Real Estate News: Real Estate Investing Podcast

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Buying vs. Renting in Largest U.S. Cities Mar 02, 2022

Show notes

Rents are not just making a rebound after a dip during the pandemic. They are blowing right past the monthly cost of buying a home in more than half of the largest U.S. markets. A new realtor.com report says they've been rising so fast, it's now more affordable to buy a home in 26 U.S. cities, than it is to rent. (1)

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.

January was the eighth month in a row that rents have shown double digit growth in the U.S. Realtor.com says the year-over-year increase hit 19.8% in January. That kind of growth is almost double the monthly cost increase for buying a home – which started the year at 11%.

Rent Growth Breakdown

Rents have risen the most for studio apartments. Those rents are up 21% or about $256 a month, compared to a year earlier. One- and two-bedroom units are up 19.2% which adds about $266 dollars to the monthly rent for a one-bedroom and about $323 for a two-bedroom.

Higher rents mean that the monthly cost of a starter home is about 20.6% lower than it is for renting in 26 of the 50 largest metros. That translates to a $323 monthly savings, for home buyers in those metros.

Top Three Buying Markets

The realtor.com report shows that the three top markets that favor buying over renting provide an even bigger discount.

1 - In Birmingham, Alabama, the monthly cost for a starter home is just $668 compared to a median rent of $1,201. That's a 44.3% savings or about $533 a month.

2 - In Cleveland, Ohio, the monthly buying cost is $809 versus $1,325 a month for rent. That's a 38.9% difference or about $516.

3 - In Pittsburgh, Pennsylvania, homebuyers are paying $945 a month compared to a median monthly rent of $1,530. That's a 38.3% savings or about $585.

But realtor.com says the trend is not universal. While it's pricier to rent than to buy in 26 metros, it's still more affordable to rent in 24 others. Realtor.com says the price difference in those metros makes it about 24.8% more expensive to buy than to rent, giving renters a monthly savings of about $536. In cities with a lot of big tech, buyers are shelling out even more money per month. That cost is about 41.6% higher per month than renting.

Rent vs. Buying in Tech Markets

The top three tech metros where buying is a whole lot more expensive than renting include:

1 - Austin, Texas, where the monthly cost of buying is about 76.1% higher than renting.

2 - New York City where buyers pay an extra 52.4% month over renting.

3 - And San Francisco where the monthly cost of buying is about 49.1% more expensive.

Realtor.com's chief economist Danielle Hale says: "While both rental and home-buying costs are rising, a number of factors could tip the affordability scale in favor of first-time buying for many Americans this year. She says: "Rents are forecasted to outpace listing price growth in 2022 and are already accelerating across all unit sizes." She also says that surveys show a majority of landlords plan to raise their rental rates even higher this year.

Florida Metros Top Rent Growth List

The metros where rents are rising the fastest are all in Florida. Realtor.com's list of the Top 10 Markets for Rent Increases in January 2022 list Miami, Tampa, Orlando, and Jacksonville as the top four.

We'll have a link to that report in the show notes at newsforinvestors.com.

You can also visit our Learning Center while you are there and join our network for access to our Investor Portal. It's free to join. Members can look at sample property pro-formas, and connect with our experienced investment counselors. The portal also offers access to property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.

Thanks for listening, and please remember to hit the subscribe button, and leave a review!I'm Kathy Fettke.

Links:

1 -https://www.realtor.com/research/january-2022-rent/

The Real Estate News Brief: Mortgage Rates Hit 4%, Homebuyer Competition, Vacation Home Demand Mar 01, 2022

Show notes

In this Real Estate News Brief for the week ending February 26th, 2022... mortgage rates move past the 4% level, homebuyers battle it out in January, and big investors target vacation homes.

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.

Concerns about inflation continue. The Federal Reserve's preferred monitoring tool, known as the PCE Index, shows a .6% increase in January for a yearly rate of 6.1%. (1) That's slightly lower than the more widely known CPI or Consumer Price Index. It shows an annual rate of inflation, at 7.5%.

Companies are raising prices because of labor shortages and supply chain issues. Russian military action in Ukraine is also contributing to inflation worries, especially for oil, grains, and metals. Some economists believe a full-scale Russian invasion will push the CPI as high as 10%. If that happens, it would be the highest year-over-year rate of inflation since 1981. (2)

The U.S. labor market remains strong. Jobless claims fell again last week. They were down 17,000 to a total of 232,000. Continuing claims also tumbled. They were down 112,000 to 1.48 million. That's the lowest they've been since March 1970. (3)

Higher mortgage rates are also impacting demand for new homes. The government says that sales were down 4.5% in January to an annual rate of 801,000 homes. But regional numbers varied a lot with sales in the Northeast down 10.7% while sales in the West were actually up slightly, by 1.2%. (4)

Existing home sales were also down. The National Association of Realtors says that pending home sales fell 5.7% in January. Year-over-year, they are down 9.5%. It was the third month in a row that sales were down, thanks to a tight supply, higher interest rates, and higher home prices. (5)

Home prices are up by almost 19% year-over-year. The S&P CoreLogic Case-Shiller indexes show that Phoenix had the highest rate of growth at 32.5% year-over-year. Tampa and Miami were close behind at 19.4% and 27.3% respectively. An FHFA report on home prices shows that Arizona, Utah, and Idaho had the strongest home price growth. The District of Columbia, Louisiana, and North Dakota had the weakest. (6)

Mortgage Rates

Mortgage rates went in both directions last week and remain in the 4% range. According to Freddie Mac's latest report, the 30-year fixed-rate mortgage is down slightly, to 3.89%. But the Mortgage Bankers Association says they did a U-turn shortly after Freddie's report. The MBA says the average lender is currently quoting conventional 30-year fixed-rate loans at well over 4%. (7) (8)

In other news making headlines...

