Real Estate News: Real Estate Investing Podcast

In this Real Estate News Brief for the week ending September 23rd, 2023... the Fed's forecast on inflation, future rate hikes and the GDP, why remote work is good for the environment, and calls for a major shake-up at NAR. We begin with economic news from this past week and a message from Fed Chief Jerome Powell. He announced the result of the committee's September meeting, saying there would be no rate hike at this time, but a majority of Fed officials expect the need for one more quarter-point hike this year. The range is currently 5.25% to 5.5%. 12 Fed officials foresee another hike while seven don't see them going any higher. Only "one" Fed official expects the need to raise rates above 6% next year... ...That's it for today. You can read more about the stories in this episode by following links in the show notes at newsforinvestors.com. And please remember to subscribe to this podcast, and leave a review! If you'd like to know more about creating a financial safety net with real estate, please sign up for a free RealWealth membership. It'll take just a minute to sign up and will give you complete access to our website. Thanks for listening! Kathy Fettke Links: 1 - https://www.marketwatch.com/story/fed-skips-september-rate-hike-doesnt-rule-out-november-rise-38887479?mod=federal-reserve 2 - https://www.cnbc.com/2023/09/20/fed-signals-it-will-raise-rates-one-more-time-this-year-before-it-ends-hiking-campaign.html 3 - https://www.marketwatch.com/story/jobless-claims-fall-to-8-month-low-of-201-000-c593f45f?mod=economy-politics 4 - https://www.marketwatch.com/story/home-sales-fall-in-august-to-the-lowest-level-in-nine-months-ede3e35f?mod=economic-report 5 - https://www.marketwatch.com/story/u-s-housing-starts-drops-to-lowest-level-since-june-2020-daac45 6 - https://www.marketwatch.com/story/builder-confidence-index-falls-to-five-month-low-amid-high-mortgage-rates-6d3a2572?mod=economy-politics 7 - https://www.freddiemac.com/pmms 8 - https://gizmodo.com/working-remotely-could-cut-worker-emissions-in-half-1850853923 9 - https://therealdeal.com/national/2023/09/19/nar-staffers-call-for-leadership-overhaul-amid-controversy/

The market for existing homes is so tight that even the big landlords are having a tough time finding them, but the new rental real estate playbook is all about build-to-rent homes. It's no secret that renters want the single-family lifestyle, and builders are pumping tens of thousands of new rental homes into the market, with the biggest BTR boom in the South from Texas to Florida. According to stats from RealPage, more than 104-thousand BTR units are under construction across the nation right now. As of September of this year, more than 61,200 of them are in the Southeast section of the US , about 28-thousand five-hundred are in the Western half of the US, almost 13-thousand are in the Central states, and close to 17-hundred are in the Northeast. The RealPage definition of single-family includes fully detached, semi-detached, row homes, duplexes, quadruplexes, and townhomes... At RealWealth, we recently launched a new build-to-rent fund for investors over the Texas border in Oklahoma. It's a pre-boom area that has all the right features for a desirable and growing residential location. It's near main highways, close to large employers, and is just 12 miles from Gainesville, Texas. That's in an area north of Dallas which has been expanding rapidly as a major technology hub. We've already started purchasing new fourplexes with built-in equity for the fund, and we've contracted with a builder for a total of 10 fourplexes over the next two years. My fund partner, Leah, was born and raised in the area, and has witnessed the growth patterns in vast undeveloped areas that are now bustling cities. She is currently focused on Thackerville near the Oklahoma-Texas border because it's in desperate need of housing and so close to booming job growth. At the time of the interview she said there was only one rental on the market and just 11 homes for sale. If you'd like to check on all the build-to-rent stats mentioned in this podcast, check for links in the show notes at newsforinvestors.com. You can find out more about our rental fund at growdevelopments.com. My partner Leah also provided a lot of information about why she thinks this area is ready to blast off on a recent Real Wealth Show with the title: "The Nearby Texas Market that's Poised to Blast Off!" RealWealth can help you create a financial safety net with real estate. It's free to join and gain complete access to all our data and resources. And please remember to subscribe to this podcast and leave a review! That's it for today! Thanks for listening. Kathy Fettke Links: 1 - https://www.realpage.com/analytics/btr-by-region/ 2 - https://squaremile.com/property/development-resident-experience-investor-returns/ 3 - https://growdevelopments.com/

In this Real Estate News Brief for the week ending September 16th, 2023... two more reports on inflation just ahead of this week's Fed meeting, single-family versus multi-family rent growth, and why two background check companies were fined $5.8 million. We begin with economic news from this past week and another round of inflation reports for the month of August. The Consumer Price Index showed an increase in overall inflation but a drop in the core rate which eliminates pricing for energy and food. The overall CPI rose an unexpected .6%, mostly due to a surge in energy prices. That brought the yearly rate up from 3.2% to 3.7%. But when you strip the numbers down to the core rate, inflation was only up .2% and that small increase lowered the annual core rate from 4.7% to 4.3%... ...That's it for today. You can read more about the stories in this episode by following links in the show notes at newsforinvestors.com. And please remember to subscribe to this podcast, and leave a review! If you'd like to know more about how to buy rental real estate, make sure you are a RealWealth member. It's free to join and will give you access to all our data on various rental markets along with hundreds of webinars, our experienced investment counselors, more than a dozen property teams, and lots of great ideas about how to get from point A to B in your wealth-building journey! Thanks for listening! Kathy Fettke Links: Kathy's Instagram: https://www.instagram.com/kathyfettke/ Kathy's audiobook on Audible: https://tinyurl.com/retirerichaudible 1 - https://www.marketwatch.com/story/cpi-shows-biggest-increase-in-inflation-in-14-months-efec35e1?mod=economy-politics 2 - https://www.cnbc.com/2023/09/14/ppi-inflation-report-august-2023-.html 3 - https://www.marketwatch.com/story/when-will-inflation-cool-to-the-feds-2-target-by-late-next-year-says-jp-morgan-strategist-bd6f1c25?mod=mw_quote_news 4 - https://www.marketwatch.com/story/u-s-4-week-average-of-jobless-claims-drops-to-lowest-level-in-seven-months-672e01a9?mod=economic-report 5 - https://www.freddiemac.com/pmms 6 - https://www.apartmentlist.com/research/rents-are-falling-slower-in-the-suburbs 7 - https://www.corelogic.com/intelligence/annual-rent-growth-slows-again-june/ 8 - https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-says-truthfinder-instant-checkmate-deceived-users-about-background-report-accuracy-violated-fcra? 9 - https://www.nar.realtor/magazine/real-estate-news/commercial/new-tool-helps-hosts-calculate-short-term-rental-profit

The Australian real estate tycoon who became notorious for his comments about millennials wasting money on avocado toast, is making new waves with comments about employee attitudes. Tim Gurner spoke out at an Australian Financial Review conference and told his peers that they have to "kill" this feeling of superiority among employees and to do that, employees, and the economy in general, would need to feel some pain.... ...You'll find a link to the Fortune article in the show notes at newsforinvestors.com. And please remember to subscribe to this podcast, and leave a review! If you'd like to learn more about how to become your own boss through real estate investing, be sure to check out the RealWealth website, and sign up for free. Members will get complete access to all our information, resources, and experienced investment counselors, with no cost, and no obligation to buy anything. Links: 1 - https://fortune.com/2023/09/13/australia-real-estate-ceo-tim-gurner-pain-in-economy-avocado-toast/

More big landlords and property managers are getting hauled into court over alleged rent-fixing. I recently reported on a lawsuit against RealPage and institutional landlords who use the company's YieldStar rent-setting platform. Now there are similar allegations against Yardi Systems and 18 property management companies. Seattle-based law firm Hagens Berman filed the lawsuit accusing Yardi and the property management firms of a scheme to fix apartment rents nationwide. The attorneys say that the companies used Yardi's RENTmaximizer tool to automatically raise rents so they wouldn't compete with each other. That eliminated the need for discounts and other move-in deals to entice tenants... ...You can read more about the Yardi lawsuit by following a link in the show notes at newsforinvestors.com. And please remember to subscribe to this podcast, and leave a review! You can find out more about the business of single-family rentals at RealWealth.com. Sign up for free and enjoy a wealth of information about how to find and manage rentals, without breaking any laws! That's it for today! Thanks for listening. Kathy Fettke Links: https://www.bisnow.com/national/news/multifamily/yardi-18-real-estate-firms-accused-of-rent-fixing-in-class-action-lawsuit-120603

In this Real Estate News Brief for the week ending September 9th, 2023... we'll tell you the mortgage rate buyers are waiting for, the homebuying expectations for millennials, and a new super low 1% down payment program. Economic News We begin with economic news from this past week, and comments from three Federal Reserve Bank Presidents about the possibility of more rate hikes. New York's Bank President, John Wiliams, spoke at a conference and said that monetary policy is in a good place right now with the desired effects. But, he says: "Going forward, we will have to keep watching the data… and asking ourselves the question 'is this sufficiently restrictive, do we need to maybe raise rates again?" He also says that worries about a recession have essentially vanished, although he expects the unemployment rate to hit 4% in the coming months. It's currently at 3.8%.... ...That's it for today. You can read more about the stories in this episode by following links in the show notes at newsforinvestors.com. And please remember to subscribe to this podcast, and leave a review! If you'd like to know more about how to buy real estate for investment purposes, sign up for a free membership at RealWealth.com. It'll take just a minute to sign up and will give you complete access to our website. That includes hundreds of webinars, data on different rental markets, a curated list of real estate professionals and property teams, and access to our own experienced investment counselors. Thanks for listening! Kathy Fettke Links: 1 - https://www.marketwatch.com/story/feds-williams-says-monetary-policy-is-in-a-good-place-recession-talk-has-vanished-270384ec 2 - https://www.marketwatch.com/amp/story/chicago-feds-goolsbee-suggests-central-bank-is-almost-done-raising-rates-bd88492e 3 - https://www.marketwatch.com/story/feds-logan-says-skipping-rate-hike-in-september-does-not-imply-stopping-61a077c 4 - https://www.marketwatch.com/story/u-s-jobless-claims-fall-to-216-000-lowest-level-since-february-bfe4111f?mod=mw_latestnews 5 - https://www.freddiemac.com/pmms 6 - https://www.cnbc.com/2023/09/05/mortgage-rate-tipping-point-homeowners-say-5percent-is-the-magic-number.html 7 - https://www.redfin.com/news/gen-z-millennial-affordability-barrier-to-homeownership/ 8 - https://www.cnn.com/2023/08/25/homes/zillow-low-down-payment-loan/index.html

Are you thinking of buying land as a place to build your dream home or to own as an investment opportunity? With such a tight inventory of already-built homes, land sales are increasing across the country and so is a real estate scam known as title fraud. According to an attorney for the National Association of Realtors, title fraud has become a more popular tactic among real estate fraudsters than wire fraud. (1) We're seeing more and more headlines about land that's being sold without the property owner's knowledge, and warnings from various authorities and real estate professionals about title fraud. It's also being called "vacant land fraud" and "seller impersonation fraud" according to one story out of Nevada. (2) The Nevada Division of Insurance and the Nevada Real Estate Division have been warning residents about this kind of scam... ...You can read more about this topic and the precautions you can take to prevent it from happening by following links in the show notes at newsforinvestors.com. And please remember to subscribe to this podcast, and leave a review! If you'd like to know more about how to buy real estate for investment purposes, sign up for a free membership at RealWealth.com. It'll take just a minute to sign up and will give you complete access to our website. That includes hundreds of webinars, data on different rental markets, a curated list of real estate professionals and property teams, and access to our own experienced investment counselors. Thanks for listening! Kathy Fettke Links: 1 - https://www.businessinsider.com/land-fraud-explained-how-properties-being-sold-from-under-people-2023-9 2 - https://www.fox5vegas.com/2023/08/31/nevada-warns-residents-increasingly-common-real-estate-scam/ 3 - https://www.reviewjournal.com/investigations/a-rising-fraud-scammers-are-selling-other-peoples-real-estate-2871438/ 4 - https://www.businessinsider.com/mans-arizona-lot-sold-for-200000-without-him-listing-it-2023-8

In this Real Estate News Brief for the week ending September 2nd, 2023... what the Fed's favorite inflation gauge is telling us about July, the home buying slowdown among investors, and plans for a brand-new bustling city in the San Francisco Bay Area. We begin with the Fed's preferred inflation gauge showing a slight uptick in July. The Personal Consumption Expenditure price index rose 3.3% compared to the previous year. That's up from 3% in June. The core rate which excludes food and fuel was also up from 4.1% in June to 4.2% in July. The report is fuel for the Fed's next meeting when officials will decide on whether to hike short-term rates once again... You can read more about these stories by following links in the show notes at newsforinvestors.com. While you are there, be sure to sign up for a free RealWealth membership. You can learn more about how and where it makes sense for you to invest. You can also look at sample rental properties, get your questions answered by experienced investment counselors, and connect with property teams and other real estate professionals. And please remember to subscribe to this podcast, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.marketwatch.com/story/inflation-rate-rises-slightly-in-july-pce-finds-f496f493 2 - https://www.nytimes.com/2023/08/31/business/economy/fed-inflation-july.html 3 - https://www.reuters.com/markets/rates-bonds/feds-bostic-says-us-interest-rates-are-high-enough-2023-08-31/ 4 - https://www.reuters.com/markets/rates-bonds/feds-bostic-says-us-interest-rates-are-high-enough-2023-08-31/ 5 - https://www.marketwatch.com/story/u-s-jobless-claims-fall-to-lowest-level-in-four-weeks-3b2da360 6 - https://www.marketwatch.com/story/u-s-creates-187-000-jobs-in-august-382df422?mod=economy-politics 7 - https://www.freddiemac.com/pmms 8 - https://www.redfin.com/news/investor-home-purchases-drop-q2-2023/ 9 - https://www.nytimes.com/2023/08/25/business/land-purchases-solano-county.html

Like any industry, there are plenty of stories within the real estate world about lawsuits, fraud, and scandalous behavior. Some of the latest headlines include the resignation of the president of the National Association of Realtors in the midst of a scandal, a huge class-action price-fixing lawsuit against RealPage and some of the nation's biggest landlords, and a real estate influencer in Philadelphia accused of swindling starry-eyed first-time real estate investors. I thought I'd dedicate this episode to those stories and a few others... If you'd like to learn more about real estate investing without breaking any laws, please sign up as a RealWealth member. Membership is free and will give you full access to our website and resources, including our property teams and our investment counselors. You can also catch up on any episodes you've missed and find links to our sources at newsforinvestors.com. And please remember to subscribe to this podcast, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.cnn.com/2023/08/29/homes/nar-president-resigns/index.html 2 - https://therealdeal.com/national/2023/08/29/national-association-of-realtors-pocket-listing-suit-revived/ 3 - https://therealdeal.com/national/2023/08/20/philadelphia-real-estate-influencer-accused-of-fraud/ 4 - https://therealdeal.com/national/2023/08/20/philadelphia-real-estate-influencer-accused-of-fraud/ 5 - https://therealdeal.com/miami/2023/08/18/miami-realtor-sentenced-in-ppp-fraud-case/

In this Real Estate News Brief for the week ending August 26th, 2023… tough talk on inflation from the Fed Chief, when and why we might see a surge in home prices, and what Texas is doing to manage a booming economy north of Dallas. We begin with economic news from this past week and comments from Fed Chief Jerome Powell. He delivered the keynote address at the Kansas City Fed's annual retreat in Jackson Hole, Wyoming. He reiterated previous sentiments about making progress on inflation, but says it's still too high and the central bank plans to "keep at it until the job is done." He said: "We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective" – which is 2%... ...The North Texas area is becoming a global technology hub as semiconductor companies move into the area. That's creating tens of thousands of jobs, and with all those jobs, a surge in housing demand. We are capitalizing on this opportunity at RealWealth with a North Dallas Rental Fund for accredited investors. You can find out more about this fund at growdevelopments.com. That's it for today. You can listen to past episodes and check for links to our news sources at newsforinvestors.com. You can also sign up for a free RealWealth membership while you are there to learn more about how and where to invest in real estate. And please remember to subscribe to this podcast, and leave a review! Thanks for listening! Kathy Fettke Follow Kathy on Instagram at: https://www.instagram.com/kathyfettke/ Purchase Kathy's audiobook on Audible at: https://tinyurl.com/retirerichaudible Links: 1 - https://www.marketwatch.com/story/powell-unsure-of-the-need-to-tighten-further-b43a9d18?mod=federal-reserve 2 - https://www.marketwatch.com/story/jobless-claims-drop-to-3-week-low-of-230-000-still-no-sign-of-rising-u-s-layoffs-1f1411f6?mod=economic-report 3 - https://www.marketwatch.com/story/u-s-home-sales-fall-in-july-as-rates-rise-and-listings-fall-33b79a54?mod=economic-report 4 - https://www.marketwatch.com/story/u-s-new-homes-sales-rise-4-4-in-july-533ab184?mod=economic-report 5 - https://www.freddiemac.com/pmms 6 - https://markets.businessinsider.com/news/commodities/housing-market-outlook-recession-home-prices-mortgage-rates-fannie-mae-2023-8 7 - https://finance.yahoo.com/news/house-prices-wont-fall-ndash-195516944.html 8 - https://www.rentcafe.com/blog/rental-market/market-snapshots/new-apartment-construction/ 9 - https://www.bizjournals.com/dallas/news/2023/08/18/txdot-greg-abbott-115-billion.html

