Category: Residential
Institutional Investors in SFRs Search for Yield by Tweaking Their Criteria
SFR investors are buying older homes, and looking at markets like Birmingham, Ala.
The single-family rental (SFR) industry appears to still be in growth mode.
“Institutional investors are still very actively buying homes in many markets around the country,” says Gary Beasley, CEO and co-founder of Roofstock, an online marketplace for selling and buying SFRs.
In addition to established SFR operators such as Invitation Homes and American Homes for Rent, the market has seen an entry of new firms, including Front Yard Residential and Cerberus, which are buying thousands of homes in spite of the fact that prices have risen sharply over the past four years.
“We are in the midst of a second wave of institutional buyers,” according to Jennifer von Pohlmann, a director with research firm ATTOM Data Solutions.
The average price of a single-family home has been going up since 2012. Since 2014, that rate of growth exceeded 5 percent a year. In the third quarter of 2018, home prices were up 6.6 percent compared to the year before.
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Suraj Shrestha is an associate at Harborside Partners. He has been taking the lead role on research projects; to develop and implement online marketing strategies for search engine optimization and social media marketing. He is one of the core parts for helping to grow business revenue and the company’s online presence.
U.S. Home Affordability Drops to More Than 10-Year Low in Q4 2018
But Affordability Improves From Previous Quarter in 58 Percent of Local Housing Markets; Wage Growth Outpacing Home Price Growth in 22 Percent of Markets, Including San Diego, Brooklyn, Seattle, San Jose and Manhattan.
IRVINE, Calif. – Dec. 20, 2018 — ATTOM Data Solutions, curator of the nation’s premier property database, today released its Q4 2018 U.S. Home Affordability Report, which shows that the U.S. median home price in the fourth quarter was at the least affordable level since Q3 2008 — a more than 10-year low.
The report calculates an affordability index based on percentage of income needed to buy a median-priced home relative to historic averages, with an index above 100 indicating median home prices are more affordable than the historic average, and an index below 100 indicating median home prices are less affordable than the historic average. (See full methodology below.)
Nationwide, the Q4 2018 home affordability index of 91 was down from an index of 94 in the previous quarter and an index of 106 in Q4 2017 to the lowest level since Q3 2008, when the index was 87.
Among 469 U.S. counties analyzed in the report, 357 (76 percent) posted a Q4 2018 affordability index below 100, meaning homes were less affordable than the long-term affordability averages for the county. That was down from a 10-year high of 78 percent of counties posting an affordability index below 100 in Q3 2018.
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Suraj Shrestha is an associate at Harborside Partners. He has been taking the lead role on research projects; to develop and implement online marketing strategies for search engine optimization and social media marketing. He is one of the core parts for helping to grow business revenue and the company’s online presence.
Residential Mortgage Originations Drop 21 Percent in Q3 2018
Dollar Volume of Refinance Originations Falls to 4.5-Year Low;
Purchase Originations Down 2 Percent, HELOC Originations Down 11 Percent;
Median Down Payment Percent Increases to Nearly 15-Year High
IRVINE, Calif. – Dec. 13, 2018 — ATTOM Data Solutions, curator of the nation’s premier property database, today released its Q3 2018 U.S. Residential Property Mortgage Origination Report, which shows that 681,455 refinance mortgages secured by residential property (1 to 4 units) were originated in the third quarter, down 15 percent from the previous quarter and down 21 percent from a year ago to the lowest level as far back as data is available — Q1 2000.
The refinance mortgages originated in Q3 2018 represented an estimated $175.1 billion in total dollar volume, down 14 percent from the previous quarter and down 21 percent from a year ago to the lowest level since Q1 2014 — a 4.5-year low.
“Rising mortgage rates continued to dampen demand for mortgages in the third quarter, particularly refinance mortgages,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “There were some notable exceptions to that trend, primarily in markets affected by the hurricanes in the third quarter of 2017.”
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Suraj Shrestha is an associate at Harborside Partners. He has been taking the lead role on research projects; to develop and implement online marketing strategies for search engine optimization and social media marketing. He is one of the core parts for helping to grow business revenue and the company’s online presence.
