FHFA Seeks to Expand Mortgage Access

DAILY REAL ESTATE NEWS | TUESDAY, SEPTEMBER 02, 2014

The Federal Housing Finance Agency announced that it wants housing finance giants Fannie Mae and Freddie Mac to provide greater support to low-income mortgage borrowers and refinancers.

FHFA, which is the regulator for Fannie Mae and Freddie Mac, outlined goals for 2015-2017 aimed at advancing that goal. It wants to ensure that low-income families account for 23 percent of the GSE’s purchases of single-family home mortgages. Also, the agency seeks to ensure that the firms raise the share of their purchases that back mortgages in low-income areas with large minority populations. FHFA has charged the firms with raising the share of their mortgage refinance operations that target low-income Americans, Reuters reports.

Find out why first-time and low-income mortgage borrowersmay have an easier time qualifying for a Federal Housing Administration loan.

More specifically, FHFA has charged Freddie Mac with gradually expanding the number of loans it backs for low-income multifamily buildings, such as apartment buildings. It wants Freddie Mac to expand such loans to 230,000 by 2017; currently it’s target for this year is 200,000.

Some lawmakers may view FHFA’s move as controversial, with critics saying that boosting the support of mortgage access for low-income borrowers is what led to the housing bubble that burst in 2006, Reuters reports.

Source: “U.S. Housing Regulator Seeks More Support for Poor Borrowers,” Reuters (Aug. 29, 2014)

http://realtormag.realtor.org/daily-news/2014/09/02/fhfa-seeks-expand-mortgage-access

www.RebeccaSellsAZ.com

Commercial Sectors Surge on Improved Economy

DAILY REAL ESTATE NEWS | WEDNESDAY, AUGUST 27, 2014

After several false starts, the economy is finally gaining ground, and stronger growth is boosting the outlook for all of the major commercial real estate sectors, according to the National Association of REALTORS®’ quarterly commercial real estate forecast.

A Bright Spot for Commercial

• NAR: Commercial Recovery Slow But Steady
• Big Year Predicted for Commercial Success
• Commercial Market Posts Gains Across the Board

“The job market has been the bright spot of the economy this year, as employers are feeling more confident about their growth prospects and adding to their payrolls,” says Lawrence Yun, NAR’s chief economist. “This gradual turnaround from being overly cautious to more optimistic should slightly boost the demand for leasing and purchase activity as well as new-construction projects in the upcoming year. … The economy can handle the inevitable rise in interest rates as long as commercial rents steadily rise to generate investor returns.”

Here’s an overview of the four major commercial real estate sectors from NAR’s latest quarterly Commercial Real Estate outlook.

Office Markets

Vacancy rates for the office market is expected to remain unchanged at 15.7 percent in the third quarter of 2015. Office rents are forecasted to rise 2.6 percent this year and 3.2 percent next year.

Markets with the lowest office vacancy rates (third quarter 2014): Washington, D.C. (9.3%); New York City (9.6%); Little Rock, Ark. (11.5%); San Francisco (12.4%); and New Orleans (12.7%).

Industrial Markets

The industrial vacancy rate is projected to drop from 8.9 percent in the third quarter of this year to 8.5 percent in the third quarter of 2015. Annual rents are expected to rise 2.4 percent this year and 2.8 percent next year.

Markets with lowest industrial vacancy rates: Orange County, Calif. (3.5%); Los Angeles (3.8%); Seattle (5.9%); Miami (6.1%); and Palm Beach, Fla. (6.6%). 

Retail Markets

The retail vacancy rate is forecasted to fall from 9.8 percent currently to 9.6 percent in the third quarter of 2015. Retail rents are projected to increase 2 percent this year and another 2.4 percent next year.

Markets with the lowest retail vacancy rates: San Francisco (3.5%); Fairfield County, Conn. (3.9%); San Jose, Calif. (4.6%); Long Island, N.Y. (5.2%); and Orange County, Calif. (5.3%).

Multifamily Markets

The apartment rental market is expected to see vacancy rates decline from 4.1 percent today to 4 percent in the third quarter of 2015. (Vacancy rates below 5 percent are considered a landlord’s market, and the high demand often justifies the higher rents.) Average apartment rents are forecasted to increase 4 percent this year as well as in 2015.

“New construction for multifamily housing has picked up in recent months and looks to be alleviating the short supply,” says Yun. “However, the demand for rental housing continues to show strength. As a result, rent growth will outpace broad consumer inflation in upcoming years.”

Markets with lowest multifamily vacancy rates: Orange County, Calif. (2.2%); Providence, R.I. (2.2%); Sacramento, Calif. (2.2%); New Haven, Conn. (2.5%); and Hartford, Conn. (2.5%). 

Source: National Association of REALTORS®

http://realtormag.realtor.org/daily-news/2014/08/27/commercial-sectors-surge-improved-economy

www.RebeccaSellsAZ.com

Report: Hurricanes Could Put 6.5 Million U.S. Homes at Risk

DAILY REAL ESTATE NEWS | FRIDAY, JULY 11, 2014

More than 6.5 million homes along the U.S. Atlantic and Gulf coasts could be at risk of a storm surge from a hurricane, which could amount to nearly $1.5 trillion in potential reconstruction costs, according to the 2014 storm surge analysis conducted by CoreLogic. The analysis estimates the number and reconstruction value of single-family homes that could be exposed to a potential hurricane-driven storm surge.

When natural disaster strikes:

• After the Storm
• Will You Be Ready?
• CoreLogic: 1.2M Homes at Risk for Wildfires in West

“This exposure could constitute significant risk for home owners and financial services companies, as many at-risk homes lack protection from insurance coverage,” CoreLogic’s report notes.