Building a small rental unit on your property is a great way to create passive income, but housing experts say that accessory dwelling units, or ADUs, can also help solve the nation's housing crisis. And there are a growing number of states that are allowing them. Plus, three states are actually paying people to build them! California was the first to legalize ADUs back in 1982 The law allowed homeowners to build a second unit but local governments hampered the effort with restrictions. Some municipalities charged hefty "impact fees" or imposed complicated and expensive permitting requirements. There may have also been restrictions on renting the units if the owner didn't live on the property and problems qualifying for a loan to build an ADU... If you live in a place that allows ADU's, It's now time to check your yard for space to build an ADU that can bring you some passive income! You can also find out how to become a landlord at our RealWealth website. Membership is free! You can also catch up on any episodes you've missed at newsforinvestors.com. And please remember to subscribe to this podcast, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 - https://jbrec.com/insights/adus-surge-in-california-gain-momentum-nationwide/?utm_campaign=BMI&utm_medium=email&_hsmi=271469296&_hsenc=p2ANqtz-_-Hlar9T334pF3qolJt4tha6w2J6owC4q8dk-bEGPqJ1cu2FHzL0uPQKvYkVbr0EF1LiWvSP8vwxxXhrRyDCAbkgUURA&utm_content=271469296&utm_source=hs_email 2 - https://www.governing.com/community/the-role-of-adus-in-easing-americas-housing-crisis 3 - https://www.businessinsider.com/states-will-compensate-you-for-building-tiny-home-adu-2023-8?inline-endstory-related-recommendations= 4 - https://jbrec.com/insights/adus-surge-in-california-gain-momentum-nationwide/?utm_campaign=BMI&utm_medium=email&_hsmi=271469296&_hsenc=p2ANqtz-_-Hlar9T334pF3qolJt4tha6w2J6owC4q8dk-bEGPqJ1cu2FHzL0uPQKvYkVbr0EF1LiWvSP8vwxxXhrRyDCAbkgUURA&utm_content=271469296&utm_source=hs_email

In this Real Estate News Brief for the week ending August 19th, 2023... what economists say the Fed will do next, a new record high for U.S. home values, and the cities with the biggest need for new housing. We begin with the results of a poll among economists on whether the Fed is through with rate hikes. Reuters polled 110 economists for their opinion on what the Fed will do next. 90% of them believe the Fed will keep interest rates right where they are. About 80% don't think we'll see another rate hike for the rest of the year. And, a slight majority are anticipating a rate cut by March... Please sign up for free membership at our RealWealth website if you'd like to learn more about how and where to invest in real estate. You can also catch up on any episodes you've missed at newsforinvestors.com. And please remember to subscribe to this podcast, and leave a review! Links: 1 - https://www.reuters.com/markets/rates-bonds/fed-done-hiking-slim-majority-economists-say-no-rate-cut-through-march-2023-08-18/ 2 - https://www.cnbc.com/2023/08/16/fed-meeting-minutes-signal-coming-rate-moves.html 3 - https://www.marketwatch.com/story/jobless-claims-fall-11-000-to-239-000-layoffs-in-the-u-s-still-low-c9cd3418?mod=economic-report 4 - https://www.marketwatch.com/story/builder-confidence-falls-for-the-first-time-in-2023-despite-strong-u-s-home-buying-demand-f6b543e1?mod=economic-report 5 - https://www.marketwatch.com/story/builders-ramped-up-construction-of-new-homes-in-july-6d087590?mod=economy-politics 6 - https://www.freddiemac.com/pmms 7 - https://nationalmortgageprofessional.com/news/us-home-values-soar-record-468-trillion-amid-housing-shortage 8 - https://www.bloomberg.com/news/articles/2023-08-14/san-francisco-real-estate-declines-spur-property-tax-assessment-appeals 9 - https://finance.yahoo.com/news/housing-market-2023-4-cities-113007105.html

In addition to the tragic loss of lives in the Maui wildfire, residents and insurance companies are assessing property losses which are currently coming in at about $3.2 billion. But it won't just be Maui residents paying for this fire. Insurance companies will be raising rates for everyone to help cover their losses. As reported by Barron's, insurance companies won't have any problem paying claims for fire losses in Maui. The U.S. property and casualty industry is well-capitalized with about $980 billion at the end of last year. That's according to the Insurance Information Institute. The Institute's Janet Ruiz told Barron's: "The Hawaii insurance market is stable. Insurance companies are prepared to handle catastrophes." But analysts and industry experts say insurance companies are already raising rates as natural disasters cause more and more damage across the U.S. and the Maui wildfire will only reinforce this trend. Insurance companies will raise rates based on what they expect to pay out in the next few years... If you've missed some of our episodes, you can catch up at https://www.newsforinvestors.com. You can also hit the Join for Free button to become a RealWealth member. And please remember to hit the subscribe button, and leave a review! Links: 1 - https://www.barrons.com/amp/articles/maiu-hawaii-wildfire-homeowners-insurance-2fbc156 2 - https://www.nytimes.com/2023/08/11/us/maui-wildfires-housing.html 3 - https://www.washingtonpost.com/nation/2023/08/14/hawaii-housing-crisis-lahaina-homes-maui-fires/ 4 - https://www.newsweek.com/investors-calling-maui-wildfire-victims-buy-their-land-1819600 5 - https://www.nar.realtor/magazine/real-estate-news/realtors-give-1-5m-to-aid-maui-wildfire-recovery

In this Real Estate News Brief for the week ending August 12th, 2023... you'll hear what Fed officials are forecasting for housing inflation, why a New York judge tossed an Airbnb lawsuit, and the top ten cities for build-to-rent single-family homes. We begin with economic news from this past week that features two reports on inflation. The Labor Department reported that the Consumer Price Index was slightly higher in July than it was in June, although the reported figure for both months was .2%. The slight increase was enough to bring the yearly rate up a tiny bit, from 3% to 3.2%, but as MarketWatch reports, the fluctuation may not be enough to worry the Fed. The core rate, which eliminates prices for food and fuel, was also up .2% with an annual rate that was down slightly from 4.8% to 4.7%... If you've missed some of our episodes, you can catch up at https://www.newsforinvestors.com. And please remember to hit the subscribe button, and leave a review! You can also hit the Join for Free button to become a RealWealth member. As a member, you get access to our Investor Portal, where you'll be able to look at property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and others. Links: 1 - https://www.marketwatch.com/story/u-s-inflation-rate-creeps-back-up-cpi-shows-feds-fight-not-over-5f213049?mod=economy-politics 2 - https://www.bisnow.com/national/news/economy/rents-now-account-for-90-of-inflation-which-ticked-up-in-july-120172 3 - https://www.marketwatch.com/story/u-s-wholesale-prices-pick-up-in-july-ppi-shows-2a4dbfaf?mod=economy-politics 4 - https://www.marketwatch.com/story/fed-has-more-work-to-do-to-get-inflation-back-down-daly-says-1899e2cf 5 - https://www.marketwatch.com/story/u-s-jobless-claims-rise-to-highest-level-in-a-month-e2ec6929?mod=economy-politics 6 - https://www.freddiemac.com/pmms 7 - https://www.bisnow.com/new-york/news/hotel/airbnbs-lawsuit-challenging-new-yorks-restrictions-dismissed-by-judge-120161 8 - https://www.businessinsider.com/financial-execs-would-quit-if-mandated-back-to-office-2023-8 9 - https://www.globest.com/2023/08/11/here-is-where-the-most-build-to-rent-units-are/

In this Real Estate News Brief for the week ending August 5th, 2023... the government's debt rating get a downgrade, typical mortgage payment rises, and wind risk data is now available on a popular listing website. We begin with economic news from this past week that features a downgrade on U.S. government debt. The Fitch credit rating agency lowered the U.S. government's debt rating one notch, from AAA to AA+ saying the downgrade reflects "expected fiscal deterioration" that includes a rising amount of government debt and repeated problems with "governance" because of all the debt-ceiling battles in Congress... Please visit newsforinvestors.com to keep up with all the real estate news, and hit the "Join for Free" button to become a member of RealWealth. You'll get access to all our real estate data on markets that make sense for investors. And please remember to hit the subscribe button for this podcast, and leave a review! You can also follow me on instagram, and learn how to create financial freedom from my audiobook, Retire Rich with Rentals. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.marketwatch.com/story/mortgage-rates-rise-as-fitch-downgrades-u-s-government-debt-6d049644 2 - https://www.marketwatch.com/story/the-u-s-debt-will-rise-by-more-than-5-billion-every-single-day-for-the-next-decade-775ed38d?mod=economy-politics 3 - https://www.marketwatch.com/story/warren-buffett-dismisses-fitch-downgrade-there-are-some-things-you-shouldnt-worry-about-f20a4482 4 - https://www.marketwatch.com/story/kashkari-says-fed-pulling-off-soft-landing-would-be-a-resounding-positive-outcome-77b581d3 5 - https://www.marketwatch.com/story/richmond-feds-barkin-says-inflation-remains-too-high-expects-economy-to-slow-f72776d4?mod=inflation 6 - https://www.marketwatch.com/story/jobless-claims-inch-up-to-227-000-but-show-no-sign-of-rising-layoffs-bd103957?mod=economy-politics 7 - https://www.marketwatch.com/story/job-openings-in-the-u-s-little-changed-at-9-6-million-e2fe3eb9?mod=economy-politics 8 - https://www.marketwatch.com/story/u-s-adds-187-000-jobs-in-july-and-points-to-slowdown-in-hiring-f24ac81f?mod=home-page 9 - https://www.marketwatch.com/story/u-s-construction-spending-rises-in-june-6a4047a4?mod=economic-report 10 - https://www.freddiemac.com/pmms 11 - https://www.redfin.com/news/housing-market-update-monthly-mortgage-payments-near-record-high/ 12 - https://www.redfin.com/news/redfin-adds-wind-risk-data-for-u-s-homes/

The Federal government announced a plan to make it easier for builders to get new housing on the market. It's part of the Biden administration's Housing Supply Action Plan. This program, announced on July 27th, would reduce land use and zoning restrictions, increase financing for affordable energy efficient housing, and promote the conversion of under-used commercial space into homes. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. The housing crisis is the result of an oversized demand for housing, a limited supply of affordable homes, and a whole lot of rules and regulations that make it difficult to build more homes. Each city and municipality has zoning rules and land use policies that lean toward low-density housing, like single-family detached homes... If you want to learn more about how you can use real estate to build wealth, hit the join for free button on our website. And please remember to hit the subscribe button, and leave a review! Links: 1 - https://www.bisnow.com/national/news/affordable-housing/biden-administration-rolls-out-plan-to-cut-zoning-and-land-use-red-tape-120000 2 - https://www.whitehouse.gov/briefing-room/statements-releases/2023/07/27/biden-harris-administration-announces-actions-to-lower-housing-costs-and-boost-supply/ 3 - https://www.whitehouse.gov/briefing-room/statements-releases/2023/01/25/fact-sheet-biden-harris-administration-announces-new-actions-to-protect-renters-and-promote-rental-affordability/ 4 - https://www.zillowgroup.com/news/a-rental-market-that-works-for-everyone/

In this Real Estate News Brief for the week ending July 29th, 2023… the Fed's latest rate hike, how the central bank's economic forecast has changed, and good news about the dreaded IRS "knock on the door." We begin with economic news from this past week and a Fed meeting that resulted in yet another rate hike. The Federal Reserve raised the benchmark rate a quarter point, to a range of 5.25% to 5.5%. That's the highest it's been in 22 years. In a news conference after the meeting, Fed Chief Jerome Powell said that inflation has moderated somewhat, but the 2% target is still a ways off. He wouldn't say whether Fed officials are leaning toward another rate hike in September. He said it would be a meeting-by-meeting data-driven decision... Please remember to hit the subscribe button, and leave a review! If you want to learn more about how you can become a wealth-building real estate investor, hit the join for free button on our website. Thanks for listening. I'm Kathy Fettke. Links: https://www.cnbc.com/2023/07/26/fed-meeting-july-2023-.html?&qsearchterm=fed%20approved%20hike%20that%20takes https://www.marketwatch.com/story/fed-no-longer-sees-a-recession-and-other-things-we-learned-from-powells-press-conference-ef98d718 https://www.marketwatch.com/picks/were-already-seeing-some-cds-with-5-75-apy-now-that-the-fed-hiked-interest-rates-again-might-rates-climb-higher-de14c37f https://www.marketwatch.com/story/gdp-increases-at-2-4-annual-pace-in-the-second-quarter-7e548aed?mod=home-page https://www.marketwatch.com/story/u-s-inflation-slows-again-pce-shows-966aa14c?mod=economy-politics https://www.marketwatch.com/story/jobless-claims-drop-to-the-lowest-level-since-february-51cea584?mod=economic-report https://www.marketwatch.com/story/s-p-case-shiller-shows-u-s-home-prices-up-for-fourth-straight-month-in-may-9190cfd0 https://www.marketwatch.com/story/newly-built-u-s-home-sales-fall-in-june-6123fd72 https://www.nar.realtor/magazine/real-estate-news/economy/nar-economist-housing-recession-is-over https://www.freddiemac.com/pmms https://www.marketwatch.com/story/the-housing-recession-is-over-real-estate-group-says-as-pending-home-sales-tick-up-for-the-first-time-in-4-months-2d4cce4f https://www.bisnow.com/national/news/office/landlord-finances-owners-open-books-119930 https://www.bisnow.com/national/news/office/amazon-return-to-office-relocating-workers-major-downtown-hubs-119926 https://www.irs.gov/newsroom/irs-ends-unannounced-revenue-officer-visits-to-taxpayers-major-change-to-end-confusion-enhance-safety-as-part-of-larger-agency-transformation-efforts

Fraud concerns are growing in connection with the Nightingale investment firm's handling of investor funds. We just reported on the disappearance of millions of dollars raised on the CrowdStreet platform for two Nightingale deals. And now, CrowdStreet is worried about the management of a Nightingale office tower in Chicago, which was also partially paid for by CrowdStreet investors. In a previous podcast, we reported that Nightingale is accused of misappropriating more than $50 million that investors pumped into two high-end properties in Atlanta and Chicago. The deals never closed, and when the money went missing, CrowdStreet recommended the appointment of an independent manager. Shareholders agreed and hired Anna Phillips. She then placed the entities created for those deals into bankruptcy to help track down the money. Now CrowdStreet is taking a closer look at the Nightingale campaigns and wants to put Phillips in control of the Chicago property. That's after a request for audited financial records went unanswered. But in this case, putting an independent manager in charge is more complicated because the Chicago office tower is an operating asset with equity investors who are not connected to CrowdStreet. There's also an ownership transfer to deal with and several loans... This is why I've decided to create a master course on development, that will be helpful for both investors and developers. So many syndications require development of some kind, and it's important that investors understand how to analyze the deal. It's also going to be valuable for developers because the courses will be taught by my developer partners. You can find out more at GrowDevelopments.com. Thanks for listening! List: 1 - https://www.bisnow.com/chicago/news/office/crowdstreet-seeks-takeover-of-another-nightingale-asset-after-landlord-goes-dark-119919 2 - https://realwealth.com/category/real-estate-due-diligence/

Some CrowdStreet investors are expressing disbelief, and rage, after learning that millions of dollars of their investment funds have gone missing! Investors pumped more than $60 million into two deals sponsored by Nightingale Properties on that platform, and Poof! The money has mysteriously disappeared! Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. As reported by Bisnow, Nightingale did a great job pitching the deals to CrowdStreet investors. One was Nightingale's purchase of the Atlanta Financial Center for $182 million, which represented a $78 million loss for the seller and instant equity for the buyers. The Real Deals reports that more than 650 investors clamored into that deal with $54 million. The other deal was the renovation of a Miami Beach office building that Nightingale already owned. It raised $9 million for that project... You can find out more about how to invest responsibly as a RealWealth member. It's free to join, and takes just a few minutes. Keep up with important real estate news at newsforinvestors.com, and please remember to subscribe to this podcast to get new episodes automatically delivered to your phone! Thanks for listening! Kathy Fettke Links: 1 - https://www.bisnow.com/national/news/capital-markets/crowdstreet-investors-say-accusations-about-nightingale-mind-boggling-as-they-face-a-possible-total-loss-119896 2 - https://therealdeal.com/national/2023/07/14/fiduciary-to-investors-funds-in-nightingale-projects-misappropriated/ 3 - https://www.bisnow.com/new-york/news/capital-markets/nightingale-properties-crowdstreet-scandal-illegal-behavior-119884?utm_source=outbound_pub_58&utm_campaign=outbound_issue_69142&utm_content=link&utm_medium=email

In this Real Estate News Brief for the week ending July 22nd, 2023... what economists are expecting from the Fed, why there's so much optimism about a soft landing, and what landlords are seeing for rent growth in today's market. 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. We begin with economic news from this past week, and much of that news has been focused on what economists predict the Fed will do at this week's meeting. There's basically a consensus that the Fed will hike short-term rates another quarter point to squash inflation, and that that will likely be the final rate hike. But at the same time, most economists don't expect Fed Chief Jerome Powell to say that out loud, and he has predicted the need for another two rate hikes. But he's more likely to leave people guessing at this point, as Fed officials evaluate inflation data. And it's been good recently. The consumer price index or CPI dropped to 3.1% in June, but the core rate is still too high at 4.8%. The core rate eliminates food and gas and is considered a better gauge for determining what prices are doing... Check the show notes for links at newsforinvestors.com. You can see all the data for rent growth by following a few of those links. And please remember to subscribe to this podcast and leave a review! You can also join RealWealth by clicking on the "Join for Free" button. As a member, you have access to the Investor Portal where you can look at sample rental properties in various markets. You'll also have access to our experienced investment counselors who can answer questions and the property teams we've been working with. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.marketwatch.com/story/everyone-thinks-the-feds-rate-hike-next-week-will-be-the-final-one-except-the-fed-dc5fb209?mod=home-page 2 - https://www.marketwatch.com/story/jobless-claims-drop-to-two-month-low-of-228-000-f6709597?mod=economy-politics 3 - https://www.marketwatch.com/story/home-prices-climb-to-highest-level-in-a-year-as-home-listings-dwindle-c49ad934?mod=economy-politics 4 - https://www.marketwatch.com/story/u-s-housing-starts-retreat-in-june-e4a71eaa?mod=economy-politics 5 - https://www.freddiemac.com/pmms 6 - https://www.redfin.com/news/housing-turnover-decline-since-pandemic/ 7 - https://www.corelogic.com/intelligence/us-rent-growth-returns-to-pre-pandemic-level-in-may-corelogic-reports/ 8 - https://yieldpro.com/2023/07/yardi-matrix-reports-solid-rent-growth-in-june/

