Real Estate News: Real Estate Investing Podcast

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

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

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

In this Real Estate News Brief for the week ending September 4th, 2021... new FHFA rules on the foreclosure bidding process, the for-sale homes needed for a "normal" market, and the renters who don't think they will ever be homeowners. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week. The number of people applying for unemployment has dropped again. The Department of Labor reported that 340,000 people filed for state claims last week. That's a decline of 14,000 from the week before and the lowest it's been since the start of the pandemic. Continuing claims are also down, to a total of 2.75 million, and the total for all 8 state and federal programs is 12.2 million. That's down from 30 million at the peak of the pandemic. (1) More disappointing is the August report on hiring. The Wall Street Journal had estimated an additional 720,000 jobs, but the Bureau of Labor Statistics reported a disappointing 235,000 new jobs. That's the lowest number we've seen in more than a half a year. Job growth suffered the biggest decline in the retail sector. New government jobs were also down, along with jobs in the construction industry. The official unemployment rate is currently 5.2%, but of course that doesn't include people who are not looking for a job. (2) Meanwhile, home prices recorded a third month of record-high price growth. The latest S&P CoreLogic Case-Shiller Home Price Index is up 18.6% in June, on an annual basis. The 20-city index is ever higher, at 19.1%. S&P DJI investing strategist Craig Lazzara says the data is consistent with the hypothesis that the pandemic drove buyers from urban areas to the suburbs. (3) Pending home sales dipped a little in July. The National Association of Realtors says they were down 1.8%. MarketWatch economists had expected a slight increase. NAR's chief economist Lawrence Yun says: "The market may be starting to cool slightly, but at the moment there is not enough supply to match the demand." (4) Consumers are also feeling more anxious about the economy. The Conference Board says that consumer confidence fell to a six-month low of 113.8 in August. The worry list includes inflation and the spread of the Delta variant, although there's some evidence that Covid caseloads have peaked in some of the hardest hit areas. (5) Mortgage Rates Mortgage rates are holding steady. Freddie Mac says the 30-year fixed-rate mortgage stayed the same this last week at 2.87%. The 15-year was up one basis point to 2.18%. (6) In other news making headlines… New Rules on Foreclosure Bidding Process Owner-occupants are getting more time to buy foreclosures before investors are allowed to big on them. The Federal Housing Finance Agency announced that it is extending the amount of time that owners have to view and buy foreclosures from 20 days to 30 days. It's part of the First Look Program first launched in 2009 to help promote owner occupancy and stabilize neighborhoods. The FHFA's acting director, Sandra Thompson says: "Extending the amount of time owner-occupants have to bid on an REO property, without competition, is especially important for neighborhood preservation while the supply of homes for sale is severely limited." Housing Gap is 1.5 Homes Short of Normal The housing market needs another 1.5 million for-sale homes to help fill the inventory gap. Analysts at Morgan Stanley say that would get us back to a housing market "normal." That applies to both the resale market and the building market. (7) Morgan Stanley strategists say that inventory is lagging about three years behind demand. And the number of homes needed could be as high as 5 million, depending on how you add it all up. That imbalance is reflected in the rate of home price growth, although DataTrek analyst Nicholas Colas says: "While house prices are certainly trending above long-run growth rates, they are not yet as elevated as 2005 on an 8-year trailing appreciation basis." Renters Who Say They'll Always Be Renters Many renters hope to someday buy their own homes, but according to a LendingTree survey, half of them don't think that will ever happen. (8) LendingTree surveyed 2,500 people and 83% said they'd prefer to own their own homes, but 48% said they have doubts about their ability to buy. So what's keeping them from buying a home? More than half said they can't afford a down payment. About a third said home prices are too high or their credit scores are not good enough. A quarter of them said they don't have a stable job right now or they are not sure "where" to settle down. Some of the other reasons include student loan debt and plans to get married first. That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Port

