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Some Banks Offset Loan Risk with ‘Synthetic’ Transfers: WSJ

Originally published on November 7, 2023 by Matt Wirz for the Wall Street Journal.

U.S. banks have found a new way to unload risk as they scramble to adapt to tighter regulations and rising interest rates.

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White House Announces Actions Backing CRE Conversions

Originally published on October 27, 2023, by The White House. 

Today, the Biden-Harris Administration is announcing new actions to support the conversion of high-vacancy commercial buildings to residential use, including through new financing, technical assistance, and sale of federal properties. These announcements will create much-needed housing that is affordable, energy efficient, near transit and good jobs, and reduce greenhouse gas emissions, nearly 30 percent of which comes from the building sector.

Office and commercial vacancies across the country are affecting urban downtowns and rural main streets. A new blog released today by the Council of Economic Advisers finds that office vacancies have reached a 30-year high from coast-to-coast, placing a strain on commercial real estate and local economies. At the same time, the country has struggled for decades with a shortage of affordable housing units, which is driving up rental costs, and communities are seeking new ways to cut emissions, especially from existing buildings and transportation.

The actions announced today build upon the initiatives in the White House Housing Supply Action Plan, which is lowering housing costs, boosting housing supply, and promoting fair housing, and the Administration’s actions to lower energy costs and tackle the climate crisis. Lowering costs, increasing access to good jobs, and building the clean energy economy are key tenants of Bidenomics — the President’s agenda to grow the economy from the middle out and the bottom up. 




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Recent Homebuyers May Not See Profit for 13 Years: Zillow

Originally published on October 30, 2023, by Nicole Bachaud for ZIllow.com.

The cost of buying a home has soared over the past few years with home values near record highs and mortgage rates higher than they’ve been in 20 years. New home buyers can expect to spend approximately 13.5 years in their house before they would be able to sell at a profit over the purchase, mortgage interest, and sale costs that went into the home.

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White House Designates 31 Emerging Tech Hubs Hoping to Create Next Silicon Valley

Originally published on October 23, 2023, by the White House.

Today, President Biden and Secretary of Commerce Gina Raimondo will announce the designation of 31 communities across the country as Regional Innovation and Technology Hubs (Tech Hubs) through the Department of Commerce Economic Development Administration. These Tech Hubs will catalyze investment in technologies critical to economic growth, national security, and job creation, and will help communities across the country become centers of innovation critical to American competitiveness. The Tech Hubs program was authorized by the CHIPS and Science Act – signed by President Biden in August 2022 – and is part of the President’s Bidenomics agenda to grow the economy from the middle out and bottom up.

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Low Inventory of Existing Homes Gives New Construction a Boost: NAHB

Originally published on October 25, 2023, by Elizabeth Thompson for the National Association of Home Builders.

Despite mortgage rates that are at a 23-year high, new home sales posted a double-digit percentage gain in September because of a lack of inventory in the resale market.

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FHFA Fails to Fully Review Desktop Appraisal Reports: OIG

Originally published on October 25, 2023, by the Federal Housing Finance Agency Office of Inspector General.

The Federal Housing Finance Agency has failed to adequately document desktop appraisal reports, and the lack of oversight can make it difficult to determine the effectiveness of the program and hinders the ability to detect trends or problems with the appraisals, the Office of Inspector General reported Oct. 25 in an audit of the FHFA's supervision of Fannie Mae's and Freddie Mac's use of desktop appraisals.

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AI PAREA Receives Certified Residential Path Approval

Originally published on October 17, 2023 by Craig Steinley, MAI, SRA, AI-GRS, AI-RRS for the Appraisal Institute. 

The Appraisal Institute, the nation’s leading professional association of real estate appraisers, announced that the Appraiser Qualifications Board (AQB) has approved the certified residential real property credential (CR) path for the Appraisal Institute Practical Applications of Real Estate Appraisal (AI PAREA) program.
 
This follows the May approval and September public release of the AI PAREA licensed residential (LR) path, an online, simulated appraisal experience program that is an alternative pathway for aspiring appraisers to gain the required experience to become a licensed or certified appraiser. Historically, the primary option for an appraiser to complete experience hours was through a supervisor/trainee model that required the aspiring appraiser to find a supervisory appraiser.
 
“We are proud to be the first-to-market with this innovative program,” said Appraisal Institute Board President Craig Steinley*. “Following significant initial interest in our licensed residential path, we are determined to continue opening more virtual doors to new communities of aspiring appraisers.”




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Another Rate Hike Expected by Federal Reserve Officials, According to Fed Minutes

Originally published on October 11, 2023, by Bryan Mena for CNN.com

Most Federal Reserve officials said last month that they expect one more rate hike, according to minutes from their September policy meeting released Wednesday. Some officials said that how fast inflation cools in the coming months will determine how long rates remain elevated.

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Home Prices Expected to Continue Climbing, Forecast Reveals

Originally published on VeroFORECAST

SANTA ANA, Calif., Oct. 5, 2023 —Veros Real Estate Solutions (Veros®), an industry leader in enterprise risk management and collateral valuation services, released its 2023 Q3 VeroFORECASTSM that anticipates that home prices are expected to increase on average 2.2% over the next 12 months, compared to last quarter’s forecast of 1.7% increase, indicative of a steady market.