The rent control debate is gaining momentum at the top of the legal food chain. New York landlords are asking the Supreme Court to overturn lower court decisions on a 2019 rent stabilization law, and several national real estate groups are showing support. If the high court takes the case and rules in their favor, experts say it could "destabilize" rent stabilization laws across the nation. 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 two landlord groups pushing for a Supreme Court review of the lower court rulings are the Community Housing Improvement Program and the Rent Stabilization Association. They are both based in New York, and claim that the 2019 "Housing Stability and Tenant Protection Act" is unconstitutional. The law is also known as the Rent Stabilization Law or RSL... You'll find links to our sources at newsforinvestors.com. You can also find out more about the real estate market and how rental properties can help you become financially independent by signing up as a RealWealth member. It's free to join, and takes just a few minutes. And don't forget to subscribe to his podcast! Thanks for listening! Kathy Fettke Links: 1 - https://www.bisnow.com/national/news/multifamily/national-landlord-organizations-join-chips-supreme-court-fight-against-rent-regulation-119647 2 - https://www.nationalreview.com/2023/07/the-case-against-new-yorks-rent-regulatory-regime/

In this Real Estate News Brief for the week ending July 15th, 2023... the best inflation news in a long time, why you might get some money back from BofA, and a ranking of state economies with two of my favorites at the top. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and the big news came from two promising inflation reports. With a tiny .2% increase in June, the Consumer Price Index, or CPI, shows that inflation is slowing down. The June reading is down from a .3% increase in May, and brings the annual rate down from 4% to 3%. It's the lowest rate of inflation we've seen since March of 2021. The core rate of inflation, which omits food and gas, rose the same .2%, but the annual rate is still on the hot side. It's currently at the 4.8% level. The core rate is considered a better gauge for price growth, and is still well above the 2% target the Fed is aiming for. But things are going in the right direction. (1) The Bureau of Labor Statistics also reported good news for wholesale inflation. It says the Producer Price Index or PPI rose .1% in June and indicates that wholesale costs may have stopped going up. The annual rate has now slowed from 1.1% in May to just .1% currently, which is VERY close to zero. The core rate shows the same monthly increase with an annual rate that is now 2.6%. Economists are still predicting that Fed officials will hike rates again at the next meeting despite these great reports, to make sure they've squeezed every last drop of inflation out of the economy. (2) San Francisco Fed President Mary Daly more or less confirmed that view, saying that "It is really too early to declare victory on inflation." She says she's still in the wait-and-see mode. (3) Fed Governor Christopher Waller also spoke out after the CPI report saying: "The report warmed my heart, but I have got to think with my head." He says he's seeing two more 25-basis-point hikes by the end of the year. (4) The weekly jobless report continues to highlight the strength of the job market. Jobless claims dipped again from a revised 249,000 to 237,000 last week. The decline may have also been impacted by the July 4th holiday, if workers didn't apply for benefits right away. But the big picture shows that the job market is still going strong. (5) Mortgage Rates Mortgage rates are not doing what we'd like them to do. Freddie Mac says the 30-year fixed-rate mortgage was up 15 basis points last week, to an average of 6.96%. The 15-year was up 6 points to 6.3%. (6) The Mortgage Bankers Association reports that average rates were up in the 7% range, but decreased slightly after those reports on inflation. (7) In other news making headlines… Bank of America Caught Double-Dipping Bank of America is doing damage control for millions of dollars worth of illegal transactions. The Consumer Financial Protection Bureau says that BofA allowed fees to be repeatedly charged for the same insufficient funds transaction, withheld credit card reward points and cash, and created unauthorized accounts to help meet sales-based incentive goals. (8) BofA will be paying $100 million to repay customers for illegal fees or unauthorized account charges, and about $90 million in penalties. Customers don't have to apply for this compensation. The bank will either deposit any money owed into customer accounts, or send checks to the account holders. Lenders Offer Loan Tweaks to Help Commercial Borrowers The commercial real estate crunch is easing somewhat with the help of banks trying to prevent defaults. Many of those loans are expiring, and refinancing has become a problem because of high interest rates. Real estate analysts say that banks are dealing with the situation by offering loan extensions and modifications, selling derivatives to fix interest costs, and offering subsidized loans to investors to purchase defaulted loans. Analysts say that lenders are hoping that this will help tide things over until properties become more profitable and refinancing can take place with lower interest rates. And the data reportedly shows that it's working. As an example, a U.S. News article says that about $2.1 billion in CMBS office loans matured in May. That's almost double the total amount that matured from January through April. A Moody's report says that a little more than a third of those loans were modified or extended. The default rate is currently at about 4% which is well below the projected 10%. Analysts are however, predicting that it could hit 6% by the end of the year. Best State Economies List Florida, Texas at the Top! This last story is about the top 10 U.S. state economies, and the two top ranking states are at the top of my list for investors. According to CNBC's America's Top States for Business study, Florida leads the nation with a score of 340 out of a possible 360 points! GDP growth last year was

This is the 1300th episode of our news podcast! And to celebrate we are featuring another big win for our RealWealth investors -- the public opening of a man-made crystal lagoon in the Tampa Bay area that's now the nation's largest! The 15-acre Mirada Lagoon is part of a massive development project in Pasco County that was syndicated by us at RealWealth. It was supposed to open a few years ago, but thanks to the pandemic and supply chain issues, those plans were delayed until now! (1) Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. We acquired the land for about 10 cents on the dollar nearly a decade ago, during the downturn. It was called Cannon Ranch at the time, and slated for 4200 homes on a golf course, but our team thought that consumers might be ready for something different. We brought on a partner, Metro Development Group, and decided to replace the golf-course plan with a huge 15-acre crystal lagoon. We changed the name from Cannon Ranch to The Mirada. It's located near Wesley Chapel, north of Tampa, right next to another community with the nation's first crystal lagoon, also built by Metro. It's the 7.5 acre Epperson Lagoon. As reported by the Orlando Sentinel, Metro has now opened a total of three lagoons in the Tampa Bay area. (2) The Neighborhood News says Metro is opening a fourth in Ft. Myers, with plans for several more in central Florida. (3) What Are Crystal Lagoons? So exactly what is a crystal lagoon? They've been described by some as nothing short of massive and stunning. (4) They have the ability to transform any ordinary piece of land into a safe, family-friendly beach. They are filled with crystal clear water that's perfect for swimming, paddle boarding, kayaking and other water sports. They can be as deep as nine feet or as shallow as needed for young children. And there is no limit to their size. The technology is also impressive. Crystal Lagoons use one hundred times fewer chemicals than swimming pools on a per-volume basis. Instead of chlorine they use an automated remote-controlled system that measures the water's PH, temperature, and other factors to determine the exact locations that need disinfecting. Disinfectant is then used only in those places. They also have a low-cost ultrasonic filtration system for solid matter that uses sound waves to push dirt into a giant suction cart that travels on the bottom of the pool. It's very energy efficient and uses 50 times less energy than typical swimming pool technology. And, they are good at conserving water. Despite the massive volume of water needed to fill one of these pools, they use 30 times less water than a golf course and 50% less water than a park of the same size. And, they use anti-evaporation technology that conserves even more water. Mirada Lagoon - Massive and Stunning! The Mirada is so big, it took 45 days and about 33 million gallons of water to fill it! It also needed about 17 million pounds of sand to create a mile-long shoreline around the lagoon. Amenities include a swim-up bar, a water slide, a "splash zone" for kids, and a floating obstacle course. Visitors can rent cabanas, as you might expect, along with paddle boards and kayaks to cruise around the lagoon. Metro's vice president of marketing and communications, Vaike O'Grady, says the Mirada Lagoon presented some unexpected challenges, like the Covid-related supply-chain issues and labor shortages, but overall, demand for crystal lagoons has been strong. She said of the company's plans: "After we saw what the success was, we realized we could do this again and again because there was so much demand for it." The overall size of the Mirada development is about 2,000 acres. Although some residents already live there, plans call for a total of 4,500 homes from six different builders. O'Grady says prices will range from the high $200s to more than $1 million. Popularity Growing for Crystal Lagoons She says about 40% of the buyers come from out-of-state, and that many are finding the lagoon an affordable alternative to a home along the ocean. She says: "When they come here and they see they can have an inland lagoon lifestyle from prices as low as the high $200s, they're blown away by the value." Crystal lagoons are becoming popular in many areas. Including the Palm Springs area of Southern California. That's where Disney is building a community called Cotino with another mammoth-sized lagoon. It was initially going to be about twice the size of the Mirada, but plans have apparently been scaled back to about 24-acres, which is still substantially larger than the Mirada Lagoon. As for how you can enjoy the Mirada Lagoon – members of the general public can purchase day passes. All-day passes range from $20 to $40. (5) You can also learn how to buy real estate in places like this as a member of RealWealth. It's free to join for access to our housing market data, investment counselors

In this Real Estate News Brief for the week ending July 8th, 2023... what's on the minds of Fed officials, how homebuyer competition is impacting prices, and what isn't happening with the back-to-office migration. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week and the release of the minutes from the central bank's last policy meeting. As you know, members of the Federal Open Market Committee voted unanimously in favor of a pause in rate hikes, but the minutes show that some members were in favor of another 25 point increase. The minutes also noted that the economy has been stronger than expected and that Fed officials don't see a lot of "clear signs" that inflation is headed to their 2% target. (1) Fed Chief Jerome Powell has said that more rate hikes are likely. We'll get two inflation reports in the coming week that will give us a better idea of what's happening with inflation. The job market also remains strong, although the latest reports show a slight weakening and some economists don't think it's enough to avoid another rate hike. The unemployment report was up 12,000 from the previous week to a two-year high of 248,000 initial claims. But the number of ongoing claims was down 13,000 to 1.72 million. It's the third week in a row that they went down. As MarketWatch reports, the decrease in continuing claims is probably due to laid-off workers finding new jobs quickly, thanks to a strong job market. Although it's great that people are employed, Fed officials feel that it also contributes to wage growth and inflation, which they are trying to control. (2) The Labor Department also reported that job openings fell below the 10 million mark in May, which is another sign that the labor market is cooling slightly. (3) And companies only added 209,000 jobs in June. That's the smallest number of new jobs since 2020, but the unemployment rate also fell from 3.7% to 3.6%. Average hourly pay is also up about 4.4% on an annual basis. (4) Most of the new jobs are for education, health, and the government, but construction jobs are also among the industries contributing to labor market growth. Mortgage Rates Mortgage rates are defying gravity and slowly creeping higher. Freddie Mac says the average 30-year fixed-rate mortgage is 6.81%, but Mortgage News Daily says it hit 7% this last week. Freddie's chief economist Sam Khater blames the high rates on the strong economy, sticky inflation, the Fed's rate hikes, and of course, a persistent low inventory of homes. (5) (6) In other news making headlines… Homes Selling Above Asking Price One Again Homes are selling above their asking price for the first time in almost a year. Redfin says the average sale-to-list price ratio hit 100.1% for the four weeks that ended on July 2nd. The report says low inventory is the main reason for the higher sales price. (7) Redfin says that new listings are down 25% from a year ago, and the total number of homes for sale is down 12%. There's no lack of demand however. Redfin says that requests for home tours and other services are up 4% compared to a month earlier. Agent Jeremy Lewis out of Portland, Oregon, says: "Almost every home is getting multiple offers and selling over asking price. The lack of supply is making it feel almost like 2021 all over again." Although he says the bidding wars are happening at a lower price point because buyers are getting squeezed by higher mortgage rates. Return to the Office Hit a Plateau at 50% Companies trying to get employees back in the office have hit a plateau. According to security company Kastle Systems, U.S. office workers are back in their offices about 50% of the time. The national average was actually a little less than that at 49.8% in late June. Kastle analyzes office usage in 10 U.S. metros. That's up from about 40% last year but the number hasn't changed much since the beginning of this year. (8) Some companies are cracking down on employees to get them into the office. Citigroup is reportedly threatening employees with "consequences" if they don't conform to the hybrid schedule. That's usually three days a week. Google is also warning employees that office attendance will be part of their performance review. Texas Lawmakers Approve Huge Cut in Property Taxes! In breaking news out of Texas – State lawmakers are making it a whole lot more affordable to own property with the largest property tax cut in state history! It's not quite a done deal yet, but the Texas House and Senate have agreed to an $18 billion dollar package to reduce property taxes. $12 billion will go toward a reduction in the school property tax for all homeowners and businesses. It also includes a $100,000 homestead exemption and a 20% limit on appraisal growth for non-homesteaded properties worth at least $5 million. According to Houston Public Media, state lawmakers expect to pa

In this Real Estate News Brief for the week ending July 1st, 2023... where we stand on inflation and rate hikes, how many homes we need to meet demand, and the amount of money Americans expect to need in retirement. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week and a report on the Fed's preferred inflation measure. The government released the latest CPI on Friday which shows the lowest rate of overall inflation since April of 2021. Prices rose a mere .1% which brought the annual rate down to 3.8%. That's down from 4.3% in March. At the core level, inflation remains a little sticker. It omits food and energy, and shows a .3% price increase with an annual rate of 4.6%. (1) The good news is that inflation is coming down, but maybe not fast enough to please the Fed. The central bank skipped a rate hike in June, but Fed chief Jerome Powell is hinting at the need for another one or two rate increases. He said during the European Central Banks annual forum: "Although policy is restrictive, it may not be restrictive enough and it has not been restrictive for long enough." (2) He talked about the risk of overdoing the rate hikes as compared to the risk of underdoing them and allowing inflation to keep going higher. He said those two risks are starting to come into balance but are not there yet. (3) One risk of overdoing it is the risk to the banking system, but new stress tests on the nation's 23 largest banks show they are in good shape. In fact, the results show they are in better shape than last year, despite a more painful worst-case scenario. (4) The economy also continues to show resiliency. It was supposed to falter under the pressure of higher interest rates, but the latest revision on the GDP shows the first quarter was up a solid 2%. It was previously calculated at 1.3%. Second quarter results aren't in yet, but officials are expecting to see a 1 to 2% expansion. (5) The job market also remains strong. Initial claims have been rising very slowly, but this last week, they were down 26,000 to a four-week low of 239,000. Continuing claims were also down 19,000 to a total of 1.74 million. As MarketWatch reports: "Still no sign of a recession." (6) As for the housing market, new home sales were surging in May. The Commerce Department says they were up more than 12% for the month to a seasonally adjusted annual rate of 763,000 homes sold. That's quite a bit higher than Wall Street economists had anticipated. Those figures are volatile however, and are often revised, but demand is strong as inventory remains low, especially for existing homes. (7) And those sales were down in May. The National Association of Realtors says that pending home sales fell almost 3%, thanks to such low inventory. But despite the lack of contract signings, NAR's Chief Economist Lawrence Yun says: "The housing market is resilient with approximately three offers for each listing." (8) That kind of demand is keeping pressure on home prices. The S&P CoreLogic Case-Shiller national home price index was up .5% in April. For the 20-city index, home prices were up .9%. Miami shows the largest year-over-year gain at 5.2%. Chicago is second at 4.1%. Other cities with strong home price growth include Atlanta, Charlotte, Cleveland, and Tampa. The biggest home price declines were in Seattle at 12.4% and San Francisco at 11.1%. (9) Mortgage Rates All this as mortgage rates creep higher. Freddie Mac says the 30-year fixed-rate mortgage was up 4 basis points this last week to 6.71%. The 15-year was up 3 points to 6.06%. (10) In other news making headlines… Zillow: U.S. Need 4.3 Million More Homes Zillow just published a report that shows just how many homes are needed to meet U.S. demand. The study says we are short 4.3 million homes, and the number of people needing a new home is twice the number of homes available. (11) A Zillow economist compared the situation to a game of musical chairs because there are just not enough homes for everyone who wants one. The report says low income families are getting hit the hardest with 68 percent of them living in shared spaces. Americans Put a Dollar Amount on Retirement Americans are placing a higher price tag on retirement, but a new study shows that they aren't saving anywhere near enough. The research by Northwestern Mutual says the magic number for all age groups is $1.27 million, but it varies quite a bit from one age group to another. Of the 2,740 adults who participated in the survey. People in their 50's expect to need $1.6 million which is the most of all the age groups. People in their 60's and 70's expect to need less than but close to $1 million. For the 20 to 40-something people, the figures were $1.2, $1.4, and $1.3 million for each of those decades. Unfortunately, the survey shows that most people have only a small fraction of those amounts in their sav

