Much has been made of the insane price appreciation in the housing market. Many cities are seeing housing prices go through the roof, with double-digit year-over-year gains. But what about rent? Are rents keeping pace with property appreciation in the nation’s biggest metros?

Let’s examine how rents have grown since the beginning of 2020, which cities have seen the largest rent growth, and which cities have slid backward since the pandemic began.

Methodology

For this dataset, I am examining Zillow’s Observed Rent Index (ZORI). I took that data and calculated five high-level metrics to see how rent has performed across 106 metro areas.

  1. Median rent growth for each city from January 2020 through April 2021. This gives us the most holistic look at what has changed since COVID-19 was introduced to all of us early last year. So I made this metric up, and I’ll call it the “Since COVID-19 Started” (SCS) growth rate.
  2. Year-over-year (YoY) growth
  3. Year to date (YTD) growth
  4. Month-over-month (MoM) growth shows up what happened between March and April 2021.

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Analysis

Let’s state the obvious: Rent went up in the vast majority of cities since COVID-19 started. The average growth rate is 5.8%, with a median of 6.8%. That’s a lot of growth!

To show just how many cities have seen rent increases since January of 2020, I made a histogram to show the distribution of growth rates. As you can see below, the most common bucket was 6-8% growth, followed by 8-10% growth.

since covid started

The same chart for YoY rent growth looks pretty similar. I won’t publish it here but will tell you that the mean YoY growth rate was 5.2%, with a median of 5.7%. To put this in perspective, between April 2018 and April 2019 (the last non-COVID-19-affected year), the average rent growth rate was 4% YoY. Thus, rents grew faster on average during the pandemic than before the pandemic.

Five cities have actually posted double-digit growth rates over the last year: Boise, Idaho; Riverside, California; Tucson, Arizona; Spokane, Washington; and Phoenix, Arizona. All in the West.

After the top five, it gets more geographically dispersed. Memphis, Tennessee, is the first southern city on the list, sitting in sixth place with 9.9% YoY growth. Providence, Rhode Island, reps the Northeast in the eighth spot with 9.7% YoY growth.

Here’s a list of the top 10 performers.

Region Rank size Year to date Year-over-year Since January 2020 Month-over-month
Boise City, ID 85 4.9% 13.9% 15.6% 1.2%
Riverside, CA 13 4.0% 11.6% 13.3% 1.0%
Tucson, AZ 53 3.7% 10.7% 12.4% 0.9%
Spokane, WA 99 3.5% 10.5% 12.2% 0.9%
Memphis, TN 41 3.2% 9.9% 12.0% 0.8%
Phoenix, AZ 14 3.6% 10.4% 12.0% 0.9%
Stockton, CA 77 3.3% 9.9% 11.5% 0.8%
Providence, RI 38 3.3% 9.7% 11.1% 0.8%
Fresno, CA 56 3.3% 9.3% 10.9% 0.8%
Port St. Lucie, FL 119 3.0% 8.9% 10.8% 0.7%
Bakersfield, CA 63 2.9% 8.9% 10.8% 0.7%

The cities near the top in one category are near the top in pretty much every category. In fact, Boise was the top city for YTD, SCS, and MoM. As of this writing, these markets are showing no signs of slowing down.

I wanted to test a hypothesis, so I used Zillow’s Size Ranking to test the idea that the SCS growth rate might be related to the size of the city. There does appear to be a small correlation at .36. This indicates that the smaller the city, the higher the rent growth rate tends to be—but it’s only a modest relationship as measured by correlation.

But just looking at the data visually tells me something a little different. Remember our histogram above? There were only eight cities that had rent growth of 0 or less: New York (1), Los Angeles (2), Chicago (3), Washington D.C. (7), Boston (10), San Francisco (11), Seattle (15), and San Jose (34). Seven of the eight cities that saw declining rents SCS were in the top 15 biggest cities.

It seems that while the “smaller cities are seeing better rent growth” hypothesis is not true when looking at the whole dataset, for a subset of the data (the largest of all cities), a fairly obvious relationship exists. Perhaps I should reword the hypothesis to be, “the largest cities are faring the worst.”