Nearly 1.5 Million Vacant U.S. Homes in Q3 2018 Represent 1.52 Percent of All Single Family Homes and Condos
IRVINE, Calif. – Oct. 30, 2018 — ATTOM Data Solutions, curator of the nation’s premier property database, today released its 2018 Vacant Property and Zombie Foreclosure Report, which shows that nearly 1.5 million (1,447,906) U.S. single family homes and condos were vacant at the end of Q3 2018, representing 1.52 percent of all homes nationwide — down from 1.58 percent in 2017.
The report also found that there were 10,291 vacant “zombie” foreclosures homes nationwide at the end of Q3 2018, representing 3.38 percent of all homes actively in the foreclosure process. The number of zombie foreclosure homes was down from 14,312 a year ago, and the zombie foreclosure rate was down from 4.18 percent a year ago.
“The number of vacant foreclosures is now less than one-fourth of the more than 44,000 in 2013 when we first began tracking these zombie homes,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Policy solutions such as land banks designed to mitigate the ripple effects of vacant properties on neighborhoods and cities have had a substantial impact, and a booming housing market in many areas of the country is lifting all boats. There are still high concentrations of zombie homes and other vacant homes in some local markets and submarkets, but those high concentrations are becoming fewer and farther between.”
Markets with highest vacant home rates
States with the highest share of vacant homes were Tennessee (2.65 percent), Kansas (2.50 percent), Oklahoma (2.49 percent), Mississippi (2.47 percent), and Indiana (2.45 percent).
Among 153 metropolitan statistical areas analyzed in the report, those with the highest share of vacant homes were Flint, Michigan (6.99 percent); Youngstown, Ohio (3.80 percent); Beaumont-Port Arthur, Texas (3.71 percent); Myrtle Beach, South Carolina (3.70 percent); and Mobile, Alabama (3.69 percent).
Among 405 U.S. counties analyzed in the report, those with the highest share of vacant homes were Baltimore City, Maryland (7.83 percent); Genesee County (Flint), Michigan (6.99 percent); Saint Louis City, Missouri (5.93 percent); Bibb County (Macon), Georgia (5.73 percent); and Wayne County (Detroit), Michigan (5.60 percent).
Richard is our resident social media expert. He researches and writes about; the economy, marketing trends and all aspects of real estate investing.
Single Family Rental Platform Puts Pedal to the Metal with Marketing Lists
Online single family rental marketplace OwnAmerica identifies and engages SFR operators with the help of targeted marketing lists generated by ATTOM Data Solutions from its nationwide database of more than 155 million U.S. properties.
The Power of Property Marketing Lists
The property-level marketing lists include not just ownership information for non-owner occupied properties, but also property characteristics and home value data, allowing OwnAmerica to also provide portfolio valuation services to the rapidly growing SFR market.
“OwnAmerica is operating on the assumption that the market is very strong and will continue to be,” said Greg Rand, CEO. Rand even posted a challenge on LinkedIn offering to place a $10,000 bet that there will not be a recession in 2020. “Predictions of a coming recession might be wishful thinking from some people. I will leave you to speculate on why anyone would root for a recession.”
Rand argued that the investor niche his company operates in — single family rentals (SFR) — will benefit even if home prices do take a hit.
“Remember that SFR is different than housing overall. When the market is strong, investors and consumers are confident and prices rise. Investors win on appreciation,” he explained. “When the market is weak, homeownership declines and renter demand increases. Investors win on yield. SFR is a two-sided coin because every house has two uses: owner-occupied or tenant-occupied/investor owned. No other commercial asset class gives owners two demand drivers and two exit strategies.
Richard is our resident social media expert. He researches and writes about; the economy, marketing trends and all aspects of real estate investing.
Pretium Is Said to Explore Up to $5 Billion of Rental-Home Sales
(Bloomberg)—Pretium Partners LLC, the third-largest owner of U.S. single-family rentals, is working with Morgan Stanley and Ardea Partners to explore options that could include a sale of most of the company’s homes, according to people with knowledge of the matter.
