Real Estate News: Real Estate Investing Podcast

Copyright: © Copyright 2021 RealWealth Network, LLC. All rights reserved. Disclaimer: For entertainment purposes only and not offering investment advice. You are fully responsible for the use of this content and hold the producers and company harmle

Latest Episodes:

The Real Estate News Brief: Inflation Eases Up, All-Cash Homebuyers, and Real Estate as a Wealth Builder Dec 26, 2022

Show notes

In this Real Estate News Brief for the week ending December 24th, 2022... we have the latest report on inflation, a surge in all-cash home purchasing deals, and the results of a survey on real estate as a wealth builder. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week, and a new report that shows inflation is cooling off. The Commerce Department says the Personal Consumption Expenditure index shows that prices rose just .1% in November. That brings the annual rate of inflation down from 6.1% to 5.5%. The core rate, which eliminates food and gas prices, was up .2% with an annual rate that dropped from 5% to 4.7%. The PCE index is the gauge preferred by the central bank because it takes into account changes in consumer behavior to compensate for high prices. (1) Some economists believe that the good news on inflation will soften the Fed's plan to continue with rate hikes. Fundstrat equity strategist Tom Lee is predicting a "massive collapse" in inflation. As reported by CNBC, Lee believes that inflation is currently operating near the Fed's long-term goal of 2%, and that could prompt the Fed to slam on the brakes when it comes to rate hikes. (2) The job market is still fending off the impact of a slowing economy. Initial claims were only slightly higher last week, to a total of 216,000. That's only 2,000 claims higher than the week before. The number of continuing claims was unchanged at 1.67 million. (3) November was a good month for new home sales. They were up 5.8% compared to October. Year-over-year, they're still down 15.3%. Analysts say that November sales rose despite high mortgage rates thanks to builder incentives such as mortgage rate buy-downs and home price reductions. (4) New home construction was down in November, along with housing permits and builder sentiment. The Commerce Department reports that housing starts were down .5% following a 2.1% drop in October. Starts were down much more which means fewer new homes in the pipeline. They were down 11.2% in November. For single-family homes, housing starts were down 4.1% and permits were down 7.1%. For multi-family buildings of four or more units, starts were "up" 4.8% but permits fell 17.9%. (5) Builder sentiment fell again in December as it has done for every other month this year. But as MarketWatch reports, builders see a silver lining. They've had a tough time finding buyers, but mortgage rates have been coming down from the 7% level, and buyers are trickling back into the market. Builders are also offering incentives, as I mentioned, to sweeten the deal. (6) Existing home sales continue to slump. They were down in November for the 10th month in a row. The National Association of Realtors reports a 7.7% decline to a seasonally adjusted annual rate of 4.09 million. Existing-home sales have now dropped almost 37% since March. The last time they were this low was in May of 2020. Before that, it was November of 2010. (7) Mortgage Rates The 30-year fixed-rate mortgage continues to slowly deflate. According to Freddie Mac, the average rate was down another 4 basis points last week, to 6.27%. The 15-year mortgage went in the opposite direction. It was up 15 basis points to 5.69%. (8) In other news making headlines… New High for All-Cash Purchases High interest rates are turning more affluent home buyers into all-cash buyers. Redfin says the all-cash deals have gone up from 24.7% last October to 31.9% this last October. (9) Redfin analyzed 39 of the largest U.S. metros for this data. Most of the all-cash deals happened in Florida with Jacksonville topping the list at 50%. Other top metros for cash sales were West Palm Beach, Cleveland, Cincinnati, and Atlanta. The lowest number of all-cash offers happened along the West Coast where home prices are more expensive. Real Estate as a Wealth Builder A new CNBC survey shows that real estate is the most popular way to build wealth, but that many Americans are not acting on those beliefs. According to the survey, 23% of Americans believe that investing in real estate is the best way to create wealth, but only 12% of them purchased real estate in 2022. Instead, 27% of the people who responded put money into the stock market. Financial experts say that the cost of real estate is what keeps many Americans from doing what they believe is best. Real estate can be a more secure investment over the long-term, but it also requires a bigger initial investment. If you'd like to learn more about how you build wealth with real estate, please join RealWealth. It's free to join at newsforinvestors.com and learn more about how to pay for your real estate investments. You'll also find links to other topics mentioned in the show notes of this episode. Please remember to subscribe to our podcast, and leave a review! Thanks for listening, and Happy Holidays! Links: 1 - https://www.marketwatch.com/story/high-u-s-inflation-is-on-the-wane-pce-price-gauge-shows-11671802664?mod=economy-politics 2 - https://www.cnbc.com/2022/12/22/fundstrats-tom-lee-says-the-fed-could-pause-hiking-soon-sparking-rally.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Message 3 - https://www.marketwatch.com/story/jobless-claims-inch-up-to-216-000-but-offers-little-sign-of-labor-market-weakness-11671716394?mod=economic-report 4 - https://www.marketwatch.com/story/u-s-new-home-sales-rose-in-november-by-5-8-11671808949 5 - https://www.marketwatch.com/story/u-s-building-permits-fall-11-2-in-november-while-housing-starts-only-dip-slightly-11671544599?mod=economy-politics 6 - https://www.marketwatch.com/story/builder-sentiment-drops-fell-every-single-month-in-2022-builders-say-theres-a-silver-lining-11671462193 7 - https://www.marketwatch.com/story/u-s-existing-home-sales-fall-for-the-10th-straight-month-in-n 8 - https://www.freddiemac.com/pmms 9 - https://www.redfin.com/news/all-cash-home-purchases-fha-loans-october-2022/ 10 - https://www.cnbc.com/2022/12/15/americans-say-real-estate-is-best-way-to-build-wealth.html

