Low #Mortgage Rate Party Over? & Reforming @FannieMae, @FreddieMac

Posted on February 15, 2017 in GSE, Housing | Add Your Voice
New_Collingwood_Banner-3.png

THE COLLINGWOOD GROUP NEWS BRIEFING

Everything YOU need to know to stay ahead of your competitors
February 15, 2017

Low Mortgage Rate Party Over? & Reforming Fannie and Freddie

Federal Reserve Chair Janet Yellen signaled a rise in interest rates ahead at the Fed’s March meeting as she spoke to the Senate Banking Committee, her testimony continues today before a House Committee.

If job gains and rising inflation continue to progress as the Fed expects, an increase in the benchmark federal funds rate would likely be appropriate “at our upcoming meetings,” Yellen said in prepared remarks.

While mortgage rates don’t always follow Fed rates higher – there’s a good probability mortgages will cost more.

Last week Freddie Mac reported the rate on 30-year fixed-rate loans slipped to an average 4.17 percent from 4.19 percent the previous week.

Asked about reforming Freddie Mac and Fannie Mae Yellen said, “It’s very important Congress continues to deal with the GSE’s and bring private equity back into the mortgage market.”

Sacramento, Las Vegas Top Ten-X Apartment Market Outlook

Sacramento and Las Vegas are tops for multifamily real estate assets according to Ten-X.  While the latest Ten-X survey long-term forecast reveals the apartment sector remains strong after years of booming growth, it may now be primed for a slowdown after far surpassing its prior cyclical peak.

The forecast indicates in addition to Sacramento and Las Vegas, Atlanta, Phoenix and Dallas fill out the top 5 markets in which investors should consider buying multifamily assets. These regions are being fueled by robust local economies, with a steady influx of new jobs attracting residents still eager to forgo home ownership for the opportunity to rent in a large metropolis.

San Francisco, New York City, San Jose, Calif., Miami and Milwaukee are the top markets where Ten-X Research estimates market conditions might cause multifamily investors to consider selling their properties. These cities have generally been at the forefront of the massive shift toward urban centers over the last decade, and are now coping with rising vacancies and flattening rents as new supply continues flooding the market.

Ten-X also notes that home ownership, which has been declining sharply for years, has begun to show signs of stabilization. While demand for apartments should remain largely unaffected, absorption rates could slow should the trend begin to gain steam. Overall economic indicators, including steady employment growth and rising wages, may provide a boost to the market by pushing millennials saddled with student debt out of their parents’ homes and into the rental market.

California’s Housing Crisis

California’s affordable housing crisis has reached an epidemic level, with rents at an all-time high and home ownership rates at their lowest since the 1940’s. Still, despite the housing crunch, California has some of the country’s toughest laws requiring affordable housing. But as the NBC Bay Area Investigative Unit uncovered, those rules are rarely enforced, leaving millions of people looking for alternative ways to live.

Serial entrepreneur Cat Volz is among the Bay Area workers feeling the housing burden. Volz gave the Investigative Unit a tour of the 10′ by 10′ office space that she calls home.

“It was like the nicest space for the cheapest, so I got it,” Volz told NBC Bay Area. For the past year and a half, Volz has lived in the tiny office in the heart of Silicon Valley, paying $300 per month for rent. Volz says she know’s it isn’t legal, but it’s all she can afford.

“I don’t use a blanket or pillow or anything because it’s like contraband,” Volz said pointing to the thinly carpeted office floor where she sleeps. “It’s safe and it’s mine.”

A Saratoga native, Volz graduated at the top of her class from Regis University in Denver in 2012. She returned to the Bay Area and used her education to form a startup a business making perfume, as well as doing web design, marketing, and digital media. However, Volz says she quickly found herself in a catch 22, too qualified to be hired for hourly wage jobs, but not making enough money to afford steady housing. Since then, she’s lived in offices, backyard sheds, and her Toyota Corolla.

Volz is one of millions who struggle to pay for housing in California. State data shows more than 1.5 million households pay more than 50% of their income towards rent.

read more: http://www.nbcbayarea.com/investigations/Bay-Area-Housing-Crisis-Illegal-Occupancy-413621063.html

Seattle Turns to Lottery for Low-Income Housing

Inexpensive housing is so scarce in Seattle that competing for an affordable apartment is like playing the lottery.

There are some winners, but the odds are bad and the experience can be depressing.

Nearly 2,100 households submitted applications last month to live in a new rental building for low-income families near the Othello light-rail station in South Seattle.

Because the building will have only 108 units, nonprofit developer Mercy Housing Northwest — in the interest of transparency — scheduled a lottery-like drawing and invited the applicants to watch.

That brought hundreds to the New Holly Gathering Hall on a dreary Monday morning.

Waiting for the drawing to begin, they cradled babies, sipped coffee from paper cups and checked their cellphones.

‘An anxious hush spread across the room. Then Bill Rumpf, the nonprofit’s president, picked up a microphone.

He described how the lottery would work. Names printed on slips of paper would be drawn from a box and assigned a number.

In the coming weeks, the applications would be processed and the building filled in that order. People not awarded an apartment would be placed on a wait list.

