing homes also tumbled in June. According to the National Association of Realtors, they were down 8.6% for the month and 20% year-over-year. As MarketWatch reports, potential home buyers are spooked by high home prices and inflation in general, higher mortgage rates, and talk of a recession. NAR's Chief Economist Lawrence Yun says that buying a home in June of this year was 80% more expensive than it was in 2019. (7)*But home price growth has started to slow down. The S&P CoreLogic Case-Shiller Index shows a year-over-year price growth of 19.7%. That's down from 20.6% in April. (8) Keep in mind that the Case Schiller index is a lagging indicator, and a lot has changed in the market since May. As for consumer thoughts on the economy…The Conference Board reports that confidence levels fell for a third month in a row to a reading of 95.7. Economists like to say that consumer spending is still robust, but the International Monetary Fund says that's at higher income levels. One member of the Conference Board, Lynn Franco, says that consumers will likely face “headwinds” over the next six months as they deal with inflation and additional rate hikes. (9) A survey on consumer sentiment by the University of Michigan shows similar results. It was up slightly at the end of July but is still near the lowest level on record. (10)Mortgage RatesMortgage rates are falling as home buyers sit on the sidelines. Freddie Mac says the average 30-year fixed-rate mortgage was down 24 basis points last week to 5.3%. The 15-year was down 17 points to 4.58%. (11)In other news making headlines...Will the Latest Rate Hike Impact Mortgages?The Fed's rate-hiking plan has created concern that mortgage rates will continue to move higher. The two are not directly related, although higher short-term rates often do influence mortgage rates. But NAR's Lawrence Yun doesn't think mortgage rates will move much higher this year. He says: “The long-term bond market on which mortgage rates are generally priced has mostly priced in all future actions by the Fed and may have already peaked with the 10-year Treasury shooting up 3.5% in mid-June.” (12)He feels that the 30-year fixed will settle down at 5.5 to 6% for the rest of the year. That's it for today. Check the show notes for links.If you'd like more news on the housing market, please go to newsforinvestors.com and check on other podcasts you may have missed. You'll also find hundreds of webinars and articles on the housing market at our website. If you haven't joined RealWealth, you can sign up for free. That will give you access to our investor portal where you'll find details on specific single-family rental markets.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/fed-hikes-rates-by-0-75-percentage-points-and-signals-more-hikes-coming-11658944875?mod=home-page2 -https://www.marketwatch.com/story/coming-up-pce-inflation-and-consumer-spending-11659096833?mod=economic-report3 -https://www.marketwatch.com/story/coming-up-u-s-gdp-11659010141?mod=economy-politics4 -https://www.marketwatch.com/story/was-feds-powell-dovish-or-not-4-key-takeaways-from-todays-press-conference-11658965985?mod=federal-reserve5 -https://www.marketwatch.com/story/u-s-jobless-claims-retreat-after-hitting-highest-level-in-eight-months-11659012115?mod=economic-report6 -https://www.marketwatch.com/story/u-s-new-home-sales-fall-in-june-to-the-lowest-level-since-the-pandemic-11658845189?mod=mw_latestnews7 -https://www.marketwatch.com/story/u-s-pending-home-sales-tumble-in-june-11658930424?mod=mw_latestnews8 -https://www.marketwatch.com/story/u-s-home-prices-slip-in-may-from-record-high-in-prior-month-case-shiller-11658840473?mod=economic-report9 -https://www.marketwatch.com/story/u-s-consumer-confidence-declines-for-third-straight-month-in-june-11658845555?mod=bnbh_mwarticle10 -https://www.marketwatch.com/story/consumers-pessimistic-about-inflation-and-the-economy-sentiment-poll-shows-11659104044?mod=economic-report11 -https://www.freddiemac.com/pmms12 -https://magazine.realtor/daily-news/2022/07/28/2nd-historic-fed-rate-hike-unlikely-to-further-damage-mortgage-borrowers

Real Wealth Show: Real Estate Investing Podcast
A Real Wealth Family Plan: “Property, Baby, Property, Property, Baby”

Real Wealth Show: Real Estate Investing Podcast

Play Episode Listen Later Aug 5, 2022 30:56


They created a very simple five-year plan that went something like this: "property, baby, property, property, baby". It was a plan that would give them the financial freedom to ditch their jobs as UCLA professors, and have enough money and time to enjoy their growing family.In this episode, Kim Hopkins joins Kathy Fettke for an animated conversation about a life-changing decision to get into real estate after spending years earning a PhD. But there are no regrets. Kim and her husband, Ben, have now met their five-year goal for “properties and babies” and are working on a plan for the next five years.You'll hear about what they've done with real estate, the kind of lifestyle they've created for themselves, and how they are trying to figure out what comes next. You'll be inspired by Kim's exuberant personality, and how she has learned to elevate her lifestyle by delegating to other people what she herself would prefer not to do.Kim co-founded an investment company in 2014 called Iron Peak Properties. Kim is in charge of strategic planning and asset acquisitions. Just four year before, she had earned her PhD in Mathematics at the University of Texas in Austin. Although she quit her professorship, she makes use of her math skills for algorithmic number theory and analysis at her company. Iron Peak owns and manages more than 350,000 square feet of real estate in Oregon, Washington, Utah, Texas and Arizona and focuses on multi-tenant industrial properties. A big part of any investment plan is deciding what kind of real estate you want to buy. At RealWealth, we focus on single-family rentals, both rent-ready and build-for-rent. You can find out more about how we can help you by joining RealWealth for free. Qualified members can also speak with our investment counselors. The consultation is free and without obligation.Please remember to subscribe to our podcast and leave us a review! Thank you!

