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

Transcript 00:00:00 Intro [Speaker] Kathy Fettke Doing an office exclusive on your home may not get you top dollar. There’s a new study that shows homes listed on the MLS sell for substantially more than those that are sold off the MLS. Hi I’m Kathy Fettke and this is Real Estate News for Investors. Thanks for joining me and don’t forget to hit the subscribe button for our podcast. We recently did a podcast on private listings, which are also known as pocket or whisper listings, because they seem to be growing more popular. It covered the pros and cons of keeping your home off the MLS for both buyers, sellers, and brokers. While some sellers like to sell privately to keep their identities, situations, or belongings private, it’s really the brokers who benefit. By selling privately, the broker may share the information, and the commission, with another broker, But in many cases, the seller’s broker will earn the entire buyer/seller commission. Private listings impact buyers also because they might not be aware that these homes are for sale. Bright Study So what does this new study tell us? It found that homes listed on the MLS sell faster and have a median sale price that is 17% higher than homes sold privately. (1) And 17% is significant. The median price for listed homes is $310,000 and just $265,000 for unlisted homes. That’s a $45,000 difference. The study was done by Bright MLS and covers an area along the mid-Atlantic area from Pennsylvania to Virginia. It included data from more than 442,000 home sales in a two-year period from January 2019 to December 2020. Bright also broke the study down by home size and found that mid-sized homes with 12 to 16-hundred square feet sold for almost 27% more if they were listed. Slightly larger homes up to 2150 square feet had a 12% advantage on the MLS. Why Are Sellers Going Private? The Bright report says that some sellers believe that demand is so high, they don’t need the MLS to get the highest price for their properties. According to this study, that’s not true. CEO Brian Donnelley says: “We have always known the power of the MLS network, and past studies have shown that homes shared cooperatively on the MLS sold for more. We’re proud to confirm without extensive data that promoting homes through our MLS delivers significant value over other methods.” (2) Private Sale Methods There are several methods for selling a home without the MLS or a broker’s help including “For Sale by Owner” which is abbreviated FSBO. The seller is the one that does the advertising and the legwork, without any help from an agent. There’s also the iBuyer method which involves a real estate investing company that will make cash offers on homes so sellers can move quickly on buying another home. The iBuyer may do a few improvements and then resell the home. Office exclusives are the ones we’ve been talking about when a seller makes an arrangement with a brokerage to sell the home without any public advertising or MLS listing. It’s only marketed by that broker. Getting Your Home Sold Fast The Bright report says that office exclusives don’t work well for many sellers. It says that office exclusives take a combined average of 31 days to go under contract while those on the MLS take 11. And, it found that 63% of the office exclusives wind up on the MLS. Real estate economist Elliot Eisenberg was also part of the study. He says: “There’s a perception that selling outside the multiple listing service, either with an agent or as a For Sale By Owner, can save time and money for the consumer. “ He says the study clearly shows otherwise for getting both top dollar, and a fast sale. Check the show notes for a link to the report. 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://assets.ctfassets.net/1g8q1frp41ix/69PEVCSSUVfYRCqrSpKKEd/35da1493a4976e721947ccbbbe4c44d8/Bright_MLS_On-Off_MLS_Study.pdf 2 - https://magazine.realtor/daily-news/2021/08/03/mls-finds-that-listed-homes-sell-for-17-more

Transcript 00:00:00 Intro Kathy Fettke [Speaker] In this Real Estate News Brief for the week ending July 31st, 2021… an inflation surprise for the Fed Chief, where single-family rents are growing the most, and a pet’s influence on home buying decisions. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Economic News We begin with economic news from this past week. Fed Chief Jerome Powell uttered words that many economists had predicted -- inflation has risen higher and faster than he expected. But he still believes that prices will settle back down. As to when it will happen, he says that inflation will probably return closer to the central bank’s 2% mark in the next year… or so. There was “no” change to the Fed’s bond-buying strategy, or short-term interest rates. (1) The unemployment lines were a little shorter last week. Initial jobless claims were down 24,000 to 400,000. That’s after a surge that brought them to a two-month high. The previous increase was partially due to the shutdown of auto manufacturing plants for retooling during the last few weeks of July. The total number of continuous claims from all state and federal programs is still above 13 million. (2) Consumer spending was up as Americans took long overdue vacations and services they avoided during the pandemic. The government reported a 1% increase in spending for the month of June. (3) But some of that spending is due to higher prices as inflation ticks up. Prices were up 5.4% year-over-year in June. If you exclude food and energy, they were up 4.5%. (4) Turning now to real estate, new home sales slid 6.6% in June. That’s the lowest level since the beginning of the pandemic. Buyers have been discouraged by increasingly higher prices, and a diminishing supply of affordable homes. New homes sales had surged to an annual rate of 1 million at the beginning of the year, but they are now down to a rate of 676,000. (5) Pending home sales for existing homes also fell in June, but not as much. The National Association of Realtors says they were down 1.9% nationally. They were up in the Midwest and the Northeast, but declined in the West and South. (6) So what about those high home prices? Case-Shiller says the national composite index hit a new record in May for the second month in a row. It was up 16.6% year-over-year. That’s up from 15% in April. The 20-city index shows an even higher increase of 17% in May. The Federal Housing Finance Agency reported similar results. That index shows a record 18% increase for the year. (7) There are mixed results on consumer confidence. The Consumer Confidence Board says the index edged up a bit in July because consumers are feeling good about the lifting of Covid restrictions, although the Delta variant is threatening our newfound freedom. (8) A survey on consumer sentiment by the University of Michigan shows that consumers are more pessimistic. That index fell from a reading of 85.5 to 81.2, in part due to worries about inflation. (9) Mortgage Rates Mortgage rates didn’t move much. Freddie Mac says the average 30-year fixed-rate mortgage was up 2 basis points to 2.8%. The 15-year was down by the same amount to 2.1%. (10) In other news making headlines... Single-Family Rent Growth Single-family rents have been soaring in many parts of the country. Core Logic’s latest update shows the national year-over-year increase for May was 6.6%. That’s up from 1.7% in May of last year.CoreLogic economist Molly Boesel says: “Strong job and income growth, as well as fierce competition for for-sale housing, is fueling demand for single-family rentals.” (11) Rents in Phoenix have gone up the most. Those rents are up 14%. Tucson was second highest with a gain of 11.1%. Las Vegas was third, with a 10.7% year-over-year increase. CoreLogic also broke the data down into price tiers. At the lower levels where rent is 75% or less than the regional median, rents were only up 4.6%. The increases grow larger for the higher-priced SFRs. Rents for homes that were 125% of the regional median or more, were up 7.9%. Eviction Moratorium Deadline The eviction moratorium expired on July 31st despite last ditch efforts by some members of Congress to get an extension. The moratorium was initially imposed by the CDC, and the Supreme Court ruled that it could remain in place until the end of July, but after that, it could only be extended by Congress. (12) Democrats scrambled on Friday to get enough votes for an extension, but that legislation was rejected, and the House adjourned for August recess. President Biden has asked state and local governments to “immediately disburse” rental assistance funds to help renters, and their landlords. Pets As Home Buyer Priority There’s new evidence that home-buying decisions are largely based on the needs of pets. A Home.com survey found that 68% of homeowners said they had moved to a new home to accommodate their pets. Of the renters who bought a home, two thirds did so because they wanted to get a pet or keep the one they already had. (13) One in five people said they rejected a home because it wasn’t pet-friendly enough. Some of the things they are looking for are secure fencing, yard space, hardwood floors, and a mudroom. They also want to be close to parks and places where dogs can play. Last year, Realtor.com did a survey with similar results. That’s it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. 00:06:37 End Links: 1 - https://www.marketwatch.com/story/feds-powell-admits-inflation-has-risen-higher-than-expected-but-he-still-thinks-it-will-all-fade-away-11627500977?mod=federal-reserve 2 - https://www.marketwatch.com/story/jobless-claims-fall-after-hitting-two-month-high-11627562987?mod=economic-report 3 - https://www.marketwatch.com/story/consumers-boost-spending-in-june-and-spearhead-u-s-economic-recovery-11627649220?mod=economy-politics 4 - https://www.cnbc.com/2021/07/13/consumer-price-index-increases-5point4percent-in-june-vs-5percent-estimate.html 5 - https://www.marketwatch.com/story/sales-of-new-homes-slump-to-the-lowest-level-since-start-of-pandemic-high-costs-and-low-selection-are-to-blame-11627308798?mod=economic-report 6 - https://www.marketwatch.com/story/pending-home-sales-dip-in-june-after-surging-in-prior-month-11627567417?mod=economy-politics 7 - https://www.marketwatch.com/story/no-letup-in-home-price-gains-in-may-case-shiller-11627391524?mod=economic-report 8 - https://www.marketwatch.com/story/u-s-consumer-confidence-rises-slightly-in-july-to-16-month-high-11627394776?mod=economic-report 9 - https://www.marketwatch.com/story/u-s-consumer-sentiment-falls-in-july-as-inflation-expectations-hit-13-year-high-11627655744?mod=economy-politics 10 - http://www.freddiemac.com/pmms/ 11 - https://www.worldpropertyjournal.com/real-estate-news/united-states/irvine/real-estate-news-single-family-rental-report-for-2021-corelogic-may-2021-single-family-rent-index-sfri-molly-boesel-home-rental-data-for-2021-12637.php 12 - https://www.marketwatch.com/story/biden-calls-on-congress-to-extend-eviction-moratorium-2021-07-29?mod=mw_latestnews 13 - https://magazine.realtor/daily-news/2021/07/29/consumers-are-moving-for-their-pets

For the full transcript, click on the Notes tab on the podcast player for this episode on our website: www.NewsForInvestors.com. Transcript 00:00:00 Intro Music [Speaker] Kathy Fettke: With all the talk about the housing gap, you might think it’s because we have very strong population growth. But in reality, the opposite is true. The birth rate has dropped again, and population growth is close to zero. Hi I’m Kathy Fettke and this is the Real Estate News for Investors. Please take a moment to subscribe to our podcast. It helps us rank, and helps people find us! This episode is all about the status of the U.S. birth rate and population growth, because it’s so important to the present and future health of our economy. The economy needs to growth and for that to happen we need workers. A low growth rate now, means fewer workers in the coming years. Status on Birth Rate, Population Growth The U.S. has experienced a low birth rate for about a decade, and continues to dip below a threshold needed to replace people who are dying. The official U.S. birth rate for 2020 is 1.64 which is the average number of children born to women of childbearing age. The threshold amount is 2.1. And that’s bringing total population growth down. (1) As reported by the Wall Street Journal, preliminary figures show that the population growth rate was just .35% in the fiscal year that ended on July 1st, 2020. (2) Demographers are expecting that figure to remain flat, or near flat, for the current year. Some also say there’s a chance our population could shrink. Why This is Important As I mentioned, population growth is an important part of the labor market, and the strength of the nation’s economy. Demographers say they are not overly concerned about one bad year, because the growth rate usually bounces back in step with the economy. But after a peak in 2007 and the subsequent recession, they say the birth rate never recovered and has been drifting down since then. Economists Melissa Kearney and Phillip Levine say many young women avoided pregnancy because of the pandemic and economic uncertainty. They expect that to result in 300,000 fewer births this year. Data has already become available showing a decline during the first quarter of the year, compared to last year. Before the pandemic, the decline was partially due to millennials postponing their family plans, women placing more importance on their careers, and financial issues stemming from the Great Recession. Covid-19 only compounded the situation. U.S. vs. Other Countries A researcher at the conservative American Enterprise Institute, Nicholas Eberstadt, says that despite all those impacts on the U.S. population, we are actually doing much better than other countries, such as China, Russia, and nations in the European Union. He says the big wild card for the U.S., right now, is immigration. Brookings Institution demographer, William Frey, agrees with Eberstadt. He told the Journal that he doesn’t think population growth will turn negative, thanks, in part, to immigration. Over the last ten years, demographers say that immigration has boosted population by 30 to 50%. It has dropped due to recent restrictions, but at least some of those restrictions are being lifted by the current administration. And that could help offset the lower birth rate. Other Issues Impacting Population Growth The U.S. should also see a boost in the numbers as fewer people die of Covid-19. But the Journal cites other issues that are putting pressure on mortality. One is a rise in drug-overdose deaths, along with an increase in homicides. Some chronic diseases are also lowering life expectancy, which is also happening because of the pandemic. As for birth rate demographics, the Journal says that “every type of U.S. county, from the most urban to the most rural, on average saw a decrease in the number of births per death in the second half of the 2010s compared with the first half.” That’s according to data from the U.S. Census Bureau. The situation is more pronounced in rural areas however, where there are fewer jobs, less housing, and hard-to-find child care options that growing families need. As for worldwide population growth, I’ll close with a few interesting statistics from Pew Research. According to a 2019 report, world population has been increasing by 1 to 2% per year, and has grown from 2.5 billion in 1950 to 7.7 billion today. But the fertility rate is falling. It cites a 2.5 fertility rate in 2019 that is expected to drop to 1.9 in 2100, which is below the replacement threshold of 2.1. Africa is the only country that’s expected to have strong population growth throughout this period of time. Asia is second. Population growth in Europe and Latin America is expected to decline. Pew Research says that people migrating to the U.S. will contribute the most to U.S. population growth in the coming decades. It’s projecting the U.S. that 85 million people will migrate to the U.S. during the remainder of this century. You’ll find links to our sources in the show notes. You'll also find a link to join our RealWealth network of investors. It's free and easy to join. As a member, you'll 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. Thank you for listening. Please be sure to hit subscribe. It helps with our ranking and will deliver new episodes to your podcast player. We’d also love a great review from you on Apple podcasts or whatever platform you use! Thank you! I’m Kathy Fettke and this is Real Estate News for Investors. 00:05:40 End Go to www.NewsForInvestors.com for the show notes. Links: 1 - https://www.brookings.edu/blog/up-front/2021/05/24/will-births-in-the-us-rebound-probably-not/ 2 - https://www.wsj.com/articles/u-s-population-growth-slows-birth-rate-decline-economic-risk-11627231536?mod=searchresults_pos6&page=1 3 - https://www.pewresearch.org/fact-tank/2019/06/17/worlds-population-is-projected-to-nearly-stop-growing-by-the-end-of-the-century/

For the full transcript, click on the Notes tab on the podcast player for this episode on our website: www.NewsForInvestors.com. Transcript 00:00:00 [Speaker] Kathy Fettke: Americans behind on their mortgage payments are facing the end of a long pandemic-induced foreclosure ban. The moratorium officially ends on July 31st for federally-backed mortgages, and with forbearance programs also coming to an end, the government is offering new options to keep borrowers from losing their homes. Hi I’m Kathy Fettkie and this is Real Estate News for Investors. The pandemic left millions of Americans unemployed and struggling to pay their mortgages. Many went into forbearance programs that allowed them to put their payments on pause. Black Knight says the number of loans in forbearance peaked last August and September at about 4.4% of all active mortgages. But those numbers have been dropping over recent months. Forbearance Volume Drops to about 2 Million According to the latest survey by The Mortgage Bankers Association, servicers are reporting that forbearance volume has dropped for at least 19 weeks in a row. As of July 4th, it fell another 11 basis points to about 3.76% of all active mortgages. That’s about 1.9 million homeowners who are currently in forbearance plans. (1) A large portion of the loans are backed by Fannie Mae and Freddie Mac. The MBA says that the share of government-backed loans in forbearance dropped 8 basis points to 1.91%. And it’s the second week in a row that those loans dipped below 2%. The MBA’s chief economist, Mike Fratantoni, says that forbearance rates have been coming down quickly since April, and that delinquency rates were also lower in June -- meaning that many borrowers are getting their finances and mortgage payments back on track. But he also says that: “Borrowers who are exiting forbearance now are likely to have been in relief for over a year, with almost 60% of borrowers in forbearance for longer than 12 months.” You may remember that borrowers could get up to 18 months of forbearance. These delinquent borrowers must now get back to making payments, or risk losing their homes because they will no longer be protected by a foreclosure moratorium once their exit forbearance. The foreclosure moratorium was extended one last time in June, for an additional month, until the end of July. The forbearance enrollment window was also extended three months, until the end of September, so some borrowers may still have many months of forbearance protection ahead of them. But to help borrowers who are currently exiting forbearance programs, the government is offering new options. Government Offers Help for Borrowers One is a loan modification and payment reduction plan. (2) Homeowners with loans backed by the FHA, the FHFA, the VA, and the USDA will be able to extend the length of their loans with lower interest rates. This help will be offered to borrowers who are still impacted by COVID-19. That’s defined as homeowners who are “looking for work, re-training, having trouble catching up on back taxes and insurance, or are continuing to experience hardship for another reason.” Loan modification options will also differ depending on the agency. (3) For a loan backed by Fannie and Freddie, borrowers will be able to lower their principal and interest payments by 25%. That will include interest at the current market rate with a new 30-year loan term. For a USDA loan, borrowers will get a 20% reduction with reduced rates, longer terms, and something called a “mortgage recovery advance.” That has to do with repaying previously missed payments. Borrowers with a VA loan, will be able to get a reduction of 20% or more by spreading the payments over 40 years instead of 30. That could reduce monthly payments, but will probably add more total interest to the loan. Ginnie May is also working on a new securities pool that will give all the agencies the flexibility to extend mortgage terms to four decades. But that pool won’t be up and running until later this year. The FHFA has also killed the controversial “adverse market fee.” That was a 50-basis-point fee added to refinancing loans during the pandemic. (4) The FHFA began charging that fee last year to cover higher costs and risks during the pandemic. Critics claim it was imposed to help raise capital for Fannie and Freddie during last year’s refinancing boom. It is being eliminated as of next month. The Consumer Financial Protection Bureau is also offering some homeowner protection. It is telling lenders that before any foreclosure proceedings can take place, they have to reach out to borrowers to see if they qualify for a loan modification or a lower interest rate. The next few months could be a bumpy ride for some delinquent borrowers, but it appears they will have some options. You can read more about some of these changes by following links in the show notes at newsforinvestors.com. You'll also find a link to join our RealWealth network of investors. It's free and easy to join. As a member, you'll 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. If you like our podcasts, be sure to subscribe, and leave us a review! Thanks for listening. I’m Kathy Fettke. Links: 1 - https://www.housingwire.com/articles/forbearance-exits-are-speeding-up/ 2 - https://magazine.realtor/daily-news/2021/07/26/foreclosure-ban-nears-end-white-house-vows-more-aid 3 - https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/23/fact-sheet-biden-administration-announces-additional-actions-to-prevent-foreclosures/ 4 - https://www.housingwire.com/articles/fhfa-to-kill-the-adverse-market-fee/

For the full transcript, click on the Notes tab on the podcast player for this episode on our website: www.NewsForInvestors.com. Transcript 00:00:00 Intro Music [Speaker] Kathy Fettke: In this Real Estate News Brief for the week ending July 24th, 2021… why refi’s are getting cheaper, what investors are doing with this hot market, and how homeowners are making money from their backyard swimming pools. Hi, I'm Kathy Fettke and this is the Real Estate News for Investors. Economic News We begin with economic news from this past week, and a jump in the number of people applying for unemployment benefits. Initial jobless claims were up 51,000 to 419,000 in the last week. It’s the highest level in two months, but the increase is “not” due to the pandemic. As MarketWatch reports, claims were higher in auto manufacturing states like Michigan, Kentucky and Texas because plants are shut down during the summer for retooling. (1) Existing home sales rebounded in June. They had been heading lower for four months due to the tight inventory, but there’s been an increase in listings, and that’s boosting home sales. Inventory levels are currently at 2.6 months of supply. That’s up from 2.5 in May. It takes about 17 days, on average, for homes to sell. (2) Builders are also increasing their output. June housing starts hit their highest level since March. They were up 6.3% from May to June, and are up 29% year-over-year. Permits were down a bit however. They dipped 5% from May but are still 23% higher year-over-year. (3) That dip in permits may reflect a dip in home-builder confidence. The monthly index fell one point in July to a reading of 80. Anything over 50 is a positive sign of builder confidence. The National Association of Homebuilders says builder confidence has dropped somewhat because of a shortage of workers, construction materials and buildable lots. (4) Mortgage Rates Mortgage rates dipped quite a bit this last week. Freddie Mac says the average 30-year fixed rate mortgage was down 10 basis points to 2.78%. The 15-year was also down 10 points to 2.12%. The report says that rates have dropped because of concerns about the Delta variant of the Covid virus, which is putting pressure on Treasury yields. And when Treasury yields drop, so do mortgage rates. (5) In other news making headlines… Bye-Bye to Dreaded Refinancing Fee A controversial fee added to refinancing loans during the pandemic has been eliminated, and that will lower the cost of most refi’s. The Federal Housing Finance Agency announced that, starting in August, lenders will not be required to pay an adverse market fee of 50 basis points to Fannie Mae and Freddie Mac. That fee has been, of course, passed on to borrowers. (6) The FHFA began charging that fee last year to cover higher costs and risks during the pandemic. Critics claim it was imposed to help raise capital during last year’s refinancing boom. The GSEs have done well throughout the pandemic. As Housingwire reports, Fannie Mae reported $5 billion in net income for the first quarter of this year while Freddie Mac reported $2.8 billion. Investors Pouring into the Rental Market The number of homes purchased by investors set a new record in the second quarter. A Redfin study shows that investors bought almost 68,000 U.S. homes worth a record $48.5 billion. That’s a 15.1% increase from the first quarter, and a 106.7% increase from the same quarter last year. (7) Redfin says that investors are buying about one in every six homes, and that multi-family properties are still the most popular. But it says single-family homes and condos are gaining ground. Redfin senior economist, Sheharyar Bokhari, says: “Investors see soaring home prices as an opportunity. With housing values consistently on the rise, solid returns are pretty much guaranteed -- especially when you’re an investor who has access to extremely cheap debt.” But it’s interesting to note that about 75% of the investor purchases were financed with all cash. That’s the highest level of all-cash investor home purchases since 2018. It’s also much higher than the national average of 30% for all buyers, although that represented a big increase from last year, as well. (8) Airbnb for Backyard Pools If you can’t rent your home to short-term guests, what about your backyard pool? That’s apparently what some people have discovered as a way to earn extra cash. Realtor.com reports that “homeowners are listing their underused private pools online to rent them out for a few hours” and the trend is being called “Airbnb for backyard pools.” Realtor mentions one pool rental site called Swimply. It has about 13,000 pool owners signed up in about 125 markets. And reservations are reportedly “booming.” That’s it for today. Check the show notes for links. And please remember to subscribe to our podcasts and leave a review if you like what you hear. You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke... 00:05:32 Closing Music End Links: 1 - https://www.marketwatch.com/story/u-s-unemployment-claims-jump-51-000-to-nine-week-high-of-419-000-11626958688?mod=economic-report 2 - https://www.marketwatch.com/story/existing-home-sales-rebound-in-june-after-four-months-of-declines-11626963388?mod=economy-politics 3 - https://www.marketwatch.com/story/construction-of-new-homes-improves-but-home-builders-hold-the-key-to-the-housing-markets-trajectory-11626785317?mod=economy-politics 4 - https://www.marketwatch.com/story/home-builder-confidence-wanes-as-materials-and-labor-shortages-continue-11626703703?mod=economy-politics 5 - http://www.freddiemac.com/pmms/ 6 - https://www.housingwire.com/articles/fhfa-to-kill-the-adverse-market-fee/ 7 - https://www.redfin.com/news/investor-home-purchases-q2-2021/ 8 - https://www.redfin.com/news/all-cash-home-purchases-2021/ 9 - https://magazine.realtor/daily-news/2021/07/22/homeowners-are-renting-out-their-pools-for-extra-cash

Audio Transcript 00:00:00 Music Intro [Speaker] Kathy Fettke: Competition is so fierce among homebuyers, that we’re seeing a surge in all-cash offers. A new Redfin study shows that all cash-offers are up almost 5% nationwide in the last year. There are also a host of start-ups that help buyers make cash offers and they are expanding. Hi I’m Kathy Fettke and this is the Real Estate News for Investors. The Redfin study found that all-cash offers rose from 25.3% last year to 30% this year. (1) Redfin used county records dating back to January 2001 for this study. You may remember the last big surge happened during the recession when cash offers grew to as much as 34.1% in 2011 and 2012. We’re not quite there yet, but the lack of inventory is making the market much more competitive. Surge in Cash Offers Many of those cash offers were from investors, but in today’s market, people buying their own homes are coming up with cash. A Redfin real estate agent in Idaho says she been seeing more cash offers over the last year than she’s ever seen in her career. Shauna Pendleton says: “I just sold a $700,000 home to a cash buyer last week. The entire $700,000 came from his E*Trade account.” She says another way that buyers are getting the cash they need is by selling their homes in expensive cities and moving to places where home prices are lower. That’s a strategy that’s become popular because so many people can work remotely. Pendleton says: “Affluent homeowners in Seattle, Portland and parts of California are selling their homes for $1 million or $2 million. Then they’re coming to Boise, where they’re buying houses that are twice the size for half the price.” There’s also been an increase in all-cash offers from investors who are coming back into the market after the initial pandemic slowdown. Redfin says there was a 2.7% increase in home purchases by investors during the first quarter of this year. But coming up with the cash isn’t always easy, especially when you have to sell your home to get the cash you need to buy a new one. Not having that liquidity is a big a disadvantage when there’s a lot of home-buying competition. Redfin says that about two-thirds of the offers written by Redfin agents wind up in a bidding war. iBuyers Help Buyers Compete That’s created a market for companies that will help homebuyers by paying them cash for their homes so they can buy a new home before they have to move out of the old one. There are several so-called iBuyers in this space such as Opendoor, Ribbon, Accept.inc and Flyhomes. Flyhomes just announced a huge expansion of its business with $150 million in funding from venture capitalists. (2) It’s a five-year-old start-up that plans to double its workforce and move into new markets. It’s currently operating in some big markets including Seattle, the San Francisco Bay Area, Los Angeles, San Diego, Portland, Oregon, and Boston. (3) Buyers working with Flyhomes must get pre-underwritten so they know how much of a home they can buy. The company will then provide a short-term loan so the buyer can buy the new home. Once the old home sells, Flyhomes will refinance the short-term loan into a long-term loan. Any proceeds from the sale will go toward the down payment. Flyhomes does have a brokerage that can finance the long-term loan. The website shows some sample rates for someone with excellent credit, and the rates for a 30-year fixed were below 3%. The company also offers a sales guarantee for the old home. If it doesn’t sell within 90 days, the buyer will have the option to sell it to Flyhomes, or leave it on the market. Accept.inc also raised millions of dollars to expand. It recently announced $90 million in funding and currently operates in Colorado. (4) But the company considered the leader in this iBuyer category is Opendoor. (5) It was founded in 2014 and operates in 41 major metros across the country. It offers a similar service to buy homes and provide financing to homebuyers. Ribbon is also similar. It operates in North and South Carolina, Tennessee, Georgia, Texas, and Florida. (5) Pros & Cons of Cash Offers One thing to remember is that sellers don’t always want a cash buyer. Some may need time to close on a new home, and prepare to mov. A buyer who’s getting a mortgage might be a better option in that case. Sellers may also get a higher price if they go with the buyer who needs a loan, but much will depend on the details of the offer. Those drawbacks aside, there are several reasons why sellers like cash offers. MarketWatch lists five reasons why they can benefit sellers. (7) 1 - There’s a higher chance that the deal will go through. 2 - The sale takes place more quickly. 3 - There are usually fewer contingencies. 4 - Closings are less complicated. 5 - Appraisals are not required. A decision on whether to accept a cash offer will probably be based on the offers. Although a majority of offers are now over list price, a significantly higher offer from a buyer seeking a loan could be the winner. For buyers, choosing to go with an iBuyer might give you even more options. Just remember to use your calculator to determine how you benefit financially from any of these options. Join RealWealth today to find out how to build wealth with new and renovated single-family rentals. Membership is free, and will give you 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. To join, go to newsforinvestors.com. If you like our podcasts, be sure to subscribe, and leave us a review! Thanks for listening. I’m Kathy Fettke. 00:06:01 [End] Links: 1 - https://www.redfin.com/news/all-cash-home-purchases-2021/ 2 - https://www.flyhomes.com/ 3 - https://www.businesswire.com/news/home/20210610005171/en/Real-Estate-Innovator-Flyhomes-Raises-150M-in-Series-C-Financing-to-Accelerate-Expansion-and-Level-the-Playing-Field-for-Homebuyers-Amidst-Record-Setting-Housing-Market 4 - https://accept.inc/ 5 - https://www.opendoor.com/faq 6 - https://www.ribbonhome.com/faqs 7 - https://www.marketwatch.com/story/the-pros-and-cons-of-taking-a-cash-offer-when-you-sell-your-home-11624557948