Surge in Rent Control Activity Expected in 2023 Dec 23, 2022

Show notes

Rent growth has been slowing down in step with the economy, but it's still running hotter than it was before the pandemic. And that's expected to encourage more jurisdictions to consider and or pass rent control legislation. Even Florida is turning towards rent control as an answer for high rents. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. As Bisnow reports, rents remain "painfully high" for many Americans, despite slower rent growth for both single-family and multi-family rentals. (1) Year-over-year single-family rent growth hit a high of 13.9% in April of last year, but has been slowing down for the last five months. It's still in the double digits, but is now 10.2%. Florida metros have seen the highest SFR rent growth with Miami and Orlando at the top of that list. (2) It's a similar situation for apartments but rent growth has come down further. Annual rent growth hit a record high of 17.6% in 2021. It's now down to 4.6% year-over-year, although that's still a healthy gain for landlords. (3) Rent Growth vs. Wage Growth Because rent growth has outpaced income, many households are finding it more difficult to pay their rent. According to the U.S. Census Bureau, more than 19 million renter households paid more than 30% of their income on housing from 2017 to 2021. That's defined as "cost-burdened" by the Department of Housing and Urban Development. Housing costs vary from market to market, but the National Multifamily Housing Council, which advocates "against" rent control, has identified a number of markets that could become rent control battlegrounds in the coming year. These markets are identified in the NMHC's 2023 Rent Control Outlook report. (4) Four Rent Control Risk Levels The report separates the potential for rent control activity into four categories. Tier one includes states where "active state or local legislation action is expected." Those states include: Colorado, Illinois, Florida (which has been notoriously opposed to rent control), Maryland Massachusetts, Nevada, and Washington State. Tier two includes states where the potential for state or local legislative activity is "elevated." Those states include Connecticut, Hawaii, Michigan, New Mexico, and Rhode Island. Tier three includes states where rent control activity is expected, but will probably not get approved. Those states include Arizona, Kentucky, North Carolina, Pennsylvania, and South Carolina. The last category is where rent control expansion is an ongoing threat. California and New York are among those states, of course, along with Maine, Minnesota, New Jersey, and Oregon. Rent Control Minefield for Investors Rent control can be a minefield for investors, especially if they purchased a property under one set of rules, and then the rules change. It costs money to run a rental business, and when rents are controlled, rent revenues suffer. Investors may be less likely to put money into rentals, which could impact repairs on existing rentals and/or reduce the overall supply and make it harder for renters to find housing. A cap on rents could also reduce the value of the property. Bisnow cites a study published in October by Duke Financial Economics Center. It found that property values declined 6% in St. Paul, Minnesota during the first three months after rent control was implemented last year. That's for all rental and non-rental properties. For rental properties alone, values were down an additional 6% to a total of 12% due to lower future rents. The report says that lost property value essentially transferred that value from the owners to the renters. White House Silent on Presidential Executive Order While the NMHC anticipates activity at the local and state levels, some rent control advocates are floating the idea of an executive order by President Joe Biden that would impose some sort of rent control. So far, the White House has been silent on that matter. It did enact a housing plan in May that would "ease the burden of housing costs" but that plan did not include rent control. It just offered general policy proposals that include zoning reforms, new kinds of financing, and federal dollars for affordable housing. As what might be seen as a follow-up to this, a coalition of more than 2,500 nonprofits and public agencies wrote a letter to Congress asking for affordable housing legislation. The letter is addressed as a "Call to Invest in Our Neighborhoods" or ACTION. Specific requests in the letter call for a 50% expansion of the Low-Income Housing Tax Credit and a lower Private Activity Bond financing threshold of 25%. It is currently at 50%. According to a Realtor.com survey, 70% of landlords said in October that they plan to raise their rents over the next year. That is down from about 72% last spring. You'll find links to the reports I mentioned in the show notes at newsforinvestors.com. You can also join RealWealth for free while you are there for access to all our real estate news, educational material, and data on individual markets. Please remember to subscribe to our podcast and leave a review! Thanks for listening! LInks: 1 - https://www.bisnow.com/national/news/multifamily/as-rents-spiked-this-year-so-did-the-push-for-rent-control-116806 2 - https://www.corelogic.com/intelligence/corelogicannual-single-family-rent-growth-decelerates-for-fifth-consecutive-month-and-seasonal-patterns-return/ 3 - https://www.apartmentlist.com/research/national-rent-data 4 - https://www.nmhc.org/news/nmhc-news/2022/2023-rent-control-outlook/

The Real Estate News Brief: Fed's Latest Rake Hike, 2023 Top Markets, Airbnb's "Live Like a Hobbit" Dec 20, 2022