Real Estate News: Real Estate Investing Podcast
Best Investment Option During Times of Inflation?

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Aug 5, 2022 6:38


The latest reports on inflation have given the economy indigestion. The Consumer Price Index hit 9.1%, the Producer Price Index hit 11.3%, and the Fed's preferred gauge, the Personal Consumption Expenditures Price Index or PCE, hit 6.8%. They are all signs that inflation is much too high and the reason the Federal Reserve just hiked short term interest rates another whopping three-quarters of a percent. So what's the best way to invest when inflation is working against you? (1, 2, 3)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.Four Peaks Capital put together a great list of all the options that I received in an email which I will share with you in this episode. The company is mostly focused on large multi-family projects, but this list pertains to everyone.Investing Options1 - First on the list is cash. It's not an investment as much as it is a way to preserve a certain quantity of money. But when there's a high rate of inflation, that same quantity of money will be worth less over time. As Four Peaks explains: Putting $100,000 under your mattress for something you want to buy in a year, won't cover the cost. At today's rate of inflation, you'll need an additional 9.1% or $9,100. So hiding your money under the mattress isn't a great idea if you don't want to lose money. Warren Buffett would agree. He says: “The first rule of an investment is don't lose money. The second rule of an investment is don't forget the first rule.” Let's take a look at your other options.2 - You can invest in stocks. Wall Street is a magnet for investor enthusiasm and money, but people are often invested at the worst possible times. A period of inflation is typically one of those times. As inflation rises and the Federal Reserve raises rates, stocks often fall because it'll cost more money for companies to get the funding they need to do business. We've seen some major stock losses lately because of investor concerns on inflation.3 - Crypto, Blockchain, and NFTs have become a new investment category, and it's gotten a lot of attention, but it's also very volatile. The crypto market had soared to a peak of about $3 trillion dollars, but when the economy got choppy, crypto got chopped. Investors liquidated their gains and the crypto market quickly shrank to just $1 trillion. The high-flying leader of the pack, Bitcoin, had actually hit $69,000 earlier this year but is now down to one third of that value.4 - You can buy Certificates of Deposit, or CDs, as a more traditional and safer way to invest money. NerdWallet has a list of CDs, and its top choice is a CD with a fixed 5-year term at 3.35%. But even that percentage won't make you money because inflation is so high. At 9.1%, inflation wipes out the gain and leaves you with a -5.75% loss.5 - You can put your money into a Money Market Account. But the interest you'll earn is even less than a CD. It's more like 1% right now, although that could increase as the Fed raises rates, but at 1%, you stand to lose -8% of your investment because of inflation.6 - High-Yield Savings Accounts are another option. They are supposed to give you a better interest rate than money market accounts. But the extra bump in interest only reduces the loss you'd get from a CD by a tiny amount.7 - Annuities can provide better gains, but they still don't offset today's rate of inflation. Four Peaks explains it like this: “Some of the best fixed-income annuity rates right now hover in the 4.5% range, but that doesn't take into account administration fees of 1-3% annually, putting real rates at 1.5% to 3.5%. In the best-case scenario, the annual loss of the best annuity is -5.6% when considering inflation.”8 - And then you have Treasuries. The 10-year treasury might give you 2.96%, but when you account for inflation, you end up with a loss of -6.41%. So, we've run through “eight” investing options and none of them make your money grow when inflation is as high as it is. That leaves us with an eighth option that covers a lot of “ground,” no pun intended. As Four Peaks puts it: “Cash flowing tangible assets tied to essential goods… that consumers will always need… like shelter.” Four Peaks says: “That's why certain classes of commercial real estate like affordable housing will thrive in downturns.” 9 - The ninth option is real estate. At RealWealth, we focus on single-family rentals which also provide a tangible asset that's in high demand. The foreclosure crisis produced the first big surge in demand for single-family rentals. And now we're seeing a new surge because people who can't afford to buy a home, still crave the single-family lifestyle.We recently had an investor on my other podcast, The Real Wealth Show, who was not discouraged by today's market. Jimmy Vreeland believes that the housing market slowdown is providing an opportunity for investors to find deals, and there's no better time to buy real estate than the present. He says: “You don't wait to buy real estate. You buy real estate, and wait.” In other words, the value of your real estate will go up in time. Jimmy talks about how you can maximize that potential with the "value add" concept.Plus, when you borrow money, like most people do when acquiring real estate, you are getting another hedge against inflation. It's like the inflation is eating away at your debt.If you are interested in hearing more about how to invest in real estate when prices are high, please check out Jimmy's interview. He's both entertaining and inspiring. You'll find it at newsforinvestors.com. Just click on the Learn tab. You'll find the interview under the Real Wealth Show with the title “Invest Now or Wait?”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/coming-up-consumer-price-index-for-june-116577136652 - https://www.marketwatch.com/story/u-s-wholesale-prices-surge-again-and-signal-inflation-is-still-running-hot-116578024323 - https://www.marketwatch.com/story/coming-up-pce-inflation-and-consumer-spending-11659096833