Region Rank size Year-to-date Year-over-year Since January 202 Month-over-month
New York, NY 1 3.6% 9.5% 10.6% 4.1%
Los Angeles-Long Beach-Anaheim, CA 2 4.2% 10.4% 13.1% 5.7%
Chicago, IL 3 4.0% 9.5% 10.2% 4.2%
Dallas-Fort Worth, TX 4 5.6% 11.9% 13.0% 8.1%
Philadelphia, PA 5 5.0% 13.3% 14.7% 4.2%
Houston, TX 6 4.0% 9.1% 10.2% 5.3%
Washington, DC 7 4.9% 11.5% 12.7% 3.7%
Miami-Fort Lauderdale, FL 8 3.7% 9.1% 10.7% 6.5%
Atlanta, GA 9 5.7% 13.0% 14.7% 7.7%
Boston, MA 10 4.5% 11.6% 13.3% 5.5%
San Francisco, CA 11 3.9% 7.4% 8.8% 6.8%
Detroit, MI 12 3.8% 11.0% 13.4% 7.4%
Riverside, CA 13 7.1% 16.2% 17.8% 6.7%
Phoenix, AZ 14 7.8% 20.4% 23.7% 8.2%
Seattle, WA 15 5.5% 14.6% 17.9% 9.3%

Clearly, something is going on in the country’s largest cities. There are a few strong performers in this group (Atlanta, Detroit, Riverside, and Phoenix), but pretty much all of the negative numbers come from this group (only San Jose is negative and not featured above).

While we’re on the subject of the poorer-performing cities, it’s worth noting that things aren’t changing for the better. Rather, these cities are continuing to see declining rents. Of the cities with negative SCS rates, all of them also had negative MoM rates (Los Angeles was flat, fine).

What does this mean?

These findings lend credence to the theory that many Americans are moving out of the country’s biggest cities and into smaller cities or the suburbs.

Despite the pandemic, most American metro areas have seen significant rent growth since the beginning of 2020. At this point, the cities that have seen the most explosive growth are not showing any signs of slowing down and could make worthwhile considerations for investors.

I think rent growth will likely continue upward, on average, for the foreseeable future. With inflation likely (at least in the short-term), economic expansion, and potentially even wage growth, many indicators signal continued rent growth.

But what about those large cities still seeing declines? I think things will level out rather quickly but might not start growing again for a few months.

Why? My hunch is that these cities saw a lot of workers exit the city during the pandemic to work remotely or live somewhere with more space. As work returns to normal and cities reopen, my guess is that demand for rentals in the country’s biggest cities will return gradually.



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The Federal Housing Finance Agency (FHFA) found that house prices across the nation rose 16% from April 2020 to April 2021.

From March to April, house prices across the nation rose 1.8%, surpassing the previous month’s 1.6% increase.

Three regions — the Pacific coast, the western states and New England — saw more pronounced year over year increases. The FHFA index tracks seasonally-adjusted, purchase data from Fannie Mae and Freddie Mac.

In the mountain division, which includes Colorado, New Mexico, Idaho, Wyoming, Utah, Nevada, Arizona and Wyoming, house prices rose 21% year over year. In the pacific division, encompassing Washington, Oregon and California, prices rose 18%. In Maine, Vermont, New Hampshire, Massachusetts, Connecticut and Rhode Island, house prices also rose 18%.

“House prices recorded another monthly and annual record in April,” said Dr. Lynn Fisher, FHFA’s deputy director of the division of research and statistics. “This unprecedented price growth persists due to strong demand, bolstered by still-low mortgage rates, and too few homes for sale.”

Mortgage rates rose above 3% for the first time in 10 weeks last week. Mortgage applications are still on the rise, however.

House prices have risen during the past year as a result of elevated lumber prices, a lack of available homes and increased demand for homes.

Lockdowns early in the pandemic led many to work from home and divide their living space into home offices. Those who were able to bought homes with more space, better suited to the pandemic remote work trend.

That has led to astonishing price increases in markets like Seattle, where the median home-sale price rose more than 26% year-over-year to a record $737,800 in May 2021. Tech employees there, faced with working remotely from cramped apartments, instead hunted for homes with more space.

“I’ve never seen anything like this housing market,” a Seattle-area Redfin agent said.

The post House price increases still growing: FHFA appeared first on HousingWire.



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The threat of natural hazard risk in United States is on the rise. According to the National Centers for Environmental Information, there were 22 weather and climate disasters in 2020 which cost over $1 billion. This is nearly 150% more than the average of 16.2 events for the most recent five years, and three times the average of 7.1 events for the past 40 years.

But what effect does climate change have on real estate—or, specifically, on a home’s property value?

A Closer Look: Otay Ranch

Otay Ranch is a neighborhood 20 miles south of downtown San Diego. It is part of the city of Chula Vista, a place whose name translates to “beautiful view” and boasts an idyllic location nestled between San Diego Bay and the coastal mountain foothills.

In analyzing the relationship between property values and natural hazard risk, the former was estimated with Total Home ValueX—a new state-of-the-art automated valuation model from CoreLogic that leverages artificial intelligence and machine learning capabilities built on cloud technology, and that reflects the price of recently sold similar properties nearby. Properties in the same neighborhood were used to serve as a control for value differences between different markets.

