Tuesday, September 26, 2017

In The News

In the News   Presented by Prairie Title  
September 21, 2017
Housing Inventory Still an Issue
Prices remain high, interest rates are low, inventory is not adequate, existing home sales are sluggish  — those are the hallmarks of the residential real estate market as we enter the final quarter of this year. The news is ever-confusing and contradictory, even in the same week. Overall, it’s not a pretty picture.
For a variety of reasons, prominent among them lost equity following the recession which began nine years ago, many households that we would have expected to move up from starter and mid-range homes have stayed put, reducing available inventory. Also, many mid-life families who want to move up have been caught in the middle between second home purchasers who are not selling their homes and millennials who are slow to get into the starter home market, many of whom are held back by crushing student debt.  
Taken together, these factors combine to prolong a shortage of residential real estate inventory, which drives up prices and keeps large numbers of potential home buyers from getting into the market or moving up. There is some light in the tunnel, however. Encouraging data recently shows that move up buyers are starting to get into the market in greater numbers. At the same time, mortgages with less than 10 percent down are available now, and that may bring more millennials to get into the market.
Also on a positive note, commercial real estate remains on “sound fundamentals” NAR reports, while the National Retail Federation notes that retail store openings increasing this year. Even with new supply, solid absorption led to increases in rents,” the NAR report said. “Office demand was stable in the second quarter of 2017, fueled by higher tenant interest in technology, advertising and marketing, healthcare and life sciences sectors. Net absorption totaled 8.8 million square feet.”

An important final point: The recent Equifax data breach is yet another reminder of the critical importance of cybersecurity. In our business, building awareness about wire fraud schemes among consumers is a key component of preventing data theft – and in this case the direct theft of thousands of dollars from unsuspecting home purchasers. To help, ALTA has created both a video and an infographic that you can use with your customers to help them be vigilant.

ALTA has many other helpful tools for consumers on homeclosing101.org. Be sure to point your clients to the site to answer all their questions about title insurance and closings.

What’s your point of view? Call or email me, or write a comment below. Let’s keep the conversation going.

Monday, July 31, 2017

In The News

In the News   Presented by Prairie Title  
July 31, 2017
Homes more valuable than ever. Is that a good thing?

As CNBC reported, last week Zillow said that the median value of all U.S. homes has exceeded $200,000, the highest it has ever been. Zillow also said that the inventory of homes for sale was down more than 11 percent from June 2016. Whether or not Zillow is spot on with those numbers, the fact remains that home values have risen — but at what cost?  How many potential buyers are frozen out of the market by tight inventory and the high prices that accompany a shortage of available housing?
Backing that up, NAR also noted last week that U.S. home resale volume fell more than expected in June as a “dearth of properties pushed house prices to a record high.”

High values are great if your own a home and are not looking to move up past a starter home. For the younger generation, the current shortage and high prices are clearly a deterrent.
As NAR’s Lawrence Yun put it, “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”
Let’s hope that changes soon.

CFPB’s (and Cordray’s) Future

Much uncertainty swirls around the CFPB and its director, Richard Cordray, as Congressional Republicans and the Trump Administration seek to de-fang the agency and its powerful head. Cordray, it seems, also may be on the path to giving way to the inevitable (his term expires next June) by resigning and announcing his candidacy for governor of Ohio. In the meantime, we await the federal appeals court’s decision on the constitutionality of the CFPB’s structure in PHH vs. CFPB. The regulatory environment we face could be very drastically different by early next year.

Final thought: There have been a number of stories in the news lately about scammers stealing thousands of dollars from home buyers by sending them fraudulent wire transfer instructions. These stories are real and we are the first line of defense against these cyber thieves. Proper instructions to home buyers can prevent fraudulent activity. The American Land Title Association has just produced a two-minute video explaining the danger and what industry members and consumers alike can do to prevent it. I urge you to view the video and share it with your staff and customers.
What’s your point of view? Call or email me, or write a comment here. Let’s keep the conversation going.

Tuesday, May 30, 2017

In The News

In the News   Presented by Prairie Title  
May 30, 2017
Housing, Housing, Housing
Naturally, there’s nothing more critical to the real estate economy then the state of the housing market, and the news was positive recently as NAR Chief Economist Lawrence Yun noted on May 18 that the first quarter was the best quarterly existing sales pace in exactly a decade (5.62 million on an annual basis), and he expects activity to mostly stay on track and finish around 5.64 million. That would be the best since 2006 (6.47 million) and 3.5 percent above 2016.
“The housing market has exceeded expectations ever since the election, despite depressed inventory and higher mortgage rates,” said Yun. “The combination of the stock market being at record highs, 16 million new jobs created since 2010, pent-up household formation and rising consumer confidence is giving more households the assurance and ability to purchase a home.”   
There is a cautious note in the Chicago area, though, as Gail MarksJarvis of the Chicago Tribune reported last week that “sales of homes in the Chicago area dropped in April as potential homebuyers looked at houses but then turned away after finding disappointing choices."