Show notes

In this Real Estate News Brief for the week ending December 17th, 2022... the Fed's latest rate hike, a 2023 top market forecast, and where you can "live like a hobbit" on Airbnb. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week. As I mentioned in an update a few days ago, the Fed hiked short-term rates once again. This time, it was a half point increase. The previous four increases were three quarters of a point. That brings the federal-funds rate up to a range of 4.25% to 4.5%. The Fed's effort to stop inflation is expected to go as high as 5.25%. Several Fed officials expect rates to go even higher. Fed Chief Jerome Powell says of the need for more rate hikes: "We're going into next year with higher inflation than we thought." This is expected to increase the risk of a recession. (1) The Fed's decision on rates came a day after the latest report on consumer prices. The Labor Department reported that the Consumer Price Index or CPI only rose .1% in November. That brings the annual rate of inflation down from 7.7% in October to 7.1% in November. When you omit prices for food and fuel, the core rate was up .2% to an annual rate of 6%. Digging in a little deeper, you'll see that some price categories are still seeing high inflation, such as rents. They were up .8% in November. The good news is that prices are not rising as fast as they were, but the Fed doesn't expect to get inflation down to pre-Covid levels of 2% until 2024 or 2025. (2) CoreLogic released its latest report on home price growth, which shows that annual gains are down to 10.1%. That's the slowest annual gain since early 2021, although some metros are still seeing a high rate of growth. The states of Florida, South Carolina, Georgia and North Carolina are seeing the biggest home price gains right now. The city of Miami is at the top of the metro list with an annual gain of 22.6%. Tampa is a close second at 20%. (3) The job market is holding up. As MarketWatch reports: "Layoffs have increased, but job losses remain small." Initial claims were 20,000 lower last week to an 11-week low of 211,000. They've slowly risen from a 54-year low of 166,000 last spring. Continuing claims are also slowly rising. They were up by 1,000 last week, to 1.67 million. (4) Mortgage Rates Mortgage rates have been coming down a bit as the rate of inflation weakens. Freddie Mac says the average 30-year fixed-rate mortgage is down 2 basis points to 6.31%. The 15-year is down 13 points to 5.54%. It's not enough to boost demand however. Freddie says it remains "very weak." (5) In other news making headlines… Where Are the Hot 2023 Housing Markets? Realtor.com came out with a top ten list of housing markets for 2023, and it looks like the South to Southeast part of the country will be in the lead. Atlanta is at the top of the list. As the so-called "New York of the South, it has the highest potential for growth, according to the National Association of Realtors. It is also more affordable compared to similar cities. NAR says that 20% of Atlanta renters can afford to buy a median-priced home. That's higher than the national average. (6) Raleigh, North Carolina is second on the list, followed by Dallas-Fort Worth, which is one of our preferred markets for single-family rentals. We also like Huntsville, Alabama; Jacksonville, Florida; and San Antonio, Texas which are 7th, 8th, and 9th on the list. We'll have a link to the complete list in the show notes. The City where Building Permits Take Almost 2 Years! If you've ever had to wait weeks or even months for a building permit, you probably weren't trying to build something in San Francisco. The Chronicle did a little research on permit-approval time and found that the typical waiting period was 627 days, or very close to "two years"! And that doesn't include the time it might take to deal with an earlier planning approval stage which can take up to a year or more. According to Corey Smith of the Housing Action Coalition: "It just proves what we know: that San Francisco doesn't prioritize building new housing." The report comes in the midst of a state review for the city's permitting process. The city's Department of Building Inspection also responded to the report saying that it is currently making changes that will speed up the process, but it won't be known for some time as to how much. (7) The Airbnb That Lets You "Live Like a Hobbit"! Airbnb is offering a unique stay at the original "Hobbiton" in New Zealand. That's where filming took place for "The Hobbit" and "Lord of the Rings." It's been open for tours for years, but the owner of the property is opening it up for 3-night stays next March to celebrate the 10th anniversary of "The Hobbit: An Unexpected Journey." Guests will be accommodated in one of 44 hobbit holes and experience life in The Shire. You must be at least 18 years of age, with a verified Airbnb profile, and lots of positive reviews to stay overnight. We'll have a link to that information and our other stories in the show notes. That's it for today. Please remember to hit the subscribe button, and leave a review! It's also free to join RealWealth if you haven't done so already. We offer hundreds of articles, webinars, and podcasts on real estate investing. As a member, you'll also have access to our Investor Portal with data on specific markets, our experienced investment counselors, and our curated list of real estate professionals that can help you build a rental housing portfolio. Thanks for listening. I'm Kathy Fettke. Show Notes link: https://www.newsforinvestors.com Join link: https://join.realwealth.com/?utm_content=Real%20Estate%20News%20Podcast&utm_campaign=Join%20for%20Free&utm_term=Description%20Text%20Link Subscribe link: https://podcasts.apple.com/us/podcast/real-estate-news-real-estate-investing-podcast/id1079952715 Links: 1 - https://www.marketwatch.com/story/fed-hikes-interest-rate-by-half-percentage-point-benchmark-rate-seen-topping-out-at-5-25-11671044699?mod=mw_latestnews 2 - https://www.marketwatch.com/story/coming-up-cpi-inflation-report-11670937380?mod=mw_latestnews 3 - https://www.scotsmanguide.com/browse/content/corelogic-home-price-growth-drops-near-single-digits-in-october 4 - https://www.marketwatch.com/story/jobless-claims-drop-to-11-week-low-of-211-000-in-early-december-11671111658?mod=economy-politics 5 - https://www.freddiemac.com/pmms 6 - https://www.nar.realtor/magazine/real-estate-news/10-housing-markets-expected-to-lead-the-nation-in-2023 7 - https://www.sfchronicle.com/sf/article/housing-permits-san-francisco-17652633.php 8 - https://news.airbnb.com/hobbiton/

Are the Big Real Estate Funds Faltering? Dec 17, 2022

Show notes

Blackstone is defending its decision to limit withdrawals from its $69 billion dollar real estate fund as investors become more cautious about what's ahead. Fund managers say that redemption requests for the Blackstone Real Estate Income Trust, or BREIT, exceeded previously set limits, and that investors knew there would be only so much liquidity to pay existing investors. The only way to create more liquidity is to sell properties, and that doesn't happen overnight. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Blackstone chief, Stephen Schwarzman, says the fund is performing well, and the high number of redemption requests are mostly from Asian investors who are facing financial stress in Asia. But there's also growing concern about commercial real estate valuations here in the U.S. with weakening demand for office space and the impact of the Fed's interest rate hikes on the economy. Apartment rent growth is also slowing down, despite strong housing demand, and multi-family properties account for the lion's share of Blackstone's fund. The Blackstone website says that 55% of fund assets are multi-family properties with a high concentration of properties in the western half of the U.S. and the south to southeast states. Industrial properties make up about 23% of the fund. Other fund assets include net leasing, data centers, hospitality, self-storage, office space, and retail. The fund is up 9.3% year-to-date and 13% since its inception. (1) Blackstone Sets Limits on Withdrawals These new withdrawal limits come as investors pull money from all the REITS, including publicly-traded REITs. CNBC reports that publicly-traded REITs have gotten "slammed" this year. The $35 billion Vanguard Real Estate ETF is down 26% year-to-date. (2) The Wall Street Journal cites the FTSE NAREIT All Equity REITs INdex which tracks publicly-traded landlords. That index shows a 20% drop. It reports that office owners are seeing worse results. (3) Although the privately-traded Blackstone is still "up" by more than 9% for the year, The Wall Street Journal reports that redemption requests for private REITs have escalated. The article said they are 12 times higher than they were in Q3 of last year. They hit $2.9 billion in Q2 of this year, and $3.7 billion in Q3 which they typically are less than a total of $1 billion. Although the Blackstone chief identified Asian investors as the ones who are yanking their funds, the Wall Street Journal reports that pension funds and university endowments are poised to do the same. BREIT Shows Strong Fund Performance Although Blackstone saw a doubling of requests last month, COO Jon Gray cited the fund's strong performance in an interview with CNBC. Gray suggested that investors should be saying: "You guys have done an incredible job at deploying our capital in exactly the right geography, in exactly the right sectors with the right balance sheet." He says: "We set up the product with limitations on liquidity. We described it as semi-liquid because we knew at some point there would be a period of volatility, and we didn't want to sell assets at the wrong time under pressure." Blackstone has a 5% cap on quarterly redemptions and a 2% cap for any given month. But Gray says: "We can sell if needed" which, he says, gives fund managers a lot of confidence. And despite the volatility we're seeing in the housing market right now, Blackstone fund managers feel confident about their approach to real estate. The website boast all s that BREIT is the world's largest commercial real estate owner… that has outpaced inflation drive by a high conviction, and thematic investment approach. The website says: "BREIT's performance is more closely tied to real estate fundamentals than publicly traded REITs which are often subject to public market volatility." Rick of Too Many Redemption Requests Although Blackstone is feeling some of the volatility, the Journal reports REITs in general are concerned about the number of redemption requests. It reports: "If the number of investors asking for their money back keeps growing, it would likely become a problem for the real-estate market. That is because funds that need to raise cash to pay back their investors often and no other choice but to sell buildings." And that could put pressure on apartment rents and office values over the long term. That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! To find out more about the single-family rental markets, go to newsforinvestors.com. You can join for free and get access to our market data and our list of real estate professionals. That includes our experienced investment counselors that can answer questions and help you get where you want to go with real estate. Thanks for listening. I'm Kathy Fettke. LInks: 1 - https://www.breit.com/why-breit/ 2 - https://www.cnbc.com/2022/12/08/blackstone-chief-defends-real-estate-fund-amid-rush-for-withdrawals.html 3 - https://www.wsj.com/articles/investors-yank-money-from-commercial-property-funds-pressuring-real-estate-values-11670293325