Transcript 00:00:00 music [Speaker] Kathy Fettke: The MLS isn’t the only place to find homes for sale. There are studies that show more and more sellers are opting for exclusive listings, and that is limiting buyer options. Also known as “pocket” or “whisper” listings, buyers might want to work with an agent who has them. But beware, pocket listings are best for the broker, and not always the best option for buyers and sellers. Hi I’m Kathy Fettke and this is Real Estate News for Investors. There are many reasons for the current shortage of homes for sale. The pandemic delayed many seller plans to list their homes. The record low mortgage rates encouraged many to refinance with dirt cheap loans and remodel instead of moving. Many baby boomers are choosing to “age in place” which keeps those homes off the market. And there’s been a housing gap, in general, for many years. But there are headlines out there that blame another phenomenon. According to the Washington Post, many real estate experts say there’s been an increase in these so-called pocket listings, which keeps them out of the public view. (1) Increase in Pocket Listings Also known as office exclusives and private listings, these homes are not listed publicly on the MLS. They are marketed privately to potential buyers and other agents and brokerages. A realtor in the D.C. area told the Post: “We’re seeing an increase in the number of office exclusives, and I’m not a fan of them from the consumer perspective.” But he says an increase in buyers makes it possible to attract more of them to these private listings, even though they don’t really benefit the buyer. They are not that great for the seller either, but they are good for brokers who can earn the entire commission for both seller and buyer. So there’s incentive for the broker to encourage private listings. Why Sellers Choose Pocket Listings Sellers may also have a few good reasons to choose this strategy, and one big one for not choosing it. Moving.com offers some pros and cons. (2) 1 - Sellers may want to test the market and see if buyers are interested. 2 - Sellers may want to test a price especially if they aren’t willing to negotiate. 3 - Sellers may want to keep their real estate transactions private and avoid an open house. 4 - Sellers don’t want their home to languish on the MLS and be viewed as a problem. On the downside, sellers will have fewer buyers considering the purchase of a home. That could mean less competition, fewer people to bid up the price, and fewer offers to choose from. Not Much Benefit for Buyers For the buyer, pocket listings make it harder to find those homes. Many sellers also choose pocket listings because they don’t want to negotiate, but in today’s market, that could actually hurt sellers since a majority of them are offering more than the listing price. Another drawback with pocket listings is their potential to create a bias in the market, because real estate agents may end up marketing homes to certain people. Redfin CEO Glenn Kelman says: “Study after study shows that pocket listings disproportionately exclude people of color.” He cites housing market researcher Elizabeth Korver-Glenn who told him that a ban on pocket listings would help close the race gap in homeownership. Her research shows that many brokers will market private listings to their own connections, and those connections will reflect their own ethnicity and background. That would naturally create racial subdivisions in the marketplace. Kelman told the Post: “We have to ask sellers to be part of supporting the Fair Housing Act.” But some agents feel that a policy by the National Association of Realtors that’s meant to prevent private listings, actually encourages them. NAR passed the Clear Cooperation Policy in 2019. It requires MLS members to list homes one day after they have been marketed in any way to the public. But it also gives sellers the option to keep their homes off the MLS. And apparently, those sellers have grown in number. Redfin data shows that the number of homes sold as pocket listings rose 67% since November of 2019. They accounted for 2.4% of the market then, and currently account for about 4%. But some experts dispute that data saying that homes may be selling so fast, they don’t make it to the MLS. Compass Promotes Private Listings The Post reports that Compass real estate has been the most aggressive brokerage to promote private listings. It even has a page on its website that’s dedicated to this approach, called “Compass Private Exclusive.” It lists a bunch of reasons why sellers might want to be more discreet about selling their homes. Those reasons include moving for a new job, a change in family circumstances such as a marriage or a divorce, health issues, a desire to avoid open house events and interior photos for security reasons or to keep personal belongings private. These are just a few examples. Some say private listings are not a big problem for sellers if they know the limitations. But D.C. area realtor David Howell says: “The real problem is when companies have a strategy to intentionally withhold a significant percent of their listings from the MLS. That ultimately benefits the company, not sellers and not buyers.” He says that consumers benefit the most from competition and cooperation. Private listings don’t do much for that dynamic. It’s something to be aware of as you search for properties, and want more complete knowledge of what’s on the market. Check for pocket listings in the area that you are searching. You can also check for links to our sources in the show notes at newsforinvestors.com. If you like our podcasts, be sure to subscribe, and leave us a review! You'll also find a link to join our RealWealth network of investors for free in the show notes. As as a member, you'll have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I’m Kathy Fettke. 00:06:04 End Transcript Links: 1 - https://www.washingtonpost.com/realestate/competition-is-getting-nasty-rise-in-private-home-listings-benefits-brokerages-hurts-buyers-and-sellers/2021/07/07/4ad6a0d6-ca00-11eb-81b1-34796c7393af_story.html 2 - https://www.moving.com/tips/what-are-the-pros-cons-of-a-pocket-listing/

Audio Transcript: 00:00:00 Intro Music [Speaker] Kathy Fettke: In this Real Estate News Brief for the week ending July 17th, 2021... what the Fed says about the June inflation report, why there’s been a surge in listings, and where homebuyer love letters are now banned. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Economic News We begin with economic news from this past week, and an unexpected bump in the consumer price index. The government reported a .9% increase in prices for June. According to MarketWatch, that’s the largest monthly increase since 2008, mostly due to higher prices for used cars. But prices are also climbing for food, energy, clothing, plane tickets and hotels. The June bump brings the 12-month rate up to 5.4%. The core rate, which eliminates prices for food and energy, was also up .9%, but the 12-month rate is less. It currently stands at 4.5%. (1) Fed Chief Jerome Powell told members of Congress that inflation has risen faster and higher than the central bank expected, but he still thinks it’s a temporary situation. He told the House Financial Services panel that prices will probably remain elevated in the coming months before they moderate. He cited three reasons. They include “base effects” because we are comparing current readings to last year in the midst of the pandemic, supply chain issues, and production bottlenecks. (2) The Fed plans to keep interest rates where they are for the time being and continue with the monthly bond purchases. The number of people collecting unemployment continues to dwindle. Initial jobless claims were down to 360,000 last week, which is a new pandemic low. And the total number of people collecting benefits from any program offered by state and federal governments is 13.8 million. (3) Consumers are worried about rising prices and the job market. The University of Michigan’s consumer sentiment index fell to a six-month low in July, from 85.5 to 80.8. That’s not a horrible number, but it shows that consumer sentiment hasn’t climbed back to pre-pandemic levels. (4) That hasn’t stopped consumers from shopping and dining at restaurants however. Retail sales were up .6% in June, which beat forecasts, and are now up 18% for the past year. That’s better than they were before the pandemic. (5) Mortgage Rates Mortgage rates are down again this week. Freddie Mac says the average 30-year fixed-rate mortgage dropped 2 basis points week to 2.88%. The 15-year was also down 2 basis points and is now an average of 2.22%. The 30-year hit a recent peak of 3.18% in April. (6) In other news making headlines... More Homes Hit the Market Sellers are finally making an appearance. According to Redfin, There was a jump in new listings last month. They were up 4% year-over-year in June, and 3% from June of 2019. Homeowners with plans to sell had been holding off during the pandemic. (7) They were concerned about having people in their homes as well as being able to find a new one. CNBC reports that vaccines are giving them confidence about health concerns and an increase in inventory is encouraging them to go through with their plans. Apartment Rents Surge Higher The latest monthly rent report from Zumper shows that rents are rising across the country. It shows the median national rent for a one-bedroom apartment was up 4.9% in June to $1,315 a month. The median for a two-bedroom was $1,644. (8) The report says: “Rents are on the rise in a major way. Nationally, rents jumped at a staggering rate, and the cities that experienced the biggest drops in rents during the pandemic are now starting to trend in the opposite direction.” Buyer Love Letters Banned in Oregon A new state law in Oregon prohibits homebuyers from sending love letters to sellers. Buyers try to endear themselves to sellers with warm and fuzzy stories about how much they love the home along with information about themselves. They may sound harmless enough, but the Oregon law prevents real estate agents from delivering those letters to sellers. The National Association of Realtors has been warning agents that they are putting themselves at risk by getting involved with love letters in any state. It said in a blog last year: “These letters can actually pose fair housing risks because they often contain personal information and reveal characteristics of the buyer, such as race, religion, or familial status.” NAR says that agents should refuse all love letters from buyers. Oregon is the first state to ban them. (9) Most Desirable Dream Home Features Outdoor space has risen to the top of a list of priorities for the American dream home. A Buildworld survey shows that 66.3% of the participants want a garden more than anything else. Second on the list is a garage, and third on the list is natural light. In step with the idea of minimalism, having lots of storage is 15th on the list. (10) You can check for links to our sources in the show notes at newsforinvestors.com. You'll also find a link to join our RealWealth network of investors for free in the show notes. As a member, you'll 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. If you like our podcasts, be sure to subscribe, and leave us a review! Thanks for listening. I’m Kathy Fettke. Closing Music 00:05:49 End Links: 1 - https://www.marketwatch.com/story/consumer-inflation-posts-biggest-increase-since-2008-cpi-shows-11626180086?mod=economy-politics 2 - https://www.marketwatch.com/story/inflation-will-moderate-powell-says-in-prepared-testimony-to-congress-11626265864?mod=economy-politics 3 - https://www.marketwatch.com/story/u-s-unemployment-claims-drop-to-new-pandemic-low-of-360-000-11626353365?mod=economy-politics 4 - https://www.marketwatch.com/story/u-s-consumer-sentiment-sentiment-falls-to-6-month-low-amid-record-inflation-concerns-11626446571?mod=economic-report ​​5 - https://www.marketwatch.com/story/big-tabs-at-bars-and-restaurants-drive-u-s-retail-sales-higher-in-june-as-americans-get-out-and-about-11626439961?mod=economic-report 6 - http://www.freddiemac.com/pmms/ 7 - https://www.cnbc.com/2021/07/12/homebuyers-finally-get-a-break-as-new-listings-rise-and-mortgage-rates-drop.html?&qsearchterm=catching%20a%20break 8 - https://www.zumper.com/blog/category/rent-reports/ 9 - https://magazine.realtor/daily-news/2021/07/09/oregon-bans-buyer-love-letters 10 - https://magazine.realtor/daily-news/2021/07/15/a-third-of-americans-say-their-dream-home-is-attainable

Transcript: [Intro music 00:00:00] Kathy Fettke [Speaker]: It looks like the sellers are coming out of hiding. Redfin is reporting an increase in listings, and a new survey by Fannie Mae shows that more and more people feel that “now” is a good time to sell. (1) But there are also signs of a pullback among homebuyers. Hi I’m Kathy Fettke and this is Real Estate News for Investors. It’s been a sellers’ market throughout the pandemic, as buyers compete for a dwindling supply of existing homes. But now that the pandemic is easing and home prices have hit record highs, sellers are more motivated to put their homes up for sale. New Listings Jumped in June Redfin says new listings jumped 4% in June, compared to June of last year. That’s the biggest increase since 2019, before the pandemic. But the total number of active listings is still well below levels they were at a year ago. CNBC reports they are off by 32%. But that’s also the smallest year-over-year drop since February. (2) A monthly Fannie Mae survey shows strong seller optimism. 77% of the participants said “now” is a great time to sell. Home prices have reached record highs, and sellers want to capture some of that appreciation. According to CoreLogic, prices were up 15.4% year-over-year in May. They are expected to continue rising, but not as fast. CoreLogic is predicting another 3.4% gain by May of next year. Many homes also sell well above their listing prices as buyers make high offers and compete with other buyers. In June, 55% sold above the listing price compared to 27% in June of last year. But it’s that kind of price growth that is also pushing some buyers out of the market. The same Fannie Mae survey shows that 64% think it’s a bad time to buy. CoreLogic CEO, Frank Martell says: “First-time buyers are hitting a wall in many places around the country as the pace of home-price rises outpace the benefits of lower borrowing costs. Younger and first-time buyers, including younger millennials, are faced with the challenge of having sufficient savings for a down payment, closing costs and cash reserves.” While sellers are revving their engines, some buyers are downshifting. The pullback is showing up in the pending sales report. Redfin says: “Pending sales posted their smallest year-over-year increase in almost a year, and fell twice as fast month-over-month as they did during this same time in 2009.” The Redfin Homebuyer Demand Index is based on requests for home tours and other agent services. It recently fell 1.2% week-over-week. There was also a similar drop in mortgage applications. Redfin’s Chief Economist Daryl Fairweather says: “Many buyers have backed away from the housing market and are waiting until more and better homes are listed.” He says: “They don’t have the same sense of urgency that they did at the beginning of the year.” Sellers Have the Upper Hand But even with a pullback in demand, the experts say it’s still a seller’s market. According to Fannie Mae’s chief economist, Doug Duncan, sellers will continue to have the upper hand. He says: “Despite the pessimism in home buying conditions, we expect demand for housing to persist at an elevated level through the rest of the year.” He attributes that to mortgage rates that are still hovering below 3%, along with consumer confidence about the job market and household income. You’ll find links in the show notes at newsforinvestors.com. Click here to join RealWealth now, it's free and only takes a minute! If you like what you hear, subscribe to our show. And don’t forget to give us a thumbs up or a stellar review on whatever podcast platform you are using. Thanks for listening. I’m Kathy Fettke. [Closing music] [End 00:03:52] Links: 1. https://www.redfin.com/news/housing-market-update-new-listings-pass-2019/ 2. https://www.cnbc.com/2021/07/12/homebuyers-finally-get-a-break-as-new-listings-rise-and-mortgage-rates-drop.html?&qsearchterm=catching%20a%20break

Transcript: [Speaker] Kathy Fettke: In this Real Estate News Brief for the week ending July 10th, 2021... what lenders are saying about a mortgage slowdown, why ARMs are suddenly attractive, and which cities are attracting people who are relocating. Hi, I'm Kathy Fettke and this is the Real Estate News for Investors. Economic News We begin with economic news from this past week. The latest unemployment report shows a slight rise in new claims, but the total number of claims continues to fall. As of June 19th, the number of people collecting benefits was 14.2 million. Economists expect that number to fall faster in September when extra unemployment benefits expire and people are forced to go back to work. (1) And there should be plenty of jobs available. The Labor Department’s latest report on job openings shows a record 9.2 million. That’s exactly double the number of job openings from a low point during the pandemic, and the third month in a row that openings have set a record. (2) In addition to people sitting on the sidelines, many workers are quitting as they seek better jobs. The data shows that 4 million people quit two months ago. Most of them want better paychecks. Many may also want new work scenarios that reflect some of the changes we’ve seen during the pandemic, such as the ability to work remotely. Mortgage Rates Mortgage rates have moved lower again this last week. Freddie Mac says the average 30-year fixed-rate mortgage was down 8 basis points to 2.9%. The 15-year dropped 6 points to 2.2%. The dips follow a drop in the U.S. Treasury yields. (3) In other news making headlines... Mortgage Applications Are Down Lenders are seeing fewer home loan applications despite that drop in mortgage rates. The Mortgage Bankers Association says that applications for new loans were down 1% for the week, and 14% from last year. Refinance loans dropped 2% for the week, and are 8% lower than last year. (4) The MBA’s Joel Kan says: “Swift home price growth across much of the country, driven by insufficient housing supply, is weighing on the purchase market and is pushing average loan amounts higher.” Adjustable Rate Loans The adjustable-rate mortgage appears to be making a comeback, as a way for some borrowers to keep loan payments low. So-called ARMs became very unpopular during the housing crisis when home values tanked and loans readjusted to higher interest rates. The current surge in home prices has triggered new interest in getting a loan that starts off with lower payments. (5) According to the Mortgage Bankers Association, applications for ARMs have gone up 12.5% year-over-year. The initial savings is currently about a half percent. Realtor.com reports that the average rate for a 5-year hybrid adjustable-rate mortgage was 2.54% on July 1st, and 2.98% for a 30-year fixed-rate mortgage. Those loans typically readjust to a new interest rate after 5 or 10 years. Lumber Price Drop Lags for Builders Lumber prices have now dropped about 50% from a peak in early May, but those lower prices have not yet reached builders. (6) The National Association of Builders say there can be a “long lag time” for price reductions to work their way through the supply chain. NAHB Economist David Logan says: “As the price declines began grabbing headlines, the price of lumber packages quoted to builders held at record highs.” He attributes this lag to dealers who have inventory purchased for higher prices. The lumber supply chain has several stages. It begins with the cutting of timber that is then sent to a sawmill. From there it goes to a wholesaler who distributes it to a retailer. The builder finally gets the product as an end user. Prices for new-build homes have continued to rise. The NAHB says the median price was $374,400 in May. That’s an 18% increase from May of last year. Construction Worker Shortage Home prices are also being driven higher by the construction worker shortage. The Associated Builders and Contractors group says the industry has only recovered about 80% of the 1 million skilled technicians that it lost during the pandemic. (7) The association says the industry is short 430,000 for this year, and will need another 1 million trained construction workers over the next two years. Metros Benefitting from Pandemic Relocations There’s a new report from Lending Tree on the top 50 metros attracting homebuyers who are relocating. The list shows the desirability of those cities. Many of them are also on our own list for single-family rentals. I would like to share some of those cities. They include Jacksonville, Tampa, and Orlando, in Florida. Atlanta is on that list, along with Indianapolis, Charlotte, Dallas, Columbus, Houston, and Cincinnati. Those are among the top 25. There are plenty more along with details on how the migration patterns have increased from year-to-year. (8) You’ll find links in the show notes at newsforinvestors.com. If you like what you hear, subscribe to our show. And don’t forget to give us a thumbs up or a stellar review on whatever podcast platform you are using. Thanks for listening. I’m Kathy Fettke. Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://www.marketwatch.com/story/unemployment-claims-rise-slightly-to-373-000-in-early-july-11625748104?mod=home-page 2 - https://www.marketwatch.com/story/u-s-job-openings-hit-record-9-2-million-as-businesses-compete-for-limited-supply-of-workers-11625667240?mod=economy-politics 3 - http://www.freddiemac.com/pmms/ 4 - https://magazine.realtor/daily-news/2021/07/08/mortgage-applications-drop-to-pre-pandemic-levels 5 - https://magazine.realtor/daily-news/2021/07/06/adjustable-rate-mortgages-stage-comeback-after-scrutiny 6 - https://magazine.realtor/daily-news/2021/07/08/plummeting-lumber-prices-little-help-to-builders 7 - https://www.cnn.com/2021/07/08/economy/construction-worker-shortage/index.html 8 - https://magazine.realtor/daily-news/2021/07/08/cities-that-benefitted-most-from-pandemic-relocations

Transcript: Kathy Fettke: The U.S. needs millions of homes to meet the current demand for housing, and is depending on builders who can’t find enough workers to do the job. According to one source, the industry needs to hire 1.5 million more construction workers from now through the year 2023. So where have all the workers gone? Hi I’m Kathy Fettke and this is Real Estate News for Investors. The construction industry is in hyper-drive right now to satisfy a critical demand for new housing and for upgrades to existing homes. More people are working from home making “home” a much more important part of our lives. It’s a perfect time for builders to expand their businesses but they are limited by the number of workers available. Where Are All the Construction Workers? Solar installer, Matthew Messer, is the owner of New York Solar Maintenance. And he says he’s out in the field working seven days a week because business is booming and he can’t get enough help. He told CNN: “The phone is ringing off the hook. I am expanding as quickly as I can, but right now that’s governed by the amount of skilled technicians I can bring in.” (1) The Associated Builders and Contractors issued press release saying that construction companies need to hire 430,000 more workers in 2021 than they had in 2020. And almost one million more workers over the next two years. The analysis of data from the U.S. Bureau of Labor Statistics also shows that every $1 billion spent on construction spending generates an average of 5,700 construction jobs. Three Growth Scenarios ABC also used data from economic consulting firm, Markstein Advisors, which shows a construction industry workforce of almost 8 million last year. (2) And with an estimated $1.45 trillion in construction spending in 2021, the firm determined that another 430,000 workers are needed. The analysis included three growth scenarios, and the one with the highest growth rate calls for many more workers. The first is a “base case” scenario and is thought to be the most likely to occur. That is based on $1.43 trillion in construction spending last year, a 1.3% growth rate for 2021, 3.5% in 2022, and 4.5% in 2023. That’s an average of 3.1% per year. When it’s applied to the size of the workforce in 2020, the result is an employment demand for 430,000 more workers in 2021, and a total of 1.28 million for all three years. In the second scenario, ABC considered a slower growth rate of 1.3% per year. That resulted in a three-year demand for 816,000 more workers. And in the third scenario, ABC calculated employment demand for a high growth rate scenario. The average growth was 8.1% which resulted in the need for almost 2 million more workers during that three-year time span. Some of the factors that ABC considered in this analysis include higher costs for building materials and labor, along with several other variables. They include: A shift toward high-end residential construction which costs more but doesn’t require that many more worker hours The adoption of labor-saving technology due to the worker shortage More efficient scheduling of workers and better logistics for building materials Increased use of prefabricated pieces that reduce the amount of labor that’s needed And, the folding of smaller, less efficient construction companies. Employers Offer Higher Wages The analysis was also based on 2020 wages, which are going up in an attempt to attract workers. In the CNN article, Messer says he offered $18 to $22 an hour but no one applied for those jobs. He boosted that to $23 an hour, and still -- nothing. He says: “I increased it to $25 and they’re starting to trickle in right now. It was a dramatic increase, but in order to grow the business, I need technicians.” Although the pandemic had an impact on the labor shortage within the construction industry, the housing crisis in 2008 and the recession that followed had much more of an impact. According to the Journal of Light Construction and the U.S. Census Bureau, more than 60% of the workers that were displaced during that crisis, also left the industry for good. That helped create the labor shortage, combined with what the Bureau says is a “persistent drop in the hiring of younger workers into construction jobs.” (3) Attracting Young People to the Industry One big change in school curriculum that works against the industry is the lack of “shop classes” that were once so popular. As CNN points out, they were part of the normal class offerings in high schools across the country. Now they are “few and far between.” ABC is working on boosting interest in a construction career. Bellman says: “We want to go out to every area where we can attract top talent. Once we get them into the industry, we’re educating and upskilling.” Bellman says the idea is to increase retention. ABC says the organization and its contractor members invest a total of $1.5 billion a year in workforce development initiatives that include job training. CEO Michael Bellman said in a statement: “Now is the time to consider a career in construction, a vocation that offers competitive wages and ample opportunities to both begin and advance in an industry that builds the places where we work, play, worship, learn and heal.” But there’s a high turnover rate in the industry. The Bureau of Labor Statistics says the average monthly turnover in the last decade has been 5.2%. That’s quite a bit higher than the overall average of 3.6%. With too few humans to fill the shoes of workers, the industry is now turning to technology. That’s opening up positions for tech workers, who may ultimately fill the need of the industry as it tries to keep up with the housing boom. In the meantime, competition for workers, and for the hiring of contractors will continue to have an impact on home construction. Check for links in the show notes at NewsForInvestors.com. Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://www.cnn.com/2021/07/08/economy/construction-worker-shortage/index.html 2 - https://www.abc.org/News-Media/News-Releases/entryid/18636/abc-the-construction-industry-needs-to-hire-an-additional-430-000-craft-professionals-in-2021 3 - https://www.jlconline.com/article/constructions-exodus-of-labor_c