Fraudulent applications for the government's Covid-era Paycheck Protection Program helped push home prices higher in some markets. That's the conclusion of new research from the University of Texas at Austin. It says that fraudulent PPP loan recipients increased their home purchase rate more than non-fraudulent loan recipients, and that that corresponded to higher home prices. (1) Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. The research paper shows that home price growth was much faster in areas with a high amount of "suspicious lending per capita." In other words, areas with higher rates of loan fraud correlated with fraud recipients who also bought property. That may have increased prices due to competition among well-funded buyers, or maybe because it was easy to spend a little more on a home with easy money. Loan Fraud Impact on Home Prices So what was the estimated size of this impact? The report says: "at the zip code level, house prices in high fraud zip codes increased 5.7% more than in low fraud zip codes within the same county." The analysis also accounted for land prices, historical home pricing trends, remote work impact, migration, population density, and how close the homes were to business districts. The PPP loan program distributed more than $793 billion dollars from April 2020 through May 2021. Research done previously at the Austin university labeled $117 billion of those PPP loans as "suspicious." Study co-author and professor of finance, Sam Kruger, says: "The fraud was highly concentrated geographically. And because of that concentration, there may have been spillover effects in some of those local areas." (2) Why Did This Happen? Government data shows that home prices rose 24% nationwide from November of 2019 through November of 2021. Many factors contributed to those high prices including remote work, migration from crowded urban areas, and a desire for larger homes with yards, but this new research says that money handed out by the government to help business owners retain employees may have contributed to home price growth. Kruger says: "This is a very specific type of stimulus that injected cash into certain areas, and it seems to have played a pretty significant role." How Did This Happen? The report also blamed lax loan standards among Fintech companies, which had a higher rate of fraudulent loans than traditional lenders. It also suggested that social media was used to spread the word about getting fraudulent loans from those Fintech loan providers. In a zip code map of the country, areas where much of this fraud occurred was along the sun belt, as you might expect. If you'd like to read more about the study and check out that map, you'll find links in the show notes at newsforinvestors.com. You can also learn how to buy real estate legally as a member of RealWealth. It's free to join for access to our housing market data, investment counselors, and referrals to real estate professionals that you might need to help build a portfolio of rental properties. Thanks for listening, and please remember to subscribe to the podcast! Kathy Fettke Links: 1 - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4487877 2 - https://www.cnbc.com/2023/06/26/ppp-loan-fraud-drove-home-price-inflation-in-certain-markets.html

In this Real Estate News Brief for the week ending June 24th, 2023... what the Fed Chief is saying about another two rate hikes, where evictions are rising the most, and how the economy is impacting commercial real estate. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and comments from Federal Reserve Chairman Jerome Powell about interest rates. He testified before Congress that U.S. inflation is still too high and that more rate hikes are likely this year. He told members of the House Financial Services Committee: "Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year." But he also says that decisions will be made "meeting by meeting" so there's no timetable as to if or when this will happen. Most of the members are anticipating two more quarter point rate hikes. (1) In a more positive light, Powell said that it's possible to get inflation under control without a huge increase in unemployment. During his testimony before the Senate Banking Committee, he said that he sees the labor market cooling gradually but doesn't expect to see significant job losses. (2) Federal Reserve President Raphael Bostic is one of just two committee members who doesn't believe the Fed should hike rates again this year. He said in an interview that interest rates should remain where they are for the time being, and that rate cuts should not happen until later "next" year. He believes the economy hasn't yet felt the effects of previous rate cuts, and doesn't want the Fed to make the mistake of causing a significant economic downturn. (3) The weekly unemployment report shows that initial claims are rising, although the number of applications was flat last week. The government says that 264,000 people requested benefits which is about the same as the previous two weeks. But, the last three weeks represent the highest level we've seen since late 2021. (4) Builders are feeling bullish about new home construction. Housing starts for single-family homes surged in May to a new high point for the year. The National Association of Home Builders says housing starts were up 21.7% to an annual pace of 1.63 million. Economists were expecting a decline of .8%. (5) The association's monthly confidence index also reflects a feel-good attitude among builders. The index was up 5 points to 55 which puts it in positive territory. (6) Meantime, the sale of existing homes rose a bit in May. Sales were up 3.8% to an annual rate of 1.08 million, but due to high mortgage rates, prices were down about 3%. It's the largest monthly drop in existing home prices since December of 2011. (7) Mortgage Rates Mortgage rates didn't move much this last week. Freddie Mac says the average 30-year fixed-rate mortgage was down 2 basis points to 6.67%. The 15-year was down 7 points to 6.03%. (8) In other news making headlines… Eviction Rates Are Rising in Some Cities Rising rents and a lack of pandemic-era protections are pushing many renters into eviction proceedings. Princeton University's Eviction Lab tracks filings in almost three dozen cities and 10 states. It reports that eviction rates are now 50% higher than they were before the pandemic. (9) Some of the hardest hit cities include Houston with rates that were 56% higher in April, Minneapolis/St. Paul with rates that were up 106% in March, 55% in April, and 63% in May. Nashville, Phoenix, and the state of Rhode Island are also seeing a lot of evictions. Zillow reports that national rents are up 5% from a year ago, and almost 31% from 2019. High eviction rates right now are also due to the fact that many tenants were protected from being evicted during the pandemic. Distress Starting to Hit Commercial Real Estate We're beginning to see more distress in the commercial real estate market. A report from MSCI Real Assets shows about $64 billion in distress for the first quarter, and a total of about $155 billion in assets that are now at risk. (10) Retail properties are suffering the most with about $23 billion in distress. But those problems began "before" the pandemic as stores lost business to online shopping websites. Office properties are now seeing about $18 billion in distress thanks to the rise in remote work, and leases that need to be renewed at high interest rates. Multi-families are also seeing some amount of distress. Delinquency rates for multifamily loans from major investment groups hit the 3% level at the end of the first quarter. That's it for today. Check the show notes for links at newsforinvestors.com. And please remember to hit the subscribe button, and leave a review! I also encourage you to join RealWealth at newsforinvestors.com. It's free to join and will give you access to information about how you can build wealth with single-family rentals. Membership will also connect you t

The latest report on single-family rents shows that rent growth is still positive, but declining in step with the Fed-induced economic slowdown. CoreLogic just released its Single-Family Rent Index for April which shows another monthly dip and rent growth levels for various metros. (1) Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. The CoreLogic report shows that single-family rents were up 3.7% in April for all the U.S. metros included in the index. That's down from 4.3% in March, and 14% from April of last year. The report shows single-digit rent increases for the most part. Las Vegas was the only exception with a negative reading of .8%. Despite the huge year-over-year decline, single-family rents are still up almost 26% since the beginning of the pandemic, thanks to strong demand and low inventory. Gains Approaching Pre-Pandemic Levels CoreLogic principal Economist, Molly Boesel, said in a press release: "Single-family rent growth has slowed for a full year, and overall gains are approaching pre-pandemic rates." She says: "Prior to 2020, single-family rent gains increased in the range of 2% to 4% for nearly a decade." Boesel also said that it appears rent growth is bottoming out which means that rent increases we've seen over the past three years are "more or less permanent." The CoreLogic analysis separates rent growth into four rent-level tiers and two property types. For lower-priced single-family homes, which are valued at 75% or less than the regional median, rent growth was up 6% in April. For lower-middle priced homes, at 75% to 100% of the regional median, rent growth was up 4.6%. High-middle priced homes, which fall in the 100% to 125% of the regional median, were up 4.1%. And higher-priced homes were up 2.4%. As for attached versus detached homes, attached single-family rents were up 4.6% while detached rents were up 2.6%. Top Rent-Growth Metros Let's take a look at a few of the top 20 rent-growth metros. CoreLogic says that Charlotte, North Carolina took the top spot with the highest year-over-year increase in single-family rents. They were up 6.9% in April. Boston and Orlando had the next highest rent-growth levels at 6.2% and 6% respectively. A few other metros I find interesting include Dallas with 3.5% in April, and Atlanta with 3.4%. The index is comprised of close to 100 metros. That's it for an update on single-family rent growth. You can read more about CoreLogic latest report at newsforinvestors.com. You can also find out more about investing in single-family rentals at as a RealWealth member. It's free to join for complete access to all our educational material along, networking opportunities, and real estate professionals that can help you build wealth. Please remember to subscribe to the podcast if you haven't already! And thanks for joining me on the Real Estate News for Investors. -Kathy Fettke Links: 1 - https://www.corelogic.com/intelligence/us-single-family-rent-growth-continues-yearlong-descent-in-april-corelogic-reports/

California is hoping to solve a massive homeless problem with a change in the state constitution. One lawmaker is proposing an amendment that proclaims "adequate housing" as a fundamental right. It's not clear what "adequate housing" would mean, but if it gets on the ballot, and it's passed by voters, it would be the first such constitutional amendment in the nation. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. Assembly Constitutional Amendment 10 Assemblyman Matt Haney of San Francisco proposed the amendment which is currently working its way through the state legislature. The measure, called Assembly Constitutional Amendment 10, would make state and local governments responsible for upholding this mandate. There would have to be some guidelines as to what's "adequate." As reported by the Orange County Register, it could include the creation of more housing, better tenant protections, the repurposing of under-utilized or vacant properties, as well as housing subsidies. (1) What is "Adequate Housing"? Lobbyist Chris Micheli told the Register: "Some people might view 'adequate' as merely having a roof over your head. It could also mean shelter inside a gymnasium or a large building of some sort, almost like when we have emergencies." Or would it mean that everyone is entitled to a standalone single-family home or an apartment? Assemblymember Haney told the Orange County Register that: "California has been at the epicenter of the housing crisis" with 30% of the nation's homeless living in California. Haney says: "We have more Californians living on the street than anywhere else in the nation." Basic Human Needs: Housing, Food, Water Assemblymember Sharon Quirk-Silva, who supports the proposal, says the goal is to consider housing as a basic human need. She says: "There (are) really only three basic needs… and that is housing, food and water… And I think many of us grew up taking that for granted, but what we've seen over the last decade in California has not only been a housing crisis but, of course, a homeless crisis. And that's what propels me to support this." (2) She says the big challenge is the housing shortage. There are just not enough beds for all the people who need them. She says: "We just have not kept pace with housing production in California…" That's resulted in high rents, and as as rents move higher, more people end up on the street, or they move out of state. But she says: "Many individuals are just one rent payment away from being homeless." To get on the ballot, the proposal would need approval by a two-thirds majority in both the State Assembly and Senate by June of 2024. It received a 6 to 2 approval in the Assembly Committee on Housing and Community Development. That pushed it on to a Senate committee. (3) Concern About the Courts Setting the Standard Some of the lawmakers expressed concern about who would be responsible for setting the "adequate housing" standard. "Assemblyman Joe Patterson of Rocklin, who voted against the proposal, said: "I think the state and local governments haven't done a good job on housing which I think has contributed to homelessness, but I'm concerned about the hundreds of judges we have in California having different ideas about what this means." Cal Matters reports that more than a hundred groups and organizations that advocate for renters and affordable housing are showing support for the proposal, while none are publicly opposing it. But, it did say that the League of California Cities has "expressed reservations." (4) Price Tag? As for the cost of the bill, Cal Matters cited a study done in 2022 by the Corporation for Supportive Housing and the California Housing Partnership. That analysis determined that to house all the homeless people living in California, it would cost $8.1 billion a year for the next 12 years. Before that, in 2020, Governor Gavin Newsom vetoed a bill that would have guaranteed housing for everyone. He said the estimated $10 billion a year price tag was too much. Dramatic Shift in Our View of Housing The proposal would create a dramatic shift in the way we view housing. And despite the odds of it making it through the legislature, onto the ballot, and approved by voters, the end result would be game-changing. In the words of Micheli: "To have something enshrined in the constitution is very significant." You can read more about this by following links in the show notes at newsforinvestors.com. You can also become a member of RealWealth while you are there to learn more about housing and the real estate market. Just click on the "Join for Free" button in the upper right corner. And please remember to subscribe to the podcast! Thanks for listening! Kathy Fettke Links: 1 - https://www.ocregister.com/2023/05/16/how-adding-a-right-to-housing-in-the-california-constitution-could-alleviate-the-crisis-2/ 2 - https://enewspaper.dailynews.com/infinity/articl

In this Real Estate News Brief for the week ending June 17th, 2023... why we might see two more rate hikes this year, what the latest consumer price report is showing us, and the cities that are attracting the most attention from renters! 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 that grabbed headlines this last week. Members of the Fed's Open Market Committee decided to put their rate hike regimen on pause for the month of June, but said that two more rate hikes are likely later this year. The decision was unanimous for the pause, but not so for the rate hikes. Two members don't see any further hikes, four are anticipating one more rate hike, and nine are expecting the need for two. Two more believe we'll need three, and one is saying four. (1) By holding the interest rate steady for the time being, the Fed will have a chance to "assess additional information and its implications for monetary policy." Fed Chief Jerome Powell said at a news conference: "We have raised our policy interest rate by five percentage points, and we've continued to reduce our security holdings at a brisk pace. We've covered a lot of ground and the full effects of our tightening have yet to be felt." The Federal Funds rate is currently in a target range of 5 to 5.25%. Assuming quarter-point hikes, another two would bring that up to about 5.6%. Committee members meet next in July. Powell emphasized that the "core rate" of inflation for the personal consumption expenditure index, or PCI, is the most important indicator. The Fed received two other reports on inflation right before the meeting. The consumer price index, or CPI, shows that prices rose only .1% in May, mostly due to less expensive gas. The low rate of monthly inflation brought the yearly rate down from 4.9% to 4%. That's the lowest it's been since March of 2021. When you omit prices for gas and food to get the core rate, there was a .4% gain with an annual rate that slipped from 5.5% to 5.3%. (2) The U.S. Department of Labor Statistics also released the producer price index, or PPI, for May. It shows that wholesale prices fell .3% in May. It's the third time they've gone down in the past four months. That brings the yearly rate down from 2.3% to 1.1%. Again, the reading is slightly different for the core rate, which didn't move in either direction. The yearly core rate dropped from 3.3% to 2.8%. The PPI represents what companies pay for producing their goods such as packaging and transportation, which they often pass on to the consumer. (3) Weekly jobless claims were unchanged from the previous week at 262,000, while the number of continuing claims was up about 20,000 to a total of 1.78 million. (4) Mortgage Rates Mortgage rates were down slightly for the week. Freddie Mac says the average 30-year fixed-rate mortgage was down two basis points to 6.69%. The 15-year was down 3 points to 6.1%. (5) In other news making headlines… Potential Sellers Remain on the Sidelines High interest rates are keeping many potential sellers on the sidelines. Redfin notes that almost everyone with a mortgage has an interest rate below 6%. About 80% of homeowners have an interest rate below 5% and almost 25% have one below 3%. (6) As for inventory, Redfin says there are about 6% fewer homes for sale now than there were a year ago, and 40% fewer homes for sale than there were five years ago in June of 2018, before the pandemic. (7) Redfin blames the shortage on high mortgage rates, and a construction slump that began more than a decade ago. The number of months it would take to sell the inventory on hand is 2.6. A housing market with a balance between supply and demand typically has four to five months of supply. Most Popular Cities Among Renters A new report shows that the Midwest has become quite popular among renters. According to RentCafe's Rental Activity report, Kansas City, Missouri, is getting the most attention from renters. Runner-up is Overland Park in Kansas which is a suburb of Kansas City. Minneapolis was third, followed by Cincinnati and Albuquerque, New Mexico. Detroit took sixth place, Atlanta seventh, and Orlando eighth. Rounding out the top ten are Arlington, Virginia, and Raleigh, North Carolina. You can get the full list of 30 cities by following links to the article at newsforinvestors.com. Make sure you are signed up as a RealWealth member to learn more about real estate investing in many of the markets on this list. And don't forget to subscribe to the podcast! Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.cnbc.com/2023/06/14/fed-rate-decision-june-2023.html 2 - https://www.marketwatch.com/story/inflation-slows-again-cpi-shows-and-might-keep-fed-on-sidelines-5137bc46?mod=economy-politics 3 - https://www.marketwatch.com/story/wholesale-prices-shrink-again-ppi-finds-and-point-to-slower-inflation-ahead-1de0968?mod=bnbh_mwarticle

In this Real Estate News Brief for the week ending June 10th, 2023… what builders are saying about the lot shortage, where rent growth is highest and lowest, and the rising number of all-cash offers 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… which doesn't amount to much. Economists are focused more on what's coming up "this week." The Fed's June meeting is scheduled for Tuesday and Wednesday where members of the Federal Open Market Committee will be deciding what happens next with interest rates. CNBC reports that a majority of economists are predicting a pause on rate hikes, but that we could see another rate hike in July. (1) Much depends on where we stand on inflation right now, and we're set to get those numbers just ahead of this week's Fed meeting. The government will release May reports on the Consumer Price Index, or CPI, and the Producer Price Index, or PPI. The PPI will tell us what's happening with wholesale prices. The only economic report that I'd like to share in this episode is the weekly jobs report. It shows a surge in jobless claims. They were up 28,000 from the week before, to a total of 261,000. As reported by MarketWatch, that's a two-year high. (2) According to Logan Mohtashami, lead analyst of HousingWire, if jobless claims break over 323,000 on the four-week moving average, the 10-year yield would likely decline along with mortgage rates. Mortgage Rates Mortgage rates settled down a bit this last week. Freddie Mac says the average 30-year fixed-rate mortgage was down 8 basis points to 6.71%. The 15-year was down 11 points to 6.07%. (3) In other news making headlines… Lot Shortage Easing Up But Still an Issue The lot shortage appears to be easing up, but it's still not easy for builders to get the buildable lots they need. In a report by the National Association of Home Builders Builders, 42% of single-family builders say the supply is "low" while another 25% says it's "very low." That's a total of 67% reporting some kind of shortage. But it's better than in 2021 when 76% of builders said they were having a tough time finding enough lots. (4) The survey also shows a more acute shortage among the most desirable "A" lots. 67% of builders report low or very low access to those lots, while 58% reported difficulties getting ahold of "B" lots, and 52% said the same about "C" lots. The NAHB says that a lack of easy credit is one reason that builders can't get the lots they need. The association also blames government regulation. It says the red tape involved with building a single-family home is responsible for about 42% of the cost of the lot. Asking Rents Down Slightly Nationwide Asking rents are down slightly nationwide according to data from Redfin.com and Rent.com. The latest report shows the median U.S. asking rent was down .6% in May to $1,995. It's the first time rent growth has decreased since March of 2020, and is well below a near-record in May of last year, when year-over-year rent growth was up 16.5%. (5) An increase in supply is one of the reasons that rent growth is slowing down. Builders are building more apartments and single-family homeowners are often choosing to rent out their previous homes instead of selling them. Redfin expects more of those homes to hit the market once housing prices bounce back. But rent growth varies from region to region. Redfin says that rent growth has fallen the most in the West. It was down 2.1% year-over-year. In other parts of the country it has gone up. It was up 5.4% in the Northeast, 4.9% in the Midwest, and .8% in the South. More Buyers Paying Cash for Homes More and more homebuyers are avoiding high interest rates by paying for homes in cash. Redfin reports that 33.4% of the homes bought in April were paid for in cash. That's up from 30.7% in April of last year. Redfin Senior Economist Sheharyar Bokhari says the homebuyer who can afford to pay in cash is weighing two options: "They can use cash to pay for the home and avoid high monthly interest payments, or take out a loan and pay a high mortgage rate. In that case, they could use the money that would have gone toward an all-cash purchase to invest in other assets that offer bigger returns." That's it for today. Check the show notes for links at newsforinvestors.com. While you are there, be sure to hit the Join for Free button. You'll get complete access to our website, with information on real estate investing, various rental markets, and our curated list of real estate professionals. That includes our investment counselors who are available to qualified investors, for free. And please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.cnbc.com/2023/06/09/wall-street-placing-its-bets-for-a-big-fed-meeting-and-inflation-reports.html 2 - https://www.marketwatch