In addition, hazard risk scoring was used to identify the properties with the greatest risk from perils including flood, wildfire, tornado, hail, surge, earthquake, straight line winds, hurricane wind, and sinkhole. The probability of an event, or the frequency of those events, is a significant factor in determining the risk levels. Otay Ranch, in particular, is close to valleys and parks which have had brush fires in the past.

To analyze the hazard risk scoring for Otay Ranch, all properties in the community are plotted on a map, with blue dots to indicate properties with lower hazard and red dots for those with higher hazard risk. Of the 2,546 residential properties in Otay Ranch, 942—or nearly 40% of them—possess high hazard risk. The average home value for high hazard risk properties is $697,000, as compared to the neighborhood average of $773,000 dollars.

With a nearly $75,000 gap, it becomes evident that homes in Otay Ranch at higher risk also have lower property values.

Does the Trend Persist?

In Otay Ranch, it is clear that homes with higher risk have, on average, lower property values. But does this tendency continue across different neighborhoods?

In a similar analysis for Stockton, a neighborhood on the east side of downtown San Diego, there are 61 properties that have high hazard risk, and their average price is $463,000 (compared to a neighborhood average $534,000). In this case, the difference between higher risk homes and lower risk homes was worth almost $70,000.

To round out the comparison, a third neighborhood was viewed—the Loma Alta district in the city of Oceanside, located about 40 miles north of San Diego. Here, 191 out of 2,098 properties are identified as high hazard risk with an average value of $544,000 (as compared to a neighborhood average $612,000). 

The discount for high hazard risk properties is more than 10% in both Stockton and Alta Loma.

As our growing population and associated residential development expands into higher natural hazard risk areas—thus increasing the number of homes in those areas—an increasing number of properties are becoming more exposed to climate change risk.

San Diego, in particular, has seen the expansion of new construction and development into the wildlands, thus exposing a greater number of homes to the susceptibility of wildfire. But even outside of California, hurricane-prone Florida has become an increasingly popular destination for homeowners seeking sunshine and lower prices. As the climate changes, these homes, too, will only increase in exposure to hazard risk.

Although this research is still seminal, and other factors could give rise to pricing differentials in various neighborhoods, it is of crucial importance for homeowners, mortgage lenders, insurers, and policymakers to understand the holistic impact of climate change—and in turn, natural hazard risk—on property values. A proactive approach to this challenge and the resultant effect it has on the housing market will be critical in promoting a healthy housing ecosystem.

The post Are higher-risk homes cheaper? appeared first on HousingWire.



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Home prices in April saw an annual gain of 14.6% in April — up from a 13.3% increase in March, per the latest S&P CoreLogic Case-Shiller National Home Price Index.

Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Index, called April’s gain “truly extraordinary,” as home price gains have been expanding for the last 11 months.

“The 14.6% home price gain in the National Composite is literally the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data,” Lazzara said. “We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. April’s data continue to be consistent with this hypothesis.”

The monthly 10-city composite was up 14.4% year over year, and up from 12.9% in March. The 20-city composite was 14.9% higher, up from 13.4% in March. The cities with the highest year-over-year home price gains were Phoenix (22.3% increase), San Diego (21.6% increase), and Seattle (20.2% increase), with a more than 20% gain each. And Charlotte, Cleveland, Dallas, Denver and Seattle saw their largest annual gains ever.

Phoenix, San Diego, and Seattle have been growing steadily since the beginning of 2021. The three metros have seen at least a 15% increase in sales every month since January.


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Each region of the country reported double-digit sales volume increases in the latest Case-Shiller report, led by a 17.2% increase in the West and a 16.9% increase in the Southwest.

“This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years,” Lazzara said. “Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing.”

The inventory of homes for sale rose slightly in May compared with April, but was still 21% lower than May 2020.

Mortgage rates remain near historic lows, a demographic wave of households aging into prime homeownership years continues to swell, and despite showing some signs of bottoming, the number of available homes for sale remains historically small, particularly given the elevated demand for housing,” said Matthew Speakman, Zillow economist.

The Federal Housing Finance Agency also released its U.S. House Price Index, noting that prices rose 1.8% nationwide in April. Home prices rose 15.7% from April 2020 to April 2021.

For the nine census divisions, seasonally adjusted monthly home price changes from March 2021 to April 2021 ranged from up 1.2% in the West-North-Central division to up 2.6% in the Mountain and Middle-Atlantic divisions.

“This unprecedented home price growth persists due to strong demand, bolstered by still-low mortgage rates, and too few homes for sale,” said Lynn Fisher, FHFA deputy director of research and statistics.

The post Case-Shiller: April home price increase ‘truly extraordinary’ appeared first on HousingWire.