The Real Estate News Brief: The Fed's Latest Rate Hike, Two Inflation Reports, and a New Landlord Video Game Dec 16, 2022

Show notes

In this Real Estate News Brief updated to December 14, 2022… the Fed hikes short-term rates once again, two inflation reports show signs of improvement, and a video game called "The Tenants" showcases the job of a landlord. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin economic news with another rate hike by the Fed as it tries to control inflation. Fed officials decided on a half point rate hike, as most economists expected. That's lower than the last four three-quarter point rate hikes, and puts the Federal Funds rate between 4.25% and 4.5%. Fed officials also indicated that they would keep rates high throughout 2023, so any reduction in the overnight lending rate wouldn't happen until 2024. (1) Fed officials had just received the latest report on the consumer price growth the day before. The Labor Department reported that the Consumer Price Index or CPI was only up .1% in November to an annual rate of 7.1%. That's down from an annual rate of 7.7% in October, and 9.1% in June. So it's come down a full two points in four months. The core rate, which omits food and fuel, has also fallen from 6.3% to 6% over the last year. A report on wholesale prices came out the week before showing a higher than expected monthly increase in the Producer Price Index or PPI. It was up .3% in November which puts the annual rate at 7.4%. Despite the monthly increase, the yearly rate has come down from a peak of 11.7% in March to 7.4% today. (3) The job market is slowly cooling off in response to the Fed's rate hikes. There were 4,000 more initial claims this last week for a total of 230,000 new claims. Last spring, initial claims were as low as 166,000 when the economy was still roaring back to life. The Fed's rate hikes are forcing companies to trim their workforce a bit. There are now a total of 1.67 million people collecting benefits. (4) The stock market's response to economic conditions, including rate hikes, have resulted in a steep loss of individual net worth. The Federal Reserve reports that nominal net worth was down almost $7 trillion during the first three quarters of the year. It dropped 4.6% to a total of $143.3 trillion. If you include the loss of purchasing power because of inflation, you get real net worth which has suffered about twice the loss. Total real net worth is about $13.5 trillion. (5) Despite the resort on net worth, consumers are feeling a little less worried about inflation. The University of Michigan says its consumer sentiment index rose almost three points in December, to a reading of 59.1. Economists didn't expect such a positive response. They think lower gas prices have helped make consumers feel more at ease about inflation. (6) Mortgage Rates Mortgage rates are down for a fourth week in a row. Freddie Mac says the average 30-year fixed-rate mortgage was down 16 points to 6.33%. The 15-year dropped 9 points to 5.67%. Rates breached the 7% mark in early November. The rapid decline since then is the fastest since 2008. (7) And some of our Real Wealth members are getting investor loans in the 5% range, because sellers have been willing to pay points to bring down the rate. With builder's discounting property and offering rates in the 5's, cash flow is back to 2019 levels on new homes. Find out at RealWealth.com. In other news making headlines... Big Decline in Listing Volume More and more home sellers are sitting on the sidelines. According to House Canary, the volume of new listings has declined for seven months in a row, and is now down 25.1% year-over-year. Listing removals have climbed even higher, to 64.3% compared with November of last year. Many buyers and sellers have put their plans on hold because of high interest rates, and other economic factors. Economists expect to see more of the same as we head into the new year. Top State for Homebuyers Millennials who aren't postponing their homebuying plans are ditching New York, Los Angeles and Chicago for other hot metros in Texas and Florida. A new study by SmartAsset shows four of the top ten millennial destinations are in Texas and Florida. Austin moved up from fourth place last year to the top spot this year. Denver is second on the list followed by Dallas. Raleigh, North Carolina is fourth, and Jacksonville, Florida is fifth. The other top five cities are Henderson, Nevada; Salt Lake City; Virginia Beach; Tampa; and Nashville. (8) The cities that are seeing the biggest outflow of millennials are New York, Chicago, Washington, D.C., Boston, and Los Angeles. San Francisco is also among those losing a lot of millennials. A study by Redfin on cities getting the highest number of searches also includes Tampa and Dallas, but Sacramento, California was at the top of that list. Several other Florida cities are also on the Redfin list including Orlando, Miami, Cape Coral, and North Port-Sarasota. (9) "The Tenants" Video Game A new video game could teach players to be a little more understanding about the job of a landlord. The game is called "The Tenants" with the players taking on the role of the landlords. I haven't tried it yet, but Bisnow says the game "carries the potential to add a little nuance to the public perception of the business – and asks the question, can this often-maligned profession get a little love?" (10) Players are faced with making choices that have consequences for their rental business and the well-being of their tenants. If they blow off a tenant request to save money, the tenant might revolt in some way. If a tenant causes a problem, they will have to decide how to respond. The co-creators say it's great for property management training, because the players deal with all aspects of the business, including renovations, maintenance, bill-paying, and emergencies that need to be taken care of in the middle of the night. You'll find the game on the Steam platform. That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com to find out how to become a real-life landlord! It's free to join and free to access our data on hot rental markets. You also get access to our experienced investment counselors and other real estate professionals that can help you reach your real estate goals. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.cnbc.com/2022/12/14/fed-rate-decision-december-2022.html 2 - https://www.marketwatch.com/story/coming-up-cpi-inflation-report-11670937380?mod=mw_latestnews 3 - https://www.marketwatch.com/story/coming-up-producer-inflation-for-november-11670590979?mod=economic-report 4 - https://www.marketwatch.com/story/u-s-jobless-claims-climb-to-230-000-in-sign-labor-market-is-slowly-cooling-off-11670506623 5 - https://www.marketwatch.com/story/household-wealth-down-by-13-5-trillion-in-2022-second-worst-destruction-on-record-11670623787?mod=rex-nutting 6 - https://www.marketwatch.com/story/consumer-sentiment-improves-in-december-as-inflation-worries-ease-11670598779?mod=economic-report 7 - https://www.freddiemac.com/pmms 8 - https://smartasset.com/data-studies/where-millennials-are-moving-2022 9 - https://www.cnbc.com/2022/12/10/nearly-25percent-of-us-homebuyers-want-to-relocate-to-a-new-city.html 10 - https://www.bisnow.com/national/news/commercial-real-estate/meet-the-tenants-the-game-that-could-change-perceptions-about-landlords-116394

