In this Real Estate News Brief for the week ending June 25th, 2022... what the Fed Chief is promising about inflation, what’s happening with home price cuts, and top destinations for home buyers, and investors. 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. Fed Chief Jerome Powell expressed his resolve, once again, to control inflation, but also warned that the Fed’s aggressive interest rate hikes could result in some job losses. The Fed raised rates by three-quarters of a percent at the June meeting, and is planning to hike it again in July by either a half or three-quarter percent. Powell acknowledges that the Fed misjudged the risk of inflation and should have moved faster with the rate hikes. Powell said: “We did underestimate it. With the benefit of hindsight, clearly we did.” He says Fed officials anticipated a speedier end to the pandemic and supply chain issues, but that supply chain problems “remain problematic.” (1) Unemployment claims were down slightly last week, but they remain at a five-week high. Economists say it’s a sign that the job market is cooling off although there’s still a record number of job openings, and not enough employees to fill them. According to MarketWatch, 34 states and U.S. territories show a “decline” in jobless claims, while 19 show an increase. (2) New home sales picked up in May. The Commerce Department reports they were up almost 11% to a seasonally-adjusted annual rate of 696,000. That’s a big jump from the April numbers which came in at 629,000. They are still down 5.9% for the year however. Home price growth is slowing, thanks to rising mortgage rates. The median sales price for a new home was $449,000 in May. That’s down from a record high of $454.700. (3) Existing home sales were down in May, for a fourth month in a row. According to the National Association of Realtors, they were down 3.4% to a seasonally adjusted annual rate of 5.41 million. There are far fewer existing homes for sale than new homes. While the supply of new homes could last more than 7 months, the supply for existing homes is just 2.6 months. The median price for an existing home has hit a new record high of $407,600. (4) Consumer confidence is dropping as inflation continues. The University of Michigan consumer sentiment index shows it fell to an all-time low of 50 in June. 50 is considered the mid-point between positive and negative on a scale of 100. Consumers are unhappy about high prices and the impact on their standard of living. (5) Mortgage Rates Mortgage rates continue to move higher. Freddie Mac says the average 30-year fixed-rate mortgage rose 3 basis points to 5.81%. The 15-year was up 1 basis point to 4.92%. (6) In other news making headlines… Sellers Are Cutting Prices We’re starting to see more price cuts for listed homes. Data real estate firm Redfin says that almost one out of five home sellers lowered their price in May. That’s the highest rate of price cuts since October of 2019. (7) Zillow economist Nicole Bachaud told Market Watch that it’s a sign of the housing market rebalancing. She says: “The share of listings with a price cut is creeping up, possibly a sign that sellers cannot be quite as ambitious in their pricing strategy as they coil have in recent months.” She says homes are selling as fast as they ever have, and the typical homes is selling in seven days for more than the listing price. Homebuyers Love Florida Redfin also did a little research on current trends for homebuyer destinations. It says that buyers are chasing after affordability, and that found that two Florida cities topped the destination list in April and May. Miami was number one as it has been all year, and Tampa pushed Phoenix out of the way for second place. (8) Tampa has become very popular since the start of the pandemic. Prices are up 28% year-over-year, but Tampa remains relatively affordable. A typical Tampa home sells for around $370,000. The national median is $424,000. Redfin says that Tampa is attracting a lot of newcomers from New York and the Northeast. Redfin says it’s also attracting a lot of investors, which we, at RealWealth, can attest to. It’s a strong market for rental properties, including single-family homes. You can find out more about buying single-family rentals by going to our website at newsforinvestors.com. It’s free to join, and free to talk to our investment counselors, and get access to our list of resources. Joining a network is also a great way to meet other like-minded investors like yourself. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.cnn.com/2022/06/23/economy/fed-jerome-powell-house-testimony/index.html 2 -https://www.marketwatch.com/story/unemployment-claims-fall-slightly-to-229-000-but-labor-market-might-be-cooling-off-11655988191?mod=economy-politics 3 -https://www.marketwatch.com/story/u-s-new-home-sales-stronger-in-may-11656079765?mod=economic-report 4 -https://www.marketwatch.com/story/u-s-existing-home-sales-fall-for-4th-straight-month-in-may-while-prices-skyrocket-11655820059?mod=economic-report 5 - https://www.marketwatch.com/story/consumer-sentiment-drops-to-record-low-as-inflation-worries-grip-u-s-11656079725?mod=economy-politics 6 -https://www.freddiemac.com/pmms 7 -https://www.marketwatch.com/picks/the-share-of-listings-with-a-price-cut-is-creeping-up-5-economists-and-real-estate-pros-on-what-the-housing-market-will-look-like-this-summer-01654028472 8 -https://www.redfin.com/news/may-2022-housing-migration-trends/

If history tends to repeat itself, you might wonder whether it’s round two for the mortgage industry and the underwriting of risky loans – specifically, for short-term rental properties. It’s easy to get into a short-term rental with a loan that’s based on future rental income. It’s not a new concept for real estate investors, but it’s now becoming very popular for short-term rental investing as a way to pay for more expensive properties. On the other hand, it’s possible to cover that expense with the expected income. But, what happens to that loan if, let’s say, we have a recession and demand dries up for expensive short-term rentals? Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Non-Owner, No Income Loans You may already know a bit about these loans. They are commonly known as NONI loans which stands for Non-Owner, No Income and are based on the future income of a property, and not on the borrower’s paycheck. When a lender underwrites this kind of loan, they approve an amount for the purchase of the property that is proportional to future income. According to Realty411, it’s typical to get up to a 75% LTV on loans up to $3.5 million. Borrowers don’t need to show any income or employment, and they can be first-time investors because qualification is based on the expected cash flow from the property. (1) Those are a few of the basics for a NONI loan. You might also hear them called “debt service coverage ratio” loans, but NONI has a nicer tone. It also means grandmother in Italian. One lender, called “The Lender,” is capitalizing on that with an image of a grey-haired woman wearing heart-shaped glasses and flashing a peace sign. (2) What’s not to like about that? The ad says: “Our NONI likes Airbnb. The NONI program allows borrowers to use income from vacation rentals, like Airbnb and VRBO… Results without the B.S.” So granny will get you a loan for your short-term rental business. Thanks granny! Just to be perfectly clear about NONI loans, they are very common loans for real estate investors. And the real estate investing mortgage market has been booming, but it’s unclear how much of that boom is due to short-term rental NONI loans. Loans Based on Projected Rental Income According to Inside Mortgage Finance, lenders issued almost $10 billion in loans to investors last year. That’s eight times as much as they did in 2018. Most of those investors qualified for the loans based on projected rental income. Although there’s no way of knowing how many were borrowing money for short-term rentals, it appears those numbers are growing. Bloomberg says that rating companies have noticed more mortgages for properties without a lease or for properties with leases that are less than 90 days. “The Lender” told Bloomberg that it expects 60% of its rental-based loans for this year will qualify because of short-term rental income. (3) As it stands, the default rate is usually higher for NONI loans. One analyst says that borrowers who qualify for these loans are three times as likely to default as those with conventional loans. And with an unsteady economy, and the idea of a potential slowdown in the short-term rental market, that could put those borrowers at a higher risk, especially if they are inexperienced. “The Starry-Eyed Inexperienced Investor” As former assistant director at the U.S. Consumer Financial Protection Bureau, Patty McCoy, told B;oomberg: “The influx of the starry-eyed inexperienced investor is artificially boosting demand and causing the rental market to be overheated.” She says: “This whole class of loan and, in particular, some of these underwriting practices are a sign of market euphoria. That rarely turns out well.” Although some analysts see a parallel here with subprime mortgages that were approved with little or no income documentation, lenders say they underwrite these loans with great care. For one, borrowers must have exemplary credit, and lenders often require experience in the short-term rental market, or at least some amount of experience as a landlord. Some lenders may have tougher requirements than the ones I previously mentioned. For example, Viseo Co-Founder, Jeff Ball, says that borrowers often need a 30% down payment and at least six months of funds in reserve to pay the mortgage. He says the loans that his companies underwrite perform extremely well. He says: “People with good credit have good credit because they have a history of paying their obligations in good times and bad times.” But he also acknowledges that in the event of a recession, and a cut back on travel, there could be trouble. He says: “It’s an interesting question.” Will There be a Short-Term Rental Downturn? Consumers are still whole right now. They saved money during the pandemic, and are now itching to get away. Many of them can also work remotely so a typically shorter vacation can be turned into a longer one. That puts money into the pockets of short-term property owners, and helps to pay for those NONI loans, but there’s also another issue that STR investors need to keep in mind. The need for long-term housing is putting more and more pressure on short-term operators. It’s something that is impacting the housing market here in the U.S. and around the world. There’s a headline in the news right now, about the housing shortage in Brisbane, Australia, and a warning that short-term operators will be slapped with a huge additional fee. Like many places, Brisbane has seen a huge surge in short-term rentals. There are cities in Southern California tourist destination hot spots that have stopped issuing new licenses. Many long-term residents also want the ones in operation to be phased out. It’s a wildcard that could spoil the best of your short-term rental plans! The best advice is to do your homework and make sure you know what’s happening with demand and regulations. As you’ve heard me say before, real estate is the best way to build wealth, and there are many ways you can do that. But, you need to do your due diligence. You can find out more about how to invest safely by joining our network at newsforinvestors.com. It’s free to join, and get your questions answered. While you are there, you can also check for links on this topic in the show notes for this episode. And please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 -https://realty411.com/the-non-owner-no-income-noni-loan-solution/ 2 -https://retail.thelender.com/ 3 -https://www.bloomberg.com/news/features/2022-06-14/airbnb-rentals-turn-into-real-estate-goldmines-with-easy-money-mortgages

In this Real Estate News Brief for the week ending June 18th, 2022... the Fed’s supersized rate hike, mortgage rate sticker shock, and the home equity bonanza. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and the Fed’s biggest rate hike in three decades. The central bank hiked the federal funds rate by three-quarters of a percent which puts it between 1.5% and 1.75%. If inflation doesn’t show signs of slowing by next month, Fed Chief Jerome Powell said they might hike it by another three-quarters of a percent. He doesn’t expect that to be a common practice, but he said the Fed is determined to get inflation back down to 2%. (1) The rate hike came after two more hot inflation reports. The Consumer Price Index shows that inflation hit an annual rate of 8.6% in May, while wholesale prices came in at 10.8%. Economists are now looking ahead to the CPI report for June as they anticipate the size of the next rate hike and whether higher rates will tip the economy into a recession. As reported by MarketWatch, the Fed has backed off the idea of a “soft landing” and is running the risk of a recession to get inflation under control. (2) The Fed is currently expecting the economy to slow to 1.7% over the next year-and-a-half with inflation running at 5.2% by the end of this year and 2.6% by the end of next year. It anticipates a slight rise in unemployment, but expects the job market to remain strong. Right now, jobless claims are low while job openings are high. There have been some reports of layoffs, which is contributing to recession anxiety. Last week, real estate companies Redfin and Compass announced layoffs, in response to a slower housing market. Redfin is cutting 8% of its staff, and Compass is cutting 10% because fewer people are buying homes. Many can’t afford the high price of the home combined with a more expensive mortgage. (3) The housing slowdown is also impacting residential construction. The Commerce Department says that housing starts dropped 14.4% in May to an annual rate of 1.55 million. That’s the biggest decline since April of last year. Multi-family starts dropped the most - by 26.8%. Single-family starts were down 9.2%. Permits also fell but only by 7%. (4) Mortgage Rates Mortgage rates bolted higher last week, for the largest one-week increase since 1987. Freddie Mac says the average 30-year fixed-rate mortgage rose 55 basis points to 5.78%. The 15-year was up 43 points to 4.81%. On a positive note, higher mortgage rates will help control the crazy home price growth we’ve seen lately. (5) In other news making headlines… Mortgage Rate Sticker Shock The rapid rise in mortgage rates is giving some homebuyers sticker shock. Even though mortgage rates are nowhere as high as they were decades ago, they are at their highest level since about 2008. And that’s cutting into homebuyer budgets. (6) The National Association of Realtors says that higher interest rates have chopped about 25% off the homebuyer’s budget since the beginning of the year. As an example, NAR says that the typical buyer could afford a $360,000 home with a $1,400 monthly mortgage payment in January. Now, with higher interest rates, that buyer will have to shop for a $270,000 home if they want to maintain a $1,400 a month payment because a larger portion of the mortgage will go toward interest. Homebuyers Are Embracing ARMs One way that homebuyers are dealing with the cost of the loan, is by choosing an adjustable rate mortgage or what’s known as an ARM. The Mortgage Bankers Association says that the number of ARMs doubled in May, to help keep initial payments lower. They were as much as a full point lower on the MAXEX exchange. (7) According to the loan-trading platform, MAXEX is a network of 320 banks and nonbank originators, as well as 20 “high-profile investors.” It says these lenders have been seeing explosive growth in ARMs and it expects the trend to continue. Big Equity Gains for Homeowners While price appreciation makes it tough to buy a home, most homeowners are feeling a whole lot richer. According to a CoreLogic report, 62% of all U.S. properties rose in value with an average gain of about $64,000. (8) The states with the highest amount of appreciation were California and Hawaii with an average of about $140,000. Other red-hot states were Washington, Arizona, Utah, Colorado, and Nevada. The states with the lowest amount of average appreciation were Iowa at $17,000 and North Dakota at $19,000. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! I’d also like to recommend a new book called “The Wise Investor” by RealWealth co-founder Rich Fettke. He wrote the book as an entertaining way to share what he’s learned about creating wealth both financially and personally. The protagonist is a man who realizes his life is nothing like he had planned and sets off to change that. The reader is swept along for the ride. It’s a quick read, and is currently available as a Kindle book on Amazon. The hard cover and audio versions are coming out in August but you can pre-order them now. You can also read more about the book here. (at realwealth.com/grow) Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.marketwatch.com/story/fed-lifts-rates-by-most-in-three-decades-anticipates-policy-rate-rising-to-3-8-by-end-of-2023-11655316254?mod=mw_latestnews 2 -https://www.marketwatch.com/story/as-fed-aggressively-raises-rates-here-are-4-takeaways-from-jerome-powells-press-conference-11655340311?mod=economy-politics 3 -https://www.cnn.com/2022/06/17/investing/premarket-stocks-trading/index.html 4 -https://www.marketwatch.com/story/u-s-housing-starts-plunge-in-may-11655383118?mod=u.s.-economic-calendar 5 -https://www.freddiemac.com/pmms 6 -https://magazine.realtor/daily-news/2022/06/17/surging-mortgage-rates-spook-house-hunters 7 -https://www.housingwire.com/articles/maxex-report-shows-arms-doubled-in-may/?utm_campaign=Newsletter%20-%20HousingWire%20Daily&utm_medium=email&_hsmi=216674568&_hsenc=p2ANqtz--7Is5ehx6QK5u6f15i-lFl9EfIiIrNoDk029qwgACHkfo3hZfA7lCOZovmqBlflCXrRa7iSat3Dq_i5TwJHWqKqwqWlQ&utm_content=216674568&utm_source=hs_email 8 -https://magazine.realtor/daily-news/2022/06/10/homeowners-see-12-month-equity-gain-of-64k

There’s a lot of uncertainty in the economy right now as inflation pushes higher. The housing market is contributing to inflation with higher home prices, and now we’re seeing higher mortgage rates. As potential homebuyers get priced out of the market, real estate investors see the need for housing as a big opportunity for single-family rentals. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Institutional investors have been very busy this year expanding their portfolios of single-family rental homes. As reported by HousingWire, they’ve sponsored at least 10 SFR securitization deals worth almost $8 billion. (1) ATTOM Data Solutions’ Rick Sharga says: The historically low inventory of homes to buy coupled with (rental) vacancy rates hovering around 2.5%, have positioned SFR owners for success in today’s housing market.” Strength of the Single-Family Rental Market The institutional deals highlight the strength of the single-family rental market, but it’s the “mom and pop” investors who are the biggest beneficiaries because the single-family rental market is dominated by small investors. According to rentalhomecouncil.org, 99% of single-family rentals are owned by smaller investors and 90 percent of them own fewer than ten units. (2) But the Wall Street landlords are showing a lot of interest, and their share is growing. This trend is gaining momentum as potential homebuyers lose the battle against inflation, and the Fed tightens the belt on the money supply. The Fed’s recent decision to increase short-term lending rates by a whopping 75 basis points is the Fed’s latest attempt to slow a hot economy. It’s the biggest rate hike we’ve seen since 1994 and will raise borrowing costs for adjustable rate mortgages and other short-term loans. Rising Mortgage Rates It’s not directly tied to the popular fixed-rate mortgage, but will impact mortgages through a complex set of economic relationships. That includes nervousness among investors, bond yields and the 10-year Treasury. After more than a decade of low mortgage rates, the 30-year fixed-rate mortgage topped 6% last week. According to ATTOM, mortgage originations were down 18% from the Q4 of last year to Q1 of this year. Year-over-year, they were down 32%. The biggest reason for the mortgage downturn is a decrease in refinancing. ATTOM says just 1.45 million home loans were rolled into new mortgages during the first quarter. That’s 22% lower than the end of last year and 46% lower than a year ago. According to Sharga: “The drop-ff in Q1 refinancing activity is no surprise with mortgage rates rising as rapidly as they have.” Renting Cheaper than Buying Home prices are also keeping homebuyers at bay. According to John Burns Real Estate Consulting, it’s now more costly to own a home than it is to rent one since the year 2000. The consulting group says it costs about $839 per month more to buy than to rent. (3) John Burns senior research manager, Danielle Nguyen, says: “With demand now shifting toward renting, home builders who were once reluctant to sell to rental home investors are now soliciting offers from investors.” She says: “Strong demand from investors will provide additional support to today’s home prices.” SFR Opportunities for Investors As dire as it may sound to hear about higher mortgage rates and expensive homes, demand for single-family rentals remains strong, and that’s attracting more institutional investors. MetLife Investment Management told HousingWire that: “MIM believes that institutional SFR ownership is likely to grow significantly over the next decade.” It expects that share to grow from 2% where it is today to around 10% in the future. Much of that growth will come from the new build-to-rent trend that’s taking shape. It isn’t just the big landlords who are doing the build-to-rent thing. Although it’s great that institutional investors might prefer to leave the existing home inventory to small investors and homebuyers, there are opportunities for small investors to own newly-built rentals. If you’re a member of RealWealth, then you probably know that we work with with property teams who can provide that kind of rental unit to our members. If you’d like to know more about that, please go to newsforinvestors.com and sign up. It’s free, and will give you access to our resources, including investment counselors and property teams. While you are there, you can also check for links on this topic in the show notes for this episode. Also, please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.housingwire.com/articles/as-rates-skyrocket-wall-street-single-family-rental-investors-see-opportunity/?utm_campaign=Newsletter%20-%20HousingWire%20Daily&utm_medium=email&_hsmi=216674568&_hsenc=p2ANqtz-9kKz4UtawEjJ2FBXak6h5mP0nz8HU01QcfNmJN26CMLgu3kR8V-0LQbz_pxwqztwv6NKfgARrR6Fz2zghXhhq6CKy2Gg&utm_content=216674568&utm_source=hs_email 2 -https://www.rentalhomecouncil.org/ 3 -https://www.marketwatch.com/story/its-now-more-expensive-to-own-a-home-than-to-rent-one-than-at-any-time-since-2000-heres-what-that-means-for-house-prices-11655213808

Reporting rent payments to credit bureaus is growing in popularity to help tenants build credit. But it’s not just something that helps tenants. According to the media website, Propmodo, it’s also a better way to do business for landlords. And there are a growing number of companies offering this service to both tenants and landlords. (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. Having a long history of on-time rent payments speaks well of a renter. That’s something every landlord looks for during the screening process. But until more recently, the only option for passing that information along to the “next” landlord is by word of mouth – from one landlord to another who’s checking references, typically by phone. For the renter, on-time rent payments will obviously keep the peace with a current landlord, and help with any phone calls from a new landlord, but it does little to improve a renter’s credit score. Although renters can build credit from paying their other bills, rent hasn’t been one of things reported to the big three credit agencies because landlords are not considered creditors. Technology-Based Solutions The arrival of technology-based solutions or “fintech” is changing the way this information is distributed. Just this week, a company called “Bilt Rewards” announced that it will offer a free rent reporting service for tenants who live in Bilt Alliance multi-family buildings. Bilt tenants have been able to earn points for paying their rent on time, and then use those points to pay for other things like travel or to help pay next month’s rent. And now those tenants can also choose to have those rent payments reported to Experian, Equifax, and Transunion to help build their credit, which they need to possibly eventually buy a home. As Bilt says on its website: “Rent reporting can help build a credit history, increase the types of credit on your credit report, and may boost your credit score.” (2) Rent Reporting is Valuable to Landlords This kind of information is also valuable to landlords to evaluate the likelihood that a future tenant will pay his or her rent. It even seems like a glaring omission that rent reporting has not been part of the credit reporting system, but as I mentioned, that’s changing. There are a number of companies now offering the service. FrontLobby and RentRedi are two that come to mind, along with the one I previously mentioned, Bilt Rewards. Propmodo mentions a company called Piñata that also rewards tenants for making on-time payments. It’s a New Jersey start-up with an app that provides currency to tenants with timely rent payments. That currency can then be used to buy things from prominent brands like Costco, Amazon, and Starbucks. Piñata also helps tenants build credit, and hopes to close the credit discrimination gap for renters. Propmodo says that the “lack” of rent reporting can be a source of frustration for renters. According to a report from Harvard’s Joint Center for Housing Studies, almost 11 million renters spent more than 50% of their income on housing in 2018. That’s a big chunk of a typical renter’s income that doesn’t build equity, and without contributing to their credit score, provides no additional financial benefit. Building Credit, Avoiding Delinquencies As reported by Propmodo, FrontLobby says that tenants have seen their credit scores jump more than 40 points “in a matter of months.” And for landlords, it says they can “lower payment delinquencies by 36%.” The Propmodo piece calls it a win-win for both tenants and landlords because “landlords and property management companies can make better screening decisions when they’re deciding who to rent to. And, it says that “offering to report a tenant’s rent payments to the credit bureaus is its own incentive to attract tenants.” For tenants, it helps them build credit, which they might need if they ever want to become homeowners. Fannie Mae has been using data on rent payments in its underwriting process since last September. And Freddie Mac is reportedly looking into doing it as well. (3) Check for links in the show notes at newsforinvestors.com. And please check out Rich Fettke’s new book, “The Wise Investor.” It’s a book that will help ground you and expand your horizons while teaching you about real estate, financial freedom, and the discovery of your better self. The kindle book is for sale on Amazon. The hard cover and audio versions are coming out in August but you can pre-order them now. You can also read more about the book here. Also, please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.propmodo.com/reporting-rent-to-credit-bureaus-is-better-for-tenants-and-landlords/ 2 -https://www.biltrewards.com/ 3 -https://www.nationalmortgagenews.com/news/rent-payment-reporting-program-launched-by-bilt-rewards

In this Real Estate News Brief for the week ending June 11th, 2022... inflation hits a 40-year high, demand grows for single family rentals, and a popular TV show inspires a Montana migration. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and a report that shows the highest rate of inflation since 1981. The Consumer Price Index was up 1% in May to an annual rate of 8.6%. It was 8.3% last month. The increase is mostly due to rising gas and food prices. If you strip those out, the core rate was up .6% to an annual rate of 6%, which was actually down slightly from 6.2%. (1) The report is setting off alarm bells. Financial experts are now anticipating a 75 basis point rate hike at the next Fed meeting in June, and further hikes in July and September. The talk so far has been more along the lines of two 50 basis point hikes in June and July, but as one wealth advisor told CNBC, this report was a “doozy.” Tom Graff of Facet Wealth says: “The most concerning part of this report was its breadth. The monthly number wasn’t driven by a few items. Most of the major categories actually accelerated price increases month-over-month.” (2) As inflation fears grow, so do worries about recession. Now the Atlanta Fed is lowering its forecast for the second quarter from 1.3% to a gain of just .9%. (3) It’s interesting to note that real estate accounted for almost 17% of the GDP last year. The National Association of Realtors says it was 16.9% of the GDP or about $3.9 billion. That’s about $113,000 in total economic impact for each home sale. (4) The Memorial Day weekend may have contributed to a jump in jobless claims. MarketWatch says they were up 27,000 to a five-month high of 229,000. It calls them seasonal “quirks” due to the holiday and not layoffs. (5) Mortgage Rates After idling for a few weeks, the mortgage rate seesaw continues. Freddie Mac says the average 30-year fixed-rate mortgage was 14 basis points higher last week to 5.23%. The 15-year was up 6 points to 4.38%. (6) The average contracted rate of interest was higher. The Mortgage Bankers Association says the 30-year went from 5.33% to 5.40%. That corresponded to a 7% drop in purchase applications. Refinance loans were also down 6%. The MBA says mortgage demand dropped to its lowest level in 22 years. (7) Freddie Mac’s deputy chief economist Len Kiefer said in a tweet that the “U.S. housing market is at the beginning stages of the most significant contraction in activity since 2006.” He said: “It hasn’t shown up in many data series yet, but mortgage applications are pointing to a large decline over the summer.” He also clarified that he expects home sales to slow down quite a bit over the summer, but doesn’t expect them to “grind to a complete halt.” (8) In other news making headlines... Pessimism Among Would-Be Homebuyers A new survey supports the idea of slower sales this summer. Fannie Mae’s Home Purchasing Sentiment Index shows that almost 80% of the participants feel it’s a bad time to buy a home right now. Almost as many people feel that mortgage rates will continue to march higher over the next year. (9) Fannie Mae expects a mild recession next year, but the agency says that inflation and rapidly rising short term interest rates could push us into a recession much sooner. Demand for Single-Family Rentals Big landlords are responding to a demand for single-family rentals. The National Association of Home Builders says that builders broke ground on 13,000 single-family rentals in the first quarter. That’s a 63% increase from the first quarter of last year. (10) American Homes 4 Rent CEO, David Singelyn, told CNBC: “There are not enough quality homes for the number of American families.” He says the quantity of inquiries, showings, and applications for new rental homes is “two to three times greater today than it was two years ago before the pandemic.” TV Shows Drives Newcomers to Montana Montana is getting a lot of attention as a great place to live, thanks to Kevin Costner’s TV show “Yellowstone.” The show features the Dutton family and ranch-style living on large stretches of land with sweeping views of mountains and prairies. (11) Beartooth investment Group founder, Robert Keith, says his company has received influx of inquiries from all sorts of wealthy families who want to buy a ranch. He says: “They are looking to own really amazing large properties” like you see in the TV show. The show debuted in 2018 and has already pumped tens of millions of dollars into the Montana economy, but long-time Montana residents are worried it’s attracting too many new residents and driving up home prices. The median home price was $500,000 before the pandemic. It’s now almost $750,000. 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’re worried about inflation, real estate is a good way to safeguard your money. Real estate values don’t fluctuate as wildly as stocks, and your rental income will carry you through any sort of a downturn. You can find out more about single-family rental investing at newsforinvestors.com. Join for free, and get access to experienced investment counselors, property teams, lenders, and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.marketwatch.com/story/coming-up-consumer-price-index-for-may-11654862886?mod=home-page 2 -https://www.marketwatch.com/story/catastrophically-bad-inflation-report-is-boosting-chances-of-a-75-basis-point-hike-in-june-or-july-11654876860?mod=MW_article_top_stories 3 -https://www.cnbc.com/2022/06/07/fed-gdp-tracker-shows-the-economy-could-be-on-the-brink-of-a-recession.html 4 -https://cdn.nar.realtor/sites/default/files/documents/2022-state-economic-impact-report-us-04-28-2022.pdf 5 -https://www.marketwatch.com/story/u-s-unemployment-claims-jump-27-000-to-five-month-high-of-229-000-11654778599?mod=economic-report 6 -https://www.freddiemac.com/pmms 7 -https://www.cnbc.com/2022/06/08/mortgage-demand-falls-to-the-lowest-level-in-22-years.html?__source=realestate%7cnews%7c&par=realestate 8 -https://www.realtor.com/news/trends/the-u-s-housing-market-is-at-the-beginning-stages-of-the-most-significant-contraction-in-activity-since-2006/ 9 -https://www.housingwire.com/articles/almost-80-believe-its-a-bad-time-to-buy-property/ 10 -https://www.cnbc.com/2022/06/10/big-landlords-jump-into-the-homebuilding-as-demand-for-single-family-rentals-surges.html?__source=realestate%7cnews%7c&par=realestate 11 -https://magazine.realtor/daily-news/2022/06/08/hit-tv-show-yellowstone-prompts-more-moves-to-montana