Audio Transcript: Kathy Fettke: The housing market has been booming, but not for everyone. Many Americans are struggling financially as the economy recovers from the pandemic. High home prices are impacting both homebuyers and renters, and we could see a wave of foreclosures and evictions when pandemic moratoriums expire. Those are just a few of the challenges mentioned in “The State of the Nation’s Housing 2021.” It’s put together by the Joint Center for Housing Studies of Harvard University. Hi I’m Kathy Fettke and this is the Real Estate News for Investors. Home sales have been soaring in the past year. Many Americans have been on a home-buying binge as the country shifts to a post-COVID reality. Existing home sales were up 20% year-over-year from September of last year through February, and new home sales were even higher. They rose 30% year-over-year from June of last year through February. Home Sales and Prices Are Soaring Existing homes have been hobbled by a historically tight supply that grew worse during the pandemic because sellers didn’t want to list their homes. The Harvard study shows that the existing home inventory shrank 30% on average from June of 2020 to February of 2021, to just 1.05 million homes. That drove the months of supply down from a low 3.9% on average in 2019 to 3.1 months last year. It even dipped below 2 months briefly, before the end of last year. And 6 months is considered normal. That kind of demand for homes has pushed prices consistently higher. The S&P Case Shiller Home Price Index shows that home prices were up 13.2% year-over-year in March. That’s up from 4.2% in the first quarter of last year, and 3.5% in 2019. Some people have worried about a price bubble, similar to what happened before the Great Recession, but conditions are different now than they were then. It’s not as easy to get a loan now, so homebuyers are better qualified with more equity in their homes. Interest rates are also lower, giving homebuyers more purchasing power, and a greater desire to “buy now.” Builders have been producing more homes, to help meet demand. Single-family housing starts topped a seasonally adjusted annual rate of 1.0 million last August. That rate of production has continued since then. If it continues through August of this year, it will be the first year that single-family starts have been above the one million level since 2007. Homeownership Rises, But Not for All The report says that homeownership rates remain “on an upward trajectory” but not for everyone, because of rapidly rising home prices. For many, home prices are rising much faster than their salaries. The price-to-income ratio last year was 4.4, nationally. Twenty years ago, it was less than 3 in a majority of the 100 largest U.S. metros, and higher than 5 in just a few. Last year, it was less than 3 in just 16 of those big metros and higher than 5 in 23 of them. Many homeowners and renters are also facing the risk of foreclosure or eviction as pandemic moratoriums are lifted. The number of homeowners in forbearance programs has dropped considerably but the report says that the future is uncertain for 2.3 million borrowers. They are still in forbearance and have not yet resumed their mortgage payments, at the time of this report. It isn’t just the job losses, but the loss of loved ones who helped maintain the family and pay the bills. Renters Impacted by the Pandemic The situation is similar for many renters. Millions of renters lost their jobs at the beginning of the pandemic. The Household Pulse Survey shows 51% of renter households had lost income because of the pandemic by March of this year, but that situation is very different from region to region. The report says the Southeast has the highest number of renters who owe their landlords, with Mississippi topping that list at 27%. Delaware and Louisiana follow at 25%. The areas with the lowest number of renters who need to “catch up” are farther west in the Midwest and Mountain regions. The report mentions Idaho, North Dakota, Montana, and Utah. Just 12% were behind on their payments early this year. Near-Term Housing Outlook The report offers a near term outlook at opposite ends of the spectrum for many American households. There are those with good-quality housing and secure employment along with millions more who are struggling. It expects that dichotomy to continue despite the economic recovery. It also expects demand for homeownership to remain high, especially among younger buyers, and it says that inventory issues could ease up as more sellers come on the market. That could put a damper on home price growth, but builders also need to keep pumping new homes into the market to keep prices affordable. It expects some of the housing market changes that happened during the pandemic to be temporary, including the drop in demand for high-end urban rentals. But the demand for suburban homes among buyers and renters may be here to stay, especially for those who continue to work remotely. You can see vacancy rates shift higher for urban rentals and lower for rentals in the suburbs, early last year. That has reversed somewhat as the pandemic dies down, but researchers expect suburban demand to continue. Longer-Term Impacts Longer term impacts on the housing market include a big drop in population growth. Researchers cite a combination of factors including a falling birth rate, a big drop in immigration, and a surge in mortality, thanks to the pandemic. The report says U.S. population growth is the slowest it’s been in 100 years. That could help resolve the housing gap if there are fewer people competing for homes, but it could also have a negative impact on the economy as a whole. Researchers suggest the need for policymakers to “reinvigorate population growth” by increasing immigration, providing childcare for working families, and improving economic growth by addressing the income and wealth gap. The report dives much deeper into current housing conditions. Check the show notes for links to the report at NewsForInvestors.com. Thanks for listening to the Real Estate News for Investors. If you like what you hear, please be sure you subscribe. And don’t forget to give us a thumbs up or a stellar review on whatever podcast platform you are using. Thanks for listening. I’m Kathy Fettke. Click here to join RealWealth now, it's free and only takes a minute! Links: https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_State_Nations_Housing_2021.pdf

Transcript: In this Real Estate News Brief for the week ending on the 4th of July, 2021... what the U.S. Supreme Court decided about the CDC eviction moratorium, the surprising drop in price for lumber, and a new credit card that helps you get money for the down payment. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Economic News We begin with economic news from this past week. The latest unemployment report shows that fewer people are applying for benefits, probably because the COVID-era benefits are being phased out. The Labor Department says that 364,000 people applied for benefits. That’s 50,000 less than the week before. Initial claims are now below the half million mark. The total number of people collecting benefits from all eight state and federal programs is 14.7 million, which is another pandemic low. (1) There are plenty of job openings for people looking for work. Companies pumped 850,000 new positions into the market in June. That’s the biggest hiring increase in 10 months, according to MarketWatch, but economists say employment levels are still a long way from pre-pandemic levels. Most of these new positions are for jobs that correspond to the reopening, like those for restaurants, hotels, and stores. (2) The official unemployment rate is at 5.9%. Economists say the true rate is probably two or three percentage points higher than that. The percentage of people over 16 who are able to work is 61.6%. That’s known as the labor participation rate. It’s the same now as it was in October. Home prices are rising at an eye-popping rate. The S&P Case-Schiller nationwide index rose from 13.3% year-over-year in May to 14.6% in April. The 10-city index shows a bigger jump, from 12.9% to 14.4%. The cities with the biggest gains were Phoenix, San Diego, and Seattle. A representative for the Index says the gain for the nationwide index is the highest reading in more than 30 years. (3) Homebuyers were busy in May. The National Association of Realtors reported an unexpected 8% increase in pending home sales, compared to April. CNBC says that economists expected a 1% decline, but instead, contract signings rose to levels we haven’t seen since 2005. (4) NAR’s chief economist, Lawrence Yun, said in a statement: “May’s strong increase in transactions -- following April’s decline, as well as a sudden erosion in home affordability -- was indeed a surprise.” (5) Construction spending was lower in May, overall, due to non-residential projects, but spending was higher among home builders. The Commerce Department says that spending for residential construction was up .2%, and is up a total of 28.2% year-over-year. Not surprisingly, spending for office construction is down substantially. The government says it’s down 23.3% for the past year. (6) Consumer confidence is flying high. The Conference Board says it jumped up from 120 in May to 127.3 in June. That’s the highest level of confidence since the COVID-19 ravaged the country. (7) Economists say it’s because the pandemic is dying down, government stimulus, and a recovering job market. But they say, many consumers are still worried about the risk of inflation. Mortgage Rates Mortgage rates dipped back down this last week. Freddie Mac says the average 30-year fixed-rate mortgage dropped 4 basis points to 2.98%. It had risen above the 3% level previously. The 15-year also dropped 8 basis points to 2.26%. (8) In other news making headlines... SCOTUS Upholds Eviction Ban The U.S. Supreme Court ruled against a request to block the CDC’s eviction ban. In a 5 to 4 decision, Chief Justice Kavanaugh and Justice Brett Kavanaugh sided with their liberal counterparts to keep the moratorium in place. Kavanaugh wrote in the decision: “Because the CDC plans to end the moratorium in only a few weeks, on July 31st, and because those few weeks will allow for additional and more orderly distribution of the congressionally appropriated rental assistance funds, I vote at this time to deny the application to vacate the District Court’s stay of its order.” (9) The decision was a disappointment to real estate agents in Georgia and Alabama, who were the plaintiffs, and the National Association of Realtors who reportedly funded their legal challenge. The plaintiffs had argued that the CDC moratorium “shifted the pandemic’s financial burdens from the nation’s 30 to 40 million renters to its 10 to 11 million landlords. NAR says that landlords have been losing more than $13 billion a month during the moratorium. Lumber Prices Continue to Fall Lumber prices are coming down quickly after a frightening peak in early May. They had risen as high as a jaw-dropping $1,700 for a thousand board feet, but have been coming down since then. The latest report shows that lumber futures tumbled 40% in June. That’s the biggest monthly drop on record. And that prices are now down to about $700 for a thousand board feet. That’s still more than double what they were a year ago, but the big drop in price is great news for builders, homebuyers and investors. (10) (11) Credit Card with Down Payment Reward Points First-time buyers have a new way to save up for a down payment. A real estate start-up called Bilt Technologies is offering a credit card with reward points that can be used to pay bills like the rent, or a down payment on a home. If property owners accept credit cards for rent payments, then the money paid for rent would go toward those points. The Wall Street Journal says a $1,500 a month rent payment for 10 years would give you enough points for a $6,000 down payment. (12) That’s it for today. Check the show notes for links at NewsForInvestors.com. I'm Kathy Fettke and thanks for listening to Real Estate News for Investors. If you like what you hear, please be sure you are a subscriber. And don’t forget to give us a thumbs up or a stellar review on whatever platform you are using. Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://www.marketwatch.com/story/u-s-unemployment-claims-sink-51-000-to-new-pandemic-low-of-364-000-11625143912?mod=economy-politics 2 - https://www.marketwatch.com/story/u-s-gains-850-000-new-jobs-in-june-in-sign-of-strength-for-the-economy-11625230019?mod=economic-report 3 - https://www.cnbc.com/2021/06/29/home-price-gains-in-april-truly-extraordinary-sp-case-shiller-says.html 4 - https://www.cnbc.com/2021/06/30/may-home-sales-rebound-to-highest-level-since-2005.html?__source=realestate%7Cnews%7C&par=realestate 5 - https://www.marketwatch.com/story/pending-home-sales-surge-higher-but-economists-warn-that-the-housing-market-could-soon-hit-bottom-11625062462?mod=economic-report 6 - https://www.marketwatch.com/story/construction-spending-falters-in-may-as-nonresidential-sector-remains-weak-11625149059?mod=economic-report 7 - https://www.marketwatch.com/story/consumer-confidence-leaps-in-june-to-pandemic-high-as-coronavirus-fades-away-11624976332?mod=economy-politics 8 - http://www.freddiemac.com/pmms/ 9 - https://www.housingwire.com/articles/supreme-court-upholds-cdc-eviction-ban/ 10 - https://www.cnbc.com/2021/06/30/lumber-prices-dive-more-than-40percent-in-june-biggest-monthly-drop-on-record.html 11 - https://www.calculatedriskblog.com/2021/06/update-framing-lumber-prices-down.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+CalculatedRisk+(Calculated+Risk) 12 - https://magazine.realtor/daily-news/2021/06/29/startup-launches-credit-card-to-save-for-down-payment

Transcript: Installing solar panels on your home could give you a big boost in value. A new study from Porch.com shows that the average solar-powered home is worth $680,000 which is almost 50% more than the average home in a given area. But it also depends on where you live. Hi I’m Kathy Fettke and this is Real Estate News for Investors. Porch.com tallied the number of listings and the average sales prices for the top 500 most populated U.S. cities. It then eliminated the cities that didn’t have at least five solar-powered homes for sale. That left 175 cities in 29 states, and the District of Columbia. (1) It also surveyed homeowners to ask them about home prices in their areas, and how much more solar-powered homes were going for. But the difference in the added value was substantial from city to city. Wide Range in Added Value Pensacola, Florida had the biggest increase in value for homes with solar. The average is $615,000 which is three-and-a-half times the average home price in that area. At the opposite end of the spectrum is Billings, Montana. It was the only city where homes with solar panels were worth less than homes that had them. The average home in Billings costs $286,000, while the ones with solar average just $170,000, according to this study. The state where solar-powered homes are the most expensive is California, because home prices are so high to begin with. But in some cities, solar did add a substantial amount of value to an already higher-priced home. For example, in the city of Concord, solar increased the value by 113%, on average. In Fresno, it was 89%. But in Santa Monica, the difference in value was negligible, at just 1%. Twenty-five California cities were included in this analysis and were spread across that spectrum. Studies Show Varied Results Other important studies on this topic include one from the Lawrence Berkeley Laboratory in California. It was done in 2015 and found that solar panels add $4 per watt to the value of your home. As reported by the Solar Nerd, if you have a 6 kW system, the value of your home could increase by $24,000. That’s an attractive number because in 2015, the average cost of a solar system was “less” than $4 per watt. (2) The study authors the higher value may be due to buyers who are willing to pay a little extra for solar because it’s environmentally friendly. They call it a “green cachet” or the “Prius effect.” That study dug into 12 years of data and almost 23,000 homes in 8 states. It also made adjustments to the results to account for different features of the homes, such as square footage, number of bedrooms, and the location of the homes. Zillow conducted a study in 2019 and found the premium for a solar home was 4.1%. That adds about $10,000 onto the value of a home in the median price range. In San Francisco, a home typically sells for around $1.45 million. The added value for that home would be about $60,000. That study also adjusted for various attributes of the home. (3) According to Homelight, the Office of Energy Efficiency and Renewable Energy states that solar will likely increase the value of your home, and that buyers are willing to pay about $15,000 more for a home with an average-sized solar system. (4) As you can see, there are wildly different figures for the value of solar-powered homes. And not everyone agrees that they are an attractive feature for all homebuyers. A Contrarian Viewpoint In Sacramento County, real estate agent, Michael Miller, told Homelight that: “Some people value solar, but it’s on a case-by-case basis.” That’s mostly because the seller doesn’t actually own their solar systems. He says: “A seller may own the solar outright, but in other cases, they may be involved in a lease where a third party owns the equipment. In other scenarios, the seller may have purchased the equipment with a loan.” And that would create a lien on the property. Miller says some buyers tend to steer clear of solar-powered homes involving a lease or a lien. He also believes that as more people adopt solar, we may see a standard develop on the added value. And that of course, people like the energy savings that solar power provides. But, one thing noted by the Porch.com researchers is that even though prices for solar panels are coming down, they are typically found on more expensive homes. You’ll find links to these studies in the show notes at NewsForInvestors.com. Thanks for listening. I’m Kathy Fettke. Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://porch.com/advice/solar-power-homes-study 2 - https://www.thesolarnerd.com/blog/do-solar-panels-add-value-to-your-home/ 3 - https://www.zillow.com/research/solar-panels-house-sell-more-23798/ 4 - https://www.homelight.com/blog/buyer-do-solar-panels-increase-property-value/

The Miami condo collapse has got a lot of people wondering about the safety and integrity of their own buildings. The 12-story oceanside condo partially collapsed while people were sleeping. At the time of this podcast, 18 people are confirmed dead and 145 are still missing. As crews continue their search through the rubble, there are reports that the building was in dire need of repair. There were 136 condos at the 40-year-old Champlain Towers South building. More than 50 of them collapsed on June 24th at 1:30 a.m. Eyewitness Accounts of the Collapse The investigations are only beginning to get underway, but there’s growing evidence that the building’s pool deck had a major design flaw, and the concrete under that slab was in bad shape. A Tik Tok video may reveal a lot about what happened. Adriana Armiento took the video from across the street. It shows the entrance to the condo garage just moments before the building came down. You can see what looks like huge chunks of concrete on the floor and water pouring out of the ceiling. The post says: “The basement was the first to collapse!” (1) Another resident told the Washington Post that she ran to the lobby to tell a security guard about a loud boom, and that part of the surface-level parking area and the pool deck had collapsed into the underground garage. She then ran back to her condo to get her two children and the three of them escaped just minutes before the building became a pile of rubble. (2) Condo Warned about Problems in 2018 The condo association had been warned by an engineer in 2018, at the start of a 40-year certification process. But residents spent the next two-and-a-half years negotiating whether millions of dollars in repairs were truly needed. Frank Morabito was hired by the association to get a jump start on the certification process. According to ABC News, Morabito’s initial inspection found “significant cracks and breaks in the concrete.” (3) The report mentioned a major design flaw to the pool deck area, and the failure of waterproofing under the pool deck which was “causing major structural damage” to the concrete below. He also warned that repairs were needed “to ensure the safety of the residents and the public.” Residents Debated the Need for Repairs That set the stage for a lot of negotiating among residents and board members about the cost of repairs. At first, the price tag was about $7 million. By waiting, the price tag had recently grown to more than double that amount. In the meantime, the issues grew worse, and the need for repairs became more critical. In April, the board president wrote to residents about the urgent need for repairs. USA Today got ahold of the letter. (4) In it, Jean Wodnicki described a situation that you might expect when condo owners are told about expensive repairs. She said: “We have discussed, debated, and argued for years now.” And she speculated that that would continue. But, she also sent details about the extent of the repair work in an attempt to convince residents that pricey owner assessments were justified. She explained that much of the work would be structural repairs to the concrete but also warned that because so much of the damage was underground, that crews would have to pull up almost all of the ground-level slab. She also said that crews may discover even more problems once the damaged areas are exposed and inspected. Roof Repairs Has Recently Begun According to the Real Deal, work on the roof began in April. That work was given priority because of the start of the hurricane season on June 1st. Some people have speculated that heavy equipment on the roof helped destabilize the building, but an attorney for the association doesn’t agree. Donna Berger told the Real Deal: “A building doesn’t fall down because you work on a roof or because there are 16 cracks in the stucco." (5) There’s also speculation that shifting sand under the condo may have contributed to the problems. The part that collapsed faced the ocean. And a study at the Florida International University had found that the building was sinking about 2 millimeters a year in the 1990s. That study didn’t raise much of an alarm, apparently. Conclusions won’t be known for quite some time. For now, our hearts go out to the people who are missing and their loved ones. We’ll have a few links to our sources in the show notes. Thanks for listening. I’m Kathy Fettke. Links 1 - https://www.washingtonpost.com/nation/2021/06/30/florida-condo-building-collapse-live-updates/ 2 - https://www.washingtonpost.com/investigations/interactive/2021/building-experts-miami-condo-collapse/ 3 - https://www.nbcnews.com/news/us-news/condo-board-president-warned-deterioration-need-repairs-months-collapse-n1272583 4 - https://www.usatoday.com/story/news/2021/06/28/miami-condo-deterioration-worsening-april-letter-says/7790478002/ 5 - https://therealdeal.com/miami/2021/06/25/details-emerge-in-search-for-cause-of-fatal-surfside-condo-collapse/

In this Real Estate News Brief for the week ending June 26th, 2021... mortgage rates are back above 3%, forbearance programs are dwindling, and California renters could get their back rent paid off. Economic News We begin with economic news from this past week. The latest report on inflation shows the PCE index rose 3.4% in May, compared to a year earlier. (1) That’s the largest annual increase in almost 30 years, according to CNBC. The Personal Consumption Expenditures index tracks changes in the price of goods and services. It’s considered a more wide-reaching index than the Consumer Price Index, and is the one used by the Federal Reserve. The weekly unemployment report shows the job recovery may be hitting a speed bump. (2) The Labor Department says that initial jobless claims only fell 7,000, and are still above 400,000. MarketWatch says that Wall Street economists had expected a much bigger drop in new claims. The total number of people collecting unemployment from state and federal programs was 14.8 million as of June 5th. Consumer spending has settled down from a reopening surge in recent months. The government says it was about the same last month as it was in April, but spending is still higher than it was before the pandemic. MarketWatch says it’s increasing enough to “keep the economy humming.” (3) Turning now to the housing market, economists say that new home sales were disappointing. The Census Bureau says they were down 5.9% in May compared to the month before. (4) But even with that drop, they are still up more than 9% from May of 2020. Realtor.com says about 20% of builders are putting limits on production because of high lumber and material prices and a labor shortage. Lumber prices have started to come down, however. (5) Existing home sales are also down. They were down .9% in May, to a seasonally adjusted annual rate of 5.8 million. But they are still 45% higher than they were a year ago. (6) Although economists say the pandemic-inspired home buying frenzy may be cooling off, they don’t expect a huge drop in demand. Michael Gregory of BMO Capital Markets told MarketWatch that “demand should remain warm” because of low mortgage rates, millennials moving ahead with home buying plans, and pandemic savings that are helping people come up with a down payment. Mortgage Rates Mortgage rates moved back above the 3% mark. Freddie Mac says the annual 30-year fixed-rate mortgage was up 9 basis points, to 3.02%. The 15-year moved up 10 basis points to 2.34%. Freddie Mac economists expecte that rates will continue to move higher, but gradually. (7) In other news making headlines... Housing Affordability Falls Housing affordability has fallen in all four regions of the U.S. thanks to higher home prices. Realtor.com says the median family income has dropped about $7,000 to $88,500 while mortgage payments have risen. NAR’s index shows they have gone up 16% year-over-year. The average was $1020 in April of 2020 and it’s now $1,184. (8) As a percent of income, mortgage payments accounted for 13.7% of a family’s paycheck last year. This year, they account for about 16%. NAR’s research data specialist, Michael Hyman, says the combination of higher prices and smaller paychecks “is not a good combination for a potential home buyer.” Forbearances Dip Below 4% Some homeowners are getting their mortgage payments back on track. The Mortgage Bankers Association says that forbearances have dipped below 4% for the first time in a year. (9) According to an association survey, they fell 11 basis points last week, to 3.93%. The report also shows that new forbearance requests have dropped to an extremely low level. California Extends Eviction Ban But Will Pay Back Rent California landlords may appreciate this next story. Governor Gavin Newsom and lawmakers announced a plan to extend the moratorium through September, and pay 100% of all back rent for eligible tenants. (10) The current moratorium is set to expire on June 30th, which is the same day that Federal eviction protections expire. The agreement between Newsom and the leaders of the state Senate and Assembly, could be approved as early as Monday, June 28th. Senate President Pro Tem, Toni Atkins, says the goal is to avoid mass evictions. Atkins said in a statement that the “housing situation in California was a crisis before COVID, and the pandemic has only made it worse.” New Record for Digital Real Estate Real estate that only exists in cyberspace is gaining ground as an investment option, although it’s considered to be very speculative and volatile. Realtor.com reports that a chunk of digital real estate in the online world of Decentraland sold for almost a million dollars. This kind of real estate is bought and sold with a type of cryptocurrency called nonfungible tokens, or NFTs, and is based on a blockchain. In a news release for an NFT Summit that took place recently, it says: “From music to sports, real estate to digital fashion, art to collectibles: non-fungible tokens (NFTs) are transcending industries and transforming economies. They’ve led to an explosion of disruptive technologies, the digitization of culture and assets, and the creation of an immersive internet. The piece of digital real estate that was purchased consisted of 259 units of land. That’s equal to 16 square acres. Earlier this month, another large purchase was made for digital real estate in a virtual world, or “metaverse,” called The Sandbox. That piece of cyberspace was bought for $650,000. You might wonder what people do with this real estate. Realtor.com explains that “users purchase land to show off their digital art collections, walk around with friends, visit buildings, or to attend events.” Okay, wrap your head around that one! You’ll find links to our sources in the show notes at NewsForInvestors.com Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://www.cnbc.com/2021/06/25/us-bonds-10-year-treasury-yield-rises-ahead-of-inflation-data.html 2 - https://www.marketwatch.com/story/u-s-unemployment-claims-barely-fall-and-disappoint-for-second-week-in-a-row-11624539532?mod=economy-politics 3 - https://www.marketwatch.com/story/consumer-spending-barely-rises-in-may-as-federal-stimulus-money-dries-up-11624625957?mod=economy-politics 4 - https://www.marketwatch.com/story/new-home-sales-fall-short-of-expectations-but-dropping-lumber-prices-could-provide-breathing-room-11624457962?mod=economic-report 5 - https://magazine.realtor/daily-news/2021/06/24/new-home-sales-drop-to-lowest-pace-of-year 6 - https://www.marketwatch.com/story/existing-home-sales-slump-as-momentum-slows-in-the-housing-market-11624370746?mod=economy-politics 7 - http://www.freddiemac.com/pmms/ 8 - https://magazine.realtor/daily-news/2021/06/21/mortgage-payments-are-increasing-despite-low-rates 9 - https://www.housingwire.com/articles/for-the-first-time-in-a-year-forbearances-dip-below-4/ 10 - https://www.latimes.com/california/story/2021-06-25/newsom-legislative-leaders-agree-on-extending-eviction-protections-paying-back-rent 11 - https://magazine.realtor/daily-news/2021/06/23/even-virtual-real-estate-is-setting-price-records 12 - https://www.builderonline.com/building/habitat-for-humanity-builds-its-first-3d-printed-home-in-tempe_o 13 - https://www.wsj.com/articles/blackstone-bets-6-billion-on-buying-and-renting-homes-11624359600?mod=hp_lead_pos3 14 - https://abc7.com/10816581/

Single-family rents are increasing at their fastest rate in almost 15 years. A new CoreLogic report shows that rent growth for single-family homes was up 5.9% year-over-year in April. That’s the fastest rate of growth since 2006, before the housing meltdown and the Great Recession. Demand for detached homes has mushroomed because of the pandemic. Many Americans want more space inside their home as well as a place to go outside for fresh air. Remote work has also allowed for a migration to smaller cities and more remote locations. There’s also a lack of affordable for-sale homes to satisfy demand at lower income levels. All those factors are pushing people into rentals, and with that kind of demand, rents are moving higher. CoreLogic’s Single-Family Rent Index CoreLogic’s Single-Family Rent Index tracks SFRs. (1) That includes detached homes and single-family homes that are attached to other single-family homes, like condominiums. It analyzes the same group of homes over time to come up with a reading on rent growth. The index shows that rent growth for detached homes is three times the rate of rent growth for units that are attached to other units. It also shows that rent growth for all kinds of units is now higher than it was before the pandemic. CoreLogic economist, Molly Boesel, says: “While rent growth dipped significantly last April at the start of the pandemic, rising affordability issues and supply shortages in the for-sale housing market and ongoing demographic pressure from aging millennials have continued to place upward pressure on the single-family rental market.” She also sees these factors continuing and “leading to strong rent growth this year.” Uneven Rent Growth Rate The growth rate is somewhat uneven, however, between the low and high-priced rentals. CoreLogic says the difference is due to the uneven pace of the job recovery, which it refers to as a “K-shaped” recovery. It defines the low-priced tier as less than 75% of the regional median, and the high-priced tier as more than 125% of the local median. Looking at the different price tiers: The rate of growth at the low end was 3.9% year-over-year in April. That’s up from 3.2% a year earlier. At the high end, the rate of growth was 6.1% compared to 2.2% in April of last year. That high-end increase is the fastest we’ve seen since May of 2006. Rent Growth Highest for Detached SFRS CoreLogic also analyzed the difference in rent growth for the various single-family property types. In addition to condos, those attached properties include duplexes, triplexes, quadplexes, townhomes, row-houses, and co-ops. CoreLogic found that rent growth for all tiers of detached homes accelerated most rapidly, at 7.9% year-over-year. The reading was just 2.2% for other kinds of single-family homes. The report also shows the highest rent growth in lower-density cities that are attracting more renters. Phoenix tops that list with 12.2% rent growth. Tucson is a close second at 10.6%. Las Vegas, Atlanta, Austin, Dallas, Charlotte, Detroit, San Diego, and Houston round out the top ten. Supply & Demand Dynamic The CEO of one of the nation’s biggest institutional landlords, Dallas Tanner of Invitation Homes, says that he expects the current dynamic in the rental market to continue. During an interview with CNBC, he said: “You do not see anything in the numbers that suggest the supply and demand factors are going to change dramatically overnight.” (2) He says with some 65 million millennials making major life decisions like buying or renting a home, he doesn’t expect a decrease in the need for housing. Although he views the housing market as healthy, he says we’re not building enough new homes each year to meet demand. According to St. Louis Fed, builders are producing about 1.5 million new units each year. (3) Tanner compared that to the late 1990s, and says the most urgent need right now is for more “more quality housing... across all spectrums.” Links: 1 - https://www.corelogic.com/intelligence/inaccessibility-in-for-sale-housing-pushes-up-demand-for-single-family-rentals/ 2 - https://www.cnbc.com/2021/06/18/invitation-homes-ceo-says-hes-not-worried-about-a-housing-bubble.html 3 - https://fred.stlouisfed.org/series/HOUST