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

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

In this Real Estate News Brief for the week ending August 28th, 2021... which lender will let you pay in Bitcoin, why a Covid-19 vaccine will get you a discount on closing costs, and the rising popularity of patios, for outdoor living. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We have economic news from this past week, but first, big news on the latest federal eviction moratorium. If you haven't heard, the U.S. Supreme Court blocked that mandate after a new legal challenge by the Alabama Association of Realtors and a group of landlords. The plaintiffs argued that the CDC doesn't have the authority to issue this kind of mandate. The justices agreed, saying the policy should've come from lawmakers, and not the CDC. (1) As Newsweek reports, progressive members of Congress are now considering legislation that would reinstate the moratorium, as the nation continues to deal with the pandemic. (2) So the battle continues. Members of the Federal Reserve met virtually for their annual Jackson Hole Symposium, and discussed the need to pull in the reigns on its bond-buying policy. (3) After the meeting, Fed Chair Jerome Powell said a majority of Fed officials, including himself, believe that tapering should begin this year. He has been saying that the economy needs to make "substantial further progress" before the Fed would cut back on its stimulus policy, and he said for the first time in his speech, that that test has now been met. An announcement on "when" tapering might begin is expected in September. Meantime, the inflation rate has now hit a 30-year high, according to the PCE Index. That stands for Personal Consumption Expenditure index. It's the one that the Fed pays close attention to. It was up .04% in July and brings the annual rate of inflation to 4.2%. (4) That's lower than the Consumer Price Index or CPI, which shows an annual rate of 5.4%. (5) Both are much higher than the Fed's 2% inflation target. A revised report on second quarter GDP shows the economy grew at an annualized rate of 6.6%. That's up from 6.5%. (6) The number of new weekly jobless claims rose for the first time in more than a month. The Labor Department says they were up 4,000 to about 353,000 for last week. Claims have been falling overall but have still not returned to pre-pandemic levels of about 220,000 per week. If you add all the people with ongoing claims, the total is about 12 million. That's down from a high of 30 million toward the beginning of the pandemic. (7) On to real estate: New home sales reversed a three-month decline, with a 1% increase for July. If that rate continued for an entire year, the sales total would hit 708,000. Currently, the median price for a home is $390,500. (8) Existing home sales are also higher in July. The National Association of Realtors says they were up 2% to a seasonally-adjusted annual rate of 5.99 million homes. The increase in sales is being attributed to an increase in inventory. The median price for an existing home is now $359,900, or 17.9% more than it was a year ago. (9) Mortgage Rates Mortgage rates are still idling below the 3% level. Freddie Mac says the 30-year fixed-rate mortgage was up 1 basis point to 2.87%. The 15-year was also up just one basis point to 2.17%. (10) In other news making headlines… Paying Home Loans with Bitcoin United Wholesale Mortgage made a big announcement about Bitcoin. It says that it will begin accepting cryptocurrency payments for home loans. UWM is the 2nd-largest lender in the U.S. The plan to accept crypto for payments is the first for the national mortgage industry. (11) Lender Discount for the Vaccinated What appears to be another industry first, is an announcement by Neat Loans to offer a discount to borrowers who are vaccinated against Covid-19. It would apply to $500 on closing costs for residential and refinancing loans. The concern is that an unvaccinated person would be more likely to get sick and be out of work, making it difficult to keep up with mortgage payments. Borrowers who are unable to get the vaccine for health or religious reasons, would also qualify for the discount. (12) Patio Popularity is Skyrocketing New data shows that the popularity of patios jumped another notch higher in 2020. The National Association of Homebuilders reports that the share of new homes with patios rose to 61.4%. It's the first time that number has ever been higher than 60%. At the beginning of the Great Recession, it got as low as 44.8%, but has been continually increasing since then, with a big jump in 2020. It rose from 59.6% to the current 61.4%. You'll also find more homes with patios in warmer Western and Southern states. (13) That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor

