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Starter Home Prices Reach Highest Point in a Decade, NAR Announces

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.

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Confidence in Multifamily Market Drops, But Stays Positive, NAHB Finds

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.

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Medical Office Vacancies at 10-Year Low; Developers Stay Busy, Report Shows

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.

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Existing Home Sales at 2-year Low: NAR

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 sales1https://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.

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First-time Buyers Maintain Control of Mortgage Market: Urban Institute

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.

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Freddie Reports Steady Mortgage Rates Despite Second Consecutive Drop

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.”

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Multifamily Market to Stay Strong Well into 2019, Freddie Mac Projects

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.

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Commercial Real Estate Executives See 'Balanced, Stable' Market: Survey

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.

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High Demand for Warehouse Facilities in Coastal Markets, Report Shows

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.

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Construction Costs, Zoning May Slow Office Sector: Cushman & Wakefield

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.

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Commercial Real Estate Prices Steady as Market Matures: Report

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.

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Fed Beige Book Reveals Mixed Results in Residential, Commercial Sectors

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.

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Housing Industry Loses Status as Economic Driver: Fed Chair

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.

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Nationwide Rents at New High: 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.

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Net Lease Retail Market Sees Cap Rate Increases, Report Shows

Written by Liz Wolf

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

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New AI videos: Unusual Challenges and USPAP Optimization

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.

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Home Sales and Prices to Rise this Year, NAR Reports

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.

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Appraisal Institute Contributes at Major Industry Events in June

The Appraisal Institute announced June 27 that its elected officers and others represented the organization at various events throughout the month.
 
AI President James L. Murrett, MAI, SRA, was joined by President-Elect Stephen S. Wagner, MAI, SRA, AI-GRS; Vice President Jefferson L. Sherman, MAI, AI-GRS; and Immediate Past President and Acting CEO Jim Amorin, MAI, SRA, AI-GRS, at the Appraisal Institute of Canada Annual Conference, June 13-16, in Quebec City.
 
Sherman also addressed the Ohio Coalition of Appraisal Professionals Real Estate Appraiser Seminar, June 19, in Columbus, Ohio, where he presented “Issues Affecting the Appraisal Community.”
 
Amorin attended the National Council of Real Estate Investment Fiduciaries Summer Conference, June 19-22, in Charlotte, North Carolina; Sherman represented AI at the International Right of Way Association Education Conference, June 24-27, in Edmonton, Alberta, where AI also exhibited; and Wagner joined Murrett at the Institute for Professionals in Taxation Annual Conference, June 24-27, in Vancouver, British Columbia.
 
AI 2016 President Scott Robinson, MAI, SRA, AI-GRS, AI-RRS, addressed the World Association of Valuation Organizations’ and International Valuation Standards Council’s Global Valuation Conference, June 25-26, in Singapore where he presented “Fundamentals of Separating Real Property, Personal Property and Intangible Business Assets.”
 
AI exhibited at the CRE Finance Council June Conference, June 11-13, in New York.

Appraisal Institute Releases Guide to "Residential Green" Addendum

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.

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