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This week’s question comes from Joey on the Real Estate Rookie Facebook Group. Joey is asking: Was driving in a new part of town and came across a house that had a yard that hasn’t been maintained in months and the house looks unkept.  Any suggestions on how I should go about finding the owner and asking if they would be interested in selling? 

We had a ton of great responses in the Facebook group, but Ashley and Tony will do their best to answer based on their own experience and their preferred style of skip tracing. You can do this both for free or for a fee, it all depends on which information you need!

If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE).

Ashley Kehr:
This is Real Estate Rookie episode number 90.
Niner E. I don’t even know how I would say that to try to throw a niner in there. I am your host, Ashley and I am here with your other host, Tony. And today we are back with another Rookie Reply. Tony, what is new with you today?

Tony J. Robinson:
Ashley Kehr, what’s going on? Today’s a good day for us. We just listed our property. It’s officially live on the MLS and we’re selling one of our Joshua Tree properties. We’re super excited to see how this thing is going to turn out for us.

Ashley Kehr:
And by the time you guys listen to this, we are hopeful that it will be sold, right Tony?

Tony J. Robinson:
We are so, so hopeful, but we’re putting in the listing that whoever buys this house also has to buy my house in Shreveport that nobody wants to buy. So they are a package deal for whatever investor wants both of them together.

Ashley Kehr:
And you guys have heard about that property 10 times already, and that is why I am so, so hopeful that this property sells right away. So we’re not getting pitched two properties.

Tony J. Robinson:
Two properties.

Ashley Kehr:
But I was just telling Tony that I listed a property about three weeks ago too that hasn’t sold at all either. So maybe I’ll start pitching that one for people to buy.

Tony J. Robinson:
They have to pick and choose between the bad investment in Buffalo and Shreveport. [inaudible 00:01:23]. But yours is cashflow positive, at least, right? I’m actually actively losing money right now. So if anyone has pity, take pity on me first.

Ashley Kehr:
Well, ours is vacant. We rehabbed it, and we were actually just going to rent it out. And then we had a realtor convince us to sell it and we got all excited about what she thought she could sell it for and it is not selling. So we’ll probably take it off the market and rent it out, or I was actually thinking of turning it into an Airbnb because there is a brand new beautiful event center that just opened right next to it. And I think the closest actual hotel is maybe 20 minutes away from it. So I can’t wait to have Tony help me do this. [inaudible 00:02:09].

Tony J. Robinson:
That’s a big opportunity, right? If you find a property in a market that’s underserved, you can go in there and be the big player, if you’re the only one in there. So I would be more than happy to help you. I’ll just charge you an implementation fee instead of [inaudible 00:02:22].

Ashley Kehr:
Here’s my credit card.

Tony J. Robinson:
All right, well, let’s get into today’s question. We’ve got a good one today from the rookie group. For those of you that are listening, if you have not joined the Real Estate Rookie Facebook group, you are absolutely 100% missing out. This is one of the most active Facebook groups I’ve ever been in. Like I said, every time I try and go in there and answer a question, there’s already 10, 20, 30 answers on there that are all really great answers. So look at the Real Estate Rookie Facebook group, and get active if you haven’t already. But today’s question comes from Joey Tate. And Joey’s question is, “I was driving in a new part of town and came across a house that had a yard that hasn’t been maintained in months and the house looks unkept. Any suggestions on how I should go about finding the owner and asking if they would be interested in selling. Thanks in advance.” So, Ash, what do you got for our guy Joey here?

Ashley Kehr:
This is a really good question for us because I feel like we both go and look at properties and immediately try to figure out, okay, how do we buy this? So the first thing I would do is if you see this property, obviously write down the address for it. Then there is GIS mapping software. So just Google your county GIS mapping and it should come right up. So this is a parcel mapping software where you can type in the address and it will give you information, such as what the county taxes are, who the property owner is and a mailing address for them and also kind of give you an estimate of the lot lines of how big the property actually is, how many acres. So I would start there looking at that. And then you can also see an owner’s history. Maybe they’ve owned it for a really long time, or maybe they just bought it within the past year.
You can view that too. And I know Tony will want to talk about this too, but there’s also PropStream, that software that we both love and I use it daily now. I love it. So you can try PropStream. What is it, Tony, a seven day free trial for it?

Tony J. Robinson:
Yeah, I think it was seven day free trial. Mm-hmm (affirmative).

Ashley Kehr:
We need to get them to sponsor us.