Darin Batchelder’s Real Estate Investing Show
Women of Influence See Powerful Results With Kathy Fettke [DB112]

Darin Batchelder’s Real Estate Investing Show

Play Episode Listen Later Aug 2, 2022 64:44


Do you want to be a woman of influence? Kathy Fettke is a woman of influence and has learned from some of the most powerful women around. She knows how to build a brand, give back, and is not afraid to be in front of the camera. If you want to learn more about real estate investing or just become a more powerful woman, then this is the episode for you. Listen in to hear why Kathy's real wealth membership has grown to over 72,000 members. For links and resources discussed in this episode, please visit our show notes at https://darinbatchelder.com/women-of-influence

Real Estate News: Real Estate Investing Podcast

The quitting trend that started during the pandemic is still here, and it's not going away anytime soon. Job market trends are important to real estate investors because housing markets rely heavily where people are working. In this episode, you'll hear about how the job market has changed, why more workers are quitting or changing the way they work, and the kinds of jobs they are seeking. (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.This quitting trend has been called The Great Resignation, but a new study by McKinsey and Co. describes it as The Great Attrition which is now turning into The Great Renegotiation. This is happening because more and more people are rethinking their work-life balance and renegotiating the terms of their employment with a greater emphasis on their personal lives.The Great RenegotiationTo get an idea of the magnitude of the change we're seeing, data from the US Department of Labor shows the voluntary quit rate is 24% higher now than it was before the pandemic. Companies are scrambling to fill positions and keep them filled. In April of last year, there were 9.3 million job openings. Fast forward to May of this year, and there were 11.3 million job openings. That's an increase of two million unfilled positions.As the McKinsey study points out, there's a huge mismatch between the number of available jobs and the number of workers eager to fill those positions. What the study reveals about the current situation is that many companies are trying to fill an abundance of traditional positions with traditional workers, and that's where things have changed. Although some 60% of workers are still traditionalists, according to this analysis, there's a growing number of workers who won't accept the old way of doing things.The McKinsey analysis includes survey responses from 13,000 people in six countries who answered questions between February and April of this year. 6,294 were Americans. One of the authors of the report, Bonnie Dowling, says of the work world: “This isn't just a passing trend, or a pandemic-related change to the labor market. There's a fundamental shift in workers' mentality, and their willingness to prioritize other things in their life beyond whatever job they hold.” She says: “We're never going back to how things were in 2019.” (2)Why Are the Quitters Quitting?The results show three patterns among the quitters.1 - The first is a desire to “reshuffle” their careers. That's driving the reshufflers from one industry to another. In fact, 48% of the non-traditionalists are reshufflers. But the exchange of employees is not balanced so that some industries are losing more workers than they are getting in return.2 - The second pattern shows a desire to “reinvent” their careers. That might take the form of an employee transitioning from a traditional full-time job to one that's not traditional. That could include work that's part-time, temporary, remote or non-traditional in some other way. 47% of the survey participants fall into this category.3 - The third pattern is one the study calls “reassessing.” That's when people quit their jobs altogether to take care of personal needs and reassess their priorities. They might quit to take care of children, older relatives, or even themselves. Discontent Varies from Country to CountryThe desire to quit varies from country to country with India at the top of the list for discontent. The study shows that more than 60% of the workers in India want to leave their jobs. The second highest level of discontent was in Singapore, at 49%. The other four countries in this study include Australia, Canada, the United Kingdom, and the United States. Taken together, 40% of the participants expressed a desire to quit within the next three to six months.So what is it that makes a job that motivates workers to quit or to stay? The survey says that workplace flexibility is the most important factor in preventing employees from quitting. Meaningfulness of work is also right up there. Other factors include support for an employee's health and well-being, a safe workplace, and inclusivity. Geographic ties also play into this equation, although it could be a moot point with remote workers.The things that drive employees away include a lack of adequate compensation. No surprise there. Following that, employees quit when the job doesn't live up to their expectations. It could be a lack of career development or advancement opportunities. They also want reliability and support from colleagues, and bosses that are caring and inspiring.Five Worker PersonasBut that's only part of the picture. The analysis shows a total of five worker personas with the traditionalists accounting for the largest share. They are the first type of persona and make up 60% of the workforce. The four other personas account for the remaining 40% and they are the ones who are most likely to quit in the next several months.The second type of persona is the do-it-yourselfer. This type of employee places a high value on workplace flexibility, although a high wage offer could draw them back to the traditional workforce. The analysis says they are typically between 25 and 45 years old, and want more autonomy in their jobs. That could drive them to self-employment or non-traditional full- or part-time jobs, or gig work.Third is the caregiver. These are the people who quit their jobs to care for others, and wind up passively looking for a new job. For them to return to the workplace, they need a flexible schedule and a lot of support.Fourth are the idealists. This category includes students and younger part-timers, typically between the ages of 18 and 24. They don't have a lot of financial obligations yet, and are looking for work that is more meaningful. They want flexibility, career opportunities, meaningful work, and people in their work world that are reliable and supportive. Compensation is not as important.Last but not least are the relaxers. These people don't really care if they have a job or not. They may be retired, or job optional, and might return to the workforce if the job is sufficiently important or meaningful.Employees Have Raised the Bar on their JobsDowling says of this work trend that: “People aren't tolerating toxic bosses and toxic cultures anymore, because they can leave and find other ways to make money without being in a negative situation.” She says: “There are more opportunities for work now than ever before with our increased connectivity.” What this shift in worker mentality says to me is that a large number of people are reevaluating their work-life balance, and getting their lives into focus. That's not always easy to do because we are confronted with so many distractions.My husband Rich is a professional coach and conducts a “Focused Investor” presentation at the end of each year. It helps people focus on where they are now, and where they'd like to be a few years down the road. You can do this at any time of the year by watching a replay of his latest presentation on YouTube. The clip is called: “The Focused Investor - Four Steps to Success in 2022.”And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke. Links:1 - https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/the-great-attrition-is-making-hiring-harder-are-you-searching-the-right-talent-pools2 - https://www.cnbc.com/2022/07/20/40percent-of-workers-are-considering-quitting-their-jobs-soon.html