The Real Estate News Brief: New Conforming Loan Limits, Longer Hours to Pay Rent, SFR Rent Growth Slows Dec 09, 2022

Show notes

In this Real Estate News Brief for the week ending December 3rd, 2022... new limits for 2023 conforming loans, the hours tenants need to work to pay rent, and a single-family rent growth slowdown that's still good news for landlords. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with economic news from this past week. The inflation gauge favored by the Fed showed a bigger drop in price growth, but a report on job creation and wage growth showed that the economy is still running too hot. The Personal Consumption Expenditures Index or PCE shows a .2% increase for the October core rate which is down from a .5% rate of growth in September. The current annual rate is now 5.2% for the PCE core rate which excludes food and gas prices. The improvement suggests that inflation is stabilizing. (1) The government also released a report that shows stronger-than-expected job growth in November and a sharp increase in wages. That's good for workers, but a hot job market contributes to inflation. The report shows that companies added 263,000 new jobs in November – Wall Street had forecast around 200,000 – and that wages surged .6% to an average of $32.82. As MarketWatch reports, that's the largest increase in 13 months. The unemployment rate was unchanged at 3.7%. (2) Initial jobless claims were lower. There were 16,000 fewer applications to a total of 225,000 initial claims. That was also a surprise. Economists had expected a much bigger decline. The number of ongoing claims did move higher, however, to the highest level since last February. They rose 57,000 to a total of 1.61 million. Economists say that unemployment numbers can also be difficult to interpret during the holiday season. (3) Meantime, Fed Chief Jerome Powell spoke at the Brookings Institution on Wednesday. He said that the central bank may decide to slow the pace of interest rate hikes at the upcoming meeting but he also warned that the terminal rate may go higher than originally anticipated which means smaller rate hikes for a longer period of time. He said the Fed needs to see clear evidence that inflation is declining, including lower prices for housing. Some economists are now predicting a half-point rate hike at the December meeting, followed by three (3) quarter-point rate hikes next year. That would bring the short-term rate to a range of 5 to 5.25%. Powell said during his speech: "The truth is that the path ahead for inflation remains highly uncertain." (4) The housing market continues to cool, with existing home sales down 4.6% in October. According to the National Association of Realtors, it's the fifth month in a row they've been down. Year-over-year, pending home sales are down 37%. Home sales have stalled for several reasons including high prices and rising mortgage rates. (5) Home prices have started to come down. The S&P CoreLogic Case-Shiller national price index was down .8% in September. Year-over-year prices still show a 10.65% rate of appreciation however. (6) Mortgage Rates Mortgage rates are coming back down. Freddie Mac says the average 30-year fixed-rate mortgage dropped 9 points to 6.49%. The 15-year was down 14 points to 5.76%. Freddie attributes the decline to optimism that the Federal Reserve will move more slowly with the rate hikes. (7) In other news making headlines… Conforming Loan Limits for 2023 The government released new higher limits for 2023 conforming loans. The new amount that borrowers can get for loans guaranteed by either Fannie Mae or Freddie Mac will run from a base amount of $726,000 to more than one million dollars. More expensive counties will qualify for higher amounts with the highest tier at $1,089,300. (8) The Federal Housing Finance Agency regulates Fannie and Freddie and has published a county-by-county list with conforming loan limits. (9) The limits are based on average home prices in each area. If home prices fall, the loan limits will not be reduced but they will not be increased again until home prices move above the current conforming loan amounts. Hours Worked by Tenants to Pay the Rent A new analysis shows that tenants are working more hours to pay their rent. Research by Zillow shows that a typical full-time employee must work about 63 hours to pay the average rent of $2,040. That's about 36% of the average tenant's paycheck. Anything above 33% is considered "rent-burdened." (10) The situation is the result of robust rent growth and wages that are not rising as fast as rents. Labor statistics show the average hourly wage has grown 23% over the last five years and that rents have gone up about 37%. Rent Growth is Slowing for SFRs Data shows that rent growth is slowing down. According to CoreLogic, which tracks single-family rent growth, year-over-year rents were down for a fifth month in a row but were still at double digits. The data shows the annual single-family rent growth was 10.2% in September from a high of 13.9% in April of last year. CoreLogic economist Molly Boesel says that SFR rent growth is coming down, but it's still more than twice what it was before the pandemic. (11) That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! To find out more about rental real estate, go to newsforinvestors.com. You can join for free and get access to our market data and our curated list of real estate resources. That includes our experienced investment counselors and other real estate professionals that can help you get where you want to go with real estate. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.cnbc.com/2022/12/01/key-inflation-measure-that-the-fed-follows-rose-0point2percent-in-october-less-than-expected-.html 2 - https://www.marketwatch.com/story/u-s-adds-263-000-jobs-in-november-and-wages-rise-sharply-still-too-much-for-the-feds-liking-11669988407?mod=economic-report 3 - https://www.marketwatch.com/story/u-s-weekly-jobless-claims-retreat-in-latest-week-11669902096?mod=economic-report 4 - https://www.marketwatch.com/story/powell-says-pace-of-interest-rate-increases-can-slow-as-soon-as-december-meeting-11669833150?mod=economy-politics 5 - https://www.marketwatch.com/story/u-s-pending-home-sales-drop-for-fifth-straight-month-in-october-11669820442?mod=economy-politics 6 - https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/?utm_medium=next_gen&utm_source=google&utm_campaign=paid_campaign&utm_term=home&price&index&utm_content=Intl_Indicators&gclid=Cj0KCQiA4aacBhCUARIsAI55maGtTBygJMpl-CDDyORMbYFhSWa8LQMT5KwodBWyhjCuvr2tjC4rUFIaAoG8EALw_wcB#overview 7 - https://www.freddiemac.com/pmms 8 - https://www.mortgagenewsdaily.com/news/11292022-conforming-loan-limits-loan-limits-fhfa-case 9 - https://www.fhfa.gov/DataTools/Downloads/Documents/Conforming-Loan-Limit/FullCountyLoanLimitList2023_HERA-BASED_FINAL_FLAT.pdf 10 - https://www.nytimes.com/2022/12/01/realestate/rising-rent-us-cities.html 11 - https://calculatedrisk.substack.com/p/rents-falling-faster-than-seasonality