A Phoenix-based construction company isn’t worried about the high price of lumber. It has replaced lumber with another building material that it claims is cheaper, more available, more resistant to natural disasters, and more energy efficient. 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. Amazing Building Material So what is this amazing building material? It’s basically a combination of foam and cement in layers. It can be used on all parts of a home including walls, floors, and ceilings. And lowers the cost of building the home by as much as 10 to 50%. Strata International calls the product SABS which stands for Saebi Alternative Building System. Strata is a green structural engineering company and Amir Saebi (Sigh-EE-bee) is the Executive Operations Manager. (1) The process involves the cutting of foam slabs into smaller elements of the home design and then gluing them together with a foam adhesive to create a three-dimensional structure. That foam structure is then covered on both the inside and the outside with a thin layer of high-strength concrete. No Wood. No Nails. No Steel. No Nothing. Saebi told a local TV station: “Once the panels come together you have a monolithic system completely made out of foam.” After that, he says: “We’ll take the high-strength concrete and apply it to the exterior and interior and that’s all the system uses. No wood. No nails. No steel. No nothing. It’s just the foam and the SABS product which goes over it which is the high-strength concrete.” (2) Saebi says it’s so strong that you could drive an F150 truck onto a six-inch finished piece without cracking it. He also described the environmental qualities of the foam as “100% breathable, 100% liveable, FDA approved, and 100% recyclable.” There’s a chart on the website that shows how this foam can outperform other building materials when it comes to mother nature. (3) It says that houses made of this foam can withstand winds up to 260 miles per hour, making it highly resistant to hurricanes. It’s also at the top of its class when it comes to earthquakes, mold resistance, and rodent resistance. It has a moderate reading for fires which is better than wood. Practical Solution for Green Construction Strata says the foam is a perfect solution for a building material that is more climate friendly, and the first practical solution for green construction because it checks so many boxes – from affordability to sustainability. It’s also a better insulating material than wood, masonry and other building materials. It has a minimum R-value of 35 with an average R-value of 50 to 65. The minimum R-value alone is more than double the R-value of wood and masonry. The R-value of a building material indicates how well it resists heat. The higher the number, the higher the resistance. The foam is also good for soundproofing. Saebi says that energy efficiency is about double what you’d get from a home built of wood, and in places like Arizona, it can cut your AC bill in half. No Limits on Design He also emphasizes the design benefits of foam because you have no limits to the kind of shapes you can create. There are also fewer steps to the construction process. Building a home out of foam might require four kinds of sub-contractors while a wood home requires 11. The company has already built hundreds of foam buildings around the world, and is currently building a 6,000-square foot home out of foam in the Phoenix area. Saebi says the supply chain issues that have haunted builders for the last few years haven’t impacted the availability of foam so foam prices haven’t really hasn’t increased. Strata first introduced its foam building material more than 20 years ago in 1999 so it’s been around for a while. Saebi says with supply chain and climate change issues, it’s now becoming more popular. Check for links in the show notes at newsforinvestors.com. Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.strataus.com/media 2 -https://www.fox10phoenix.com/news/as-cost-to-build-home-rises-phoenix-area-company-using-new-material-to-build-houses 3 -https://www.strataus.com/_files/ugd/077c93_088198965db54c829afee29a01d596f8.pdf

In this Real Estate News Brief for the week ending June 4th, 2022... what’s being done about inflation, how inflation is impacting homebuyers, and why lumber prices are actually falling. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and lots of talk about inflation. President Biden launched a new effort last week to tackle inflation. As reported by the Washington Post, he was apparently fuming to aides that not enough was being done to control inflation. That turned into a flurry of activity to get the ball rolling and send a positive message to the American people. He met with both Federal Reserve Chief Jerome Powell and Former Fed Chief Janet Yellen in the Oval Office, and said in a public address that fighting inflation was his top economic priority. (1) President Biden also published an op-ed piece for the Wall Street Journal outlining a three-part strategy for fighting inflation. The first part involves the Federal Reserve’s responsibility for controlling inflation, which it’s now doing with aggressive rate hikes. Biden says he won’t meddle with that, but for part two, he says he will do what he can, or with the help of Congress, “to make things more affordable for families.” That includes an effort to lower prices for gas, utilities, prescription drugs, and other everyday goods. The third part involves deficit reduction. The Congressional Budget Office projected the deficit will fall by $1.7 trillion this year. Biden wants to see even more of a reduction with what he calls “common-sense” tax reforms. (2) *Ironically, what was not mentioned was the Fed's stimulus, and the trillions of dollars that were created over the past two years that increased the money supply by nearly 50%. Additionally, the Fed had continued to buy Mortgage Backed Securities to support the housing market, until spring of 2022, when home prices had already increased by 20%. So in my opinion, the Federal Reserve together with the US government contributed to the inflation they are now trying to combat with rapidly rising rates and Quantitative Tightening. If you'd like to hear more about my opinions on how we got here, listen to the new podcast, On the Market, which is sponsored by FundRise. I am a regular guest expert on that show, and we go into detail on what's behind the headlines. There’s a bit of good news about Social Security thanks to the strong job market recovery. The Treasury Department says that Social Security benefits are now fully funded through 2034. That’s one year longer than previous estimates. It also says the disability insurance program has enough funds to pay full benefits for the next 75 years, through 2097. Last year, Treasury officials said that funds would be gone by 2057. (6) Unemployment claims fell for a second week in a row. There were just 200,000 initial claims, and 1.31 million continuing claims. Continuing claims are the lowest since 1969. (7) The unemployment rate in May was at 3.6%. (8) Now to the housing market: Construction spending was .2% higher in April, mostly due to money spent on residential construction. It was up .5% for single-family homes, .8% for multi-family buildings, and down for non-residential private and public construction. (9) *The latest Case-Shiller home price report shows that prices hit a new record high in April. The 20-city index was up 3.1% in April for a yearly rate of 21.2%. Keep in mind that April closings probably had rate locks in March, before interest rates increased two points.(10) Mortgage Rates Mortgage rates didn’t move much this last week. Freddie Mac says the average 30-year fixed rate mortgage was down just one basis point, to 5.09%. The 15-year was up one point to 4.32%. (11) Purchase applications are now about 14% lower than they were a year ago, thanks to higher rates. The Mortgage Bankers Association says the average contract rate for a 30-year with a 20% down payment was 5.33% last week. (12) In other news making headlines... Inflation Impact on Homebuyer’s Budget Inflation is taking a huge bite out of the homebuyer’s budget. According to the National Association of Realtors, homebuyers have to chop $40,000 off their budget for a home because they are paying more for everything else. (13) NAR says the average consumer is paying about $500 more per month compared to a year ago. That’s an extra $6,000 a year. NAR’S chief economist Lawrence Yun expects a 10% decrease in housing demand thanks to higher prices, although he still expects a 5% increase in home prices because of the tight inventory. Lumber Prices Tumble Lumber prices are coming back down to earth. The National Association of Homebuilders says they fell 12% this last week to their lowest level so far this year. (14) The Wall Street Journal reports that prices are coming down because the housing market is cooling off a bit. It says that orders for lumber are slowing down so inventories are building up, and sawmills are slashing prices. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.washingtonpost.com/politics/2022/05/31/biden-inflation-frustration/ 2 -https://www.wsj.com/articles/my-plan-for-fighting-inflation-joe-biden-gas-prices-economy-unemployment-jobs-covid-11653940654?mod=opinion_lead_pos5 3 -https://www.cnbc.com/2022/06/03/feds-mester-says-inflation-hasnt-peaked-and-multiple-half-point-rate-hikes-are-needed.html 4 -https://www.cnbc.com/2022/06/02/fed-vice-chair-lael-brainard-says-its-hard-to-see-the-case-for-the-fed-pausing-rate-hikes-.html 5 -https://www.cnbc.com/2022/06/01/the-feds-mary-daly-says-rate-hikes-should-continue-until-inflation-is-tamed.html 6 -https://www.cnbc.com/2022/06/02/social-security-trust-fund-will-be-able-to-pay-benefits-longer-than-expected.html?&qsearchterm=social%20security 7 -https://www.marketwatch.com/story/u-s-unemployment-claims-drop-to-200-000-as-layoffs-fall-to-lowest-level-on-record-11654173646?mod=economy-politics 8 -https://www.marketwatch.com/story/coming-up-u-s-jobs-report-for-may-11654257620?mod=economic-report 9 -https://www.marketwatch.com/story/u-s-construction-spending-rose-slightly-in-april-271654094325?mod=search_headline 10 -https://www.marketwatch.com/story/increase-in-u-s-home-prices-hits-another-record-high-case-shiller-shows-11654004193?mod=bnbh_mwarticle 11 -https://www.freddiemac.com/pmms 12 -https://magazine.realtor/daily-news/2022/06/02/mortgage-applications-are-falling 13 -https://www.realtrends.com/articles/inflation-cuts-homebuyer-budgets-by-40000/ 14 -https://magazine.realtor/daily-news/2022/06/03/the-lumber-bubble-may-have-just-burst 15 -https://magazine.realtor/daily-news/2022/06/01/top-cities-for-renting-in-2022

In this Real Estate News Brief for the week ending May 28th, 2022... you’ll hear about the “condo comeback,” a new wildfire risk assessment tool for your properties, and which states can save you the most money on taxes. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week and a bit of good news about inflation. The Federal Reserve’s preferred method for tracking inflation shows that price growth could be slowing down. The Personal Consumption Index or PCE rose only .2% in April. That brings the annual rate down from 6.6% in March to 6.3% in April. As reported by MarketWatch, it was the first time we’ve seen a pullback in a year-and-a-half. (1) The PCE is considered to be more accurate than the Consumer Price Index or CPI because it factors in additional criteria such as consumers substituting expensive products for cheaper ones. The latest CPI shows an annual inflation rate of 8.3%. The Fed released the minutes of its last meeting which show that most central bank officials are in favor of two more half-percent rate hikes. Some officials believe that inflation has already peaked, but the minutes show that Fed officials feel that two more rate hikes are likely. The bank raised the Federal Funds rate by a half a percent (or 50 basis points) at the last meeting to a range of three-quarters to one percent. Some Wall Street analysts expect the Fed to go as high as 3% by the end of the year. (2) Meanwhile, unemployment claims went down which is a sign that the labor market is still strong. There were about 8,000 fewer new claims last week, for a total of 210,000. Most companies have positions they are trying to fill, and MarketWatch reports that only a “smattering” of companies have reduced their hiring plans or announced layoffs. The number of continuing claims rose slightly. There are about 1.35 million people collecting unemployment benefits. (3) New home sales took a bit of a nose dive in April. They were down 16.6% to an annual rate of 591,000. It’s the fourth month in a row that they’ve gone down, thanks to higher home prices and rising mortgage rates. The median price of a home is now the highest on record at $435,000. The average price is even higher, at $570,300 which means there are more homes selling for that higher price point. The slowdown in sales has boosted inventory. It’s now at a 14-year high of 444,000. (4) Existing home sales are also down for a sixth month in a row. The National Association of Realtors says that pending sales dropped to 3.9% in April, which is the slowest they’ve been in ten years. Compared to a year ago, they were down 9.1%. NAR’s chief economist, Lawrence Yun, says higher interest rates have increased the cost of buying a home by more than 25%, and higher home prices have added another 15% on top of that. He’s predicting that home price growth will slow down to about 5% by the end of the year, but that home prices are “in no danger of a meaningful decline” because of the housing shortage. (5) Mortgage Rates Mortgage rate pain did ease up a little this last week. Freddie Mac says the average 30-year fixed-rate mortgage dropped 15 basis points to 5.1%. The 15-year was down 12 points to 4.31%. Lower rates are the result of the housing market slowdown. (6) In other news making headlines... Demand Rising for Condos Builders are responding to a new demand for condominiums. The National Association of Home Builders reports 11,000 starts for condominium units in the first quarter of this year. That’s the highest level of condo construction since the third quarter of 2008. (7) Redfin manager, Chance Glover, in Boston told Realtor.com: “The condo market has bounced back. People are no longer afraid to live downtown, close to the crowds.” She says: “Rising prices are pushing single-family homes out of reach for a lot of buyers, so condos are affordable in comparison.” (8) New Risk Factor Tool for Wildfires The foundation that developed a tool to determine a property’s risk of flooding just introduced one for wildfires. The First Street Foundation said in a press release that more than 30 million properties across the U.S. have at least a 1% chance of wildfire over 30 years because of climate change. (9) The Foundation’s new tool helps individual homeowners, buyers, and renters understand the wildfire risk for specific properties. Like you can with the flood risk tool, you can put your address into the tool and get details on the risk of a wildfire. That includes a risk factor on a scale of one to ten, the extent of potential damage, and the impact of recent nearby wildfires. (10) States with the Lowest Taxes Do you own property in a high tax or a low tax state? There’s a new state ranking from Credit Karma that compares income tax, sales tax, and property tax for all 50 states. When you combine the impact of all three, the five states with the lowest total tax rate are (drum roll): Alaska Wyoming New Hampshire Nevada South Dakota Florida is 6th on that list and Texas is 9th. You can check out the full list of states with a breakdown on the individual tax rates by following a link in the show notes at newsforinvestors.com. You’ll also find links to the wildfire risk assessment tool as well as the other topics in this episode. That’s it for today. Please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.marketwatch.com/story/u-s-inflation-rate-slows-to-6-3-pce-shows-in-sign-price-pressures-could-be-near-peak-11653655258?mod=economy-politics 2 -https://www.marketwatch.com/story/most-fed-officials-lean-to-1-2-point-rate-hikes-at-next-couple-of-meetings-11653503049?mod=federal-reserve 3 -https://www.marketwatch.com/story/u-s-unemployment-claims-fall-to-210-000-and-signal-labor-market-still-strong-11653568551?mod=economy-politics 4 -https://www.marketwatch.com/story/new-home-sales-plunge-as-high-prices-and-rising-mortgage-rates-discourage-buyers-11653401523?mod=economy-politics 5 -https://magazine.realtor/daily-news/2022/05/26/contract-signings-hit-slowest-pace-in-nearly-a-decade 6 -https://www.freddiemac.com/pmms 7 -https://eyeonhousing.org/2022/05/condo-construction-market-showing-gains/ 8 -https://magazine.realtor/daily-news/2022/05/27/condo-construction-ramps-up 9 -https://firststreet.org/press/press-release-2022-wildfire-model-launch/ 10 -https://riskfactor.com/ 11 -https://magazine.realtor/daily-news/2022/05/25/20-states-with-the-lowest-taxes-in-2022

It’s no secret that energy costs have been soaring. That goes for the money we spend at the pump, and the money we spend to heat and cool our homes. Homeowners can do things to increase efficiency, but renters typically get whatever comes with the unit and without knowing the cost for utilities before they move in. One group hopes to change that scenario with research that shows how energy labels in rental listings can be a win-win for both tenants and landlords. 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/id1079952715 Researchers with the “American Council for an Energy-Efficient Economy” conducted a survey recently to find out how energy labels would impact a rental applicant’s preferences. They enlisted the help of about 2500 people in different parts of the country who used a fake listing website to search for rentals. Survey on Tenant Preferences They were split into seven groups. Six of the groups were able to search through listings with energy cost information that was displayed in different formats. The seventh group was a control group and looked at listings without energy labels. Researchers say that participants given information about the cost of utilities were 21% more likely to choose energy efficient units. But the results also varied according to the visual presentation of that information. They say that groups who received the information within a “context” were more likely to respond favorably to the energy cost rating. For example, listings that displayed estimated costs with a minimum and maximum range of typical costs for the area were better at attracting users than the ones with just a figure for estimated costs. There was also a difference among various sub-groups of tenants depending on what part of the country they were in and their ages. Sub-groups that preferred higher energy efficiency lived in the hottest and coolest climates, which makes sense given the need for more heating and cooling. Age seemed to impact the results with people younger than 45 being a little more interested in the energy efficient units. One curious result was that apartment renters were more interested in energy efficiency than people renting single-family homes. These sub-groups were also willing to pay more in rent, typically within the 1 to 2% range. Energy Labels Good for Tenants & Landlords Researchers feel the information is important for landlords who’d like to attract higher-quality tenants. And if energy efficient units command higher rents while reducing what tenants pay for utilities, that’s a win-win for tenants and landlords, and, of course, another “win” for the environment. Researchers suggest that landlords may want to prioritize energy upgrades when they are drawing up their list of improvements, and that local regulators may want to consider policies that require this kind of information in rental listings Currently, there are no requirements anywhere in the country for the display of this information. But there’s growing concern about energy use and summer power outages. We’re already seeing headlines about how dire the situation might be this summer. Energy Emergencies Expected This Summer Forecasters are expecting a hotter-than-normal summer and regulators are warning about potential energy emergencies when people crank up their air conditioners and large appliances. Just last week, power grid regulator NERC, which stands for North American Electric Reliability Corporation, warned that large portions of the country will be at risk of power outages in the coming months. The Upper Midwest faces the highest risk of an energy emergency. It lost about 2% of its power generating capacity because of recently retired power plants. A key transmission line is also being repaired. There’s also an elevated risk across the entire Western half of the U.S. thanks to high temperatures, drought, and wildfires. While extreme heat results in more use of electricity, it also increases the risk of mechanical failures at power plants. Drought reduces output at hydroelectric power plants. Wildfires can destroy major power lines, and smoke reduces power generation at solar facilities. So there are several issues at play across the West. NERC’s John Moura told CBS MoneyWatch: “We’ve been doing (grid assessments) for close to 30 years. This is probably one of the grimmest pictures we’ve painted in a while.” He says: “As extreme weather continues to plague us, we’ve really noticed that extreme weather doesn’t really mean rare weather. (We’re seeing) the extreme happening more often.” What this all means is that property owners of all shapes and sizes will be asked to reduce their energy consumption. When you own rental property, it might be easy to overlook the energy needs of the tenants, but there’s a growing trend for energy efficiency, and tenants will probably be paying more and more attention, as will local regulators. We’ll have a link to the full report in the show notes at newsforinvestors.com. Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.aceee.org/sites/default/files/pdfs/b2204.pdf 2 -https://www.bloomberg.com/news/articles/2022-05-18/vast-swath-of-us-is-at-risk-of-summer-blackouts-regulator-warns

The Biden administration announced an ambitious new goal to close the affordable housing gap in just five years. The plan includes financial incentives to build more housing, along with changes to zoning and land use regulations to potentially make it easier to create new housing. It also includes new financing policies for things like accessory dwelling units and manufactured homes, and solutions for the supply chain crunch that’s making it difficult for builders and renovators. 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 White House released details of its Biden-Harris Administration Housing Supply Action Plan on May 16th. (1) It falls under President Biden’s effort to tackle inflation as a top priority and the need to address housing costs. According to the Consumer Price Index, housing accounts for about 30% of the prices increases we’re seeing today. Housing Supply Action Plan With this new plan, the administration hopes to create and/or preserve hundreds of thousands of affordable housing units. The government would not build any homes directly. It would all be done with the help of government policies, financing, and incentives for the private sector. This plan is also in addition to a previous one announced in September of last year, to create 100,000 homes in three years. There are five main categories to the Biden-Harris plan: 1 - The first category provides incentives for cities and districts to loosen zoning and land-use rules. Districts that do this will rank higher during the competitive process for securing federal grants. 2 - The second category includes new financing programs for the creation or preservation of small-scale housing. That includes ADUs, manufactured homes, and small multi-family buildings. 3 - Third on the list is a plan to expand and improve existing forms of federal financing. That includes more access to so-called “construction to permanent loans,” promoting the use of surplus COVID-19 recovery funds for the creation of affordable housing, and reforms to the Low Income Housing Tax Credit which would benefit investors who create affordable housing. 4 - Fourth, is a plan to give priority to homebuyers who plan to live in the homes and non-profits when disposing of federally-owned land and homes, including FHA foreclosures. The idea is to steer these deals away from large institutional investors. 5 - And last, to work with the private sector to fix supply chain issues. The goal is to get supplies moving again and allow builders to finish construction on the most new homes this year than in any year since 2006. Some of the provisions in this plan will also rely on approval from Congress, which is never a given. But some steps could also be implemented right away, including a policy at the Department of Transportation that grands higher scores during the federal grant process to districts that encourage more housing density. The Federal Housing Administration and the Federal Housing Financing Agency can also help lenders launch and expand financing programs for the construction of ADUs, manufactured homes, and the renovation of single-family homes. The FHA will also be investigating the Fannie Mae purchase of construction-to-permanent multi-family loans which would help fast track the development of multi-families, and lower the cost for builders. Affordable Housing Crisis According to Moody’s Analytics, we need at least 1.5 million more homes to meet current demand. As you know, the housing gap grew during the Great Recession and was made worse by the pandemic. Because of this massive shortfall, housing expenses have gone sky-high, making homeownership unaffordable for many Americans. That’s creating a bigger demand for rentals, which is great for investors, but rising rents are also becoming more of a burden on tenants. As reported by CNN, almost eight million Americans are spending at least half of their monthly income on housing. Anything over 30% is considered a burden. (2) CEO Buzz Roberts of the National Association of Affordable Housing Lenders says that today’s homebuyers are really feeling the impact of inflation. He told HousingWire: “On the nightly news you hear about gas and groceries, and while those things are critically important, when trying to buy a house, inflation is really daunting.” He says: “If you get a higher mortgage rate, there’s still some change you can refinance out, but the price (of the home) is baked in.” (3) Urgent and Comprehensive Action Needed The National Association of Realtors is supporting this plan. NAR President Leslie Rouda Smith says that “urgent” and “comprehensive” action is needed to tackle the housing shortage problem. She says: “For too long, land use restrictions have driven up the cost of housing for too many.” (4) Support for the creation of ADUs and manufactured homes is a big part of the plan, and a potential opportunity for investors. You can read more about this topic by following links in the show notes at newsforinvestors.com. Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/16/president-biden-announces-new-actions-to-ease-the-burden-of-housing-costs/ 2 -https://www.cnn.com/2022/05/16/politics/biden-administration-action-plan-affordable-housing/index.html 3 -https://www.housingwire.com/articles/bidens-plan-to-fix-housing-supply-depends-on-congress/ 4 -https://magazine.realtor/daily-news/2022/05/17/biden-administration-takes-aim-at-america-s-housing-shortage