The Arizona governor is calling for new limits on construction in the Phoenix suburbs due to a dwindling supply of groundwater. Governor Katie Hobbs announced a pause on new subdivisions that don't have a proven source of water. The policy comes after an analysis that says the supply of groundwater will fall short of demand over the next 100 years. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. Growth Putting Pressure on Water Supply Phoenix is the 5th largest city in the U.S. with more than 1.6-million people, but the entire metro area has closer to 5-million people. Those suburbs and outlying areas are also growing rapidly, and putting more and more pressure on groundwater supplies that do not replenish rapidly, especially during times of drought. The city's groundwater analysis involved tests on more than 40,000 wells, along with the testing of aquifers and streamflows. Those tests show that water levels will fall about 185 feet across the entire basin over the next century. Outlying areas that are closer to the mountains will see a bigger decline in those levels. As reported by the Washington Post, the outflow of water is expected to exceed the inflow by a factor of 1.4 or 140%. The unmet demand would be about 4% or close to 5-million acre-feet of water over 100 years. One acre foot is about 326,000 gallons. A typical home might use half- to one-acre foot per year. At one acre-foot per home, about 50,000 homes would run dry in the Phoenix area over that 100 year period. At a half-acre foot, it would be more like 100,000 homes. Those are very rough figures. New Policy Requires Water Assurances To address the issue, Governor Hobbs announced that any new development projects will have to have proven water supplies. And many Phoenix area cities already have them, such as Scottsdale, Mesa, Gilbert, and Goodyear. But more rural communities that rely on groundwater don't have those assurances. Former Phoenix mayor Terry Goddard says: "You can't build unless you know exactly where the water is coming from." Developments that have already been approved can still move forward, but those cities are also scrambling to be sure they have adequate water for the decades ahead. Places like the town of Queen Creek, east of Phoenix, is working on a way to import water and meet demands for mushrooming growth. According to the Post, the town is spending $27 million to buy Colorado River water from a farm elsewhere in Arizona. It also made a deal for groundwater in another part of the state. The town's water resource director, Paul Gardner, says the town has about 10,000 lots ready to build, and water has been secured for those homes. But the city is working on ways to import water for other parts of the project, and while water importation will help solve the problem, Gardener also says the water price tag is rising. One of several landowners involved with development projects expects the cost of water to add as much as $15,000 to $25,000 to each home. Dan Reeb told the Post: "Arizona has gotten very good at stamping out four-bed, two-and-a-half bath, three-car garage homes, and a great job to go with it." But he says: "It's not going to be as inexpensive and simple as it has been for the last 50 years of phenomenal growth." Massive Development Project on Hold One massive development plan in Buckeye called Teravalis is now on hold. Plans call for some 100,000 homes on 37,000 acres for what would be the largest planned community in Arizona. But most of the property currently lacks the necessary water supply approvals. Buckeye officials are working on a solution, and they insist that their water future is secure. A big part of their plan is an $80-million deal to purchase groundwater from another rural part of the state. Each town, city and/or region is dealing with its own water supply problem, so there's a difference in how well they are each solving this problem. While some cities have already invested a lot of money in their water supplies, newer communities that rely on groundwater are having to rethink their options. In addition to informing residents about the water situation, Governor Hobbs is also offering assurances that the city won't be running out of water anytime soon. She says: "We are not running out of water and we will not be running out of water. We have to close this gap and find efficiencies in our water use." Sharon Megdal of the Water Resources Research Center at the University of Arizona says it's a matter of responsible growth. She says: "What these models are suggesting is that the patterns of growth may change." She says: "It's part of our reality check, an appropriate one, that we make sure the people buying these homes can be confident that the water is there." Groundwater as Key to the Future An Arizona State University professor doesn't feel that the issue is being addressed as a major priority. He told the Pos

In this Real Estate News Brief for the week ending June 3rd, 2023... a new surge in job openings and job creation, a big drop in investor activity, and a new legal battle over short-term rentals in New York City. 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 and several reports on the strength of the job market. The government reports that companies created a whopping 339,000 new jobs in May. That's a sign of strength for the job market, but the report also shows a surge in unemployment from 3.4% to 3.7%. That's the highest jobless reading since October. Some economists see that as a potential warning sign. But job market resilience is also showing up in a report on job openings which rose from a revised 9.7 million in March to a three-month high of 10.1 million in April. Wall Street Journal economists had forecast a drop in job openings to 9.5 million. (1) Job openings increased the most for retail, health care, transportation, and warehousing. They were down for manufacturing, government, leisure and hospitality. When comparing job openings to the number of unemployed workers, they rose in April from 1.7 to 1.8 openings per person. The Fed would like to see those numbers at a pre-pandemic level of 1.2. (2) The weekly unemployment report shows only a slight increase in claims. Applications were up 2,000 to 232,000. The takeaway from all this – the labor market is showing strength overall, with businesses hiring and no word of major layoffs. That's not exactly what the Fed wants to see. It's hoping for a weakening of the job market in its fight against inflation. (3) Builders are among those contributing to job market strength. The Commerce Department reports that construction spending was up 1.2% in April. That's much higher than a Wall Street forecast of .1%. The numbers break down to a .5% monthly increase for private residential construction but that includes a .8% decrease for single-family and a .6% increase for multi-family. The construction industry contributed 64,000 of those new jobs in May. (4) Home prices are still moving higher. The S&P CoreLogic Case-Shiller national index shows a .4% increase in March. The Southeast shows the strongest price growth, thanks to strong demand for housing and potential sellers who don't want to list their homes right now. The 20-city index was up .5%. A few of the cities showing the strongest price growth were Tampa at 4.8%, Charlotte at 4.7%, and Atlanta at 4.5%. On the flip side, Seattle prices are down 12.4%. San Francisco prices have also fallen by almost as much at 11.2%. (5) Consumers are showing more concern about the economy. The Conference Board says consumer confidence was down in May to a six-month low. (6) Mortgage Rates High mortgage rates are one of the things consumers are worried about. And they spiked a bit last week ahead of another potential rate hike by the Fed this month. Freddie Mac says the 30-year fixed-rate mortgage was up 22 basis points to 6.79%. The 15-year was up 21 points to 6.18%. (7) In other news making headlines… Record Slowdown for Investor Home Purchases Many investors are sitting on the sidelines as interest rates rise and home values fall. Redfin says investor home purchases shrank almost 50% year-over-year in the first quarter. But investors are still accumulating a large share of homes, buying up 18% of homes that sold in the first quarter. That's higher than pre-pandemic percentages, but down slightly from a peak of 20% last year. (8) The Redfin analysis covers 40 of the most populated metros in the nation, and includes both institutional and individual investors. But one Redfin agent says there isn't much activity from the Wall Street investors. The agent from Jacksonville, Florida, says: "Some smaller companies and mom-and-pop investors are still active in the market, but the big corporations aren't buying anymore." Redfin expects to see investor activity slow further as interest rates rise. Of course, investors with cash aren't feeling that kind of restraint. Short-Term Rental War Heats Up in New York City The battle over short-term rentals is escalating in New York City. Airbnb is suing the city for what it says is an "extreme and oppressive" law that the city plans to begin enforcing next month. It claims that the law is confusing and conflicts with Federal law that protects websites from liability for content posted by users. The New York Times also reports that three Airbnb hosts have filed similar lawsuits for a law that they say is too complicated. The Big Apple is a huge market for Airbnb with more than 38,500 active listings and $85 million in revenue last year. The company argues that short-term rentals are important for tourism and for hosts who need extra income. The city says it is committed to preserving permanent housing as it deals with a lack of housing for residents. Other cities

In this Real Estate News Brief for the week ending May 27th, 2023... you'll get the latest reading on inflation, how much home prices have come down in a year, and the long-awaited opening of Amazon's HQ2. 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. Minutes from the Fed's May meeting offer a few insights. They reveal that several officials believe we may not need more rate hikes to get inflation back down to the 2% level. Forward guidance also indicates a pause in hikes at the June meeting, although some Fed officials say rate hikes have not been ruled out. (1) And, with the latest report on inflation, there's new concern that the Fed could be inclined to hike rates again. The U.S. Bureau of Economic Analysis released the April reading on the PCE index. It shows it going in the wrong direction ahead of the Fed's next meeting. The index was up .4% and raises the annual rate from 4.2% to 4.4%. The core rate was also a disappointment. It eliminates prices for food and fuel, and was up .4% to an annual rate of 4.7%. The PCE is the Federal Reserve's preferred inflation gauge, so it will play an important role in their next rate hike decision. (2) The Fed minutes also offer a recession forecast, predicting a mild recession in the fourth quarter of this year. A moderately priced recovery would follow with unemployment set to increase this year, and then peak next year. Those numbers would start coming down in 2025, according to Fed officials. But they also acknowledged that the impact of the tightening process would be lagging, and that close monitoring of incoming data is essential. (3) Cleveland Fed President Loretta Mester spoke out on Friday after the PCE was released, and said the data shows the Fed has "more work to do." She believes that the central bank will need to rate rates again, while other Fed officials appear to be undecided. (4) Jobless claims pulled back from the previous week, after a major crackdown on fraudulent claims in Massachusetts. The latest report shows 229,000 applications for benefits. That's up 4,000 from the revised numbers for that surge in claims. As MarketWatch reports: "Jobless claims show little or no sign of rising U.S. layoffs since the early spring." (5) Consumer spending has kept a recession at bay, and April was no exception. Consumers shelled out .8% more money in April, which was double the amount that Wall Street Journal analysts had forecast. A lot of the money went toward new cars, but also for travel, recreation, and other services. As reported by MarketWatch, that's a sign of confidence in the economy. (6) Consumers also spent money buying new homes. New home sales were up 4.1% in April, according to the Commerce Department. That brings the annual rate up to 683,000 from a revised 656,000 in March. That number is seasonally adjusted, and reflects the "pace" of construction and how many homes would be built if that pace continued for the entire year. (7) One thing driving consumers to new homes is the low inventory of existing for-sale homes. The National Association of Realtors reports that pending home sales were flat for the month of April thanks to a shortage of those homes, and high mortgage rates. (8) Mortgage Rates Mortgage rates have continued to rise. Freddie Mac says the average 30-year fixed-rate mortgage was up 18 basis points to 6.57%. The 15-year was up 22 points to 5.97%. (9) The Mortgage News Daily reports a higher average of 7.14% for the 30-year and 6.54% for the 15-year. (10) In other news making headlines… High Home Prices Slowly Deflating Although home buyers are still struggling with affordability issues, home prices are deflating. Redfin reports that U.S. prices are down about 4.1% nationwide or close to $18,000 for the average home. That brings the median sale price down from $426,000 last year, to approximately $408,000 this year. (11) But some markets are seeing steeper declines, mostly because prices went sky-high previously, especially during the pandemic. In Oakland, for example, prices have come down 16% or about $174,000 for a typical home. In Boise, Idaho, the average home costs about $80,000 less than it did at the same time last year. And some markets have actually seen prices rise over the past year. According to Redfin, Tampa home prices were up 5.0% in April compared to last year, selling for a median price of $420K. On average, homes in Tampa sell after 22 days on the market compared to 7 days last year. Amazon HQ2 Is Now Open for Business! It was five years ago that Amazon solicited bids from various cities as it searched for the perfect place to build a second headquarters. Well, the day has finally arrived that Amazon's HQ2 has launched, and is welcoming its first employees. The winning city was Arlington, Virginia which now has more than two million square feet of new Amazon offic

It's another dose of bad news for office space providers. Researchers had previously estimated that remote work would take a 28% bite out of office values by 2029, but they apparently underestimated the impact. They are now predicting the decline will be closer to 44%. On the flip side of that coin, a drop in values will also make it easier for at least some of those buildings to be converted to badly needed housing, with the help of government incentives. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. As Bisnow reports, researchers had reported last year that office values would lose about $500 billion in value over ten years, from 2019 to 2029. Now those academic researchers from New York University and Columbia University are saying that office values have already surpassed that amount in just three years, from 2019 through last year. (1) Half a Trillion Dollar Loss in Value In New York City, values were down about $70 billion. In San Francisco, the loss in value was more like $33 billion. And in Charlotte, it was about $5 billion. Their research estimated a total of $506 billion, or more than half a trillion dollars, in lost value for the entire nation. Researcher Arpit Gupta says of the update: "The primary reason for the change is that we now estimate a more persistent work from home regime than before." He also says that researchers took into account work-from-home rates for various cities and says that New York was hit hard because of a high number of remote workers. Lost Tax Revenue, Lifeless City Centers Office owners aren't the only ones grappling with this situation. Cities are also dealing with lost tax revenue and downtown corridors that appear lifeless as office space sits empty. Unfortunately, not all office space is suitable for a conversion, and conversions are expensive. According to Josh Bernstien of Bernstein Management in the New York Times, just one in 20 office buildings in Washington, D.C. would be suitable for a conversion. And then the conversion might cost a whopping $400 to $500 a square foot. Bernstein says that it's often the case that building from scratch would cost less. (2) Most Office Space is Not Suitable for Conversion The Times cited a Moody's analysis that found only three percent of the buildings it tracked would be candidates for conversion because the median rent is so low. In New York, the median rent is just $55 a square foot. The analysis shows that only 36% of the office properties roughly match that value. And then on top of that, there's the cost of the conversion which includes design issues. As the Times reports, offices may have columns that are 20 feet apart, huge open areas, and windows that don't open. But, there is a growing trend to turn at least some of the now empty office space into housing. And state and local governments are recognizing the need for incentives. (3) States, Cities Incentivize Conversion Projects California is one of them with a $400 million program. Chicago is another. It's making almost $200 million available for developers in "tax increment financing" or TIFs. The Department of Transportation website describes a TIF as: "A value capture revenue tool." It says: "The TIF creates funding for public or private projects by borrowing against the future increase in these property-tax revenues. The intent is for the improvement to enhance the value of existing properties and encourage new development in the district." (4) Bisnow reports that the opportunities exist for these so-called "Office-to-Resi" projects and that developers are showing interest, so long as there's public money to subsidize them. A big decline in office values will also help make these conversions more affordable. Researchers say the key takeaway from all of this is that: "Remote work is shaping up to massively disrupt the value of commercial office real estate in the short and medium term." For real estate investors, when one door shuts, another opens. And the trend to convert office space to residential units is an opportunity, especially when it comes with government incentives. You can read more about this by following links in the show notes at newsforinvestors.com. If you haven't become a RealWealth member, hit the Join for Free button to learn more about real estate investing. It's easy to sign up, and will just take a minute. And please remember to subscribe to this podcast! Thanks for listening! Kathy Fettke Links: 1 - https://www.bisnow.com/new-york/news/office/persistent-wfh-could-wipe-44-from-office-values-by-2029-119082 2 - https://www.nytimes.com/2022/12/27/business/what-would-it-take-to-turn-more-offices-into-housing.html​​ 3 - https://www.bisnow.com/national/news/office/more-cities-are-giving-away-money-for-office-to-resi-projects-as-threat-of-obsolescence-grows-118474 4 - https://www.fhwa.dot.gov/ipd/value_capture/defined/tax_increment_financing.aspx