Florida has the highest number of homes at risk of storm surge damage, with nearly 2.5 million homes potentially in harms way, representing $490 billion in potential damages, according to the report. At the metro level, the New York metro area, which includes northern New Jersey and Long Island, contained the highest number of homes at risk for potential storm surge damage – 687,412 – as well as the highest reconstruction value at more than $251 billion.

The reconstruction value of homes exposed to storm surge damage was found to be much greater in the Atlantic region than the Gulf. The total reconstruction cost value of homes along the Atlantic coast is nearly $951 billion – nearly double the value of properties at-risk in the Gulf Region, at slightly over $545 billion, according to the report.

The CoreLogic analysis includes single-family homes, mobile homes, duplexes, manufactured homes and cabins. View the full report at CoreLogic. 

Source: CoreLogic

http://realtormag.realtor.org/daily-news/2014/07/11/report-hurricanes-could-put-65-million-us-homes-risk

www.RebeccaSellsAZ.com

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Builders Say Labor Shortages Grow More Widespread

DAILY REAL ESTATE NEWS | WEDNESDAY, JULY 09, 2014

The real estate industry has called for homebuilders to ramp up construction to meet inventory shortages. But homebuilders increasingly are facing significant labor shortages that is making it more difficult to complete projects, a new study shows.

A June 2014 survey from the National Association of Home Builders shows that the industry is facing shortages of labor and subcontractors that have become “substantially more widespread since 2013.” Shortages are particularly notable for basic skills like carpentry and framing, the NAHB notes.

The Homebuilding Shortage Continues

• Builder Confidence Subdued This Spring
• Labor Shortages Plague Homebuilding Industry
• Homebuilders Face Shortage of 1 Million Jobs

Forty-six percent of builders reported a shortage of labor in 2014, the highest shortage reported since 2000 and slightly higher than at the peak of the housing boom in 2004 and 2005, when the United States was averaging about 2 million housing starts a year, the NAHB notes in its report.

Today, annual housing starts remain mostly under 1 million. New-home construction has only about partially recovered from its 2008 downturn and labor shortages are persisting despite relative slowdown in activity compared to previous years, the NAHB notes.

Builders say a shortage of subcontractors is raising their costs. On average, builders said their direct labor costs on the same house rose by 2.9 percent, while subcontractor costs grew by 3.8 percent.

Three out of five builders say the labor shortages have caused them to pay higher wages or subcontractor bids (65%); raise home prices (62%); and created difficulty in completing projects on time (60%). Thirty-six percent of builders said the labor shortages were making some projects unprofitable, and 18 percent of builders reported having to even turn down some projects.

Source: “Builders See Shortages of Labor And – Especially – Subcontractors,” National Association of Home Builders Eye on Housing Blog (July 8, 2014)

http://realtormag.realtor.org/daily-news/2014/07/09/builders-say-labor-shortages-grow-more-widespread

www.RebeccaSellsAZ.com

10 Biggest Rebound Cities Since the Recession

DAILY REAL ESTATE NEWS | THURSDAY, JUNE 26, 2014

Everything is bigger in Texas, including the economy.

Eight of the top 10 cities in the country that have rebounded the most since the recession are in the Lone Star State, according to a new analysis by financial site NerdWallet. Texas has seen large economic growth, and its housing market has been following the upward trend.

What Does a Recovery Look Like?

6 Signs of a Market Rebound
 

With the recession officially coming to an end in June 2009, NerdWallet looked at data over the last five years to see which cities improved the most since then. In its analysis of the 510 largest U.S. cities, the site considered factors such as the performance of the labor market, median household income, and median home values.

The following cities were ranked in the top 10 for largest recoveries since the recession. (Each city is listed below with the change in median home values since the recession.) 

1. McAllen, Texas: 15.61%
2. Midland, Texas: 21.67%
3. San Angelo, Texas: 20.92%
4. Fargo, N.D.: 13.30%
5. Bryan, Texas: 10.81%
6. Chattanooga, Tenn.: 14.04%
7. College Station, Texas: 3.67%
8. Odessa, Texas: 5.87%
9. Edinburg, Texas: 6.50%
10. Amarillo, Texas: 11.87%

Source: “Recession Recovery: Cities That Have Improved the Most,” NerdWallet Finance (June 23, 2014)

http://realtormag.realtor.org/daily-news/2014/06/26/10-biggest-rebound-cities-recession

www.RebeccaSellsAZ.com

10 States Ready for the New Economy

DAILY REAL ESTATE NEWS | MONDAY, JUNE 23, 2014

Which states are poised to fare the best in the “new economy?” According to the Information Technology and Innovation Foundation (ITIF), the “new economy” is marked by “globalization, technological innovation, and entrepreneurial development.” And often, booming economies lead to booming housing markets.

Find out how Fannie Mae seesthe "new normal" for the housing industry.

To determine a state's potential success in the new economy, ITIF used 25 indicators among five categories (knowledge jobs, globalization, economic dynamism, the digital economy, and innovation capacity). The following 10 states were at the top of ITIF’s list:

1. Massachusetts
2. Delaware
3. California
4. Washington
5. Maryland
6. Colorado
7. Virginia
8. Connecticut
9. Utah
10. New Jersey

Source: “The Best and Worst States for the New Economy,” Forbes.com (June 17, 2014)

http://realtormag.realtor.org/daily-news/2014/06/23/10-states-ready-for-new-economy

www.RebeccaSellsAZ.com