The Appraisal Institute, the nation’s largest professional association of real estate appraisers, today encouraged home sellers to consider making energy-efficient improvements to their properties and urged potential buyers to seek homes with those features.

“The latest research shows that green and energy-efficient home improvements have the potential to pay dividends for buyers and sellers,” said Appraisal Institute President James L. Murrett, MAI, SRA. “However, it depends on the improvements made. Some green renovations, such as adding Energy Star appliances and extra insulation, are likely to pay the homeowner back in lowered utility bills relatively quickly.”

Additionally, by purchasing an energy-efficient product or renewable energy system for a home, the owner may be eligible for a federal tax credit based on EPA-established guidelines.

Three recent studies confirm that green homes sell for more than non-green properties:

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.

Click here to read more.

Confidence in the multifamily housing market edged down in the second quarter of 2018, according to the Multifamily Production Index (MPI) released today by the National Association of Home Builders (NAHB). The MPI dipped two points to 51 compared to the previous quarter.

The MPI measures builder and developer sentiment about current conditions in the apartment and condo market on a scale of 0 to 100. The index and all of its components are scaled so that a number above 50 indicates that more respondents report conditions are improving than report conditions are getting worse.

By Brian J. Rogal 

Once considered something of an afterthought by institutional investors, medical office has rapidly established itself as one of the most desirable sectors. And with so many favorable trends, including the aging of the US population and the desire among patients to see medical professionals in new facilities close to home, experts say new construction should continue proceeding at a healthy clip. For most kinds of commercial real estate, a rapid expansion is usually taken as a sign that a more cautious approach may be needed, at least from an investment standpoint. But medical office will probably escape that trap.

Click here to read more.

Existing-home sales subsided for the fourth straight month in July to their slowest pace in over two years, according to the National Association of Realtors®. The West was the only major region with an increase in sales last month.

Total existing-home sales1, https://www.nar.realtor/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.7 percent to a seasonally adjusted annual rate of 5.34 million in July from 5.38 million in June. With last month’s decline, sales are now 1.5 percent below a year ago and have fallen on an annual basis for five straight months.

Click here to read more.

By Karan Kaul

First-time homebuyers face a difficult housing market: high prices, low supply, tight credit, and renting costs that make it difficult to save for a down payment. But compared with repeat buyers, first-timers have dominated the mortgage market for the past 10 years, and their share today is still high. We don’t see this changing anytime soon.

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that mortgage rates decreased slightly for the second consecutive week.  

Sam Khater, Freddie Mac’s chief economist, says mortgage rates remained mostly flat over the past week, which has been the dominant theme since late spring. “This stability in borrowing costs comes despite the highest core inflation rates since 2008 and turbulence in the currency markets,” he said. “Unfortunately, this pause in rates is not leading to increasing home sales.”

A new analysis by Freddie Mac (OTCQB: FMCC), finds that the strong performance experienced by the multifamily market in the first half of 2018 will continue throughout the end of the year and well into 2019. The findings were released as part of Freddie Mac Multifamily’s 2018 Mid-Year Outlook pdf and companion video. The Outlook predicts that in 2018, multifamily origination volume is expected to grow by 3.3 percent to $305 billion. 

In the Outlook, Freddie Mac Multifamily Research and Modeling vice president Steve Guggenmos and manager Sara Hoffmann find that overall, the multifamily market continues to experience very healthy performance. While fundamentals have started to moderate over the past few years, the factors most critical to market strength continue to remain strong, for example, with rents rising above inflation and vacancy rates only increasing slowly.

By Michael Tucker

Commercial real estate executives see "balanced and stable" market conditions despite growing concerns the market could be nearing the end of its current cycle, the Real Estate Roundtable reported.

By Patricia Kirk

Industrial developers in coastal U.S. markets are cashing in on the extraordinarily high demand by small businesses for for-sale modern warehouse facilities of between 25,000 and 40,000 sq. ft.

Written by Patricia Kirk

While new office construction has been robust so far in 2018, next year developers might begin pulling back, according to David Bitner, head of Americas capital markets research with real estate services firm Cushman & Wakefield. He cites rising construction costs, concerns about the end of the real estate cycle and zoning issues as the reasons.

Written by Michael Tucker

Commercial real estate asset prices have "plateaued" and transaction volume has moderated as the real estate cycle matures, reported Green Street Advisors, Newport Beach, Calif., and CoStar, Washington, D.C.

Some Fed districts reported moderate improvements in the residential real estate sector, but their reports on commercial activity revealed largely stagnant conditions, the Federal Reserve reported July 18 in its newest Beige Book.

Click here to read more.

Written by Kelsey Ramirez

Last Wednesday, Federal Reserve Chair Jerome Powell had his second hearing this week, this time before the House Committee on Financial Services for his semi-annual monetary policy report.

Written by Ben Lane

We’ve known that the rent may be too high for quite a while now, but a new report shows that rent has never been this high before.

Written by Liz Wolf

Cap rates for net lease retail properties have finally pushed upward.

The Appraisal Institute has posted new videos to its YouTube channel. 

You can see the related blog posts on AI’s “Opinions of Value” blog.

A stronger economy, wage growth and an improving job market are expected to march home sales and prices higher in 2018, but low supply and weakening affordability will tamper the rate of increases, according to speakers at a residential real estate forum during the 2018 REALTORS® Legislative Meetings & Trade Expo.

Lawrence Yun, chief economist of the National Association of Realtors®, presented his 2018 midyear forecast and said despite headwinds a moderate and multiyear increase in home sales is likely ahead. After accelerating 3.8 percent in 2016, existing home sales rose only 1.1 percent to 5.5 million in 2017 and are forecast to finish 2018 at a pace of around 5.6 million (up 1.8 percent). He projects 5.7 million sales for 2019.

The Appraisal Institute, the nation’s largest professional association of real estate appraisers, today released a guide to complete and use the organization’s “Residential Green and Energy Efficient Addendum.”

This guide helps appraisers, real estate agents, energy and green raters, lenders, builders, the secondary mortgage market and sustainability organizations understand how each section of the addendum applies to valuation and marketing of the property.