In this Real Estate News Brief for the week ending May 20th, 2023... what the Fed Chief is saying about interest rates and potential rate cuts, how the FHFA is responding to a controversy over new rules for home loan fees, and why mall owners have become interested in pickleball. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and the Fed chief's response to predictions about what the central bank plans to do next. Jerome Powell spoke out at a conference at the Federal Reserve Bank of Chicago and said that Fed officials have made "no" decision yet on their next move. Many economists are expecting a pause in rate hikes, but the Fed is determined to bring inflation back down to the 2% level, no matter what. A decision would be made after the Federal Open Market Committee evaluates "all" the most recent data. (1) Powell may have also dashed a few hopes for rate cuts later this year. He says: "The data has continued to support the FOMC's view that bringing inflation down will take "some time" and that rate cuts simply are not part of the Fed's current forecast. But he also says that interest rates are currently high enough to slow economic growth, and hopefully tamp down inflation without further credit tightening. Meantime, the U.S. leading economic index, or LEI, shows a decline in April, for the 13th month in a row. The declines have pointed toward a potential recession, but so far, that hasn't happened. The index was down .6% last month with eight of the ten economic indicators showing a decline. (2) Initial jobless claims were down last week, thanks to an effort in Massachusetts to reduce fraudulent claims. They fell from 264,000 the previous week to 242,000 last week. Overall, they have been slowly rising since January. The number of continuing claims was also down by about 8,000 with about 1.8 million people collecting benefits. (3) New home construction was higher in April, thanks to an outsized demand among consumers, despite high interest rates. The government says they rose 2.2% for the month with more activity in the Midwest and the West. That's for both multi-family construction, which was up 5.2%, and single-family, which was up 1.6%. Building permits were down, however, by 1.5%. (4) The home builders confidence index also reflected a positive outlook among builders. The National Association of Home Builders say the index was up five points to a central balance point of 50 in May. Anything above 50 is positive, and below 50, negative. The reading for May is the first time it's been out of negative territory in almost a year. (5) The latest report for existing home sales is for February, and according to the National Association of Realtors, it surged 14.5% as interest rates experienced a temporary dip. It was the biggest monthly increase since July of 2020 when sales skyrocketed 22.4%. NAR says that single-family sales are currently at their highest level since the association started tracking them in 1999. (6) Mortgage Rates Mortgage rates are still moving sideways. Freddie Mac says the 30-year fixed-rate mortgage was up just 4 basis points, to 6.39%. The 15-year was unchanged at 5.75%. (7) In other news making headlines... FHFA Rescinds New DTI Fee Structure The FHFA is rethinking its controversial new up-front fee structure for single-family home loans which placed more importance on a borrower's debt-to-income ratio than it did on credit score. The government finance agency has now rescinded the new fee structure for Fannie and Freddie loans, and is asking for input on the goals and policy priorities that the FHFA should pursue in regards to an upgrade of the pricing framework. (8) When the FHFA announced the previously upgraded pricing structure, there was an outcry from real estate organizations, including the Mortgage Bankers Association, the National Association of Realtors, and others. It kinda blew up in the media, because it appeared to raise the fees for people with higher credit scores while lowering fees for low income borrowers, and gave the appearance of an unfair fee subsidy. The FHFA denies that the fee structure was based on the idea of a subsidy. But it is now accepting feedback from the public on how to adjust the fee structure to better reflect loan risk in order to protect Fannie and Freddie against those risks, and without unnecessary expense for borrowers, especially those struggling with affordability issues. Mall Owners Filling Empty Stores with Pickleball Courts! Mall owners have a new strategy to fill vacant stores and attract more people. They are turning to the fast-growing sport of pickleball, and replacing shuttered stores like Bed, Bath, and Beyond with pickleball courts! (9) The combination satisfies a need on both sides as consumers gravitate toward locations that offer fun, social experiences and not just a place to sh

A Senate hearing on recent bank failures turned into a prickly confrontation between bank executives and lawmakers. Former leadership for Silicon Valley, Signature, and First Republic Banks were hammered by lawmakers about why their banks collapsed. And there wasn't a lot of agreement on the cause. Bank executives blamed the government and the media, while lawmakers blamed mismanagement and greed. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. Silicon Valley Bank made the biggest splash as the first bank to fall with about $210 billion in assets. Signature bank had about $110 billion when it was seized by regulators. They were the third and fourth largest banks in the U.S. so their failures raised huge concerns about the impact on the entire financial system. First Republic went south and teetered for a few months after it lost billions in deposits, and was largely taken over by JPMorgan. SVB CEO Blamed a Series of "Unprecedented Events" In a joint session before the Senate Banking Committee, former Silicon Valley Bank CEO Greg Becker pointed a finger at the federal government, saying the bank's failure was the result of a series of "unprecedented events." He testified that: "With near zero-percent interest rates and the largest government sponsored economic stimulus in history, more than $5 trillion in new deposits flooded into commercial banks. By the end of 2020, SBV had grown 63 percent over the prior year, and in 2021, SVB's assets grew another 83 percent to $212 billion." (1) He also pointed out that during the pandemic, when inflation started to become an issue, the Federal Reserve insisted that inflation was "transitory" and that interest rates would remain low. Massive Bank Run at SVB The bank's collapse largely happened after a decision to invest more than half of the bank's loan portfolio into fixed-income Treasury securities, when interest rates were low. They are considered "low risk" but they are also impacted by interest rate hikes. When interest rates blew up to fight inflation, the value of SVB's portfolio shrank and that forced the bank to sell at a $2 billion loss. When news spread about the bank's situation, depositors became concerned about accessing their funds and the bank experienced a massive bank run. Media Misconceptions Becker also blamed the media for comparing the March 8th failure of Silvergate Bank to Silicon Valley Bank. He told lawmakers that the two banks had completely different business models, and said: "Rumors and misconceptions quickly spread online, culminating on March 9th with the first-ever social media bank run leading to more than $42 billion in deposits being withdrawn from SVB in 10 hours, or $1 million every second." Two More Dominoes to Fall Former Signature Bank Chairman Scott Shay was miffed that his bank was seized by New York State regulators on March 12th. He insisted that the bank would have survived that bank run. He argued: "We were at all times solvent and well-capitalized, and even with the sale of our available-for-sale securities, we still would have remained well capitalized." Former First Republic CEO Mike Roffler also blamed social media and news stories for inciting panic among depositors along with technology that allows for fast-paced digital withdrawals. Roffler told lawmakers: "The contagion spread very quickly and panic is very hard to control." (2) Lawmakers Blame Mismanagement, Greed But lawmakers also took the conversation in a different direction, criticizing bank leaders for millions of dollars in bonuses and personal stock sales ahead of the failures. Senator Sherrod Brown ripped into Becker saying: "Workers face consequences, executives ride off into the sunset. Only in corporate boardrooms can you run your business into the ground, take the whole economy along with you and come out ahead. We can't let that happen again." Some lawmakers said that bank executives could have reduced the risk by hedging their portfolios, but that they, instead, placed profits ahead of safety. As explained in a Washington Post article, Silicon Valley Bank had financed short-term liabilities with long-term debt. It seemed like a no-brainer when interest rates were low, and to be fair, there was a lot of talk about interest rates remaining low for a very long time. But when the Fed started hiking rates, the value of those Treasurys went down. Lawmakers say the bank could have swapped those longer-term notes for one with shorter-terms that match the duration of the bank's liabilities. But they say the banks didn't do that because it would have been more expensive. (3) Sharp Words from Some Senators The session became downright nasty at times. Senator John Kenney of Louisiana had sharp words for what he called SVB's "stupidity." He told Becker: "You made a really stupid bet that went bad, didn't ya? And the taxpayers of America had to pick up the tab for your stupidity,

In this Real Estate News Brief for the week ending May 13th, 2023... some good news about inflation, how a U.S. debt default might impact housing, and a new Gallup Poll on investor preferences. 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 two inflation reports from this past week. The first was a report on the Consumer Price Index for April. The CPI shows a .4% rise in consumer prices which is a slight increase from the previous month, but it brought the annual rate below 5% for the first time in two years. It hit a high of 9.1% last summer, but is now down to 4.9%. The core rate, which omits food and fuel, was also down .4%, with an annual rate of 5.5%. Shelter prices rose the most, but those prices are slowing down. It's interesting to note that the three-month annualized rate is now at 3.2%. (1) Producer prices are also coming down. The Labor Department reported a .2% increase in the Producer Price Index for April, with an annual rate of 2.3%. The PPI's core rate was also down .2% but the annual rate is a bit higher, at 3.4%. As MarketWatch reports: "Inflation is moderating at the consumer and producer levels. This is adding to market expectations that the Federal Reserve will refrain from raising interest rates further at the next meeting in mid-June." (2) The Fed's preferred report on inflation, known as the Personal Consumption Expenditure Index or PCE, will play a big role in what the Fed does next. That's coming out at the end of this month. Weekly jobless claims were a surprise on the upside, with 240,000 people filing for benefits. They were 22,000 higher than they were for the previous week. Economists had only expected an increase of 3,000. That's the highest number of claims since October of 2021. The numbers have been steadily rising since January, for a total of 1.81 million continuing claims. Higher numbers indicate a softening of the job market and slower wage growth which the Fed wants to see in its fight against inflation. (3) Mortgage Rates Mortgage rates are still idling in the lower 6% range. Freddie Mac says the 30-year fixed-rate mortgage was down four basis points to 6.35% this last week. The 15-year was down one point to 5.75%. (4) Freddie Mac's chief economist, Sam Khater, says: "A recent sideways trend in mortgage rates is a welcome departure from the record increases of last year." (5) In other news making headlines… Mortgage Rates Would Skyrocket if U.S. Defaults on Debt As lawmakers haggle over the debt ceiling, there's concern about what would happen if they don't come to an agreement and the government defaults. According to Zillow, it would have a devastating impact on the housing market, with mortgage rates potentially rising to 8.4%. That would increase a typical mortgage payment by 22%. (6) Zillow says if mortgage rates get to the 8% level, existing home sales could fall from April's 4.3 million to around 3.3 million in September. That's a 23% drop. Zillow's senior economist, Jeff Tucker, acknowledges that a default is "unlikely" but if it did happen, he says it would send the housing market into a "deep freeze." It is hoped that President Joe Biden and Speaker of the House Kevin McCarthy will hammer out a deal by June 1st. In a Bloomberg interview, Treasury Secretary Janet Yellen said: "There is no satisfactory solution for the U.S. that's good for the economy and financial markets other than Congress acting to raise the debt ceiling." Fed's Rate Hikes Are Now Hurting the Housing Market Housing economists are not happy about the latest rate hike. The Fed hiked short-term rates another quarter point to a range of 5 to 5.25%. The National Association of Realtors' Lawrence Yun and the National Association of Home Builders' Robert Dietz call it "disappointing." They say the high rates are freezing loan activity and hurting the economy. (7) They say that consumer prices have been coming down for months and the last rate hike wasn't necessary. Yun says that: "Regional banks are an important source of loans – but they are frozen." He says: "They are shuffling their balance sheets and figuring out what to do." Dietz says that higher rates are making it harder for developers to build homes, which are badly needed to boost inventory. He says: "We need to be building more than 1.1 million homes a year to haVe a meaningful impact on the lack of inventory." Real Estate Still a Top Investment Choice, but Lead is Shrinking A recent Gallup poll shows that real estate is still a top investment choice, but the lead is shrinking. In 2022, 45% of the participants said that real estate is the best long-term investment. This year, that percentage shrank to just 34%. (8) Many consumers have turned to gold, which has now taken second place and pushed stocks into third. Gold was favored by 26% this year, compared to 15% last year. Stocks dropped from 24% last year to 18% this year. S

In this Real Estate News Brief for the week ending May 6th, 2023… why economists are expecting a rate hike pause, where homeowners are paying the most and the least for their mortgages, and new home search help from a chatbot! Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and the big news is, of course, the Fed's rate hike. The Federal Reserve's Open Market Committee followed through on an expected quarter point hike to the overnight lending rate, which puts the target range between 5 and 5.25%. It was the 10th rate hike in a row and a unanimous decision among committee members, despite calls for a pause from some Congressional lawmakers. (1) The Fed also appeared to suggest that it might now be time for a pause, by eliminating a sentence that says "some" additional rate hikes may be needed. Instead, the statement kind of hedged on the idea of rate hikes by saying that any further rate hikes would depend on "the cumulative tightening of monetary policy, the lags with which monetary policy affect economic activity and inflation, and economic and financial developments." Economists are interpreting that to mean that the Fed is prepared to take a more "dovish" approach at its next policy meeting. As MarketWatch puts it, the Fed is "on hold." Fed Chief Jerome Powell also said in his press conference after the meeting that: "We are no longer saying we anticipate" rate hikes. He says: "We will be driven by incoming data, meeting by meeting." (2) Some economists say the Fed has already gone too far. Chief economist for the National Association of Realtors, Lawrence Yun, is one of them. He called last week's rate hike "unnecessary and harmful." Yun says inflation has been coming down and will continue to do so. He says: "It will be even lower as the heavyweight component to inflation, which is rent, will inevitably slow down given the robust, 40-year high in construction of new apartment units." He also says that many small banks are struggling right now. He says: "They are becoming zombie-like banks, unable to lend even to good businesses, as they are more concerned with balance sheet shuffling for survival." (3) Meanwhile, there are new signs that the job market is softening. Initial claims were up 13,000 to a total of 242,000. That's up from about 200,000 in January. Continuing claims were down, however, by 38,000 to a total of 1.81 million. (4) The April jobs report also shows that the job market is still going strong. It shows that companies increased the number of available positions by 253,000. Wall Street economists had anticipated the addition of just 180,000 new jobs. The unemployment rate also declined from 3.5% to 3.4%. (5) Mortgage Rates Mortgage rates dipped a little this last week. Freddie Mac says the average 30-year fixed-rate mortgage was down four basic points to 6.39%. The 15-year was up five points to 5.76%. (6) In other news making headlines… The Average Monthly Mortgage Payment The average monthly mortgage payment is now $2,317. Lending Tree's latest study shows that the average U.S. home buyer needs a mortgage of $333,342 with the highest amounts needed in the District of Columbia, Washington State, and California. (7) High priced states skew the averages however, so you need to look at the individual states to see how affordable they are. The three states with the lowest average mortgage amounts are West Virginia, Kentucky, and Michigan. In West Virginia, the average is just $1,700. Homeownership Not a Priority Among Most Renters A majority of renters don't see homeownership in their future. Online brokerage Home Bay conducted a survey that shows about two-thirds say they have lost hope in owning a home, although half of the respondents said that homeownership is "very important." Given their current situation, they'd prefer to spend their money on other things. The top three priorities are paying down debt, having a comfortable retirement, and owning a car. (8) Among the renters who want to own a home, a third are willing to pay a high price to do that including many who said they'd skip meals or sell their plasma. Two thirds also said they would take on a second job. Zillow, Redfin Launch ChatGPT Plugin Searching for a home could get a little easier with the help of a chatbot. Both Zillow and Redfin announced that users will be able to get a ChatGPT plugin that will allow them to describe homes and have the chatbot show relevant listings. The OpenAI website says that only a small number of users have access to the plugins right now, but you can add your name to a waitlist. (9) That's it for this week's News Brief. Check the show notes for links at newsforinvestors.com. You can also join RealWealth while you are at our website by hitting the "join for free" button. Membership gives you full access to our Investor Portal where you can see sample

When it comes to renting a home, landlords may see many more applicants with pets than they do parents with children. According to the U.S. Census Bureau, the number of households with pets is almost double the number of households with children. That's a trend that impacts the rental market as well as the home buying market, as pet owners look for housing and neighborhoods that will accommodate the needs of their children, and their pets. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. Census data shows that the number of families with kids under the age of 18 has been declining over the past 20 years. Last year, in 2022, just 40% of households had children. That's down from 48% in 2002. A RisMedia article suggests two reasons for the decline: One, because birth rates have been shrinking over the last few decades, except for an increase in just the last year; And two, because baby boomers still comprise a large share of U.S. households, but at this point, with no kids. Pet Households Rise and Kid Households Decline As households with children have dwindled, those with pets have been rising. The American Pet Products Association says that, back in 1988, 56% of households had a pet which was most likely a dog or a cat. Today, about 70% of U.S. households have pets. Although the number has been steadily rising over the years, many people adopted pets during the pandemic and continue to lavish time and money on their pet companions. The BLS American Time Survey shows that the share of Americans who spend daily time with their pets grew from about 13% in 2003 to almost 20% in 2021, with women spending more time on pets than the men. Americans are also spending more money on their pets. The American Pet Products Association says the expenditure has grown from about $53 billion in 2012 to $123 billion in 2021. The Importance of Pets in Real Estate Decisions With that kind of time and money being lavished on our pet companions, it's not that surprising to think that pet owners will place great importance on the well-being of their pets in their home buying process or their rental decisions. According to the National Association of Realtors, almost one-third of unmarried homebuyers will consider their pet when they decide on a neighborhood. About 14% of married couples will factor that in. When it comes to gender, 25% of single women want a pet-friendly neighborhood compared to 16% of men. Pet friendly neighborhoods are ones with a high walkability score, access to parks and recreation areas, and homes with bigger yards. Renting to Tenants with Pets As a landlord, it has become more important to accommodate pets, but you should also have clear, comprehensive rules written into the lease agreement. The California Apartment Association offers a Pet Addendum that can help landlords and property managers protect their property and the safety and cleanliness of their rental community in general. Among the key components of the addendum is a requirement that renters get a landlord's written consent before they bring a pet onto the premises. The addendum also requires detailed information about the pet including type, breed, name, sex, age, size, and a description or photograph. This can help with record-keeping. If there are local pet ordinances, the tenant should agree to comply with those. There should also be guidelines for the disposal of any pet waste on the rental property and the maintenance of litter boxes. We'll have a link to the addendum, and the data on households with children and pets in the show notes at newsforinvestors.com. I also ask that listeners become RealWealth members to find out more about the creation of rental property income. It's free to join at our website. And please remember to subscribe to this podcast! Thanks for listening! Kathy Fettke Links: 1 - https://www.rismedia.com/2023/05/08/stunning-stat-more-pets-than-kids-home/ 2 - https://caanet.org/allowing-a-pet-be-sure-to-use-caas-pet-addendum/