Homebuyer Competition at Record High

Competition is fierce among homebuyers. Redfin says that 70% of the offers written by Redfin agents faced bidding wars in January. That's up from 67.7% in December and 61% last year. (9)

Redfin says that buyers are rushing to buy homes before interest rates move even higher. The metros with the strongest competition were Spokane and Seattle in Washington state, and Sacramento in California.

A Redfin agent in Spokane says that one of her listings had 45 showings in five days and received 14 offers. Another one of her listings had 12 offers and sold for $120,000 over the list price of $525,000.

Investor Demand for Vacation Homes

Big investors are showing more interest in vacation homes. Demand for vacation homes and short-term rentals, in general, has been growing since the pandemic began. They've typically been owned and operated by individual homeowners or small investors. But that's changing. (10)

The Wall Street Journal reports that big investment firms are capturing more of the short-term rental market. It offers an example, reporting that New York Investment firm, Saluda Grade, has teamed up with AvantStay to purchase $500 million worth of vacation homes. They will be just outside of major metros, making it easy for clients to take short vacations and possibly work remotely.

It can be a challenging business to operate short-term rentals, however. Many cities are tightening the rules and making it tough on short-term rental investors who've already purchased properties or would like to.

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.marketwatch.com/story/coming-up-pce-inflation-index-and-consumer-spending-11645795161?mod=mw_latestnews

2 -https://www.marketwatch.com/story/russia-ukraine-puts-10-u-s-inflation-on-radar-as-blackrock-repeats-central-banks-may-have-to-live-with-inflation-11645565763

3 -https://www.marketwatch.com/story/jobless-claims-retreat-in-latest-week-painting-a-picture-of-a-strong-labor-market-11645709922?mod=economy-politics

4 -https://www.marketwatch.com/story/coming-up-u-s-new-home-sales-11645713360?mod=economy-politics

5 -https://www.marketwatch.com/story/pending-home-sales-slump-for-third-straight-month-in-january-11645801451?mod=economic-report

6 -https://www.marketwatch.com/story/coming-up-s-p-case-shiller-and-fhfa-home-price-indexes-11645537850?mod=search_headline

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

8 -https://www.mortgagenewsdaily.com/markets/mortgage-rates-02242022

9 -https://www.redfin.com/news/real-estate-bidding-wars-january-2022/

10 -https://magazine.realtor/daily-news/2022/02/24/investment-firms-target-vacation-homes

11 -https://magazine.realtor/daily-news/2022/02/24/poll-moving-more-stressful-than-breakups

The Real Estate News Brief: Rate Hike Forecasts, New Rent Growth Record, Disney Gets Into Housing Feb 25, 2022

Show notes

In this Real Estate News Brief for the week ending February 19th, 2022… what economists are saying about rate hikes, where rents are growing the fastest, and a new residential development plan for Disney fans.

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 what economists are saying about inflation and rate hikes. St. Louis Fed President James Bullard believes the Fed should push rates up a full point in the near term. His comments about the need for more aggressive action is also pushing rate hike forecasts as high as seven this year. Bullard told CNBC: "I do think we need to front-load more of our planned removal of accommodation than we would have previously." (1) The government reported last week that the annual rate of inflation hit 7.5%. (2)

Unemployment applications were up 23,000 last week, but economists are not concerned about the strength of the job market. As CNBC reports, millions of businesses have open positions they'd like to fill, so we probably won't see many layoffs. Currently, there are 11 million job openings. (3)

Existing home sales were up almost 7% from December to January for a seasonally-adjusted annual rate of 6.5 million homes. That's despite the tight inventory which has now dropped to a 1.6-month supply. Economists had predicted sales of 6.1 million homes. Sales were up in all parts of the country, but sales were strongest in the South with a 9% increase. (4)

Builders are letting up on the gas pedal to some degree. The Census Bureau reported that housing starts were down 4% in January. Economists say the decline reflects a number of obstacles that builders are dealing with including supply-chain issues, COVID-19 cases, and bad weather in some areas. Builders are also worried that higher mortgage rates could impact demand. Permits were up 1%. The chief economist at Pantheon Macroeconomics, Ian Shepherdson, told CNBC: "The housing market is set for a sustained softening over the next few months." (5)

A monthly survey on homebuilder confidence was also down. The National Association of Home Builders says it fell for a second straight month, mostly due to supply chain delays. NAHB Chairman Jerry Konter says: "Production disruptions are so severe that many builders are waiting for months to receive cabinets, garage doors, countertops, and appliances." (6)

Mortgage Rates

Mortgage rates have now jumped to their highest level since May 2019. Freddie Mac says the average 30-year fixed-rate mortgage was up 23 basis points to 3.92% last week. The 15-year was up 22 points to 3.15%. (7)

In other news making headlines…

Rents Are Surging Higher

Rent growth hit a new record in January. Redfin says the average asking rent was up 15.2% year-over-year. Rent growth was the highest in Portland, Oregon, and Austin, Texas at 39% and 35% respectively. Other metros in the top ten list include the Florida metros of Tampa, Fort Lauderdale, West Palm Beach, and Miami. They are all in the 30% range. (8)

Redfin's chief economist Daryl Fairweather says that housing is expensive whether you are renting or buying. Redfin says the average monthly rent is now $1,891 while the average monthly mortgage payment is $1,595. Many consumers can't afford to buy a home, however, because of the down payment.

