Month: January 2021

BLACK KNIGHT’S FIRST LOOK AT DECEMBER 2020 MORTGAGE DATA

2020 Ends With 1.7 Million More Seriously Delinquent Homeowners Than at Start of Year; Foreclosures at Record Low

  • The year ended with 1.54 million more delinquent and 1.7 million more seriously delinquent mortgages than at the start of 2020, a looming reminder of the challenges facing the market in 2021
  • Despite the year-over-year increase, the national delinquency rate saw modest improvement in December, falling by 3.9% from November to 6.08%, the lowest level since April 2020
  • Serious delinquencies (loans 90 or more days past due) also improved, falling to 2.15 million from 2.19 million the month prior
  • Even after months of improvement, 90-day default activity rose by more than 250% (+2.6 million) overall in 2020
  • Foreclosure starts fell by 67% from the year prior and the year’s 40,000 foreclosure sales (completions) represented an annual decline of more than 70%
  • Starts and sales have hit record lows as moratoriums and forbearance plans protect distressed homeowners from facing foreclosure in the wake of the pandemic
  • Prepayment activity rose by 12% in December, ending the year 112% higher than the same month in 2019 and highlighting a still-strong refinance market entering 2021

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    Nearly 20% of renters in America are behind on their payments

    The typical delinquent renter now owes $5,600, being nearly four months behind on their monthly payment, according to a new analysis. This also includes utilities and late fees.

    About 18% renters in America, or around 10 million people, were behind in their rent payments as of the beginning of the month.

    It is far more than the approximately 7 million homeowners who lost their properties to foreclosure during the subprime mortgage crisis and the ensuing Great Recession. And that happened over a five-year period.

    In one of his first executive orders, President Joe Biden extended the Centers for Disease Control and Prevention’s current eviction moratorium through the end of March, but that is unlikely to be long enough.

    A new analysis from Mark Zandi, chief economist at Moody’s Analytics, and Jim Parrott, a fellow at the Urban Institute, shows the typical delinquent renter now owes $5,600, being nearly four months behind on their monthly payment. This also includes utilities and late fees. In total, an astounding $57.3 billion is owed. This includes all delinquent renters, not just those suffering financially due to the Covid pandemic.

    “Compared to renters that are making their rent payments on time, currently delinquent renters are more likely to be lower income, less educated, black and with children,” noted the authors of the analysis.

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      What an Uncertain Commercial Real Estate Outlook in 2021 Means for Financing

      By Steven Caligor, BHI

      In these early days of 2021, there appears to be some cautious prospects of hope.

      A COVID-19 resurgence both internationally and domestically, further lockdowns, and even a new variant of the virus create uncertainty. However, the vaccine rollout has sparked market rallies, along with hopes of returning to a degree of normalcy toward the end of the year. We now have a stimulus package and a new presidential administration. Yet this scenario is tempered by a focus on the predicted winter COVID activity, thus creating further question marks.

      Even the economic forecasts present a mixed picture. The base case from the Conference Board calls for a 3.4 percent annual expansion of the U.S. economy in 2021. Yet the Congressional Budget Office (CBO) projects that GDP will increase 4.2 percent in 2021, and the CBRE Real Estate Market Outlook forecasts 4.5 percent GDP growth this year.

      The ambiguity of where we are in the COVID crisis — whether there is an end in sight and when — will determine prospects for the real estate sector. In 2021, the real estate story will be all about asset class, density and geography. For each of these aspects, to paraphrase Charles Dickens, it could be the best of times or the worst of times, depending on multiple variables.

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        Surprise! This chart shows holiday shoppers did rush to malls in final weeks of 2020

        Traffic to the malls tracked by Placer.ai in 2020 peaked in February, climbing 10.7% from 2019 levels.

        Procrastinating shoppers found they couldn’t avoid the mall during the holidays.

        A data analysis released this week by Placer.ai shows how shopper visits to malls have ebbed and flowed amid the Covid pandemic. The research firm, which uses cellphone data to track consumer behavior, studied foot traffic at more than two dozen “top-tier” malls across the country over the span of the year.

        Visits to the malls tracked, which Placer.ai declined to name, peaked before the pandemic, in February, climbing 10.7% from 2019 levels. In March — when retail stores and malls began to shut down to try to slow the spread of Covid — visits tumbled 59.5%. That was followed by a 95.9% year-over-year decline, marking a bottom, in April.

        During the summer months, as Americans felt a bit more comfortable getting out of the house, visits to these malls steadily rebounded, month by month into the fall. But a resurgence in Covid cases hit traffic in November and led some to believe that U.S. malls would be especially bleak in the final weeks of the year.

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          6 Ways To Get More Rental Applications Now

          By Justin Becker

          How do you get more rental applications? This is the cornerstone question for any property manager. Quite simply, to draw in new business and ensure you have the tenants that are right for you, you need to have good strategies to increase the number of rental applications you take in. However, the ways that we garner new tenants are constantly evolving.

          Property managers must consider that what has worked in the past now has to be shifted for the future. What are the new solutions to get more rental applications by increasing innovation and strategy?

          Here are six ways you get can get more rental applications:

          No. 1: Lower the Price of Rental Applications

          The rental-screening process is imperative to ensure that the right people move into our apartments and rental houses.

          By looking at the prospective tenant’s household information, income, and longevity of employment, as well as general background information, we can vet an applicant before they even set foot on our property. For this reason, rental applications are paid for by the renter to recover the cost incurred and so that potential tenants are well-informed of the requirements of renting the property.

