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Millennials, First-time Buyers Boost Homeownership Rates: Census Bureau

By Kelsey Ramirez

The homeownership rate increased slightly in the third quarter, driven primarily by a jump in first-time homebuyers.

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Industrial Sector Net Absorption Surges During Third Quarter, Colliers Reports

By Michael Tucker

Industrial activity ‘surged' in the third quarter, led by demand from the third-party logistics and packaging industry, reported Colliers International, Toronto.

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Technology Company Expansion Boosts New Office Markets: CBRE

By Michael Tucker

Technology companies from northern California, Seattle, Boston and New York are expanding into new markets, creating more office space demand and rent growth in beneficiary markets, reported CBRE, Los Angeles.

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Fed Proposes Varied Risk-based Supervisory Standards for Large Banks

The Federal Reserve issued its highly anticipated proposed framework for applying enhanced prudential standards to banking firms with $100 billion or more in assets, as required by S. 2155, the regulatory reform law.

The Fed proposed to establish four categories of standards that seek to reflect the risks of firms in the group. The agency outlined the risk-based indicators it would use to determine the applicability of standards, including size, cross-jurisdictional activity, weighted short-term wholesale funding, nonbank assets and off-balance sheet exposure. In addition, the Fed released a second joint proposal with the OCC and FDIC that would tailor requirements under the regulatory capital rule, the Liquidity Coverage Ratio and the proposed Net Stable Funding Ratio rule for banks in each group. The proposal does not apply to foreign banking organizations or intermediate holding companies of foreign banking organizations, but the Fed signaled it will issue a separate proposal in the weeks ahead on how it will supervise these institutions.

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Mortgage Rates See Slight Uptick That Could Benefit Some Homebuyers

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that rates increased slightly across the board.

Sam Khater, Freddie Mac’s chief economist, says, “Despite volatility in the stock market, the 30-year fixed-rate mortgage inched forward just 1 basis point to 4.86 percent this week. We expect rates to continue to rise, which will put downward pressure on homebuying activity. While higher borrowing costs will keep some people out of the market, buyers with more flexibility could take advantage of the decreased competition.”

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.86 percent with an average 0.5 point for the week ending October 25, 2018, up from last week when it averaged 4.85 percent. A year ago at this time, the 30-year FRM averaged 3.94 percent. 
  • 15-year FRM this week averaged 4.29 percent with an average 0.4 point, up from last week when it averaged 4.26 percent. A year ago at this time, the 15-year FRM averaged 3.25 percent. 
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.14 percent with an average 0.3 point, up from last week when it averaged 4.10 percent. A year ago at this time, the 5-year ARM averaged 3.21 percent.
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Appraisal Institute Presents at Key Industry Events in October

The Appraisal Institute announced Oct. 31 that its elected officers and others represented the organization at key events in October.
 
President James L. Murrett, MAI, SRA, attended Valuation Expo, Sept. 30-Oct.3, in Las Vegas, where he presented “What’s New at the Appraisal Institute.” AI also exhibited at this event.
 
Vice President Jefferson L. Sherman, MAI, AI-GRS, spoke at the Iowa Commercial Real Estate Expo, Oct. 2, in Des Moines on “Issues Affecting the Appraisal Community.” 
 
President-Elect Stephen S. Wagner, MAI, SRA, AI-GRS, represented AI at the American Society of Appraisers’ International Appraisers Conference, Oct. 7-10, in Anaheim, California. 
 
Murrett and CEO Jim Amorin, MAI, SRA, AI-GRS, represented AI at Expo Real, Oct. 8-10, in Munich. 
 
Sherman presented at the joint FECOVAL/UPAV/Pan Pacific/IRWA meeting, Oct. 8-13, in Tijuana, Mexico, where he spoke on the “State of the Appraisal Profession” and “AI Body of Knowledge.” 
 
Murrett presented at The European Group of Valuers Associations (commonly known as TEGoVA) Fall Meeting, Oct. 18-20,  in Athens, Greece, about “Prospective Values.” 
 
2016 AI President Scott Robison, MAI, SRA, AI-GRS, AI-RRS, spoke on the behalf of the organization at Remnin University in Beijing on “Appraisal Review in the U.S.” and at the China Institute of Real Estate Appraisers and Agents Annual Meeting, Oct. 25-26, in Beijing, on “Impact and Opportunity of Technology-Based Valuations on the Valuation Profession.”
 
