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.

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…         

Is Housing Gaining Traction?

In the News   Presented by Prairie Title  

June 1, 2016         

TRID Bumps along; Housing too 

By Frank Pellegrini, Prairie Title CEO 

I find it informative to follow the voices of those in the media who really know real estate inside and out. Two of those real estate media pros, Ken Harney and Diana Olick, are typically spot on in their assessments of the market and real estate industry issues in the short term and the long run. 

Harney, syndicated by the Washington Post, recently wrote an article whose premise was that implementation of TRID is delivering mixed results for professionals and consumers. He noted:

“A new study gauging consumers' experiences before and after the new rules took effect suggests that things may be looking up. It found that 92 percent of buyers are taking time to review their mortgage documents in advance of the settlement — making use of the three days they're now allotted to do so.” That study was conducted by the American Land Title Association. 

Citing another survey, Harney said, “Buyers also were pleased by being encouraged to shop for settlement services such as title insurance.”  I was especially happy to read that. We are actively encouraging consumers to shop for title services and I’m glad that approach is taking root. 

Lenders fees have increased to cover the additional costs at their end, and the average time to closing has increased (and now stabilized). For consumers, Harney’s bottom line was: “Be aware of the pluses and minuses of the rule changes. Expect greater transparency about costs — and more time to check them out — but also maybe a little longer time to close and increases in fees.” 

Olick is a featured reporter on CNBC who writes about day-to-day real estate activity more than the longer term trends Harney typically dives into. She is a great resource for the facts and figures that drive the trends in the industry. Among other analytics, she has recently focused on pending home sales, the shortage of existing homes for sale and the driving forces behind increasing mortgage applications, pointing out the fits and starts we continue to experience as housing bumps along. 

We regularly Tweet Harney’s and Olick’s observations and I would encourage you to follow them as well. Or simply follow Prairie Title on Twitter and we’ll provide that information for you.

Other stories we’re following:

Who’s Afraid of TRID risk?                                    Housing Prices Increase more than Expected.

 

Home Buying Drives Mortgage Apps.                         ommercial Sales Subdued in First Quarter.             

Spring Has Sprung?

In the News   Presented by Prairie Title            

Commentary by Frank Pellegrini, Prairie Title CEO  

April 25, 2016

We’re seeing it in our home town, where multi-family construction is going like gangbusters, and the numbers nationwide affirm it: Builders are confident as we move deeper into Q2 of 2016. The National Association of Home Builders’ closely-watched Confidence index, which focuses on single-family construction, was 58 for the third straight month. (Any reading over 50 signals improvement.) Midwest numbers mirror the national averages, holding steady in the 50s for nearly a year now.                                                                                                                                        

“Builder confidence has held firm at 58 for three consecutive months, showing that the single-family housing sector continues to recover at a slow but consistent pace,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill.  “As we enter the spring home buying season, we should see the market move forward.” 

At the same time, NAR announced on April 20 that existing home sales sprung ahead in March, “bolstered by big gains in the Northeast and Midwest.” That was the good regional news. Here comes the bad. 

Those of  us who live in Illinois know that things are a bit depressing at the moment as our governor and legislature grapple during a budget crisis with no foreseeable end in sight. I just returned from the ILTA lobby day in Springfield where we had a chance to meet with our legislators about issues that concern the real estate business and get a feel for the general state of affairs in Illinois government. Needless to say, there’s a lot of tension in the air. 

Whichever side of the political divide you’re on — or even if you’re sick of them all — I urge you to get involved individually, in your neighborhoods and through your business associations to help move the needle in Springfield. Until and unless the decision makers feel some real heat from the citizenry they have little incentive on either side to compromise.

Let’s keep the discussion going. Call or email me, or write a comment below.

Other stories we’re following:

Cybercrime on the Rise.                                              TRID Having an Effect on Jumbo MBS?     

Finally Easier to get a Mortgage.                                 Builder MSAs Here to Stay?

In The News

In the News   Presented by Prairie Title            

Commentary by Frank Pellegrini, Prairie Title CEO  

January 25, 2016

Winter is here in full force, the stock market is gyrating and we’re in the midst of an annual lull in the real estate business. So why be optimistic? Two reasons:

1)      Home buying season is just around the corner!

2)      Commercial real estate is in good shape for 2016 and the years beyond.

On the housing front, while it’s true that things are a bit slow for the moment, as is typical in January (complicated this year by TRID implementation), the trends look promising. As reported by the MBA, total mortgage application activity — for refinancings and home purchases combined — posted strong numbers the last three weeks, climbing 21.3 percent on a seasonally adjusted basis the week ending Jan. 8, and a further 9 percent following week.

“The good news for the new year is that following the holidays, application activity resumed at levels just exceeding those observed during early December, suggesting that the purchase market has picked up right where it left off,” noted Lynn Fisher, the MBA’s vice president of research and economics. Meanwhile Interest rates have trended lower the last two weeks, also a good sign that activity is poised to pick up.  

Commercial: Last month, Congress passed a tax bill that includes a number of provisions favorable to commercial real estate, including one that analysts say could spur some $30 billion in annual foreign investment in U.S. commercial real estate starting this year. The provision eases 1980s tax requirements imposed on foreign investors to curb their appetite for U.S. commercial real estate.

Meanwhile, the Daily Real Estate News reported on Jan. 14: “Over the next three years, developers are expected to construct nearly 1 million apartments nationwide, hoping to snag wider profits from soaring rents.”

Need another reason for optimism? Baseball’s Spring Training starts in less than a month.

Let’s keep the discussion going. Call me, email me, or post a comment.

Other stories we’re following:

Chicago Housing Market saw Solid 2015 Improvement.
Home Construction up Last Year.
Big Banks Pulling Back from Mortgages.
Cybercriminals Targeting Mortgage Industry.