In this Real Estate News Brief for the week ending June 19th, 2021... what the Fed is saying about rate hikes and tapers, how much single-family rents have grown, and where homebuyers are moving. Economic News We begin with economic news from this past week. The Federal Reserve is starting to make plans for rate hikes and tapering due to the risks of higher inflation. In a statement after its monthly meeting it said that it might hike short term interest rates two times in 2023. It also continued to say that recent price hikes were temporary, but Fed Chief Jerome Powell said in the news conference that inflation could rise faster and last longer than he and his colleagues had anticipated. The Fed had forecast an annual rate of 3% this year, but it recently surged in May to a 13-year high of 5%. Powell also said that the Fed has had its first discussion about tapering. It is currently purchasing $80 billion in Treasurys and $40 billion in mortgage-backed securities to help stimulate the economy. (1) The job market recovery had a slight setback last week. Wall Street Journal economists had predicted initial jobless claims to continue their decline, but the Labor Department reported an increase of 37,000. Continuing claims were also up by a small amount to a total of about 3.5 million. And there’s still a total of 14.8 million people collecting state or federal benefits of some kind. (2) Many are collecting an extra $300 a week from a federal program that’s set to expire in September. Because it’s been difficult to fill all the jobs that are available, 25 states say they are opting out of that program early, as an incentive for people to get back to work. (3) Housing starts were higher in May, but lumber prices and labor shortages kept those numbers lower than economists expected. The Census Bureau says they were up 3.6% to an annual rate of 1.57 million. And then permits were down 3%, which is also a reflection of the trouble that builders are dealing with. (4) But they may get a break on lumber pricing. They have dropped significantly in just the past two weeks. The Wall Street Journal reports that lumber futures for July are down 41% to around $1,000 for a thousand board feet. That’s from a high of around $1,700 in early May. (5) Mortgage Rates Mortgage rates shot up on Thursday, after comments from Fed Chief Powell. According to Mortgage News Daily, the 30-year fixed-rate mortgage jumped to 3.25%. Earlier in the day, Freddie Mac had posted it’s weekly results for the average interest rate and it was still below 3%. (7) In other news making headlines... Single-Family Rent Growth Doubles Single-family rent growth doubled during the pandemic with a one-year period. CoreLogic says rent growth rose from 2.4% in April of last year to 5.3% in April of this year. That includes both townhomes and detached homes. As CNBC reports, that’s the fastest rate of growth in almost 15 years, mostly due to strong demand for larger homes with yards. (8) If you separate the numbers for stand-alone detached homes, the gains are even larger. CoreLogic says those rents are 7.9% higher, with Phoenix topping the list at 12.2%. Tucson, Las Vegas, and Atlanta were right behind Phoenix. Two big-city decliners include Boston, with a 5.9% drop in single-family rents, and Chicago, with a 2.6% decline. Moving to a Different Metro A new report from Redfin shows that homebuyer interest in moving to a different metro that began during the pandemic, continues at an elevated level. (9) Based on where Redfin.com users are searching, 31.4% of those people were interested in moving to a new metro in April and May. That’s up from 26% in the first quarter of last year, and only one-tenth of a percent less than the first quarter of this year. The top five destination cities include Phoenix, Las Vegas, Sacramento, Austin, and Miami. That’s also pushing prices higher in those destination cities. Redfin says that prices in Austin are up 42.4% year-over-year. That’s the largest increase among all the cities that Redfin was tracking. Phoenix prices had the second largest increase. They were up 33.3%. Sacramento was fifth on the list with prices rising 29.3%. Redfin chief economist, Daryl Fairweather, says: “Even though homes in popular destinations are much more expensive than they were a year ago, it’s still well worth it for many people to leave expensive coastal cities in favor of inland metros.” States with the Most Shopping Centers Have you ever wondered how many shopping centers and malls there are in the United States? According to a report by the International Council of Shopping Centers, the U.S. has just over 115,000 of them. And 27% of them can be found in just three states. (10) California has the most wth 15,285. Texas is second with 12,834. And Florida is third, with 10,843. Those three states also pay the most in sales tax as well. You’ll find links to our sources in the show notes for this episode at NewsForInvestors.com Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://www.marketwatch.com/story/fed-now-sees-two-interes-trate-hikes-in-2023-11623866824 2 - https://www.marketwatch.com/story/u-s-jobless-claims-rise-unexpectedly-in-latest-week-11623933361?mod=economy-politics 3 - https://www.cnbc.com/2021/06/16/states-to-end-federal-unemployment-benefits-for-400000-this-weekend.html 4 - https://www.marketwatch.com/story/builders-break-ground-on-more-new-homes-in-may-but-its-still-not-enough-11623848035?mod=home-page 5 - https://magazine.realtor/daily-news/2021/06/16/lumber-prices-are-dropping-fast 6 - http://www.mortgagenewsdaily.com/ 7 - http://www.freddiemac.com/pmms/ 8 - https://www.cnbc.com/2021/06/15/rents-for-single-family-homes-just-saw-the-largest-gains-in-nearly-15-years.html 9 - https://www.redfin.com/news/april-may-2021-housing-migration-trends/ 10 - https://chainstoreage.com/27-us-shopping-centers-are-found-california-texas-and-florida

What a difference a month makes! Lumber prices were at a staggering all-time high at the beginning of May. Over the last few weeks they’ve dropped more than 20%. In the securities world, that’s enough of a drop to call it a “bear market.” Prices are still much higher than they were before the pandemic, but they have ratcheted down substantially from their peak. Lumber prices topped $1,500 for a thousand board feet at the end of May, on May 28th. Since then, they have tumbled from their $1,515 high to $1,210, according to an industry trade publication cited by Fortune. (1) That’s a tad more than 20%. Lumber Prices Drop 20% This is great news for homebuilders and do-it-yourselfers who’ve stalled on projects because of the high prices. The National Association of Homebuilders says that the cost of lumber has added an extra $36,000 to the price of a new home, compared to April 2020. It also added about $119 a month for rent on a new apartment. In the midst of the current building boom, builders balked at the cost of lumber and May housing starts pulled back. They were down 8.8%. Home improvement sales were also down by almost as much, but not only because of high prices. The DIY dip also coincided with the lifting of pandemic safety measures, and less interest in doing projects at home. Meanwhile, the experts say that loggers and sawmills have been ramping up production because they are fetching more money for their products. That has injected more inventory into the supply chain, but as inventory grows, prices retreat, which is what’s happening. Fortune reports that southern loggers increased production to a 13-year high this last April. (2) Demand is Still Skyrocketing Prices haven’t done a complete reversal however, because demand is still skyrocketing, especially among homebuilders. New home construction hit a 14-year high in March, and fell back somewhat in April. But it was still 22% higher than April of 2019, and 67% higher than April of last year. One commodity trader told Fortune: “The backlog is just too strong. There are too many places to put wood.” And we’re coming off a year that’s marked by a historic lumber shortage. Sawmills cut production at the beginning of the pandemic. They were worried about a housing crash so they also unloaded a lot of their lumber stock and then the crash didn’t happen. Instead, there was a recession-inspired housing boom that included a large number of millennial home buyers. There were also many bored homeowners in lockdown who decided to upgrade their homes. Editor Shawn Church of Fastmarkets Random Lengths told Fortune: “What we’re seeing right now is that of all the factors that contributed to the record run, those trends have eased or turned over and are incrementally contributing to the drops.” (3) As I mentioned, the turn-around began just a few weeks ago in conjunction with the lifting of pandemic restrictions, and slower home improvement sales. Retailers Surprised by Price Drop That caught many big-box retailers by surprise. Nils Martinsson of Sherwood Lumber told Fortune: “Home centers across the country forecasted greater demand from the DIY sector this year based on the frenzied pace we saw over the past 12 months.” He says consumers are now more focused on lock-down free activity, and that has loosened up the supply and brought prices lower. Fortune reports that prices will probably continue to fall, based on lumber futures. But the big question is “by how much.” They peaked on May 10th at more than $1,700 for July delivery contracts. As of last Tuesday, on June 15th, they were just $1,010. The futures show September contracts at $907. So the momentum is bringing lumber prices lower. But those prices are still double to triple what they were before the pandemic. Back then they’d range from $350 to $500 per thousand board feet. And demand hasn’t dried up. It may have slowed down a bit, but it’s still going strong. The Wall Street Journal says that: “Lumber producers and traders expect that prices will remain relatively high due to the strong housing market, but that the supply bottlenecks and frenzied buying that characterized the economy’s reopening… are winding down.” (4) Shadow Inventory Boosts Supply The Journal also says that many builders were hoarding lumber to make sure that they didn’t run out, and are now selling their excess inventory. This so-called “shadow inventory” increases the availability of lumber, and puts downward pressure on prices. But over the long-term, current inventory issues are just a drop in the bucket compared to what will be needed to increase the housing supply. One lumber producer told the Journal: When you think about the amount of housing that we’re going to have to build in the U.S. over the next three, five, 10 years, that’s just a significant amount of demand for wood products.” If you want to read more on this topic, check the show notes for links to our sources at NewsForInvestors.com Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://fortune.com/2021/06/16/lumber-prices-falling-2021-chart-update-price-of-lumber-going-down-wood-costs/ 2 - https://fortune.com/2021/06/10/lumber-prices-2021-chart-price-of-lumber-production-wood-supply-costs-update-june/?queryly=related_article 3 - https://fortune.com/2021/06/04/lumber-prices-housing-market-costs-back-down/?queryly=related_article 4 - https://www.wsj.com/articles/lumber-prices-are-falling-fast-turning-hoarders-into-sellers-11623749401

Solar energy is not a fringe concept anymore. Experts say it’s becoming more mainstream, but that supply chain issues are impacting the industry right as it’s picking up speed. One reason for the growth of solar is that prices have been dropping, but experts say there’s been a recent surge in the cost of components, labor, and freight, similar to what we’re seeing in many industries, including construction. And that could cause a major setback for solar. The website oilprice.com is calling it: “The Worst Setback for the Solar Boom in a Decade.” (1) With concerns about climate change and an international push toward clean energy, the industry is getting hit with unforeseen expenses. The oilprice blog cites the tripling of steel prices and higher prices for fuel, freight, and polysilicon. It says that many solar companies are in a “wait-and-see mode,” hoping that prices for solar components and freight charges will stabilize at a lower level. Solar Panel Prices Spike According to Bloomberg, the solar panel prices are up 15% so far in the second quarter. That’s after seven quarters of lower prices, due to the growth of the industry. The report offers some good news about the polysilicon shortage. Bloomberg analyst Yali Jiang says the industry will see a huge increase in the polysilicon supply, mainly from China. Chinese manufacturers are expected to boost their output by about 76%. That kind of output should push prices down, and according to this blog, to levels seen before the pandemic. (2) The Bloomberg opinion piece also cites a threat to that supply chain, due to allegations of forced labor in China’s western region among Muslim minorities and a world spotlight on how China is handling that situation. There is legislation in Congress now that would ban all Chinese products produced with the use of forced labor. The solar industry is working on ways to make it easier to determine which manufacturers are using forced labor. The Solar Energy Industries Association released guidelines this year, to help with supply chain traceability. According to Bloomberg columnist David Fickling, “something has to give.” He says China’s solar industry accounts for 70% of the world’s panel production, and that “attempts to set up non-China supply chains, whether in India, the U.S., or Saudi Arabia, have done little except raise the cost of photovoltaic installations and put off the moment when fossil fuels are driven out of business.” Solar Demand Is Soaring All this while solar installations are soaring. During the first quarter, the SEIA reports that the U.S. solar market installed over 5 gigawatts of solar capacity. That’s a 46% increase from the first quarter of 2020. It’s also the largest year-over-year increase on record. The association’s 2021 Q2 Solar Market Insight Report also says that “solar accounted for 58% of all new electricity-generating capacity added in the U.S. during the first quarter.” (3) It says the U.S. is on track to install another 24.4 gigawatts of solar this year. That’s 24% more than in 2020. A good portion of that demand is coming from utilities and corporations that are trying to meet climate change goals. Reuters reports that three quarters of the Q1 installations were done by the bigger customers, and that higher prices for materials and shipping could interfere with that growth curve. Wage issues and a tight labor market are also having an impact. But demand is also being driven by an interest in the federal tax credit for solar before it expires at the end of this year. It’s currently at 22% after notching down from 30% and 26% in 2019 and 2020, respectively. (4) The Biden administration would like Congress to extend the tax credit as part of a push toward renewable energy. Warming Up to the Use of Solar In the meantime, more and more people are warming up to the use of solar as “normal.” As reported by realtor.com, homeowners are “showing more willingness” to install solar panels on their homes. (5) In California, all new homes must be equipped with solar panels, with only a few exceptions. California is the first state to issue a mandate like that. It became law last year. Senior policy counsel for the U.S. Green Building Council, Elizabeth Beardsley, says: “This mandate normalizes the idea of solar panels as acceptable to regular homeowners.” But she says: “It will be a long time before mandates are considered by other states except for the most progressive ones.” Underlying those mandates, is the need for clean energy and cost effectiveness. Recent price surges aside, Kevin Wilson of Tri Pointe Homes says that adoption has grown because of an “extreme decline in the cost of installing a solar panel system.” High energy costs in places like California also contribute to the desire for cheaper electricity. One thing that has changed, Wilson says that homeowners are not as concerned about the “look” of the solar panels as they used to be. They used to want to hide them in the back of the house, but that’s not such a big issue anymore. You’ll find links to our sources in the show notes at newsforinvestors.com Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://oilprice.com/Energy/Energy-General/The-Worst-Setback-For-The-Solar-Boom-In-A-Decade.html 2 - https://www.bloomberg.com/opinion/articles/2021-06-13/the-coming-solar-panel-crisis-could-be-less-about-price-and-more-about-xinjiang 3 - https://seia.org/research-resources/solar-market-insight-report-2021-q2 4 - https://www.energy.gov/sites/prod/files/2020/01/f70/Guide%20to%20Federal%20Tax%20Credit%20for%20Residential%20Solar%20PV.pdf 5 - https://magazine.realtor/daily-news/2021/06/02/will-solar-panels-become-more-common

The high cost of lumber has challenged the construction industry this past year, but there may be some relief in sight. Prices have been pulling back a bit, but how far will they go? Industry experts are expecting a building boom, and that could put more pressure on the price of lumber and other materials in short supply, like paint. As reported by CNBC, lumber futures have been pulling back in the last month, after a huge surge during the pandemic. (1) For July deliveries, they were down more than 5% to $1,158 per thousand board feet. That’s off about 30% from a record high of $1,711 on May 10th. Lumber Prices Off Their Record High But even with that pullback, lumber prices have risen more than 200% in the last year. And that’s adding about $36,000 to the average price of a home, according to a recent report. (2) One lumber industry insider told CNBC that it might make sense to hold off a bit on a project if you can, because of high wood costs. Kyle Little of Sherwood Lumber says: “We do see some relief over the next six to 12 months.” But he says “at prices that are much, much higher than prices we’ve experienced in the recent past.” Sherwood Lumber is a private distribution company based in New York. Little believes that lumber prices came down a bit because some builders were putting off projects. Single-family starts were down 13% in April compared to March. CNBC reports that about 15% of the builders were pouring foundations but had postponed the framing of the homes. (3) An official home start must include both the foundation and the framing. A monthly survey by the National Home Builders Association supports that idea. Builders said in the survey that they were slowing production to help deal with higher prices for lumber and other materials like steel, copper, and paint. Paint in Short Supply Paint shortages are being blamed on the pandemic, as well as the winter storm in Texas last February. A spokesperson for Sherwin-Williams told Realtor.com: “In a supply chain already challenged by COVID-19, the February natural disaster in Texas further impacted the complex petrochemical network, causing significant disruptions.” He says: Recovery has been significant in recent weeks and is improving -- but is still far from complete.” The blog says that builders are on waiting lists for paint, and that prices will likely run higher until the shortages are resolved. Paint manufacturers expect increases between 6 and 40%. New Building Boom Expected The owner and publisher of Madison’s Lumber Report, Keta Kosman, told the Lesprom Network that she expects a new building boom, similar to one in the 1950s. (4) In addition to the surging demand for homes, the U.S. administration wants to act on a huge infrastructure plan. Those projects will use many different materials, including a lot of wood. She says higher home prices have as much to do with demand as anything else. She says smaller builders may have pulled back because of lumber prices, but the larger builders just raised their home prices. If the homes are pre-sold, builders are now adding clauses to the contract to cover the rising cost of lumber. When asked if we can expect lumber prices to stop rising, Kosman said: “That’s very hard to know. The price of lumber can’t go up forever.” She says: “Previously, the normal was $300 per thousand board feet. We are never going back to those levels again.” As for the lumber supply, she says that sawmills have only so much capacity, and it takes two years to build a new mill. The U.S. also imports about 40% of its lumber, according to Kosman, and there’s constraint in that supply line as well. She says the latest report for Canada’s sawmill capacity is from February, and that’s showing below normal levels. The takeaway from Kosman’s interview is that lumber prices may come down some more, but don’t hold your breath for a return to pre-pandemic levels. She expects another “15 years of robust building” and a new bottom for lumber prices. We’ll just have to wait to see where they land. The National Association of Home Builders would like more to be done to improve the lumber cost situation. NAHB Chairman Chuck Fowke said in a statement: “These lumber price hikes are clearly unsustainable. Policymakers need to examine the lumber supply chain, identify the causes for high prices and supply constraints and seek immediate remedies that will increase production.” If you’d like to read more about this, you’ll find links in the show notes at NewsForInvestors.com Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://www.cnbc.com/2021/06/08/lumber-executive-sees-further-relief-in-sky-high-prices-.html?recirc=taboolainternal 2 - https://www.businessinsider.com/lumber-expensive-increases-price-new-homes-national-association-home-builders-2021-5#:~:text=Expensive%20lumber%20costs%20have%20added,a%20new%20home%2C%20report%20finds&text=Expensive%20lumber%20has%20added%20to,price%20of%20a%20new%20home 3 - https://www.cnbc.com/2021/05/18/home-construction-sees-biggest-drop-since-pandemic-hit-heres-why.html 4 - https://magazine.realtor/daily-news/2021/06/07/paint-shortage-adds-to-construction-remodeling-woes 5 - https://www.lesprom.com/en/news/There_will_be_new_bottom_lumber_price_and_15_years_of_very_robust_building_99039/

In this Real Estate News Brief for the week ending June 12th, 2021… inflation hits a new 13-year high, homeowners make big gains in equity, and “The House that SHE Built” in Utah. Economic News We begin with economic news from this past week. The latest inflation report shows another surge in consumer prices. The U.S. Bureau of Labor Statistics reported a .6% jump in the consumer price index last month. That puts the annual rate at a 13-year high of 5%. The core inflation rate, which excludes food and energy, also jumped .7% to a 29-year high of 3.8%. The Federal Reserve has assured Americans that these price increases are the result of a fast economic recovery, and will only be temporary. Some economists worry that the higher prices won’t come back down, but as MarketWatch reports, the debate is expected to “play out over the next year.” (1) The number of people filing for unemployment continues to drop. The government reported just 376,000 new claims for the week ending June 5th. (2) The number of continuing claims also fell by another 258,000 to a total of 3.5 million. Combined with seven other state and federal programs, 15.34 million people are collecting checks. That’s about half the number at the same time last year. While jobless claims went down, job openings shot up to a record high. The Labor Department says there were 9.3 million openings in April, which is about 1 million more than March, and about 5 million more than there were during the early months of the pandemic. (3) Employers say they are struggling to find people to fill open positions. A high number of people are also quitting their jobs. Economists say there are several reasons for this situation, including early retirement, trouble finding childcare, extra unemployment benefits, and fear of COVID. Consumers regained their confidence in the economy in June. The University of Michigan’s consumer sentiment survey shows a 4-and-a-half point increase to a reading of 86.4. That’s after it hit a 13-month high in April, and then dropped in May. (4) Mortgage Rates Mortgage rates were down slightly in the last week. Freddie Mac says the 30-year fixed-rate mortgage slipped 3 basis points to 2.96%. The 15-year was down 4 points to 2.23%. (5) In other news making headlines… $1.9 Trillion in New Homeowner Equity June is National Homeowners Month, and U.S. homeowners have something to celebrate. (6) According to CoreLogic’s latest Home Equity Report, homeowners with mortgages have enjoyed a 19.6% year-over-year increase in their equity. That represents an average yearly gain of $33,400 per homeowner, and a total gain of more than $1.9 trillion. (7) CoreLogic’s chief economist, Dr. Frank Nothaft, says: “Double-digit home price growth in the past year has bolstered home equity to a record amount. This reduces the likelihood for a large number of distressed sales of homeowners to emerge from forbearance later in the year.” Instead of letting their homes go into foreclosure, they are more likely to sell their homes and pay off the loan. The first quarter report shows that loans with negative equity decreased 7% to 1.4 million homes. That’s about 2.6% of all homes with a mortgage. Turkey Leads for Global Price Growth Home prices around the globe have been rising at their fastest pace since 2006. A report from Knight Frank shows they were up 7.3% year-over-year in March. And the country at the top of that list is Turkey at around 32%. New Zealand is second with a 22% increase, and is followed by the U.S. and Sweden at 13%, Austria at 12%, and Canada at 11%. (8) Frank Knight says it is “not” a global boom, however, because many countries are seeing modest price growth, and four are seeing price declines. Home prices in Malaysia, Morocco, India, and Spain are down between about 1 and 2% year-over-year. “The House that SHE Built” The so-called “House the SHE Built” is making a debut at Utah’s annual Parade of Homes. The 3,200-square foot custom-home was designed and built by an all-female construction team. It began as a local project in Sarasota Springs to encourage more women to take this career path, but grew into a national event that attracted women from across the country including engineers, designers, architects, landscapers, and skilled workers. Many provided the materials and the labor for free or at cost. (9) Proceeds from the sale of the home will be used in a number of ways to help women pursue a construction industry career. Some will go toward scholarships, while other funds will go toward charitable organizations geared to help women and educational events that teach young girls about home building opportunities. Check the show notes for links to further information about these stories at NewsForInvestors.com. Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://www.marketwatch.com/story/consumer-prices-soar-again-cpi-shows-and-shove-rate-of-inflation-to-a-13-year-high-11623328693 2 - https://www.marketwatch.com/story/jobless-claims-drop-to-post-pandemic-low-of-376-000-11623328772 3 - https://www.marketwatch.com/story/u-s-job-opening-leap-to-record-9-3-million-but-hiring-lags-well-behind-11623161366?mod=economic-report 4 - https://www.marketwatch.com/story/u-s-consumer-sentiment-rebounds-in-june-11623421938?mod=economy-politics 5 - http://www.freddiemac.com/pmms/# 6 - https://www.builderonline.com/design/consumer-trends/housing-demand-remains-strong-as-the-industry-celebrates-national-homeownership-month_o 7 - https://www.worldpropertyjournal.com/real-estate-news/united-states/irvine/real-estate-news-rising-home-equity-data-for-2021-corelogic-2021-housing-data-frank-martell-frank-nothaft-coronavirus-pandemic-impact-home-prices-in-2-12564.php 8 - https://www.worldpropertyjournal.com/real-estate-news/turkey/istanbul-real-estate-news/real-estate-news-global-home-price-growth-in-q1-2021-knight-frank-global-home-price-index-for-2021-turkey-property-news-covid-pandemic-impact-on-globa-12556.php 9 - https://www.builderonline.com/design/projects/all-female-built-home-makes-its-debut-at-utahs-annual-parade-of-homes_c

A London-based company is betting on the need for climate risk management for governments, companies, and investors around the world. Cervest just announced $30 million dollars in new venture capital funding to grow its climate intelligence platform called Earthscan. According to media website Axios, the money will be used to expand the company’s presence from London to the U.S. and other countries in Europe. (1) The Cervest website calls the service “on-demand climate intelligence.” It promises to help you “understand how current and future climate events will affect your physical assets.” Understanding Climate Change Risk Founder and CEO, Iggy Bassi, said in a press release: “Climate volatility has thrown us into a new era where climate intelligence needs to be integrated into all decisions. Organizations that fail to do so risk being blindsided by climate events such as the recent floods and fires in Australia, the droughts in Europe and the winter freeze in Texas.” (2) The new Earthscan platform is still under development, but you can see the kinds of information it will provide. You can also sign up for a spot in the company’s Early Access Program. (3) Cervest’s Earthscan Tool Earthscan is described as an on-demand asset-level risk analysis tool that combines statistical science and machine learning with public and private data. And it says it will make the Earthscan platform openly accessible to everyone for free. It calls this a “freemium model.” The company says Earthscan will look at data for things like flooding, droughts, and extreme temperatures going back 50 years, and use that data to forecast the risk to assets over the next 80 years. It says: “EarthScan equips all organizations with the climate intelligence needed to anticipate and act on climate risk to assets.” Cervest anticipates that climate intelligence will soon be a requirement for all major asset-related decisions. It claims that climate risk is business risk, and climate intelligence is business intelligence because climate events are expected to be a threat to assets everywhere. Climate Risk is Business Risk Of course, the impact and the timeline will vary from place to place. Cervest says that: “Climate intelligence can tell us what’s happening with any asset in the world, right now, as well as how it’s changed over time, and how it will change in the future.” The questions that Cervest says its tool will answer include: 1 - What are the physical risks to my assets? 2 - How will a changing climate impact my supply chains? 3 - What competitive opportunities will emerge? 4 - How can I calculate, disclose and comply with regulatory requirements now and in the future? Axios reports that Cervest has been growing the Earthscan database with asset data from around the world. And that by opening the platform up to the public for free, it will help connect all the stakeholders for a particular asset to the same data on climate risk. For example, that might be an investor, the bank that loaned the money to the investor, and a future tenant. Climate Risk as a Major Industry Axios says that Cervest isn’t the only player in this field. It mentions a few others including one called Jupiter Intelligence. It says Jupiter claims to have already signed contracts with the U.S. government, a major bank, several insurance companies, and two big U.S. cities. Jupiter CEO, Rich Sorkin, told Axios that he isn’t concerned about competition from Cervest. He says: “We believe that climate risk management will be a major industry, and we think there will be room for multiple companies.” Axios listed a few other climate risk companies such as Demex, First Street Foundation, the Rhodium Group, KatRisk LLC, and The Climate Service. Demex co-founder, Steven Bennett, says these companies can be divided into three types. He says that some focus on extreme weather events, while others assess the risk and help clients make plans for climate change events or they are designed to help customers operate within the context of those extreme events. The Axios report expects to see more climate risk companies emerging, as demand grows for this kind of data and the AI tools become more sophisticated. It also expects investor interest to rise which will help feed the growth of this space. So it may not be a big surprise to hear more about massive funding rounds for these kinds of operations in the near future. If you want to read more about this, check for links in the notes for this episode at NewsForInvestors.com. Click here to join RealWealth now, it's free and only takes a minute! Thanks for listening. I’m Kathy Fettke. Links: 1 - https://www.axios.com/prominent-investors-jump-into-climate-change-risk-47e0168b-d416-4338-a427-507f2304b8bc.html 2 - https://www.prnewswire.com/news-releases/cervest-secures-30-million-in-series-a-funding-to-launch-worlds-first-ai-powered-climate-intelligence-platform-and-lead-new-40-billion-market-301295454.html 3 - https://cervest.earth/