Investors Buying Record Share of Homes

That kind of rent growth is great motivation for investors who bought 18.4% of U.S. homes in the fourth quarter. That's almost 13% higher than Q4 of last year. Redfin says that investors are taking advantage of the strong demand for rentals and the incredible rent growth. (9)

Redfin says that investors are paying high prices for homes because of that rent growth. Many are also paying in cash, which eliminates the expense of a loan. A typical price point for investors is about $433,000. That's up 10% from last year.

Disney's Housing Development Plan

If you love Disney theme parks, you may get the opportunity to enjoy the magic as your primary residence. The Walt Disney Company announced a residential development project called "Cotino" near Palm Springs, in Rancho Mirage. It'll be a 24-acre "grand oasis featuring clear turquoise waters with crystal lagoons." (10)

It will house residents of all ages with a special section for the 55-plus age group. Homes will range in size from condos and single-family homes to larger estates. There will be a waterfront clubhouse, club-only beach area, water activities, and Disney events throughout the year. Disney cast members will run the community association. Day passes will also be available to non-residents.

If you don't want to live in the desert, Disney says it is working on other locations for future developments as part of its "Storyliving by Disney" long-term plan. That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!

Thanks for listening. I'm Kathy Fettke.

Links:

1 -https://www.cnbc.com/2022/02/14/bullard-say-the-fed-needs-to-front-load-tightening-because-inflation-is-possibly-accelerating.html

2 -https://www.marketwatch.com/story/coming-up-consumer-price-index-11644498273

3 -https://www.marketwatch.com/story/u-s-jobless-claims-jump-23-000-to-248-000-11645105161?mod=economy-politics

4 -https://www.marketwatch.com/story/coming-up-u-s-existing-home-sales-11645195810?mod=economic-report

5 -https://www.marketwatch.com/story/coming-up-u-s-housing-starts-11645104312?mod=newsviewer_click

6 -https://www.cnbc.com/2022/02/16/builders-are-waiting-months-to-get-cabinets-and-garage-doors.html?__source=newsletter%7Ceveningbrief

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

8 -https://finance.yahoo.com/news/real-estate-investors-buying-record-140000275.html

9 -https://www.redfin.com/news/redfin-rental-report-january-2022/

10 -https://magazine.realtor/daily-news/2022/02/18/disney-to-build-themed-housing-development

A New Record for Real Estate Investors Feb 23, 2022

Show notes

Real estate investors were very busy in the second half of last year. A new Redfin study shows that they purchased a record share of U.S. homes in the fourth quarter.

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.

The Redfin study shows that investors bought about 80,000 homes in the fourth quarter. That's about 18.4% of all residential real estate sales for that time period. The investor home purchase share was 17.4% in the third quarter, and 12.6% a year earlier. (1)

Share vs. Numbers

While investors accounted for a record share of residential real estate purchases in the fourth quarter, the number of homes they bought dropped about 9% from the third quarter. They purchased about 88,000 homes in Q3 compared to 80,000 in Q4.

The dip in quantity is due to the lack of inventory affecting all homebuyers. Redfin says it's also due to typically slower sales at the end of the year.

Investors have been buying more homes despite skyrocketing home prices. Redfin says that prices were up 15% year-over-year in December. That's pushing many potential homebuyers out of the market, and increasing demand for rentals.

It's also pushing rents higher. Redfin says the average monthly rent for a new lease was up 14% at the end of last year.

Redfin economist Sheharyar Bokhari says: "While record-high home prices are problematic for individual homebuyers, they're one reason why investor demand is stronger than ever." She says: "Investors are chasing rising prices because rental payments are also skyrocketing, incentivizing investors who plan to rent out the homes they buy."

Cash is King for Investors

Most investors are also paying in cash, which reduces the overall cost of the home, and makes it hard for consumers to compete. Redfin says that 75% of investor purchases in the last quarter were paid for in cash.

Bokhari says: "It's tough to compete with all-cash offers, and rising mortgage rates have a smaller impact on investors because they often don't use mortgages at all."

Most Popular Price Category

Mid-priced homes were the most popular with investors. They made up 37% of Q4 investor purchases. Low-priced homes made up about 32% of the deals and high-priced homes about 30%.

Single-family homes were also the most popular type of home. Redfin says that three out of four investor purchases were single-family homes. Condos and coops accounted for 15%, townhouses for 6%, and small multifamilies for just under 4%.

Demand for Single-Family Homes

If you've been following the rental market, you know that single-family homes have surged in popularity because of the pandemic. More people can work remotely from home, and many have decided they need more space to do that. While many would like to buy a single-family home, it's tough for a lot of consumers to afford the high prices, so they continue to rent.