Housing Activists Hope to Beat Investors with Cash Offers! Dec 06, 2022

Show notes

Investors often use this strategy and now some housing activists are doing the same, hoping to beat investors with cash offers. It's the cash offer on a home that often gives investors an edge, and one activist group in Milwaukee is hoping to level the playing field with funds to buy homes in cash that it will then sell to low-income families. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Act Housing is a nonprofit organization that wants to give low-income families an opportunity to buy homes that are often scooped up by investors with cash offers. The Wall Street Journal is calling them "activist house flippers." In this case, the group would flip the homes for a minimal profit because it would sell them to families for close to the cost of the homes. (1) Housing Acts In Fundraising Mode The group hopes to raise $10 million by next year from the government and other groups that provide philanthropic funding. The activists spearheading this project say they are "leveling the playing field" because many sellers prefer cash offers and this provides a way for investors and future homeowners to compete at the same level. The group's president, Michael Gosman, explained the situation with a question: "If a family is willing to pay the same amount for a property as an investor, how do we make sure that family actually gets that opportunity." Acting on behalf of a homebuyer, the group would make a competitive all-cash offer. Targeting Bungalow-Style Homes The group is targeting smaller bungalow-style homes that might cost about $75,000 to purchase, and another $25,000 to renovate. It already has more than 100 families signed up as potential buyers. More than 80% of them are people of color. According to the Wall Street Journal, this is more of a nationwide trend, with activist groups in other places using a similar strategy. It reports that a neighborhood activist in Jackson, Mississippi, is flipping homes to first-time buyers. A nonprofit in Memphis is also doing this. In the Cincinnati area, the Port of Greater Cincinnati Development Authority recently beat Wall Street investors in the purchase of almost 200 rental homes. And in California, lawmakers set aside half a billion dollars to help subsidize the purchase of homes and rentals by nonprofits that help families with affordable housing. Investors Bought 1-in-5 Homes in Q1 Investors have been busy expanding their portfolios of single-family rentals. During the first quarter of this year, investors bought more than 20% of the homes that were sold. And many of those homes were converted into rentals. Investors have pulled back on their purchases since then, because of market conditions, but a pullback is also typical for this time of year. Despite the outcry over the investor purchase of homes that are turned into rentals, there's a huge need for rentals. Families given the opportunity to buy these homes may still be unable to qualify for a loan, so they will still need to rent. Some families also prefer to rent. For those that hope to buy in the Milwaukee area, they may get help from this new Housing Acts group. Gosman is hoping to find homes to flip using the same techniques that investors use, like fliers on phone poles and mailers. He told The Wall Street Journal: "I think in a lot of cases we'll copy (the investors.)" There will be no lack of competition however. Real estate is a hot deal for everyone whether you are a future homeowner or an investor trying to build generational wealth. In addition to the purchase of existing homes, many big landlords are funding huge build-to-rent projects. JPMorgan is one of them. It has entered into a joint venture with Haven Realty Capital to spend $1 billion on hundreds of new build-to-rent homes starting with three projects in the Atlanta area. (2) You'll find links to the Wall Street Journal article in the show notes for this episode. You can also find out how to find deals as an investor by joining RealWealth. It's free to join and gives you access to our market data, our experienced investment counselors, and our curated list of real estate professionals. And please remember to subscribe to this podcast if you haven't already, and leave us a review! Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.wsj.com/articles/activist-house-flippers-take-on-wall-street-to-keep-homes-from-investors-11669686997?mod=lead_feature_below_a_pos1 2 - https://www.businessinsider.com/jp-morgan-to-acquire-1-billion-of-single-family-rentals-2022-11

Portuguese Citizenship In Exchange for Minimal Real Estate Investment Nov 29, 2022

Show notes

There's still time to get in on an affordable real estate deal that also gives you Portuguese citizenship, access to affordable, state of the art healthcare, university education in Europe, and easy access to Europe. Portugal's Golden Visa program encourages foreign real estate investment in exchange for citizenship, and the minimum investment is just €280,000 which is about $280,000. But the opportunity might not last forever. The Portuguese government is in the process of making a decision on whether to end the program but anyone already signed up will be grandfathered in! Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Portugal's Golden Visa Program Portugal's Golden Visa program has been around since 2012. It was created to help Portugal recover from the worldwide economic downturn during the Great Recession. It encourages foreign investment and because the Euro is currently on par with the dollar, U.S. investors are getting a big discount from prices that are much lower over there. Because the program has attracted heavy investment into residential properties in the most popular areas, the government is now limiting the program to commercial properties in those areas. But these properties consist of rooms, suites, and even apartments in luxury hotels and resorts that provide passive income, and a place that investors can use when they are in Portugal. I went to Portugal this year to find out more about the Golden Visa program, and met with a team of experts, including attorneys, CPA's and developers who have properties that meet the Golden Visa requirements. You can find out more about the teams we met with at www.gatewayportugal.com. (1) What You Can Buy With Gateway Portugal Some qualifying properties offer apartments in luxurious resorts with old world surroundings and five-star service. They range in price, returns, and the amount of time that owners get to use them. Some of the properties offer buybacks after five years. Investors will get five years of passive income, a set amount of time to use and enjoy the property, and the big prize – Portuguese citizenship. The Golden Visa program does come with a few additional fees, but the returns that the investor makes will easily cover those fees. One of the least expensive investments being offered by Gateway Portugal is a hotel suite for €220,000. It's located along the beach in the very popular town of Lagos. Investors would earn a 7 to 10% return per year depending on occupancy levels. The owner would get to use the suite for two weeks every two years. However, to qualify for the Golden Visa, a minimum of $280,000 would have to be invested in Portugal, which means investors would need to buy two of these suites to qualify. Minimum Investment Only About $280,000 One thing to keep in mind is the amount of the investment that qualifies you for the Golden Visa program. There are three tiers with minimum investment amounts of €280,000, €350,000, and €500,000. Those correspond to the locations and types of investments that qualify. The first bracket of 280k to 350k investments get you a renovation project in a less densely populated area. The buildings that qualify as renovation projects must be a building that is at least 30 years old. 350k to 500k gets you a renovation project in a more densely populated area such as Lisbon, Porto, or the Algarve. 500k and up gets you a new build in a more densely populated area. Once you invest, you get immediate residency. To maintain your residency, you will have to spend some amount of time in Portugal, but that requirement is minimal. The first year, you have to spend at least a week in Portugal. After that, you can spend two weeks every two years. When you hit the five year mark, you are eligible for citizenship, so long as you have kept your investment during that time. Immediate family members are also eligible for citizenship if they were included on the application. Children must be younger than 18 at the time of the application or attending school with the support of their parents. Grandparents are also eligible. Beautiful Country, Low Cost of Living, High Quality Lifestyle What a great way to experience Europe, as a citizen in a beautiful country with a low cost of living and a high quality of life! Portugal's health care system is considered world class. In 2019, the World Health Organization published an extensive ranking of healthcare systems around the world. Portugal ranked 12th on the list. That's way ahead of the U.S. which was 37th on that same list. Health care isn't totally free but it's free for kids under 18 and adults over 65 and is extremely affordable for the rest. For example, hip replacement surgery might cost about $40,000 in the U.S. but will only set you back with a minimal co-pay in Portugal. Housing is also a lot cheaper in Portugal. The globalcitizensolutions.com website says it's about 50% less expensive in Portugal than it is in the U.S. And you'll save a bundle on property taxes. They are typically less than 1% of the property value. So a $300,000 home might cost you around $300 a year in property taxes. (2) The website lists several other ways you'll save money, for things like groceries, restaurants, transportation, education, and utilities. And you can put your worries to rest about Russian energy dependence in Portugal. The portugal.com website claims that only 5% of Portugal's non-renewable energy comes from Russia. (3) You'll also feel safer in terms of crime. According to nationmaster.com, there are about twice as many police officers in Portugal than there are in the U.S. and about half as much overall crime. The Global Peace Index ranked Portugal as the 6th safest country in the world. In comparison, the US ranked 129th out of 163 countries. (4) Portugal Tops Most Lists for Expats & Retirees In a Forbes article about Portugal's Golden Visa program, it says: "Portugal appears at the top of most of the lists of places recommended for expats and retired people to enjoy a good life and its Golden Visa program is one of the most popular in the world. The number of Americans living in Portugal rose 45% in 2021 from the previous year, according to government data." (5) But the program may not be around forever. It's not clear when the government will make a decision on whether to keep it going and it probably won't end overnight, but it could end soon. You can find out more at GatewayPortugal.com. Krista and Alec recently joined me on the Real Wealth Show to talk about what they are doing with the program. If you'd like to hear that, go here. If you're interested in other kinds of real estate investing, please check out the RealWealth website at newsforinvestors.com. It's free to join. And please remember to subscribe to our podcast and leave a review! Thank you! And thanks for listening. I'm Kathy Fettke. Links: 1 - https://gatewayportugal.com/ 2 - https://www.globalcitizensolutions.com/comparing-living-costs-portugal-vs-usa/ 3 - https://www.portugal.com/science/energy-in-portugal-where-does-portugal-get-its-energy-from/ 4 - https://www.nationmaster.com/country-info/compare/Portugal/United-States/Crime 5 - https://www.forbes.com/sites/ceciliarodriguez/2022/09/20/americans-moving-to-europe-portugal-still-top-place-for-expats-despite-restrictions/?sh=3c74c35d60f1