In this Real Estate News Brief for the week ending May 21st, 2022… forbearance claims hit a two-year low, rent levels are setting new records, and a new list of the “best places to live”. 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 the past week, and comments from Fed Chief Jerome Powell about the central bank’s resolve to fight inflation. He told the Wall Street Journal that “restoring price stability is… something we have to do” and, he says, “there could be some pain involved.” (1) The Fed approved a 50 basis point increase for the federal funds rate at its last meeting. And, it expects to do the same at the next two meetings. The short-term rate is now within a range of .75 to 1%. Raising it another 100 basis points will bring it to 1.75 to 2%. Powell says it’s still possible to avoid a recession, but he’s now describing the process as a “soft-ISH” landing. (2) He hopes to control inflation without a big impact on the labor market. He says, if there is a recession he hopes it will be “short and not all that deep.” Many economists are lowering their economic forecasts because of inflation and higher interest rates. That includes Fannie Mae’s chief economist Doug Duncan. He says: “Financial conditions have tightened significantly and the economy is slowing faster than previously expected.” Fannie Mae now expects a full-year GDP of 1.3%. That’s .8% lower than the previous forecast. The Fannie Mae group is predicting a modest recession in the second half of next year 2023. (3) Jobless claims hit a four-month high last week. There were 218,000 initial claims, which is 21,000 more than the week before. The number of people collecting benefits is still extremely low. 25,000 people dropped off that list last week, for a total of 1.32 million. That’s the lowest number of claims since 1969. Economists are watching unemployment numbers closely because they typically rise before a recession. (4) New home construction hit a speed bump for the second month in a row. Housing starts were .2% lower to an annual pace of 1.72 million. Economists blame rising mortgage rates and higher home prices for the slowdown. Permits were down 3.2% to an annual rate of 1.82 million. A drop in single-family construction brought the numbers down. Starts on those projects were down more than 7% while multi-family starts were higher by almost 17%. Builders have shifted their focus to multi-family rental units as they try to meet the demand for housing. (5) Existing home sales were down in April. The National Association of Realtors says they fell 2.4% to a seasonally adjusted annual rate of 5.61 million. If you compare these numbers to a year ago, sales were down almost 6%. As reported by MarketWatch, this is the third straight month that sales have declined. Currently, there’s a 2.2 month supply of homes on the market. (6) Mortgage Rates Mortgage rates came down slightly last week. Freddie Mac says the average 30-year fixed-rate mortgage was down 5 basis points to 5.25%. The 15-year was 4.43%. (7) In other news making headlines... Forbearance Claims Hit 2-Year Low The number of home loans in forbearance has now dropped below 1%. According to the Mortgage Bankers Association, forbearance claims dropped from 1.05% in March to just .94% in April. That’s about 470,000 loans. The MBA says this is the lowest level since June of 2020, right before the pandemic left many homeowners without a paycheck, and without means to pay their loans. (8) The five states with the highest number of loans in forbearance include: Louisiana, Mississippi, West Virginia, New York, and Oklahoma. The five states with the lowest number of loans in forbearance include: Idaho, Washington, Colorado, Utah, and Oregon. Rent Levels Are Setting New Records Scorching hot demand for rentals is pushing apartment rents higher once again. Realtor.com says the U.S. median rental price hit a new high of $1,827 in April. The year-over-year increase for a studio apartment is 17.2%. For a one-bedroom, it’s 15.6%. And, for a two-bedroom, it’s 15.9%. (9) Orlando posted the largest rent gains in April at 32.9%. Tampa was next at 27.8%. San Diego, Las Vegas, and Miami were also among the top five rent gainers. “Best Place to Live” in 2022 When it comes to a great rental market, it doesn’t hurt to score a top spot on a list of “best places to live.” And that’s what you’ll find on the latest U.S. News & World Report list which places Huntsville, Alabama at the top. The report analyzes several metrics including affordability, quality of life, health care, employment, and crime. (10) Editor Devon Thorsby says: “Much of the shakeup at the top of this year’s ranking is a result of changing preferences.” He says: “People moving across the country today are putting more emphasis on affordability and quality of life than on the job market.” If you’re curious about the other 11 cities on the list, here they are: Colorado Springs, Colorado; Green Bay, Wisconsin; Boulder, Colorado; San Jose, California; Raleigh and Durham, North Carolina; Fayetteville, Arkansas; Portland, Maine; Sarasota, Florida; San Francisco; Ann Arbor, Michigan; and Naples Florida. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.wsj.com/articles/feds-powell-to-take-wsj-questions-on-inflation-and-economic-outlook-11652779802 2 -https://www.marketwatch.com/story/powell-says-a-softish-landing-for-u-s-economy-is-plausible-11652812959?mod=economy-politics 3 -https://www.fanniemae.com/newsroom/fannie-mae-news/rapidly-rising-rates-and-persistent-inflation-further-soften-economic-outlook 4 -https://www.marketwatch.com/story/u-s-unemployment-claims-climb-to-four-month-high-of-218-000-11652963872?mod=economy-politics 5 -https://www.marketwatch.com/story/home-builders-slow-new-construction-for-second-month-in-a-row-as-demand-softens-11652877792?mod=coronavirus 6 -https://www.marketwatch.com/story/existing-homes-sales-fall-for-third-straight-month-in-april-11652969139?mod=economic-report 7 -https://www.freddiemac.com/pmms 8 -https://nationalmortgageprofessional.com/news/mortgages-forbearance-dip-below-1 9 -https://magazine.realtor/daily-news/2022/05/19/rents-jump-to-new-record-once-again 10 -https://magazine.realtor/daily-news/2022/05/18/best-place-to-live-is-down-south

As the country deals with high inflation in food, energy, and housing, many real estate investors are pivoting to keep up with changing market dynamics. Smart investors can thrive in challenging times, if they know where to look. 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. I recently interviewed John Chang on my other podcast, The Real Wealth Show. John is the National Director of Research at Marcus & Millichap, and he offered some very good insights that I wanted to summarize here on Real Estate News for Investors. Marcus & Millichap’s John Chang Just to give you some background on John, he leads a team of real estate research professionals and is responsible for the production of the firm’s vast array of commercial real estate publications, tools and services. Under his leadership, Marcus & Millichap has become a leading source of market analysis, insight and forecasting, and the firm’s research is regularly quoted throughout the industry and in mainstream business media. To summarize, John is well-respected in his field. During his recent interview, he explained how good investors had it last year, and what they will be up against this year. He says last year was off the charts for commercial real estate. Transaction volume was up about 30% higher than the previous peak, and the dollar volume was up 45%. He says there were more deals, and many of them were also bigger deals, which is why there was a surge in dollar volume. Changing Real Estate Environment But as prices and interest rates rise, what are we starting to see now? At the time of this podcast, the overnight lending rate was up 75 basis points. That’s triggering the beginning of a slowdown, but John says we haven’t really felt the impact yet, because many of the transactions that are closing today were locked in 30, 60, or 90 days ago. He doesn’t think we’ll see much of a change during the first half of 2022, and in the second half, he expects a little bit of a slowdown, but nothing dramatic. He says, even with a few more rate hikes, there won’t be a huge impact on most real estate investors., because there’s a lot of capital out there. After all, the Federal Reserve increasing the amount of that's circulating by nearly 50% in just two years time. This is unprecedented. As those dollars circulate, investors are looking for places to put that money as a hedge against this inflation. There are also tax benefits that investors will be trying to capitalize on. So he expects investors to keep moving forward with their plans, but hopefully with more caution. The “Value Add Mentality” John told us a little story about his Dad during the interview. He said that his Dad bought his first rental property in 1971. He took out a loan at 6.5% which is higher than what we are facing right now. John’s Dad still owns that property today, and John says the reason it has worked out so well is because of something called “value add.” His Dad continued to add value to that property so that the high interest rate didn’t matter that much. And over time, it’s been a worthwhile investment. John says that smart investors have a “value add mentality.” They will research and analyze a property, and figure out a way to improve it with better management or upgrades or conversions. This mentality is something that new investors may not have developed yet because it’s been so easy in recent years. Analysis hasn’t really been necessary. As John put it: “Investors have gotten lazy… because interest rates have been so low you can just buy into a deal and it cash flows right away. You don’t have to work as hard.” But he says that we are now coming to a time when “investors have to roll up their sleeves, understand the intrinsic value of the property… what they can do differently than the previous owner, and then buy those properties.” Sophisticated investors don’t see high interest rates as a game changer. Instead, they look for ways to add value to the property to eliminate that expense. Even properties with a negative cap rate can be good for investors, so long as there’s a way to add value. John points out that the U.S. economy is the strongest in the world. People are working and spending money. Real estate is doing well. There are still supply chain issues to deal with, but when it comes to construction, the winners will be the builders with more experience and connections. This is important for investors also, to work with people who are connected. Successful investors will need to choose their properties and their partners carefully. Where Are the Deals Now? As for where investors will find deals in the commercial real estate space, John had several ideas. He mentioned multi-family buildings in smaller cities as a possibility, along with certain types of hotels, although hotel ownership also needs a special skill set. Also, he likes suburban office space in areas where people are moving, and self-storage, to name a few. If you’d like to hear more about commercial real estate from John, please check out his interview on The Real Wealth Show. You can also find out more about owning single-family rentals at newsforinvestors.com. It’s free to join our network. As a member, you get access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Also, please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: On Our Website: Navigating New Real Estate Challenges w/Marcus & Millichap Analyst, John Chang On YouTube: Sage Advice from Top Real Estate Analyst

In this Real Estate News Brief for the week ending May 14th, 2022… why lumber prices are falling, what the FHA is doing to discourage investors, and the new Google mapping tool that could help house hunters. 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. Inflation appeared to slow down a bit last month. The government reported a slight decline in the Consumer Price Index from an annual rate of 8.5% in March to 8.3% in April. But that’s coming off a 40-year high, so we haven’t come down much. Plus, the so-called “core rate of inflation” - which omits prices for food and gas - was .6% higher. That was a disappointment on Wall Street because analysts had forecast a lower .4% increase. (1) As reported by MarketWatch, many economists expect inflation to slow down, but they say it will probably take a while for that to happen. Supply chain issues and the labor shortage are two big reasons that prices keep rising. The decline was also not enough to put consumer minds at ease. The University of Michigan says its consumer sentiment index fell to a ten-year low as of this month. It went from a reading of 65.2 in April to 59.1. A survey shows that most Americans expect overall inflation to remain at the 5.4% level for the next year and at 3% for the next five years. (2) Mortgage Rates Mortgage rates also crept a little higher last week. Freddie Mac says the 30-year fixed-rate mortgage rose 3 basis points to an average of 5.3%. The 15-year was down 4 points to 4.48%. (3) The mortgage company says that many homebuyers are continuing with their plans but are paying about one third more per month than they would have a year ago. In other news making headlines… Builders Getting a Break on Lumber Prices Lumber prices are headed lower. They fell below $800 per thousand board feet last week. That’s about 30% lower than they were at the beginning of the year, but they are still much higher than they have been historically. The National Home Builders Association says they’ve been so high that homes were $18,000 more expensive than they were in previous years, just because of high lumber prices. (4) A recent survey by John Burns Real Estate Consulting shows that prices may be coming down a little because of softening demand for entry-level homes. And, the COO of Sherwood Lumber, Kyle Little, told Insider: “We expect prices in the long term to be challenged with the affordability and rising interest rate headwinds.” Landlords Lose in Appeal to CA Supreme Court The California Supreme Court rejected a request by landlords to review a lower court ruling that impacts the Costa-Hawkins Rental Housing Act. If you haven’t heard of Costa-Hawkins, it’s legislation enacted in 1995 that prevents California cities from imposing rent control on single-family homes, condominiums, and residential properties built after 1995. (5) There was concern that San Francisco landlords were circumventing eviction laws by raising rents so high that tenants would move out. The city called them “bad faith” rent increases that were used to evict tenants. The city then passed an ordinance in 2019 to prevent that from happening. It included a way to compare rent increases to market rates, and to check if there had been a recent eviction attempt. Landlords sued, but lost their case in lower courts. In 2020, a Superior Court judge said: “Costa-Hawkins does not protect a landlord’s right to use a pretextual rent increase to avoid lawfully imposed local eviction restrictions.” The high court’s decision last week, allows the lower court ruling to stand. FHA Gives Owner-Occupants First Dibs on Foreclosures The Federal Housing Administration will make investors wait their turn, for a look at foreclosed properties. The FHA announced that owner occupant buyers, government entities, and HUD-approved nonprofits will get first dibs during a 30-day exclusive time period. It will also provide time for buyers to get a loan if they need one. (6) The FHA says it’s doing this to support a goal to reduce the number of homes that investors are buying and turning into rentals, and to help people who want to become homeowners. Buyers must provide a signed statement saying they intend to live in the home. They also have 15 days to back out of a deal if they get “buyer’s remorse.” Google Street View Get “Immersive” Google is adding a new feature to its mapping software that will help house hunters. It combines satellite and street view images so that users can fly over an area and then drop down to street level to take a closer look. Some people say the aerial view looks like you’re flying over a property with a drone. Google calls it an “immersive view.” (7) It’s being introduced in New York and Los Angeles. Google plans to expand soon to new 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. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.marketwatch.com/story/u-s-inflation-rate-slows-to-8-3-cpi-finds-after-hitting-40-year-high-11652272713?mod=home-page 2 - https://www.marketwatch.com/story/consumer-sentiment-hits-ten-year-low-amid-high-prices-umich-survey-finds-11652451173?mod=economic-report 3 - https://www.freddiemac.com/pmms 4 - https://magazine.realtor/daily-news/2022/05/11/lumber-prices-tumble-to-lowest-level-of-2022 5 - https://www.sfchronicle.com/bayarea/article/State-Supreme-Court-rejects-a-challenge-by-17166499.php 6 - https://caanet.org/calif-supreme-court-snubs-appeal-of-costa-hawkins-case/?mkt_tok=NTU5LVRFTi05NDgAAAGEXbZRUIFaYfDr8n_JnaducPEN7VatF5PpAR34RTKWv7UiK3Y8lW_ce1Ko7WQ8Ot94wKy1cFzjQ3HgtJy6wLdJXjpjwPON50XI1dFc5Q 7 - https://magazine.realtor/daily-news/2022/05/11/fha-gives-buyers-exclusive-sneak-peek-at-foreclosures 8 - https://magazine.realtor/daily-news/2022/05/11/fha-gives-buyers-exclusive-sneak-peek-at-foreclosures 9 - https://magazine.realtor/daily-news/2022/05/12/new-google-map-feature-offers-immersive-view-of-streets

Dealing with sea level rise along the California coast is not going to be easy. One of the options that cities are encouraged to consider is something called “managed retreat.” In a nutshell, that’s when homes are moved away from the coast as it crumbles toward the sea. With so many expensive California homes perched on oceanside cliffs, the idea has become very controversial. There’s even debate over the use of the term “managed retreat.” (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. Managed retreat is a concept that’s been around for a while. It’s been used after natural disasters that have flooded whole communities. As reported by the SF Chronicle, The town of Soldiers Grove, Wisconsin, began relocating about 600 homes in 1979, after the Kickapoo River had flooded 25 times. It cost more than $27 million in federal, state, and local funds to buy new land and move 70 buildings, including 24 homes. “Managed Retreat” to Fight Rising Sea Levels Now, with increased concern about rising sea levels because of climate change, there’s been more discussion about how to deal with it, and “managed retreat” is one of the options. But it’s not being embraced by everyone. Managed retreat is something that goes against the desirability and value of oceanside real estate. As the Chronicle reports, it “represents a radical departure from decades of coastal development philosophy and runs counter to our proclivity to build houses and cities up against the ocean.” And now cities along the shore have a tremendous challenge to deal with. As UC Santa Cruz professor, Gary Griggs, puts it: “Dealing with sea level rise and (cliff) retreat… is the biggest challenge that human civilization may ever have to face.” The Cost of California Sea Level Rise In a 2019 study that was published in the journal Scientific Reports, researchers estimated that sea level rise along California’s 1,271 mile-long coast could negatively impact $150 billion in property and 600,000 people. Two thirds of the impact is expected to hit the San Francisco Bay Area. But the same study predicts substantial erosion in Southern California over the next 80 years, and the disappearance of 67% of its beaches. California has already tried to fight erosion with other less aggressive measures such as seawalls, the reinforcing of cliffs, and the building of levees and jetties. Professor Griggs says the state has used these methods to protect about 10% of the coastline, but they are expensive and they don’t last forever. They need maintenance and updating in the race to keep ahead of climate change. In some places, sand has been added to help keep the ocean at bay. The city of Santa Cruz has been doing this for decades. The Chronicle reports that Santa Cruz has dumped additional sand onto beaches 58 times since 1965. The price tag? Almost $18 million. Pacifica’s Crumbling Cliff and Lost Homes One well-known example of the need for the relocation of homes has made headlines in San Mateo County. Winter storms in 2010 and 2015 caused so much damage to the cliff along Esplanade Drive in Pacific, the city was forced to condemn, purchase, and demolish several homes and apartment complexes. But even in a situation like this, it is not easy to tell people they must relocate because homes are at risk of falling into the sea. In 2015, the Coastal Commission asked cities to study how they would deal with sea level rise. Pacifica considered the use of managed retreat but after feedback from the community, rejected it. The city council said that it did not align with the city’s goals or the desires of the residents. SF State economist Philip King told the Chronicle: “When you ask people to leave their homes, even if you could fully compensate them 100% economically, you still would be pulling them away from their community.” He says: “It’s an issue we’re going to have to face in California.” The Term “Managed Retreat” Conveys “Defeat” The term “managed retreat” also sounds too much like “defeat” for some people. An article in Slate suggests changing the term to something more obscure like “managed realignment” or “planned relocation.” Or maybe something like “aggressive resilience” or “strategic advance” which sound more proactive. (2) One city that’s embracing the idea of managed retreat is the city of Marina in Monterey County. Officials there have created a plan that allows for some amount of property relocation. That includes support from the owner of a beach resort who will have to move some buildings. One of the co-authors of a UC Santa Cruz paper on Marina said in the report: “So there are cases in which private property owners have seen the writing on the wall and they know that they’re not going to be able to constantly rebuild their infrastructure after flooding and erosion. They are on board with the plan, and they want to help preserve the community.” (3) You can read more about this topic by following links in the show notes at newsforinvestors.com. Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.sfchronicle.com/travel/article/California-coast-sea-level-rise-17091737.php 2 -https://slate.com/technology/2022/04/managed-retreat-climate-change-language.html 3 -https://www.eenews.net/articles/managed-retreat-unpopular-expensive-and-not-going-away/

The Real Estate News Brief; Fed’s Rate Hike Plan, Record Home Price Growth, Real Estate Career Surge In this Real Estate News Brief for the week ending May 7th, 2022... the Fed fights inflation with rate hike, home prices hit new record high, and the popularity of a career in real estate. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and words from the central bank that touched off a dramatic roller coaster of gains and losses on Wall Street. Fed Chief Jerome Powell sat down with the press for an hour on Wednesday after a decision by Fed officials to raise the Federal Funds rate by 50 basis points. Powell said that inflation is too high but essentially nixed the idea of a 75 basis point rate hike. He also suggested the possibility of two more 50-basis point rate hikes during the next two meetings. (1) His comments about shelving a more aggressive rate hike plan triggered a huge stock rally with the Dow gaining at least 900 points. But the exuberance didn’t last long. Stocks fell harder on Thursday than they flew higher on Wednesday, and the losses continued on Friday. So there’s still plenty of uncertainty about where our economy is headed. But Powell’s comments were encouraging. Among his comments: “We need to do everything we can to restore stable prices as quickly and effectively as we can. We think we have a good chance to do it without a significant increase in unemployment or a really sharp slowdown.” (2) So how do the rate hikes affect consumers and investors? They are directly linked to higher rates for credit cards, student loans, car loans, and adjustable-rate mortgages. They will also influence mortgage rates, although they are not directly linked. On a positive note: higher mortgage rates along with high home prices are expected to result in a cooler and more normal housing market. But how high will mortgage rates go? Lending Tree’s senior economic analyst, Jacob Channel, is predicting that the 30-year fixed-rate loan will hit 6% by the end of the year. (3) I think it will hit 7%. There were 200,000 initial jobless claims last week which was an increase of 19,000 from the week before. It was the biggest weekly increase since almost a year ago, but continuing claims decreased by the same amount, but they remain at their lowest level since early 1970, at 1.38 million. (4) U.S. companies also added almost a quarter million new jobs in April, but there are still far too few workers to fill all the open positions. In March, there were a record 11.5 million jobs that needed filling. The unemployment rate is currently at 3.6% which is slightly higher than a 54-year low. (5) (6) Construction spending was slow in March, because of a drop in non-residential spending. Money spent on all kinds of residential construction was up 1%. That’s mostly due to a 1.3% increase in single-family home construction that was offset by a drop in spending on multi-families. (7) Mortgage Rates Mortgage rates moved higher again this last week. Freddie Mac says the 30-year fixed-rate mortgage was up 17 basis points to 5.27%. That’s the highest it’s been since 2009. The 15-year was up 12 basis points to 4.52%. (8) The Mortgage Daily News says the average 30-year was even higher, at 5.55%. It also warned that home affordability is close to the worst it’s ever been. At the start of the pandemic, 6% of U.S. housing markets were less affordable than long-term levels. That percentage is now up to 95%. (9) In other news making headlines… Home Price Growth Hits Record High The latest report from CoreLogic is out on home price growth in March. According to this report, it was up a record 20.9% year-over-year. If that number isn’t impressive enough, CoreLogic says the March increase was the 122nd month in a row that home prices have gone up. (10) Chief economist Frank Nothaft says when you combine home price growth with higher interest rates, the monthly principal and interest payment on a home is now 50% higher than it was a year ago. Florida was at the top of the list for home price gains. They are up 31.4% year-over-year. Arizona was second followed by New York and Washington, D.C. People Switching to Real Estate Careers The hot real estate market is attracting more than just home buyers. A lot of people are quitting their jobs for a career in real estate. According to the New York Times, there was a 60% increase in the number of people who started working in real estate during the pandemic - from 2020 to 2021. (11) Coldwell Banker Real Estate CEO Ryan Gorman says that many people are exploring self-employment options, and with real estate, the sky is the limit. He says: “They’ve realized they can get out of it what they put into it” and that could mean a six-figure paycheck. But those expectations could be unrealistic. As realtor.com reports, most real estate agents don’t make six figures. In May of last year, the median was just over $48,000. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke... Show Notes link: https://www.newsforinvestors.com Join link: https://join.realwealth.com/?utm_content=Real%20Estate%20News%20Podcast&utm_campaign=Join%20for%20Free&utm_term=Description%20Text%20Link Subscribe link: https://podcasts.apple.com/us/podcast/real-estate-news-real-estate-investing-podcast/id1079952715 Links: 1 - https://www.marketwatch.com/story/why-powell-took-75-basis-point-rate-hike-off-the-table-and-other-takeaways-from-the-fed-press-conference-11651707052?mod=economy-politics 2 - https://www.cnbc.com/2022/05/04/follow-the-latest-updates-as-the-federal-reserve-gets-set-to-hike-rates.html 3 - https://magazine.realtor/daily-news/2022/05/05/fed-raises-rate-what-it-means-for-housing 4 - https://www.marketwatch.com/story/u-s-jobless-claims-jump-in-latest-week-by-biggest-amount-since-last-july-11651754614?mod=economy-politics 5 - https://www.marketwatch.com/story/coming-up-u-s-jobs-report-for-april-11651838865?mod=mw_latestnews 6 - https://www.marketwatch.com/story/u-s-job-openings-rise-to-record-11-5-million-and-job-quitting-also-hits-all-time-high-11651587236?mod=economic-report 7 - https://www.marketwatch.com/story/u-s-construction-spending-slowed-in-march-missing-expectations-271651501992?mod=search_headline 8 - https://www.freddiemac.com/pmms 9 - https://www.cnbc.com/2022/05/02/mortgage-rates-surge-as-home-affordability-nears-record-worst.html 10 - https://www.housingwire.com/articles/corelogic-u-s-home-price-gains-hit-all-time-high-in-march/ 11 - https://magazine.realtor/daily-news/2022/05/03/great-resignation-leads-to-real-estate-rush 12 - https://www.housingwire.com/articles/you-can-no-longer-get-a-mortgage-at-costco/

The Supreme Court has refused to step into the battle over the cap on SALT deductions. Several states sued to lift the cap on state and local tax deductions but the high court refused to hear the case. That leaves the matter up to Congress which hasn’t produced results so far, or to the states which in some cases have offered a work-around. 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 $10,000 cap on SALT deductions was one of the most controversial parts of the 2017 tax bill. Those deductions cover state sales, income, and property tax. Once upon a time, they were unlimited. The Tax Cut and Jobs Act or TCJA was passed by a Republican-controlled Congress under President Trump and provided $1.5 trillion in tax cuts. (1) The low cap on the SALT deduction helped offset that lost tax revenue, along with a lower cap on the mortgage interest deduction. A higher individual tax deduction was also offered as partial compensation for the loss of those tax-saving strategies. SALT Cap Hit “Blue” States the Hardest The SALT deduction hit some states harder than others, particularly those with high priced homes and high tax rates. They were also states that were mostly “blue” or Democratic. New York is one of those states. As reported by the New York Times, it was estimated that the cap would force New York taxpayers to pay an additional $121 billion in federal taxes from 2018 through 2025, when the provision expires. (2) New York led the legal battle against the cap by filing a lawsuit in 2019. The states of Maryland, Connecticut, and New Jersey also joined the lawsuit. The case was dismissed by a District Court in New York, and was then dismissed on appeal. Appeals Court Ruling on SALT The appeals court ruling found that Congress had the power to impose the SALT cap. In the ruling it wrote: “It is obviously true that members of Congress were aware that the SALT deduction cap would adversely affect some states more than others. But the SALT deduction cap is not unlike the countless federal laws whose benefits and burdens are unevenly distributed across the country.” A few days ago, the case made its way to the Supreme Court but the high court rejected the case which leaves the rule intact until the 2025 expiration – unless it is modified or extended. Democrats claim the 2017 law is an unconstitutional infringement on their sovereignty by Republicans who were targeting blue states. And, New York Governor Kathy Hochul has expressed disappointment with the Supreme Court decision. She wants Democrats in Congress to undo what she calls “an economic attack” on middle-class families by restoring the SALT deduction. Debate Over the SALT Deduction There is debate on whether it should be restored, even among Democrats. As reported by the Times, some of the more progressive Democrats in Congress feel that getting rid of the cap would only benefit wealthy Americans, and not the middle-class. Moderate Democrats would like the cap scrapped for the benefit of their wealthier constituents. There’s also another issue involved with scrapping the SALT cap. In addition to imposing the cap, the 2017 tax bill eliminated two other provisions that helped moderate SALT deductions – namely, the individual alternative minimum tax or AMT and the PEASE limitation. If the SALT cap is lifted without reinstating those two provisions, the value of the tax deductions would be much higher than they were prior to the 2017 tax bill. According to the Tax Foundation, the Pease limitation capped deductions at 80%, including SALT deductions, for high-income taxpayers. If the alternative minimum tax applies to a taxpayer, the SALT deduction is eliminated altogether. (3) The Tax Foundation says that repealing the SALT cap in 2022 would give a 2.8% bump to the after-tax income for the top 1% of taxpayers, and a 1.2% bump to the top 2 to 5%. You can dive into the details at the Tax Foundation website. We’ll have a link in the show notes. SALT Workarounds As for the work-arounds, CNBC reported last December that 19 states are offering a way for pass-through business owners to bypass the cap. (4) The report also says that five other states have similar laws in the works. Pass-through entities that qualify include partnerships, S-corporations and some LLCs. The workaround involves a credit for taxes paid instead of a deduction, which can be capped. But it’s more complicated than that, and tax experts say that each individual’s situation is different, so you need to have your tax accountant crunch the numbers. As for what Congress is currently doing about the SALT cap, Democrats had increased the cap to $80,000 in the House-passed “Build Back Better” budget reconciliation bill. That plan would have cost the government about $50 billion a year, according to the Joint Committee on Taxation, but the legislation died in the Senate and hasn’t yet been resurrected. And now, President Biden is working on ways to reduce the deficit without raising taxes. According to Roll Call, the administration’s deficit reduction plans depend on the expiration of 2017 tax cuts, which would include the expiration of the SALT cap. (5) Roll Call says there is one problem however – that Biden’s promise to not raise taxes applies to people making less than $400,000 a year. If the 2017 tax cuts are allowed to expire, Roll Call says that taxes would go up for many of those individuals. So we’ll likely see another tax reckoning in the near future. Until then, the $10,000 cap on the SALT deduction will continue to haunt some homeowners. You can read more about this topic by following the links in the show notes at newsforinvestors.com. Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://commercialobserver.com/2022/04/supreme-court-salt-taxes/ 2 - https://www.nytimes.com/2022/04/18/nyregion/supreme-court-salt-cap-taxes.html 3 - https://taxfoundation.org/salt-deduction-cap-repeal/#:~:text=The%20Pease%20limitation%20could%20cap,AMT%20would%20lose%20it%20outright. 4 - https://www.cnbc.com/2021/12/07/-these-states-offer-a-workaround-for-the-salt-deduction-limit-.html 5 - https://rollcall.com/2022/04/04/biden-budgets-omission-of-tax-cut-renewals-leaves-deficit-hole/