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

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

In this Real Estate News Brief for the week ending August 21st, 2021... we'll look at second quarter home prices, a big surge in rents for single-family homes, and a softening demand for vacation homes. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week. The Fed released the minutes of its last big meeting in July and acknowledged what many economists have been saying, that the current surge in U.S. inflation could continue into next year. That's mostly due to a shortage of labor and materials as the nation deals with the latest wave of the pandemic. MarketWatch reports that the Fed's July summary mentioned the delta variant six times after not one mention of the virus in June. The Fed previously said that high prices might last a little longer, but in this summary, Fed officials also acknowledged that the "spread of the delta variant may temporarily delay the full reopening of the economy and restrain hiring and labor supply." And that could put more pressure on prices. (1) On a more positive note, St. Louis Fed President James Bullard doesn't believe that the spread of the delta variant will derail the economy. He told MarketWatch: "The economy has clearly adapted to the pandemic situation." He says both businesses and consumers have found ways to deal with it. (2) According to published reports, there's growing support among Fed officials to begin the tapering process. The Wall Street Journal says that public statements from those officials suggest an announcement could be made next month, with a reduction in bond-buying activity beginning a month or two later. (3) The latest unemployment report shows that initial claims have reached a new pandemic low. They were down to 348,000 for the week ending August 14th, which supports the idea that the economy will weather this new outbreak. We'll know more next month when many people are expected to return to work as extended unemployment benefits run out, kids return to school, and the coronavirus is hopefully under better control. (4) Supply chain issues are still impacting home builders. The Census Bureau reported a 7% decrease in housing starts last month. Housingwire says the news is not all bad because housing starts are still 12% higher than last year and the number of single-family homes under construction is the highest since 2007. (5) But home builder confidence has dropped. The National Association of Homebuilders say the monthly confidence index fell five points in August, to a reading of 75. That's the lowest it's been in more than a year, mostly because of supply chain issues and high home prices. (6) Mortgage Rates Mortgage rates didn't move much last week. Freddie Mac says the 30-year fixed-rate mortgage was down 1 basis point to 2.86%. The 15-year was up 1 basis point to 2.16%. (7) In other news making headlines… Home Prices Up Again in Q2 Home prices pushed higher in the second quarter due to overwhelming demand and a short supply of homes. The National Association of Realtors says the sales price for the median single-family existing home was $357,900. That's up 22.9% year-over-year. (8) Looking at metros, NAR says that prices were higher in 182 of the 183 metros it analyzes. And in 94% of those metros, the median price was more than 10% higher. Metros with the strongest price growth have been in the South and West. The top gainer was Pittsfield, Massachusetts which is not in either of those regions. Second and third on the list of gainers was Austin, Texas and Naples, Florida. The only metro that posted a decline was Springfield, Illinois. That said, the overall market has cooled off a bit. NAR's chief economist Lawrence Yun says: "The housing market looks to move from 'super-hot' to 'warm,' with markedly slower price gains. Single-Family Rents Push Higher Strong demand for single-family rentals has also continued, and that's pushing rents higher. CoreLogic says U.S. single-family rents are up 7.5% year-over-year in June. That's five times higher than rent growth in June of last year. But rent growth is not the same across all price points with the fastest rent growth at the upper end. (9) Demand for single-family rentals really took off during the pandemic, and it hasn't slowed down. CoreLogic says they are overwhelmingly preferred by would-be homebuyers who have been either priced out of the market or can't find a home to buy. The 7.5% increase includes detached homes, duplexes, triplexes, quadplexes, townhomes, row-houses, condos, and co-ops. If you look at the rent growth for "just' detached single-family homes, it was 10.5% year-over-year in June and just 4.6% for "attached" rentals. Demand Slows for Second Homes The pandemic also produced a surge in demand for second homes, but Redfin says that trend has died down quite a bit. The real estate website says second-home demand fell 21% in July compare