Cyber-security, always
Another week, another story of a couple being scammed out of money by a hacker in a real estate transaction. This time, an Ohio couple lost $20,000 when a hacker posed as their title company and gave them fraudulent instructions on where their bank should transfer their downpayment. In this era of growing and changing use of financial technology, we must be diligent at all times about securing our vital transaction information in our systems and through the use of encrypted email. Equally important, we must be certain that our clients know to never follow instructions included in an unencrypted email.

Final thought: I was impressed by a presentation given by HUD Secretary Dr. Ben Carson to an American Land Title Association group recently. Dr. Carson’s remarks were both thoughtful and thought-provoking. Wherever you are on the political spectrum, I urge all of us to give him a chance. We might just be surprised by his capabilities in the housing arena.

What’s your point of view? Call or email me, or write a comment below. Let’s keep the conversation going.

Tuesday, March 14, 2017

Technology and Real Estate

In the News   Presented by Prairie Title  
March 14, 2017
Tech Talk and the Real Estate Business

According to survey results released in December by Fannie Mae, demand for and use of mobile mortgage products almost doubled over the course of 12 months. The survey covered 1,200 consumers who bought homes in the last year and have a mortgage guaranteed by Fannie Mae.
“This is a startlingly large increase reflecting the pervasive and growing use of mobile technology among consumers at all income levels,” wrote Steve Deggendorf, director of market insights research for Fannie Mae. “Although this research focused on low- and moderate-income homebuyers, our prior research suggests the results would be even larger for mobile usage and interest among higher-income consumers.” 
Fannie Mae’s findings help draw a picture of how the real estate market is moving rapidly toward maximum use of technology, often driven by customers.
Recently, loanDepot, which bills itself as “a fast-growing national consumer lender, announced the launch of its end-to-end proprietary digital lending platform as part of an $80 million investment in technology. The platform features three distinct components: a web-based consumer portal, a mobile point of sale system, and a fully digital mortgage loan application. All will be integrated into loanDepot’s web-based loan origination system, which consumers and lenders can use via mobile or desktop devices. 
Development of these types of systems can be both exciting and a bit scary. For all of us, regardless of our specific roles in the industry, survival depends on embracing technology with all its built-in challenges. To put a twist on the old saying from academia: When it comes to technology, we all need to produce or surely we will perish.
What’s your point of view? Call me, email me, or write a comment below.

Other stories we’re following: 
Affordability is main hurdle for aspiring home buyers.
Sales up, consumer sentiment down.
Three factors affecting millennial home ownership – negatively.
Limited inventory, quick sales.

Tuesday, January 31, 2017

New Year, New President

In the News   Presented by Prairie Title  
January 31, 2017
Onward We Go

We’ve just inaugurated a new President, and as we move forward as a nation in a different direction, uncertainty seems to be the dominant factor. No one knows how the new administration in Washington will work with the new Congress. Republicans are cheered, of course, about having control of the legislative and executive branches, but it was only eight years ago that Democrats had the same level of power, and they lost the legislature after two years.

One item that concerns me is the possibility that the home mortgage interest deduction might be revisited by the new Congress. It’s hard to tell how accurate reports are, but there seems to be some substance to the discussion. I hope changes to this vital economic tool are quickly taken off the table, as does nearly everyone in the real estate industry. Eliminating the mortgage interest deduction would no doubt do great damage to our industry, and likely the entire economy as middle class families work to cope financially without that valuable deduction.

I urge you to follow developments in Washington and stay in touch with your local and national associations, representatives and senators as events unfold. Let’s make sure our voices are heard as decisions are made.

Meanwhile, signs point to a growing real estate market this year. On the construction front, the builders are predicting another strong year. Last year, the National Association of Home Builders projected 1.16 million total housing starts in 2016, which was up nearly 5 percent from the previous year. Now NAHB is forecasting a 10 percent increase in single-family production for 2017 and a 12 percent rise for 2018.

On the whole, I’m optimistic about our industry in 2017. Refinances are drying up, but existing home sales will be good, more Millennials will be moving into the housing market and the commercial market is stable.  

What’s your point of view? I’d love to start a conversation. Call or email me, or write a comment below.

Other stories we’re following:

Pending home sales predict strong 2017.
Total value of U.S. home sales at all-time high.                    
Blockchain for mortgages, compelling but premature?
Millennials desire home ownership, but…