March wasn't a great month for investor home sales. A new Redfin report shows that one in every seven homes sold by investors was sold at a loss. That's 14% of investor sales or about triple the number from a year earlier, and the highest level of investor home sale losses since 2016. But there is a catch! These sales were mostly for investors who bought more recently and sold after a short length of time, such as flippers. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. The housing market has slowed dramatically as home prices and mortgage rates make it tough to buy, and in some areas and for some people, tough to invest. It's important to remember that the report is based on national statistics, and that six in seven of those real estate investors made money on sales, although their gains may have been smaller. Typical Gains for Investor Home Sales Redfin says the typical investor who sold a home in March, sold it for about 46% more than they paid. That's down from a little over 55% in March of last year. Profit will likely be less than that, because of other costs, like renovations. Redfin Senior Economist Sheharyar Bokhari says: "You might wonder why investors don't just wait to sell until the housing market bounces back. Many long-term investors who rent their properties are doing that, but many flippers–especially those who bought recently–can't afford to." She says: "Holding onto homes that aren't producing income can be expensive because the owner is on the hook for property taxes, operating costs, and in many cases, mortgage payments." Phoenix Redfin agent Van Welborn says: "Home flippers aren't reaping the gains they used to." Flippers More Likely to Report Losses If you narrow the overall results of the Redfin study down to "just" flippers, Redfin says that one in five sold at a loss in March. Redfin defines a flipper as someone who bought and sold a home within a nine-month time frame. Holding long-term will likely produce much better results, although the median U.S. asking rent has been slowing. It was down .4% year-over-year in March but that is also the first time it's gone down in three years. Redfin agents say that Airbnb operators are also hurting in some markets, and have had to sell. Flippers Lose More in Pandemic Boomtowns Places where investors are more likely to sell at a loss are the pandemic boomtowns like Phoenix and Las Vegas. In Phoenix, 31% sold at a loss in March. In Las Vegas, that percentage was more like 28%. The report says that many of the sellers are mom-and-pop investors who are worried about where the market is headed, possibly remembering what happened in 2008. But today's housing market is nothing like it was in 2008, and real estate is still a solid investment over the long term. Many institutional investors see it that way. Instead of selling, many are holding on to their properties and waiting for buying opportunities. My Formula for Real Estate Wealth Redfin says that 10% of the homes on the market right now are for sale by investors. That's higher than at any time before or during the pandemic but down from a peak of 12.4% last year. My formula for real estate wealth is to buy wisely and hold on to your properties long-term, especially now when there's such strong demand for single-family rentals. At RealWealth we encourage the use of a platform called DealCheck for a thorough analysis of a deal before you close on it. DealCheck is a powerful property analysis platform that's easy to use, and provides instant details on a property's cash flow, cap rate, ROI, profit from a sale, acquisition cost, and other helpful information. If you're a RealWealth member, just sign into the portal and look for DealCheck under the Resources tab. If you aren't a member, it's free and easy to sign up. And, please remember to subscribe to this podcast! Thanks for listening! Kathy Links: 1 - https://www.redfin.com/news/homeowner-tenure-2022/

In this Real Estate News Brief for the week ending April 29th, 2023... you'll get mixed news on inflation, results for the first quarter GDP, and a rate hike in South America that you never want to see here! 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 Let's begin our economic review with the latest inflation report. The Personal Consumption Expenditure Index for March was released on Friday and showed a tiny .1% increase in overall inflation. That brought the yearly rate down from 5.1% in February to 4.2% in March – the lowest it's been since May of last year. But unfortunately, the news wasn't as good for the PCE's core rate. When you omit prices for food and gas, the core rate rose .3%, and brought the annual rate down from 4.7% to 4.6%. As MarketWatch reports, the core rate hasn't changed much for the last five months. (1) The PCE is the Fed's preferred inflation gauge, and will be an important factor in determining whether to hike interest rates again this week. It's generally believed that the central bank will hike rates another quarter point, but it's a delicate situation because the economy is teetering on the brink of a recession. As Bill Adams of Comerica told MarketWatch: "The Fed is stuck between raising interest rates and likely pushing the economy into a recession… or pausing and risking that inflation accelerates in a few quarters if the economy regains momentum and sticky prices stay high." First quarter GDP is out. It shows the economy grew at a rate of 1.1%. That's down from a GDP of 2.6% in the fourth quarter. Consumer spending has been strong, but was offset by spending cautiousness among businesses. Home construction and sales are also a drag on the GDP, thanks to higher mortgage rates. But MarketWatch says the biggest impact on the GDP was a lack of inventory growth. Business inventories were down $138 Billion. If that had not been the case, and inventory growth remained flat, the GDP would have reportedly been much higher, at 3.4%. (2) Jobless claims reversed course this last week and fell an unexpected 16,000 to a seasonally adjusted 230,000. Economists had expected them to rise slightly. The report shows that the job market is still strong, which feeds into the Fed's concern about inflation. Continuing claims were also down 3,000 to 1.86 million. (3) Housing demand and a lack of existing home inventory drove new home sales higher in March, despite high mortgage rates. The Commerce Department says they were up 9.6% for the month, to a seasonally adjusted annual rate of 683,000. The surge was mostly driven by new home sales in the Northeast. The median price for a home was $449,800. Chief Economist, Lisa Sturtevant, at Bright MLS, says that about one in three homes for sale are new builds. Historically, it's more like one in 10. (4) Although the sale of existing homes has been rising over the last several months, they fell in March. The National Association of Realtors says contract signings were down 5.2% for the month which is more than economists had predicted. NAR says about a third of the listings are seeing multiple bids, and 28% are selling for more than the asking price. (5) The February report on home prices by Case Schiller shows the national index was up .2% for the month, and 2% for the year. That's the smallest increase in home price growth since 2012. (6) Mortgage Rates NAR says that realtors are predicting that mortgage rates will hit 6% this year, and 5.6% next year. But they aren't there yet. Freddie Mac says the average 30-year fixed rate mortgage was up 4 basis points this last week, to 6.43%. The 15-year was down 5 points to 5.71%. (7) In other news making headlines… Study: Home Demand Rises After Periods of High Inflation The desire to own a home will likely increase thanks to inflation. The results of a new study by UC San Diego show that the inflation we're seeing today will have a lasting impact on the housing market, with many people buying homes to protect themselves from future price growth. The study claims to be the first of its kind to show that personal experience with inflation will lead to home ownership. (8) One of the study co-authors says: "We think one reason people choose to buy instead of rent is because they are worried about future inflation, which may drive up both rent and house prices." She says: "Our paper suggests that cohorts living through the current inflationary period will have a higher demand for housing for years to come." Huge Rate Hike in Argentina as Inflation Soars As the American consumer worries about inflation and another rate hike when the Fed meets this week, consider this: The Argentina central bank just hiked short-term rates 300 basis points to an annual rate of 81%! That's in response to surging inflation that hit 104% in March. Argentine officials had hoped to cut rates this year after a difficult tightening cycle in 202

Fannie and Freddie are changing some rules that could make home loans more expensive for people with high credit scores, and less expensive for those at the low-end of that spectrum. Critics say the rules amount to an unfair subsidy for high-risk borrowers, but the GSE's say it's a misconception about what they are changing. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. You may have seen the headlines already. One says: "A Bigger Subsidy for Risky Mortgages." Another says: "Upside Down Mortgage Policy." Another says this new policy will "screw Up the Homebuying Market." The headlines refer to a new rules from the Federal Housing Finance Agency regarding loan-level price adjustments or LLPAs for conventional loans. They officially kick in on May 1st, although some lenders have already been incorporating them into their fee structures. What's an LLPA? If you have a mortgage that's backed by Fannie or Freddie, you have paid or are paying this fee. LLPAS are fees that the government-sponsored enterprises charge when they buy loans from lenders. The fee is passed on to borrowers as a percentage of the loan and the amount is based on the borrower's risk factors such as credit score and down payment. People with higher risk factors pay higher LLPAs, and they can be paid up front or with higher monthly mortgage payments. Business Insider offers a few examples of how the new pricing structure will impact borrowers. 1 - Someone who might see an increase could have a credit score of 700 with a 20% down payment for a $300,000 loan. They would have previously paid 1.25% of that loan amount or $3,750. With the new fee structure, they'd pay 1.375% or $4,125, which is an increase of $375. (1) 2 - Someone who might see a decrease could have a credit score of 780 but a down payment of just 3%. Previously, they would have paid .75% on a $300,000 loan or $2,250. With the new rules, they'd pay .135% or $375. That's a $1,875 reduction. NAR, NAHB Opposed to the New Rule The National Association of Realtors is among those criticizing the rule change. It is encouraging the FHFA to rescind the new rule especially given the affordability issues facing home buyers. It suggests instead that: "The GSEs could simply reduce the fees for (higher risk) borrowers and maintain the others at the same cost—especially given the sharp decline in affordability over the last year." (2) National Association of Home Builders CEO, Jerry Howard, told Newsweek: "In the short term, this may increase homeownership among the targeted group, but I'm afraid it could decrease homeownership among the middle class. I'm not sure that we're not robbing Peter to pay Paul here." (3) FHFA Defends New Rules FHFA Director Sandra Thompson issued a press release this week to "set the record straight." She says: "Much of what has been reported advances a fundamental misunderstanding about the fees charged by the GSEs and why they were updated." She says the pricing structure hadn't been updated for many years, and the new pricing structure is the result of a 2021 review. (4) The goal: "To maintain support for purchase borrowers limited by income or wealth, ensure a level playing field for large and small lenders, foster capital accumulation at the Enterprises, and achieve commercially viable returns on capital over time." The overhaul has been done in steps over the last 18 months, beginning with fee increases for loans on second homes, high balance loans, and cash-out refi's. Then some fees were eliminated for first-time homebuyers with lower incomes but the means to meet their loan obligations. She says in her statement that this latest step is a recalibration of upfront tees that will make the housing finance system more resilient. Among the misconceptions, she says: 1 - Stronger credit borrowers are not subsidizing weak credit borrowers. She claims that fees generally increase for lower credit scores, despite the down payment. 2 - She says the new fee structure does not raise the fees for all low-risk borrowers. She says many borrowers with high credit scores or high down payments will see no change in their fees or even a decrease. 3 - She says the old framework was not perfectly calibrated to risk. She says it was essentially outdated, and is now better aligned for the performance of a mortgage relative to its risk. 4 - The new rules do not encourage low-income borrowers to pay a lower down payment to benefit from lower fees because they will also have to pay mortgage insurance premiums. 5 - The elimination of upfront fees is not for people with lower credit scores but for borrowers with lower incomes, and she says they are essentially supported by the loan fees for second homes and cash-out refi's (and not by good credit, high down payment borrowers). 6 - The changes are not intended to stimulate mortgage demand, but rather to advance the soundness and safety of the GSE's. The o

In this Real Estate News Brief for the week ending April 22nd, 2023… we have two new forecasts on whether we'll see a recession this year, some good news about the cost of construction materials, and a report that shows how much wealthier you are if you own instead of rent. 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 a look at economic news from the past week. There are a few new reports predicting that we'll have a "mild" recession in the second half of the year. The Conference Board's leading economic indicator index, or LEI, was down for a 12th month in a row in March. It fell 1.2%, which is the biggest decline in the last three years, according to MarketWatch. The index is a compilation of 10 indicators. One Conference Board manager says: "Economic weakness will intensify and spread more widely throughout the U.S. economy over the coming months, leading to a recession starting in mid-2023." (1) Fannie Mae economists are also predicting a recession later this year. The GSE's Economic and Strategic Research Group says the economy is "running out of steam." Although the economy got off to a strong start this year, the ESR group expects to see an economic contraction during the second half of 2023. Fannie Mae's chief economist Doug Duncan, says: "The economic slowdown has resumed – whether the end result is a modest recession or simply a soft landing remains unanswered." He attributes much of his optimism to the strength of the housing market, saying: "The greater-than-expected resilience of the housing sector to the affordability pressures of higher home prices and mortgage rates is central to our expectation that the recession will be modest." (2) The Labor Department reported another weekly increase in jobless applications, which are now at their highest level since the end of 2021. Initial claims were up another 5,000 to a total of 245,000. That's still an historically low number. Continuing claims also jumped a bit. They were up 61,000 to a total of 1.87 million. (3) Housing starts were down .8% in March, to a rate of 1.52 million. The drop is mostly due to a slowdown in condo construction which fell 6.7%. Starts for single-family homes offset that a bit with an increase of 2.7%. Permits for single-family homes were also higher, by 4.1% while permits for multi-family buildings were down almost 25%. The pullback in apartment construction follows a red-hot building streak over the last several months. (4) Builders are feeling more confident about the market as demand grows for new homes. The National Association of Home Builders says its monthly confidence index was up one point to 45 in April. It's the fourth month that the index has gone higher, and it's now the strongest it's been since September of last year. Demand is strong because the inventory for existing homes is so low. (5) Meantime, existing home sales were down 2.4% in March, to an annual rate of 4.44 million. Compared with March of last year, they are down 22%. Prices are also falling which means that current homeowners would lose some of their equity if they sold now. The National Association of Realtors says that prices were down 1% in March, which is the biggest monthly drop in a decade. That's a national number. A recent report from Black Knight says that prices are falling in the West but rising in the East. Prices are falling the most in cities that experienced a pandemic housing market boom. (6) (7) Mortgage Rates Mortgage rates started rising again this last week. Freddie Mac says the average 30-year fixed-rate mortgage was up 12 basis points to 3.69%. The 15-year was up 22 points to 5.76%. (8) In other news making headlines… Prices Dipping for Construction Materials Prices for construction materials are finally coming back to earth. According to an analysis by the Associated Builders and Contractors group, they are lower today than they were a year ago. It's the first year-over-year decrease we've seen in more than 18 months. Construction Dive says that building costs are still almost 40% higher than they were right before the pandemic struck. (9) Costs for some individual construction materials remain high, however. Bisnow reports that concrete is up 14.5% from a year ago. Construction machinery and equipment is also about 12% higher. Prices are also fluctuating a lot from month to month. Chief Economist Ken Simonson for the Association General Contractors of America told Construction Dive that: "Contractors remain wary about committing to projects" because of the price volatility. Some contractors are also putting the brakes on hiring. The Bureau of Labor Statistics reports a 50% drop in construction job openings at the start of this year. Homeowner vs. Renter Wealth Report Many homeowners are becoming much wealthier than renters, thanks to an increase in their home equity. A study by the National Association of Realt

Fannie and Freddie have a growing blacklist for certain properties that they won't lend to, but it's not public and it could surprise you when you're trying to close on a deal. The Los Angeles Daily News first reported on this, saying the government-sponsored enterprises are placing condos, associations, and co-ops on the list for a variety of reasons, including deferred maintenance. (1) Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. The president of Philadelphia-based condo and co-op lending service provider CondoTek told the Daily News that the blacklist has now grown to more than 1,400 properties. Orest Tomaselli says just 16 months ago, there were only 900 properties on the list. New Tighter Standards After Condo Collapse Fannie Mae and Freddie Mac tightened their standards after the collapse of Champlain Towers South in Surfside, Florida. The catastrophic failure of the 12-story condo building resulted in the deaths of 98 people and $1B in property losses. HOAs started seeing a new questionnaire months later at the beginning of last year. According to the Daily News, Fannie and Freddie are using data from this questionnaire to determine whether a property has deferred maintenance, structural issues, or a lack of funds or insurance to cover needed upgrades or repairs. Concerns That Questionnaire Creates Liability The questionnaire has been controversial. Other than questions regarding maintenance and upkeep, they also include questions that could presume future liability for any deficiencies – questions like: "Is the HOA or Cooperative Corporation aware of any deficiencies related to the safety, soundness, structural integrity, or habitability of the project's buildings?" The Orange County Register reported on a survey by the Community Associations Institute that shows 89% of the participants felt they might be held liable in the future because of questions they didn't know how to answer. Almost as many also feared liability exposure because they refused to answer those questions. (2) News reports say that some condo associations and property management companies feel the questionnaires are "draconian" and have chosen instead to boycott Fannie/Freddie loans. Questionnaire Alternative Not Well Received The mortgage giants are offering an alternative although that hasn't gotten a great reception either. Instead of the questionnaire, the underwriter can provide reviews of board minutes from HOA meetings, engineering inspections, and local government inspections. Lenders weren't thrilled with that option because it could expose the lender to future liability issues. Mortgage broker Jeff Lazerson says in the Orange County Register article, that 50% of the loans that his shop runs through Fannie and Freddie require a limited review and a shorter list of HOA questions. A Freddie Mac spokesperson says that: "Freddie Mac's requirements are designed to help ensure residential buildings with aging infrastructure are safe for their residents and the condos and co-ops needing critical repairs have a plan to do so." Safety is of utmost importance, but with affordable housing in short supply, the questionnaire and the blacklist add two more obstacles for homebuyers looking for a lower price tag. Secret Blacklist for Lenders & Servicers As for the blacklist, it's reportedly available to lenders and servicers, but not the property owners or the public in general which includes potential buyers. That means buyers counting on a loan from Fannie or Freddie might not find out until the last minute. Tomaselli says: "It's a crapshoot. The only way for you to find out if a project is on that list is if you apply for a mortgage and the lender runs that project to see if it's unavailable. And only then, typically, is the buyer informed." Buyers must then turn to riskier, more expensive mortgages to complete their transaction. You'll find links to articles about the blacklist and the HOA questionnaire at newsforinvestors.com. As always, I ask that you join RealWealth for free to learn more about real estate, and subscribe to this podcast! We'd also appreciate a review on whatever podcast platform you are using. Thank you! And thanks for listening, Kathy Fettke Links: 1 - https://www.bisnow.com/national/news/capital-markets/secret-blacklist-of-condos-co-ops-means-some-buyers-ineligible-for-fannie-freddie-financing-118544 2 - https://www.ocregister.com/2022/02/24/condo-questionnaire-causing-some-boards-to-boycott-fannie-freddie-financing/