The Real Estate News Brief - Week Ending April 30, 2022; Growing Demand for ARMs, The 7-Year Foreclosure, Top Complaints about Neighbors In this Real Estate News Brief for the week ending April 30th, 2022... you’ll hear about the surging demand for adjustable-rate mortgages, the years it takes to foreclose in some states, and the top reasons people dislike their neighbors. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Before we start, I want to let you know that we are hosting our first live event in over 2 1/2 years on May 21st in St Petersburg Florida. I'll be there giving my 2022 Housing Update, and we'll also have property teams from 10 different markets to update us on what's going on in their markets and share available income properties. We'll also have a tour of rental properties in St Pete on Sunday and then Jacksonville on Monday. Check it out at newsforinvestors.com Economic News We begin with economic news from this past week, and more concerns about inflation. The Federal Reserve’s preferred inflation index rose again in March to an annual rate of 6.6%. That’s up from an annual rate of 6.4% in February. But there are signs that inflation may be hitting a peak because the core rate of inflation went down for the first time in a year. The core rate excludes food and energy and decreased from 5.3% to 5.2% in March. The Fed believes the PCE is more accurate than the consumer price index or CPI because it’s more comprehensive. (1) Despite all the worries about inflation, the job market is going strong. Initial claims were down 5,000 to just 180,000 last week. Continuing claims were also down to their lowest level since 1970, at approximately 1.41 million. (2) Rising mortgage rates are putting a damper on new home sales. The Census Bureau says that sales dropped 8.6% in March to an annual rate of 763,000. High prices are also discouraging buyers. The median price for a new home was $436,700 in March. That’s about $77,000 more than it was in March of last year. (3) Pending home sales for existing homes were also down in March. The National Association of Realtors says they dipped 1.2%. It is predicting that sales will be down a total of 9% for the year. NAR’s chief economist Lawrence Yun expects multiple offers to disappear, and calmer, more normal conditions to replace the homebuying frenzy we’ve been witnessing. (4) Because demand remains high for housing, home prices continue to rise. The S&P CoreLogic Case-Shiller 20-city index was up 2.4% in February. That brought the annual rate up to 20.2%. At a national level, annual home price growth rose to 19.8%. The Federal Housing Finance Agency reported similar results. It shows that home prices rose 19.4% year-over-year in February which was a 2.1% increase from January. (5) There are mixed reports on consumer sentiment. A survey on consumer confidence shows it dipped slightly in April because of inflation. But it also shows that consumers are still spending money on big-ticket items, despite the high prices. (6) Meantime, the University of Michigan’s consumer sentiment index jumped higher by several points. Consumers are reportedly happy that gas prices have gone back down a bit, and are feeling more optimistic about the future. (7) Mortgage Rates Mortgage rates didn’t move much, but the average 30-year fixed-rate mortgage remains above the 5% level. Freddie Mac says it was down just one basis point to 5.1%. The 15-year was up 2 points to 4.4%. (8) In other news making headlines… ARMs In High Demand as Fixed Rates Rise More home buyers are choosing adjustable-rate loans to keep mortgage payments lower at the beginning of their loan term. The Mortgage Bankers Association says demand for ARMs has “doubled” compared to three months ago The interest rate for an ARM was 3.78% last week, according to Freddie Mac. The Mortgage Bankers Association says the average rate for a 5-year ARM was 4.28%. Both are lower than the 30-year fixed rate, and that’s driving up demand. (9) The Lengthy Process of Foreclosure Buying a foreclosure might get you a great price on a home, but in some places, the length of time it takes to foreclose could eclipse any monetary value. ATTOM Data Solutions published a report on the states with the longest average times to foreclose, and the winner was Hawaii, at 2,578 days. That’s a little longer than 7 years. Louisiana, is second on the list with an average of about 2,000 days or 5.5 years. Other states on the top ten list include Kentucky, Nevada, Connecticut, New York, Florida, New Jersey, Pennsylvania, and New Mexico. New Mexico was last on the list but foreclosures there still take more than 3.5 years. (10) At the other end of the spectrum are states with the fastest foreclosure process. Montana came out at the top of that list, at 133 days. Mississippi was second at 146 days, and West Virginia was third at 197 days. What’s Up with the Neighbors? The last story I’d like to share with you is a report on the top reasons Americans don’t like their neighbors. According to a Lending Tree survey, 28% of the participants said their neighbors “give off a weird vibe.” Other reasons include noise levels, rudeness, disruptive pets, being nosy, and unruly kids. Some people also said they don’t like it when their neighbors have guests that park in front of their house, or their parking space. Smoking was listed by 11% of the people. 4% said they had issues with their neighbors’ political views, and 3% said they were not happy that their neighbors were using their homes as short-term rentals. (11) It’s interesting that so few people listed short-term rentals as a problem, given all the controversy about how much disruption they cause, or don’t cause. Of course, it’s often the case that people who are disgruntled about an issue will speak out more loudly than the ones who don’t mind. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke... Show Notes link: https://www.newsforinvestors.com Join link: https://join.realwealth.com/?utm_content=Real%20Estate%20News%20Podcast&utm_campaign=Join%20for%20Free&utm_term=Description%20Text%20Link Subscribe link: https://podcasts.apple.com/us/podcast/real-estate-news-real-estate-investing-podcast/id1079952715 Links: 1 - https://www.marketwatch.com/story/coming-up-pce-inflation-index-and-consumer-spending-11651234498?mod=economy-politics 2 - https://www.marketwatch.com/story/u-s-jobless-claims-fall-5-000-to-180-000-showing-momentum-continues-in-labor-market-11651149515?mod=home-page 3 - https://www.marketwatch.com/story/new-homes-are-likely-a-viable-choice-for-fewer-first-time-home-buyers-new-home-sales-dip-as-affordability-worsens-11650982695?mod=economic-report 4 - https://www.marketwatch.com/story/the-spring-housing-market-is-off-to-an-unpredictable-start-pending-home-sales-fall-amid-rising-mortgage-rates-11651068612?mod=search_headline 5 - https://www.marketwatch.com/story/it-will-take-time-for-surging-mortgage-rates-to-rebalance-the-market-home-prices-are-still-skyrocketing-but-buyers-could-see-relief-soon-11650979422?mod=economic-report 6 - https://www.marketwatch.com/story/consumer-confidence-slips-in-april-but-americans-arent-cutting-back-on-spending-11650982322?mod=economic-report 7 - https://www.marketwatch.com/story/consumer-sentiment-jumps-in-april-on-lower-gas-prices-and-more-optimism-about-the-economy-11651241527?mod=economy-politics 8 - https://www.freddiemac.com/pmms 9 - https://magazine.realtor/daily-news/2022/04/28/demand-doubles-for-arms 10 - https://magazine.realtor/daily-news/2022/04/26/where-foreclosures-could-take-years-to-process 11 - https://magazine.realtor/daily-news/2022/04/27/why-75-of-americans-say-they-don-t-like-their-neighbor

Real Estate News - Construction Companies at Risk of Dangerous Cyberattacks There’s growing concern about the possibility of a dangerous cyberattack on automated systems used by construction companies. These programs are used for things like the measuring and mixing of materials used to support large construction projects. Some companies are taking steps now to protect themselves from hackers but cybersecurity experts say the threat level is rising, and the safeguards are lagging behind other industries. (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. White House Warning about Cyberattacks Just a few weeks ago, the White House issued a warning about a possible Russian cyberattack linked to the Ukraine invasion. U.S. intelligence officials got together with more than a hundred infrastructure companies and industry groups to share classified information related to this threat. (2) Cyber security researchers from Mandiant say that so-called “threat actors” have developed a set of tools called “Incontroller.” They say these tools are “exceptionally rare and dangerous” because they can be used to shut down or sabotage industrial facilities. That includes turning off safety controllers at power plants, for example. Mandiant researchers can’t pinpoint the source of this threat but they suggest that the activity is similar to what they say is Russia’s “historic interest in industrial control systems.” A Dallas-based contractor that contracts with top-level government agencies promises to “make the world smarter, more connected and more sustainable” but is also increasing its emphasis on cybersecurity. Jacobs has clients like the U.S. Department of Defense, the U.S. Intelligence Community, NASA, the U.S. Department of Energy along with defense agencies for other countries and private sector companies involved with aerospace, automotive, energy, and telecommunications. Jacobs CEO Bob Pragada says: “There is not an infrastructure project right now with major agencies, in the U.S., the U.K., across the world, in Australia, where we don’t have a cyber component that’s with it.” And he says that’s becoming a much bigger part of the business. Contractor’s Vulnerability Let's scale that risk down to the level of the contractor doing the work, in this case the pouring of concrete. Construction Dive explains that a concrete contractor uses automatic control systems to mix and lay the concrete. After the concrete hardens, automatic systems are also used to inspect the integrity of the finished product. These systems rely on internet- and cloud-based software which could make them vulnerable to an attack. One technology and cybersecurity consultant offered an example of a worst-case scenario. Jason Vigh told Construction Dive: “Take for instance the construction of a bridge, you have to have strength integrity. What if hackers change the systems that are actually being used to automate the project and (the bridge) collapses… all because the supply chain is compromised in the first place.” He says there’s already a lot of security in place for the financial sector, but when it comes to manufacturing, cybersecurity is lagging. Precautions Needed for Construction Companies So far, most cyberattacks in the construction industry have involved ransomware or access to customer data. A northern California concrete contractor, Ghilotti Bros reported a breach in December of last year. It says an unauthorized party gained temporary access to its systems and files. An energy company out of Oklahoma City also reported a data breach a few months ago, according to Construction Dive. Recently, a German company reported a cyberattack that impacted 40% of its wind turbines. Cybersecurity experts say that more precautions are being put into place, but it does require pro-active investment by companies and industries. Autodesk vice president of product development, Sameer Merchant says the money companies need to spend now to protect themselves will be “a much smaller price to pay than the price you pay if they are exposed to these attacks.” If you’d like to read more on this topic, you’ll find links in the show notes at newsforinvestors.com Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke... Show Notes link: https://www.newsforinvestors.com Join link: https://join.realwealth.com/?utm_content=Real%20Estate%20News%20Podcast&utm_campaign=Join%20for%20Free&utm_term=Description%20Text%20Link Subscribe link: https://podcasts.apple.com/us/podcast/real-estate-news-real-estate-investing-podcast/id1079952715 Links: 1 - https://www.constructiondive.com/news/cybersecurity-experts-automation-materials-worst-case-scenario-hackers/621210/ 2 - https://www.cybersecuritydive.com/news/white-house-warns-russian-cyberattack-ukraine/620755/

Real Estate News Brief - Week Ending April 23rd, 2022 Top Investor Concerns, Foreclosure Activity, 40-Year Loan Option In this Real Estate News Brief for the week ending April 23rd, 2022... the top concerns for investors, what’s happening with foreclosures, and a new 40-year loan option for some borrowers. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week and growing concerns about inflation. Fed Chief Jerome Powell says: “It’s absolutely essential to restore price stability.” He feels it’s appropriate to move more quickly with interest rate hikes and says that a 50-basis point rate hike is on the table for the Fed’s May meeting. He says: “Our goal is to use our tools to get demand and supply back in sync, so that inflation moves down and does so without a slowdown that amounts to a recession.” But he also warns that it will be a challenging process. Consumer inflation hit an annual rate of 8.5% in March. That’s well above the central bank’s 2% target. (1) Fannie Mae is predicting a recession by next year, due to the need for aggressive monetary policies to control inflation. But it says it will probably be a “moderate recession” and not like the Great Recession of 2008. It expects the strength of the housing market to help cushion the blow although the mortgage financing giant also expects the housing market to slow down somewhat due to high home prices and mortgage rates. The National Association of Realtors is predicting a 10% decrease in home sales for this year. (2) Unemployment claims remain near a 40-year low. They were down 2,000 from the week before to 184,000. The low numbers are the result of a strong labor market that has more job openings than unemployed workers to fill them. Continuing claims were also down. They dropped 58,000 to 1.42 million. That’s the lowest they’ve been since 1970. (3) Home builders are increasing the number of homes they are starting despite rising inflation, higher mortgage rates and the labor shortage. But they are shifting their focus because of those issues, from single-family homes to multi-families. The Census Bureau says that home starts were up .3% in March to an annual rate of about 1.79 million. Permits were also .4% higher to an annual rate of about 1.87 million. (4) Home builder confidence is lower however because of rising mortgage rates and all the other things making new homes so much more expensive. The National Association of Home Builders says its monthly confidence index was down two points in April to a reading of 77. Even though it is hovering near its lowest level since last September, anything over 50 is considered positive. (5) Existing home sales were lower for a second month in a row. The National Association of Realtors says they were down 2.7% in March to a seasonally-adjusted annual rate of 5.77 million. If you compare sales to March of 2021, they were down 4.5%. (6) Mortgage Rates Mortgage rates are now over 5%. Freddie Mac says the average 30-year fixed-rate mortgage was up 11 points last week, to 5.11%. The 15-year was up 21 points to 4.38%. (7) In other news making headlines… Top Concern for Investors Investors are more concerned about inflation than they are about rising mortgage rates and access to capital. Real estate investor financing firm Kiavi conducted a survey which shows that 65% of the participants were concerned about inflation, 63% were concerned about higher interest rates, and 58% were concerned about access to capital. But that said, Kiavi says these worries are not keeping investors from moving forward on their investment plans. (8) CEO Michael Bourque says: “We’re seeing our customers continue to identify smart investments and make good decisions. With over two-thirds of U.S. homes 30 years old or more real estate investors will continue to play an important role as they revitalize aged homes and make them move-in ready for millions of families across the country.” Foreclosure Activity on the Rise Foreclosure activity is rising now that most of the pandemic-related moratoriums have been lifted. There was a 39% increase in foreclosure filings during the first quarter of this year. Compared to a year ago, they are up 139%. That’s according to ATTOM Data Solutions. (9) The states with the highest level of foreclosure activity are California, Florida, Texas, Illinois, and Ohio. The metros where you’ll find the greatest number of foreclosure starts are Chicago, New York, Los Angeles, Houston, and Philadelphia. FHA 40-Year Covid Loan Modification Option The Federal Housing Administration introduced a 40-year loan modification option for borrowers impacted by Covid. Loan servicers can offer this option immediately to help homeowners avoid foreclosure. In 90 days, it will be a requirement to offer the 40-year modification to help people lower their payments. (10) That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke... Show Notes link: https://www.newsforinvestors.com Join link: https://join.realwealth.com/?utm_content=Real%20Estate%20News%20Podcast&utm_campaign=Join%20for%20Free&utm_term=Description%20Text%20Link Subscribe link: https://podcasts.apple.com/us/podcast/real-estate-news-real-estate-investing-podcast/id1079952715 Links: 1 - https://www.cnbc.com/2022/04/21/powell-says-taming-inflation-absolutely-essential-and-50-basis-point-hike-on-the-table-for-may.html 2 - https://magazine.realtor/daily-news/2022/04/21/fannie-mae-predicts-moderate-recession 3 - https://www.marketwatch.com/story/u-s-unemployment-claims-dip-to-184-000-and-stay-near-53-year-low-11650544616?mod=economy-politics 4 - https://www.marketwatch.com/story/new-home-construction-improves-despite-high-inflation-and-rising-mortgage-rates-11650372876?mod=economic-report 5 - https://www.marketwatch.com/story/home-builder-confidence-declines-in-the-face-of-rising-interest-rates-11650290417?mod=economy-politics 6 - https://www.marketwatch.com/story/existing-home-sales-fall-for-second-consecutive-month-amid-rising-mortgage-rates-2022-04-20?mod=economy-politics 7 - https://www.freddiemac.com/pmms 8 - https://www.prnewswire.com/news-releases/kiavi-real-estate-investor-survey-reveals-inflation-pains-renovation-gains-and-need-for-technology-301525483.html 9 - https://magazine.realtor/daily-news/2022/04/21/foreclosure-activity-at-new-high-since-the-pandemic-began 10 - https://www.housingwire.com/articles/fha-adds-40-year-loan-term-to-covid-19-arsenal/

The National Association of Realtors is hoping to bring a case before the Supreme Court on the use of “floor plans” for real estate deals. NAR and a coalition of real estate groups want the high court to overturn an appeals court ruling that claims the creation of a floor plan is a copyright violation, by anyone, including the homeowner who might want to post a floor plan online to help sell the home. (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 lawsuit was filed last year by Missouri-based Designworks Homes, and the company’s owner, Charles James. They claim that two real estate companies violated copyright laws by creating floor plans to help with the sale of homes that James had built. Designworks lost the first case, but the Eighth Circuit Court of Appeals overturned that ruling saying that copyright law also applied to floor plans. Ruling Has Wide-Reaching Implications The ruling has wide-reaching implications for all sorts of real-estate related purposes. In a brief to the U.S. Supreme Court by NAR and other real estate groups, they claim that Congress specifically allowed for pictorial representations of homes by their owners when it created the Copyright Act of 1976. They also argue that: "Many home buyers rely on floor plans in real estate listings 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 creation of a floor plan." The brief also describes other reasons a homeowner might need a floor plan, for things like renovations, installations, and the arranging of furniture. They are also useful for mortgages, tax assessments, property valuations and insurance coverage. Real Estate Coalition Appeal to Supreme Court The brief was submitted by NAR and a coalition of 18 other groups including Redfin, Zillow, the American Property Owners Alliance, and CoreLogic. They said in the brief that most Americans would be “startled” to hear they can’t make a floor plan of their own home without violating copyright law. They say the ruling severely limits property rights and creates a scenario that invites frivolous lawsuits. It would also be a big disappointment to buyers and sellers. In NAR’s recent 2021 Generational Trends Report, floor plans were third on the list of important website features for online homebuyers. Photos and listing details are the only two features listed higher than floor plans. (2) Floor Plan Popularity Among Buyers & Sellers The American Property Owners Alliance also cited its own research on the topic. In a survey conducted last month, it found that almost 90% of the respondents strongly agreed with the idea that homeowners should be able to create a floor plan of their home anytime they want. The case will go before the Supreme Court if four of the nine justices vote in favor of hearing the case and that won't happen until later this year. In the meantime, is it an issue to create and post floor plans right now? NAR’s General Counsel Katie Johnson acknowledges the risk in the brief: She says: “Homeowners should be able to create and use floor plans without fear of litigation throughout the ownership and sale of their homes.” If you’d like to read more on this topic, you’ll find links in the show notes at newsforinvestors.com. Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.nar.realtor/newsroom/nar-asks-supreme-court-to-protect-consumers-from-lawsuits-when-making-floor-plans-of-their-homes 2 -https://www.nar.realtor/sites/default/files/documents/2021-home-buyers-and-sellers-generational-trends-03-16-2021.pdf 3 -https://propertyownersalliance.org/article/american-property-owners-alliance-supports-appeal-of-ruling-on-homeowners-use-of-floor-plans/

In this Real Estate News Brief for the week ending April 16th, 2022... the latest surge in consumer prices, where rents are growing the fastest, and the high cost of building new homes. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and another alarming report on inflation. The consumer price index jumped 1.2% last month to a 40-year high of 8.5%. The increase was mostly driven by higher prices for gas, food, and housing. If you eliminate gas and food you get a core rate of 6.5%. Some economists believe that inflation will ease up soon, when the price of oil stabilizes and some of the supply chain issues clear up. But other economists worry that we might continue to see prices going higher. (1) Wholesale prices are also surging. The producer price index was up 1.4% in March to an annual rate of 11.2%. That’s the highest it’s been in almost 40 years and likely a sign of continued inflation. Economist Kurt Rankin of PNC Financial Services says: “Producer prices are an early warning sign of what households can expect in terms of consumer price inflation.” (2) There was a slight rise in new jobless claims, but that’s off a 54-year low just last week. The Labor Department reported an 18,000 increase in applications, to a total of 185,000. Meanwhile, the number of continuing claims went down 48,000 to a total of 1.48 million. (3) Mortgage Rates Mortgage rates hit the 5% mark for the first time in more than 10 years. Freddie Mac says the average 30-year fixed-rate mortgage was up 28 basis points to exactly 5%. The 15-year was up 26 points to 4.17%. High home prices combined with higher mortgage rates are making it a lot harder for many Americans to become homeowners. (4) In other news making headlines… Rents Hit Double-Digits in Many Areas Rents are also moving higher in step with home prices. Many landlords are playing catch-up with rent levels after the pandemic. Realtor.com says that average rents are up almost 20% since 2020. The research covered March of 2020 to March of this year. (5) Among the areas with the fastest rent growth are Miami; Riverside County, California; and Tampa, Florida. Orlando and Jacksonville are also both in the top 10 for rent growth. Realtor.com economist Daniel Hale says that rents are creating affordability issues for some renters. She also says there are signs that rent growth is slowing down but it’s hard to predict if the trend will continue. She says: “The jury is still out on whether rent growth will hit single digits by the end of 2022.” Property Taxes Heading Higher Home values appear to be rising much faster than property tax, which suggests that tax assessors have some catching up to do. ATTOM Data Solutions says the average property tax on single-family homes rose 1.8% nationwide last year. That’s the slowest pace of tax growth in five years. (6) ATTOM’s Rick Sharga says it’s surprising that property taxes have gone up more because home values are up 16% for last year. That likely means that homeowners can expect to see higher tax bills as homes are reassessed. Some areas have already increased property taxes. In Nashville, Tennessee, they went up an average of 27% last year. Milwaukee homeowners are paying about 18% more on property taxes. Baltimore and Grand Rapids, Michigan, are third and fourth for the highest recent tax increases. Surprisingly, tax rates actually went down in some areas including Houston, Dallas, and Austin, Texas. Prices Keep Rising for Building Materials The cost of building a new home keeps going up, although lumber prices just came down a little. The National Association of Home Builders says building material prices have gone up 20.4% year-over-year and 33% from the beginning of the pandemic. (7) Additional costs have added 31% to the cost of a new home. Realtor.com reports the average sales price of a new home was $511,000 in February. Insider attributes the drop in lumber prices to improvements in the supply chain and a softening of demand for lumber. It says lumber prices have fallen 39% from a March high and are now 52% lower than they were in May of last year. That’s when they peaked at $1,733 per one thousand board feet. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.marketwatch.com/story/coming-up-consumer-price-index-for-march-11649764935?mod=economy-politics 2 - https://www.marketwatch.com/story/wholesale-prices-surge-1-4-and-point-to-high-u-s-inflation-through-the-spring-11649853503?mod=economic-report 3 - https://www.marketwatch.com/story/jobless-claims-bounce-higher-after-hitting-54-year-low-in-prior-week-11649940054?mod=mw_latestnews 4 - https://www.freddiemac.com/pmms 5 - https://magazine.realtor/daily-news/2022/04/14/rent-jumps-by-nearly-20-in-2-years 6 - https://www.attomdata.com/news/market-trends/home-sales-prices/attom-2021-property-tax-analysis/ 7 - https://magazine.realtor/daily-news/2022/04/14/building-materials-rise-but-lumber-prices-ease

Cement is to the construction industry like dirt is to a garden. It’s essential for all kinds of buildings and infrastructure. But it’s also a huge greenhouse gas contributor. With the current push toward more climate-friendly technologies, two researchers from Massachusetts claim they have created a cement-like material that is not just carbon neutral, but literally sucks carbon dioxide out of the atmosphere. 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. So what is this intriguing new material? It’s called Enzymatic Construction Material or ECM. It was created at the Massachusetts-based Worcester Polytechnic Institute by researchers Suzanne Scarlata and Nima Rahbar. Carbon-Negative Foodprint In addition to its eco-friendly carbon-negative footprint, they say it will also use stored carbon to heal cracks. And it may also be a good material to patch aging concrete. As reported by Construction Dive, the primary component of ECM is calcium carbonate crystals. You get that by combining carbonic anhydrase with CO2, which is an enzyme found in living cells. The mixture also includes sand, water, and a polymer binding agent. The final product isn’t as strong as concrete, but Scarlata and Rahbar say it could be used for smaller projects with a lower load demand. That might be the side of a house, for example. What’s a Megapascal? ECM’s strength is currently 12 MPa, or Megapascals, which is a unit of measure for the compressive strength of concrete. The higher the number, the more pressure can be applied to the concrete before it starts to break down. Typical Portland Concrete ranges from 20 to 40 MPa but some concrete is rated much higher for projects that require high strength and durability. Scarlata told Construction Dive: “The technology’s there, but needs tweaking and a little more development.” They have patented their product and founded a start-up called Enzymatic Inc. to develop it. In addition to making it stronger, they also reportedly want to make it more resistant to humidity and water damage. They plan on conducting more tests, and will be filing for grants to help fund their research. ECM currently costs about $168 per cubic yard to produce although Rahbar says the benefits it provides for the environment are much greater than concrete. Concrete is cheaper, dollar-wise, at $125 per cubic yard. Other Eco-Friendly Concrete Alternatives But this isn’t the only eco-friendly product being developed to replace concrete some day in the future. According to media website, Anthropocene, which focuses on sustainability science and innovation, there are other products in development that are also carbon-negative. One is called hempcrete, which is made of hemp fibers and a binding agent. Another is a material that’s infused with bacteria that absorbs carbon dioxide. The ECM product has an enzyme that does that. ECM vs. Concrete Anthropocene says that twenty-seven cubic feet of ECM will store 8 kilograms of carbon dioxide while the same amount of concrete will “emit” more than 180 kilograms of carbon dioxide. In addition to being carbon negative, ECM can use the carbon it stores to heal cracks. It can also be produced without high temperatures and doesn’t take a long time to cure, like concrete. It’ll take a huge effort to displace concrete, however. Concrete pretty much rules the construction world right now, with some 30 billion metric tons used per year. It also accounts for about 7% of the greenhouse gases produced worldwide. Rahbar says their goal is to produce a building material with a lower carbon footprint. He says: “It’s our contribution to climate change issues.” If you’d like to read more on this topic, you’ll find links in the show notes at newsforinvestors.com. Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.constructiondive.com/news/self-healing-concrete-ecm-enzymatic-substitute-sucks-carbon-out-air/620368/ 2 - https://www.anthropocenemagazine.org/2022/03/new-building-material-soaks-carbon-and-heals-itself/