The Real Estate News Brief: Fed's Next Move, Investor Q3 Pullback, Rent Growth Slowdown Nov 28, 2022

Show notes

In this Real Estate News Brief for the week ending November 26th, 2022... what the Fed is expected to do next, what investors did not do in the third quarter, and a new rent growth report. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Economic News We begin with a light week for economic news as most of us enjoyed a day with family and friends for Thanksgiving. But there are a few things to report. The Federal Reserve released the minutes of its last meeting which shows that most of the voting members feel it's appropriate to reduce the size of the rate hikes. They feel that aggressive measures are still needed, but that smaller hikes will give them an opportunity to evaluate the economic impact. They are hoping to avoid what they call a "hard landing" as they tighten the reigns on the money supply. Economists are now expecting a half point rate hike at the meeting in December. That's after four consecutive three-quarter point hikes. (1) The Fed is hoping to control inflation without hurting the job market and causing layoffs. This last week, jobless applications jumped up a little, to 240,000 initial claims, but that's still near a low point. Continuing claims were also up by 48,000 to 1.55 million. Economists do see this slow creep higher as a result of Fed policy. Ian Shepherdson at Pantheon Economics told MarketWatch: "We are increasingly inclined to think that the trend in claims is now rising gently, as firms come under increasing pressure from the Fed's aggressive tightening." (2) The Commerce Department released the latest report on new home sales. It shows a 7.5% increase to a seasonally-adjusted rate of 632,000 in October. And that's with a record-high median price of $493,000. It was $455,000 in September. Some analysts say that home buyers may be rushing to close a sale before homes get any more expensive. As reported by MarketWatch, they also say the report doesn't include data on a high number of cancellations. They expect the housing market will continue to be a drag on the economy for several more quarters. (3) Consumer sentiment sank a bit more in November. The University of Michigan's consumer sentiment survey shows a drop to 56.8 because consumers are worried about inflation and the risk of recession. It was 59.9 in October and 73.6 in October of last year. When asked about inflation, participants said they expect inflation to run at an average of 4.9% next year, and drop down to 3% over the long run. The Fed pays attention to consumer expectations because it can influence future price trends. (4) Mortgage Rates Mortgage rates deflated a bit more last week. Freddie Mac says the 30-year fixed-rate mortgage was down 3 basis points to 6.58%. The 15-year was down 8 points to 5.9%. (5) In other news making headlines... Investor Buying Activity Falls 30% There's really never a bad time to buy real estate, so long as you find the right deal. And right now, it's a bit more difficult to find those deals. So much so, that the investor purchase of residential property dropped a whopping 30% in the third quarter. The Redfin study tracks 40 markets, and the results show that investors purchased around 66,000 homes in Q3 compared to 94,000 in Q3 of last year. But the report also shows that nationally, investors accounted for 17.5% of all home sales in the third quarter. That's a higher percentage than at any time before the pandemic. (6) While investors are facing the same economic headwinds as any home buyer, they are also waiting on the sidelines to jump back in. JPMorgan Chase recently announced that it plans to spend $1 billion on build-to-rent homes. The plan will launch with the purchase of 250 new rental homes in three communities in Atlanta. Rent Growth Slow to 18-Month Low One of the headwinds that investors are facing is a slowdown in rent growth, but it's also important to note that it's a slowdown. Although some rents in expensive areas may be experiencing a small amount of negative rent growth, rents are still rising in most parts of the country. But the slowdown is real.l (7) The Realtor.com October Rental Report shows that nationally multifamily rent growth has dropped to about 4.7% year-over-year. It also found that most landlords are planning to raise rents in the next year by smaller amounts. What's really happening is that rent growth is returning to normal after a period of astronomical rent growth that is no longer sustainable. Single-Family Homes Shrinking in Size The size of new single-family homes could shrink in the coming months, despite a trend for larger homes that began during the pandemic. The National Association of Homebuilders says it's a tug-of-war between demand for more space and a demand for less expensive homes. (8) The average size of a home grew 5.6% since the Great Recession while the median size is 9.7% higher. The NAHB expects that trend to reverse, as homebuyer budgets will probably take priority in the coming months. That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review! You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.cnbc.com/2022/11/23/fed-minutes-november-2022.html 2 - https://www.marketwatch.com/story/u-s-jobless-claims-jump-to-240-000-highest-since-august-11669210939?mod=economic-report 3 - https://www.marketwatch.com/story/u-s-new-home-sales-defy-gravity-in-october-11669216932?mod=economic-report 4 - https://www.marketwatch.com/story/consumer-sentiment-stays-depressed-after-u-s-elections-11669216338?mod=economic-report 5 - https://www.freddiemac.com/pmms 6 - https://www.wsj.com/articles/investor-home-purchases-drop-30-as-rising-rates-high-prices-cool-housing-market-11669067972?mod=hp_lead_pos2 7 - https://www.forbes.com/sites/brendarichardson/2022/11/18/rental-price-growth-slows-to-the-lowest-level-in-18-months/?sh=19aa21e3738e 8 - https://eyeonhousing.org/2022/11/new-single-family-home-size-trending-lower-2/

