The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation on Oct. 16 published answers to frequently asked questions about appraisals and evaluations for real estate transactions that are covered by the interagency appraisal rules.
By Michael Tucker
A record number of e-commerce retailers opened physical stores last year and 850 more are set to open in the next five years, reported JLL, Chicago.
By Patricia Kirk
A shakeup may be in store for the office REIT sector with firms likely to change hands as interest rates rise and investors—private equity funds, other REITs and foreign investors—seek opportunities for placing large amounts of available capital.
ATTOM Data Solutions, curator of the nation’s premier property database, today released its Q3 2018 U.S. Foreclosure Market Report™, which shows a total of 177,146 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the third quarter, down 6 percent from the previous quarter and down 8 percent from a year ago to the lowest level since Q4 2005 — a nearly 13-year low.
U.S. foreclosure activity in Q3 2018 was 36 percent below the pre-recession average of 278,912 properties with foreclosure filings per quarter between Q1 2006 and Q3 2007 — the eighth consecutive quarter where U.S. foreclosure activity has registered below the pre-recession average.
The modest decline in mortgage rates is a welcome respite from the rapid increase in rates the last few weeks. While the housing market has clearly softened in reaction to the rise in mortgage rates, the economy and consumer sentiment remain very robust and that will sustain purchase demand, particularly in affordable markets and neighborhoods.
By Jessica Guerin
The Federal Housing Administration’s investigation into possible appraisal inflations on reverse mortgage loans revealed an issue the agency decided it must address.
By William Maher
Real estate economists continue to have a generally bullish outlook for the U.S. economy, capital markets, and real estate fundamentals. Overall, expectations have improved since the prior forecast in March 2018, and the strong second-quarter gross domestic product (GDP) growth rate of 4.2 percent was fresh in forecasters’ minds as they weighed in on future years. Based on this forecast, the U.S. economy will easily surpass the current record for length of expansion (120 months) in mid-2019. Consistent with a strong economy, key real estate metrics—such as NCREIF Property Index (NPI) returns and transaction volumes—moved moderately higher in this survey. While expectations have improved, the survey was completed prior to recently announced tariffs by the United States and China that could curtail growth in 2019 and possibly beyond. While there are many potential outcomes for the current trade dispute, escalated tariffs with China could dampen the next round of forecasts in April 2019.
The Appraisal Institute, the nation’s largest professional association of real estate appraisers, today encouraged home sellers to consider making energy-efficient improvements to their properties and urged potential buyers to seek homes with those features.
“The latest research shows that green and energy-efficient home improvements have the potential to pay dividends for buyers and sellers,” said Appraisal Institute President James L. Murrett, MAI, SRA. “However, it depends on the improvements made. Some green renovations, such as adding Energy Star appliances and extra insulation, are likely to pay the homeowner back in lowered utility bills relatively quickly.”
Additionally, by purchasing an energy-efficient product or renewable energy system for a home, the owner may be eligible for a federal tax credit based on EPA-established guidelines.
Three recent studies confirm that green homes sell for more than non-green properties:
Starter homes are now more costly to purchase than at any time since 2008, when the last boom came to a crashing halt. In the second quarter, first-time buyers needed almost 23 percent of their income to afford a typical entry-level home, up from 21 percent a year earlier, according to an analysis by the National Association of Realtors.
The property market, after years of price gains that outpaced income growth, is showing signs of slowing as sales decline. The affordability crunch is especially severe at the low end of the market and in hot areas where supplies are tightest and values have risen most. A jump in mortgage rates this year only made it worse.
Confidence in the multifamily housing market edged down in the second quarter of 2018, according to the Multifamily Production Index (MPI) released today by the National Association of Home Builders (NAHB). The MPI dipped two points to 51 compared to the previous quarter.
The MPI measures builder and developer sentiment about current conditions in the apartment and condo market on a scale of 0 to 100. The index and all of its components are scaled so that a number above 50 indicates that more respondents report conditions are improving than report conditions are getting worse.
By Brian J. Rogal
Once considered something of an afterthought by institutional investors, medical office has rapidly established itself as one of the most desirable sectors. And with so many favorable trends, including the aging of the US population and the desire among patients to see medical professionals in new facilities close to home, experts say new construction should continue proceeding at a healthy clip. For most kinds of commercial real estate, a rapid expansion is usually taken as a sign that a more cautious approach may be needed, at least from an investment standpoint. But medical office will probably escape that trap.
Existing-home sales subsided for the fourth straight month in July to their slowest pace in over two years, according to the National Association of Realtors®. The West was the only major region with an increase in sales last month.
Total existing-home sales1, https://www.nar.realtor/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.7 percent to a seasonally adjusted annual rate of 5.34 million in July from 5.38 million in June. With last month’s decline, sales are now 1.5 percent below a year ago and have fallen on an annual basis for five straight months.
By Karan Kaul
First-time homebuyers face a difficult housing market: high prices, low supply, tight credit, and renting costs that make it difficult to save for a down payment. But compared with repeat buyers, first-timers have dominated the mortgage market for the past 10 years, and their share today is still high. We don’t see this changing anytime soon.
Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that mortgage rates decreased slightly for the second consecutive week.
Sam Khater, Freddie Mac’s chief economist, says mortgage rates remained mostly flat over the past week, which has been the dominant theme since late spring. “This stability in borrowing costs comes despite the highest core inflation rates since 2008 and turbulence in the currency markets,” he said. “Unfortunately, this pause in rates is not leading to increasing home sales.”
A new analysis by Freddie Mac (OTCQB: FMCC), finds that the strong performance experienced by the multifamily market in the first half of 2018 will continue throughout the end of the year and well into 2019. The findings were released as part of Freddie Mac Multifamily’s 2018 Mid-Year Outlook pdf and companion video. The Outlook predicts that in 2018, multifamily origination volume is expected to grow by 3.3 percent to $305 billion.
In the Outlook, Freddie Mac Multifamily Research and Modeling vice president Steve Guggenmos and manager Sara Hoffmann find that overall, the multifamily market continues to experience very healthy performance. While fundamentals have started to moderate over the past few years, the factors most critical to market strength continue to remain strong, for example, with rents rising above inflation and vacancy rates only increasing slowly.
By Michael Tucker
Commercial real estate executives see "balanced and stable" market conditions despite growing concerns the market could be nearing the end of its current cycle, the Real Estate Roundtable reported.
By Patricia Kirk
Industrial developers in coastal U.S. markets are cashing in on the extraordinarily high demand by small businesses for for-sale modern warehouse facilities of between 25,000 and 40,000 sq. ft.
Written by Patricia Kirk
While new office construction has been robust so far in 2018, next year developers might begin pulling back, according to David Bitner, head of Americas capital markets research with real estate services firm Cushman & Wakefield. He cites rising construction costs, concerns about the end of the real estate cycle and zoning issues as the reasons.
Written by Michael Tucker
Commercial real estate asset prices have "plateaued" and transaction volume has moderated as the real estate cycle matures, reported Green Street Advisors, Newport Beach, Calif., and CoStar, Washington, D.C.