Purpose-Driven Wealth
Episode 31 - Using Real Estate to Achieve Real Wealth

Purpose-Driven Wealth

Play Episode Listen Later Jul 26, 2022 49:03


In this episode of Purpose-Driven Wealth, your host, Mo Bina, and Kathy Fettke talk about the synonymity of real estate to real wealth. For Kathy, the only ones who cannot acknowledge real estate's power are those who know nothing about it. She shares her early days of interviewing wealthy people, an experience that proved the essence of due diligence, the elements she looks for in a chosen market, and what the M1 and M2 charts tell us about the US dollar for the past two years. In this episode, Kathy talks about: Interviewing wealthy people It's amazing how investors can sometimes disprove "experts" You don't slack off on your due diligence—ever! What factors does Kathy look into when choosing a market? What the founding fathers knew about untethered currency and so much more! About Kathy Fettke:   Kathy specializes in teaching people how to build multi-million dollar real estate portfolios through creative finance and planning. She is passionate about researching and then sharing the most important information about real estate, market cycles, and the economy. Author of the #1 best-seller, Retire Rich with Rentals, Kathy is a frequent guest expert on such media as CNN, CNBC, Fox News, NPR, and CBS MarketWatch.   Follow Kathy Fettke on:   Website:          https://realwealth.com/   Connect with Mo Bina on:   Website:          https://www.high-risecapital.com/ Medium:          https://mobina.medium.com/   For more information on passive investing in commercial real estate, please check out our free eBook — More Doors, More Profits — by clicking here: https://www.high-risecapital.com/resources-index      

Real Estate News: Real Estate Investing Podcast
The Real Estate News Brief: A Supply Chain Fix, Housing Affordability, Rental Income Side Hustle