In this Real Estate News Brief for the week ending June 5th, 2021… a lawsuit over the CDC eviction moratorium is heating up, what remote workers are saying about going back to the office, and the important role that pets are playing in the homebuying process. Economic News We begin with economic news from this past week, and a job market that continues to improve. The weekly jobless report shows another pandemic low for initial jobless claims. They were down to 385,000, according to the Labor Department. That’s down from 405,000 for the previous week. More than 15.4 million Americans are still receiving unemployment benefits. (1) The latest home price report from CoreLogic shows that prices were up 13% year-over-year in April. That’s the highest annual gain since February of 2006. It’s been driven mostly by competition among buyers for a tight inventory of homes as well as the low mortgage rates. Economists say we might see slower price growth as more homes come on the market from builders and existing home owners who are no longer afraid to list because of the pandemic. (2) Builders have been busy. According to the Census bureau, construction spending was up 5.8% during the first four months of this year, compared to last year. For April, the monthly increase was 1.3% and the year-over-year increase was 9.8%. Private construction accounts for most of the increase. The building of new single-family homes tops that list. The Census Bureau shows a 39.5% year-over-year increase for single-family construction. (3) A record number of builders are also reporting material shortages which is driving up the cost of construction. The National Association of Home Builders says that appliances, lumber, engineered wood, and plywood are all topping the list. Many of the builders surveyed say they are seeing a serious shortage in those four categories. Windows and doors are also hard to come by along with trusses, copper wiring, plumbing fixtures, and vinyl siding. Actually, there’s some amount of shortage for all the things you need to build a home, but the ones I mentioned are the worst. (4) Mortgage Rates Average mortgage rates are still under 3% but they are 4 basis points higher than the week before. Freddie Mac says the average 30-year fixed-rate mortgage is 2.99%. The 15-year is 2.27%. (5) In other news making headlines... CDC Eviction Ban Heads to Supreme Court The plaintiffs in a lawsuit against the CDC Eviction Moratorium are taking their case to the Supreme Court. The moratorium is set to expire at the end of this month, if it isn’t extended before then. Realtor Associations in Georgia and Alabama along with two landlords and two property management companies lost an appeal this last week, and have now asked the U.S. Supreme Court to step in. They claim that landlords across the nation have lost more than $13 billion in unpaid rent because of the moratorium. They want the high court to block the CDC mandate, on an emergency basis. Many Workers Reject Office Return Many workers are telling their bosses they don’t plan to return to the office. According to a new survey commissioned by Bloomberg, 39% say they’d rather quit than go back to an in-person office situation. It was a nationwide survey of 1,000 people. And surprisingly, younger workers were the most likely to say they’d rather quit than go back to work at the office. About half of the millennial and Gen Z participants said no to office work. There’s been some talk that younger workers might prefer the camaraderie of an office environment. The results are similar to a recent survey by realtor.com that shows 60% of new homeowners are working from home. And about the same percentage prefer to continue their remote work positions. A lot of them said they will be looking for a new job if they are forced to go back to the office full-time. Buyers Want Feedback from Pets Pets are becoming an important part of the homebuying process. In a recent survey by Ally Home, 20% of the participants have brought their pets with them to look at homes. Almost 25% of women say they’ve done that while 15% of the men say they’ve gone house-hunting with Fido. Ally Home president, Glenn Brunker, says it makes sense because people want their pets to feel comfortable in the home. Millennials were the biggest group that said pets will influence their home-buying decisions. Many want a dedicated space for the pet, or maybe a bedroom that’s large enough for a bed that will accommodate their pet. In a survey last year by the National Association of Realtors, 81% of its members said they were animal lovers. And 43% wais they would consider moving to a more pet-friendly home. You’ll find links to our sources in the notes for this episode at NewsForInvestors.com. Click here to join RealWealth now, it's free and only takes a minute! Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.cnbc.com/2021/06/03/weekly-jobless-claims.html 2 - https://www.corelogic.com/blog/2021/5/home-prices-post-third-consecutive-double-digit-gain-in-april.aspx 3 - https://www.census.gov/construction/c30/pdf/release.pdf 4 - https://eyeonhousing.org/2021/05/record-numbers-of-builders-report-material-shortages/ 5 - http://www.freddiemac.com/pmms/ 6 - https://www.cnn.com/2021/06/03/politics/supreme-court-realtors-eviction-moratorium/index.html 7 - https://magazine.realtor/daily-news/2021/06/02/39-of-workers-say-they-ll-quit-if-remote-work-is-not-permitted 9 - https://magazine.realtor/daily-news/2021/06/02/expect-buyers-pets-on-home-tours

Airbnb just unveiled a big upgrade to its platform as the company gears up for a post-pandemic travel surge. (1) The upgrade includes more than a hundred changes with a focus on flexibility. Airbnb says that people need more flexible options because they are traveling more often, searching for new destinations, and are staying for longer periods of time. Airbnb says the changes it made to its platform were inspired by a comprehensive analysis of its booking data and travel has changed because of the pandemic. According to the Airbnb Report on “Travel & Living”: “We are shifting from traveling at all the same times to all the same old places, to many of us living anywhere, at any time, for however long.” Airbnb describes this as “a world in which living and traveling are one and the same.” (2) Airbnb’s Report on Travel & Living The report says the number of people who see traveling as more of a lifestyle today is almost the same as the number of people who see traveling as a series of individual trips. People in five countries and three U.S. states answered the question. The five countries included the United States, the United Kingdom, Mexico, France, and Australia. The overall percentage was 39% for travel as a lifestyle and 43% for one-off trips. Florida had similar results but the survey participants in California and New York leaned even more heavily toward “travel as a lifestyle.” Airbnb calls this kind of travel shift a “blurring of traveling and living” with three key trends. The first one is that “people are less tethered and more flexible on when they can travel.” Researchers say the number one response from people surveyed in those five countries is that they would travel more often because they can -- thanks to the ability to work and study remotely. Second, people are traveling to a wider range of destinations. They are shifting toward the road less traveled and trying out new locations. For example, Airbnb says there was a big jump in the number of people searching for natural settings such as mountain, coastal, and rural destinations. But they are also looking for places within 300 miles of home, just not the usual places. And third, people are staying for longer periods of time at their destinations. Airbnb says the average length of stay has grown from 3.5 nights in 2019 to more than 4 nights in April of this year. It also found that long-term stays of at least 28 nights have almost doubled. Those accounted for 14% of the bookings in 2019 compared to 24% of the bookings in the first quarter of 2021. More than half of those long-term guests said they were also working or studying during their stay. The New “Live Anywhere” Trend This “live anywhere” trend appears to be growing, as well. 74% of the people surveyed said they would like to live someplace other than where their employer is based. 11% of those surveyed described their lifestyle as “nomadic.” And 5% said they plan on giving up their homes to live full-time in Airbnbs. In support of this new trend, Airbnb is offering three new ways to search on Airbnb. The new tools are called: Flexible Dates, Flexible Matching, and Flexible Destinations. Flexible Dates allow a person to search for a weekend getaway, a week-long vacation, or a month-long stay, for example. That opens up the possibility for getting a place that might not show up if you specify dates because of a reservation overlap with someone else. Flexible Matching will show results that might be slightly outside your search area, or slightly higher than the price you specified. And Flexible Destinations offers a way to find unique places that you wouldn’t know to search for. These are one-of-a-kind properties that have apparently grown in number just recently. Airbnb says: “From adobe houses to wagons, Airbnb has over 170,000 one-of-a-kind properties to choose from and the number of searches for these unique listings has grown 94% so far in 2021 compared to the same period in 2019. Airbnb has also added new filters to help people fine-tune their search results. That might include locations near certain points of interest such as a national park, and properties with specific attributes like an ocean view or a wood-burning fireplace. Other changes make it easier for people to become a Host. The process has been whittled down to just 10-steps. The program is smart enough to help arrange photos, and will auto-fill some of the details with public real estate data. Changes for guests include a faster checkout process, an easy-access arrival guide, a more robust review process, and easier-to-understand cancellation policies. Airbnb is expecting a travel rebound “like no other” as more and more people feel safe enough from COVID-19 to travel. CEO Brian Chsky also shared another interesting tidbit with CNBC. He said Covid was sort of a reset button for Airbnb’s relationship with cities. He says: “A lot of cities that had too much tourism before... now have under-tourism. And they are reaching out to us.” He says: “We had over a hundred destination marketing organizations reach out to us asking us for help to drive demand towards them.” (3) There’s lots more data in this report. If you’d like to learn more, you’ll find a link to the report in the notes for this episode at NewsForInvestors.com Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://news.airbnb.com/2021-release/ 2 - https://news.airbnb.com/wp-content/uploads/sites/4/2021/05/Airbnb-Report-on-Travel-Living.pdf 3 - https://www.cnbc.com/2021/05/24/airbnbs-big-new-update-is-focused-on-flexibility-heres-whats-new.html

In this Real Estate News Brief for the week ending May 29th, 2021... what the GDP is expected to do in the second quarter, how much single-family rents have shot up, and what developers are saying about off-the-grid homes. Economic News We begin with economic news from this past week. The latest update on the GDP shows the first quarter holding at 6.4%. Economists had expected a revision to 6.6% but stronger imports apparently offset an increase in consumer spending. (1) Looking ahead to the second quarter, economists are expecting an annualized growth rate of 8.2%. And JP Morgan Chase CEO, Jamie Dimon, thinks we’ll continue to see this kind of growth for the next few years. Inflation hit a 13-year high in April. According to the PCE index, it jumped to 3.6%. (2) That’s the strongest reading of the personal consumption expenditure index since 2008. It’s also well above the Federal Reserve’s 2% goal. Great news on the job market. The government reports just 408,000 new unemployment claims for last week. (3) That’s the lowest number we’ve seen since the pandemic began. The biggest declines in new claims happened in the states of Washington, Florida, New Jersey, Texas, and Ohio. Oklahoma was the only state with a big increase. Both new home sales and pending home sales for existing homes were down in April. The Census Bureau says new home sales fell 6% on a seasonally-adjusted annual basis. (4) The National Association of Realtors reports that pending home sales were down 4.4%. (5) Both are much higher than they were in April of 2020 however, but the pullback likely reflects higher prices and inventory issues. Prices have been soaring across the country. The latest S&P CoreLogic Case-Shiller 20-city home price index shows a 1.6% increase from February to March. (6) On an annualized basis, prices are up 13.3%. Phoenix, San Diego, and Seattle prices have been rising the fastest. Phoenix prices are up 20% while the other two cities are close to that. Consumers are apparently worried about inflation. Consumer confidence dipped slightly in May. It’s the first time in six months that the Conference Board reported a down month. (7) The University of Michigan had similar results for its consumer sentiment index. (8) Both reports say consumers are feeling less secure about the economy because they are paying higher prices for almost everything. Mortgage Rates Mortgage rates are still below 3% for a second week in a row. Freddie Mac says the 30-year fixed-rate mortgage was down 5 basis points to 2.95%. The 15-year was down 2 points to 2.27%. (9) In other news making headlines… Lenders Speeding Up Days to Close Lenders are shortening the time it takes to close after a pandemic rush on loan applications that increased their workload. A report from ICE Mortgage Technology shows that the average number of days to close on a purchase was just 51 days in April. (10) For refinancing, it was 53 days. A year ago, it took 42 days for a purchase and 39 days to refinance. ICE president, Joe Tyrrell, says that lenders are able to get the job done more quickly because of digital mortgage technologies. Lenders Ready to Resume Foreclosures Lenders are preparing for the end of the foreclosure moratorium. It’s set to expire on June 30th, and realtor.com says that some lenders are planning to move forward with foreclosures, but some banks plan to hold back. (11) Bank of America says that most clients are now current and it plans to work with the remaining few who need help. JP Morgan also says that about 90% of the people seeking forbearance have now exited those programs. Wells Fargo recently said that it plans to extend the moratorium on its loans until the end of the year. That’s in line with a proposed rule by the Consumer Financial Protection Bureau which would prevent foreclosures from happening until 2022. Rent Growth is Picking Up Speed Rent growth has been picking up speed. CoreLogic says that single-family rents were up 4.3% in March compared to a year ago. Back then, the year-over-year increase was 3%. Rents are rising faster because demand is so strong for single-family rentals. They are also rising much faster than apartment rents. According to Real Page, apartment rents were up 1.3% year-over-year. Demand Grows for Off-Grid Homes Demand is growing for off-the-grid homes, as climate change and natural disasters result in more and more power failures. CNBC reports that major blackout events are up about 60% from 2015. These have been caused by hurricanes along the Atlantic coast, a freak ice storm in Texas, a horrendous number of wildfires in California, and other events. That includes rolling blackouts that have become somewhat common on very hot days. Grid shutdown in the midst of wildfires inspired one California developer to produce self-powered homes. Dvele homes have solar, battery back-ups, better insulation, and smart technology that use much less energy, and can operate without the grid, if there’s an emergency. Off-the-grid living isn’t just for remote extremists anymore. The CEO of home improvement website Rise, Matthew Daigle, says: “I think you’re going to see more and more people looking for ways in which they can protect themselves as there are increased risks from storms, more utility disruptions, and more need for resiliency.” You’ll find links to all these stories in the show notes at NewsForInvestors.com. Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://www.marketwatch.com/story/u-s-gdp-expanded-at-unrevised-6-4-rate-in-first-quarter-11622119270?mod=economy-politics 2 - https://www.marketwatch.com/story/another-key-u-s-inflation-gauge-surges-in-april-and-hits-13-year-high-11622205893?mod=economic-report 3 - https://www.marketwatch.com/story/unemployment-claims-fall-to-new-pandemic-low-of-406-000-11622119426?mod=economic-report 4 - https://www.marketwatch.com/story/new-home-sales-slump-as-rising-construction-costs-give-buyers-and-builders-pause-11621952602?mod=economic-report 5 - https://www.marketwatch.com/story/pending-home-sales-sink-as-the-housing-market-returns-back-to-earth-11622125381?mod=economic-report 6 - https://www.marketwatch.com/story/home-prices-rise-at-fastest-pace-since-2005-as-housing-grows-more-expensive-in-every-part-of-the-country-11621948739?mod=economic-report 7 - https://www.marketwatch.com/story/consumer-confidence-slips-in-may-for-first-time-in-six-months-on-worries-about-jobs-and-inflation-11621952096?mod=economy-politics 8 - https://www.marketwatch.com/story/consumers-are-feeling-the-pinch-from-higher-inflation-sentiment-survey-shows-and-they-dont-like-it-11622211423?mod=economic-report 9 - http://www.freddiemac.com/pmms/ 10 - https://magazine.realtor/daily-news/2021/05/27/lenders-are-shortening-closing-times 11 - https://magazine.realtor/daily-news/2021/05/28/some-lenders-set-to-resume-foreclosures-in-july 12 - https://www.cnbc.com/2021/05/25/get-ready-rents-are-rising-fast-again-even-in-san-francisco.html 13 - https://www.cnbc.com/2021/05/21/climate-change-creates-demand-for-off-the-grid-homes-.html

The U.S. Senate is taking a close look at the YIMBY Act. The Yes in My Backyard legislation was first introduced in 2019, but was put on hold because of the pandemic. It addresses the national housing shortage by encouraging local policies that will increase affordable housing, including changes to zoning restrictions in single-family neighborhoods. Republican Senator Todd Young of Indiana and Democratic Senator Brian Schatz of Hawaii reintroduced the YIMBY Act a few weeks ago. (1) YIMBY is a reaction to the well-known NIMBY concept for Not in My Backyard. Inside the YIMBY bill is a list of 20 policies that local governments or states could adopt to increase housing affordability and availability. HUD Block Grant Funding Although the bill doesn’t mandate the adoption of these policies, it requires the elimination of discriminatory land use policies and affordable housing barriers before jurisdictions receive HUD block grant funding. To qualify for the annual grants, jurisdictions would have to submit reports to the U.S. Housing and Urban Development at least once every five years. The reports would identify which policies a jurisdiction has implemented or is in the process of implementing and how they are being implemented. For the policies that are not being adopted, the jurisdictions must explain why that can’t happen. A similar bi-partisan bill was passed in the House about one year ago, in March 2020. That legislation also included a policy list that is basically the same as the one in the Senate bill. Policies in the YIMBY Act At the top of the list are policies that would increase housing density in single- and multifamily neighborhoods. One policy also targets single-family neighborhoods exclusively by proposing they be zoned to allow duplexes, triplexes and fourplexes. Another one encourages zoning that allows the subdividing of single-family homes into duplexes. The bill also proposes that zoning rules include manufactured homes and prefabricated structures. Other entries on the list encourage multifamily development in retail, office and light manufacturing areas, single-room occupancy development within multifamily housing, smaller lots, and fewer buildings that are protected by historic preservation codes. The legislation also wants to see easier and faster permitting for affordable housing projects, the elimination of off-street parking requirements, and the conversion of empty office space to apartments. (There may be plenty of empty office space for that last one, if companies don’t bring all their employees back from their remote work positions.) Both lists include the lifting of restrictions on accessory dwelling units for single-family properties. And the Senate bill trades the last four policies on the House bill for two others which include the legalization of short-term home rentals and the legalization of home-based businesses. The four House policies include bonuses for housing density, fewer height restrictions on buildings, tax abatement for higher density developments, and the donation of land for affordable housing development. YIMBY Support from Housing Groups More than a hundred affordable housing groups just sent a letter to Senate lawmakers in support of the YIMBY Act. (2) It says in part: “The YIMBY Act is vital for encouraging communities to build more affordable and market-rate housing. This need will only grow as the country recovers from the economic and public health impacts of COVID-19.” It says the legislation is: “An essential first step in decreasing barriers to new housing at all price levels.” All the big real estate and mortgage groups signed on to the letter, along with many smaller state and local organizations. The Washington D.C.-based National Housing Conference was one of them. President David Dworkin told HousingWire that local governments are often given money for affordable housing but don’t end up putting it to its best use because of NIMBY opposition. (3) He says, instead, local officials may sign off on something that is easier to swallow for the NIMBYs. As HousingWire reports: “The politics of the YIMBY Act is tricky. There is no organized opposition in Washington to the bill. You won’t find a national NIMBY group.” The article basically says the issue will blow up at the local level when community members become concerned about a proposed project. Advocates might say that this legislation is a way to mandate more of a YIMBY attitude toward housing. You’ll find links to the legislation and the letter in the show notes for this episode at: NewsForInvestors.com Click here to join RealWealth now, it's free and only takes a minute! Links: 1 - https://www.young.senate.gov/imo/media/doc/YIMBY%20Act.pdf 2 - https://www.housingwire.com/articles/housing-groups-organize-against-nimbys/ 3 - https://www.young.senate.gov/imo/media/doc/YIMBY_Coalition_Support_Letter_2021-05-13.pdf

Warren Buffett is launching a new business venture that could shake things up in the building industry. A Berkshire Hathaway-owned construction company has teamed up with a New York City architect on a new way to make modular mainstream. The plan is based on a way to make the modules more transportable and keep local contractors and workers involved. First reported by the Wall Street Journal, the initiative launched last week between tech-construction company MiTek and Architect Danny Forster. (1) They started working on this initiative about a year ago with backing from Berkshire Hathaway. The investment is reportedly worth millions of dollars. Modular Units Would be Collapsible The modular units would be made of steel boxes that can be attached to and stacked onto other units. But unlike the bulky building blocks of other modular construction projects, these will be made to “fold” so they can be transported more easily. As reported by Fast Company: “Instead of large steel boxes that have to be carefully routed under bridges and overpasses on the back of a truck, MiTek’s collapsible modules fold flat, easing transportation to job sites.” (2) The folded shells will then be shipped to warehouses close to the building sites. The rest of the “pre-assembly” can take place at those locations before they are moved to the jobsite. That one change is significant because it means these collapsible modules can be shipped more economically at a much greater distance from the factory. Transportation costs are something that have apparently held other modular companies from growing. Pre-Assembly Finished at Local Level Also, by doing much of the assembly at the local warehouse, with local employees, there’s less chance of a push back from labor unions and local officials who can say yay or nay to a project. Forster told Fast Company he’s run smack into a solid steel wall when it comes to getting approval for a project that sidesteps the labor unions. He says: “The unions have told us very clearly there’s no way in hell you’re shipping in a building from offshore or even from out of state. They’ve said if it’s not 40 miles from the job site and local labor’s not participating, it’s not happening in downtown San Francisco.” That project is still in the process of getting city approval, but it appears that it may be in line for MiTek’s new collapsible modules. They will be initially built at a 250,000-square foot factory in Lebanon, Pennsylvania, and shipped from there to construction sites. General contractors will be hired to get them fully built at the local level. But the modules will be designed to make it faster and easier to do the finish work from pipes and electrical wiring to windows and doors. Two Prototypes Already Built The MiTek team has already built two prototype “rooms” that could be used for a hotel project. MiTek’s Todd Ullom says: “We took the plumbing process from 16 labor hours down to 4 hours and 10 minutes. We’re trying to create the NASCAR pit crew for construction.” Making the process more efficient is a challenge when it comes to negotiating with a contractor, because it means fewer hours for workers. Ullom feels it will take some time for this process to gain acceptance. He says the company will be spending the rest of the year fine-tuning the process, and hopes to begin module production in 2022. But it isn’t just the manufacturing process that needs tweaking. There’s a lot of work to be done talking to contractors who need convincing, and local officials who control the permitting and inspecting of projects. MiTek is reportedly in high-level talks with two national builders, but there’s no word on which ones. A Better, More Efficient Process The goal is to bring down construction costs and speed up the building process. Forster told Architectural Digest that there needs to be a “better, more efficient process” but so far, modular construction has only realized limited adoption. (3) The challenge is to get a large number of stakeholders on board including insurance companies, designers, developers, investors, lenders, materials testing people and others. He says: “I’ve spent a lot of years on this bumpy ride and right now we’re trying to fix potholes before we start chasing business. He says MiTek will build modular rooms for hotels and apartment buildings, including senior living and affordable housing. He rejects the idea that their modular concept will lead to cookie-cutter buildings. He says they are creating a “system for architecture” and not an “off-the-shelf box” that will appear all over America. He says they are working on getting this right, and are not in a rush to get this to market. He says: “This probably comes from Mr. Buffett. Not a lot of companies can say I’m taking a 10-year look at this.” If you’d like to read more about the MiTek Modular Initiative, you’ll find links in the show notes at NewsForInvestors.com Click here to join RealWealth. It's free and only takes a minute. Links: https://www.wsj.com/articles/warren-buffett-to-offer-a-new-spin-on-modular-construction-11621339201 https://www.fastcompany.com/90637837/how-a-berkshire-hathaway-company-is-quietly-planning-to-disrupt-the-construction-industry https://www.architecturaldigest.com/story/warren-buffett-offer-fresh-approach-modular-construction

Investor interest in single-family rentals is making a post-COVID comeback. A new report by Redfin shows an increase in the purchase of single-family homes by investors after three straight quarters of declines during the pandemic. Redfin says there was a 2.7% increase in the number of homes bought by investors during the first quarter of this year. That’s about 1 in every 7 homes compared to about 1 in every 10 homes during the previous three quarters. Cautious Approach During Pandemic Redfin says that investors held back at the beginning of the pandemic and were slow to jump back in. Even though the housing market recovered quickly, many investors took a more cautious approach because of job losses, unpaid rents, and the eviction moratorium. Redfin’s senior economist, Sheharyar Bokhari says: “Investors are likely starting to feel more comfortable because the economy is in recovery mode.” And, they may also see the declining inventory of homes as an opportunity because a lot of families who’d like to buy a home will end up renting. He says many investors have the cash and can easily add these homes to their portfolios. Real Estate More of a Safe Haven Redfin’s chief economist, Daryl Fairweather, calls it “a relatively safe bet right now.” If you’ve been following the stock market, you know that it’s been extremely volatile. Even with home prices rising as fast as they have, real estate has been more of a safe haven than the stock market. And the higher-priced homes are getting a lot of that attention. Redfin says that the purchase of expensive homes by investors was up almost 20% year-over-year in the first quarter, while the purchase of mid-priced homes was only up 12.7%. Low-priced homes were up 9.2%. That last number may have something to do with the lack of inventory at the lower price levels. Home prices for those three tiers average about $429,000 for expensive, $272,000 for mid-priced, and $184,000 for affordable. Bidding Wars for Luxury Homes Getting an even bigger piece of the pie are luxury homes. Redfin says there was a 41% increase in the purchase of luxury homes by investors year-over-year in quarter one. Those are homes selling for an average of almost a million dollars. The National Association of Realtors’ chief economist, Lawrence Yun, says there’s more activity at the upper end because there’s less of an inventory problem. But it’s also very competitive. A recent article in SFGate talks about bidding wars in the San Francisco East Bay and said that homes are often selling for $1 million over asking. Investors Buy 1 in 5 Affordable Homes But Redfin says while the biggest jump in purchase activity among investors occurred at the upper end, the largest share of homes purchased by investors was at the lower end. In just that part of the market, 1 in 5 single-family homes sold in the U.S. was bought by an investor. Miami topped the list of cities with the largest market share of single-family homes purchased by investors. Atlanta was next, followed by Jacksonville, Charlotte, Las Vegas, and Phoenix. Interest in Smaller Markets Growing The report confirms investor interest in smaller markets is growing. It says: “In recent years, investors and individual homebuyers alike have crowded into mid-sized cities that are more affordable than major hubs like San Francisco and New York. This trend has been accelerated by the pandemic, with so many Americans suddenly able to work from anywhere. These markets have become increasingly competitive for buyers.” You’ll find links to those reports in the notes for this episode at NewsForInvestors.com Links 1 - https://www.prnewswire.com/news-releases/investor-home-purchases-rise-for-first-time-in-a-year-as-us-economy-bounces-back-301294921.html 2 - https://www.housingwire.com/articles/investors-are-buying-up-single-family-homes-across-the-us/

