U.S. mall values plunged an average 60% after appraisals in 2020, a sign of more pain to come for retail properties even as the economy emerges from pandemic-enforced lockdowns.
About $4 billion in value was erased from 118 retail-anchored properties with commercial mortgage-backed securities debt after reappraisals triggered by payment delinquencies, defaults or foreclosures, according to data compiled by Bloomberg.
Originally published by Rich Miller on February 19, 2021, for Bloomberg.com.
The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday.
Originally published by Kate Duguid for Reuters.com on February 22, 2021.
Rising sea levels and extreme weather could cause $20 billion of flood damage to at-risk U.S. homes this year, rising to $32 billion by 2051, according to research from New York-based flood research non-profit First Street Foundation published on Monday.
Originally published by Michael Tucker on February 23, 2021, for Newslink.com
The office market has seen less deterioration during the pandemic recession than it did during the Great Recession, but it’s not out of the woods yet, reported Moody’s Analytics REIS, New York.
Originally published on February 18, 2021, for the National Association of Home Builders.
Housing production softened in January as rising lumber prices continue to affect the housing industry. Overall housing starts decreased 6.0% to a seasonally adjusted annual rate of 1.58 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
While housing starts ended the year on a strong note, rising lumber prices and increasing regulatory cost concerns could affect future production. Led by a solid, double-digit gain in single-family starts, overall housing starts increased 5.8 percent to a seasonally adjusted annual rate of 1.67 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The December reading of 1.67 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 12.0 percent to a 1.34 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, decreased 13.6 percent to a 331,000 pace.
By Michael Tucker
Cushman & Wakefield, Chicago, reported the recession that began in March is still being felt in the U.S. office market.
Leading diversified professional services and investment management firm Colliers International Group Inc. (NASDAQ and TSX: CIGI) reveals investors are largely optimistic about a market rebound in 2021, according to its new Global Capital Markets 2021 Investor Outlook. Colliers’ research anticipates a 50 per cent surge in investment activity in the second half of the year, pointing to a broad-based renewal of confidence in the property market as a result of recent vaccine developments and continued government stimulus.
“Based on our global analysis, which gives us a bird’s-eye view of investors’ interests and expected appetite, longer-term tailwinds in the property sector remain intact. With a massive volume of equity raised globally and the need for real assets, investors are eager to deploy pent-up capital and pursue opportunities during the year,” said Tony Horrell, Head of Capital Markets | Global at Colliers International. “We expect to see movement up the risk curve this year, with investors exploring all types of assets from senior care homes to public infrastructure projects.”
Foreclosures were 57% lower in 2020 than in 2019, reaching a record low of 214,323 filings on residential properties — 0.16% of all housing units — due to the government moratorium, analytics firm ATTOM Data Solutions reported Jan. 14. The highest foreclosure rates were reported in Delaware, Illinois and New Jersey.
Residential real estate activity remained strong in many fed districts even as home prices increased due to inventory shortages, but commercial activity still struggled amid weak conditions, according to the latest Beige Book released Jan. 13 by the Federal Reserve.
The Federal Housing Finance Agency announced Jan. 14 that Fannie Mae and Freddie Mac will extend their flexibilities pertaining to both property appraisals and employment verification through Feb 28. The flexibilities were initially put in place in March 2020 and extended throughout last year in an effort to facilitate liquidity in the mortgage marketplace during the coronavirus outbreak.
Freddie Mac released the results of its Primary Mortgage Market Survey (PMMS), showing that the 30-year fixed-rate mortgage (FRM) averaged 2.71 percent.
“Mortgage rates remain at record lows, resisting their typical correlation to Treasury yields, which have recently been moving higher,” said Sam Khater, Freddie Mac’s Chief Economist. “Mortgage spreads – the difference between mortgage rates and the 10-year Treasury rate – are declining from their elevated levels earlier this year. Although today’s mortgage spread is about 1.8 percentage points and still has some room to move down if the 10-year Treasury continues to rise, it’s encouraging to see that the spread is almost back to normal levels.”
The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) fell 1.7 points in November to 80.0, the first decline after three consecutive months of increases. Three of the six HPSI components decreased month over month, with consumers reporting a more pessimistic view of homebuying conditions, including mortgage rate expectations, but a more optimistic view of home-selling conditions and home prices. Moreover, consumers also reported mixed results regarding job loss concerns and household income changes. Year over year, the HPSI is down 11.5 points.
"The HPSI appears to have peaked for now as consumers continue to consider how COVID-19 impacts their ability to buy or sell a home," said Doug Duncan, Senior Vice President and Chief Economist. "This follows the HPSI's recovery of slightly more than half of the loss experienced during the first few months of the pandemic."
ATTOM Data Solutions, licensor of the nation’s most comprehensive foreclosure data and parent company to RealtyTrac (www.realtytrac.com), a foreclosure listings portal, released its November 2020 U.S. Foreclosure Market Report, which shows there were a total of 10,042 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in November 2020, down 14 percent from a month ago and down 80 percent from a year ago.
“It’s not unusual to see foreclosure activity slow down beginning in November and through the holiday season,” said Rick Sharga, executive vice president at RealtyTrac, an ATTOM Data Solutions company. “Both foreclosure starts and repossessions were down about 80% on a year-over-year basis, but it might be worth noting that a few cities that may be vulnerable to the pandemic-driven flight from urban areas to the suburbs – like New York City, Chicago, and Miami – were among the markets with the highest levels of foreclosure actions.”
The U.S. housing market will likely withstand a wave of foreclosures as investors and first-time homebuyers purchase these homes, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. This analysis was conducted by Redfin Chief Economist Daryl Fairweather.
More than 3.3. million of U.S. homeowners will be on the hook for delinquent payments when mortgage forbearance ends. While some of those homeowners who are overleveraged or unaware of their options will contribute to a wave of foreclosures, most will be able to work with their lenders to either refinance their mortgage or sell to cash in on rising home values.
By Jim Berry and Kathy Feucht
The impact of COVID-19 on the global economy and the CRE industry has made 2020 the most memorable year in recent history. CRE companies have needed to digitize operations, close physical facilities due to extensive lockdowns, and prepare for reopening, while ensuring the health and safety of employees and occupiers and considering the financial health of tenants and end users.
By David Kitai
A study of the COVID-19 pandemic’s impact on commercial real estate, commissioned by the Building Owners and Managers Association International (BOMA), has found that office users face widespread economic challenges but many remain convinced that in-person workspaces are crucial to their operations. They noted, as well, that landlords and property managers have successfully adapted to new needs during the pandemic.
The appraisal can be a stressful process and may threaten to derail transactions. Twenty-one percent of REALTORS® say “appraisal issues” delayed their sales contracts in October, according to the most recent REALTORS® Confidence Index. Appraisal issues led to 13% of contracts being terminated. The appraiser evaluates the home’s lot size, condition (both inside and out), foundation, neighborhood, and any other amenities that add or decrease value.
By Jacob Passy
When the coronavirus pandemic first reached U.S. shores earlier this year, worries abounded about how it would affect the country’s housing market.