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Jul 26, 2022 6:04


In this Real Estate News Brief for the week ending July 24th, 2022... how Yellen would like to fix the supply chain, a return to 2007 housing affordability, and the latest way to make rental income off your property.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 reassurances from former Fed Chief Janet Yellen. She said during an interview on NBC's “Meet the Press” that the U.S. economy is slowing down, but says that a strong job market is proof that we're not in a recession. (1) Her words come before a week of important economic reports. Coming up in the week ahead, the second quarter GDP, inflation, consumer income and spending, and what is expected to be a three-quarter point rate hike by the Federal Reserve.Let's rewind to this past week. Although hiring is strong, the government reports a jump in state unemployment claims. They were up 7,000 to 251,000. Wall Street economists had expected a slight decline in those initial claims. Currently, there are 1.38 million collecting unemployment checks. (2)The housing market slowdown continues. Housing starts fell in June. the Commerce Department reports that they were down 2% in June to 1.56 million new home starts. That's also a 6.3% annual drop in starts and the lowest level since last September. Building permits were also down .6% to 1.69 million. Breaking the report down further, construction starts fell 8.1% for single-family homes while apartment starts were “up” 15%. The number for permits were similar. (3)As a real estate investor, it's important to remember that the housing market is “local” so national numbers don't tell the whole story. The National Association of Home Builders issued a report on permits showing the top ten markets for single-family construction. At the top of the list is Houston, followed by Dallas-Fort Worth, Phoenix, Atlanta, Austin, Charlotte, Orlando, Nashville, Tampa, and Jacksonville. Despite the overall slowdown, some markets are still fired up. (4)Demand is still strong for single family homes, but prices have gotten too high for some buyers. The National Association of Realtors says that existing home sales fell 5.4% to a seasonally-adjusted annual rate of 5.12 million homes in June. That's the weakest they've been since the start of the pandemic, and compared with last year, they are down 14.2%. (5) In addition to high home prices, sales are being impacted by higher mortgage rates and a lack of more affordably priced homes. (5)Housing market conditions have weakened home builder confidence. The NAHB says the monthly confidence index dropped 12 points to 55 in July. That's a larger-than-expected decline, and the second largest since the association created the index. As a comparison, the index was at 80 last July. (6)Mortgage RatesMortgage rates crept a little higher last week. Freddie Mac says the average 30-year fixed-rate mortgage was 3 basis points higher to an interest rate of 5.54%. The 15-year was 8 points higher to 4.75%. (7)In other news making headlines...Yellen on Supply Chain IssuesYellen offered a suggestion for supply chain issues. She said that allied countries could strengthen their supply chains by “friend-shoring.” The term is similar to “onshoring” which refers to production or operations within our borders. (8)She says she's not discouraging trade with any country, but says that by working more with trusted partners, supply chains would be more resilient when there's some sort of global emergency or conflict.Housing Affordability Near 2007 LevelHousing affordability is hovering near 2007 levels. A report by S&P Global Ratings shows that homebuyers will have to pay about 28% of their income on mortgage payments by the end of this year. That's the highest percentage since the first quarter of 2007. NAR guidelines state that a homeowner's mortgage payment should not be higher than 25% of their paycheck. (9)That calculation is based on a 10% down payment. The analysis also shows that it will take entry-level buyers 11.3 years to save up for that down payment. It's more than twice as long as a pre-pandemic rate of five years.SwimplyThere's more ways than one to make money renting some part of your home. A website called Swimply makes it easy to rent out your pool for hours at a time. A CNBC Make It blog profiled an Oregon resident who spent $110,000 building a luxury pool ten years ago, and over the last two years has more than made that money back. (10)He says it's important to know a lot about pool maintenance and water chemistry. He also says that he was a lot busier when there were fewer people doing the same thing because there are now a lot more pools for potential customers to choose from.That's it for today. Join RealWealth for free here. Check the show notes for links, and remember to hit the subscribe button for the latest news on real estate, the housing market, and the economy. By subscribing, you'll have easy access to all past and future podcasts. If you like what you hear, we would greatly appreciate a review with lots of stars! Thanks for listening. I'm Kathy Fettke.Links:1 -https://apnews.com/article/inflation-economy-prices-janet-yellen-948009cdbc67f5b6f9742a35f7214feb2 -https://www.marketwatch.com/story/u-s-jobless-claims-jump-to-highest-level-since-november-11658407332?mod=economic-report3 -https://www.marketwatch.com/story/u-s-housing-starts-fall-in-june-for-the-second-straight-month-11658234929?mod=mw_latestnews&mod=u.s.-economic-calendar4 -https://eyeonhousing.org/2022/07/slowdown-in-single-family-permits-in-may-2022/5 -https://www.marketwatch.com/story/u-s-existing-home-sales-fall-for-the-fifth-straight-month-in-june-11658326211?mod=economic-report6 -https://www.marketwatch.com/story/u-s-home-builder-confidence-plunges-in-july-nahb-reports-11658152827?mod=economy-politics7 -https://www.freddiemac.com/pmms8 -https://www.cnbc.com/2022/07/19/us-treasury-secretary-on-supply-chain-resilience-use-friend-shoring.html9 -https://seekingalpha.com/news/3859754-us-housing-affordability-poised-to-fall-to-lowest-since-gfc-on-soaring-prices-rates10 -https://seekingalpha.com/news/3859754-us-housing-affordability-poised-to-fall-to-lowest-since-gfc-on-soaring-prices-rates11 -https://www.cnbc.com/2022/07/21/swimply-side-hustle-making-money-renting-backyard-pool-to-strangers.html

Going Long Podcast with Billy Keels
How Being a Wise Investor Brings You Real Wealth - Rich Fettke

Going Long Podcast with Billy Keels

Play Episode Listen Later Jul 25, 2022 51:22


Are you an Accredited Investor that's tired of getting crushed by paying so much in income tax? Find out how we're helping others like you keep Uncle Sam out of your pocket. Click the link HERE  or go to https://www.firstgencp.com/goinglong Going Long Podcast Episode 232: How Being a Wise Investor Brings You Real Wealth In the conversation with today's guest, Rich Fettke, you'll learn the following:   [00:32 - 03:56] Show introduction with comments from Billy. [03:56 - 07:05] Guest introduction and first questions. [07:05 - 16:41] The backstory and decisions made that led Rich to this point in his journey. [16:41 - 19:47] The importance of connecting with and understanding as much as possible about a potential property manager. [19:47 - 21:33] Rich describes where his substantial network came from, and the kind of people that benefit from having access to it or being part of it.  [21:33 - 27:10] Rich tells us about his book, The Wise Investor. [27:10 - 34:13] How liabilities and assets are not only about financial aspects, but also include other important things in life, such as Time. [34:13 - 37:51] Rich explains what the term Real Wealth means, being the name of his company.   [37:51 - 40:50] How to overcome your negative self-talk. Here's what Rich shared with us during today's conversation:     Where in the world Rich is based currently: Malibu, California. The most positive thing to happen in the past 24 hours: Having a video call with his 2 and a half year old grandson! Favourite European city: Majorca, Spain.  A mistake that Rich would like you to learn from so that you don't have to pay full price: Make sure that an investment makes sense from day one of the investment, not relying solely on the fact that it will hopefully appreciate over time!  Book Recommendation: Retire Rich with Rentals, by Kathy Fettke.  Be sure to reach out and connect with Rich Fettke by using the info below:     Website: https://realwealth.com/  Instagram: https://www.instagram.com/richfettke/?hl=en  Facebook: https://www.facebook.com/rich.fettke  LinkedIn: https://www.linkedin.com/in/fettke  Book: https://realwealth.com/the-wise-investor-book/  To see the Video Version of today's conversation just CLICK HERE. How to leave a review for The Going Long Podcast: https://youxccbxtu.be/qfRqLVcf8UI    Start taking action TODAY so that you can gain more Education and Control over your financial life.   Are you an Accredited Investor that's tired of getting crushed by paying so much in income tax? Find out how we're helping others like you keep Uncle Sam out of your pocket. Click the link HERE  or go to https://www.firstgencp.com/goinglong   Be sure to connect with Billy!  He's made it easy for you to do…Just go to any of these sites:   Website: www.billykeels.com Youtube: billykeels Facebook: Billy Keels Fan Page Instagram: @billykeels Twitter: @billykeels LinkedIn: Billy Keels  