In this Real Estate News Brief for the week ending May 22nd, 2021... the government’s rental assistance program is helping landlords, rent growth speeds up, and the housing boom is adding value to opportunity zones. Economic News We begin with economic news from this past week, and a Treasury Department announcement that it has distributed $6 billion in rental assistance in the last two weeks. And more money is on the way. (1) A total of $21.6 billion was allocated to the program as part of a stimulus package approved in March. Another $25 billion had been approved in December. The funding is important to help pay off tenant debt to landlords as eviction moratoriums expire. More Americans are heading back to work. The latest unemployment report shows that initial jobless claims were down 34,000 last week, to 444,000. (2) That’s the lowest number we’ve seen in more than a year. More than 16 million people are still getting unemployment checks, but that number is also decreasing. Several states say they plan to stop offering the additional $300 a week in federal benefits, to encourage people to get back to work. That program is supposed to end on September 6th. CNBC reports that a few states are also offering a one-time bonus for people who start working again. Those states include Arizona, Montana, New Hampshire and Oklahoma with bonuses ranging from 500 to $2,000. (3) The latest round of housing data shows another drop for existing home sales. The National Association of Realtors says they fell 2.7% in April to a seasonally adjusted annual rate of 5.85 million homes. (4) It’s the third month in a row that sales fell as the inventory crunch continues. NAR’s chief economist, Lawrence Yun, expects to see more inventory “as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes.” Residential construction was also down in April. The U.S. Census Bureau reports a 13% decline in month-to-month single-family home starts. Permits were also down by 4%. (5) Economists had expected better numbers. Senior economist, Andrew Grantham, at CIBC Capital Markets told MarketWatch that the decline is probably the result of material shortages such as lumber, and possibly labor as well. That decline didn’t hurt builder confidence. The National Association of Homebuilders reports that the monthly index held steady in May. (6) Although builders face challenges, the NAHB says that builders remain confident about the strength of the housing market. Mortgage Rates Mortgage rates returned to that 3% level this last week. Freddie Mac says the average 30-year fixed-rate mortgage was up 6 basis points to exactly 3%. The 15-year was up 3 basis points to 2.29%. (7) In other news making headlines... Rent Growth Speeds Up Rent growth sped up in March to its fastest pace since the beginning of the pandemic. Realtor.com says the median rent in the 50 biggest metros was up 2.7% year-over-year. Before COVID-19, the annual rate was 3.2%. (8) Realtor.com says that two-bedroom units are seeing the most growth. They were up 5.2% annually. The website’s chief economist, Danielle Hale says: “If the trend continues, renters could expect to be paying pre-pandemic rates by as early as this fall.” Tech hubs still have a ways to go because rents were high, and they fell the most as employees worked remotely from less expensive areas. But tech companies are announcing return-to-office plans, so rents in the tech hubs are starting to turn around. Median Home Price Hits New High Redfin is reporting a new high for the median home price. According to its researchers, the national median home price hit $370,528 in April. That’s a 22% increase from a year earlier. (9) That percentage may be somewhat skewed because people weren’t buying many homes in April of last year, but Redfin’s chief economist, Daryl Fairweather says that the tight inventory will keep those prices climbing. She says it’s going to take years for builders to catch up and the housing boom is far from over. In April, for-sale homes only spent an average of 19 days on the market. Redfin says that 49% of them sold for more than the asking price. Both are new records. California Home Prices The national home price numbers pale in comparison to California. NAR says the median there has flown past $800,000 for the very first time. (10) The new median home price for California is $813,980. That’s up 7.2% from March and it’s up 34% from the previous year. Again, that year-over-year percentage is probably skewed because of the pandemic lockdown. Prices Rise in Opportunity Zones The housing boom is also adding value to opportunity zones. Those are federally designated areas that need the help of investors. In exchange for long-term opportunity zone investment, they will get tax breaks. The program was approved as part of the Tax Cuts and Jobs Act of 2017. According to ATTOM Data Solutions, two-thirds of those areas have seen home price growth of at least 10% in the first quarter of this year. (11) Prices are still much lower than the rest of the nation. Researchers say that about 43% of the zones have median home prices that are less than $150,000. But the percentage is going down. A year ago it was 50%. You’ll find links to the stories and reports I’ve referenced in this podcast at www.NewsForInvestors.com Links: 1 - https://home.treasury.gov/news/press-releases/jy0193 2 - https://www.marketwatch.com/story/u-s-unemployment-claims-continue-to-set-pandemic-lows-11621514795?mod=economy-politics 3 - https://www.cnbc.com/2021/05/21/states-ending-unemployment-offering-a-return-to-work-bonus-up-to-2000.html 4 - https://www.marketwatch.com/story/existing-home-sales-fall-for-third-straight-month-as-inventory-constrain-hamper-the-housing-market-11621606928 5 - https://www.marketwatch.com/story/construction-on-new-homes-retreats-as-builders-grapple-with-supply-chain-headaches-11621342845?mod=economic-report 6 - https://www.marketwatch.com/story/home-builder-confidence-remains-strong-but-buyers-should-expect-rising-prices-11621260739?mod=economic-report 7 - http://www.freddiemac.com/pmms/# 8 - https://magazine.realtor/daily-news/2021/05/20/rents-post-largest-uptick-since-covid-19-onset 9 - https://www.housingwire.com/articles/home-prices-rapidly-climbing-toward-375000/ 10 - https://www.wealthmanagement.com/sfr/california-home-prices-shoot-past-800000-first-time 11 - https://magazine.realtor/daily-news/2021/05/20/prices-surge-in-opportunity-zones 12 - https://magazine.realtor/daily-news/2021/05/20/buyers-go-to-crazy-extremes-to-win-a-home

We’ve been hearing a lot about the risk of inflation lately. With government money flooding into the market and the economic recovery in high gear, we’ve already seen some price jumps. The Federal Reserve has tried to calm fears by telling us that prices will settle back down, but rent prices are probably not among them, and higher rents, or what’s known as shelter inflation, is a big part of the Consumer Price Index. A recent Business Insider blog makes a case for rent growth as a catalyst for inflation -- that rents are starting to go up after a decline during the pandemic, and are not likely to “settle back down.” (1) The blog cites Morgan Stanley economists who say that rent prices are “flashing signs of more persistent inflationary pressures” and Goldman Sachs economists who say “special factors that suppressed inflation during the pandemic” have eased up. They feel that as other prices rise and pull back because of the reopening, that rents will continue to accelerate and will likely bring permanent inflation above 2%. The central bank expects to see inflation rise above 2%, but not forever. The Fed likes that 2% mark, but is willing to let it run above 2% because it had run below 2% for such a long time. If inflation runs past the Fed’s sweet spot and stays there for too long, we may see some changes in the Fed’s strategy, such as short-term interest rate hikes. But what economists are all trying to predict is exactly where inflation will go from here. What I found interesting about the current situation is the role that higher rents would play in this scenario, and that shelter inflation may not be an accurate measurement. Primer on Shelter Inflation To understand this kind of impact, it’s important to understand what policymakers are looking at. In this case, it’s shelter inflation which tracks housing costs based on rent levels, and it’s a major part of the CPI basket. Home prices don’t figure into this calculation however. It’s based on rent that tenants are paying, which is based on real numbers, and the “implicit rent” that owner occupants would pay if they were paying rent on their homes, which is hypothetical. The Labor Department collects this data from its Consumer Expenditure Survey. One of the questions posed to homeowners is what their home would rent for, in their opinion. The answer is called the “owner’s equivalent rent” and it’s up to the owner to provide that information. A recent Bloomberg opinion piece shows why this could spell trouble for calculating real inflation, because homeowners don’t adjust as quickly as the market does to pricing pressures. (2) Owners' Equivalent Rent According to that blog, the owners’ equivalent rent increased 2% this last April compared to a year earlier, while the National Association of Realtors reported a 16.2% increase in year-over-year home prices during the first quarter of this year. Bloomberg’s author, Brian Chappatta, says: “This kind of wide discrepancy, unseen since the mid-2000s housing bubble, could have significant consequences for reported inflation statistics and monetary policy in the world’s largest economy.” Goldman economists are expecting shelter inflation to push overall inflation permanently higher. As reported by Business Insider, they expect shelter prices to increase 3.8% year-over-year by the end of next year, and rise above 4% in 2023. And they don’t expect it will be temporary. This isn’t a direct correlation to higher home prices, but economists say that home price growth does eventually impact shelter inflation. It just takes a while. Data Discrepancy Chappatta said in his Bloomberg piece that the owners’ equivalent rent “understates the price appreciation in the housing market relative to the S&P CoreLogic Case-Shiller U.S. National Home Price Index. He says the owners’ equivalent rent has gone up 31.5% over the past decade while home prices have risen more than 73%. That’s a big difference. He said that he doesn’t believe this kind of measure is completely bogus, but that it doesn’t do a good job as an economic indicator, mostly because homeowners aren’t well-enough informed to provide market-based rent hypotheticals. It doesn’t help that the pandemic is also skewing the current set of data points. Rent Hypothetical Needs Scrutiny Chappatta says there will always be questions concerning inflation but he says: “The Labor Department’s rent hypothetical should receive extra scrutiny.” And that’s especially important right now, as the nation navigates an economic recovery unlike any other in our history. If you like our podcast, please subscribe. If you’d like more information about the housing market, real estate, and how you can make real estate work for you, please join RealWealth at NewsForInvestors.com Thanks for listening. Links: 1 - https://www.businessinsider.com/inflation-outlook-shelter-rent-prices-price-growth-permanent-economist-forecasts-2021-5 2 - https://www.bloomberg.com/opinion/articles/2021-05-13/april-cpi-housing-may-be-inflation-s-hidden-danger

In this Real Estate News Brief for the week ending May 15th, 2021... a surprise jump in consumer prices, a looser lending environment, and how government regulations impact home prices. Economic News We begin with economic news from this past week that includes a few good reports on the job market. Unemployment claims fell again, to a new pandemic low. Initial state claims are now down to 473,000. That’s the fifth week in a row they have dropped, and reflects a huge hiring effort by U.S. companies as the economy continues to recover. The March report on job openings shows 8.1 million unfilled positions. That’s up from 7.5 million in February. They had dipped to as low as 4.6 million soon after the start of the pandemic. But the problem now is finding enough qualified employees to fill all those jobs. Some people blame generous unemployment benefits, while others argue that many parents have kids at home and no childcare, or that COVID-19 may still be a threat for some people, especially those who are not vaccinated. New evidence of inflation caused some panic on Wall Street this last week. There was a sharp stock sell-off after the government reported the steepest rise in consumer prices since 2009. The Labor Department says the index was up .8% in April which is almost a half point higher than economists had predicted. Year-over-year, the rate of inflation has gone from 2.6% in April of last year to 4.2% this year. The Federal Reserve believes that this is temporary because the economy is recovering so quickly. The central bank believes that prices will settle back down with inflation numbers falling back to a long-term goal of 2%. Some economists also say that the current rate of inflation is exactly where it would be if the pandemic had never happened. The stock market did bounce back on Friday, but inflation concerns will likely persist. The University of Michigan blames those kinds of worries for a decline in consumer confidence. The index fell six points in May from around 88 to 82. Mortgage Rates Inflation hasn’t done much with mortgage rates, so far, which is great for home buyers. The thirty-year fixed-rate mortgage is still under 3%. It was down 2 basis points this last week to 2.94%. The 15-year was down 4 points to 2.26%. It’s been ticking lower for the last month but rates are expected to climb somewhat higher by the end of this year. In other news making headlines... Lenders Making It Easier to Get a Loan Homebuyers may find it a little easier to get a loan as lenders compete for their business. The Mortgage Bankers Association says that the Mortgage Credit Availability Index was up 5% last month for conventional loans, 7% for jumbo loans, and 13% for conforming loans. That suggests a loosening of credit standards as the economy recovers and the housing market continues on an upward trajectory. First-time home buyers are also flooding into the market. According to data from the National Association of Home Builders and Wells Fargo, 43% of the new homes are going to first-time home buyers so far this year. That’s up from 32% in 2018. The High Cost of Government Regulation We’ve heard a lot about the high cost of lumber and how that’s impacting new home prices, but that’s chump change next to the cost of government regulations. The National Association of Home Builders say that 23.8% of the average sales price on new single-family homes is due to regulations during construction. If your average sales price is $397,000, you are paying about $94,000 in fees. NAHB chairman, Chuck Fowke, told the World Property Journal: “This study illustrates how overregulation is exacerbating the nation’s housing affordability crisis and that policymakers need to take bold steps to reduce or eliminate unnecessary regulations that will help builders increase the production of quality, affordable housing.” Rising lumber prices have added another $36,000 to the price of a new home. Those costs were not part of this study. Existing Homes Now More Pricey Than New Ones The median price for existing homes is now higher than the median price for a new home. The National Association of Realtors says the price for an existing single-family home is now $334,500, while the Census Bureau says the median for a new home is $330,800. This flip-flop on value hasn’t happened for more than 15 years, but economists say it doesn’t mean that existing homes are truly more expensive. They say the lack of low-priced existing homes and the continued demand for high-priced homes has skewed those numbers higher, and that an increase in less expensive new homes has skewed those numbers lower. NAHB chief economist, Robert Dietz, says that new homes are still more expensive on a per-square-foot basis. The Quicken Loan Name to be Retired Quicken Loans will officially change its name to Rocket Mortgage this July. Quicken founder, Dan Gilbert, introduced Rocket Mortgage five years ago as a digital mortgage service. The company now plans to put the entire mortgage process online under the Rocket Mortgage name, so Quicken Loans will be permanently retired on July 31st. Click here to join the network for free! Links: www.NewsForInvestors.com https://www.marketwatch.com/story/unemployment-claims-fall-to-pandemic-low-as-businesses-seek-to-hire-more-workers-11620910124?mod=economic-report https://www.marketwatch.com/story/u-s-job-openings-soar-to-record-8-2-million-but-businesses-say-they-cant-find-enough-workers-to-hire-11620742194?mod=home-page https://www.marketwatch.com/story/u-s-inflation-climbs-in-april-to-the-highest-level-in-13-years-cpi-shows-11620823628?mod=mw_latestnews https://www.marketwatch.com/story/u-s-consumer-sentiment-index-slumps-unexpectedly-in-may-11621002642?mod=economic-report http://www.freddiemac.com/pmms/ https://www.housingwire.com/articles/volume-hungry-mortgage-lenders-loosen-credit-standards/ https://www.worldpropertyjournal.com/real-estate-news/united-states/washington-dc-real-estate-news/real-estate-news-national-association-of-home-builders-nahb-regulatory-costs-to-new-home-prices-in-2021-chuck-fowke-government-regulations-for-homebui-12511.php https://magazine.realtor/daily-news/2021/05/06/are-existing-homes-really-more-pricey-than-new https://www.housingwire.com/articles/quicken-brand-will-be-officially-retired-on-july-31/

The housing market is firing on all cylinders, and it’s revving up for a home sale record. Redfin is forecasting $2.5 trillion in U.S. home sales this year. That’s more than the GDP of France, and about equal to the combined value for Amazon.com and Facebook. Redfin says home sales will probably rise about 17% year-over-year in 2021. That would be a bigger jump than we saw during the pandemic last year, when demand skyrocketed for single-family homes. It will also be the biggest jump in sales since 2013. As we’ve been reporting, the housing market has gone through a huge transformation because of the pandemic. It brought mortgage rates to a record low and triggered a migration of people to new markets because of the remote work trend. In April, Redfin conducted a survey among remote workers and about 60% of those people expect to continue working from home at least part time. That kind of shift is work habits and demand for work-at-home space has helped to push home sales higher. And that’s despite a critically low inventory that is also pushing home prices higher. March has already set several new records in the housing industry including home values, sale price and number of days on the market. If mortgage rates rise, home price growth may slow down a bit. Redfin Chief Economist Daryl Fairweather says that would give us a more balanced market and would also lead to MORE home sales. He says: “We expect 2021 to be an even more active year for the housing market than 2020 because homebuyers have a better sense of what the future looks like. Employers are providing clarity on permanent remote work policies, the economy is recovering and mortgage rates remain low. All of these factors mean that we’ll likely see even more buyers enter the market this year and in 2022.” Where will we see most of these buyers? This forecast points to the South. Redfin expects $1.09 trillion worth of home sales in the South, $696.3 billion in the Westl $422.6 billion in the Midwest, and $322.8 billion in the Northeast. Although it’s common to see the South in the top spot, Redfin says its lead has grown. Fairweather says: “A lot of the wealth from the coasts is shifting South.” He says: “Affluent homebuyers from New York and San Francisco have moved to places like Florida and Texas during the pandemic.” That has also driven sales, and prices, higher in those areas. Redfin isn’t the only one forecasting more than a trillion dollars in home sales. HousingWire reports that Freddie Mac and the Mortgage Bankers Association are also on board for record high sales. Freddie Mac is forecasting $1.7 trillion while the MBA is forecasting $1.67 trillion. They both expect “favorable” conditions for the housing and mortgage markets to continue, although economists expect demand could slow down a bit if mortgage rates rise in the midst of a hot economic recovery. The MBA’s chief economist Mike Fratantoni expects the 30-year fixed-rate mortgage to hit 3.7% by the end of the year while the GDP jumps to 6.5%. Fannie Mae’s chief economist, Doug Duncan, told HousingWire that we’ll see more and more people entering the housing market as the COVID-19 vaccination program expands. Currently, a little more than a third of the U.S. population has been fully vaccinated, so we still have more than 200 million people who are not. Duncan says that consumers are looking forward to life after the pandemic, which could mean a new home. And for many, it means a second home. Redfin says that demand for second homes is more than double what it was before the pandemic. It says the number of buyers who took out a mortgage for a second home was up 178% year-over-year this April. And the increase was the 11th month that the numbers were higher. It also says that the record high increase is somewhat distorted because demand for second homes was down 24% in April 2020 when the economy had shut down. But Fairweather says demand for second homes has been elevated because the wealthy have become wealthier this last year, and the low mortgage rate environment has given them a perfect opportunity to buy vacation homes where they can also work, if they need to. You’ll find links to both reports on the podcast player page for this episode at: NewsForInvestors.com Click here to join the network for free Links: https://www.prnewswire.com/news-releases/us-home-sales-likely-to-hit-record-high-of-2-5-trillion-in-2021--301288413.html https://www.prnewswire.com/news-releases/demand-for-second-homes-is-more-than-double-pre-pandemic-levels-301287673.html https://www.housingwire.com/articles/south-poised-to-see-1-trillion-in-home-sales-in-2021/

Call it a perfect storm of conditions to keep home prices on a steady upswing as buyers clamor after too few homes. I had the opportunity to talk to HousingWire’s lead analyst Logan Mohtashami about the unusual situation we’re seeing, and whether all those scary headlines about a housing bubble are true. The housing market has been breaking all sorts of records. It’s never been so hot. Asking prices have hit an all-time high. Selling prices have hit an all-time high. The share of homes selling over list price is also breaking records. I noticed a crazy headline the other day. It said: The East Bay real estate market is so hot, houses are selling for more than $1M over asking price.” That’s a jaw dropper for sure! That headline appeared in the SFGate in reference to the San Francisco East Bay. One realtor said in the article that it’s not that surprising when they get an offer like that. Josh Dickinson says: “When my clients see a house for $1.9 million they’re almost conditioned to think it’ll go over $3 million in Piedmont or North Berkeley.” Buyers are so desperate to land a home, many are sweetening the deal with things other than money. According to SFGate, one buyer offered free one-week stays at an Airbnb in Tuscany for the next ten years, but still lost the bidding war. Stock options and airline miles are also popular. That’s undeniable evidence of housing market demand, but it isn’t the whole story, and it doesn’t provide an answer to the housing bubble question. In 2007, housing prices hit bubble territory against a backdrop of poor underwriting and buyers who couldn’t afford their homes. When the Fed raised short-term rates, adjustable rate mortgage payments skyrocketed, home prices sank, and many borrowers defaulted. Logan says it’s a whole different story today and one that is very far from a bubble. He says that today the housing story is all about demographics, low mortgage rates, and low inventory. Despite previous beliefs that millennials would never get married and settle down, they are now trying to do just that. Logan says we’re at the start of a unique period when millennials who are 27 to 33 years old are ready to buy. Since many of them are highly paid employees in the tech industry, higher-priced homes and bidding wars may not be a big problem. And if they want to get away from the high-priced homes, it’s very likely that they can do their work remotely, from a smaller metro where homes are less expensive. Mortgage rates are still very close to an all-time low. They hit rock bottom because of the pandemic, and are still under 3% right now. So even though home prices are advancing skyward, mortgage rates are very attractive. As Logan pointed out, they are lower than they should be. In 2018, they were up near 5%. In 2019, they dropped a bit, but it was COVID-19 that brought them to a record-setting low. Freddie Mac shows the low point in December of last year with the 30-year fixed-rate mortgage at 2.68%. And the inventory problem is only getting worse, making the homes that are available that much more desirable. Logan says from 1985 to 2007, the average number of years was five, before families would move. Now, it’s more like 10 years. So there’s less turnover of homes to replenish the existing home inventory. Covid made that situation even worse, as potential sellers decided to stay put. And many of those who have vacation homes are now living in them instead of renting them out. Plus, builders haven’t been able to make up for the deficit. Logan says the pandemic didn’t create this scenario, but it did contribute to it. He says Covid brought mortgages lower than they would have been and that home prices accelerated beyond the normal trend. And there’s little chance of a foreclosure crisis. That’s another scary headline that is unlikely to happen. Logan says it’s not going to happen because we just don’t have the kind of bad credit that we had before the housing crisis. He says the “housing bubble boys” and the “forbearance crash brothers” are both wrong because right now, housing is the most outperforming sector in the world. To sum it up, Logan describes the current market as a huge millennial buyer group who are well paid and ready to buy their first homes. And they are especially incentivized by the low mortgage rates. Since there is a shortage of homes, this kind of demand will continue to drive prices higher and feed into the kind of bidding wars that can add hundreds of thousands of dollars onto the asking price. But he says, the market is not on the verge of crashing. In a blog that Logan just posted on HousingWire, he says: “The key to the U.S. getting back on track economically is for its citizens to freely walk the earth again without the existential threat of COVID-19.” He expects that to happen before the end of August. If you want to immerse yourself in a very lively conversation about the housing market, check out Logan’s interview on my other podcast, The Real Wealth Show. You’ll find a link on the podcast player page for this episode at NewsForInvestors.com Links: https://www.sfgate.com/realestate/article/2021-05-east-bay-real-estate-overbids-hot-market-16151227.php https://www.realwealthnetwork.com/real-wealth-show-podcast/?wchannelid=nnhnv5t81j&wmediaid=f41ejs3akp https://www.housingwire.com/articles/weve-got-rising-home-prices-but-no-housing-crash-in-sight/

In this Real Estate News Brief for the week ending May 8th, 2021… what’s happening with the CDC eviction moratorium, why you should sell your home in May, and which rental markets are the most competitive. Economic News We begin with economic news from this past week, and a new court ruling “against” the CDC’s eviction moratorium. A U.S. District Court Judge in Washington, D.C. ruled that the Centers for Disease Control and Prevention did not have the authority to issue the moratorium. It struck down the ban but the Department of Justice immediately filed an appeal which will be heard within another two weeks. In the meantime, the court issued a temporary stay on the District Court’s decision. Realtor associations in Georgia and Alabama filed the lawsuit along with two housing providers and their property management companies. The National Association of Realtors also supported the lawsuit. NAR believes the best solution is to provide rental assistance to the tenants who are impacted by COVID. That will help both the tenants, and their housing providers. New unemployment applications dropped below 500,000 for the first time since the start of the pandemic. Weekly state claims were just under that amount, at 498,000. Another 100,000 claims were filed for temporary federal benefits, but the total number of claims are still two-and-a-half times higher than they were before the outbreak began. Economists were disappointed with the April jobs report. It shows that the U.S. only gained 266,000 jobs which is far below the one million jobs that economists had expected. That contributed to an increase in the official unemployment rate. It was down to 6%, but is now up to 6.1%, according to the U.S. Labor Department. Businesses dealing with leisure and hospitality did most of the hiring in April. Construction spending was slightly higher in March. The Commerce Department says it rose .2%. That’s also a disappointment. Wall Street Journal economists had expected an increase of 1.8%. Spending for residential construction was right about at that level, however -- at 1.7%. Other kinds of non-residential spending were down. Mortgage Rates Mortgage rates are still under 3%. They’ve been there for three weeks now. Freddie Mac says the 30-year fixed-rate mortgage was down 2 basis points this last week to 2.96%. The 15-year was down 1 basis point to 2.3%. That’s great for homebuyers who manage to score a home in this tight market. In other news making headlines... Record for Newly Built Homes Newly-built single-family homes are gaining market share. Redfin says they now account for one in four single-family homes on the market. They had a 20.4% share last year which rose to a 25.7% share in the first quarter of this year. Redfin’s lead economist Taylor Marr says there are two main reasons for the increase. He says: “Building homes has become more attractive and profitable during the pandemic due to record-low mortgage rates” along with “red-hot homebuyer demand.” Higher Home Seller Profits Home sellers are also enjoying red-hot profits. According to ATTOM Data Solutions, sellers received more than $70,000 in profit on average. That’s 26% higher than the average $55,000 in profit last year. But that’s actually a slight pull-back from December of last year. The average profit in the fourth quarter was $75,750. ATTOM’s chief product officer, Todd Teta, says it’s not unusual to see a pull-back during the winter months, but he says: “It’s definitely something to keep an eye on.” Best Time to Sell Your Home And May could be a good time for sellers to maximize their profits. ATTOM says the “five” best days to sell a home are just ahead of us -- in May. According to a new analysis, those five days are May 16th, 19th, 20th, 23rd, and 27th. The premium ranges from about 16% to 19%. But ATTOM says those are only the five best days. It says the entire months of May and June are good for selling homes at above-market prices. The average seller premium for May is 13.4% and for June, it’s 11.7%. Most Competitive Rental Markets Rent Cafe has some surprising results in a new report on rental markets. It looked at data for 125 of the largest rental markets in the country to determine which were the most competitive. It found that the hottest markets were all mid-sized metros and that cities in California’s Central Valley were at the top of the list. That includes Stockton, Modesto, Fresno, and Bakersfield. The ranking used metrics for occupancy, vacancy, number of applicants, and rental pricing trends. Places like Sacramento and the Inland Empire in Southern California are also hot rental markets as the work-from-home trend continues and people migrate away from more expensive areas, but stay within range of those bigger metros. Spokane, Washington, and Boise, Idaho were also at the top of the list. If you’d like to read more about the most competitive rental markets and the other topics mentioned in this podcast, you’ll find links at NewsForInvestors.com. Links: https://magazine.realtor/daily-news/2021/05/05/judge-vacates-cdc-s-eviction-ban-but-appeal-delays-action https://www.marketwatch.com/story/u-s-unemployment-claims-drop-below-500-000-for-first-time-since-pandemic-as-hiring-surges-11620305321?mod=economic-report https://www.marketwatch.com/story/u-s-gains-disappointing-266-000-jobs-in-april-but-all-signs-still-point-to-faster-hiring-in-months-ahead-11620391689?mod=economic-report https://www.marketwatch.com/story/u-s-construction-spending-inches-up-in-march-11620051071?mod=economic-report http://www.freddiemac.com/pmms/ https://www.worldpropertyjournal.com/real-estate-news/united-states/irvine/real-estate-news-redfin-2021-housing-data-new-home-construction-report-for-2021-lumber-prices-in-april-2021-covid-19-impact-on-home-sales-in-2021-12507.php https://magazine.realtor/daily-news/2021/05/05/where-home-seller-profits-are-highest https://www.attomdata.com/news/market-trends/home-sales-prices/attom-data-solutions-2021-best-days-to-sell-a-home-analysis/ https://www.rentcafe.com/blog/rental-market/market-snapshots/rentcafe-market-competitivity-report-april-2021/