Tony J. Robinson:
Sponsor. We’re sending a lot of business their way. I think you hit on all the big things too. First, Joey love that you’re I guess mature enough as an investor to identify when a property does look like a potential opportunity to buy. So many people, they drive around all day passed so many opportunities and they don’t even recognize it. So the fact that you’re a rookie, but you have the awareness to identify a potential deal when you see it, kudos you on that one. Ashley’s advice is spot on. I think using PropStream is a great way to get in contact with the potential owners of this property. Super simple. You plug in the address and once you have the property pulled up, you can skip trace that person for, I think it’s like 12 cents per skip trace. So literally for a few pennies, you can figure out who the owner is, get a phone number or potentially an email, and you can either send them a text message like, “Hey, I’m actually by your property. Curious if you’d interested in selling.” Send them a postcard.
I’ve heard other real estate investors that as they’re driving around, they’ll take a picture of themselves in front of the property and they’ll mail that as a postcard to the owner. So I was actually just in Joshua Tree last Friday, and as my partner and I were leaving one of the houses we just got under contract, very similar situation to Joey, I saw a house that was super overgrown, like yard that looked like they had started construction, they didn’t finish it. So I hopped out, took a picture in front of it and I’m going to send them a postcard saying, “Hey, I was at your house. I’d love to buy it.” So, I think Joey, just being courageous enough to reach out is the biggest part.

Ashley Kehr:
One thing that I’ve seen people that are doing too now when they’re driving for dollars and they’re seeing properties is leaving the door hangers that you’d see on your hotel room. I know Ballpoint Marketing, they have these where you just hang them on the door and it has your information and it says, “Hey, I want to buy your house. So here’s my phone number or whatever you want to put on it.” I’ve seen that as a way too, so maybe you’re not actually door knocking and disturbing the person, but you can just hang it on there so that they see it.

Tony J. Robinson:
I have a funny story about door hangers. When I was in college, I started a small math tutoring business. I was a tutor in math and then I had some other tutors working with me and I printed out I think 600 door hangers. And I spent three or four days in the middle of summer going around my neighborhood, putting up door hangers and I got exactly zero phone calls from any of those door hangers. Not saying they don’t work, you probably need to put up more than that. And I had no reason to believe that any of these people needed math tutoring services. I literally just dropped my finger somewhere on the map and said, I guess I’ll start here and it didn’t quite work out for me. But if you have a list that you think might have some value, then door hangers could be a good way to go.

Ashley Kehr:
I had no idea you were a math nerd.

Tony J. Robinson:
I actually took all the way up to calculus in three dimensions multi-variable calculus in three dimensions when I was in college. Don’t ask me about it now because I can’t remember any of it, but that was that.

Ashley Kehr:
Well, I’m going to tell you what your first mistake was. The first was that you didn’t go around your college dorms and hang those to other students in college. You just went around your neighborhood. You should have went to the college kids.

Tony J. Robinson:
Most of the college kids I knew were probably not interested in paying some other college kids there to tutor them.

Ashley Kehr:
So you were looking for high school kids or younger kids.

Tony J. Robinson:
I usually get high schools, junior high kids, things like that. Entrepreneur through and through.

Ashley Kehr:
To go completely off topic, I was in mathletes for one year. There was 10 of us selected and me and my best friend were in it and we went to the competition and we got first place, our team. It was so awesome. But they also gave you your individual rankings. And so out of the 10 of us, I was ninth and my friend was 10. So we definitely held the team down but we still got first.

Tony J. Robinson:
Well, Joey, there you go. Now you found out about mine and Ashley’s history as mathematicians before we became real estate investors.

Ashley Kehr:
So hopefully this was helpful as to different ways that you can actually find who the owner is. And if you are looking at a property, maybe it’s a vacant property too that you’re trying to find the owner, is don’t be afraid to find out who the neighbors are too and reach out to them. There was once this property listed, I think it was on auction.com where my partner and I actually, we stopped and door knocked at the neighbors house and asked them, what do you know about this property? And they were so nice and so helpful and gave us a very, very accurate description of what the interior actually looked like of that property since it was an auction property, and there was occupants in the property. There was no pictures or anything of the inside so it was really awesome that they were able to tell us what they knew about it and everything like that.

Tony J. Robinson:
One other thing to add, sometimes when you look at these properties on PropStream, it’s not an individual owner, it’s like an LLC and all they have listed is a PO box. If you want to figure out who the owners of the LLC is, go to whatever state you’re in, go to their, what is it? Like secretary of state’s online website. And usually you can punch in the name of that LLC and it’ll list who the members are. Sometimes it might have a phone number, sometimes it’ll at least have a mailing address so you can send them a postcard that way. So if you see a PO box, don’t get discouraged, or if there’s no information there, you can go that way to get the LLC information.

Ashley Kehr:
And even if it is a PO box, you can still send a letter there, but a lot of times, just whatever the initial information you find, whether an LLC or a PO box or someone’s name, just doing a Google search on that too will come up with some kind of crumbs that can lead you to more information on that person too.

Tony J. Robinson:
Cool.