The Real Estate News Brief: Inflation Slowdown, Fed's Next Steps, What Homebuyers Need to Earn Nov 22, 2022

Show notes

In this Real Estate News Brief for the week ending November 19th, 2022... the latest inflation slowdown, what the Fed might do next, and what homebuyers need to earn to buy the "typical home."

Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. https://podcasts.apple.com/us/podcast/real-estate-news-real-estate-investing-podcast/id1079952715

Economic News

We begin with economic news from this past week, and another good report on inflation. The government reported on Tuesday that wholesale prices only rose .2% in October. That lowers the annual rate of inflation from 8.4% to 8%. It had been as high as 11.7% in March. That report along with one the week before on the CPI, show that inflation is slowing down, but officials at the Federal Reserve say they are still seeing the need for several more rate hikes. (1)

St. Louis Federal Reserve President James Bullard says that the central bank still has a lot of work to do to attain a "sufficiently restrictive level." He even suggested that the Federal Funds rate might go as high as 7% to win the fight against inflation. The Fed has already increased the short-term lending rate from near zero to a range of 3.75 to 4%. Economists are projecting a half point rate hike at the next meeting in early December instead of the three-quarter point rate hikes we've been seeing. (2)

Fed officials are trying to slow the economy down and are hoping to do that without hurting the job market, but there's a growing number of tech companies announcing lay-offs. Amazon just announced a plan for 10,000 lay0ffs or about 3% of its workforce. Facebook's parent company, Meta, also announced workforce cuts of about 11,000 employees. That's about 13% of its workforce. Tesla founder Elon Musk, who bought Twitter, slashed that workforce in half with about 7,5000 layoffs. Many people are expecting to see higher unemployment numbers. The jobless rate was 3.7% in October. It had surged to 14.7% in April 2020, because of Covid. (3)

Despite the headlines, the number of initial claims for unemployment dropped last week. They fell slightly to a total of 222,000 applications which is considered a low number historically. The number of people who've been collecting benefits was up by about 13,000 to 1.5 million. Because layoffs appear to be increasing, economists say we will probably see unemployment numbers rising in the coming weeks and months. (4)

Inflation continues to hit the housing market with prices that many homebuyers can't afford and another drop in existing home sales. The National Association of Realtors reports a 5.9% drop in October sales to a seasonally adjusted annual rate of 4.45 million units. It's the ninth month in a row that sales have declined. Compared to a year ago, sales are down 28.4%. It's currently the lowest sales have been since December of 2011, except for a sharp drop during the pandemic. (5)

Home builder sentiment is sliding further into negative territory. The National Association of Home Builders says its monthly confidence index was down another five points in November, to 33. That's the lowest it's been since June of 2012 and is quite a big lower than it was a year ago when the index was at 83. (6)

Mortgage Rates

Mortgage rates tumbled last week after inflation data suggested that price growth may have peaked. Freddie Mac says the average 30-year fixed-rate mortgage was down 47 basis points to 6.61%. It had risen above the 7% level. The 15-year was also down slightly to 5.98%. (7)

In other news making headlines...

The Paycheck You Need to Buy a Home

Purchasing a "typical home" has gotten so expensive, home buyers need to earn at least six-figures to buy one. A new study by Redfin shows that U.S. buyers need to earn $107,281 a year if they are taking out a loan to buy a median-priced home. That's about 45.6% more than a buyer needed a year ago, while the average hourly wage has grown only about 5%. (8)

Nationally, the median-price is just under $400,000. Of course, the price of a typical home varies a lot from market to market. San Francisco and San Jose have the highest home prices, but the annual income needed hasn't grown as much as it has in other markets.

There are several Florida metros at the top of that list. North Port, Florida is first on the list with a 74% increase in the annual income needed to buy a median priced home. The median there is about $488,000. The income a home buyer needed in October of 2021 was about $75,000. In October of this year, that figure shot up to $131,000.

This list can help an investor determine where large numbers of people might need to be renters because they can't afford to buy a home. You'll find a link to the report with a complete list of metros in the show notes.

That's it for today. Please remember to hit the subscribe button, and leave a review!

You can also join RealWealth for free at newsforinvestors.com. You'll find lots of information on markets that are attracting investors. If you'd like help with your investing goals, you'll also have access to our experienced investment counselors and our list of real estate professionals including property teams that can make it easy for you to invest many miles from your home.

Thanks for listening. I'm Kathy Fettke.

Links:

1 -https://www.marketwatch.com/story/wholesale-prices-rise-slowly-again-in-october-and-point-to-softening-u-s-inflation-11668519485?mod=economy-politics

2 -https://www.marketwatch.com/story/feds-bullard-says-interest-rates-will-need-to-rise-further-to-bring-inflation-down-11668691279?mod=economy-politics

3 -https://www.marketwatch.com/story/americans-have-not-been-this-worried-about-layoffs-since-april-2020-and-they-also-see-no-immediate-end-to-rising-prices-11668450201

4 -https://www.marketwatch.com/story/jobless-claims-fall-slightly-to-220-000-but-labor-market-softening-11668692678?mod=economy-politics

5 -https://www.marketwatch.com/story/u-s-existing-home-sales-retreat-for-a-record-ninth-straight-month-in-october-11668783694?mod=bnbh_mwarticle

6 -https://www.marketwatch.com/story/home-builder-sentiment-continues-to-sour-in-november-11668611251?mod=economy-politics

7 -https://www.freddiemac.com/pmms

8 -https://www.redfin.com/news/homebuyer-income-increase-october-2022/