It’s easy to see that the housing market has remained strong throughout the pandemic, but quantifying that impact is no easy task. That kind of data crunching can help explain what happened, and what’s likely to happen in the near future. It’s also the kind of analysis that HouseCanary has done, with results that show the full-impact of the pandemic on housing. HouseCanary is a data analytics company with a focus on residential property valuations. Founded in 2008, the San Francisco-based company has put together a database of information on homes, mortgages, and neighborhoods across the U.S. and it uses that data to provide value-based solutions for people in the real estate industry. In this report, HouseCanary analyzed single-family listing volume, new listings, and median listing price information in 41 states and 50 metropolitan areas for a two-year period -- from March of 2019 to March of this year. The report is called: “One Year Later: Understanding COVID-19’s Impact on the U.S. Housing Market.” The results show five important trends that took hold during the pandemic. According to the company’s principal data scientist, four of those trends aren’t going away anytime soon. The first trend is a huge drop in inventory that occurred during the second year of the analysis. HouseCanary says that U.S. inventory dropped 32.5% from March 2020 to March 2021. That’s a record decline in housing supply which is partially due to problems faced by builders, including supply chain constraints and skyrocketing prices for lumber and other building materials. The results show that South Carolina experienced the biggest year-over-year drop in inventory, at more than 50%. Utah was next with a 44% decline. Illinois was third with an inventory drop of 43%. Homes that were priced below $400,000 were more heavily impacted by that squeeze. That also put the squeeze on the number of single-family homes that are available for rent. HouseCanary says: “From a peak in November 2020, the total number of listings available for rent dropped 46.8%.” The second trend is that demand for single-family detached homes has grown stronger. Record-low mortgage rates helped drive that demand, along with pandemic-related needs for home office space and private yards. HouseCanary says that listings under contract rose 4.5% during the year of the pandemic, while net new listings were down 3%. Third on the list of trends is the speed at which Americans closed their deals. HouseCanary says the median number of days that homes were on the market during the pandemic was 12 days less than the same period in 2019. The fourth trend is that prices have soared because of an imbalance between supply and demand. The median listing price is up 15% for the nation. Because of the competition for homes and bidding wars, the median closing price is up higher. It jumped 18.7%. Rents have also climbed because of the supply-demand imbalance. HouseCanary says the median listing price for active rentals was up 7.4%. It was $1,938 in March of 2020 and grew to $2,082 in March of this year. The fifth trend is that forbearance rates hit a record high during the pandemic. They peaked last June and have been declining slowly since then. That’s one trend that is disappearing, but HouseCanary expects the others to continue into the foreseeable future. The company’s principal data scientist Brittany Murphy says the inventory problem is not something that can be fixed quickly. She said during a Bloomberg interview that: “It’s not just a switch we can turn on… so this sustained supply drop is something that we have settled into and it’s now going to constrict supply and increase prices for the near-term future.” And while there will be constraints to deal with, the housing market is expected to remain strong. The report lists several tailwinds that will keep the housing market floating above ground including high homeowner equity, increased household formation among millennials, the need for a real estate hedge against inflation, increased institutional investment, a recovering job market, a strong economic rebound, an abundant money supply (due to all that stimulus), and a work-from-home trend that’s not going away. As for low interest rates, we still have them but there’s more chit-chat about inflation and how that will impact short- and long-term interest rates. Murphy says that if we do see increased rates, that will bring the demand down a little, although she expects to see a lot of older, well-capitalized buyers who may not be affected by slightly higher rates. You can check out the report yourself by following links on the podcast player page for this episode at newsforinvestors.com. Connect with us today to find out how you can invest in single-family rentals or small multi-unit rental properties, and where you'll find inventory in desirable sunbelt states like Florida, Georgia, and Texas. You can make an appointment to speak with one of our investment counselors for free as a RealWealth member. It doesn't cost a thing to join, and it's easy to sign up right here. Links: https://www.housecanary.com/resources/new-housecanary-data-covid-19s-impact-on-the-us-housing-market/?utm_source=pardot&utm_medium=email&utm_campaign=one%20year%20covid https://www.bloomberg.com/news/videos/2021-05-05/housecanary-s-murphy-on-post-covid-real-estate-trends-video

An appeals court decision has ruled in favor of a development project in Berkeley that will give the state more control over local housing decisions. Some people are calling it a win for developers and the state’s effort to create more housing in California, but not everyone is celebrating. The decision was based on Senate Bill 35, which addresses the housing crisis with construction mandates for cities and counties. In this case, it ends a six-year battle to keep the Berkeley project from going forward. SB 35 went into effect in January of 2018 as one of a number of bills meant to address a critical need for more housing. If a municipality doesn’t provide its fair share of housing to meet regional needs, developers can apply for approval under SB 35 and get their projects fast-tracked, by the state. Projects must meet several requirements to quality, including. 1 - The construction of multi-unit housing with two or more residential units. 2 - A location that is within city limits on an infill area. 3 - The property must be zoned for residential or mixed use. 4 - New homes must cover at least two-thirds of the property. 5 - And the developer must provide a minimum percentage of below-market units that can range from 10 to 50%, or more. The Berkeley project was first introduced in 2015 as a mixed-use development with 135 homes and 33,000 square feet of retail space and parking at 1900 Fourth Street. That’s locally known as the old Spenger restaurant parking lot, near the bay. It’s also adjacent to, and overlapping an old Indian burial ground called the West Berkeley Shellmound. The National Trust for HIstoric Preservation listed the site as one of the 11 most endangered historic places, just last year. Members of the Ohlone tribes and supporters have been fighting against the project for years. According to a Berkeleyside article, tribal leaders say they are acknowledging the legacy of their ancestors, and are protecting the desecration of a sacred site. But the historic designation doesn’t specify the boundaries of the shellmound and doesn’t specifically name the parking lots as part of the site. After SB 35 was passed, the developer updated his plan with more homes and a high percentage of affordable units. The new plan included 260 residential units with 50% of them for low-income residents. But the city rejected the developer’s request for three reasons. It said: 1 - That SB 35 cannot be applied because it interferes with Berkeley’s right as a charter city to manage its own affairs. 2 - That SB 35 doesn’t apply to projects that require the demolition of a designated historic structure. 3 - And the project conflicts with city fees for very low-income housing units and requirements for how traffic impacts the neighborhood. At that point, the developer pulled out, and the property was returned to the previous owners, who sued. The case went to court in 2019 and an Alameda county judge ruled in favor of the city and project opponents. But the case then made its way to the Appeals Court and the court has now overturned the earlier decision. In its decision, the Appeals court emphasized the “crisis of insufficient housing in the state” and the mandate put forth by SB 35. That mandate makes it impossible for cities like Berkeley to reject a proposal that meets the state’s criteria for the creation of affordable housing. The court also rejected the idea that the development would entail the demolition of an historic structure or site because there are no buildings to demolish. And it ruled that the city was not using objective land use standards when it determined that the project would not comply with its affordable housing mitigation fee and traffic impact requirements. At this point, the court has ordered Berkeley to pay court costs, and attorneys will be seeking compensation from the city as well. The case sets an important legal precedent in California by handing power to the State when it comes to issues like the affordable housing crisis, and the approval of development projects that will help fill that housing gap. According to Wikipedia, ten Bay Area developers are seeking approval for the construction of 4,000 housing units under the SB 35 rules. The online encyclopedia also says that 28 California cities and counties have met their housing quotas while almost 300 jurisdictions have not. Projects in those jurisdictions could qualify for approval under SB 35 if they devote 50% of the units to low-income residents, among other requirements, as stated by Wikipedia. You can read more about this by following links on the podcast player page for this episode at NewsForInvestors.com Connect with us today to find out how you can invest in single-family rentals or small multi-unit rental properties, and where you'll find inventory in desirable sunbelt states like Florida, Georgia, and Texas. You can make an appointment to speak with one of our investment counselors for free as a RealWealth member. It doesn't cost a thing to join, and it's easy to sign up right here. Links: https://www.jdsupra.com/legalnews/california-court-of-appeal-upholds-7824522/ https://www.natlawreview.com/article/developers-prevail-dispute-regarding-key-housing-legislation https://www.berkeleyside.org/2020/09/25/west-berkeley-ca-shellmound-most-endangered-historic-places-national-trust-historic-preservation https://en.wikipedia.org/wiki/California_Senate_Bill_35_(2017)

In this Real Estate News Brief for the week ending May 1st, 2021… the economic recovery boom, home price growth, and what builders are doing about lumber prices. Economic News We begin with economic news from this past week, and the results of a two-day policy meeting by the Federal Reserve. Fed Chief Jerome Powell acknowledged a big improvement to economic conditions, and the Fed no longer feels that COVID-19 presents a “considerable risk” to the economy. But Powell says the central bank is committed to its current stimulus strategy. As you know, short-term interest rates are near zero, and the Fed is buying $120 billion in Treasury and mortgage-backed bonds every month. Economists say the economy is poised for a boom in 2021. In fact, first quarter GDP was 6.4%. Incomes were also up more than 21% last month, and spending was up more than 4%, thanks in part to government stimulus and those $1,400 checks. Many Americans also have more money saved than normal, and are now spending it on things like new cars and trucks, restaurants, travel, and other recreational activities. MarketWatch reports that Americans have almost $2 trillion dollars in savings that they wouldn’t normally have, and are likely ready to spend. But, Powell says: “While the recovery has progressed more quickly than generally expected, it remains uneven and far from complete.” He also expressed some concern about how fast home prices are rising, but said he hoped that builders will respond with more supply, which would slow that price growth. The S&P CoreLogic Case-Shiller home price index shows the yearly pace of home price appreciation was 11.9% in February. On a month-to-month basis, it was up 1.2%. Prices are up in all parts of the country, but the Rocky Mountain area is seeing the biggest yearly rate of increase at 15.4%. Powell stands firm on his view of inflation, saying that the Fed believes any price pressure will be temporary. He also wants to see it slightly above 2%. The yearly average was up to 2.3% in March, and economists are expecting it to move higher from there. The latest unemployment report shows another drop in the number of people applying for benefits. Those state claims were down 13,000 from the previous week, to 553,000, according to the U.S. Labor Department. The total number of people collecting benefits from eight different state and federal programs is also down by almost a million in one week -- from 17.4 million to 16.5 million. Pending home sales moved higher, although the lack of inventory remains a problem. The National Association of Realtors says pending sales were up 1.9% in March. Compared to March of last year, they were up 23%. Consumers are feeling a lot more confident as the economy recovers and more people are vaccinated against COVID-19. The Conference Board says that consumer confidence hit a 14-month high in April, with an index reading of 121.7. The University of Michigan had a similar report, saying that that index rose to the highest level since the beginning of the pandemic. Mortgage Rates As for mortgage rates, they didn’t move much this past week. Freddie Mac says the 30-year fixed-rate mortgage is still under 3%. It was up just one basis point to 2.98%. The 15-year was up 2 basis points, to 2.31%. In other news making headlines... Lumber Prices Add $36,000 to New Homes Lumber prices continue to add tens of thousands of dollars onto the price of a new home. The National Association of Home Builders says that prices have tripled over the past 12 months and are now adding almost $36,000 to the price of an average single-family home. That’s up from $24,000 in February. Prices began rising at the start of the pandemic, when a number of lumber mills shut down. They’ve been slow to reopen as the coronavirus numbers continue to surge in some areas. But there is hope that prices will retreat later this year, as mills reopen and supply ramps up. In the meantime, many developers are adding escalation clauses to their contracts. They specify that if the cost of building materials increase by a certain amount, the buyer would be responsible for paying the additional amount. Sometimes, builders share that increase with the buyers. Builders are also trying to keep costs down by pre-ordering lumber or by getting lumber price guarantees. They may also delay construction if costs get out of control, or do other parts of the project while lumber prices are spiking. Mature Trees Have Become a Hot Commodity The new focus on home upgrades has increased the demand for what some are calling “trophy trees.” According to an article in the Wall Street Journal, luxury homeowners are requesting big trees as a focal point for their yards. But they aren’t willing to wait for them to grow, which has created a market for the purchase and relocation of these magnificent trees from other people’s yards. A landscaping and tree relocation company in Florida called Green Integrity says business is booming. Owner, Walter Acree, says they drive wealthy clients around the Southern part of the state looking for the perfect tree. When they find one in someone’s yard, they approach the owner to make an offer, buy it, and relocate the tree. Acree says he recently gave one client a $250,000 quote to move a tree. And they aren’t always nearby. Los Angeles real estate developer, Michael Chen, says it took a year-and-a-half to find a tree for a $65 million spec house in Beverly Hills. He ended up getting a 150-year-old 15’ olive tree from Tuscany. You’ll find links to more information on the podcast page for this episode at NewsForInvestors.com Links: 1 - https://www.marketwatch.com/story/feds-powell-doesnt-blink-and-5-other-things-we-learned-from-his-press-conference-11619647208?mod=economy-politics 2 - https://www.marketwatch.com/story/the-resurgent-u-s-economy-grew-6-4-in-first-quarter-and-even-faster-growth-lies-ahead-11619700267?mod=economic-report 3 - https://www.marketwatch.com/story/jobless-claims-sink-13-000-to-pandemic-low-553-000-11619700207?mod=economic-report 4 - https://www.marketwatch.com/story/consumer-spending-surges-in-march-after-americans-get-1-400-stimulus-checks-11619786977?mod=economic-report 5 - https://www.marketwatch.com/story/consumer-spending-surges-in-march-after-americans-get-1-400-stimulus-checks-11619786977?mod=economic-report 6 - https://www.marketwatch.com/story/home-prices-are-rising-across-every-part-of-america-but-this-city-is-seeing-the-fastest-growth-11619529787?mod=u.s.-economic-calendar 7 - https://www.marketwatch.com/story/pending-home-sales-rise-but-low-inventory-could-cause-headaches-for-buyers-11619705889?mod=economic-report 8 - https://www.marketwatch.com/story/consumer-confidence-jumps-to-14-month-high-thanks-to-coronavirus-vaccines-and-resurgent-economy-11619532387?mod=economic-report 9 - https://www.marketwatch.com/story/americans-grow-increasingly-confident-in-the-economy-and-expect-unemployment-to-decline-11619792634 10 - http://www.freddiemac.com/pmms/ 11 - https://eyeonhousing.org/2021/04/how-builders-try-to-deal-with-rising-lumber-prices/ 12 - https://magazine.realtor/daily-news/2021/04/23/luxury-owners-crown-homes-with-trophy-trees

The marketing of co-owned vacation homes in a scenic part of Northern California is causing an uproar among full-time residents. Real estate company Pacaso is buying single-family homes within driving distance of busy metro areas, and reselling them to as many as eight buyers. It’s an idea that has evolved during the pandemic. But it’s also creating a debate over the impact of co-owned homes in single-family neighborhoods. Pacaso was planning to launch its co-ownership plan in a few vacation spots before the pandemic began, but like everything else, those plans were delayed by COVID-19. Over those next several months, the Pacaso strategy changed. The pandemic highlighted the importance of “home” and created new vacation preferences. Pacaso’s original idea for co-owned vacation homes that might involve air travel morphed into one focused on a one to two-hour drive from home. At the helm of Pacaso are two Zillow executives -- former Zillow co-founder and CEO, Spencer Rascoff, and former Zillow executive, Austin Allison who’s serving as the Pacaso CEO. The concept of co-ownership is nothing new, but they say Pacaso makes it easier. As the website boasts: “Co-ownership simplified. We manage the home, and you own it. It’s the modern way to buy and own a second home.” Allison also explained in a press release: “The traditional process is difficult, high risk and onerous. Pacaso is the easy button for co-ownership.” They finally launched their new Pacaso model last October with $267 million in funding. The company is calling it the “Pacaso everywhere” plan. It begins with an interested buyer who wants a part-time vacation home they can drive to. Pacaso helps that first buyer determine how much time they’d like to spend in the home, sets up an LLC, and finds other buyers. Pacaso also manages the property so the owners don’t have to. As many as eight buyers can purchase a home and use the home for 44 days a year. Buyers can buy more than one share if they’d like more time in the home, and that would reduce the total number of owners. In the city of Napa, Pacaso is selling co-ownership shares for a home on Rainier street. It’s a quite, working-class neighborhood, according to a CBS report. Homes are about 1,300-square feet and sell for $700 to $800,000. The Pacaso home is going for $184,000 a share. It’s not a short-term rental because all the people occupying the home are owners, but it’s causing a short-term rental type uproar. In this case, the neighbors are opposed to having what they call a “time-share” vacation home in their neighborhood. Some of those neighbors told CBS, they feel like the co-owners won’t be involved in the community and are simply “sneaking” into the neighborhood. Signs have gone up staying: “Stop Pacaso. Don’t commercialize our neighborhood.” They also argue that co-owned homes are reducing the affordable housing supply. It worth noting that homes in that neighborhood are going for 700 to $800,000. Pacaso’s Allison had a few good points in response to the uproar. He argues that by selling these homes to eight second-home owners, there are fewer people in the competition pool for second homes. He also clarifies that these homes are not time-shares because they are owner-occupied. His arguments didn’t convince the City Attorney in nearby St. Helena who declared them illegal under a law that prohibits time-shares. Pacaso has filed a lawsuit in that case. In defense of company objectives, Allison says Pacaso is helping people who can’t afford to buy their vacation dream homes or don’t want the home to sit vacant for most of the year. And he says: “It’s really not up to other neighbors to say who can or can’t own in their neighborhood. Just because somebody can’t afford a $1.5 million home, doesn’t mean they shouldn’t be able to co-own a $1.5 million home with a coupe of other people.” If you want to investigate this topic further, you’ll find a links on the podcast player page for this episode at NewsForInvestors.com. Links: 1 - https://www.prnewswire.com/news-releases/pacaso-launches-to-create-new-category-of-second-home-ownership-secures-267-million-in-funding-301143719.html 2 - https://sanfrancisco.cbslocal.com/2021/04/28/homeowners-in-a-battle-with-company-converting-houses-into-co-owned-wine-country-vacation-homes/ 3 - https://www.pacaso.com/

Home prices have been rising so fast that comps have become wildly unreliable. That’s making it difficult for sellers to set accurate listing prices, and for buyers to get homes appraised for what lenders are willing to loan. Home valuation tools like Zillow’s Zestimate and others are also struggling with a volatile pricing environment, and are often off by an insanely high amount. In a report by Inman, realtor Tim Collom in Sacramento, California, said that estimated home values by companies like Zillow and Redfin are “always” off, and it’s getting worse. He says: “They’re not off by $10,000. They’re off by like $100,000 to $200,000.” If you go by percentages, he says they can off by as much as 10%, and that even experienced real estate agents are having a difficult time keeping up with the trends in home prices right now. Tools like the Zestimate are automatic valuation models or AVMs so they rely on software to automatically update figures. There’s been a lot of criticism about these tools, but Zillow defends its algorithm which it says is constantly updated by a team of data scientists. Owners can also input upgrades which may impact the value. In a statement to Inman, Zillow claims the Zestimate is “incredibly accurate with a mean error rate of 1.9 percent for on-market homes and 7.3 percent for off-market homes.” Zillow also acknowledges that valuations are more difficult right now because of fast-moving prices. The real estate website says that Zestimates are not appraisals. They are only a starting point for buyers and sellers and suggests working with a local real estate agent to fine tune that figure. Big Sky, Montana, real estate agent, Michael Pitcairn says the Zestimate has been more than 10% lower than the MLS home value data used by his brokerage. According to Inman, Zillow says Big Sky’s home price appreciation is rising 21% year-over-year. Pitcairn’s MLS tool says it’s more like 35%. That’s also very close to what Realtor.com is estimating, at 34.6%. But it isn’t just the AVMs that are causing trouble for home valuations. Many real estate professionals say that comps aren’t much help either, especially if there are no very recent sales. That’s making it hard for listing agents as well as appraisers. Missouri appraiser, Mason Spurgeon, says: “It’s a crazy time right now.” He says that appraisers don’t predict the future. It’s not their job. They look backward in time. They analyze what has already happened in service to the lender. That can also result in a big gap between the appraised value and the agreed upon sale price which is making it impossible for some buyers to follow through on a deal. If they are relying on a loan and they only have a certain amount of money for a down payment, they won't be able to cover that gap. Sometimes, buyers can provide comps to prove that an appraisal is low, but again, the comps are not keeping up with the price appreciation. Inman offers a few work-arounds for agents, and basically anyone doing their own legwork on home values. 1 - Expand the geographic area to analyze how the market has been performing. And, look for similar markets just outside that area to find data on pricing. 2 - Expand the square footage of the home to include more comps within a wider range. Or, remove the square footage altogether to get a look at what’s sold and for how much. 3 - Ask agents in the area about how many offers they are getting, how high the offers are going, and pending sale amounts. Some agents may be willing to share that information. 4 - Participate in local online discussion groups where everyone is sharing information. The take-away -- You have to be more proactive in coming up with a valuation that works within the market, and works best for you. Check the podcast player page for links at NewsForInvestors.com Click here to join the network for free Links: 1 - https://www.inman.com/2021/04/26/inman-handbook-on-comps-in-these-chaotic-times/ 2 - https://www.inman.com/2021/04/27/zestimates-cant-keep-up-with-wild-housing-market-agents-say/

In this Real Estate News Brief for the week ending April 24th, 2021... new home sales blast off, existing home sales stall, and mortgage rates are doing what we like them to do! Economic News We begin with a slow week for economic news. There were no reports on the MarketWatch calendar from Monday through Wednesday. On Thursday, the weekly unemployment report showed there were fewer first-time filers. Those initial state claims were down about 12,000, to 574,000, while continuing claims fell by 34,000 to a seasonally adjusted 3.68 million. The total number of claims for eight state and federal programs is still quite high, at 17.4 million. New home sales blasted off this last week to their fastest pace since 2006. The Census Bureau reports that sales rose 20.7% month-over-month, to a seasonally-adjusted rate of 1.021 million homes. Inventory remained about the same, although it’s down 7% from where it was a year ago. Existing home sales didn’t do as well because of extremely low inventory. The National Association of Realtors says they fell 3.7% in March to a seasonally-adjusted rate of 6.01 million. That’s the slowest rate of existing home sales since last August, and it’s down 12% from a year ago. Mortgage Rates Mortgage rates dipped back below 3% this last week. Freddie Mac says the average 30-year fixed-rate mortgage dropped 7 basis points to 2.97%. The 15-year was down 6 basis points to 2.29%. Freddie Mac’s chief economist, Sam Khater says: The drop in mortgage rates is good news for homeowners who are still looking to take advantage of the very low-rate environment.” But they aren’t expected to remain there for long. Economists expect rates to climb a bit higher for the rest of the year. In other news making headlines... Five New Real Estate Records in March The real estate market hit five new records in March. The World Property Journal made a list. The first was a record high for the national median home-sale price. It was up to $353,000 in March of this year. That’s after rising 17% year-over-year. The inventory of homes on the market dropped to a record low. It’s down 29% year-over-year, and the months of supply was just a little over “one.” The days it took for a typical home to sell was just 25 days, which is a record low and about 19 days lower than it was a year before. The percent of homes that sold above the asking price hit a new high of 42%. And the average sale-to-list ratio also hit a new high. That’s a measure for how close the sale price is to the asking price and for the first time ever, it flew past 100%. General Motors’ Simple Remote-Work Plan As companies address a complex issue involving remote workers and whether to bring them back to the office, GM has offered a very simple plan. It is telling employees to (quote) “Work appropriately.” That’s what CEO Mary Barra and other executives are telling GM’s 155,000 global workforce. They are describing it as a flexible, evolving policy that will be different for each employee depending on the project and the timeline. For factory workers who get paid by the hour, that might mean being trained remotely and returning to the assembly line after that. For other employees, it could be a full-time remote position or something that’s more of a hybrid combination of remote and in-office hours. GM’s global talent director says: “It is not about a policy or a one-size-fits-all approach but truly an evolution of our culture for everyone.” Short-Term Rental Reservations Are Skyrocketing As vaccination rates increase, reservations are skyrocketing for short-term vacation rentals. The New York Times reports that 90% of vacation homes listed on VRBO for Cape Cod, Massachusetts, and the Jersey Shore were booked by the end of March. But the supply is tight since many second-home buyers are choosing to live in the homes instead of renting them out. That combination of factors is driving rates higher. Airbnb rates are expected to average around $220 a night this year compared to $194 last year and $185 in 2019. Another trend that’s growing is that guests are booking for longer stays. Instead of a few days for a quick getaway, hosts say more and more people are booking for weeks at a time. One person told the New York Times: “We’re seeing an emerging trend of ‘slow travel,’ with travelers wanting to spend more time immersing themselves in a destination than they did pre-pandemic.” Check for links on the podcast player page for this episode at www.NewsForInvestors.com Thanks for listening. I’m Kathy Fettke. Click here to join the network for free Links: 1 - https://www.marketwatch.com/story/u-s-jobless-claims-keep-falling-11619095897?mod=economic-report 2 - https://www.marketwatch.com/story/new-home-sales-soar-to-highest-level-since-2006-2021-04-23 3 - https://www.marketwatch.com/story/existing-home-sales-slip-as-property-prices-see-record-growth-11619102154?mod=economic-report 4 - http://www.freddiemac.com/pmms/ 5 - https://www.worldpropertyjournal.com/real-estate-news/united-states/seattle/real-estate-news-redfin-2021-housing-reports-record-home-prices-in-march-2021-cov-19-impact-on-home-sales-taylor-marr-12477.php 6 - https://www.cnbc.com/2021/04/20/gms-simple-message-to-employees-about-return-to-work-work-appropriately.html 7 - https://magazine.realtor/daily-news/2021/04/21/summer-vacation-rentals-are-already-skyrocketing

