Existing Home Sales up 2.5% in July

The National Association of Realtors is reporting that existing home sales were down 2.5% in July, which the NAR says is a positive reversal after total sales were down slightly in June.  According to their release, total existing-home sales (completed transactions that include single-family homes, townhomes, condominiums and co-ops) were up 2.5% from June to a seasonally adjusted annual rate of 5.42 million in July.  Total housing inventory at the end of July was 1.89 million, representing a 4.4-month supply at the current sales pace.

“Falling mortgage rates are improving housing affordability and nudging buyers into the market,” said Lawrence Yun, NAR’s chief economist. However, he added that the supply of affordable housing is severely low. “The shortage of lower-priced homes have markedly pushed up home prices.”

Click here to read the full release at the National Association of Realtors.

 

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What the Rate Cut Means for Real Estate Investors

BY  ON AUGUST 8, 2019

For the first time since 2008, the Federal Reserve recently cut rates by one quarter point.  In a recent a recent episode of Real Estate News for Investors Kathy Fettke explains what the rate cut means for real estate investors and sheds more light on the current economic landscape.  She says this action marks a dramatic shift in monetary policy.

“So we will most likely see a strong economy through the rest of 2019, and probably up until the election. And, if the economy remains robust, there’s a strong chance Trump will get re-elected….These are however, uncertain times. The best advice for real estate investors is to sell your high priced, low cash flow properties while interest rates are low, and exchange them for low cost properties with high cash flow.”

 

Click here to read the transcript on Real Wealth Network.

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How Millennial Homebuyers Plan to Pay Their Mortgages

BY  ON AUGUST 8, 2019

Redfin says that millennial homebuyers are less likely to undertake creative measures to help pay for their mortgage.  According to their research, only 51% said they’d use a creative strategy to help buy their new home versus 60% who would, just one year ago.   To get their data, Redfin surveyed over 2k people who planned to buy or sell a home over the next 12 months, zeroing-in those born between 1981 & 1986 (millennials).  Indeed…

“Millennial homebuyers in 2019 are less likely to take extraordinary measures to afford their mortgage payments, such as getting help from their parents or co-ownership with someone other than a spouse or partner, than they were last summer.” 

Click here to read the full report at Redfin.com.

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Grocery Stores' Impact on the Housing Market

BY  ON AUGUST 23, 2019

Did you know that a Trader Joe’s or an ALDI near your property might increase its ROI?  This is according to ATTOM Data’s recent Grocery Store Battle analysis that looked at how living near a Trader Joe’s, a Whole Foods or an ALDI can affect your home’s value – or flipping ROI!    Interestingly, for investors they found that properties near an ALDI are an investor’s cornucopia with an average gross flipping ROI of 62%, compared to those near a Whole Foods which had an average gross flipping ROI of 35% and Trader Joe’s at 31 percent. The average gross flipping ROI for all zip codes with these grocery stores nationwide is 52%.  Take that to the pantry!  Happy Friday!!

Hat tip to ATTOM Data.

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Turning Obsolete Buildings into Climate Controlled Self-Storage

BY  ON AUGUST 22, 2019

Have you ever thought about turning obsolete buildings into climate controlled self-storage?  That subject was tackled in a recent episode of the Rental Property Owner & Real Estate Investor podcast.   Host Brian Hamrick interviews Scott Krone, the managing partner of Coda Management Group, a company that teams up with investors to purchase and convert undervalued warehouse space into climate controlled Self-Storage Facilities.  Scott explains how the adaptive re-use of commercial space can be turned into an asset class that is very attractive & extremely profitable.  He explains the process of converting old warehouse space into self-storage, including his typical costs per sq. ft. for acquisition, construction & soft costs.

Click here to read more at RPOAonline.org.

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Mortgage Delinquencies Rise in Q2

BY  ON AUGUST 22, 2019

According to the latest Mortgage Bankers Association (MBA) National Delinquency Survey, mortgage delinquencies increased 11 basis points from the first quarter of 2019 and 17 basis points from one year ago.  The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 4.53% of all loans outstanding at the end of the second quarter of 2019.  The foreclosure inventory rate came in at 0.9%  at the end of Q2, which was the lowest since the fourth quarter of 1995.  In addition, they point out that on a year-over-year basis, total mortgage delinquencies increased for all loans outstanding.  The delinquency rate increased by 16 basis points for conventional loans, increased 52 basis points for FHA loans, and increased 27 basis points for VA loans from the previous year.

“The unemployment rate remains quite low, but the national mortgage delinquency rate in the second quarter rose from both the first quarter and one year ago. The economy is slowing, and this poses the risk of further increases in delinquency rates,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “Across loan types, the FHA delinquency rate posted the largest variance, increasing 29 basis points from last quarter and 52 basis points from a year ago.”

MBA Chart of the week 8/16/19

Click here to read the full report at MBA.org.

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Mortgage Debt Hits Record, Eclipsing 2008 Peak

BY  ON AUGUST 21, 2019

A recent report from the Wall Street Journal (reposted by Realtor.com) says that U.S. mortgage debt reached a record in Q2, exceeding a peak last seen in 2008.   Data from the Federal Reserve Bank of New York show that mortgage balances were up $162 billion to $9.406 trillion.  The previous high water mark was $9.294 trillion back in Q3 of 2008. The article also pointed out that total household debt has been on the rise since mid-2013 rising 1.4% in the first quarter to $13.86 trillion, marking the 20th consecutive quarter of increases.  Indeed…

“The big picture is that when you look at mortgages, which is the biggest piece of [household debt], it still looks pretty healthy,” said Michael Feroli, chief U.S. economist at JPMorgan Chase, noting that while household debt has grown, so have incomes.

WSJ.com

Just for a point of historical reference, the chart below shows mortgage rates since 1974:

Historical 30-year fixed rate mortgage rates – John Burns Real Estate Consulting

 

Click here to read the full story on Realtor.com

Click here to read the full story at the Wall Street Journal.

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Yardi Says Rents Show Impressive & Consistent Performance

BY  ON AUGUST 20, 2019

According to the latest Yardi Matrix, U.S. multifamily rents rose in July, coming in at $1,469 with year-over-year growth increasing to 3.4% (up 10 basis points from June).  Yardi says multifamily rents continued their impressive and consistent performance but cautions that there is potential for market volatility and slower growth.  Indeed…

Click here to read the full report at Yardimatrix.com.

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WalletHub’s Best Places to Flip Houses

Where are the best places to flip houses in America?  While they don’t have an actual crystal ball, WalletHub recently looked at over 170 American cities, using over 29 different criteria such as market potential, cost and quality of life to come up with a list of the best places to find flips.  However, for all of you wannabe Tarek & Christinas out there, they do caution that it’s not quite as easy as it is on TV:

If you’re among the millions of HGTV viewers who’ve seen an episode of “Flip or Flop,” you’ve probably thought about the thrill of gutting a house and turning a five- or six-figure profit. But the process isn’t as easy as the professionals on television make it look. Any experienced home flipper would caution you that transforming a fixer-upper into a profitable property is a difficult process.

 

Source: WalletHub

Click here to read the full report on WalletHub.com.

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Best Housing Markets for Growth and Stability

Smartasset says that two major factors, “growth and stability” are key indicators of a property’s value (good and bad) as time marches forward.  Naturally, owners want a stable environment where the value will grow over time and not risk pushing them underwater if they have a mortgage.   That being said, Smartasset ran the numbers to find metro areas that are the best bets for growth & stability. They compared home value data for every quarter over a 25-year period through Q4 2018.

Click here to read the full report at SmartAsset.com.

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