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Older Offices Most at Risk of Loan Default; Post-2015 Buildings Face Least Risk: Data

Originally published on 

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Apartment Construction Surges, With Washinton, DC, in the Lead: Yardi Matrix

Originally published on October 12, 2023, by Andrea Nicole for RentCafe.com.

U.S. cities are buzzing with new apartment buildings — more than we’ve seen in decades. So, if you’ve noticed more cranes against your city’s skyline recently, you’re not alone. In fact, this boom is turning certain neighborhoods into hotspots for new apartments, attracting mostly young, high-earning folks chasing the dream of urban apartment living.

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FHFA to Focus on Appraisal Modernization in 2024: OIG Report

Originally published on October 9, 2023, by Tony Cantu for MPAMag.com.

The inspector general’s office of the Federal Housing Finance Agency has released its report on management and performance challenges for the upcoming year, key among them the continued conservatorship of the GSEs – both of which have a combined adjusted total risk-based capital shortfall of more than $400 billion, according to the document.

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FHFA Reports Fewer Home Appraisals on Annual Basis

Originally published on October 5, 2023 by the Federal Housing Finance Agency (FHFA).

While the number of U.S. home appraisals and median appraised values declined year-over-year between the second quarters of 2022 and 2023, both indicators increased between the first and second quarters of 2023.​

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Percentage of Office Conversions More than Double Previous Years, CBRE Reports

Originally published on October 5, 2023, by Anneliese Mahoney by the Mortgage Bankers Association.

CBRE, Dallas, found nearly 100 office-conversion projects are slated to be completed in major U.S. cities this year. That’s more than double the average of 41 per year from 2016 to 2022.

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Senior Housing Market Set for ‘Gangbusters’ Success During Next 18 Months: Report 

Originally published on September 29, 2023 by Richard Berger for GlobeSt.com.

“Gangbusters” is what CBRE’s Vice Chairman Aron Will says the seniors housing mergers and acquisitions market will look like in the next 18 months.

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Mortgage Fraud Risk Drops, Small Multifamily Properties Pose Biggest Concern: Report

Originally published on October 4, 2023, by CoreLogic.

2023 Mortgage Fraud Report

Our 2023 Annual Mortgage Fraud Report shows relative stability in fraud risk levels year-over-year, with a 3.1% decrease in fraud risk at the end of the second quarter of 2023. The decline is partially due to the recalibration of our scoring model released in 2022. More careful loan screening due to higher repurchase risk is a primary driver of stable levels of risk. 

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Nation’s Residential Real Estate Valued at $52T, Data Shows

Originally published on September 26, 2023 by Orphe Divounguy for Zillow.com.

  • The total value of the U.S. housing market is 49% higher than before the pandemic. 
  • New York, Los Angeles, San Francisco, Boston, and Miami are the most valuable housing markets. 
  • Florida now boasts the second-most-valuable real estate market, surpassing New York. California retains the top spot. 

The U.S. housing market has surged over the past year after a temporary hiccup from July 2022 to January 2023. Higher mortgage rates then contributed to a decline in the total value of residential real estate as potential buyers reconsidered their plans and residential investment fell. That downturn has proven to be short-lived as housing has rebounded impressively so far in 2023, with the total value of the U.S. housing market surging by more than $2.6 trillion over the past year. 

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Non-white and LGBTQ+ Americans Face Discrimination When House Hunting: Report

Originally published on September 28, 2023, by Kenneth Applewhaite for Redfin.

Nearly one-third (32%) of Black Americans who recently moved believe they were discriminated against based on their ethnicity or race during their home search, and an additional 22% believe they may have been discriminated against. That’s according to a survey from Redfin (redfin.com), the technology-powered real estate brokerage. The share is even higher for Hispanic Americans: 36% experienced discrimination and an additional 22% believe they may have been discriminated against.

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OCC Plans to Review Fair Lending, Appraisal Bias in 2024

Originally published on September 28, 2023, by Stephanie Collins for the Office of the Comptroller of the Currency.

The Office of the Comptroller of the Currency (OCC) today released its bank supervision operating plan for fiscal year (FY) 2024.

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NAR Report Shows Robust Retail and Hospitality Sectors, Weak Office and Multifamily

Originally published on September 27, 2023, by Oleh Sorokin for the National Association of Realtors.

While the massive interest rate hikes have hammered the commercial real estate market, the recent Federal Reserve decision to hold rates unchanged will give the market a break. After 11 collective rate hikes in the last 18 months, commercial real estate credit has gotten even tighter as lenders have been more cautious after the recent collapse of the two regional banks in March of 2023. According to the Federal Reserve survey, small and mid-sized banks — holding most commercial real estate loans — reported tighter lending standards in the year's second quarter. In the meantime, delinquency rates for commercial real estate loans have increased, albeit remaining historically low. Although the Federal Reserve is signaling more rate hikes to follow by the end of the year, this pause will give some time to assess the impact of higher rates on the economy.

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