The prediction that millions of homeowners would face foreclosure due to job losses from COVID 19 shutdowns does not seem to be materializing. There are some who say that delinquent borrowers have a way to avoid that fate this time around. Unlike the Great Recession, they have a lot more equity in their homes which they won’t want to lose. When the housing market crashed in 2008, it was the result of easy lending. Home loans were easy to get, often with no down payment or verification of income. In some cases, buyers would get money back for buying a home, or qualify with a teaser rate, not the real rate. That, of course, drove prices up and created a housing bubble. The bubble burst when those loans eventually came due and people couldn't afford the payment. Seems like an obvious problem, doesn't it? As more and more loans reset, more people went into foreclosure, flooding the market with distressed inventory far below market value. Anyone who wanted to sell their home at market value had to compete against bank owned properties that were much cheaper. Thus, the air came out of the bubble. As home values dropped nationwide, even those who could afford to own their home couldn't sell it for what it was worth if they needed to. They owed more than what the property was worth, which they called being "underwater" or upside down on their mortgage. With no home equity in the deal, it made sense to walk away, which many people did. They had nothing to lose except their good credit, and some didn't even have that. That is unlikely to happen this time around, at least to that extent, for one simple reason: Homeowners have much greater equity in their homes. And many of those homeowners also have great credit. According to Realtor.com, only 3% of homeowners are underwater, owing more than the home is worth. During the Great Recession, about 30% of homes were underwater or close to it. So even if homeowners have not recovered financially from the pandemic, they have a way to get out of mortgage debt that’s a lot easier than foreclosure -- by selling their homes to pay off their loans. Many will also see a hefty profit. And it won’t be difficult to sell those homes because of the inventory crunch. Vice President of the Mortgage Bankers Association, Marina Walsh, told Realtor.com: “There’s just not enough housing out there for the demand, which is a big, big change from the Great Recession.” That doesn’t mean that at-risk homeowners don’t face a tough road ahead, especially those in less desirable markets. Realtor.com mentions places in the Rust Belt or hurricane-prone communities in Louisiana, for example. Currently, the federal foreclosure moratorium for government-backed loans is June 30th. Even without forbearance, many homeowners have protection until then. For those in forbearance programs, they are protected for as long as 18 months. According to Black Knight, 4.4% of borrowers were in forbearance as of April 13th. That number has been decreasing steadily because the economy has been improving and people are getting jobs. But that’s still a high number of people in forbearance, putting all those homeowners at risk. In addition to that, 5% of borrowers are either seriously delinquent or have already entered the foreclosure process. That means they haven’t paid their mortgage for at least three months. And that number is higher than it was during the last foreclosure crisis, according to a report from the Urban institute. Urban Institute researcher, Jung Hyun Choi, says that even with those high numbers, she doesn’t think we’ll see another foreclosure crisis because of high home values. She says: “They have the option to sell the properties and move to a more affordable unit. Or in the worst-case scenario, they’ll have to switch to rental housing.” What she’s saying is that we probably won’t see a foreclosure crisis, but if all those homeowners sell their homes and can’t buy smaller, less expensive ones, they will become renters. ATTOM Data Solutions has done some research on the metros with the highest number of homeowners who are, in fact, underwater. ATTOM defines “seriously underwater” as owing at least 25% more than the home is worth. Those metros include Baton Rouge, Louisiana; Syracuse, New York; Scranton, Pennsylvania; New Orleans; Virginia Beach; and several cities in Ohio, including Cleveland. The percentage of underwater loans in those cities range from about 9% to more than 14%. In cities with strong job markets and highly-paid workers, like San Jose, Salt Lake City, San Francisco, and Seattle, the share of underwater loans is less than 2%. It's also important to remember that banks learned their lesson in 2009, that flooding the market with REO's, or bank owned properties, is not good for the bank's books. It's more likely that banks will try to work out a loan modification, since in many cases, it wasn't the borrowers fault that jobs were lost in the first place. It's more likely banks will just add those missed payments to the back of the loan, rather than flood the market with distressed inventory. Those who do end up having to sell their homes will likely become renters, which could exacerbate an already tight rental market and drive rents even higher. You’ll find links to the Realtor.com story on the podcast player page for this podcast at www.NewsForInvestors.com. Click here to join the network for free Links: 1 - https://www.realtor.com/news/trends/high-home-prices-could-help-prevent-a-new-foreclosure-crisis-when-forbearance-ends/

It may seem like the housing market is as hot as it can ever be, but a new survey shows that millions of Americans could be on the verge of relocating, sparking even more buyer activity. The survey is part of Zillow’s first-ever “Mover Report.” It shows that people are waiting for pandemic worries to go away as they ponder new homes and new locations. Zillow researchers were motivated to find out more about the spring home shopping season, and the people and emotions that are making it happen. What they found was that as many as eight million homeowners say they are more likely to sell their homes and relocate because of the pandemic. And that’s on top of a market that’s already experiencing high demand and low inventory. But these homeowners will also be putting their own homes on the market which is why Zillow is calling it The Great Reshuffling. Many of the potential sellers have been thinking about doing this for quite some time, but have held back due to pandemic worries and uncertainty about their circumstances. In another survey done at the end of February, 70% of homeowners said they would be “mostly or completely comfortable” about selling their homes once the COVID-19 vaccinations have become widespread. Only 52% said they’d feel that way at the time of the survey. The 70% number represents about 14 million homeowners. The latest survey shows that 1 in 10 Americans have already moved since the beginning of the pandemic. Most of those people moved for positive reasons like being closer to family or friends or to live in a place they’ve already dreamed about. And the flexibility of remote work has allowed many of them to fulfill those dreams. Technology has also helped because people moving during the more dangerous parts of the pandemic have been able to tour homes and neighborhoods virtually. That’s given many a lot of confidence about moving to a completely different location. So where are all these people moving to? According to Zillow and information from North American Van Lines, the top destinations are Phoenix, Arizona; Charlotte, North Carolina; and Austin, Texas. Those three markets had the largest number of inbound moves during the first 11 months of last year. But many other Sun Belt cities are seeing population growth as well. Zillow’s senior economist, Jeff Tucker, says: “The pandemic brought an acceleration of trends we were seeing in 2018 and 2019. More affordable, medium-sized metro areas across the Sun Belt saw significantly more people coming than going, especially from more expensive, larger cities farther north and on the coasts.” He also says the pandemic and remote work motivated many millennials to buy their first homes. The pandemic also gave many people the opportunity to do some “Zillow surfing.” Spending so much time stuck at home was a catalyst for searching through the listings for a new home, and a new reality. The Zillow survey says that almost a third of the people had been dreaming of a new home for a year or more. But stress and other worries about money and the process of moving have held many of them back -- according to the survey, about 76%. Among those who have moved, more than half say they are happy about the move or relieved. 80% said the move was worth the effort, especially the part about starting a new chapter in their lives. Almost 60% said they’ve experienced positive life events since they moved to a new home. Zillow has also done another survey on the work from home trend and found that an overwhelming majority of economists and real estate experts feel that it’s here to stay. 95% said they see a permanent shift to a hybrid model where employees work remotely on some days and go to the office on others. 45% also see a permanent tilt toward smaller cities instead of larger ones, and a suburban lifestyle instead of one in a busy city. Researchers also weighed in on housing inventory with more than two thirds saying inventory will grow during the second half of this year or the beginning of next year. That’s mostly due to an increase in existing homes being listed for sale. As more homes hit the market, home price growth is expected to cool off a bit but not by much. They expect to see values increase 6.2% this year, and then drop to 4.5% next year and around 3.5% in each of the three years that follow. Researchers say the price growth is great for sellers, but will keep many renters from buying a home. That’s good news for landlords, although panelists are expected to see a surge of evictions when the moratorium is over. They are predicting 15% of currently distressed renters will end up being evicted. The other 85% will find ways to remain in their current homes or will avoid eviction by finding less expensive rentals. I’ll have links to all these reports on the podcast player page for this episode at: www.NewsForInvestors.com Click here to join the network for free Links: 1 - http://zillow.mediaroom.com/2021-04-06-Zillows-2021-Mover-Report-The-Opportunity-Emotion-and-Trends-Behind-the-Great-Reshuffling 2 - https://www.zillow.com/research/covid-vaccine-housing-market-29008/ 3 - https://www.zillow.com/research/zhpe-q1-2021-work-from-home-29311/

In this Real Estate News Brief for the week ending April 17th, 2021... home builders are stepping on the gas, rents are headed “up” once again, and the best days to list your home. Economic News We begin with economic news from this past week. Federal Reserve Chairman Jerome Powell offered more clarity on when the central bank plans to start the tapering process. The Fed has been buying $120 billion worth of Treasurys and mortgage-backed securities each month since last summer as an economic shot in the arm. It also cut interest rates to zero. The Fed expects to begin tapering when the economy reaches full employment and a stable rate of inflation at 2% or slightly more. And, Powell says, that would happen well before any interest rate increases. After the 2013/2014 tapering process began, it took another two years for a rate hike. Powell says the Fed will follow a similar strategy. He didn’t give a date as to when this would happen. Some economists are predicting that tapering will begin next year. Others say it could happen sooner. Signs of inflation continue. Consumer prices have been higher for four months in a row, hitting their highest level in two-and-a-half years last month. The government says the index was up .6%, and the yearly rate of inflation is now 2.6%. Some economists say it could top 3% in the coming months which would put more pressure on the Fed to consider an interest rate increase. Because inflation turned negative during the early months of the pandemic, the yearly rate of inflation could also shoot higher when those low months drop out of the 12-month average. The Fed is predicting inflation will average 2.4% in 2020 and drop back down to 2% next year. Initial jobless claims were down almost 200,000 last week to a pandemic low of 576,000. That’s the first time that weekly state claims fell below 600,000 since the pandemic began. Another 131,000 people filed for help from a temporary federal program bringing the combined total to around 700,000. Continuing claims also dropped from 18.2 million to 16.9 million by the end of March. Home builders are busy after a winter slowdown. The Census Bureau says that home starts jumped 19% in March compared to the previous month. Compared with March of last year, during the pandemic, they are up 37%. Permits are also up, but they took a smaller leap higher at 2.7% but the figures were higher for single-family homes than they were for bigger multi-family developments. In the middle of those two categories was a much bigger 25.5% surge in permits for two- to four-plex homes. MarketWatch says that might indicate a push for higher density housing to meet the demand. And there is a new report out by Freddie Mac on the size of the housing shortfall. It says the U.S. housing market needs 3.8 million more single-family homes to keep up with demand. The shortage is more severe for entry level homes. Freddie Mac’s chief economist Sam Khater says: “This is what you get when you underbuild for 10 years.” Home builders have faced their own challenges, however. The housing crisis put many out of business, which has had a lasting impact. And now the pandemic has made it hard to get workers and created a lumber shortage among other issues. Despite the shortage of homes for sale, consumer sentiment is running high. The University of Michigan says its index rose from 84.9 in March to 86.5 in April. That’s the highest it’s been since March of last year. Mortgage Rates Mortgage rates took another dip this last week. Freddie Mac says the average 30-year fixed-rate mortgage was down 9 basis points to 3.04%. The 15-year was also down 7 basis points to 2.35%. In other news making headlines... Many Remote Workers Won’t Go Back to the Office A new survey shows that a third of the people working remotely would rather quit their job than return to the office. Staffing firm Robert Half asked 1,000 people about what they would do, and one out of three said they’d rather look for a new job than return to the office full-time. But many felt that a fully remote job would damage their work relationships and that working from home was less productive. About half of the participants said they’d be happy with a hybrid arrangement. Study authors suggest that companies adopt new policies when they try to lure employees back. Among the things that employees would like are flexible hours, relaxed dress codes, and more support for childcare. Having an environment that’s safe from COVID is also important. Rents are Rising Once Again Rents are on an upswing once again, after an 8-month downtrend. Realtor.com’s Monthly Rental report shows that rent growth was 1.1% year-over-year in March, in the nation’s largest metro areas. Realtor.com’s chief economist Danielle Hale says it’s still below the 3.2% rent growth we saw before the pandemic, but she expects the pace will pick up from here as the economy recovers. She also says: “Rents are not rising in all markets. The tech markets and several big metros like Chicago and Los Angeles continue to see rent declines.” But those declines are also running at a slower pace. She also says that Americans may be more interested in renting as home prices and mortgage rates rise. Best Days to List New research shows that sellers who list their homes on Tuesday, Wednesday, and Thursday will sell faster and for more money. Redfin tracked home sales data from July 2020 to February of this year, and found out that on average, homes that were listed mid-week sold for $1,700 more. But depending on the home, some sellers are getting thousands of dollars more. Redfin’s chief economist, Daryl Fairweather, says: “The market is so competitive, most homes will receive plenty of attention regardless of when they are listed.” But he says listing in the middle of the week provides more time for buyers to check out the home, and getting as many serious buyers interested will help drive up the sales price. You can read more about all these stories by following links on the podcast player page for this episode at www.NewsForInvestors.com Click here to join the network for free Links: 1 - https://www.marketwatch.com/story/powell-suggests-fed-will-follow-the-2013-2014-playbook-when-it-starts-to-taper-asset-purchases-11618422986?mod=mw_latestnews 2 - https://www.marketwatch.com/story/consumer-prices-surge-again-as-u-s-inflation-marches-higher-11618317779?mod=economic-report 3 - https://www.marketwatch.com/story/u-s-jobless-claims-nosedive-193-000-to-pandemic-low-of-576-000-11618491022?mod=economic-report 4 - https://www.marketwatch.com/story/new-home-construction-rebounds-sharply-as-america-faces-dire-housing-shortage-11618577442?mod=economy-politics 5 - https://www.foxbusiness.com/real-estate/us-housing-market-is-nearly-4-million-homes-short-of-buyer-demand 6 - https://www.marketwatch.com/story/americans-are-feeling-the-best-theyve-felt-since-the-pandemic-began-consumer-survey-shows-11618582769 7 - http://www.freddiemac.com/pmms/ 8 - https://www.bisnow.com/national/news/top-talent/third-of-remote-workers-would-quit-before-returning-to-office-108488 9 - https://magazine.realtor/daily-news/2021/04/13/rents-rising-for-the-first-time-in-eight-months 10 - https://magazine.realtor/daily-news/2021/04/15/best-time-to-list-midweek

Airbnb is taking another proactive step to prevent house parties over the Fourth of July weekend. It launched a new campaign called “Summer of Responsible Travel” which bans one-night rentals and last-minute bookings for guests who don’t have a history of good reviews. The July 4th holiday is turning into what many feel is the BIG REOPENING after more than a year of social isolation from the pandemic. Airbnb said in a statement: “We also know that public health and safety experts are still saying mass gathering should not happen.” And that’s why the short-term rental company is introducing the new rules. They are similar to ones that Airbnb implemented for Halloween and New Year’s Eve last year. Airbnb describes the summer travel initiative as an 8-point plan to help hosts, guests and communities remain safe. At the top of that list of rules is a ban on parties that could spread germs, and could also disturb neighbors. To help with the enforcement of this rule,Airbnb has expanded its community support staff by 50%. Airbnb already has a global ban on parties, but the special holiday rules help provide hosts with more tools to keep things under control. The ban on one-night reservations for guests without a history of positive reviews will not apply to guests who have good reviews. People who have already booked a one-night reservation will also be able to keep them. Last minute reservations may also trigger more stringent restrictions, especially for people who live near the Airbnb they’d like to rent. The short-term rental company is also helping superhosts who are worried about parties with discounts on noise monitoring devices. The devices measure decibel levels and can help hosts determine if a party is taking place. These devices can’t be secretly used however. Hosts must disclose their existence on listing pages. Other parts of the summer travel initiative include a Neighborhood Support Line with more Spanish-speaking monitors, house rules that are displayed more prominently on listing pages, safety tips for guests that are renting pool homes, and fire safety tips for people in fire-prone areas like the West Coast. Airbnb is also reiterating the need for hosts to continue with COVID-19 Safety Practices. That includes wearing a mask, practicing social distancing, and disinfecting rentals with a 5-step cleaning process. The issue that has probably caused the most short-term rental controversy is the noise issue. Many short-term vacation rentals or STVRs are located in residential neighborhoods where some long-time residents say there are too many loud parties by short-term rental guests. That may or may not be true in any particular neighborhood, but when enough voices are raised in opposition, elected officials are forced to listen. And now, many city governments are struggling with rules to satisfy both long-term residents and short-term rental hosts. In many cases, the long-term residents are winning that battle, and city governments are completely banning short-term rentals. Unfortunately, that can feel like an injustice to property owners who may need that income, or have been planning for that income as an investment strategy. The city of La Quinta, near Palm Springs, is one of those cities now wrestling with a decision on short-term rentals. It had implemented a ban on new short-term rental permits because of the pandemic that was supposed to be “temporary.” But now, people opposed to short-term rentals want a permanent ban on new permits to reduce the number of short-term rentals in the city. That set the stage for a lively debate at a recent City Council meeting, and the Council voted to extend the permit moratorium until June 1st as it tests a new noise monitoring program. It’s a program that involves 25 properties and devices that measure noise levels. If the noise reaches a certain threshold, the property owner is notified and given a chance to address the problem. Community Resources Analyst, Jaime Torres, told NBC news: “We reached out to three of the biggest vendors in the noise compliance industry. Each of these vendors has a device that helps monitor and track noise and our goal with this is to basically see whether these devices are effective.” Short-term rental owner, Kristen Perry, is one of the people participating in the test. She says: “So far so good!” She says: “I’ve yet to get an alert, and I have (the devices) at half the recommended setting.” If this strategy works to keep noise levels at an acceptable level, the devices could become mandatory for La Quinta vacation rentals. The results may also influence a vote on whether or not the ban on any new permits will be lifted. If you'd like to know more about Airbnb's Summer of Responsible Travel initiative, you'll find a link on the podcast player page for this episode at www.NewsForInvestors.com Click here to join the network for free Links: 1 - https://www.inman.com/2021/04/13/partys-over-airbnb-rolls-out-new-plan-to-stop-summer-gatherings/ 2 - https://nbcpalmsprings.com/2021/04/07/la-quinta-testing-noise-compliance-program-aimed-at-mitigating-stvr-complaints/ 3 - https://news.airbnb.com/airbnb-launches-summer-of-responsible-travel/

There’s a new plan brewing to help delinquent borrowers and prevent another wave of foreclosures. The Consumer Financial Protection Bureau wants to extend the foreclosure moratorium through the end of this year and is currently asking for comments on the plan. But does the CFPB have the authority to do this? According to the Mortgage Bankers Association, 2.7 million homeowners were in forbearance programs as of January 31st of this year. That’s down from a pandemic peak of some 6 million homeowners, but it’s a substantial number of homes at risk of foreclosure. Black Knight estimates the number of mortgages that are currently 90 or more days past due is about 2 million. And that’s about five times higher than before the pandemic began. The real estate data firm expects some improvement through the end of June, when the current foreclosure moratorium expires, but it expects that 1.8 million mortgages will still be seriously delinquent. The MBA says the delinquency rate for one-to-four-unit residential properties was 6.73% at the end of the fourth quarter. Black Knight says it fell below 6% in January, for the first time since the pandemic began. Although the foreclosure moratorium is currently set to expire in June, delinquent homeowners may have different dates for the expiration of their forbearance programs. Loans backed by Fannie and Freddie can have as much as one year of forbearance. Private lenders may have other options. Extending the foreclosure moratorium will give homeowners more time to work out a solution with their lenders. The CFPB is also proposing ways to streamline the process of getting homeowners out of forbearance and into other payment plans. The MBA’s CEO, Dave Stevens, feels the CFPB has gone beyond its authority in offering to extend the moratorium. Stevens told HousingWire: “My concern is that the bureau is overstepping its bounds and violating in essence agreements that have already been previously made.” He says that another halt on foreclosures could hurt the mortgage industry’s relationship with its investors, which servicers have worked hard to maintain. According to Black Knight, service providers have advanced investors $19 billion for delinquent mortgage payments during the last year. HousingWire also reports that lenders have already been doing a good job helping homeowners exit forbearance. It says that almost 86% of those who exited forbearance did so with a payment plan in place. Executive Vice President of RealtyTrac, Rick Sharga, says of the results: “I think the math speaks for itself how well the forbearance program has worked, and it’s one of the few times in my career that I have seen a government-initiated program adopted as well and executed as well by the industry as this one.” He doesn’t feel the same way about another foreclosure moratorium however. He says: “What they are doing is getting involved in a very complex process and it may be forcing servicers to violate covenants of the investor who bought the loan, and that’s the real challenge.” MBA President, Robert Broeksmit, is also citing some impressive numbers. He reportedly said in a recent article that mortgage servicers successfully helped 4.3 million Americans enter forbearance plans in less than 10 weeks. Broeksmit says: “The ability for the industry and mortgage servicers to overcome the obstacles created by COVID-19 will depend on our ability to work together.” The CFPB is proposing three actions to help borrowers impacted by the pandemic. The first is to grant borrowers more time, with a moratorium that runs through December 31st. The second is to give servicers a way to modify loans more quickly with less paperwork. And third, to improve communication with borrowers so they are aware of their options at the appropriate time. The public comment period runs through May 11th. You’ll find links to the CFPB’s proposal and other articles mentioned in this episode on the podcast player page at www.NewsForInvestors.com Click here to join the network for free Links: 1 - https://www.housingwire.com/articles/does-cfpb-have-authority-to-postpone-foreclosures/ 2 - https://files.consumerfinance.gov/f/documents/cfpb_mortgage-servicing_nprm_2021-04.pdf 3 - https://www.blackknightinc.com/black-knights-first-look-at-january-2021-mortgage-data/ 4 - https://www.mba.org/2021-press-releases/february/mortgage-delinquencies-decrease-in-the-fourth-quarter-of-2020 5 - https://dsnews.com/daily-dose/04-05-2021/cfpb-proposes-plan-to-avoid-foreclosure-surge

In this Real Estate News Brief for the week ending April 10th, 2021... an economic forecast from the International Monetary Fund, home price growth around the world, and a survey on having pets at work. Economic News We begin with economic news from this past week, and an upbeat forecast from the International Monetary Fund. The IMF raised its 2021 U.S. economic outlook from 5.1% to 6.4%. It expects to see a slowdown next year to 4.4% which is stronger than the Federal Reserve’s 3.3% prediction. The IMF also expects that pandemic-related losses for other major economies will be smaller than what we saw after the financial crisis. It is expecting global growth to be just slightly less than the U.S. this year, and about the same next year. The IMF also expressed support for the Fed’s “go slow” policy on interest rate hikes and tapering. The IMF’s chief economist, Gita Gopinath, says: “They have pledged to, kind of, given sufficient advance warning if they are going to reverse course… so we expect that would happen.” Weekly unemployment claims jumped higher for a second week in a row. Economists had expected them to decline but the Labor Department reported 728,000 new state claims. That’s 16,000 more than the previous week. Before the pandemic, the weekly average was around 220,000. If you combine all the new and continuing benefits from both state and federal programs, the total is 18.2 million. Before the pandemic, there were less than 2 million people collecting benefits. On a positive note, job growth is surging. The government says there were 7.37 million jobs available in February. That’s up from 7.1 million in January. It says that 5.74 million people were also hired in February, and the U.S. gained another 916,000 new jobs in March. Those are all good numbers. Mortgage Rates There’s also good news on mortgage rates. Freddie Mac says the average 30-year fixed-rate mortgage dropped 5 basis points, to 3.13%. That’s after seven weeks of higher rates. Freddie Mac says that mortgage rates are lower because of a “modest decline” in U.S. Treasury yields. In other news making headlines... Worldwide Home Prices Home prices are going up around the world. International property consultant Knight Frank says that average urban home prices went up 5.6% last year. That’s up from 3.2% in 2019. Emerging markets are seeing some of the strongest price gains, including Turkey which has a few cities at the top of the list. In Ankara, the year-over-year increase is 30.2%. Ismir and Istanbul are close to that. Turkish inflation is pushing those prices higher, but other countries are seeing double-digit year-over-year increases. Cities in Russia, New Zealand, Canada, and South Korea are all near the top of the list. U.S. cities with double-digit price growth include Phoenix at 14.4%, Seattle at 13.6%, San Diego at 13%, Boston at 11.4%, Washington, D.C. at 10.3% and Minneapolis at 10.2%. Higher Property Taxes for Homeowners As home prices soar, so do home values and property taxes. ATTOM Data Solutions says that U.S. property taxes rose 5.4% in 2020. The average for single-family homes in 2020 was $3,719. That translates into an effective tax rate of 1.1% but researchers say many states have much higher tax rates. The highest is New Jersey with 2.2%. Illinois is second at 2.18%. And, Texas is third at 2.15%. At the low end is Hawaii with a tax rate of .37%. CA Landlord Accepts Bitcoin for Rent The Los Angeles-based real estate company Caruso announced that it will accept rent payments in bitcoin from residential and commercial tenants. Developer Rick Caruso founded the company which is known for high-end outdoor malls like The Grove in Los Angeles and a resort near Santa Barbara. Caruso said during a CNBC interview that he hopes to create a whole ecosystem where tenants and guests can use cryptocurrency to check into a resort, pay rent, and buy things while visiting Caruso properties. He says it’s a long-term strategy that anticipates what the world might be like in the next decade, and not just the next year or five years. Pet-Friendly Workplace The pet-friendly workplace could become more common as companies try to lure employees back to the office. A new survey shows that a lot of bosses realize how important pets have been during the pandemic and that many may allow pets at work. In a survey by Banfield Pet Hospital and OnePoll, half of the executives said they are planning to allow pets at the office and 59% said they would adopt policies that give employees flexibility to take care of their pets. One reason for this benevolent attitude is that 75% of the executives said that being a pet owner has made them better, more compassionate business leaders. There have also been a lot of employee requests for a more pet-friendly workplace. If you want more information about any of these stories including home price growth in specific cities around the world and property tax rates for different U.S. states, you'll find links on the podcast player page for this episode at NewsForInvestors.com. Links: 1 - https://www.marketwatch.com/story/imf-lifts-outlook-for-global-and-u-s-growth-11617712232?mod=mw_latestnews 2 - https://www.marketwatch.com/story/imf-backs-go-slow-fed-11617719428?mod=economy-politics 3 - https://www.marketwatch.com/story/jobless-claims-move-higher-for-second-straight-week-11617886018?mod=economic-report 4 - https://www.marketwatch.com/story/u-s-job-openings-climb-to-7-37-million-and-top-pre-pandemic-levels-as-economy-speeds-up-and-more-people-hired-11617718171?mod=economy-politics 5 - http://www.freddiemac.com/pmms/# 6 - https://www.worldpropertyjournal.com/real-estate-news/united-kingdom/london-real-estate-news/real-estate-news-knight-frank-2020-global-cities-index-2020-international-home-buyer-data-covid-19-impact-on-foreign-home-buyers-12450.php 7 - https://magazine.realtor/daily-news/2021/04/08/property-taxes-jumped-54-in-2020 8 - https://www.cnbc.com/2021/04/07/rick-carusos-company-to-begin-accepting-rent-payments-in-bitcoin.html 9 - https://www.inc.com/jessica-stillman/a-lot-more-post-pandemic-offices-are-going-to-be-pet-friendly-new-survey-says.html