Get Rich Education
407: Housing Market Debate with Kathy Fettke

Get Rich Education

Play Episode Listen Later Jul 25, 2022 45:44


When mortgage rates rise, home builders slow down on building. This constrains supply and supports housing prices. A record share of Americans say inflation is their No. 1 concern. The CPI is 9.1%. Property operating expenses are rising with inflation, like insurance and property tax. What helps you pay for it? Rising rent. Philosophically, why should you raise the rent on your tenants?  Besides adjusting it to the market amount, you took time learning, you built your credit, you accumulated a 20% down payment, you originated an 80% loan, your operating expenses are rising, you weathered pandemic uncertainty. If an auto mechanic makes $60 an hour, in ten years, they might make $90 an hour. Where's the growth in this? Kathy Fettke from Real Wealth joins us.   We disagree on the housing market being “healthy”. I believe a good description of the housing market is: "unbalanced": Healthy for: rental property owners, existing homeowners, sellers. Unhealthy for: renters, homebuyers.  She believes that the Fed has overstimulated the economy, prices are high, and housing is undersupplied. We discuss real estate's demographic advantage. We agree that it's a bad market for prospective first-time buyers and renters, and good for those that have rental properties. A housing price crash anytime soon is highly unlikely. She & I each believe that today, it makes sense to add carefully-bought rental properties to rent to others. Resources mentioned: Show Notes: www.GetRichEducation.com/407 Real Wealth with Kathy Fettke: https://realwealth.com/ Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com JWB's available Florida income property: www.jwbrealestate.com/gre To learn more about eQRPs: text “GRE” to 307-213-3475 or: eQRP.co Available Central Florida new-build income properties: www.b2rdirect.com Best Financial Education: GetRichEducation.com Get our free, wealth-building “Don't Quit Your Daydream Letter”: www.GetRichEducation.com/Letter Our YouTube Channel: www.youtube.com/c/GetRichEducation Top Properties & Providers: GREmarketplace.com Follow us on Instagram: @getricheducation Keith's personal Instagram: @keithweinhold

Real Estate News: Real Estate Investing Podcast
Foreign Investors Returning to the U.S. Real Estate Market

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Jul 22, 2022 5:10


Foreign investors are returning to the U.S. real estate market after a pandemic-related dry spell. A new survey by the National Association of Realtors shows a big increase in the dollar value of properties bought by foreign buyers in the last year. They had all but disappeared during the pandemic, but are slowly coming back – especially now that most travel restrictions have been lifted which makes it easier to visit properties before they buy.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 Realtors surveyed members about transactions they've done with international clients and released the results in a report called 2022 Profile of International Transactions in U.S. Residential Real Estate. (1) The transactions would have taken place between April of last year and March of this year. NAR Report on Foreign BuyersForeign buyers purchased a total of $59 billion worth of existing homes during that time. That's an 8.5% increase from the previous year, but inflation is contributing to that figure. The report also shows that the total number of properties fell 7.9% because you can't buy as much house for your money right now. So how many homes did that money buy? According to NAR, international buyers purchased a total of 98,600 existing homes. That's 2.6% of the 6.12 million homes that changed hands over the last year.NAR's chief economist Lawrence Yun believes that high home prices have discouraged some foreign investors. He said in the press release: “Affordability challenges along with the inability to find the right property were the top reasons given for prospective international buyers who showed interest but ultimately did not purchase a home in the United States.”He also believes that travel restrictions discouraged some potential buyers. He says: “For a second year in a row, restrictions and general caution tied to international travel during the pandemic slowed home buying by wealthier foreign buyers.”Two Groups of Foreign BuyersThe report separated foreign buyers into two groups including those who recently immigrated to the U.S. or live here on a visa and buyers who live in another country. The first group accounted for more transactions. It says that foreign buyers living here purchased just over $34 billion dollars worth of existing homes. That's up 5.2% from the previous year. Foreign buyers who don't live in the U.S. spent almost $25 billion during that same time period. That's up 13.2% from the previous year.Buyers from China and Canada spent the most money. Chinese buyers spent $6.1 billion while Canadian buyers spent $5.5 billion. Rounding out the top five are buyers from INdia, Mexico, and Brazil.The most popular destination for international buyers was Florida, for a 14th year in a row. Almost 25% of the homes bought by foreign buyers were in Florida. California was second on that list followed by Texas, Arizona, New York, and North Carolina.Foreign Buyer ForecastYun is expecting to see an increase in the number of international buyers over the next year, despite high home prices and supply chain issues. He says the strong dollar may also discourage a some buyers, but overall, he says: “Many are purchasing in all cash, so the swings in the dollar are not a deal breaker.” He says that U.S. properties still appear inexpensive when you compare them to other countries. As CNN Business reports, a typical property in Hong Kong costs $28,570 a square meter. (2) One in London costs $26,262 a square meter. And in Toronto, it's $10,947 a square meter. Head over to Miami and you only pay $3,170 a square meter. Even San Francisco is cheap, at $8,250 a square meter.Yun told CNN: "Maybe it is a good thing they were absent when US real estate was super hot," said Yun. "No one really missed the foreign market, but given the current shift in the market, with more inventory and homes staying on the market, it might begin to pick up as more international travel is possible."Higher inventory levels are also good for U.S. investors. It's more difficult to find the best deals because of high home prices, but it's not impossible. If you'd like help in figuring out how to find a good deal for your money, you can do that at RealWealth. You need to be a member, but it's free to join at newsforinvestors.com. That will give you access to our network of resources, including our investment counselors.And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.nar.realtor/newsroom/annual-foreign-investment-in-u-s-existing-home-sales-climbed-8-5-to-59-billion-ending-three-year2 -https://www.cnn.com/2022/07/18/homes/foreign-home-buyers-2022/index.html