In this Real Estate News Brief for the week ending April 9th, 2022... the Fed’s inflation fighting game plan, first quarter housing affordability, and the metros with more new listings. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and the Fed’s plan to rapidly shrink its $9 trillion balance sheet to help control inflation. According to the minutes of its March meeting, which were released last week, the Fed plans to reduce its bond portfolio by about $95 billion per month. (1) Fed policymakers haven’t made a final decision yet, but they say the reduction plan could begin next month. Federal Reserve Governor Lael Brainard said at a conference that she expects a series of rate hikes and a rapid winding down of the balance sheet to bring inflation to a “more neutral position.” That includes bigger-than-usual rate hikes. Kansas City Fed President Esther George said in a Bloomberg TV interview that “50 basis points is going to be an option that we’ll have to consider, along with other things.” San Francisco Fed Bank President Mary Daly said during a meeting in Seattle that she doesn’t expect the nation to fall into a recession. She said: “We could slow so it looks like we are teetering close to it, that’s possible, but it will be a short-lived event I expect, and then we’ll be back up.” (2) Jobless claims came in at 166,000 last week, which is the second lowest reading in U.S. history. The last time jobless claims were that low was back in 1968. The job market is strong, and that’s one major buffer against the risk of recession. Wages are rising at a fast pace, although they are not keeping up with inflation. But jobs are plentiful, and workers are easily quitting one job for another. (3) Mortgage Rates Mortgage rates are also rising quickly. Last Thursday, Freddie Mac said the average 30-year fixed-rate mortgage was 4.72%. The 15-year was 3.91%. It’s gone even higher since then making it harder for many Americans to afford a mortgage. (4) In other news making headlines... Homes Affordability Drops in Many Areas Rising mortgage rates combined with higher home prices are knocking a lot of people out of the home buying market. ATTOM Data Solutions’ first quarter Home Affordability Report shows that home price growth in the first quarter was faster than it’s been for at least 15 years. It shows that median-priced single-family homes in 79% of the counties analyzed were less affordable in the first quarter than in the historical past. The same report at the beginning of “last year” showed that 38% of the counties were less affordable. (5) ATTOM’s Rick Sharga says: “It’s certainly no surprise that affordability is more challenging today for prospective homebuyers.” He says: “As home prices continue to soar and interest rates approach five percent on a 30-year fixed rate loan, more consumers are going to struggle to find a property they can comfortably afford.” Inventory Increasing for Spring Season There has been an increase in listings for the spring buying season, with more on the way. Realtor.com says that new listings were up 8% last week, and a new survey shows that 64% of the people in the survey plan to sell their homes in the coming months. (6) That’s already starting to bring prices down. According to Redfin, 12% of the homes for sale had a price drop during the month of March, although Redfin’s chief economist Daryl Fairweather says that “price drops are still rare” but they do show “there’s a limit to a sellers’ power.” He says: “Sellers can no longer overprice their homes and expect buyers to clamor at their door.” Redfin says the average home has been selling 2.1% above its asking price. (7) Cities with the Most New Listings Realtor.com did some research as to which metros are seeing the most new listings. At the top of the list is Panama City, Florida. Daphne, Alabama is second on the list followed by Myrtle Beach, South Carolina; Jacksonville, North Carolina; Iowa City, Iowa, and Macon, Georgia. Rounding out the top ten are East Stroudsburg, Pennsylvania; Greeley, Colorado; Boise, Idaho, and Atlantic City, New Jersey. It sounds like there’s a little something in there for everyone. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.marketwatch.com/story/balance-sheet-to-shrink-by-95-billion-per-month-as-many-on-fed-see-50-basis-point-hikes-coming-minutes-show-2022-04-06?mod=mw_latestnews 2 -https://www.reuters.com/business/feds-brainard-sees-methodical-rate-hikes-rapid-balance-sheet-shrinkage-2022-04-05/ 3 -https://www.marketwatch.com/story/u-s-jobless-claims-drop-to-54-year-low-of-166-000-11649335442?mod=u.s.-economic-calendar 4 -https://www.freddiemac.com/pmms 5 -https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q1-2022-u-s-home-affordability-report/ 6 -https://magazine.realtor/daily-news/2022/04/07/housing-inventory-turnaround-possible 7 -https://magazine.realtor/daily-news/2022/04/08/there-may-be-a-limit-to-sellers-power 8 -https://www.realtor.com/news/trends/where-were-seeing-the-most-new-listings/

Real Estate News Brief - Week Ending April 2, 2022 Prices Move Higher, Fed Misstep Worries, Biden’s Housing Budget In this Real Estate News Brief for the week ending April 2nd, 2022... consumer prices march higher, Wall Street worries about how the Fed will handle inflation, and Biden’s budget proposal for housing. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week and more concerns about inflation. The core personal consumption expenditures price index increased 5.4% from a year ago. That’s the largest year-over-year increase in 40 years. The PCE is considered more accurate than the consumer price index or CPI, and is the Fed’s preferred inflation gauge. The core rate excludes prices for gas and food. If you include those, the PCE is 6.4%. (1) Consumers are spending a larger share of their paychecks because of those higher prices, but they are also splurging on things like hotels, restaurants, and vacations. Government data shows that consumer spending was up .2% in February. People are spending less on things that are harder to get, like new cars and trucks. (2) The unemployment rate dropped to 3.6% in March. That’s close to a 50-year low of 3.5% which the U.S. hit right before the pandemic. The economy also added 431,000 jobs and wages moved higher as companies compete for too few workers. (3) Initial unemployment claims rose slightly last week, but continuing claims fell to their lowest level since 1969. The Labor Department reported that applications were up 14,000 to 202,000 for the week ending March 26th. The total number of claims dropped to 188,000, which is a 27,000 drop from the week before. (4) A lot of Americans are also quitting their jobs for better ones. The data shows that some 4.35 million workers quit in February. Before the pandemic, the average number of people quitting per month was less than three million. A labor shortage has given workers an advantage. Job openings were down slightly in February, but are still near a record high, at 11.27 million. (5) Builders are among those wrestling with the labor shortage. The National Association of Home Builders says construction hiring was up 5.2% but the industry still has about 381,000 open positions. That’s significantly higher than a year ago, when the industry had 257,000 available jobs. The labor gap is making it tough to meet the current demand for housing. (6) The latest report on home prices from Case-Shiller shows a year-over-year increase of 19.1% for the 20-city index. The national index is slightly higher at 19.2%. The FHFA shows a slightly lower rate of home price growth at 18.2%. Homes are appreciating the fastest in Phoenix. The Case-Shiller index shows those prices are up 32.6%. (7) Construction spending was higher in February, but some of that increase is due to inflation. The Census Bureau reported a .8% increase in private sector spending while the producer price index for construction was up .7% in February. On an annual basis, spending has increased the most for single-family construction. It’s up 20% while spending for multi-family construction is up 7.8%. (8) Mortgage Rates Mortgage rates moved higher again this last week. Freddie Mac says the average 30-year fixed-rate mortgage rose 25 basis points to 4.67%. The 15-year was up 20 points to 3.83%. (9) In other news making headlines... CNBC Poll on Economic Risks A new poll shows that Wall Street investors are more concerned about the Fed than they are about inflation. Investors told CNBC that the biggest threat to the economy is a misstep by central bank policymakers. (1) Forty-five percent of those polled listed that as their top concern. Another 33% listed inflation. Russian aggression was listed by 11%. Relations with China got 6% of worries. A new wave of Covid infections was last on the list, at just 4%. CNBC reports that “many notable investors are skeptical that the central bank will be able to engineer a soft landing even with a stronger economy.” Biden Budget & Housing President Biden is asking for a huge increase in funding to increase the supply of affordable housing. His proposal includes a 34% increase in spending to a total of about $50 billion dollars. That total includes $32 billion for the Housing Choice Voucher Program, which is also known as Section 8 subsidized housing for low-income, elderly, and disabled Americans. The rest of the funding would be distributed among several other programs that contribute to affordable housing. (11) The National Association of Realtor’s chief advocacy officer, Shannon McGahn, says that NAR has been working with lawmakers on this proposal over this past year. She says: “Many changes will be made to this plan, but it is good news that the White House sees this issue for what it is—a crisis—and many in Congress on both sides of the aisle agree.” That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.cnbc.com/2022/03/31/the-feds-preferred-inflation-gauge-rose-5point4percent-in-february-the-highest-since-1983.html 2 - https://www.marketwatch.com/story/consumer-spending-rises-slightly-but-high-inflation-is-the-reason-why-11648730714?mod=economy-politics 3 - https://www.marketwatch.com/story/coming-up-u-s-jobs-report-for-march-11648815349?mod=home-page 4 - https://www.marketwatch.com/story/u-s-jobless-claims-rise-reversing-some-of-last-weeks-big-drop-11648730591?mod=economic-report 5 - https://www.marketwatch.com/story/another-4-35-million-workers-quit-most-for-better-jobs-11648565695?mod=economic-report 6 - https://eyeonhousing.org/2022/03/steady-number-of-open-construction-jobs/ 7 - https://www.marketwatch.com/story/home-prices-increase-at-one-of-the-fastest-rates-on-record-but-higher-mortgage-rates-should-slow-future-growth-11648559497?mod=economic-report 8 - https://www.mortgagenewsdaily.com/news/04012022-construction-spending 9 - https://www.freddiemac.com/pmms 10 - https://www.cnbc.com/2022/03/30/investors-believe-the-biggest-threat-to-the-markets-now-is-a-fed-misstep-cnbc-survey-shows.html 11 - https://magazine.realtor/daily-news/2022/03/29/big-ask-for-housing-in-biden-budget

A new theme park has opened in Texas that might help get kids, and adults, interested in the construction industry. It’s called “Dig World” in Katy, Texas, just west of Houston near Interstate 10. It’s designed to provide a real world experience with full-size construction machinery that you see at job sites. 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. Dig World opened its doors on March 17th, and provides 3-and-a-half acres of construction-related activities. (1) According to Dig World, it’s “designed to safely provide a hand-on experience for both children and adults in operating heavy equipment.” That includes: full-size Caterpillar Mini-Excavatprs, Skid Steers, and UTVs. What’s a Skid Steer? Okay, I had to look a few of them up! Bigrentz defined a skid steer as “a small, versatile piece of construction equipment used primarily for digging. It’s light and maneuverable, and its arms can attach to a range of tools for various construction and landscaping jobs.” (2) I would say they look kind of like a tractor but more industrial. Or maybe a trip to Dig World would clear up any confusion! What’s a UTV? UTV stands for Utility Terrain Vehicle, as opposed to an All Terrain Vehicle. Nationwide.com says they are “built and used more for work than recreation. They are large, powerful, able to seat passengers side-by-side, and built with lots of storage space. They’re commonly used to haul equipment and supplies in locations that make using a truck impractical or impossible.” (3) So you are basically driving an oversized ATV with room for your friends, and whatever else you need to take with you! Some of Dig World’s other attractions include a gem mining station, a playground, and a turf field where visitors can play various games, like Cornhole. Founder, Jacob Robinson told Construction Dive that he was inspired to build the park by his sons who love dump trucks and other construction equipment. (4) He partnered with Texas A&M’s Department of Construction Science to create this immersive learning experience. The park is also designed to sync up with the university’s curriculum and host students on field trips. Park Safety Features The company has incorporated various safety features to ensure the public’s safety. Dig World’s website says: “We require seat belts to be engaged before any machine operation can occur. The speeds on drivable machines have been governed, and other equipment utilizes hydraulic limitations to reduce total movement.” Dig World isn’t the only construction adventure park in the U.S. Construction Dive mentioned a few others including Diggerland USA in New Jersey, Dig This in Las Vegas and Extreme Sandbox in Minnesota and North Texas. But you may soon have access to several Dig World locations. The company says it plans to build ten parks throughout the nation over the next few years. It says the goal is to “create 10 million smiles along the way!” If you’d like to read more about Dig World, you’ll find links in the show notes at newsforinvestors.com Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.prnewswire.com/news-releases/first-texas-construction-themed-amusement-park-dig-world-opens-in-katy-on-march-17th-301499549.html 2 - https://www.bigrentz.com/blog/what-is-a-skid-steer 3 - https://www.nationwide.com/lc/resources/powersports/articles/difference-between-atv-utv 4 - https://www.constructiondive.com/news/dig-world-construction-equipment-machinery-amusement-park-opens-texas/620784/

The construction industry is reporting good news about the worker shortage. The Associated Builders and Contractors group says there’s been a surge of workers returning to the industry, and the workforce size is almost what it was at the start of the pandemic. But even with that progress, the workforce gap is still an issue. (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 Labor Department says the industry added 60,000 jobs last month, in February. Nonresidential construction added about 29,000 of those jobs for an annual increase of 3.9%. Residential construction added about 31,000 jobs for an annual increase of 4.5%. That brings the total number of construction workers to 7.6 million but the industry still has many positions to fill. The unemployment rate for the construction industry is currently at 6.7%. That’s almost twice the rate of unemployment for the population in general, which is running at 3.8%. State Data on Construction Jobs If you break the data down into states, the Associated General Contractors of America says that construction employment is ‘higher” than pre-pandemic levels in 29 states and “lower” in 21 states, plus Washington, D.C. According to that organization, some states are still reporting record low employment numbers for the construction industry. (2) The association’s chief economist, Ken Simonson, says: “The scramble for workers is likely to drive wages and overtime costs even higher at the same time rising materials prices are cutting into already tight margins.” Although the worker shortage continues, the February numbers are a good sign. ABC’s chief economist Anirban Basu says: “Bottom line: The U.S. economy is charging into the post-pandemic world with significant momentum, and nonresidential construction is part of that story.” He says there’s evidence that “contractors have had a somewhat easier time filling available positions recently” and that “supply chain issues have improved slightly.” National Construction Workforce Gap Again, that kind of scenario will vary from state to state. And there is still a dire need for construction workers across the U.S. ABC estimates that the industry needs another 650,000 workers to help the industry catch up with housing market demand. But Basu believes that 2022 will be a strong year. Of course the impact of the Russian invasion of Ukraine is a big variable. That is pushing prices higher for some things, like gas, and causing new supply chain issues. Basu also points out that the government won’t be spending as much money this year, despite plans for infrastructure upgrades. AGC of America CEO Stephen Sandherr says that construction firms will have to pass along additional costs and that developers “should not be punished for failing to foresee a Russian invasion, spiking oil prices and soaring inflation when preparing public works bids.” Rapid Workforce Growth So there are still headwinds from various directions but there are also signs of optimism. Basu says: “At the heart of America’s economic momentum is rapid workforce growth, with more people re-entering the workforce to take advantage of higher wages and to better contend with rapidly rising prices.” If you’d like to read more on this topic, you’ll find links in the show notes at newsforinvestors.com Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.abc.org/News-Media/News-Releases/entryid/19274/construction-employment-surges-in-february-to-near-pre-pandemic-levels-says-abc 2 - https://www.agc.org/news/2022/03/14/construction-employment-remains-below-pre-pandemic-levels-21-states-and-dc-spiking-materials-price

The Real Estate News Brief - Week Ending March 26, 2022 Fed’s Next Rate Hike, Mortgage Rate Surge, Pets Who Sell Homes In this Real Estate News Brief for the week ending March 26th, 2022... the Fed’s next rate hike, the latest surge in mortgage rates, and why pets might help sell homes. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week. The Federal Reserve is ramping up for bigger rate hikes. Fed policymakers are saying that inflation is much too high, and that more aggressive action may be needed, including a 50 basis point rate hike in May. San Francisco Fed President Mary Daly said at an event last week: “With the labor market so strong, inflation, inflation, inflation is at the top of everyone’s mind.” Fed Chief Jerome Powell also said the central bank may start reducing its $9 trillion balance sheet in May. The Fed’s portfolio mushroomed in size with the purchase of Treasuries and mortgage-backed securities during the pandemic. (1) Unemployment applications have hit their lowest level since 1969. They were 28,000 lower last week than the week before for a total of just 187,000 initial claims. The number of people already getting benefits was also much lower. It was 67,000 lower for a total of 1.35 million claims. As reported by MarketWatch, that’s the lowest level since the 1970’s. (2) New home sales were down in February, despite higher inventory numbers. They were down 2% to an annual rate of 772,000. If you compare this February to a year ago, sales were down 6% while the supply of new homes increased to 6.3 months. That’s the highest since 2008. So what’s happening? Prices are getting too high for many first-time buyers. The average sales price for a new home that was sold in February was $511,000 while the median was $400,600. Realtor.com’s chief economist Danielle Hale says: “A new home is not an option for many first-time homebuyers even before the impact of higher mortgage rates is considered.” (3) Pending home sales were also down in February. They were down 4.1% according to the National Association of Realtors thanks to lack of affordable inventory and rising mortgage rates. Realtor.com economist researcher, George Ratiu, says: “With mortgage rates moving toward 5%, we are seeing early signs of a shift in housing fundamentals, as many people looking for a home have hit a ceiling on their ability to afford one.” (4) Consumers don’t see their economic situation improving much in the next year. The University of Michigan consumer sentiment index fell slightly to 59.4 which is close to an 11-year low. Americans are worried about Inflation and the war in Ukraine, although they are feeling confident about finding a job. (5) Mortgage Rates Mortgage rates surged higher this last week. Freddie Mac says the average 30-year fixed-rate mortgage rose 26 basis points, to 4.42%. The 15-year was up 24 basis points to 3.63%. (6) In other news making headlines... Rents Taking Larger Share of Paychecks Renters are spending more of their paychecks on rent. According to the most recent rent report by realtor.com, Americans are generally spending 30% of their paychecks on rent, and in 14 out of 50 metros tracked, they are spending more. Realtor.com’s chief economist, Danielle Hale says: “The general rule of thumb is to keep monthly housing costs to less than 30% of your income.” Anything above that, economists considered a debt-burden for households. (7) High rents are motivating some renters to become home-buyers, but high home prices and rising mortgage rates along with a lack of inventory is forcing many to keep renting. Homebuyers On the Move The number of people moving from one state to another is hitting a new high. Redfin.com says that 32.3% of its users planned to relocate during the first two months of the year. That’s up from 26% in 2019. The data was pulled from a sample of about 2 million Redfin.com users who searched for homes in 111 metros, and looked at a minimum of 10 homes in specific areas. (8) Redfin says there are more people leaving the more expensive coastal areas for more affordable inland areas. The research also shows that people are looking to move to warmer locations. Miami, Phoenix, and Tampa have been attracting the most attention. Pets Help Sellers Sell Homes If you are selling a home, you don’t have to hide your pet. A new study from Quicken Loans shows that buyers are more than open to buying a home that has had pet living there. (9) 79% of the respondents said that seeing signs of a pet won’t discourage them. Almost 20% said that it might even increase their desire to buy a particular home, so long as there aren’t any visible signs of pet damage. Only about 1 in 10 said they might regret buying a home with a barking dog next door. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.reuters.com/article/usa-fed-mester/fed-policymakers-march-toward-bigger-rate-hike-in-may-iduskcn2lk1ik 2 - https://www.marketwatch.com/story/u-s-jobless-claims-fall-to-lowest-level-since-1969-11648125485?mod=bnbh_mwarticle 3 - https://www.marketwatch.com/story/new-home-sales-slide-even-though-the-inventory-of-properties-for-sale-has-hit-the-highest-level-since-2008-11648044987?mod=economy-politics 4 - https://www.marketwatch.com/story/pending-home-sales-decline-for-fourth-consecutive-month-underscoring-down-shift-in-housing-market-11648217352?mod=economic-report 5 - https://www.marketwatch.com/story/high-u-s-inflation-leaves-consumer-sentiment-stuck-at-almost-11-year-low-11648217381?mod=economy-politics 6 - https://www.freddiemac.com/pmms 7 - https://magazine.realtor/daily-news/2022/03/23/rents-taking-a-bigger-bite-out-of-pay 8 - https://magazine.realtor/daily-news/2022/03/24/buyers-moving-states-in-record-numbers 9 - https://magazine.realtor/daily-news/2022/03/23/pets-may-attract-buyers-to-homes

The latest attempt to create affordable housing in California is sending shockwaves through the real estate industry. And it doesn’t just impact investors. It’s a wake-up call to any California resident who likes the freedom to move to a new home when the urge strikes them! This new effort involves legislation that would create a steep capital gains tax for anyone who sells their home within seven years of buying it. Hi I’m Kathy Fettke and this is the Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Democratic Assemblymember Chris Ward of San Diego introduced the legislation. It’s called the California Speculation Tax Act. Under this Act, the sale of a home within three years of its purchase would trigger a 25% capital gains tax. The tax would be reduced 5% for each subsequent year and disappear if the owner holds on to the property for at least seven years. Applies to All Residential Buyers/Sellers This would apply to any kind of residential property including single-family homes, condos, townhomes, multi-units, etc. And, it would apply to most individuals. First-time homebuyers would be exempt, but they would also get slapped with that tax if they buy and sell their second home in less than seven years. Active due military personnel are also exempt, along with the estate of a person who died within that seven-year timeline. There are a few other exceptions including multi-units that meet a 15% affordable housing requirement, properties with affordable deed restrictions, one-half of a subdivided property, properties that are exempt from transfer taxes, and commercial and mixed-use properties. Emergency Meeting on Flip Tax Bill The American Association of Private Lenders held an emergency meeting on March 17th with the law firm that represents the association, Geraci LLC, and Think Realty. Nema Daghbandan (neema dahg-ban-dun) of the association acknowledged that California has done some good things recently to create affordable housing. That includes laws that allow ADUs and the subdivision of single-family homes and/or properties. But he says this bill will not contribute to California’s housing affordability goal. He claims: “There’s no actual direct relationship as to how this will reduce the amount of people purchasing property or who isn’t purchasing it. Because ultimately what will happen for people who buy and hold for short term, all they are going to do is instead purchase these properties, hold them as rental properties, and then jack up the rent on renters. That’s all that’s going to happen. It doesn’t do anything to create housing stock.” Early Stage of the Legislation The legislation is still in committee as a draft version, but real estate professionals say now is the time to speak up. They say the legislation is not only bad for California, but a bad precedent for other states. It’s the kind of legislation that can grow legs if it’s passed in one state. In fact, a similar bill was proposed and defeated in New York a few years ago, so there’s some momentum for this kind of approach to the housing situation. The California bill began as a response to data from the California Association of Realtors. It said that investors accounted for 51% of residential sales in the third quarter of last year, while the national average was only 19%. That spooked lawmakers who quickly churned out this legislation. Their hope? To keep investors from outbidding regular folks who are buying homes for their personal use. But that’s wrongheaded at best, and really bad for anyone who buys a home in California, whether they are an investor or not. It Won’t Create More Housing What will this legislation really do? The California real estate insiders say it won’t put more homes on the market. Instead, it will shrink the inventory of homes because homeowners who want to sell will be forced to rent their homes until the seven years are up. If this becomes law, it will also contribute only 30% of the funds to the creation of affordable housing. Another 20% will be given to schools, 40% to infrastructure, and about 10% for the administration of the program. Plus, the money would go to the taxpayer’s county and not the county where the property was sold. Will it discourage investors? Likely, yes, but with bad results for California. Investors help create housing by renovating homes which improve neighborhoods and communities. That also helps local governments meet state mandates for the creation of new housing, which, critics say, they can’t do without the help of the private sector. Why Defeat this Bill? Five important reasons to defeat this bill include: 1 - It does not create affordable housing or reduce home prices. 2 - It would discourage people from moving to avoid the tax (and stifle the market). 3 - It would only contribute 30% of the funds toward the creation of affordable housing. 4 - It would contribute the rest of the money to the taxpayer’s county and not the county where the property was sold. 5 - It would apply to all homeowners even though it is meant to discourage investors. If you’d like to find out what you can do to voice your opinion about this you’ll find a link in the show notes at newsforinvestors.com. Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: https://aaplonline.com/articles/advocacy/ca-flip-tax/