Ashley Kehr:
Yeah, I think we’re good on that one. Well, thank you guys so much for joining us today. I am Ashley, @wealthfromrentals and he’s Tony, @TonyJRobinson on Instagram. And he now has two properties for sale if you guys are interested. And we will be back on Wednesday with a new episode. Make sure you guys are subscribed to our YouTube channel. It has all of our podcasts episodes that are released, and we are also putting out new content weekly, different videos that we’re doing. And also, Kyle and Lauren from Rentals To Wealth too. So make sure you guys check that out. Well, thank you guys for joining us and we will see you next time.

 

 

 

 

 

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As the market moves into a post-refi-boom era, loan officers face tough competition for purchase loans. As a result, many originators are looking elsewhere to expand their business. HousingWire recently spoke with William Tessar, president of Civic Financial Services, about the private lending space and how LOs can benefit from serving real estate investors.  

HousingWire: What is the current outlook for the private lending space as the market shifts from a refi boom to a flooded purchase market?

William-J.-Tessar_Photo_2021

William Tessar: Once interest rates rise (and they are ticking up), conventional originators will be flooding the purchase market at the same time — and with inventory at record lows, there will be fierce competition for the same loan. Right now, however, there is an often-overlooked source of business that has the potential for brokers and originators: the real estate investor channel.

Since investors buy multiple properties per year, it can fuel more consistent growth. Outside of a refi boom, a typical customer will refi or purchase a new home once every three to four years, while real estate investors purchase an average of four homes every one year.

To serve real estate investors, however, you need more tools at your disposal than conventional or government loans—especially in a hot market where speed-to-close rules.

HW: How significant is the real estate investor channel in our post-refi market?

WT: Roughly 15% of the average LO’s database is a potential customer looking to acquire or refi an investment property, so if you pass on this business and someone else fills the void then that new lender will have future opportunities to serve that customer, which means you won’t. 

When you add it all up, a typical investor can bring in four to six loans to an originator in one year. There isn’t a single homeowner who will refinance their loan that many times in one year, and this is why originators are looking to private money loans to thrive in a post-refi environment.

HW: What misconceptions do people have about the private lending space?

WT: I was in the conventional lending space for 30-plus years. I joined CIVIC in 2017 because I saw the monumental, untapped potential of the company and the private lending industry as a whole. The perception of hard money and private lending in general had been a murky one of mystery, complexity and instability.

We took the initiative to change this through increased transparency and visibility into the performance of private money loans through securitizations and aligning with some of the largest Wall Street finance companies in the space.

HW: What impact have CIVIC’s securitizations had on the private money sector as a whole?

WT: In successfully closing three of the largest private money, business purpose loans only securitizations (which excluded multifamily properties as well as long term rentals), we brought the structure and discipline of conventional lending to the private money sector. This has increased credibility and confidence of institutional capital market partners in the performance of CIVIC loans as well as opening new doors of opportunity for all private money lenders.

The quality, quantity and consistency of our loans brought Wall Street Institutional capital, seeking higher yield, into the space, while clearly understanding the risk associated with this lending channel.

Today, institutional private lending is no longer an unusual funding source. CIVIC is bridging the gap between conventional and traditional hard money lenders — serving as an institutional private lender and offering affordable access to capital to investors, brokers and correspondent partners.

The post Lenders, don’t overlook real estate investors appeared first on HousingWire.



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Alberto Musalem, a former executive at the Federal Reserve Bank of New York, has been elected to the Freddie Mac board of directors, the government-controlled company said Wednesday.

Musalem is chief executive officer, co-chief investment officer, and a founder of Evince Asset Management LP, a company developing portfolio technologies for investors and managing a quantitative global fund.

“[Musalem] brings significant finance, capital markets, economics, and public policy expertise to our Board,” said Sara Mathew, non-executive chair of Freddie Mac’s board of directors. “We welcome him as a highly qualified new member whose decades of experience position him to play an important role on our risk committee and our compensation and human capital committee.”

Before founding Evince Asset Management, Musalem served as executive vice president at the Federal Reserve Bank of New York from 2014 to 2016, as head of the Integrated Policy Analysis Group and of the Emerging Markets and International Affairs Group. Prior to that, he held various positions at Tudor Investment Corporation from 2000 to 2013, including managing director, partner and global head of research. He previously served as an economist at the International Monetary Fund from 1996 to 2000.   

In other personnel moves, Michael DeVito, who spent more than two decades at Wells Fargo before retiring last year, assumed the role of Freddie Mac CEO on June 1. DeVito was head of home lending at Wells Fargo at the time he stepped down from the depository bank, and served as the head of mortgage production and ran mortgage servicing operations.

In February, Freddie Mac, with an equity market capitalization around $7.2 billion, appointed Pamela Perry as vice president of single-family equitable housing, and Amanda Nunnink as vice president of equity in multifamily housing.