The markets where investors bought the most homes were in the Sun Belt. Atlanta tops the list with investors buying 32.7% of the homes that sold in the fourth quarter. Charlotte was second with an investor share of 32%. Jacksonville was next followed by Las Vegas, and Phoenix.

Jacksonville experienced the biggest increase in homes purchased by investors. Redfin says they more than doubled from the previous year with a 157% increase.

If you'd like to see the Redfin report with data on investor activity in 40 different metros, we'll have a link in the show notes at newsforinvestors.com.

Thanks for listening, and please remember to hit the subscribe button, and leave a review!I'm Kathy Fettke.

Links:

1 - https://www.redfin.com/news/investor-home-purchases-q4-2021/

Quiet Title Laws Allow Seizure of Some Midwest Homes Feb 17, 2022

Show notes

Some people in the Midwest are losing their homes because of a loophole in "quiet title" laws. Law experts say real estate opportunists are claiming that homes are abandoned, and are using the loophole to grab the home when homeowners are away. There are reports that this has been happening in Iowa but that quiet title laws in several states could be used to do the same thing.

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.

Iowa Public Radio broke the story about a homeowner in Marshalltown, Iowa, outside of Des Moines and Cedar Rapids. (1) Natalia Esteban had purchased the home in 2001 with her ex-husband, before they divorced. She moved to California in 2018, but kept the house in Marshalltown where she returned each summer.

Big Surprise for the Homeowner

Esteban's daughter, Maria Kendall, lived in Marshalltown with her family and noticed a listing on Zillow one day, for her mom's house. Her mother was in California at the time, so Kendall called her mom to ask about the listing. It was a big surprise for Esteban who wasn't selling the house. They discovered that Esteban had lost the title, and the new owner had put the home up for sale.

So how did the title transfer to whoever was selling her home? It's called "quiet title action" and is used to settle disputes over who owns a piece of property. There could be a dispute over a boundary, or who owns a home after the owner dies, or any number of things. In Esteban's case, Catherine Gooding petitioned for title of Estaban's home claiming the home was abandoned. She also claimed to have a tax certificate that proved Gooding was the new owner.

As required by the quiet title law, she published notification of the title dispute three times in the local newspaper. You know, the kind of small-print listings that most people probably wouldn't see, let alone Esteban who was in California at the time.

Even if she had looked at the paper, she may have missed it because she's not fluent in English. But Gooding followed the law and won her case by default because Esteban failed to show up in court.

Loophole In Quiet Title Laws

Legal experts say the loophole has two issues that make it somewhat easy to snatch the title on a home. The first issue is a vaguely written law on how a person can challenge ownership of a property. It requires that the person petitioning for title must have an interest in the property, but it reportedly doesn't provide details. The second issue is how the homeowner is contacted about the title dispute. The small-print notifications in the newspaper meet the legal requirement, but don't do a very good job at notifying homeowners, especially if they are not home at the time and are immigrants who are not fluent in English.

Esteban's daughter told Iowa Public Radio that if she hadn't seen the listing on Zillow: "We would never have found out the house was sold. My mother would have come back to Iowa in the summer and she would have found out she doesn't have a house."

Esteban went to court to fight for her home. It was revealed during that case, that Gooding had applied for a tax certificate but had never been granted one. The title ended up going back to Esteban, but unfortunately, she lost everything inside the home. The radio station says she lost many photos and family heirlooms from her native Mexico.

Weak Quiet Title Laws In Several States

The radio station reports that Gooding used the quiet title law to acquire more than 40 properties in the Marshalltown area. She did not respond to a request for comment but as the radio station points out, she followed a law with very few parameters.

As for how often this happens overall, it's difficult to track because there's no code in the Iowa court system for "quiet title" transfers. In addition to Iowa, other states that have weak quiet title laws include Missouri, Nebraska, and Kansas.

Legal experts are worried about this happening to other homeowners. Kansas City real estate attorney Mike White says he's seen many quiet title cases during his 50 years in the business. He says: "I'd say the average person knows absolutely nothing about quiet titles." And he says that quiet title laws throughout the Midwest don't do much to protect non-English speakers.

Title insurance can protect homeowners from a dispute like this. While lenders require it, title insurance is optional for homeowners without a mortgage. (2)

If you'd like to read more about this topic, you'll find links in the show notes at newsforinvestors.com.

You can visit our Learning Center while you are there and join our network for access to our Investor Portal. It's free to join. Members can look at sample property pro-formas, and connect with our experienced investment counselors. The portal also offers access to property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.

Thanks for listening, and please remember to hit the subscribe button, and leave a review!

Links:

1 - https://www.iowapublicradio.org/ipr-news/2022-02-08/this-family-almost-lost-their-home-over-iowas-little-known-quiet-title-law

2 - https://magazine.realtor/daily-news/2022/02/15/quiet-title-law-used-to-dupe-people-out-of-homes

The Real Estate News Brief: Inflation, Home Prices, Foreclosures Feb 16, 2022

Show notes

In this Real Estate News Brief for the week ending February 12th, 2022… the latest reading on inflation, home price growth, and foreclosures.

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 latest inflation report shows that consumer prices notched up another .6% in January. That brings the annual rate of inflation to 7.5%, which is the highest inflation we've seen in 40 years. Much of the increase is due to the high cost of food, energy and housing costs, which include rents. According to MarketWatch, Wall Street analysts only expected a .4% gain in January. (1)

If you strip out food and energy for a core rate of inflation, it's at 6%. That's still twice the rate the Federal Reserve would like to see. Shawn Huss at Warsaw Federal calls inflation an "economic killer." He wrote in an emailed newsletter: "It is a tax that does not get collected and if people believe prices will be higher in the future, inflation could become entrenched."