In this Real Estate News Brief for the week ending March 19th, 2022... we check on the Fed’s rate hike, look at a range of inflation projections, and get the latest update on single-family rent growth. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and the first interest rate hike in four years. The Federal Reserve has said that a quarter point rate hike was likely at its March meeting to control inflation, and that’s exactly what committee members approved. That puts the overnight lending rate between a quarter and a half point. The Fed warned that another six rate hikes are likely this year and that half point moves are a possibility. Fed Chief Jerome Powell says: “I guess I would say the expectation still is that inflation will come down in the second half of this year, but we still expect inflation to be high this year.” (1) The Fed is expecting inflation will average 4.3% for the year. Inflation is currently running at 7.9%. If you remove food and energy from the calculation, the Consumer Price Index or CPI is 6.4%. The Russian war on Ukraine is expected to push prices even higher. (2) A survey by the New York Federal Reserve shows that many Americans believe that inflation will be running a lot higher than the Fed is predicting – at about 6% for the year. MarketWatch also reports that some analysts are forecasting even higher rates of about 9% by next spring. (3) The latest report on wholesale inflation shows that wholesale prices rose .8% in February. That brings the wholesale rate of inflation up to 10%. But as MarketWatch reports, there is a “silver lining” in this data because the core rate of wholesale inflation, which excludes food and fuel, was only up .2% for the month. On the other hand, economists say we haven’t yet seen the war’s impact on commodity prices. An Oxford Economics economist told MarketWatch: “Inflation in the pipeline is showing few signs of decelerating in the near term, especially as the Russia-Ukraine war wreaks havoc in energy and other commodity markets.” (4) The latest unemployment report shows a dip in applications. They dropped to 214,000 which is a 2-and-a-half-month low. The total number of continuing claims is also lower, at 1.42 million. Companies are holding off on layoffs because of the labor shortage, and employees are enjoying more options when it comes to who they are going to work for. (5) Builders broke more ground on new homes in February. The government says that new home starts rose 6.8% in February. On an annual basis, they were up 22% compared to last February. Most of the increase was driven by single-family home construction with a 5.7% increase. There was a drop in permit applications however, for both single-family and multi-family projects. As MarketWatch reports, builders may be focusing more on the permits they already have than they are on getting new ones. (6) Existing home sales were down in February. The National Association of Realtors says they decreased 7.2% to a seasonally-adjusted annual rate of 6.02 million. NAR’S chief economist, Lawrence Yun, says: “Housing affordability continues to be a major challenge, as buyers are getting a double whammy – rising mortgage rates and sustained prices increases.” (7) Mortgage Rates And those mortgage rates did jump higher this last week. Freddie Mac says the average 30-year fixed-rate mortgage broke through the 4% mark for the first time since May, 2019. It was up 31 basis points to 4.16%. The 15-year was up 30 basis points to 3.39%. (8) In other news making headlines… Single-Family Rents Single-family rents continue to run hot with rents in some metros rising four times faster than they did last year. The index shows that rental prices are up 12.6% on average compared to 2.6% last year. (9) CoreLogic offered an example saying that tenants with a $1500 a month rent might get a renewal letter that raises the rent to almost $2,100 a month. But again, that’s where rents are rising the fastest. Miami tops that list with rents that are jumping 38.6% year-over-year. But rent growth is between 15 and 20% in many of the other largest U.S. metros, like Phoenix, Las Vegas, San Diego, Austin, Boston, Dallas, and Atlanta. Russians Unloading Homes Wealthy Russians are pumping luxury homes back into the market, as they try to offload their U.S. assets. The New York Post cites several examples of new multi-million dollar listings by Russian owners, since the Russian invasion of Ukraine. (10) One of the areas where these homes are popping up is called “Little Moscow” in Sunny Isles Beach, Florida. Brokers say that their phones are “blowing up” with calls from panicked Russian homeowners. They want to know how much their properties are worth and they want to sell quickly to all-cash buyers. They say active listings in that area have suddenly surged about 9%. Best Time to List Homes One thing in the sellers’ favor right now, is “timing.” According to realtor.com, mid-April is the absolute best time to list your home – specifically, April 10th through the 16th. Realtor.com’s researchers say that sellers who list in mid-April will get a head start on the competition. (11) That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.marketwatch.com/story/fed-raises-rates-and-plots-strategy-of-steady-further-increases-11647453994?mod=newsviewer_click 2 - https://www.marketwatch.com/story/u-s-inflation-rate-climbs-again-to-7-9-cpi-shows-and-ukraine-war-threatens-more-pain-for-consumers-11646919280?mod=article_inline 3 - https://www.marketwatch.com/story/americans-think-inflation-will-top-6-a-year-from-now-11647270119?mod=economy-politics 4 - https://www.marketwatch.com/story/u-s-wholesale-inflation-surges-again-and-jumps-10-in-past-year-11647348016?mod=mw_latestnews 5 - https://www.marketwatch.com/story/u-s-unemployment-claims-drop-to-10-week-low-of-214-000-as-hiring-revs-up-11647520732?mod=bnbh_mwarticle 6 - https://www.marketwatch.com/story/new-home-construction-activity-improves-as-builders-work-through-backlog-of-permits-11647521669?mod=mw_latestnews 7 - https://www.marketwatch.com/story/buyers-are-getting-a-double-whammy-existing-home-sales-fall-as-affordability-concerns-mount-11647613098?mod=economy-politics 8 - https://www.freddiemac.com/pmms 9 - https://www.mortgagenewsdaily.com/news/03152022-rent-rent-price-growth-sfri 10 - https://magazine.realtor/daily-news/2022/03/14/russians-unloading-luxury-homes-across-us 11 - https://magazine.realtor/daily-news/2022/03/15/mid-april-the-best-time-to-list

In this Real Estate News Brief for the week ending March 12th, 2022... we'll take a look at how the Russian invasion of Ukraine could affect the U.S. housing market, the number of homes selling for more than 100,000 over asking price, and why a federal court blocked a ban on homebuyer “love letters.” Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, which includes the Russian invasion of the Ukraine. Housing experts have been weighing in on whether this will impact the real estate market. According to a blog post by the National Association of Realtors, Russian buyers account for less than 1% of foreign purchases. Most of that activity has been in Florida, Georgia and New York. But that reduces Russian input to .2% in Florida, for example. As a result, NAR researchers don’t think we’ll see any major disruptions for real estate. If anything, it could give domestic buyers a little less competition. It could also ease pressure on the supply chain. But they also caution that higher oil prices, interest rate hikes, and other economic impacts could be disruptive for housing over the long term. (1) Inflation is one of those indicators that economists are watching closely. The latest report shows the annual rate of inflation was 7.9% in February. That’s a 40-year-high for the Consumer Price Index, or CPI. It was up .8% for the month which was higher than Wall Street economists expected. .5% of the increase went to housing, which includes rent. Higher prices for gas and food are also contributing to inflation. (2) The latest unemployment report shows an increase in initial claims. They were up 11,000 to a total of 227,000 mostly because of a surge in claims in California and New York. MarketWatch says that economists are expecting claims to return to the 200,000 level in the near future. They had previously fallen to 188,000 which is a 52-year-low. Continuing claims were also higher last week. They rose to 1.49 million but that’s also considered extremely low. (3) Employment numbers show that the job market is “red hot” and the so-called “Great Resignation” continues. The number of job openings fell slightly to 11.3 million in January, but that’s not far below a record 11.5 million in December. 4.3 million people quit their jobs for other jobs. Layoffs are also at record lows as employees try to fill all those open positions. MarketWatch says that in January, 6.1 million people left their jobs while 6.5 million were hired. (4) Consumer sentiment is slipping because of high prices and the Russian invasion of Ukraine. The University of Michigan’s latest consumer sentiment survey shows a decline from 62.8 to 59.7. Many expect the situation to impact their personal finances during the course of this year. (5) Mortgage Rates Mortgage rates reversed course slightly and moved higher after two weeks of declines that brought them below 4%. Freddie Mac says the average 30-year fixed-rate mortgage rose 9 basis points to 3.85%. The 15-year was up 8 points to 3.09%. Rates have been volatile because of the war in Ukraine. (6) In other news making headlines... Bidding Wars Continue Among Homebuyers Competition is fierce among homebuyers. Redfin says that almost 6,000 U.S. homes were sold for more than $100,000 over asking price, so far this year. At the same time last year, just 2,400 had sold for that much. The largest portion of those highly priced homes were in the Los Angeles area. In fact, most of the top ten metros were in California, but Seattle, Boston, Denver and New York also made the list. (7) A Los Angeles Redfin agent says: “On top of a lack of homes for sale, which makes everything a hot commodity, buyers are just plain eager. They’re anxious to purchase a home ASAP because as rates rise, they won’t be able to afford the homes they’re looking at now.” Federal Court Block Oregon’s Love Letter Ban A federal court has ruled that Oregon’s ban on homebuyer “love letters” is a violation of First Amendment rights. Buyers write letters to make a more personal connection with sellers. That might include how much they would love to live in the home, along with details about themselves and their families. (8) Oregon became the first state in the nation to ban these letters because sellers might use the information in a discriminatory way, which is a violation of the fair housing laws. The National Association of Realtors has also warned against the use of love letters, and many brokers and agents refused to deliver them. Attorney Daniel Ortner of the Pacific Legal Foundation says in a statement: “Love letters communicate information that helps sellers select the best offer. The state cannot ban important speech because someone might misuse it.” What’s Prompting “The Great Resignation”? If you are wondering what’s causing the so-called “Great Resignation” that I mentioned previously, The Pew Research Center conducted a survey. It found that the top reason for quitting was low pay. That was followed by a lack of advancement opportunities and a lack of respect at work. About a quarter of the respondents said they quit because of childcare issues and a lack of schedule flexibility. Many people didn’t like the benefits or wanted to relocate to another area. Some say they were working too many hours or not enough hours, and a few didn’t like the COVID-19 vaccine requirements. (9) That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://magazine.realtor/daily-news/2022/03/08/direct-harm-to-real-estate-unlikely-from-russia-ukraine-conflict 2 -https://www.marketwatch.com/story/u-s-inflation-rate-climbs-again-to-7-9-cpi-shows-and-ukraine-war-threatens-more-pain-for-consumers-11646919280?mod=economic-report 3 -https://www.marketwatch.com/story/u-s-unemployment-claims-climb-11-000-to-227-000-but-still-near-pandemic-low-11646919555?mod=economic-report 4 -https://www.marketwatch.com/story/some-4-3-million-workers-quit-in-january-as-job-openings-stay-near-record-high-11646839384?mod=economy-politics 5 -https://www.marketwatch.com/story/americans-inflation-expectations-hit-40-year-high-umich-survey-shows-11647011337?mod=economy-politics 6 -https://www.freddiemac.com/pmms 7 -https://www.redfin.com/news/homes-sold-above-asking-price-2022/ 8 -https://magazine.realtor/daily-news/2022/03/08/federal-court-blocks-love-letter-ban 9 -https://magazine.realtor/daily-news/2022/03/11/survey-reveals-what-s-prompting-the-great-resignation

In this Real Estate News Brief for the week ending March 5th, 2022... you’ll hear about the Fed’s rate hike plan, new figures on record high home equity, and why there’s a land rush for autonomous trucks. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and more aggressive talk about rate hikes to control inflation. Fed Chief Jerome Powell spoke before Congress and said he will support a quarter percent hike on the Federal Funds rate at the next policy meeting. He also anticipates that this will be one of a series of rate hikes this year, and that one or two of them would be more than a quarter point. (1) One big concern is the impact the war in Ukraine will have on prices. We’re already seeing higher gas prices than we’ve ever seen before. Realtor.com also reports that high heating bills are giving many homeowners sticker shock. A PG&E spokesperson said in a TV interview that natural gas prices are 90% higher this winter, than last. (2) And Powell doesn’t think inflation will go away anytime soon. He said during his testimony before the Senate Banking Committee: “We’re going to see upward pressure on inflation, at least for a while.” He also said this is not going to help supply chain issues. The unemployment report was good news. Jobless claims were down to a two-month low of just 215,000 applications. As MarketWatch reports, “the economy appears to have regained some momentum” after a slowdown at the end of last year, thanks to a big drop in COVID cases and the lifting of coronavirus restrictions. (3) Job growth was also impressive. The Labor Department reported a gain of 678,000 jobs in February. Most of them were for leisure and hospitality jobs, along with education, health, and professional services, but the construction industry also saw big gains. The official unemployment rate is now 3.8%. (4) Builders started pouring money into projects in January. The Commerce Department says that construction spending was up 8.2% year-over-year, after a 1.3% increase from December to January. Spending for single-family construction was up 1.2% in January and “down” .1% for multi-family. There was also a big jump in private non-residential construction such as gas and oil well drilling. But the biggest gain was 13.8% for federal government projects. (5) Mortgage Rates Mortgage rates were down again last week, as investors moved more money into bonds because of the war in Ukraine. Freddie Mac says the average 30-year fixed-rate mortgage was 3.76% while the 15-year was 3.01%. (6) In other news making headlines… Homeowners Tapping Into Home Equity Homeowners are seeing record amounts of equity as home prices continue to rise. Black Knight says the average equity is $185,000 for people with a mortgage. That does “not” include the 20% amount that lenders want mortgage holders to retain. (7) Urban Institute’s Karen Kaul says we’ll probably see more people tapping into that equity this year, but due to rising interest rates they probably won’t be doing a cash-out refi. She says many will opt for second lien products such as a HELOC, which many people use to remodel a home. Heating & Cooling Supply Chain Issues If higher energy costs aren’t enough to make you cringe, it’s growing more difficult to get parts to fix a broken furnace or air conditioner. The Wall Street Journal reports that HVAC companies are struggling to get parts for both residential and commercial buildings. Those bottlenecks add to the challenge of getting other necessary construction materials like windows, garage doors, and paint. (8) One thing that is increasing the demand for heating and cooling upgrades is the rise in remote work. The Journal says that many remote workers want new climate control technology and that HVAC backlogs are becoming “very, very disruptive.” Land Rush for Autonomous Trucks? There’s another interesting twist to our high tech future, and possibly something that will help with supply chain issues. The Journal reports that a land grab is beginning for the parking of self-driving trucks near big cities. It reports that Philadelphia-based investor Alterra Property Group is teaming up with autonomous-truck company Embark Trucks to buy properties across the country. (9) Embark plans to launch its first trucks in Sunbelt states like California and Texas. That’s expected to take place in 2024. The trucks would be autonomous on highways and taken over by humans on city streets. Vacant Properties in the U.S. While the real estate market operates with a very tight inventory, you might be curious to know how many homes are sitting vacant. According to LendingTree, there are 16 million of them, with the most number of vacant homes in Vermont, Maine, and Alaska. The vacancy rate in those three states is between 20 and 22%. The states with the least number of vacant homes are Oregon, Washington, and Connecticut. If you are wondering, California is fifth from the bottom on that list with a vacancy rate of 8.68%. (10) Vacant homes are not necessarily a bad thing. LendingTree’s Jacob Channel says: “Homes can be vacant for a variety of reasons, and just because an area has a high vacancy rate doesn’t necessarily mean that there’s something wrong with its housing market.” Although some may be uninhabitable, he said vacancies might be due to the rapid building of homes that are not yet occupied, a high number of second or vacation homes, and for-sale homes that are still on the market, among other reasons. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.marketwatch.com/story/powell-says-ukraine-war-is-adding-to-inflation-fears-11646324667?mod=federal-reserve 2 -https://magazine.realtor/daily-news/2022/03/04/high-heating-bills-stun-homeowners 3 -https://www.marketwatch.com/story/jobless-claims-drop-to-two-month-low-of-215-000-as-omicron-wanes-and-firms-hire-more-workers-11646314574?mod=economy-politics 4 -https://www.marketwatch.com/story/coming-up-u-s-jobs-report-for-february-11646399014?mod=mw_latestnews 5 -https://www.nasdaq.com/articles/construction-spending-soars-in-january%3A-4-stocks-to-buy 6 -https://www.freddiemac.com/pmms 7 -https://magazine.realtor/daily-news/2022/03/01/homeowners-tempted-to-use-equity 8 -https://magazine.realtor/daily-news/2022/03/04/add-furnace-parts-to-growing-list-of-material-bottlenecks 9 -https://www.wsj.com/articles/self-driving-trucks-start-to-propel-land-rush-near-major-cities-11646053200?mod=hp_featst_pos5 10 -https://magazine.realtor/daily-news/2022/03/02/16-million-homes-vacant-in-us

Home builders are facing all sorts of supply chain issues that are contributing to higher prices and construction delays. Some are hoarding supplies in rented warehouses while others are putting in ghost orders for projects that don’t exist yet. Whatever magic tricks they have to perform, they are running into problems right up to the finish line, including the almost impossible task of finding a garage door. 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. No Garage Door The dilemma facing builders prompted a recent headline in the New York Times that reads: “4 Bed, 3 Bath, No Garage Door: The Unlikely Woes Holding Up Home Building.” (1) Rick Palacios, Jr. of John Burns Real Estate Consulting told the Times: “Garage doors are a nightmare.” The article says that almost everyone is having a difficult time getting garage doors right now, and that prices have doubled or tripled for those doors. Plus, it could take several weeks to get one. Builders who used to order them a few weeks before a home is finished are now ordering them before they break ground. It’s crucial to get that garage door in place. In many places, a new home won’t pass inspection if it isn’t completely finished. And that brings the project to a grinding halt including buyers who can’t move in, and builders who don’t get paid. A developer working on one of our RealWealth syndications in Reno says he had to buy a truck specifically to pick up materials wherever they can find them, even if it meant driving to Denver. He says the company he was working with locally hasn’t been able to get any garage doors for months now and had to lay off their entire work force. That company is now filing for bankruptcy. In one of our residential developments, our team was able to negotiate with the city to close on the home without a garage door, so that families could move into their home. Garage As a Necessity The garage is seen as a necessary part of a home in most parts of the country. And with many people moving farther away from cities because they can work remotely, the car becomes even more important, along with a garage to house the car and the garage door. Many people use the garage as their main entry into the home. The Times says that 9 out of 10 new single-family homes had one in 2020. The article had photos of homes that were otherwise done except for the garage door, which is covered with plywood. Some builders are installing cheap, temporary doors until the better ones arrive. But it’s not what new homeowners want to see as they do a walk-through. The difficulty getting a garage door is a final gotcha moment for builders who’ve already been doing a tap dance to get the materials they need. Along with a materials shortage, prices have gone up by at least 50% for most things. Erin Roberts of Ernst Young told Construction Dive: “It’s as bad as any time during COVID.” (2) Skyrocketing Prices, Delays The Associated General Contractors of America says prices for steel mill products have gone up the most in the last year. They’re up 112%. Prices for steel pipe and tubing are up 78%. Plastic construction products are up 35%. Lumber and plywood are up 21%. The list goes on. And then there are the delays in getting those more expensive supplies. Roofing materials, steel bar joists and metal decking are all taking 8 to 10 months. Aluminum windows, structural steel, and metal studs are taking almost as long. Construction Dive says that roofing materials are “as scarce as hen’s teeth.” Peter Guffo of Boston-based Suffolk Construction’s South Region told Construction Dive: “We’re at the point now where we’re warehousing materials, and getting them wherever we can. If you have to move it twice, you move it twice.” He says the cost of moving supplies twice is much less than not having those supplies and halting construction. The New Supply Chain Setback Now, the Russian invasion of the Ukraine is throwing another monkey wrench into supply chain slowdowns. As the U.S. and other NATO countries impose economic sanctions, and global companies cut off trade with Russia, there are new supply chain issues to deal with. (3) One of the big ones is oil. Russia is the world’s third-largest oil producer, and supplies about one of every ten barrels of oil used by the global economy. Losing that oil supply is raising the price of oil elsewhere and that’s increasing costs for production and transportation. Russia also provides about one fifth of the world’s supply of natural gas. Both Russia and Ukraine are major players in the export of wheat, corn, barley, and fertilizer. Some materials and metals used by the semiconductor industry also come from Russia. Flight diversions and cancellations have put pressure on cargo space which is causing new supply chain delays. Those issues may not directly impact U.S. homebuilding, but they add to the increasing complexity of getting supplies produced and delivered from point A to point B at a reasonable price. As Construction Dive points out, “it’s anyone’s guess” as to when the supply chain snarls will end. ABC’s chief economist Anirban Basu says: “It may seem naive given current data readings, but the expectation remains that, at some point later this year, construction materials prices will moderate.” Other industry insiders are not so optimistic. They say they don’t see any relief until the end of this year or longer. If you’d like to read more about this topic, you’ll find links in the show notes for this episode at newsforinvestors.com. Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.nytimes.com/2022/02/15/upshot/homes-garage-door-shortage.html 2 -https://www.constructiondive.com/news/hoarding-ghost-orders-and-pop-up-warehouses-constructions-new-supply-cha/619131/ 3 -https://www.nytimes.com/2022/03/01/business/economy/ukraine-russia-supply-chains.html

Airbnb is offering free temporary housing for 100,000 Ukrainian refugees. It announced the effort in partnership with it’s charitable arm, Airbnb.org, and the generosity of its hosts. 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. As we’ve been hearing, many Ukrainians are fleeing their country because of the Russian invasion. The accommodations will be offered to people with immediate housing needs, paid for by Airbnb, the Airbnb.org Refugee Fund, and hosts that offer their homes and discounts for those accommodations. Help During Moments of Crisis Airbnb sent letters to European governments detailing the support that’s being offered. They were signed by CEO Brian Chesky and other company officials. The letters went to officials in Poland, Germany, Hungary, and Romania. Airbnb says it will try to accommodate any special needs, including the possibility of longer-term stays. Airbnb and its charitable arm have helped more than 50,000 refugees over the last five years. More than 4,000 donors have contributed to Airbnb.org’s “refugee fund” to help pay for that effort. Just recently, it announced that it helped 21,300 Afghan refugees and is working on helping another 20,000 from Afghanistan, Africa, the Middle East, Central and South America. The offer to help Ukrainian refugees will add another 100,000 to those numbers. COVID-19 Accommodations for Relief Workers There was a huge effort by Airbnb and hosts to help frontline workers during the initial spread of COVID-19. That helped put tens of thousands of healthcare professionals and relief workers where they were needed the most. Airbnb.org also helped victims of floods that devastated parts of Western Europe last year. Airbnb.org says it is working to establish partnerships in countries where Ukrainian refugees are fleeing. In the meantime, it says that people who need immediate support should contact the UN Refugee Agency. If you’d like to read more about this effort, or accommodations you’d like to provide to refugees, you’ll find a link to the Airbnb announcement in the show notes for this episode at newsforinvestors.com. Also, please remember to hit the subscribe button, and leave a review! You can also join our real estate investor network for free at newsforinvestors.com. That gives you access to the Investor Portal where you’ll find information on rental markets and sample property pro-formas. You can also connect with our experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://news.airbnb.com/help-ukraine/

Rents are not just making a rebound after a dip during the pandemic. They are blowing right past the monthly cost of buying a home in more than half of the largest U.S. markets. A new realtor.com report says they’ve been rising so fast, it’s now more affordable to buy a home in 26 U.S. cities, than it is to rent. (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. January was the eighth month in a row that rents have shown double digit growth in the U.S. Realtor.com says the year-over-year increase hit 19.8% in January. That kind of growth is almost double the monthly cost increase for buying a home – which started the year at 11%. Rent Growth Breakdown Rents have risen the most for studio apartments. Those rents are up 21% or about $256 a month, compared to a year earlier. One- and two-bedroom units are up 19.2% which adds about $266 dollars to the monthly rent for a one-bedroom and about $323 for a two-bedroom. Higher rents mean that the monthly cost of a starter home is about 20.6% lower than it is for renting in 26 of the 50 largest metros. That translates to a $323 monthly savings, for home buyers in those metros. Top Three Buying Markets The realtor.com report shows that the three top markets that favor buying over renting provide an even bigger discount. 1 - In Birmingham, Alabama, the monthly cost for a starter home is just $668 compared to a median rent of $1,201. That’s a 44.3% savings or about $533 a month. 2 - In Cleveland, Ohio, the monthly buying cost is $809 versus $1,325 a month for rent. That’s a 38.9% difference or about $516. 3 - In Pittsburgh, Pennsylvania, homebuyers are paying $945 a month compared to a median monthly rent of $1,530. That’s a 38.3% savings or about $585. But realtor.com says the trend is not universal. While it’s pricier to rent than to buy in 26 metros, it’s still more affordable to rent in 24 others. Realtor.com says the price difference in those metros makes it about 24.8% more expensive to buy than to rent, giving renters a monthly savings of about $536. In cities with a lot of big tech, buyers are shelling out even more money per month. That cost is about 41.6% higher per month than renting. Rent vs. Buying in Tech Markets The top three tech metros where buying is a whole lot more expensive than renting include: 1 - Austin, Texas, where the monthly cost of buying is about 76.1% higher than renting. 2 - New York City where buyers pay an extra 52.4% month over renting. 3 - And San Francisco where the monthly cost of buying is about 49.1% more expensive. Realtor.com’s chief economist Danielle Hale says: “While both rental and home-buying costs are rising, a number of factors could tip the affordability scale in favor of first-time buying for many Americans this year. She says: “Rents are forecasted to outpace listing price growth in 2022 and are already accelerating across all unit sizes.” She also says that surveys show a majority of landlords plan to raise their rental rates even higher this year. Florida Metros Top Rent Growth List The metros where rents are rising the fastest are all in Florida. Realtor.com’s list of the Top 10 Markets for Rent Increases in January 2022 list Miami, Tampa, Orlando, and Jacksonville as the top four. We’ll have a link to that report in the show notes at newsforinvestors.com. You can also visit our Learning Center while you are there and join our network for access to our Investor Portal. It’s free to join. Members can look at sample property pro-formas, and connect with our experienced investment counselors. The portal also offers access to property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening, and please remember to hit the subscribe button, and leave a review!I'm Kathy Fettke. Links: 1 -https://www.realtor.com/research/january-2022-rent/