Its other directors are Mark Bloom, Kathleen Casey, Lance Drummond, Aleem Gillani, Mark Grier, Christopher Herbert, Grace Huebscher, Allan Merrill, Saiyid Naqvi.

Earlier this month, the Federal Housing Finance Agency (FHFA) issued a request for input to determine if the current compensation of Freddie Mac and Fannie Mae executives is not “reasonable” or “comparable.” In a statement, FHFA Director Mark Calabria said the information the FHFA gathers will help to ensure transparent and appropriate executive compensation policies.

What happens next though is unclear. Following the Supreme Court’s opinion that the FHFA’s structure was unconstitutional, Joe Biden’s administration moved to remove Calabria from his position. Hours later, he resigned. It’s not immediately clear who will replace him.

The post Freddie Mac names Musalem to board of directors appeared first on HousingWire.



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The big news from the U.S. Census Bureau’s May new home sales report is that sales inventory has increased to 5.1 months, which brings the three-month average to 4.63 months. That begins to change the equation for some homebuilders, who were absolutely thriving in an ultra-low-inventory housing market environment. 

As a reminder, when the three-month average for inventory is 4.3 months or lower, builders have the confidence to continue to build. When inventory is between 4.4 and 6.4 months, builders need to see sales growth to continue to build. When inventory is 6.5 months or above, builders will exercise caution and even halt new projects.

Housing-Market

Census: For Sale Inventory and Months’ Supply, The seasonally‐adjusted estimate of new houses for sale at the end of May was 330,000. This represents a supply of 5.1 months at the current sales rate.

The headline monthly supply of 5.1 months is what we saw during decent housing market demand in the previous cycle. So although inventory has increased, it is not at a level of concern. Mother Economics is a serial killer who wants to get caught. She leaves plenty of evidence for those who are interested in discovering her next moves. Tracking the data over many years will show you the way. 

The builder’s confidence index tends to correlate with inventory. Historically speaking, the current level of builder confidence is relatively high. The index shows a parabolic move in 2020 from the lows of the COVID-19 crisis, and has since moderated. Because this index tracks confidence, a somewhat subjective measure, it doesn’t make sense to look at the total levels and compare them to other cycles. The direction of the trend is more valuable than any number. For example, the index may approach 70, which is a respectable number, but when we consider that it peaked near 90, the drop tells what the builder is thinking.

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    The post What builders see in a deeply unhealthy housing market appeared first on HousingWire.



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    “I think we should go ahead and call this a ‘shecession,’” said C. Nicole Mason, president and chief executive of the Institute for Women’s Policy Research. And rightly so. April 2020 was the first time that the female unemployment rate has reached double digits since 1948, as reported by the National Women’s Law Center.

    According to UN Women, the COVID-19 pandemic has taken a disproportionate toll on women. However, if you look into this further, the article explains that this isn’t just about job loss due to industries impacted by the pandemic.

    Women have continued to bear the brunt of domestic responsibilities in their homes. Working moms are 1.5 times more likely to report spending an additional 3 hours a day on domestic chores.

    This is like having another part-time job—an unpaid, thankless part-time job—on top of their demanding careers. A whopping 865,000 women left the U.S. workforce last September. This directly coincided with children returning to virtual school from home.

    No matter what race, gender, or orientation you belong to, all of us have felt pandemic-related stress. The pandemic affected all of us.

    If there was ever a time to make working towards your financial freedom a priority, it is now.

    As our lives slowly return back to usual and daycare providers and schools return back to their normal operating hours, for those of us who are privileged enough to have some sense of normalcy and additional time, I invite you to consider real estate investing as a new focus.

    It is important to talk about this now and understand the fleeting nature of time. As human beings living in this complicated age of information overload and social media, unless we are intentional about using our time when that gift is given to us, it is so easy to fill it up with noise.

    For those of us who are privileged enough to make it out of this pandemic physically and financially stable, I invite you to join me in reinventing yourself. As the world returns to normalcy, it will be the normalcy we choose to create as a society. It is about time we talk about money, financial freedom, and wealth-building openly.

    With that in mind, I’d like to share my acronym G.R.O.W., which represents the four pillars of reinvention.

    Growth vs. productivity

    Nowadays, you hear a lot about how to increase your productivity. There are hacks, calendars, and tips to “be more productive.” It is all about doing more stuff in the limited time that you have. There is something inherently wrong with this premise.

    I learned my ultimate lessons on growth from my own mother. After my dad passed away when I was five, I found my mom, who was a teacher, taking on all the roles in the house. She also started a business selling furniture on the side to be able to provide for us.