After the drawing, everyone would be mailed a postcard with their number, “So you don’t need to stay here for the whole session today,” Rumpf said. No one budged.

Wincing, Rumpf told the crowd, “We wish we could house you all.” Then he added, “Thank you, and good luck.”

read more: http://www.seattletimes.com/seattle-news/politics/at-seattle-low-income-housing-lottery-anxious-crowd-hopes-and-frets/

Murdoch’s News Corp. Rises Most in 18 Months on Real Estate Gain

News Corp., the Wall Street Journal publisher controlled by billionaire Rupert Murdoch, gained the most in 18 months in New York trading after digital real estate listings helped second-quarter profit beat analysts’ estimates. Earnings excluding some items fell to 19 cents a share in the quarter ended Dec. 31, according to a statement from the New York-based company. That topped the 18-cent average of analysts’ estimates. Sales of $2.12 billion matched the average projection of analysts compiled by Bloomberg. The results show that News Corp. is relying less on the declining print newspaper and more on new digital sources. … In 2014 News Corp. agreed to buy the owner of Realtor.com for $950 million, expanding its digital real-estate listings to compete with sites such as Zillow.com.

read more: https://www.bloomberg.com/news/articles/2017-02-09/news-corp-profit-beats-estimates-on-digital-real-estate-growth

Small Business, Big Confidence

A measure of small-business sentiment maintained its post-election surge as business owners remained optimistic about better economic prospects under the Trump administration.

The National Federation of Independent Business said its closely-watched survey ticked up 0.1 point in January, to a reading of 105.9. Economists had expected a decline to 104.5 after December’s 7.4-point surge, the biggest in the four-decade history of the survey.

“Small business owners like what they see so far from Washington,” NFIB said in a release. The industry group compared the recent jump in sentiment to a surge in 1983, which, as it noted, “was followed by years of economic prosperity.”

Some economists have pointed out the divergence between post-election measures of sentiment and hard data, most of which continues to suggest an economy that’s plodding along at the same tepid pace it’s held for most of the eight-year recovery.

read more: http://www.marketwatch.com/story/small-business-sentiment-keeps-up-post-election-groove-nfib-says-2017-02-14

First Big Real Estate IPO of the Year

BGC filed a confidential statement with the Securities and Exchange Commission and will offer Class A common stock in a new subsidiary holding its real estate services business. BGC posted record earnings last year — $108M — and in this week’s earnings call, chairman and CEO Howard Lutnick attributed that in part to the highest revenues ever generated from NGKF’s real estate capital markets business.  According to an official statement from BGC, the IPO is part of the firm’s plan to separate its real estate services business into a separate public company. The number of shares to be offered and the price range have not been determined. After the offering, “BGC may, subject to market and other conditions, distribute the shares that BGC will hold of the newly formed subsidiary pro rata to BGC’s stockholders in a manner intended to qualify as tax-free for U.S. federal income tax purposes.”  Stifel, Nicolaus & Co.’s John Guinee — a noted REIT analyst — said the biggest benefit of taking NGKF public is that it gives executives a liquid vehicle to compensate top performers and brokers with shares. A commercial real estate brokerage firm is only as good as its team members, or “elevator assets.”

read more: https://www.bisnow.com/national/news/commercial-real-estate/bgc-partners-is-taking-ngkf-public-70921?utm_source=CopyShare&utm_medium=Browser

This $6.9 Million Villa Comes With Its Own Private Island

Sometime in 2014, French-born, Dubai-based, real estate developer Blaise Carroz decided to buy his own island. “Since I was a kid, I dreamed of owning an island,” he said. “And it was the perfect spot for family vacations.”

The spot, Melody Key, is a small patch of land in the Florida Keys. Over his career, Carroz has been adept at developing high-end properties for the international wealthy, but the island he found needed almost no intervention. It was previously owned by Nick Hexum, lead singer of the band 311. In 2011, Hexum sold it to a British developer, who made extensive updates to the property before selling it to Carroz. By then, the only things it really needed were a few touches to the interior décor.

Sometime in 2014, French-born, Dubai-based, real estate developer Blaise Carroz decided to buy his own island. “Since I was a kid, I dreamed of owning an island,” he said. “And it was the perfect spot for family vacations.”

Still, Carroz has put the island on the market, offering it with Engel and Völkers for $6.9 million. “I now have five children, and it became a bit small for us,” he said. “When I purchased the island, it wasn’t from a professional point of view. Selling it for a profit wasn’t my aim at all.”

Will he buy a larger island to accommodate his family? “I’m not planning to purchase another island,” he said. “But I have a lot of other projects.”

read more: https://www.bloomberg.com/news/articles/2017-02-14/best-real-estate-in-melody-key-florida-is-a-private-island

>Still Ahead

Today

MBA’s National Mortgage Servicing Conference & Expo in Dallas (thru Friday)

National Association of Home Builders Housing Market Index, 10 a.m. ET

Thursday

Bloomberg Consumer Comfort Index, 9:45 a.m. ET

Friday

Fannie Mae’s Q4 Earnings Report

Collingwood_Capital_ad_3.jpg
Please TIP ME to any news your company is making for inclusion in future updates.

Have a prosperous day and a great week.


Add Your Voice