In this Real Estate News Brief for the week ending February 26th, 2022... mortgage rates move past the 4% level, homebuyers battle it out in January, and big investors target vacation homes. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. https://podcasts.apple.com/us/podcast/real-estate-news-real-estate-investing-podcast/id1079952715 Economic News We begin with economic news from this past week. Concerns about inflation continue. The Federal Reserve’s preferred monitoring tool, known as the PCE Index, shows a .6% increase in January for a yearly rate of 6.1%. (1) That’s slightly lower than the more widely known CPI or Consumer Price Index. It shows an annual rate of inflation, at 7.5%. Companies are raising prices because of labor shortages and supply chain issues. Russian military action in Ukraine is also contributing to inflation worries, especially for oil, grains, and metals. Some economists believe a full-scale Russian invasion will push the CPI as high as 10%. If that happens, it would be the highest year-over-year rate of inflation since 1981. (2) The U.S. labor market remains strong. Jobless claims fell again last week. They were down 17,000 to a total of 232,000. Continuing claims also tumbled. They were down 112,000 to 1.48 million. That’s the lowest they’ve been since March 1970. (3) Higher mortgage rates are also impacting demand for new homes. The government says that sales were down 4.5% in January to an annual rate of 801,000 homes. But regional numbers varied a lot with sales in the Northeast down 10.7% while sales in the West were actually up slightly, by 1.2%. (4) Existing home sales were also down. The National Association of Realtors says that pending home sales fell 5.7% in January. Year-over-year, they are down 9.5%. It was the third month in a row that sales were down, thanks to a tight supply, higher interest rates, and higher home prices. (5) Home prices are up by almost 19% year-over-year. The S&P CoreLogic Case-Shiller indexes show that Phoenix had the highest rate of growth at 32.5% year-over-year. Tampa and Miami were close behind at 19.4% and 27.3% respectively. An FHFA report on home prices shows that Arizona, Utah, and Idaho had the strongest home price growth. The District of Columbia, Louisiana, and North Dakota had the weakest. (6) Mortgage Rates Mortgage rates went in both directions last week and remain in the 4% range. According to Freddie Mac’s latest report, the 30-year fixed-rate mortgage is down slightly, to 3.89%. But the Mortgage Bankers Association says they did a U-turn shortly after Freddie’s report. The MBA says the average lender is currently quoting conventional 30-year fixed-rate loans at well over 4%. (7) (8) In other news making headlines... Homebuyer Competition at Record High Competition is fierce among homebuyers. Redfin says that 70% of the offers written by Redfin agents faced bidding wars in January. That’s up from 67.7% in December and 61% last year. (9) Redfin says that buyers are rushing to buy homes before interest rates move even higher. The metros with the strongest competition were Spokane and Seattle in Washington state, and Sacramento in California. A Redfin agent in Spokane says that one of her listings had 45 showings in five days and received 14 offers. Another one of her listings had 12 offers and sold for $120,000 over the list price of $525,000. Investor Demand for Vacation Homes Big investors are showing more interest in vacation homes. Demand for vacation homes and short-term rentals, in general, has been growing since the pandemic began. They’ve typically been owned and operated by individual homeowners or small investors. But that’s changing. (10) The Wall Street Journal reports that big investment firms are capturing more of the short-term rental market. It offers an example, reporting that New York Investment firm, Saluda Grade, has teamed up with AvantStay to purchase $500 million worth of vacation homes. They will be just outside of major metros, making it easy for clients to take short vacations and possibly work remotely. It can be a challenging business to operate short-term rentals, however. Many cities are tightening the rules and making it tough on short-term rental investors who’ve already purchased properties or would like to. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.marketwatch.com/story/coming-up-pce-inflation-index-and-consumer-spending-11645795161?mod=mw_latestnews 2 -https://www.marketwatch.com/story/russia-ukraine-puts-10-u-s-inflation-on-radar-as-blackrock-repeats-central-banks-may-have-to-live-with-inflation-11645565763 3 -https://www.marketwatch.com/story/jobless-claims-retreat-in-latest-week-painting-a-picture-of-a-strong-labor-market-11645709922?mod=economy-politics 4 -https://www.marketwatch.com/story/coming-up-u-s-new-home-sales-11645713360?mod=economy-politics 5 -https://www.marketwatch.com/story/pending-home-sales-slump-for-third-straight-month-in-january-11645801451?mod=economic-report 6 -https://www.marketwatch.com/story/coming-up-s-p-case-shiller-and-fhfa-home-price-indexes-11645537850?mod=search_headline 7 -http://www.freddiemac.com/pmms/ 8 -https://www.mortgagenewsdaily.com/markets/mortgage-rates-02242022 9 -https://www.redfin.com/news/real-estate-bidding-wars-january-2022/ 10 -https://magazine.realtor/daily-news/2022/02/24/investment-firms-target-vacation-homes 11 -https://magazine.realtor/daily-news/2022/02/24/poll-moving-more-stressful-than-breakups

In this Real Estate News Brief for the week ending February 19th, 2022… what economists are saying about rate hikes, where rents are growing the fastest, and a new residential development plan for Disney fans. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and what economists are saying about inflation and rate hikes. St. Louis Fed President James Bullard believes the Fed should push rates up a full point in the near term. His comments about the need for more aggressive action is also pushing rate hike forecasts as high as seven this year. Bullard told CNBC: “I do think we need to front-load more of our planned removal of accommodation than we would have previously.” (1) The government reported last week that the annual rate of inflation hit 7.5%. (2) Unemployment applications were up 23,000 last week, but economists are not concerned about the strength of the job market. As CNBC reports, millions of businesses have open positions they’d like to fill, so we probably won’t see many layoffs. Currently, there are 11 million job openings. (3) Existing home sales were up almost 7% from December to January for a seasonally-adjusted annual rate of 6.5 million homes. That’s despite the tight inventory which has now dropped to a 1.6-month supply. Economists had predicted sales of 6.1 million homes. Sales were up in all parts of the country, but sales were strongest in the South with a 9% increase. (4) Builders are letting up on the gas pedal to some degree. The Census Bureau reported that housing starts were down 4% in January. Economists say the decline reflects a number of obstacles that builders are dealing with including supply-chain issues, COVID-19 cases, and bad weather in some areas. Builders are also worried that higher mortgage rates could impact demand. Permits were up 1%. The chief economist at Pantheon Macroeconomics, Ian Shepherdson, told CNBC: “The housing market is set for a sustained softening over the next few months.” (5) A monthly survey on homebuilder confidence was also down. The National Association of Home Builders says it fell for a second straight month, mostly due to supply chain delays. NAHB Chairman Jerry Konter says: “Production disruptions are so severe that many builders are waiting for months to receive cabinets, garage doors, countertops, and appliances.” (6) Mortgage Rates Mortgage rates have now jumped to their highest level since May 2019. Freddie Mac says the average 30-year fixed-rate mortgage was up 23 basis points to 3.92% last week. The 15-year was up 22 points to 3.15%. (7) In other news making headlines… Rents Are Surging Higher Rent growth hit a new record in January. Redfin says the average asking rent was up 15.2% year-over-year. Rent growth was the highest in Portland, Oregon, and Austin, Texas at 39% and 35% respectively. Other metros in the top ten list include the Florida metros of Tampa, Fort Lauderdale, West Palm Beach, and Miami. They are all in the 30% range. (8) Redfin’s chief economist Daryl Fairweather says that housing is expensive whether you are renting or buying. Redfin says the average monthly rent is now $1,891 while the average monthly mortgage payment is $1,595. Many consumers can’t afford to buy a home, however, because of the down payment. Investors Buying Record Share of Homes That kind of rent growth is great motivation for investors who bought 18.4% of U.S. homes in the fourth quarter. That’s almost 13% higher than Q4 of last year. Redfin says that investors are taking advantage of the strong demand for rentals and the incredible rent growth. (9) Redfin says that investors are paying high prices for homes because of that rent growth. Many are also paying in cash, which eliminates the expense of a loan. A typical price point for investors is about $433,000. That’s up 10% from last year. Disney’s Housing Development Plan If you love Disney theme parks, you may get the opportunity to enjoy the magic as your primary residence. The Walt Disney Company announced a residential development project called “Cotino” near Palm Springs, in Rancho Mirage. It’ll be a 24-acre “grand oasis featuring clear turquoise waters with crystal lagoons.” (10) It will house residents of all ages with a special section for the 55-plus age group. Homes will range in size from condos and single-family homes to larger estates. There will be a waterfront clubhouse, club-only beach area, water activities, and Disney events throughout the year. Disney cast members will run the community association. Day passes will also be available to non-residents. If you don’t want to live in the desert, Disney says it is working on other locations for future developments as part of its “Storyliving by Disney” long-term plan. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.cnbc.com/2022/02/14/bullard-say-the-fed-needs-to-front-load-tightening-because-inflation-is-possibly-accelerating.html 2 -https://www.marketwatch.com/story/coming-up-consumer-price-index-11644498273 3 -https://www.marketwatch.com/story/u-s-jobless-claims-jump-23-000-to-248-000-11645105161?mod=economy-politics 4 -https://www.marketwatch.com/story/coming-up-u-s-existing-home-sales-11645195810?mod=economic-report 5 -https://www.marketwatch.com/story/coming-up-u-s-housing-starts-11645104312?mod=newsviewer_click 6 -https://www.cnbc.com/2022/02/16/builders-are-waiting-months-to-get-cabinets-and-garage-doors.html?__source=newsletter%7Ceveningbrief 7 -http://www.freddiemac.com/pmms/ 8 -https://finance.yahoo.com/news/real-estate-investors-buying-record-140000275.html 9 -https://www.redfin.com/news/redfin-rental-report-january-2022/ 10 -https://magazine.realtor/daily-news/2022/02/18/disney-to-build-themed-housing-development

Real estate investors were very busy in the second half of last year. A new Redfin study shows that they purchased a record share of U.S. homes in the fourth quarter. 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 study shows that investors bought about 80,000 homes in the fourth quarter. That’s about 18.4% of all residential real estate sales for that time period. The investor home purchase share was 17.4% in the third quarter, and 12.6% a year earlier. (1) Share vs. Numbers While investors accounted for a record share of residential real estate purchases in the fourth quarter, the number of homes they bought dropped about 9% from the third quarter. They purchased about 88,000 homes in Q3 compared to 80,000 in Q4. The dip in quantity is due to the lack of inventory affecting all homebuyers. Redfin says it’s also due to typically slower sales at the end of the year. Investors have been buying more homes despite skyrocketing home prices. Redfin says that prices were up 15% year-over-year in December. That’s pushing many potential homebuyers out of the market, and increasing demand for rentals. It’s also pushing rents higher. Redfin says the average monthly rent for a new lease was up 14% at the end of last year. Redfin economist Sheharyar Bokhari says: “While record-high home prices are problematic for individual homebuyers, they’re one reason why investor demand is stronger than ever.” She says: “Investors are chasing rising prices because rental payments are also skyrocketing, incentivizing investors who plan to rent out the homes they buy.” Cash is King for Investors Most investors are also paying in cash, which reduces the overall cost of the home, and makes it hard for consumers to compete. Redfin says that 75% of investor purchases in the last quarter were paid for in cash. Bokhari says: “It’s tough to compete with all-cash offers, and rising mortgage rates have a smaller impact on investors because they often don’t use mortgages at all.” Most Popular Price Category Mid-priced homes were the most popular with investors. They made up 37% of Q4 investor purchases. Low-priced homes made up about 32% of the deals and high-priced homes about 30%. Single-family homes were also the most popular type of home. Redfin says that three out of four investor purchases were single-family homes. Condos and coops accounted for 15%, townhouses for 6%, and small multifamilies for just under 4%. Demand for Single-Family Homes If you’ve been following the rental market, you know that single-family homes have surged in popularity because of the pandemic. More people can work remotely from home, and many have decided they need more space to do that. While many would like to buy a single-family home, it’s tough for a lot of consumers to afford the high prices, so they continue to rent. The markets where investors bought the most homes were in the Sun Belt. Atlanta tops the list with investors buying 32.7% of the homes that sold in the fourth quarter. Charlotte was second with an investor share of 32%. Jacksonville was next followed by Las Vegas, and Phoenix. Jacksonville experienced the biggest increase in homes purchased by investors. Redfin says they more than doubled from the previous year with a 157% increase. If you’d like to see the Redfin report with data on investor activity in 40 different metros, we’ll have a link in the show notes at newsforinvestors.com. You can also visit our Learning Center while you are there and join our network for access to our Investor Portal. It’s free to join. Members can look at sample property pro-formas, and connect with our experienced investment counselors. The portal also offers access to property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening, and please remember to hit the subscribe button, and leave a review!I'm Kathy Fettke. Links: 1 - https://www.redfin.com/news/investor-home-purchases-q4-2021/

Some people in the Midwest are losing their homes because of a loophole in “quiet title” laws. Law experts say real estate opportunists are claiming that homes are abandoned, and are using the loophole to grab the home when homeowners are away. There are reports that this has been happening in Iowa but that quiet title laws in several states could be used to do the same thing. 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. Iowa Public Radio broke the story about a homeowner in Marshalltown, Iowa, outside of Des Moines and Cedar Rapids. (1) Natalia Esteban had purchased the home in 2001 with her ex-husband, before they divorced. She moved to California in 2018, but kept the house in Marshalltown where she returned each summer. Big Surprise for the Homeowner Esteban’s daughter, Maria Kendall, lived in Marshalltown with her family and noticed a listing on Zillow one day, for her mom’s house. Her mother was in California at the time, so Kendall called her mom to ask about the listing. It was a big surprise for Esteban who wasn’t selling the house. They discovered that Esteban had lost the title, and the new owner had put the home up for sale. So how did the title transfer to whoever was selling her home? It’s called “quiet title action” and is used to settle disputes over who owns a piece of property. There could be a dispute over a boundary, or who owns a home after the owner dies, or any number of things. In Esteban’s case, Catherine Gooding petitioned for title of Estaban’s home claiming the home was abandoned. She also claimed to have a tax certificate that proved Gooding was the new owner. As required by the quiet title law, she published notification of the title dispute three times in the local newspaper. You know, the kind of small-print listings that most people probably wouldn’t see, let alone Esteban who was in California at the time. Even if she had looked at the paper, she may have missed it because she’s not fluent in English. But Gooding followed the law and won her case by default because Esteban failed to show up in court. Loophole In Quiet Title Laws Legal experts say the loophole has two issues that make it somewhat easy to snatch the title on a home. The first issue is a vaguely written law on how a person can challenge ownership of a property. It requires that the person petitioning for title must have an interest in the property, but it reportedly doesn’t provide details. The second issue is how the homeowner is contacted about the title dispute. The small-print notifications in the newspaper meet the legal requirement, but don’t do a very good job at notifying homeowners, especially if they are not home at the time and are immigrants who are not fluent in English. Esteban’s daughter told Iowa Public Radio that if she hadn’t seen the listing on Zillow: “We would never have found out the house was sold. My mother would have come back to Iowa in the summer and she would have found out she doesn’t have a house.” Esteban went to court to fight for her home. It was revealed during that case, that Gooding had applied for a tax certificate but had never been granted one. The title ended up going back to Esteban, but unfortunately, she lost everything inside the home. The radio station says she lost many photos and family heirlooms from her native Mexico. Weak Quiet Title Laws In Several States The radio station reports that Gooding used the quiet title law to acquire more than 40 properties in the Marshalltown area. She did not respond to a request for comment but as the radio station points out, she followed a law with very few parameters. As for how often this happens overall, it’s difficult to track because there’s no code in the Iowa court system for “quiet title” transfers. In addition to Iowa, other states that have weak quiet title laws include Missouri, Nebraska, and Kansas. Legal experts are worried about this happening to other homeowners. Kansas City real estate attorney Mike White says he’s seen many quiet title cases during his 50 years in the business. He says: “I’d say the average person knows absolutely nothing about quiet titles.” And he says that quiet title laws throughout the Midwest don’t do much to protect non-English speakers. Title insurance can protect homeowners from a dispute like this. While lenders require it, title insurance is optional for homeowners without a mortgage. (2) If you’d like to read more about this topic, you’ll find links in the show notes at newsforinvestors.com. You can visit our Learning Center while you are there and join our network for access to our Investor Portal. It’s free to join. Members can look at sample property pro-formas, and connect with our experienced investment counselors. The portal also offers access to property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening, and please remember to hit the subscribe button, and leave a review! Links: 1 - https://www.iowapublicradio.org/ipr-news/2022-02-08/this-family-almost-lost-their-home-over-iowas-little-known-quiet-title-law 2 - https://magazine.realtor/daily-news/2022/02/15/quiet-title-law-used-to-dupe-people-out-of-homes

In this Real Estate News Brief for the week ending February 12th, 2022… the latest reading on inflation, home price growth, and foreclosures. 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. The latest inflation report shows that consumer prices notched up another .6% in January. That brings the annual rate of inflation to 7.5%, which is the highest inflation we’ve seen in 40 years. Much of the increase is due to the high cost of food, energy and housing costs, which include rents. According to MarketWatch, Wall Street analysts only expected a .4% gain in January. (1) If you strip out food and energy for a core rate of inflation, it’s at 6%. That’s still twice the rate the Federal Reserve would like to see. Shawn Huss at Warsaw Federal calls inflation an “economic killer.” He wrote in an emailed newsletter: “It is a tax that does not get collected and if people believe prices will be higher in the future, inflation could become entrenched.” Huss also has some good news. He says that: “Inflation expectations for the future remain relatively low. The 10-Year Treasury breakeven rate, or what the bond market expects inflation to run on average over the next 10 years, is a relatively low 2.42%.” Jobless claims were down for a third week in a row. The Labor Department says there were 16,000 fewer initial state claims than the week before for a total of 223,000 applications. That’s the lowest number we’ve seen since December. But the number of people already getting unemployment benefits stayed the same at about 1.62 million. Economists expect that fewer and fewer people will be collecting jobless benefits as the omicron wave diminishes. (2) Mortgage Rates Mortgage rates are now at the highest level since the pandemic began. Freddie Mac says the average 30-year fixed-rate mortgage was 14 basis points higher last week, for a rate of 3.69%. The 15-year was up 16 points to an average of 2.93%. (3) Freddie expects the trend to continue because of the strong job market and the high rate of inflation, and says that that will probably take a bite out of homebuyer demand. In other news making headlines... Home Prices Higher in Q4 Homebuyers are facing higher home prices as well, although home price growth is expected to slow down with higher mortgage rates. The National Association of Realtors says the median sales price of a home was 15% higher in the fourth quarter of last year, compared to the year before. That includes both new and existing homes. That figure is down slightly from a 15.9% year-over-year increase in Q3. (4) NAR tracked mortgage rates in 183 metros and says that two-thirds of them posted double-digit appreciation. That’s making it tough on homebuyers. The report says that the typical monthly mortgage payment is about $1,240 which is about $200 higher than it was a year ago. NAR’S chief economist Lawrence Yun, says that many homebuyers are getting forced out of the market because of high home prices, but he also says that: “Home prices should begin to normalize later in 2022 as more homes come on the market.” More Foreclosure Activity Foreclosure activity is currently at its highest level since the start of the pandemic. ATTOM Data Solutions says it jumped 29% higher from December to January. That activity includes default notices, scheduled auctions, and bank repossessions. Year-over-year, they are up 139%. (5) RealtyTrac’s Rick Sharga expects to see more increases throughout the year, but he also says: “It’s likely that foreclosure activity will remain below historically normal levels until the end of 2022.” Back in 2019, foreclosure activity was about 60% higher. Sharga wasn’t surprised by the January increase because foreclosures often slow down during the holidays and then surge a bit at the beginning of the year. He says: “This year, the increases were probably a little more dramatic than usual since foreclosure restrictions placed on mortgage services by the CFPB expired at the end of December.” Metros with the highest foreclosure activity include: Detroit; Atlantic City, New Jersey; Cleveland; Columbia, South Carolina; and Trenton, New Jersey. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! To learn more about real estate investing, become a RealWealth member for free at newsforinvestors.com. You will have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.marketwatch.com/story/coming-up-consumer-price-index-11644498273?mod=mw_latestnews 2 -https://www.marketwatch.com/story/u-s-jobless-claims-fall-for-third-straight-week-11644500332?mod=economic-report 3 -http://www.freddiemac.com/pmms/ 4 -https://magazine.realtor/daily-news/2022/02/10/home-price-surge-continued-in-fourth-quarter 5 -https://magazine.realtor/daily-news/2022/02/10/foreclosure-activity-highest-since-pandemic-began

There’s a real estate boom going on in the metaverse! They hit $500 million dollars last year, and are expected to double this year, to one billion. The uptrend took off recently when Facebook announced plans to expand into the metaverse and changed its corporate name to Meta Platforms. CNBC reports that virtual real estate sales have gone up ninefold since Facebook’s announcement in October. (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. According to metaverse data provider, MetaMetric Solutions, investors spent a total of $83 million in January sales alone. Analysts based their 2022 projections on that amount of spending throughout the year. But some analysts are anticipating more growth. Analytics firm BrandEssence Market Research expects the virtual real estate market to grow at a compound annual rate of 31% a year through 2028. What is the Metaverse? But what exactly is the metaverse? And why are investors buying real estate that has no corresponding plot of land on this earth? Facebook explains it like this: “The “metaverse” is a set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you. You’ll be able to hang out with friends, work, play, learn, shop, create and more. It’s not necessarily about spending more time online – it’s about making the time you do spend online more meaningful.” (2) Andrew Kiguel of the Toronto-based Tokens.com told CNBC: “You can go to the carnival, you can go to a music concert, you can go to a museum.” This activity is carried out with a cartoon-like character called an avatar that represents you in your virtual world. (3) Many celebrities have already ventured into the metaverse with their avatars, including Justin Bieber, Ariana Grande, DJ Marshmello, and Paris Hilton. She threw a New Year’s Eve party on her own virtual island. Real Dollars for Unreal Properties To capitalize on this idea of social interaction in the metaverse, investors are paying real dollars for unreall properties in prime locations that could, some day, be worth tons of money. Maybe. Prices are going up fast right now. Kiegel says that many properties are up 4 to 500% in just the last few months. Popular Metaverse Platforms There are many metaverse platforms, and new ones are launching every day, but there are just four that are attracting most of the land sales right now. The “Big Four” are Sandbox, Decentraland, Cryptovoxels, and Somnium. The Sandbox is the biggest metaverse real estate platform. It has more than 166,000 parcels of land that measure 106 yards by 106 yards each. In December, they each sold for an ether equivalent of $12,700. An ether is the token used for Ethereum transactions, much like a bitcoin. Investors can use cryptocurrency to buy, develop, and sell parcels of land. Like the real world of real estate, their value can rise as they are upgraded and turned into more desirable properties. Metaverse real estate investor and advisory firm, Republic Realm, is creating 100 so-called “Fantasy Islands” with dream-like villas and amenities that include boats and jet skis. The company sold 90 of the properties for $15,000 apiece on the first day of sales, and some of the buyers are relisting them for more than $100,000. Republic Realm recently paid a record $4.3 million for land in the Sandbox. According to the Wall Street Journal, the company now owns more than 2,500 plots of virtual land in 19 different meta-worlds. It bought the $4.3 million dollar property from Atari SA. Two Ways to Buy Virtual Land There are two ways to buy virtual land – directly from the platform or from a developer. Investors can also make changes, although it’s not as easy as picking up a paint brush, because you have to change the code. Tokens.com set the previous record when it bought digital land for $2.43 million in the “fashion district” part of Decentraland. The metaverse real estate market is becoming a high-stakes investment play, although it’s also highly speculative. Republic Realm’s CEO Janine Yorio says it’s a very risky business and you should only invest what you can afford to lose. She says: “It’s highly speculative. It’s also blockchain-based. And as we all know, crypto is highly volatile. But it can also be massively rewarding.” Choosing Your Property As for how to choose your property, she doesn’t believe that location matters. She believes that values will increase depending on what people do with the land. That’s apparently because getting from one place to another is as simple as “teleporting.” But other investors follow the real world real estate rule on location. One example is a $450,000 purchase of a property in the Sandbox so the buyer could be Snoop Dog’s neighbor, according to Seeking Alpha. (4) There are some who feel that metaverse land sales are a crypto ponzi scheme. Investors buy land at increasingly higher prices, but there’s no underlying value because there’s no limit to the amount of virtual land you can create. Metaverse skeptics say the last man out might end up with a worthless piece of virtual space. Whatever “might” happen to the value of real estate in the metaverse, it’s going through a boom phase right now. And some of the biggest tech names are positioning themselves to be part of the metaverse future. Facebook is only one of those names. Seeking Alpha lists a few of those relationships. Disney is working on the creation of virtual theme parks. Microsoft plans to incorporate virtual reality into its Teams platform. Many game companies are expanding rapidly into the virtual reality space. As I mentioned previously, several celebrities have already held big events in the metaverse. And now, some very brave real estate investors are snapping up these imaginary properties. If you’d like to read more about this, you’ll find links in the show notes for this episode at newsforinvestors.com. You can also join RealWealth for free while you are there. As a member, you have access to the Investor Portal where you can view sample REAL WORLD properties and their pro-formas. You can also connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening, and please remember to hit the subscribe button, and leave a review!I'm Kathy Fettke. Links: 1 -https://www.cnbc.com/2022/02/01/metaverse-real-estate-sales-top-500-million-metametric-solutions-says.html 2 -https://about.fb.com/news/2021/09/building-the-metaverse-responsibly/ 3 -https://www.cnbc.com/2022/01/12/investors-are-paying-millions-for-virtual-land-in-the-metaverse.html 4 -https://seekingalpha.com/article/4479857-who-wants-to-become-a-digital-landlord

In this Real Estate News Brief for the week ending February 5th, 2022... the growth of construction spending for single-family homes, worries over rising mortgage rates, and the futuristic auction of a Tampa Bay home. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and good news about the job market. The government says that U.S. companies added 467,000 jobs in January. That’s after the creation of 510,000 jobs in December. Wall Street economists has only predicted 150,000 new jobs for January and 200,000 for December. (1) There’s no lack of jobs, but many people have missed work recently because of the omicron surge. As MarketWatch reports, a record 7.8 million people called in sick last month. That helped drive the unemployment rate higher from 3.9% to 4%. But the omicron wave is receding in many parts of the country, and the number of unemployment applications was down for a second week in a row. There were just 23,000 people applying for benefits last week. (2) The homeownership rate moved slightly higher in the fourth quarter of last year. Realtor.com reports a total of 83.5 million owner-occupied households for a homeownership rate of 65.5%. That’s .3% higher than the third quarter. If you break that down by age group, people who are 65 or older have the highest homeownership rate at 79.4%. The lowest homeownership rate is 38.3% for people younger than 35. Back in 2004, the homeownership rate hit a high of 69.2%. (3) 2021 was a big year for private residential construction spending. Money spent to build single-family homes was up 33% compared to 2020. It was up about half that much for multi-family. The two categories that saw the least amount of spending growth were public safety and office space. Spending for those categories was down 33 and 32% respectively. (4) Mortgage Rates Mortgage rates are holding steady at around 3.55% for a thirty-year fixed-rate mortgage. Freddie Mac says the average for the 15-year was down 3 basis points this last week to 2.77%. The mortgage guarantor says the economic impact of the omicron surge is keeping mortgage rates from rising higher, but it also expects them to start creeping higher again this spring and summer. (5) In other news making headlines... Keeping Rates Low with Rate Locks Home buyers are keeping a close watch on mortgage rates, and some are taking advantage of “rate locks.” It costs extra to buy a rate lock, but Realtor.com says it can prevent a big surprise when it’s time to buy. The most common rate lock is for 30 days, but buyers can get them for various amounts of time, from 15 days to 45 days or longer. (6) Buyers can also lower their mortgage rates by paying discount points. One point costs 1% of the loan amount, and could reduce your mortgage rate by about .25%. It’s not time to panic however. Interest rates are still at historic lows. The National Association of Realtors doesn’t expect them to rise that quickly. It is predicting they’ll average just 3.9% by the end of this year. Young Adults Continue to Live with Parents Many potential homebuyers are young adults who continue to live with their parents as the pandemic shakes out. NAR says that 17.8% of adults ages 25 to 34 moved back in with mom and dad in 2020. That’s the highest level since 1960. In 2021, that percentage remained high at 17%. (7) But the trend has evolved from the initial impact of the pandemic, to other related trends. NAR’S Jessie Lautz writes: “Some young adults may have recently moved back home due to the flexibility of remote work trends and to avoid paying high rents.” She says it could also be due to job losses, or getting an education, but she says: “Regardless of the reason, living with family may provide a benefit to potential first-time home buyers.” If children are living at home rent-free, it makes it easier for them to save up for a down payment. Tampa Home Hit Auction Block as NFT A Tampa Bay home is going on the auction block as the first home to be sold as an NFT. That stands for Non-Fungible Token which is a unique digital image that’s linked to a blockchain as proof of ownership. The home was turned into an NFT by first putting the home into an LLC, and then transforming the home’s certificate of authenticity into an NFT. (8) What are the benefits of buying or selling a home as an NFT? It reportedly expedites the sale process, and according to some experts, is the future of real estate. As one person described the process to the Tampa Bay Times: “You’re essentially selling a company and a company owns that house.” You can read more about that and our other stories by clicking on a link in the show notes at newsforinvestors.com. You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening, and please remember to hit the subscribe button, and leave a review!I'm Kathy Fettke. Links: 1 -https://www.marketwatch.com/story/coming-up-u-s-jobs-report-for-january-11643980058?mod=mw_latestnews 2 -https://www.marketwatch.com/story/u-s-jobless-claims-drop-23-000-to-238-000-as-omicron-wave-recedes-11643895188?mod=economy-politics 3 -https://www.realtor.com/research/homeownership-february-2022/ 4 -https://www.mortgagenewsdaily.com/news/02022022-construction-spending 5 -http://www.freddiemac.com/pmms/ 6 -https://magazine.realtor/daily-news/2022/02/02/buyers-rush-to-lock-in-rates 7 -https://magazine.realtor/daily-news/2022/01/28/young-adults-move-back-home-in-record-numbers 8 -https://www.washingtonexaminer.com/news/florida-tampa-bay-nft-home-real-estate