AI also exhibited at the Land Trust Alliance Rally, Oct. 11-13, in Pittsburgh, and at the Mortgage Bankers Association Annual Meeting, Oct. 14-17, in Washington.

Foreign Investment in US Commercial Property Increased, Report Shows

By Michael Gerrity

According to new research by global property consultant CBRE, more commercial real estate investment capital crossed U.S. borders in both directions during H1 2018, with foreign inflow up by 29% from the first half of 2017, and U.S. outflow up by 15% in H1 of 2018.

On net, the U.S. commercial real estate market had a capital surplus of roughly $12 billion. Savvy foreign investors have several strategies to mitigate foreign exchange risk when acquiring U.S. assets, one of which is purchasing forward contracts to hedge against U.S. dollar depreciation. 

French company Unibail-Rodamco's acquisition of Westfield, which included a $7.7 billion shopping mall portfolio, elevated inbound capital flows from REITs and France, as well as foreign retail acquisitions, to record highs.

CBRE further reports the cost of hedging against U.S. dollar depreciation is rising worldwide, reducing effective yields for many foreign investors, despite the continuing attractiveness of the U.S. market in growth and liquidity terms. Inbound capital flows have eased in the past 24 months, providing more opportunities for domestic investors.

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MBA Data Shows Multifamily Lending Reached New Record High Last Year

Strong market conditions helped fuel a 6 percent increase in multifamily lending in 2017 as lenders provided a record high $285 billion in new mortgages for apartment buildings with five or more units, the Mortgage Bankers Association reported today.

"The multifamily lending market in 2017 benefited from improving fundamentals, rising property values and low interest rates," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "The result was larger loan sizes and record levels of overall borrowing and lending."

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AI Professional Appointed to Missouri Real Estate Appraisal Board

By Liam Quinn

Missouri Gov. Mike Parson on Oct. 18 appointed Randy Bryson, SRA, AI-RRS, to the state's Real Estate Appraisers Commission. Bryson is president of Associated Property Analysts in Columbia and has been an appraiser since 1980. 

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Banks Say New FHA Appraisal Rule on HECMs Has Had Minor Impact

By Jessica Guerin

It’s been just a few weeks since the Federal Housing Administration announced that it will now require a second appraisal on select reverse mortgage loans, but lenders are already feeling the effects.

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NCAI Leadership Met with AI 2019 President Stephen Wagner

NCAI 2019 President Sheri Colvin and NCAI 2019 President Elect Chris Johnson met with AI 2019 President Stephen Wagner at the AI Chapter Leadership Program in Chicago, IL – October 2018. Learn more about the event here.

  

Charlotte, North Carolina, Has Most New High-end Rental Property, Data Shows

Visit any urban center in a major U.S. city and you'll see a similar view: cranes dotting the landscape and billboards advertising units in the latest luxury apartment projects. Has the focus on high-end units gotten out of hand?

New research from RentCafe found that luxury rental properties had accounted for 79 percent of all apartment construction in the U.S. And in the 2018 that number has grown to a whopping 87 percent. In many cities, a full 100 percent of projects completed in the first half of the year were upscale units.

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CRE Investors Target Cities with Millennials, Start-up Culture: Report

By Michael Tucker

"The key word for real estate's future performance is transformation, in technology, in generational choices and in a reconfiguration of preferences related to geography and property types," said ULI Global CEO W. Edward Walter. "The market shift, which will continue to play out over the next several years, is being fueled by consumers and tenants changing the way they shop and live, what they demand of their spaces and by new technologies that will enable real estate to be more flexible and responsive to users' needs."

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FHA Cites Appraisal Concerns Because of 'Technological Shortcomings'

By Ben Lane

The world’s largest mortgage insurer can only check for mortgage defects on a “small” number of mortgages due to technological shortcomings and that’s leading to a potential rise in appraisal-related issues.

Federal Agencies Release FAQs Clarifying Appraisal, Evaluation Rules

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. 

Click here to view FAQs.

More Online Retailers Opening Physical Stores, JLL Reports

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.

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Office REIT Sector Could See Significant Change, Transwestern Research Finds

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.

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Residential Foreclosure Rates Down Quarterly and Yearly, Report Shows

 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.

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Mortgage Rates Reach New 7-Year High

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.

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US Commercial Real Estate Likely to Benefit from Revised NAFTA: CBRE

By Michael Tucker

The North American Free Trade Agreement's likely replacement, the United States-Mexico-Canada Agreement, should increase U.S. commercial property market demand by decreasing uncertainty about trade, said CBRE, Los Angeles.

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