Huss also has some good news. He says that: "Inflation expectations for the future remain relatively low. The 10-Year Treasury breakeven rate, or what the bond market expects inflation to run on average over the next 10 years, is a relatively low 2.42%."

Jobless claims were down for a third week in a row. The Labor Department says there were 16,000 fewer initial state claims than the week before for a total of 223,000 applications. That's the lowest number we've seen since December. But the number of people already getting unemployment benefits stayed the same at about 1.62 million. Economists expect that fewer and fewer people will be collecting jobless benefits as the omicron wave diminishes. (2)

Mortgage Rates

Mortgage rates are now at the highest level since the pandemic began. Freddie Mac says the average 30-year fixed-rate mortgage was 14 basis points higher last week, for a rate of 3.69%. The 15-year was up 16 points to an average of 2.93%. (3) Freddie expects the trend to continue because of the strong job market and the high rate of inflation, and says that that will probably take a bite out of homebuyer demand.

In other news making headlines...

Home Prices Higher in Q4

Homebuyers are facing higher home prices as well, although home price growth is expected to slow down with higher mortgage rates. The National Association of Realtors says the median sales price of a home was 15% higher in the fourth quarter of last year, compared to the year before. That includes both new and existing homes. That figure is down slightly from a 15.9% year-over-year increase in Q3. (4)

NAR tracked mortgage rates in 183 metros and says that two-thirds of them posted double-digit appreciation. That's making it tough on homebuyers. The report says that the typical monthly mortgage payment is about $1,240 which is about $200 higher than it was a year ago.

NAR'S chief economist Lawrence Yun, says that many homebuyers are getting forced out of the market because of high home prices, but he also says that: "Home prices should begin to normalize later in 2022 as more homes come on the market."

More Foreclosure Activity

Foreclosure activity is currently at its highest level since the start of the pandemic. ATTOM Data Solutions says it jumped 29% higher from December to January. That activity includes default notices, scheduled auctions, and bank repossessions. Year-over-year, they are up 139%. (5)

RealtyTrac's Rick Sharga expects to see more increases throughout the year, but he also says: "It's likely that foreclosure activity will remain below historically normal levels until the end of 2022." Back in 2019, foreclosure activity was about 60% higher.

Sharga wasn't surprised by the January increase because foreclosures often slow down during the holidays and then surge a bit at the beginning of the year. He says: "This year, the increases were probably a little more dramatic than usual since foreclosure restrictions placed on mortgage services by the CFPB expired at the end of December."

Metros with the highest foreclosure activity include: Detroit; Atlantic City, New Jersey; Cleveland; Columbia, South Carolina; and Trenton, New Jersey.

That's it for today. Check the show notes for links. And please remember to hit the subscribe button, and leave a review!

To learn more about real estate investing, become a RealWealth member for free at newsforinvestors.com. You will 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.marketwatch.com/story/coming-up-consumer-price-index-11644498273?mod=mw_latestnews

2 -https://www.marketwatch.com/story/u-s-jobless-claims-fall-for-third-straight-week-11644500332?mod=economic-report

3 -http://www.freddiemac.com/pmms/

4 -https://magazine.realtor/daily-news/2022/02/10/home-price-surge-continued-in-fourth-quarter

5 -https://magazine.realtor/daily-news/2022/02/10/foreclosure-activity-highest-since-pandemic-began

Metaverse Real Estate Sales Are Soaring! Feb 12, 2022

Show notes

There's a real estate boom going on in the metaverse! They hit $500 million dollars last year, and are expected to double this year, to one billion. The uptrend took off recently when Facebook announced plans to expand into the metaverse and changed its corporate name to Meta Platforms. CNBC reports that virtual real estate sales have gone up ninefold since Facebook's announcement in October. (1)

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.

According to metaverse data provider, MetaMetric Solutions, investors spent a total of $83 million in January sales alone. Analysts based their 2022 projections on that amount of spending throughout the year. But some analysts are anticipating more growth. Analytics firm BrandEssence Market Research expects the virtual real estate market to grow at a compound annual rate of 31% a year through 2028.

What is the Metaverse?

But what exactly is the metaverse? And why are investors buying real estate that has no corresponding plot of land on this earth? Facebook explains it like this:

"The "metaverse" is a set of virtual spaces where you can create and explore with other people who aren't in the same physical space as you. You'll be able to hang out with friends, work, play, learn, shop, create and more. It's not necessarily about spending more time online – it's about making the time you do spend online more meaningful." (2)

Andrew Kiguel of the Toronto-based Tokens.com told CNBC: "You can go to the carnival, you can go to a music concert, you can go to a museum." This activity is carried out with a cartoon-like character called an avatar that represents you in your virtual world. (3)

Many celebrities have already ventured into the metaverse with their avatars, including Justin Bieber, Ariana Grande, DJ Marshmello, and Paris Hilton. She threw a New Year's Eve party on her own virtual island.

Real Dollars for Unreal Properties

To capitalize on this idea of social interaction in the metaverse, investors are paying real dollars for unreall properties in prime locations that could, some day, be worth tons of money. Maybe. Prices are going up fast right now. Kiegel says that many properties are up 4 to 500% in just the last few months.