Las Vegas has unveiled a digital twin of its downtown area to help city planners deal with future growth and other issues, like climate change. It’s a virtual modeling system by a Chicago-based company called Cityzenith. It says that Las Vegas has completed an initial set up phase, and is now headed into phase two. 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. Cityzenith says its SmartWorld Digital Twin technology will help Las Vegas analyze issues involving mobility, air quality, noise pollution, water use, and carbon emissions coming from large downtown buildings. City planners will be able to analyze those emissions as they call for changes to reduce greenhouse gases to a net zero level. (1) Las Vegas Begins Phase Two Cityzenith CEO, Michael Jansen, says of the Las Vegas project: “The base twin is now complete, and in the second quarter of this year, stakeholders from Las Vegas will be invited to join phase 2 of the Digital Twin project.” Stakeholders include real estate owners, government agencies, university researchers, data partners, architects, and casino operators. Jansen says that just 1.7% of American office buildings are “green.” But he says that building owners won’t have to shell out a lot of money for upgrades because Cityzenith has partners that will provide risk-free, no money down financing for retrofits. He says the digital twin platform combined with “creative financing” will make it easier for property owners to transition their buildings. Clean Cities, Clean Future This is just a first step for Cityzenith. It says on its website that the Las Vegas project is part of a much larger “Clean Cities, Clean Future” initiative. The company hopes to implement the digital twin platform in major cities throughout the world. Other cities adopting this technology include Los Angeles and Phoenix, but Cityzenith says that more than a dozen other cities and property owners are lined up to do the same. Cityzenith isn’t the only one providing this technology. Ernst and Young issued a report last year called “Digital Twin: The Age of Aquarius in Construction and Real Estate.” It predicts that the use of digital twins will become an important part of the real estate industry. (2) The report lists four ways that digital twins provide significant value: 1 - The first is to help with building maintenance and operations. It says the technology can increase efficiency by as much as 35% by determining wasteful expenses and hidden cost savings. 2 - The second is a substantial improvement to a building’s environmental footprint. The report says the technology can identify how buildings impact the environment and help reduce emissions by as much as 50%. 3 - The third value proposition is a 20% increase in health and wellness. That would happen by improving unhealthy indoor environments that can lead to illness and lower productivity. 4 - And fourth - improvements to the way people use indoor space and interact within a building. The report estimates a 15% increase in space utilization, thanks to digital twin modeling. Built Environment with Real-Time Data The technology combines spatial data from the built environment with real-time data that is collected with sensors, and the internet of things. That also allows researchers to run “what if” scenarios, and predict what actions may be needed to address any future issues or events. The CEO of data company, Terbine, that works with Cityzenith, talked about the virtues of this technology in a Construction Dive blog. (3) David Knight says: “Transitioning our home city into a clean, sustainable, and more attractive place to live and visit is a fantastic opportunity.” He says: “What we’re building here represents a model for how other cities can enable sustainability and a better quality of life for their citizens.” If you’d like to know more about this topic, check for links in the show notes at newsforinvestors.com. You can also find out more about real estate investing at our website. It’s free to join, and free to access hundreds of webinars and articles on real estate investing. You’ll also have access to the Investor Portal where you can view sample property pro-formas for new and existing rental homes, and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 -https://cityzenith.com/press 2 -https://www.ecmag.com/sites/default/files/Digital%20twin%20-%20the%20Age%20of%20Aquarius%20in%20construction%20and%20real%20estate.pdf 3 -https://www.constructiondive.com/news/las-vegas-unveils-digital-twin-of-downtown/617127/

Airbnb is becoming more of a nomadic lifestyle hub than a vacation planning website. With the rise of remote work, many people are booking longer stays on Airbnb and taking their work with them, including Airbnb CEO, Brian Chesky. He recently announced that he’ll be living on Airbnbs, and staying at a new place every few weeks. (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 pandemic has unleashed a big revolution in the way people live and work. While some people are looking for bigger single-family homes with yards, others are ditching the stay-at-home life altogether and becoming digital nomads. Airbnb caters to this lifestyle perfectly, with accommodations that can be as flexible as the remote worker schedule. Longer Airbnb Stays The Airbnb website shows how people are using short-term rentals as a way to travel while they work. In a news release about Chesky’s plan to live on Airbnbs, it says almost 50% of the reservations in the third quarter of last year was for seven or more days. That’s up from 44% in 2019. And, it says that one out of every five of the people who booked during Q3, booked for 28 days or longer. Airbnb said in the news release: “As the world undergoes a revolution in how we live and work, more people are blending life with travel.” And that’s exactly what Airbnb is researching with a campaign called: “Live Anywhere on Airbnb.” “Live Anywhere on Airbnb” The campaign involves the selection of 12 individuals and families from nine countries around the world, who get to stay at Airbnbs for free for 10 months as part of an Airbnb research project. The only thing they have to do in exchange is to share their experiences with Airbnb. That campaign was underway in the middle of last year, and there are profiles of all the people participating in the project on the Airbnb website. Now Chesky will be also be contributing his feedback on the Live Anywhere trend as a nomadic remote worker, running his company from various Airbnb locations. Airbnb Trends The company is predicting that as the remote trend matures, more and more people will use Airbnbs to live, travel, and work at the same time. The company is also predicting that we’ll see that people may venture farther away from home, and work for longer periods of time in other countries. Many may even give up their permanent address so they can live abroad unencumbered for however long the adventure lasts. Airbnb cited some data that shows international travel was already surging before the pandemic – from 25 million in 1950 to 1.4 billion in 2019. One trend that Airbnb has been seeing during the pandemic is an increase in bookings for rural areas. It says those bookings were up 85% in the third quarter of last year, compared with the third quarter of 2019. The length of time people are spending in Airbnbs has also increased dramatically. Airbnb says it grew 75% from the summer of 2019 to the summer of 2021. And those who are leading the fully nomadic lifestyle, the percentage has grown from 9% to 12% in one year from 2020 to 2021. Digital Nomad Visas Several countries are offering digital nomad visas. If you’re interested in doing something like that, check out Spain, Portugal, Costa Rica, Brazil, Malta, and Indonesia, among others. (2) You’ll find links for more information about the Airbnb lifestyle at newsforinvestors.com. Check the links at newsforinvestors.com, for more information on this topic. You can also find out more about real estate investing at our website. It’s free to join, and free to access hundreds of webinars and articles on real estate investing. You’ll also have access to the Investor Portal where you can view sample property pro-formas for new and existing rental homes, and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Show Notes link: https://www.newsforinvestors.com Links: 1 -https://news.airbnb.com/brian-chesky-to-live-on-airbnb-as-the-travel-revolution-becomes-reality/ 2 -https://www.investopedia.com/countries-offering-digital-nomad-visas-5190861

In this Real Estate News Brief for the week ending January 28th, 2022... the Fed’s rate hike plan, what investors are saying about 2022 challenges, and what buyers are doing to purchase a home more quickly. 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. All eyes were on the Fed for changes in monetary policy after the central bank’s two-day meeting. Worries about more aggressive action by the Fed to combat inflation didn’t seem to be evident. Fed Chief Jerome Powell said that committee members are “of a mind to raise the federal funds rate at the March meeting” if economic conditions are appropriate for doing so. Wall Street economists are expecting a rate hike in March, along with three others this year, to control inflation. It’s now running at an annual rate of about 7%, but Fed officials still believe it will settle back down as the year progresses and supply chain issues are resolved. Powell also said that the Fed might begin reducing it’s $9 trillion balance sheet later this year, but that timeline will depend on “the incoming data and evolving outlook.” (1) Meantime, the Commerce Department released a report on the GDP which shows the economy grew at an annual rate of 6.9% during the fourth quarter of last year. Much of that surge is due to businesses stocking up shelves for the holiday shopping season. That brings the full-year GDP up to 5.7%, which was also boosted by government stimulus. Prior to the pandemic, the GDP was only about 2.3%. MarketWatch says that economists expect strong growth to continue this year at an annual pace of at least 4%. (2) Jobless claims dipped last week, by about 30,000. The Labor Department says initial state claims were down to a total of 260,000. They had hit a three-month high in January, thanks to a wave of Omicron infections, but that outbreak has started to recede. MarketWatch reports that not a single state reported a big increase in unemployment applications. (3) Turning now to the housing market, new homes sales were up 12% in December to an annual rate of 811,000 homes. As buyers snatched up what they could, the supply was down 9%. The largest percentage of new homes was sold in the Midwest. That region alone was up 56%. (4) Pending home sales were down in December. According to the National Association of Realtors, those sales were down 3.8%. The Northeast and Western regions saw the biggest declines. (5) Inventory levels are a primary obstacle for many buyers, but higher home prices and higher mortgage rates are also pushing marginal buyers out of the market. Price growth did slow down a bit in December, according to the S&P CoreLogic Case-Shiller 20-city price index. It shows that prices were up 18.3% year-over-year in November compared to 18.5% in October. (6) As MarketWatch reports, price growth may be slowing, but it doesn’t mean prices are coming back down, especially with the kind of demand we’re seeing from buyers. Consumers are feeling a bit less optimistic about the economy. Both the consumer confidence index and the University of Michigan consumer sentiment index were down in January. Consumers have been worried about high prices as well as Omicron, although it appears that Omicron cases are decreasing. (7) (8) Mortgage Rates Mortgage rates didn’t move much last week. Freddie Mac says the 30-year fixed-rate mortgage was down one basis point to 3.55%. The 15-year was up one point to 2.8%. (9) Freddie Mac is forecasting slightly higher rates in 2022, but says it doesn’t expect rates to go higher than 4%. (10) In other news making headlines... Investor Concerns The lack of inventory is a top concern among investors. A survey by the National Association of Realtors shows that 63% of the real estate investors listed inventory as the number one challenge. They listed high home prices as the second biggest challenge. (11) Those are the same two issues topping the previous two Investor Sentiment Surveys. NAR’S Rick Sharga says: “Together with supply chain disruptions which have caused product shortages and increased materials costs, it is not surprising that individual investors think that the market is not as healthy today as it was a year ago.” Investors believe they’ll face the same challenges over the next six months, which also include higher costs for materials, and higher interest rates. Sharga says: “About 88% of the investors surveyed were concerned about inflation having an impact on their business.” Buy Now, Look Later The lack of inventory is forcing many buyers to grab what they can without looking at a lot of homes, or to skip the in-person tour altogether, and make an offer. NAR says the magic number is eight, for home tours, and that three of those tours are being done virtually. That’s a median number. (12) Between 2009 and 2011, buyers were looking at a median of 12 homes before they made a decision. During the pre-crisis meltdown, they were looking at nine homes. Technology is making it easier for buyers to do their research, of course. In 2006, 80% of buyers were using technology to find homes. In 2021, 95% of buyers were doing so. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.marketwatch.com/story/fed-expects-it-will-soon-be-appropriate-to-raise-interest-rates-11643223873?mod=home-page 2 -https://www.marketwatch.com/story/coming-up-u-s-fourth-quarter-gdp-11643289488?mod=home-page 3 -https://www.marketwatch.com/story/u-s-jobless-claims-drop-30-000-to-260-000-as-omicron-wave-fades-11643290867?mod=economic-report 4 ​​-https://www.marketwatch.com/story/coming-up-u-s-new-home-sales-11643208406?mod=economic-report ​​5 -https://www.marketwatch.com/story/pending-home-sales-slump-as-housing-supply-dwindles-11643296659?mod=economic-report 6 -https://www.marketwatch.com/story/coming-up-s-p-corelogic-case-shiller-and-fhfa-home-price-indices-11643118805?mod=economy-politics 7 -https://www.marketwatch.com/story/consumer-confidence-slips-in-january-and-points-to-softer-economy-11643123353?mod=economy-politics 8 -https://www.marketwatch.com/story/u-s-consumer-sentiment-slumps-to-a-new-ten-year-low-as-inflation-concerns-mount-11643382412?mod=economy-politics 9 -http://www.freddiemac.com/pmms/ 10 -https://www.mortgagenewsdaily.com/news/01242022-freddie-mac-forecast 11 -https://magazine.realtor/daily-news/2022/01/25/investors-reveal-top-concerns-challenges 12 -https://www.housingwire.com/articles/buyers-viewed-just-eight-homes-before-making-their-purchase/

Build-to-rent communities are one of the hottest trends in rental real estate right now! Many people who can’t own their own homes still want to live the single-family lifestyle. Demand is so hot, almost 80% of the renters participating in a RentCafe survey said they were “interested in living in a community of single-family homes.” (1) And with such a tight supply of existing homes, newly constructed rental homes are getting the attention of investors. 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 RentCafe survey includes responses from 3,300 renters, and 78% of them confirmed that interest is growing in single-family rentals. Rentcafe.com says that last year, in 2021, there were three times the number of searches for rental homes as there were the year before, in 2020. Demand Grows for Single-Family Rentals Single-family rentals have been a hot investment choice for more than a decade, so it’s not a new concept. The first big surge happened after the 2008 housing crisis when millions of homes were foreclosed but the former owners still wanted to live in detached homes. Investors bought the foreclosed homes and turned them into rentals. The pandemic has accelerated this demand once again because people want more privacy and more space, but there aren’t enough existing properties to meet the demand so many investors and developers are building new rental homes. Last year, builders pumped 6,740 new build-to-rent homes into the market. This year, that number is expected to double to almost 14,000 newly constructed single-family rentals. These figures refer to rental homes that are built within communities, which some people are calling horizontal apartment communities. But the rental units are stand-alone homes, with yards. According to Shannon Hersker at Walker a Dunlop: “The pandemic just increased demand at a faster pace. People want to live in areas that are less dense, in communities that offer more space.” And, it isn’t just Millennials who are attracted to this kind of rental. Hersker says: “In reality, you have everyone – including college students, empty nesters, families with kids, pet owners, and those wanting to downsize.” Urban vs. Suburban SFR Locations So where are all these built-to-rent homes located? RentCafe says that 61% of them are in suburban areas, and 39% are in urban areas. The website’s analysis shows that most of the communities in the Southwest are in urban areas while those in the Midwest and Northeast are in suburban areas. RentCafe has come up with two lists. One is for new single-family rentals in the suburbs of larger metro areas. The other is for cities that have the room for build-to-rent communities within city limits. Phoenix tops the list for metros with a total of 6,420 new single-family rentals in communities that are dedicated to rentals. It’s also a top metro for new apartment buildings, so there’s a big demand in Phoenix for rentals of all types. RentCafe used data from its sister company, Yardi Matrix for this analysis. There are 20 metros on the list with Columbus, Dallas, and Houston in second, third and fourth positions. On the list of cities, Las Vegas is number one with 2,520 new single-family rentals. Houston, Tucson, and Phoenix are in second, third, and fourth place on that list. We’ll have a link to the report in the show notes so you can check all the cities on both lists. RentCafe also identifies the largest built-to-rent communities. And, it has state maps showing which cities have the most single-family rentals. The report says there are currently about 90,000 single-family homes in the U.S. within about 720 communities. That includes all kinds of detached homes as well as townhomes and buildings with up to four units that also have yards and garages. Strong demand and higher home prices are also pushing rents higher, which is increasing investment value. CoreLogic says that single-family rents were up 11.5% year-over-year in November. And, landlords are having no trouble finding tenants. RentCafe says the occupancy rate was 97% for single-family rentals last year. That’s 2% higher than it was for apartments. Check the show notes for links to the full report at newsforinvestors.com. You can also find out more about investing in newly constructed rental homes at our website. It’s free to join, and free to access hundreds of webinars and articles on real estate investing. You’ll also have access to the Investor Portal where you can view sample property pro-formas for new and existing rental homes, and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.rentcafe.com/blog/rental-market/market-snapshots/built-to-rent-single-family-homes-double-in-2022/

The three top credit bureaus that have a strangle-hold on your credit score are getting a very poor performance report. A new analysis by the Consumer Financial Protection Bureau says that Equifax, Experian, and TransUnion are “routinely” failing to respond to consumer complaints about errors. Their performance is allegedly so bad that the CFPB says only “two percent” of complaints were addressed last year. (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. As you know, a good credit score is extremely important for things like getting a credit card or buying a home. In the case of a home purchase, a higher credit score means you’ll get a lower interest rate, and save tons of money over the life of the loan. Credit scores can also play an important role in other kinds of decisions, such as the hiring of a new employee, the approval of a rental applicant, or the issuing of a new insurance policy. Whatever the game plan, the higher the credit score, the better the outcome for the consumer. And that means you don’t want any errors that will bring that score lower. The Right to Dispute Errors When those errors occur, consumers have the right to dispute that information, and to have it fixed. According to the CFPB, most of the complaints sent to the bureaus qualify for a mandatory response, but they apparently “changed” the process for responding to complaints in 2020. According to the CFPB’s report, that has resulted in a faster process for closing complaints and a much lower rate of resolution, from 25% in 2019 to just 2% last year. The CFPB director Rohit Chopra told realtor.com: “America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors.” He says the CFPB report is “further evidence of the serious harms stemming from their faulty financial surveillance business model.” (2) The CFPB typically includes information on consumer complaints in its Consumer Response Annual Report. This report is a stand-alone analysis because of the huge number of complaints it received from consumers who aren’t getting their credit reports fixed. The report says that between January of 2020 and September of 2021, the CFPB received more than 800,000 complaints. More than 700,000 of them were directed at Equifax, Experian, or TransUnion. Consumers are obviously frustrated about the situation. Among the issues, they say: 1 - They were caught in an automated response system that did not result in a solution to their problems. 2 - They were left without options when the source of the incorrect data argued against them… and… 3 - They wasted a lot of time, energy, and money trying to get errors fixed, but were unsuccessful. Consumers At a Disadvantage If you haven’t dealt with this issue yet, the Washington Post published an article that paints a very clear picture. In one example, it says a creditor incorrectly reports that you were horribly late on a payment. As a result, your credit score drops substantially. The consumer then files a complaint with the credit bureaus and provides proof that the late payment never happened. (3) The credit bureaus contact the creditor who gave the wrong information. They are called ‘data furnishers” by industry insiders. The creditor allegedly checks the data and sends the same bogus data back to the credit bureaus, which then tell the consumer that the creditor has “verified” that the information is correct. As the Post article says: “This back and forth goes on for months, or for the truly unfortunate, years.” As if that’s not bad enough, the Post article says that even for consumers who get the errors fixed, those same errors could suddenly find their way back to your credit report during computer updates that might pull old information from a large database. Obligated to Address Complaints Ed Mierzwinsky of the U.S. Public Interest Research Group says the credit bureaus “have never considered consumers as their customers. They’ve always considered consumers as a nuisance.” They are obligated by law, however, to correct any errors, and they are supposed to do this within 30 days. In the CFPB report, it says: “The (credit bureau) responses to these complaints raise serious questions about whether they are unable–or unwilling–to comply with the law.” This stand-alone report was submitted to Congress and could be used for debate on how to address the problems that consumers are having with the credit bureaus. As the report states: “More than 200 million Americans have credit files and nearly 15,000 providers furnish information about consumers to the (credit bureaus). Thus, the actions, and inactions, (by the credit bureaus) have large implications for consumers’ financial well-being and the economy more broadly.” You can read more the CFPB report by following the a link in the show notes at newsforinvestors.com. You’re listening to the News For Investors podcast, which is produced by the real estate investing network, RealWealth. It’s free to join, and free to access hundreds of webinars and articles on real estate investing. As a member, you also have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Click here to join now! Please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.consumerfinance.gov/data-research/research-reports/annual-report-consumer-credit-reporting-complaints-analysis-of-complaint-responses-equifax-experian-transunion/ 2 -https://magazine.realtor/daily-news/2022/01/07/cfpb-credit-bureaus-fail-to-fix-errors-in-consumer-profiles 3 -https://www.washingtonpost.com/business/2022/01/07/fixing-credit-report-errors/

In this Real Estate News Brief for the week ending January 22nd, 2022… higher mortgage rates, home prices, and 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 News We begin with economic news from this past week. The weekly unemployment report shows a surge in the number of applications. They were up 55,000 to a three-month high of 286,000. As MarketWatch reports, it’s a sign that the current wave of covid cases is impacting businesses and triggering some layoffs. Economists say that some layoffs may also be due to the end of the holiday season. (1) On the home-building front, December was a busy month for construction activity. The U.S. Census Bureau says home starts were up 1% compared to November, and 2.5% compared to the previous December. Permits were also up, by a lot. They were up 9% in December but much of the increase happened in the Northeast as builders rushed to get permits before new rules kicked in. Most of the permits were for multi-family projects. Single-family permits were only up 2%. (2) Builders are not very happy about ongoing challenges like inflation and supply-chain disruptions. Rising mortgage rates and home prices are also a concern, along with the labor shortage. The National Association of Home Builders says its builder confidence index dropped slightly. (3) Existing home sales were down last month. The National Association of Realtors says they dropped 4.6% between November and December. That’s mostly due to inventory levels which NAR says were at their lowest level ever. The Association says while sales dropped nearly 5%, inventory was down 18%. (4) Mortgage Rates Mortgage rates moved higher again last week. Freddie Mac says the average 30-year fixed-rate mortgage rose 11 basis points to 3.56%. The 15-year rose 17 basis points to 2.79%. Mortgage rates are moving higher as Treasury yields rise and the Federal Reserve works on a plan to fight inflation. (5) On a positive note, lenders have loosened their purse strings and made funds more available for house hunters. The MBA’S Mortgage Credit Availability Index rose in December to its highest level since May of 2021. But, it’s still down 30% from pre-pandemic levels. (6) In other news making headlines... Existing vs. New Home Price Growth Existing home prices rose more than new home prices in 2021. But CoreLogic research shows price growth for new homes rose more over the last decade. (7) The report offers an important perspective on home price growth by differentiating between two methods for calculating that growth. One method is from Case-Shiller which compares the latest sales price to the previous sales price. The other method is the tracking of the median price. It points out that the median price can show trends but can also be skewed by the sale of homes at different price levels. For example, if 90% of the homes in one area are entry level homes, but 10% are luxury homes at double the price, the median will be skewed higher for all the homes. CoreLogic says the Case-Shiller method is more accurate because it compares current sales data to previous sales data, but it also has one big flaw. It can’t determine new home price growth which accounts for 10% of all sales, because there are no previous sales. It took a deeper dive into home price growth by combining the Case-Shiller Index for existing homes and a different metric for new homes which includes data for structural details of the homes and their locations. It concluded that appreciation has been about the same for both categories over the last year, although existing home price growth was slightly higher. It was up 19.8% compared to 16.6% for new homes. Over the last ten years, new home prices rose the most. They were up 127.9% compared to 93.2% for existing homes. Record Growth for Single-Family Rents CoreLogic also released the latest report on rent growth for single-family homes. It shows that rent growth was up 11.5% in November as demand soars. That’s a new year-over-year record. It says that annual rent growth has doubled in some locations in just the last several months. In some areas, rents have tripled. (8) Miami has seen the highest rate of increase at 33%. Phoenix was second at 19.4%. Las Vegas was third, at 16.7%. A few of the rental markets that we track include Orlando with an increase of 15.9%, Dallas with an increase of 14.8%, and Atlanta with an increase 14.8%. Charlotte is also on the top 20 list with a year-over-year increase of 12.2%. You can see the entire list by following 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! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.marketwatch.com/story/u-s-jobless-claims-jump-55-000-to-three-month-high-of-286-000-as-omicron-bites-11642685869?mod=economic-report 2 -https://www.marketwatch.com/story/coming-up-u-s-housing-starts-report-for-december-11642598355?mod=economic-report 3 -https://www.marketwatch.com/story/u-s-home-builders-less-optimistic-due-to-high-inflation-and-supply-woes-11642518358?mod=economy-politics 4 -https://www.marketwatch.com/story/coming-up-u-s-existing-home-sales-11642690518?mod=economic-report 5 -http://www.freddiemac.com/pmms/ 6 -https://magazine.realtor/daily-news/2022/01/18/buyers-may-find-opening-with-mortgage-credit 7 -https://www.corelogic.com/intelligence/which-increased-more-new-or-existing-home-prices/ 8 - https://magazine.realtor/daily-news/2022/01/19/single-family-rents-post-record-growth