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

In this Real Estate News Brief for the week ending August 14th, 2021… where lot values are surging, how rent payments can help new home buyers, and a contest for tiny home designs. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin today's episode with economic news from this past week. Two inflation reports show that prices are still heading higher. The consumer price index was up .5% in July. That's down from .9% in June which prompted some economists to say that inflation is moderating. But the yearly rate is 5.4% which is the same as June, and well above the Federal Reserve's 2% target. The core rate is a bit lower. That omits prices for energy and food. It was up .4% to a yearly rate of 4.3% which is slightly lower than the June rate. (1) Although the numbers show that inflation is backing off a little, it's still a whole lot higher than it was last year. The consumer price index was running at 1% annually while the core rate was about 1.6%. And… a report on wholesale prices also came out last week, and that's running hot. It shows the cost of goods rose .6% in July, mostly because of higher energy prices. Wholesale food prices were down 2.1% however. The producer price index also has a core rate which strips out food, energy, and trade margins. That was up .9% and boosted the core rate of wholesale inflation to 6.1%. MarketWatch says that's one of the highest wholesale inflation levels in several decades. (2) Economists say inflation could settle back down when everyone returns to work and supply chain bottlenecks are eliminated, but as MarketWatch reports, many feel that higher inflation may be here to stay. Fed Chief Jerome Powell has also acknowledged that inflation could run hotter than the Fed expected for a longer period of time. (3) The latest unemployment report shows that fewer people are asking for benefits, and fewer people are collecting them. The Labor Department says that initial claims dropped 12,000 to 375,000 last week. That's still higher than a pandemic low of 368,000 that occurred last month. But continuing claims were also down and they hit a new pandemic low of 2.87 million. If you tally up all the state and federal programs available, there are a total of 12.1 million people collecting unemployment checks or about 10 million more than there were before the Covid outbreak. (4) One of the more stunning reports from last week is from the University of Michigan. It shows that consumer sentiment took a nose dive in August to a reading of 70.2. That's down from 81.2 in July, and is now the lowest reading in a decade. That means it's lower right now than it was during any other month of the pandemic. MarketWatch economists believe that people are worried about inflation and a virus that may not go away anytime soon. (5) Mortgage Rates Mortgage rates did a small u-turn last week. They had been slowly sinking lower, but Freddie Mac says the 30-year fixed-rate mortgage rose 10 basis points. The average is now at 2.87%. The 15-year was up 5 basis points to 2.15%. (6) In other news making headlines... Lot Values Are Surging Lot values are surging. An analysis by the National Association of Builders shows that lot values for single-family homes that broke ground last year, have appreciated 18% to a record high of $53,000. That's close to the lot value record in 2005-2006, before the housing meltdown. Lots were going for $43,000 back then but that's equal to about $55,000 in today's dollars. (7) Lots are most expensive in New England at about $120,000 or more, but due to zoning laws, they are also usually much larger making them less expensive per acre. In the West, the median lot value is $203,000 but those lots are smaller making them the most expensive lots of all. In the Mountain region, the median value is $73,000. In the West South Central region, the median value is about $60,000 which is the least expensive but is also double what they were valued at just eight years ago. New Underwriting Bonus for Homebuyers On-time rent payments could help renters get a home loan. Fannie Mae announced that rent payment history can be used during the underwriting process. That will help people who don't have enough credit history to qualify for a loan. (8) FHFA Director Sandra Thompson said in a press release: "There is absolutely no reason timely payment of monthly housing expenses shouldn't be included in underwriting calculations." Lenders will have to get permission from mortgage applicants to check bank statements for rent payments. The new underwriting feature will be available starting September 18th. Tiny Home Design Contest Salt Lake City is holding a contest for the design of tiny homes. The city is soliciting designs for a master-planned tiny home community for the homeless. But all the submitted designs will be put into a library that can be used by homeowners and city officials. (9) The

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

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

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

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 t

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

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 w

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

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 kno

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 ou

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

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 Bel

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 co

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

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-fu

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

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 no

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

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%20hom

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.marketwat

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-p

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 reach

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-t

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.

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 pri

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-cp

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

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 S

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 NewsForI

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