Popular Metaverse Platforms

There are many metaverse platforms, and new ones are launching every day, but there are just four that are attracting most of the land sales right now. The "Big Four" are Sandbox, Decentraland, Cryptovoxels, and Somnium.

The Sandbox is the biggest metaverse real estate platform. It has more than 166,000 parcels of land that measure 106 yards by 106 yards each. In December, they each sold for an ether equivalent of $12,700. An ether is the token used for Ethereum transactions, much like a bitcoin.

Investors can use cryptocurrency to buy, develop, and sell parcels of land. Like the real world of real estate, their value can rise as they are upgraded and turned into more desirable properties.

Metaverse real estate investor and advisory firm, Republic Realm, is creating 100 so-called "Fantasy Islands" with dream-like villas and amenities that include boats and jet skis. The company sold 90 of the properties for $15,000 apiece on the first day of sales, and some of the buyers are relisting them for more than $100,000.

Republic Realm recently paid a record $4.3 million for land in the Sandbox. According to the Wall Street Journal, the company now owns more than 2,500 plots of virtual land in 19 different meta-worlds. It bought the $4.3 million dollar property from Atari SA.

Two Ways to Buy Virtual Land

There are two ways to buy virtual land – directly from the platform or from a developer. Investors can also make changes, although it's not as easy as picking up a paint brush, because you have to change the code.

Tokens.com set the previous record when it bought digital land for $2.43 million in the "fashion district" part of Decentraland. The metaverse real estate market is becoming a high-stakes investment play, although it's also highly speculative.

Republic Realm's CEO Janine Yorio says it's a very risky business and you should only invest what you can afford to lose. She says: "It's highly speculative. It's also blockchain-based. And as we all know, crypto is highly volatile. But it can also be massively rewarding."

Choosing Your Property

As for how to choose your property, she doesn't believe that location matters. She believes that values will increase depending on what people do with the land. That's apparently because getting from one place to another is as simple as "teleporting."

But other investors follow the real world real estate rule on location. One example is a $450,000 purchase of a property in the Sandbox so the buyer could be Snoop Dog's neighbor, according to Seeking Alpha. (4)

There are some who feel that metaverse land sales are a crypto ponzi scheme. Investors buy land at increasingly higher prices, but there's no underlying value because there's no limit to the amount of virtual land you can create. Metaverse skeptics say the last man out might end up with a worthless piece of virtual space.

Whatever "might" happen to the value of real estate in the metaverse, it's going through a boom phase right now. And some of the biggest tech names are positioning themselves to be part of the metaverse future.

Facebook is only one of those names. Seeking Alpha lists a few of those relationships. Disney is working on the creation of virtual theme parks. Microsoft plans to incorporate virtual reality into its Teams platform. Many game companies are expanding rapidly into the virtual reality space. As I mentioned previously, several celebrities have already held big events in the metaverse. And now, some very brave real estate investors are snapping up these imaginary properties.

If you'd like to read more about this, you'll find links in the show notes for this episode at newsforinvestors.com.

You can also join RealWealth for free while you are there. As a member, you have access to the Investor Portal where you can view sample REAL WORLD properties and their pro-formas. You can also connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.

Thanks for listening, and please remember to hit the subscribe button, and leave a review!I'm Kathy Fettke.

Links:

1 -https://www.cnbc.com/2022/02/01/metaverse-real-estate-sales-top-500-million-metametric-solutions-says.html

2 -https://about.fb.com/news/2021/09/building-the-metaverse-responsibly/

3 -https://www.cnbc.com/2022/01/12/investors-are-paying-millions-for-virtual-land-in-the-metaverse.html

4 -https://seekingalpha.com/article/4479857-who-wants-to-become-a-digital-landlord

The Real Estate News Brief: Single-Family Construction, Rising Mortgage Rates, Tampa Bay Real Estate NFT Feb 09, 2022

Show notes

In this Real Estate News Brief for the week ending February 5th, 2022... the growth of construction spending for single-family homes, worries over rising mortgage rates, and the futuristic auction of a Tampa Bay 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.

Economic News

We begin with economic news from this past week, and good news about the job market. The government says that U.S. companies added 467,000 jobs in January. That's after the creation of 510,000 jobs in December. Wall Street economists has only predicted 150,000 new jobs for January and 200,000 for December. (1)

There's no lack of jobs, but many people have missed work recently because of the omicron surge. As MarketWatch reports, a record 7.8 million people called in sick last month. That helped drive the unemployment rate higher from 3.9% to 4%. But the omicron wave is receding in many parts of the country, and the number of unemployment applications was down for a second week in a row. There were just 23,000 people applying for benefits last week. (2)

The homeownership rate moved slightly higher in the fourth quarter of last year. Realtor.com reports a total of 83.5 million owner-occupied households for a homeownership rate of 65.5%. That's .3% higher than the third quarter. If you break that down by age group, people who are 65 or older have the highest homeownership rate at 79.4%. The lowest homeownership rate is 38.3% for people younger than 35. Back in 2004, the homeownership rate hit a high of 69.2%. (3)

2021 was a big year for private residential construction spending. Money spent to build single-family homes was up 33% compared to 2020. It was up about half that much for multi-family. The two categories that saw the least amount of spending growth were public safety and office space. Spending for those categories was down 33 and 32% respectively. (4)

Mortgage Rates

Mortgage rates are holding steady at around 3.55% for a thirty-year fixed-rate mortgage. Freddie Mac says the average for the 15-year was down 3 basis points this last week to 2.77%. The mortgage guarantor says the economic impact of the omicron surge is keeping mortgage rates from rising higher, but it also expects them to start creeping higher again this spring and summer. (5)

In other news making headlines...