Is climate change creating a real estate bubble we shouldn't ignore? And who's going to get hurt if that bubble bursts? Yale's Climate Connections newsletter just reported on a study that claims there's a massive bubble forming because property values don't include climate risks like flooding and wildfires. The 2023 Nature Climate Change study also suggests six ways to reduce this risk and potentially keep this bubble from bursting. (1) Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. Although climate change skeptics may feel we are experiencing normal weather patterns, many people are concerned that severe weather events are increasing in number and intensity. We've been seeing increased storm-related flooding in some areas and more drought-related wildfires in others. Some inland areas are also dealing with water scarcity and extreme heat while coastal areas are faced with the threat of rising sea levels. The "Brittleness Bubble" The Yale newsletter cited climate futurist Alex Steffen for his definition of the so-called "Brittleness Bubble." Steffen says: "As awareness of risk grows, the financial value of risky places drops. Where meeting that risk is more expensive than decision-makers think a place is worth, it simply won't be defended. It will be abandoned." He says: "That will then create more problems. Bonds for big projects, loans and mortgages, business investment, insurance, talented workers – all will grow more scarce. Then, values will crash." Overvaluation of Homes The Nature Climate Change study pegged the overvaluation of U.S. homes in flood zones at around $200 billion, but a study done last year by consulting firm Milliman had a much higher number. In the Milliman study, researchers calculated the overvaluation at more like $500 billion. These figures apply to flood risk, and don't account for the impact of other weather-related risks like wildfires. California is suffering the impact of highly destructive wildfires that have been increasing in number and intensity. And that's pushing up insurance rates, making it unaffordable for many people to rebuild or buy homes in high-risk areas. The Southwest has also been dealing with a long-time drought although recent winter rains have helped to replenish reservoirs. But water scarcity and extreme heat are a growing problem in many areas. Reducing the Risk The report goes on to list six ways to help prevent this bubble from bursting, which I will briefly share with you. 1 - The first is to require sellers to fully disclose flood risks. The study says that, in general, properties that are highly overvalued are in coastal counties which often don't require flood-risk disclosures. Some property listing websites will show you this info however, such as Redfin and Realtor.com. Floodfactor.com also provides property-specific risk ratings. 2 - The second suggestion is to raise awareness about climate change which might lead to policy changes about development in risky areas. This will likely happen as more people suffer the impact and media attention grows. 3 - Third on the list of suggestions is to charge market-based insurance rates instead of subsidized rates provided by the National Flood Insurance Program. The NFIP has issued new risk ratings called Risk Rating 2.0. That has brought insurance costs closer to what they need to be, but it's a slow-going process because there are yearly rate-hike caps. 4 - The fourth suggestion is to reduce federal subsidies for properties in risky areas. These subsidies come in the form of supplemental disaster relief with no requirements for long-term flood-risk strategies. The study authors say it's a complex issue that will take a lot of effort to tackle because there isn't much political support or funding to get this done. 5 - Fifth on the list of actions to address the so-called climate change housing bubble is a revamping of FEMA and the creation of a National Disaster Safety Board. The report says that FEMA is "underfunded, understaffed, and has minimal authority to do what it needs to do." A National Disaster Safety Board could help implement policy changes. 6 - Last but not least, the report suggests that we should work toward a retreat policy that would help people move from areas that have suffered multiple climate-related disasters. The strategy would be to provide affordable housing for these people which may sound like a "big ask" at a time when the nation is suffering from a huge lack of affordable housing. When Will the Bubble Burst? So when will all this become critical? The Yale article cites a NOAA prediction, that the average sea level rise by 2050 will be 10 to 14 inches for the East Coast, 14 to 18 inches for the Gulf Coast, and four to eight inches for the West Coast. It says a "rapid rise" will happen after that and claims that we'll see a rise of four to seven feet by 2100 as compared to the year 2000. The st

In this Real Estate News Brief for the week ending April 15th, 2023… we have two inflation reports, the minutes of the last Fed meeting, and the results of a survey on an acceptable mortgage rate. 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 government released two reports on inflation that show prices are rising more slowly, but that inflation is still too high. The Consumer Price Index or CPI shows a small .1% increase in March, mostly due to lower food and gas prices. Energy prices were down 3.5% while groceries fell .3% including an 11% tumble for egg prices. Grocery prices are still 8.4% higher year-over-year, but those declines helped slow the yearly rate from 6% to 5%, which is the lowest we've seen since May of 2021. (1) The news isn't quite as good for the core rate, which strips out food and gas. That was up .4% and "raised" the annual rate from 5.5% to 5.6%. The increase was partly caused by a 2.7% increase in shelter prices, although rents and home price growth are slowing. The Producer Price Index or PPI for March was also released, and shows a big drop in wholesale prices. That typically means we'll see retail prices coming down in the coming months. The data shows a .5% monthly decline which brings the yearly rate down from 4.9% to 2.7%. That's the lowest it's been since January of 2021. The core rate shows a slight increase of .1%. That also reduced the annual rate from 4.5% to 3.6%. (2) Meantime, the Federal Reserve released minutes from the meeting in February which resulted in a quarter-point rate hike. The notes show that Fed officials are very concerned about rate hike stress on the banking system, and are now admitting that we'll likely see at least a "mild" recession later this year. They raised the Federal Funds rate nine times in a row to a range of 4.75% to 5% at the last meeting. They believe that inflation is still much too high and that further rate hikes may be needed, but they will be looking closely at the incoming economic data ahead of their meeting in May. (3) U.S. Treasury Secretary Janet Yellen spoke out at the end of the week, saying that banks are being more cautious, and that if they tighten their lending standards further, there may be no need for further rate hikes. She said that would serve as a "substitute for further interest rate hikes that the Fed needs to make." (4) Consumers are spending less, which is another sign that the economy is softening. Retail sales have declined four out of the last five months, and were down 1% in March. As reported by MarketWatch: "Retail sales haven't fallen off a cliff, but they also aren't rising rapidly like they did in 2021 and early 2022." (5) Jobless applications are slowly rising. There were 239,000 initial claims for the previous week, which is an increase of 11,000. That's not much of a blow to the job market, but it does show that layoffs are slowly rising. Most of the unemployment applications were filed in California where big tech companies are handing out pink slips. Continuing claims are still very low at 1.81 million. (6) Mortgage Rates Mortgage rates held steady for the most part. Freddie Mac says the average 30-year fixed rate mortgage was down just one basis point to 6.27%. The 15-year was also down one point to 5.54%. (7) In other news making headlines... Mortgage Rate "Tipping Point" The National Association of Realtors is predicting they will fall below 6% by the end of the year. NAR economist Nadia Evangelou says: "If rates drop to 6%, 3.1 million more households will be able to afford to buy the median-priced home compared to the beginning of the year." A survey by John Burns Real Estate Consulting shows the "sweet spot" for most homebuyers is lower than 6%. 71% of the participants taking that survey said they won't accept anything higher than 5.5%. (8) Sharp Drop in Single-Family Permits There's been a steep drop in the number of building permits pulled for single-family homes. The National Association of Home Buliders says the they are down more than 34% year-over-year with the sharpest decrease in the West followed by the South and the Midwest. They are down about 44%, 33%, and 31% respectively. The Northeast had the smallest drop of 23%. (9) Multifamily permits are up slightly for the nation with a year-over-year rate of just over 8%. There's been a steep drop in the Northeast for apartments while they have surged to almost 32% in the South. Texas had the highest number of single-family permits, but those have dropped more than 40% in the last 12 months. Florida and North Carolina have also experienced big declines of just over 31% and 22% respectively. That's it for today. You'll find more on all these topics by following links in the show notes at newsforinvestors.com. You can also learn more about how demand is growing for single-family rentals at ou

In this Real Estate News Brief for the week ending April 8th, 2023... reports show a slowly weakening job market, what could be a great year for single-family rentals, and a list of the top metros for home value growth and stability. 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. Although the job market remains strong, the latest reports show it is softening. For the week of March 25th, jobless claims hit 228,000. It's the ninth week in a row that they've topped 200,000. They had bottomed out last fall when they dropped to a 53-year low of 182,000. They continued around the 200,000 level for several months and have been slowly rising since February. Government revisions also show that claims during the first part of the year were higher than previously reported. MarketWatch economists say that's probably due to corporate layoffs that are just now showing up in the jobless data. (1) Job openings are also declining. They fell to a 21-month low in February, which is another sign that the job market is softening. Listings dropped from 10.6 million in January to 9.9 million in February. Openings are now down to about 1.7 openings for each unemployed worker. They were at 1.9 openings or each unemployed worker previously. Bill Adams of Comerica told MarketWatch: "The labor market is still very hot but the big drop in job openings is a sign the labor market is cooling in general." (2) A third report on job growth shows that U.S. companies added 236,000 new jobs in March. That's a sign of strength and resiliency, and probably not what the Fed would like to hear. Those new jobs helped lower the unemployment rate from 3.6% to 3.5%. Wage growth was slower however. It's come down from 4.6% in February to 4.2% in March. (3) A report on construction spending shows it was down slightly in February. The Commerce Department says it fell .1% to $1.844 trillion. Single-family construction spending was down 1.8% while multi-family spending was up 1.4%. Year-over-year, multifamily is up 22.2%. Single-family is up 21.4%. (4) Mortgage Rates Mortgage rates dipped slightly this last week. Freddie Mac says the average 30-year fixed-rate mortgage was down 4 basis points to 6.28%. The 15-year was down 8 points to 5.64%. (5) In other news making headlines… Single-Family Rental Market Remains Strong Some parts of the housing market may be in for a rough ride this year, but the single-family rental market isn't one of them. A new report from Attom projected single-family rental yields for 212 counties with a population of at least 100,000. Rental yields are calculated by dividing the annualized gross rent by the purchase price. According to Attom, rentals in those 212 counties will see a 7.5% yield this year. That's up from 6.7% last year. (6) Attom says that SFR rents are growing in over 90 of the counties analyzed, so those counties will be the most desirable. Three of the top five counties for the biggest upside in rent yields are in Florida including counties for Miami, Fort Lauderdale, and West Palm Beach. California's Orange and Santa Clara counties are the other two. There's a lot of data in this report so it's worth digging deeper if you're deciding where to buy a rental property this year. You'll find a link to the report in the show notes. Texas Shows Strength for Overall Housing Market Another report on the U.S. housing market lists the top 20 cities for growth and stability, and 12 of them are in Texas. The Smart Asset study compared home value data for 400 metros between 1998 and 2022. It then calculated the growth rate from that data. (7) The Austin, Texas, area was In the number one spot for growth and stability followed by Midland, Texas, in the Western part of the state. Boulder and Fort Collins, Colorado, took the third and fourth spots. The Kennewick-Richland part of Washington State was fifth. Rapid City South Dakota took the sixth position. Then it's back to Texas with the Odessa area in West Texas as seventh and the Dallas area as eighth. San Antonio was in the ninth spot, and Houston right after that. Texas also dominated the next ten top cities as well with six more metros showing the strongest growth and stability. The report also shows the worst cities for growth and stability with Flint Michigan topping that list. I won't list those cities, but you'll find a link to the report in the show notes. Will Commercial Real Estate Go Belly Up? While there has been a lot of concern that commercial real estate is going to implode because of maturing debt and the inability to refinance at high interest rate, CNBC published a story with the title: "The coming commercial real estate crash that may never happen." This story argues that only a quarter of office-building loans will need to be refinanced in the next year. A quarter of office-buildings? That sounds like a LOT to me. CNB

Commercial real estate is feeling the impact of high interest rates, slower rent growth, and the banking turmoil, but is that asset class really set to implode? Many of the headlines you see today would lead you to believe that that's going to happen but some real estate insiders say: "Not so fast. We could be in for a buying opportunity." Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. First, let's take a look at what's happening with apartment sales. Commercial real estate data company CoStar just released a preliminary report on first quarter sales that shows a 74% year-over-year drop. That's the biggest slowdown since 2012 except for the second quarter of 2020, when the pandemic shut down the economy. From the start of the year to March 17th, sales were around $10.6 trillion. If the quarter finished with another $2.8 billion in sales, the total would be equal to the second quarter of 2020. (1) Apartment Sale Slowdowns In 2020, apartment sales fell because of the pandemic. Now, sales are slowing down because the Fed has been pushing up interest rates to fight inflation and investors can't make the numbers work. Alex Horn of CoStar News says: "The value of multifamily assets across the United States has started to decline" over the last six months. And he expects valuations to fall further. As dour as that sounds, CoStar reports that multifamily sales are doing better than other kinds of commercial real estate, such as office and industrial. CoStar's Jay Lybik says that multifamily is "still the preferred sector to invest in." But this kind of data is looking at a "national" snapshot, which doesn't say much about the submarkets, and places where things aren't quite so bad. The Basic Tenets of Real Estate Eric Brody of ANAX Ventures is one of those optimists. ANAX is a real estate developer and lender that provides funding to distressed real estate projects. Brody spoke with Benzinga about the current situation and said: "What are the basic tenets of real estate? Location, location, location and hyper-local markets. Now you have the mainstream media making projections based on a macro scale." He says that the media should be asking about what asset class in which market and how they structured the deal. (2) He also objects to stories about a big slowdown in construction that's impacting values. According to Brody, you don't count a half built building as worth only half of it's value. He says the values are still there and there's "a lot of stuff under construction right now." Maturing Debt Creates Investor Opportunities In December, he forecast big buying opportunities in commercial real estate because of all the debt that's maturing. He told GlobeSt.com that a report by Newmark shows "over $1 trillion in loans are coming due in the next two years, and due to rising interest rates, it is expected that repayment conditions will become more challenging, with bridge financing, office, and retail loans being the most at risk." He said: "In addition to the rising rates because of increased construction costs, rent growth, and political headwinds, real estate will need an infusion of capital to either refinance assets at a lower rate, pay down existing debt, or complete current projects." (3) But what does that mean for investors with capital? Brody told Benzinga that this creates an opportunistic environment for investors with cash on hand. He says: "It's an incredible moment in time if you have the capital and the expertise." That's it for a more positive view of the commercial real estate market. You'll find links to the stories I mentioned at newsforinvestors.com. You can also join RealWealth for free while you are there, if you haven't already done so. As a member, you have full access to our website, with data on individual rental markets, sample properties, and experienced investment counselors who can answer questions for qualified investors. If you haven't subscribed to the podcast, please do so! And leave us a review! Thank you! And thanks for listening, Kathy Links: 1 - https://www.costar.com/article/2111442536/us-apartment-sales-on-pace-for-the-slowest-quarter-in-more-than-a-decade 2 - https://www.benzinga.com/real-estate/23/04/31659957/is-commercial-real-estate-dead-dying-or-just-the-subject-of-media-clickbait 3 - https://www.globest.com/2022/12/19/will-investment-sales-recover-in-2023/

Demand for badly needed housing has triggered another ban on single-family zoning. Lawmakers in Arlington County, Virginia, approved a controversial plan to eliminate single-family exclusivity, and allow as many as six homes on one property. The decision came after a contentious three-year debate, and is part of a growing trend to dismantle the long-standing concept for single-family communities. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review. The policy was unanimously approved by a five-member county board after a battle that included a so-called "Missing Middle Housing Study." The missing middle is a phrase that refers to housing that falls between apartments and single-family homes. It covers several kinds of housing including townhomes, duplexes, and triplexes with more space than apartments. It could also include backyard cottages or in-law units which are more officially known as accessory dwelling units or ADUs. Divisive Debate Over Single-Family Zoning Ban As reported by the Washington Post, some Arlington County residents supported the idea, saying a ban on exclusive single-family neighborhoods would increase affordable housing options and diversify their communities. Other residents argued that it would lead to overcrowding, lower property values, and the destruction of their lifestyle and neighborhoods. (1) Arlington County is a desirable part of the greater Washington, D.C. metro with a growing population and a growing demand for more housing. The county's board chair, Christian Dorsey, said the ban will help the county address population growth, and move past the "discriminatory noise" within zoning rules. He says: "Growth and change are not good or bad, they just are." And, he says: "It's our responsibility to make sure we accommodate that – to make sure that it works well for as many people as it possibly can." New Rules Among the Most Permissive in the Country The new rules are some of the most permissive in the country. Contractors will be allowed to put up to five or six homes on lots that range in size from 6 to 7,000 square feet. Smaller lots will have a limit of 4 units. Height, lot coverage, floor area, and setbacks will remain the same. According to Wikipedia, single-family zoning has been around since 1916, and began in the Elmwood neighborhood of Berkeley, California. The story goes that a real estate developer in the Elmwood district pushed for single-family zoning rules to prevent a dance company owned by a Black resident from moving into homes that he was trying to sell. He apparently pushed for single-family zoning with the help of other developers who were also trying to keep certain groups of people out of the neighborhood. Growing Opposition to Single-Family Zoning More than one hundred years later, the concept is now wavering under the weight of the housing crisis, and the idea of banning this kind of exclusive zoning is gaining momentum across the country. According to BisNow, at least three states and eight municipalities have passed bans on single-family-only zoning. The city of Minneapolis was the first to implement a ban in 2018. The state of Oregon followed in 2019. Several cities in California banned that kind of zoning, but state lawmakers approved a bill in 2019 called Senate Bill 9. That legislation makes it legal to have two units on a single-family property, and in some cases, four units. The state of Maine adopted a ban last year. The Washington State House of Representatives just recently passed a bill that would ban single-family zoning statewide, but it still needs approval from the state senate and the governor. (2) The policy in Arlington, Virginia, goes into effect on July 1st and will be phased in over five years. During those first five years, only 58 permits a year will be approved. The cap will be lifted in 2028. This kind of ban opens up opportunities for homeowners to be coincidental landlords if they build additional housing on their properties, and rent them out. You'll find links to the Washington Post story in the show notes at newsforinvestors.com. Please remember to join RealWealth by clicking on the "join for free" button. As a member, you'll have greater access to investing opportunities in desirable rental markets across the country. That includes our investor portal, our market data, and our experienced investment counselors. You can also find out more about our spring real estate tours in metros that are popular among single-family rental investors, and our mastermind events to help get you on the path to long-term wealth. If you haven't subscribed to the podcast, please do so! And leave us a review! Thank you! And thanks for listening, Kathy Show Notes link: https://www.newsforinvestors.com Join link: https://join.realwealth.com/?utm_content=Real%20Estate%20News%20Podcast&utm_campaign=Join%20for%20Free&utm_term=Description%20Text%20Link Subscribe link: h