Real Estate News: Real Estate Investing Podcast
The Real Estate News Brief: Big Surge in Housing Inventory, Rent Growth Rocket Ship, Supersized Social Security COLA

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Jul 19, 2022 6:26


In this Real Estate News Brief for the week ending July 16th, 2022… a big surge in housing inventory, the rent growth rocket ship, and a supersized prediction for Social Security's 2023 COLA.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 another surprise surge in the consumer price index. The Labor Department says the consumer price index or CPI rose 1.3% last month. That puts the annual rate of inflation at a 41-year record high of 9.1%. That's up from 8.6% in May. The core rate was a little more encouraging. It excludes food and fuel because those prices are so volatile. That was up .7% for June, which brought the annual rate “down” a tenth of a percent to 5.9%. (1)Wholesale prices also jumped higher. The producer price index was up 1.1% in June, mostly due to higher gas prices. That raises the annual rate from 10.9% to 11.3% - for wholesale prices. Again the core rate offered better news. It was only up .3%. That brought the annual rate down slightly, to 6.4%. (2)Inflation isn't discouraging consumer spending. The latest report on retail sales shows a solid 1% increase in June, but people are also buying things at higher prices. When you adjust for inflation, it appears that retail sales fell slightly. Senior economist for BMO Capital, Greg Daco, told MarketWatch: “American households are spending nearly as much money as they did earlier, but largely to keep up with higher prices, not to actually buy more stuff.” (3)Initial jobless claims crept higher. The Labor Department says there were about 9,000 more claims last week than the week before, for a total of about 244,000 applications. The number of continuing claims dropped by a lot more. They were down about 41,000 to 1.33 million. (4)Mortgage RatesMortgage rates aren't sitting still. After a big drop the week before last, they were up 21 basis points last week. Freddie Mac says the average 30-year fixed-rate mortgage was 5.51%. The 15 year was up 22 basis points, to 4.67%. (5)In other news making headlines...Home Buyers Canceling ContractsMore and more home buyers are backing out of their contracts because of the high prices. A new Redfin report says home sale cancellations were just under 15% in June. That's the highest level of contract cancellations since the start of Covid, when the economy briefly shut down. One year ago, in 2021, home buyers were canceling about 11% of their deals. (7)Redfin's deputy chief economist, Taylor Marr, says we're seeing the increase for a number of reasons. One is that home buyers have less competition and more time to back out of a deal if inspections or appraisals don't go their way. They may also get a higher mortgage rate than they expected and discover they no longer qualify for a particular home. Or they may feel that home prices will decline and they could get a better deal by waiting. There's also worry about a recession, and how that could impact their paychecks.Housing Inventory ReboundMeantime, a slowdown in sales is having a positive impact on inventory, which is quickly increasing. Calculated Risk reports that it was up 3.2% over the July 4th weekend. That's unusual because it's typically a busy weekend for homebuyers, and inventory levels are usually flat or slightly lower. (8)On a year-over-year basis, inventory is up around 32%, but the inventory problem has not yet been resolved. It's still at historically low levels. While it's up year-over-year compared to last year, it's down 25% compared to the same week in 2020.Soaring Rents Could Be PeakingWith more and more homebuyers getting priced out of the market, rental demand is strong, and that's pushing rents higher. The Labor Department says the rent of a primary residence was .8% higher in June that it was in May. That's up from a .6% increase the month before. (9)Some economists say that rent growth “may” be peaking. Moody's chief economist, Mark Zandi, says: “Market rent appears to be topping out, as renters are not able to afford the higher rents and are balking.” He says: “More rental supply is also coming.” RealPage reports that 836,000 multifamily units are under construction, which is the most since 1973.Huge COLA Predicted for Social SecurityPeople getting Social Security could get a big pay raise next year. The Senior Citizens League is estimating a 10.5% cost-of-living adjustment, which is also known as a COLA. The exact amount will depend on what kind of inflation we see for the rest of the year. (10)The average monthly social security check is $1,668. A 10.5% increase would bump that up $175 to a total of $1,843That'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 get more in-depth information about the housing market at our website. We have hundreds of articles and webinars that you can check out for free. It's also free to join for access to resources that could help you find and purchase rental properties around the country. Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.marketwatch.com/story/coming-up-consumer-price-index-for-june-11657713665?mod=economy-politics2 -https://www.marketwatch.com/story/u-s-wholesale-prices-surge-again-and-signal-inflation-is-still-running-hot-11657802432?mod=economic-report3 -https://www.marketwatch.com/story/u-s-retail-sales-climb-1-in-june-but-higher-prices-a-big-reason-why-11657889085?mod=economic-report4 -https://www.marketwatch.com/story/u-s-jobless-claims-rise-to-highest-level-since-last-november-11657802226?mod=newsviewer_click5 -https://www.freddiemac.com/pmms6 -https://www.wealthmanagement.com/multifamily/rents-us-rise-fastest-pace-1986-buoying-inflation7 -https://www.calculatedriskblog.com/2022/07/housing-inventory-july-11th-update-up.html8 -https://www.wealthmanagement.com/multifamily/rents-us-rise-fastest-pace-1986-buoying-inflation9 -https://www.cnbc.com/2022/07/13/social-security-cost-of-living-adjustment-could-be-10point5percent-in-2023.html