    Despite being a single mother, a full-time employee, and a business owner, she took the time to learn about finances. She worked hard but never complained about the lack of time. I realized as I got older that it was because she was focused on her top four balls that she kept in the air and let all the others drop.

    She once told me that, on average, she had bought less than one outfit per year for as long as she could remember. She had never taken an expensive vacation, but she was never stressed on a daily basis. She consistently worked on her growth and never on her productivity. I invite you to learn the lessons I learned from my mom.

    Focus on the top four balls that are important to you and let the others drop. Health, family, finances, and personal growth are mine.


    More stories from women investors on BiggerPockets


    Redefining social norms

    In my conversations with hundreds of women I have coached, I have found that they are fantastic mothers, hardworking professionals, and generous friends. However, I have also found that keeping up with the social norms is one of the biggest stressors of their lives.

    Expectations from various sources of how holidays, birthdays, and events need to go, or how their kids’ days should look, or how their house should be at any given point in time are on their minds consistently. As we come out of the pandemic, it is a great time to redefine these social norms and make new rules.

    Let’s make the topic of money and wealth something that flows as easily as the latest restaurant or spa.

    Optimizing capabilities

    You cannot obtain a college degree in a short time. Learning the ins and outs of building wealth and getting truly educated requires time, energy, and effort. Start by figuring out your strategy and making the mindset shift that you will need to become a successful investor, then graduate to learning the right tactics.

    It takes years to build a solid portfolio and robust passive income that can lead to financial freedom. Of course, that’s a fraction of the time we spend building our careers, but it does take some time.

    I replicated my six-figure salary in Engineering leadership at my corporate job within the first year as a real estate investor, but it took an entire year. I was able to build a $6 million portfolio of rentals. My husband and I are both financially free today, but it took four years to relentlessly chase one single strategy and put aside almost all other shiny objects.


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    Ready to build your investment empire?

    Unsure about the first (or next) step? Think of us as your personal trainer. From detailed breakdowns of real-world deals to one-on-one coaching sessions and a warm, welcoming community, hosts Ashley Kehr and Tony J Robinson tackle the “newbie” questions you’ve wondered about… but might be afraid to ask.


    Winning by taking action

    One of my biggest pet peeves is a push towards taking action. It took me months to figure out my strategy and my path forward when I first got started. After that, I built a framework around it, and I use various versions of it when I am stuck in analysis paralysis.

    We often forget that the particular decision we are trying to make is just the first step. In the months that follow, we will encounter numerous other choices and turning points that will change our trajectory and make or break our success story.

    The current decision is not as important as you think. Wherever you are stuck, there’s always a way out of the overwhelm.



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    After a Supreme Court ruling paved the way for the Biden administration to fire Federal Housing Finance Agency (FHFA) Director Mark Calabria at will, President Joe Biden is taking swift action.

    In a statement, a White House official told HousingWire that Biden planned to replace Calabria, a Trump appointee and vocal critic of the Government Sponsored Entities (GSEs), before the end of the day.

    “FHFA has an important mission of oversight of Fannie Mae and Freddie Mac as well as the Federal Home Loan Bank System,” the White House official said. “It is critical that the agency implement the Administration’s housing policies. As a result, in light of the Supreme Court’s decision today, the President is moving forward today to replace the current Director with an appointee who reflects the Administration’s values.”

    It wasn’t immediately clear who would take Calabria’s place when he’s terminated. The FHFA did not immediately comment.

    The Biden administration has not seen eye-to-eye with Calabria on the role the GSEs play in the mortgage market. Calabria has sought to build up the entities’ capital reserves and reduce their footprint in the market.

    Fannie and Freddie guarantee about half of the $11 trillion U.S. mortgage market. Upon the Supreme Court ruling, shares for the GSEs initially tumbled 40%.

    Calabria had pushed to remove the companies from conservatorship, but ran out of time to do so in the twilight of the Trump administration. The Biden administration has not shown any interest in ending the arrangement.

    In recent months, as exiting conservatorship appears increasingly unlikely, Fannie Mae and Freddie Mac have seen a string of high-level departures. In June, the FHFA launched a review of executive compensation at the GSEs.

    After the Supreme Court decision, few rose to defend Calabria, a Trump-appointee whose recent actions have drawn ire from many corners of the mortgage industry. Trade associations, housing advocate groups and Washington, D.C. insiders urged the Biden administration to replace Calabria without delay.

    Mortgage Bankers Association President Bob Broeksmit said in a statement that the trade group appreciates the impact of the Supreme Court decision.

    “We expect President Biden will move quickly to appoint a successor, and we look forward to working collaboratively with the administration, FHFA, and other stakeholders to ensure those markets function well for lenders and the American consumers they serve,” Broeksmit wrote on Wednesday.

    The post Biden to replace FHFA Director Mark Calabria today appeared first on HousingWire.



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