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            Commercial and Multifamily Mortgage Delinquencies Rise in December

            CONTACT
            Adam DeSanctis
            [email protected]
            (202) 557-2727

            WASHINGTON, D.C. (January 8, 2021) – Delinquency rates for mortgages backed by commercial and multifamily properties Increased for the second month in a row in December, according to the Mortgage Bankers Association’s (MBA) latest monthly MBA CREF Loan Performance Survey. The survey was developed to better understand the ways the pandemic is impacting commercial mortgage loan performance.

            “The increase in commercial and multifamily mortgage delinquencies in December is a symptom of the economic slowdown stemming from the recent surge in COVID-19 cases,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Delinquencies initially jumped in April and May, driven by the impact the pandemic had on lodging and retail properties. For several months, delinquency rates declined as the economy stabilized. But more recently, the added stress from a winter wave of the virus has weakened the economy and challenged some owners, as property income has been disrupted. The roll-out of multiple COVID-19 vaccines is good news for the long-term, but last month’s rise in commercial mortgage delinquencies reinforces that many challenges remain between now and when the economy can fully reopen.”

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              Why Multifamily Is a Strong Bet in 2021

              As we look ahead in 2021, there are positive signs that the economy may be on track for a recovery. Approvals of COVID-19 vaccines have presented a light at the end of the tunnel for what has been a long and highly disruptive time for our industry.

              In the last year, virtually every asset class in commercial real estate has been impacted in one way or another. Retail and hospitality have borne the brunt of the economic fallout, as social distancing and local lockdown measures have impacted the ability of people to shop and travel. Conversely, the continued shift to online shopping and the need for more people to work remotely have created additional demand for industrial and data center assets. While the multifamily sector may not have been propped up by the pandemic, it has maintained strong performance throughout this period of uncertainty.

              Historically, during economic recessions, the multifamily sector has been resilient and has recovered more quickly than other real estate asset classes. Based on the NCREIF Property Index returns, multifamily assets lost 27.6 percent in value during the Global Financial Crisis, but it took only 13 quarters for the sector to regain its pre-recession peak — faster than all other property types. A Pension Real Estate Association survey in the fourth quarter expected the multifamily sector to be the second strongest after industrial in the next few years, with projected total return growth of 5.8 percent annually between now and 2024.

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                5 Signs An Applicant Will Be a Good Tenant For Your Rental Property

                We all strive to find a good tenant, so here are five signs that an applicant will be a good tenant for your rental property from Keepe, the on-demand maintenance and repair company.

                When you’re receiving lots of applications for tenant positions at your rental properties, sometimes it can be difficult and overwhelming trying to sift through everything.

                After all, with so many applications in front of you, where do you begin? How do you know which applicants will make good tenants?

                There are a few telling signs as to whether or not your applicants will be good tenants. You just have to know what to look for to easily identify the good from the bad and put your mind at ease.

                No. 1: They Fill Out the Application Properly

                A sign of a good potential tenant is that they properly fill out the application.

                That may sound overly simple, but this means that they include the appropriate documents that are asked for and fill out everything correctly.

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                  The Benefits of Being Pet-Friendly For Rental Property Owners

                  Rental property owners are now integrating pet-friendly amenities in their apartments to allow renters to keep their favorite animal companions.

                  By Justin Becker

                  The dog is humankind’s best friend, and this explains why it is the most domesticated pet. According to statistics in the United States, 63.4 million households own a dog, followed by 43 million households that own a cat. Today, pets are an integral part of most families. Even rental property owners are now integrating pet-friendly amenities in their apartments to allow renters to keep their favorite animal companions.

                  So, what’s the benefit of your apartments being pet-friendly?

                  Being Pet-Friendly Means Higher Rent

                  Just as in the law of demand, fewer housing facilities means higher rent for the few available. Of course, it will cost you more to set up the necessary facilities to make your apartment pet-friendly, but you can compensate for this with a slightly higher rent.

                  Rental property owners can also set non-refundable pet fees, and because renters want to keep their family together, they will willingly pay the amount. They can again ask for a damage deposit to ensure the property is covered in case of damages, or demand compensation for pet damages.

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                    Home prices are rising faster in the middle of the U.S. as Covid drives people away from coasts

                    Smaller metropolitan markets like Indianapolis, Kansas City, Boise, Austin, Cleveland, Cincinnati, Memphis and Pittsburgh are seeing some of the strongest price gains in the nation.

                    Home prices are rising across the nation, but the Covid pandemic is turning the usual geographical trends on their heads.

                    Home values have historically risen most sharply in large cities on the coasts, where supply is leaner and demand is stronger. That is no longer the case.

                    Smaller metropolitan markets like Pittsburgh, Cleveland, Cincinnati, Indianapolis, Kansas City, Boise, Idaho, Austin, Texas, and Memphis. Tennessee are seeing some of the strongest price gains in the nation now, according to the Federal Housing Finance Agency. Prices in those cities are now at least 10% higher than with a year earlier.

                    These have all been historically more affordable markets, and markets that generally have more inventory of homes available for sale. That makes the suddenly strong price growth in the middle of the country that much more striking.

                    Much of it is likely to do with the new ability to work from anywhere due to the coronavirus. People are leaving larger more expensive metropolitan markets and heading to less expensive markets where they can get more space and land for their money.

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