Real Estate News: Real Estate Investing Podcast
Why Are So Many Homebuyers Canceling Contracts?

Real Estate News: Real Estate Investing Podcast

Play Episode Listen Later Jul 16, 2022 4:39


Home buyers are getting cold feet because of high home prices and mortgage rates. A new report from Redfin shows the number of buyers canceling deals is now the highest it's been since the beginning of the pandemic. The pullback is also impacting builders. A report by John Burns Real Estate Consulting says they are lowering prices as they try to offload inventory. 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 Redfin report shows that homebuyers canceled 15% of the deals that went under contract in June. That's about 60,000 deals and the highest percentage of cancellations since the early days of the pandemic. About a month ago, in May, 12.7% of the deals were canceled. And about a year ago, that figure was 11.2%. (1)More Homebuyers Canceling DealsAnalysts say buyers may have different motives for canceling their purchases including the possibility that home prices might go lower in the coming months, and they might get a better deal if they wait. For those who don't want to wait, there's less competition and that's giving them more negotiating power. Redfin's deputy chief economist, Taylor Marr, says there are fewer buyers willing to waive inspections and appraisals, for example. By doing that, they have more time to weigh the pros and cons of a deal and get out if something turns up during the inspection, or the home doesn't appraise.The Redfin report also says that some homebuyers simply don't qualify with the higher mortgage payments. Marr says: “If rates were 5% when you made the offer, but hit 5.8% by the time the deal was set to close, you may no longer be able to afford that home or you may no longer qualify for the loan.”Redfin says that Las Vegas has the highest percentage of cancellations in June at 27.2%. Several Florida cities that have seen strong home price growth are high on the list along with New Orleans, Phoenix, and Houston. It's a long list that ranges from the Las Vegas high to a low of about 2.6% in Newark, New Jersey. Metros that had at least 1,000 pending home sales in June were included in this analysis.Home Builders Lowering PricesHome builders are also seeing higher cancellation rates. A report from John Burns Real Estate Consulting says 9.3% of new home deals were canceled in May. That's almost three percent higher than May of last year. (2)John Burns' senior vice president, Jody Kahn, says: “Buyer's remorse and cancellations shortly after contract are increasing. Builders say that buyers are nervous about a potential recession, struggling to get comfortable with higher payments, or expecting home prices to decline.”The cancellation rate for homebuilders varied from region to region within each state. The John Burns research shows the highest cancellation rate at 27% in parts of Texas, and the lowest in some parts of the Southeast at 8%. That research shows that a quarter of the home builders are lowering their prices. A builder in Austin, Texas, told Realtor.com: “Sales have fallen off a cliff. We're selling ⅓ of what we sold in March and April.”Housing Inventory Turn-AroundOne positive impact of this high-price environment is an increase in inventory. A TV station in Texas reports that: “Major housing markets in Texas are finally seeing the beginning of a housing inventory rebound.” (3) As you may know, six months of inventory is considered normal for a balanced housing market. We're not seeing that yet, but this report says the numbers are rising in Houston, San Antonio, Dallas Fort Worth, and Austin.Many homebuyers are getting priced out of the market, but the need for housing will not go away. That creates an opportunity for investors, despite the high prices. A recent guest our other podcast, The Real Wealth Show, isn't discouraged by the high prices. His strategy: “You don't wait to buy real estate. You buy real estate and wait.” In other words, cash flow will come to those who wait for properties and rents to appreciate. The episode is called: “Invest Now or Wait?” with Jimmy Vreeland. You'll find it under the “Learn” tab and “The Real Wealth Show.”And please remember to hit the subscribe button, and leave a review!Thanks for listening. I'm Kathy Fettke.Links:1 -https://www.redfin.com/news/home-purchases-fall-through-2022/2 -https://www.realtor.com/news/trends/scary-times-builders-are-slashing-home-prices-and-slowing-construction-as-buyers-pull-back-survey-shows/3 -https://www.wfaa.com/article/money/business/right-on-the-money/major-housing-markets-finally-seeing-the-beginning-of-a-housing-inventory-rebound/287-346525d9-e3f1-4806-a2a9-121940badc45