Keeping Rates Low with Rate Locks

Home buyers are keeping a close watch on mortgage rates, and some are taking advantage of "rate locks." It costs extra to buy a rate lock, but Realtor.com says it can prevent a big surprise when it's time to buy. The most common rate lock is for 30 days, but buyers can get them for various amounts of time, from 15 days to 45 days or longer. (6)

Buyers can also lower their mortgage rates by paying discount points. One point costs 1% of the loan amount, and could reduce your mortgage rate by about .25%. It's not time to panic however. Interest rates are still at historic lows. The National Association of Realtors doesn't expect them to rise that quickly. It is predicting they'll average just 3.9% by the end of this year.

Young Adults Continue to Live with Parents

Many potential homebuyers are young adults who continue to live with their parents as the pandemic shakes out. NAR says that 17.8% of adults ages 25 to 34 moved back in with mom and dad in 2020. That's the highest level since 1960. In 2021, that percentage remained high at 17%. (7)

But the trend has evolved from the initial impact of the pandemic, to other related trends. NAR'S Jessie Lautz writes: "Some young adults may have recently moved back home due to the flexibility of remote work trends and to avoid paying high rents." She says it could also be due to job losses, or getting an education, but she says: "Regardless of the reason, living with family may provide a benefit to potential first-time home buyers."

If children are living at home rent-free, it makes it easier for them to save up for a down payment.

Tampa Home Hit Auction Block as NFT

A Tampa Bay home is going on the auction block as the first home to be sold as an NFT. That stands for Non-Fungible Token which is a unique digital image that's linked to a blockchain as proof of ownership. The home was turned into an NFT by first putting the home into an LLC, and then transforming the home's certificate of authenticity into an NFT. (8)

What are the benefits of buying or selling a home as an NFT? It reportedly expedites the sale process, and according to some experts, is the future of real estate. As one person described the process to the Tampa Bay Times: "You're essentially selling a company and a company owns that house." You can read more about that and our other stories by clicking on a link in the show notes at newsforinvestors.com.

Thanks for listening, and please remember to hit the subscribe button, and leave a review!I'm Kathy Fettke.

Links:

1 -https://www.marketwatch.com/story/coming-up-u-s-jobs-report-for-january-11643980058?mod=mw_latestnews

2 -https://www.marketwatch.com/story/u-s-jobless-claims-drop-23-000-to-238-000-as-omicron-wave-recedes-11643895188?mod=economy-politics

3 -https://www.realtor.com/research/homeownership-february-2022/

4 -https://www.mortgagenewsdaily.com/news/02022022-construction-spending

5 -http://www.freddiemac.com/pmms/

6 -https://magazine.realtor/daily-news/2022/02/02/buyers-rush-to-lock-in-rates

7 -https://magazine.realtor/daily-news/2022/01/28/young-adults-move-back-home-in-record-numbers

8 -https://www.washingtonexaminer.com/news/florida-tampa-bay-nft-home-real-estate

Real Estate Upgrade with Digital Twin Technology Feb 05, 2022

Show notes

Las Vegas has unveiled a digital twin of its downtown area to help city planners deal with future growth and other issues, like climate change. It's a virtual modeling system by a Chicago-based company called Cityzenith. It says that Las Vegas has completed an initial set up phase, and is now headed into phase two.

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.

Cityzenith says its SmartWorld Digital Twin technology will help Las Vegas analyze issues involving mobility, air quality, noise pollution, water use, and carbon emissions coming from large downtown buildings. City planners will be able to analyze those emissions as they call for changes to reduce greenhouse gases to a net zero level. (1)

Las Vegas Begins Phase Two

Cityzenith CEO, Michael Jansen, says of the Las Vegas project: "The base twin is now complete, and in the second quarter of this year, stakeholders from Las Vegas will be invited to join phase 2 of the Digital Twin project." Stakeholders include real estate owners, government agencies, university researchers, data partners, architects, and casino operators.

Jansen says that just 1.7% of American office buildings are "green." But he says that building owners won't have to shell out a lot of money for upgrades because Cityzenith has partners that will provide risk-free, no money down financing for retrofits. He says the digital twin platform combined with "creative financing" will make it easier for property owners to transition their buildings.

Clean Cities, Clean Future

This is just a first step for Cityzenith. It says on its website that the Las Vegas project is part of a much larger "Clean Cities, Clean Future" initiative. The company hopes to implement the digital twin platform in major cities throughout the world. Other cities adopting this technology include Los Angeles and Phoenix, but Cityzenith says that more than a dozen other cities and property owners are lined up to do the same.

Cityzenith isn't the only one providing this technology. Ernst and Young issued a report last year called "Digital Twin: The Age of Aquarius in Construction and Real Estate." It predicts that the use of digital twins will become an important part of the real estate industry. (2)

The report lists four ways that digital twins provide significant value:

1 - The first is to help with building maintenance and operations. It says the technology can increase efficiency by as much as 35% by determining wasteful expenses and hidden cost savings.