Pretium, founded by former Goldman Sachs Group Inc. partner Donald Mullen, is considering ways to provide liquidity to early investors, said some of the people, who asked not be identified because the discussions are private. Pretium could sell as many as 20,000 homes valued at as much as $5 billion, and is open to transactions in which it either does or doesn’t maintain management rights, one of the people said.
Richard is our resident social media expert. He researches and writes about; the economy, marketing trends and all aspects of real estate investing.
U.S. Foreclosure Activity Increases 9 Percent in August 2018 From Previous Month, Still Down 7 Percent From Year Ago
Bank Repossessions Up 14 Percent From Previous Month, Down 1 Percent From Year Ago
Foreclosure Starts Up 9 Percent From Previous Month, Down 6 Percent From Year Ago
There were 70,166 U.S. properties with foreclosure filings in August 2018, up 9 percent from July but still down 7 percent from a year ago, according to the latest ATTOM Data Solutions Foreclosure Activity Report. Nationally one in every 1,910 U.S. properties had a foreclosure filing in August 2018, according to the report.
States with the highest foreclosure rates in August were New Jersey (one in every 690 housing units); Maryland (one in every 918 housing units); Nevada (one in every 984 housing units); Delaware (one in every 1,012 housing units); and Florida (one in every 1,229 housing units).
Richard is our resident social media expert. He researches and writes about; the economy, marketing trends and all aspects of real estate investing.
Fannie-Freddie Overseer Scraps Program for Rental-Home Investors
(Bloomberg)—The U.S. regulator for Fannie Mae and Freddie Mac is shutting down a controversial program that subsidizes loans for firms investing in single-family rental homes, saying the market can function well without the support.
The Federal Housing Finance Agency said Tuesday that the two mortgage giants will dial back their participation after a two-year “test and learn” pilot program designed to gather information on the market and best practices. The agency said in a statement that it also sought industry feedback on market challenges and opportunities, and conducted its own impact analysis during the pilot period.
“What we learned as a result of the pilots is that the larger single-family rental investor market continues to perform successfully without the liquidity provided by the enterprises,” FHFA Director Mel Watt said in a statement.
Richard is our resident social media expert. He researches and writes about; the economy, marketing trends and all aspects of real estate investing.
Starter-Home Affordability Hits a Decade Low
(Bloomberg)—Here’s why the U.S. housing market is cooling: Prices are just too high.
Starter homes are now more costly to purchase than at any time since 2008, when the last boom came to a crashing halt. In the second quarter, first-time buyers needed almost 23 percent of their income to afford a typical entry-level home, up from 21 percent a year earlier, according to an analysis by the National Association of Realtors.
The property market, after years of price gains that outpaced income growth, is showing signs of slowing as sales decline. The affordability crunch is especially severe at the low end of the market and in hot areas where supplies are tightest and values have risen most. A jump in mortgage rates this year only made it worse.
“When prices go up at the entry level, that’s where the affordability issue is most acute,” Charles Dougherty, a Wells Fargo & Co. economist, said in a phone interview. “People are hesitant to stretch the amount they’re willing to pay.”
Richard is our resident social media expert. He researches and writes about; the economy, marketing trends and all aspects of real estate investing.
Three Ways to Invest in Single-Family Rentals Without Cutting Corners
If you are a landlord or aspired investor, you know the market is strong. According to U.S. Census data, the rental market has increased by 37 percent since 2006 and continues to grow. Renting is steadily outpacing ownership; more than 30 percent of Americans rent and the market shows no signs of slowing down as millennials become the highest drivers of demand for single-family rental homes (SFRs).
With increasing demand, investors have also given the SFR market more attention. Competition is intense, especially as Wall Street’s presence becomes more pronounced. The independent investor must create efficiencies and drive steady earnings to keep an edge. With a focus on strategy, diligence and standardization, local independent investors can compete. Here are three tips on how.
Richard is our resident social media expert. He researches and writes about; the economy, marketing trends and all aspects of real estate investing.