2 - The second is a substantial improvement to a building's environmental footprint. The report says the technology can identify how buildings impact the environment and help reduce emissions by as much as 50%.

3 - The third value proposition is a 20% increase in health and wellness. That would happen by improving unhealthy indoor environments that can lead to illness and lower productivity.

4 - And fourth - improvements to the way people use indoor space and interact within a building. The report estimates a 15% increase in space utilization, thanks to digital twin modeling.

Built Environment with Real-Time Data

The technology combines spatial data from the built environment with real-time data that is collected with sensors, and the internet of things. That also allows researchers to run "what if" scenarios, and predict what actions may be needed to address any future issues or events.

The CEO of data company, Terbine, that works with Cityzenith, talked about the virtues of this technology in a Construction Dive blog. (3) David Knight says: "Transitioning our home city into a clean, sustainable, and more attractive place to live and visit is a fantastic opportunity." He says: "What we're building here represents a model for how other cities can enable sustainability and a better quality of life for their citizens."

If you'd like to know more about this topic, check for links in the show notes at newsforinvestors.com. You can also find out more about real estate investing at our website. It's free to join, and free to access hundreds of webinars and articles on real estate investing. You'll also have access to the Investor Portal where you can view sample property pro-formas for new and existing rental homes, and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.

Please remember to hit the subscribe button, and leave a review!

Thanks for listening. I'm Kathy Fettke.

Links:

1 -https://cityzenith.com/press

2 -https://www.ecmag.com/sites/default/files/Digital%20twin%20-%20the%20Age%20of%20Aquarius%20in%20construction%20and%20real%20estate.pdf

3 -https://www.constructiondive.com/news/las-vegas-unveils-digital-twin-of-downtown/617127/

Work from Anywhere & Make Airbnb Your Home Feb 05, 2022

Show notes

Airbnb is becoming more of a nomadic lifestyle hub than a vacation planning website. With the rise of remote work, many people are booking longer stays on Airbnb and taking their work with them, including Airbnb CEO, Brian Chesky. He recently announced that he'll be living on Airbnbs, and staying at a new place every few weeks. (1)

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.

The pandemic has unleashed a big revolution in the way people live and work. While some people are looking for bigger single-family homes with yards, others are ditching the stay-at-home life altogether and becoming digital nomads. Airbnb caters to this lifestyle perfectly, with accommodations that can be as flexible as the remote worker schedule.

Longer Airbnb Stays

The Airbnb website shows how people are using short-term rentals as a way to travel while they work. In a news release about Chesky's plan to live on Airbnbs, it says almost 50% of the reservations in the third quarter of last year was for seven or more days. That's up from 44% in 2019. And, it says that one out of every five of the people who booked during Q3, booked for 28 days or longer.

Airbnb said in the news release: "As the world undergoes a revolution in how we live and work, more people are blending life with travel." And that's exactly what Airbnb is researching with a campaign called: "Live Anywhere on Airbnb."

"Live Anywhere on Airbnb"

The campaign involves the selection of 12 individuals and families from nine countries around the world, who get to stay at Airbnbs for free for 10 months as part of an Airbnb research project. The only thing they have to do in exchange is to share their experiences with Airbnb.

That campaign was underway in the middle of last year, and there are profiles of all the people participating in the project on the Airbnb website. Now Chesky will be also be contributing his feedback on the Live Anywhere trend as a nomadic remote worker, running his company from various Airbnb locations.

Airbnb Trends

The company is predicting that as the remote trend matures, more and more people will use Airbnbs to live, travel, and work at the same time. The company is also predicting that we'll see that people may venture farther away from home, and work for longer periods of time in other countries. Many may even give up their permanent address so they can live abroad unencumbered for however long the adventure lasts. Airbnb cited some data that shows international travel was already surging before the pandemic – from 25 million in 1950 to 1.4 billion in 2019.

One trend that Airbnb has been seeing during the pandemic is an increase in bookings for rural areas. It says those bookings were up 85% in the third quarter of last year, compared with the third quarter of 2019. The length of time people are spending in Airbnbs has also increased dramatically. Airbnb says it grew 75% from the summer of 2019 to the summer of 2021. And those who are leading the fully nomadic lifestyle, the percentage has grown from 9% to 12% in one year from 2020 to 2021.

Digital Nomad Visas

Several countries are offering digital nomad visas. If you're interested in doing something like that, check out Spain, Portugal, Costa Rica, Brazil, Malta, and Indonesia, among others. (2) You'll find links for more information about the Airbnb lifestyle at newsforinvestors.com.

Check the links at newsforinvestors.com, for more information on this topic. You can also find out more about real estate investing at our website. It's free to join, and free to access hundreds of webinars and articles on real estate investing. You'll also have access to the Investor Portal where you can view sample property pro-formas for new and existing rental homes, and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.

Please remember to hit the subscribe button, and leave a review!

Thanks for listening. I'm Kathy Fettke.

Show Notes link: https://www.newsforinvestors.com

Links:

1 -https://news.airbnb.com/brian-chesky-to-live-on-airbnb-as-the-travel-revolution-becomes-reality/

2 -https://www.investopedia.com/countries-offering-digital-nomad-visas-5190861