Posts Tagged as Real Estate Industry News

Real Estate Trends

Market Watch: The Top Commercial Real Estate Trends for 2018

With the ups-and-downs of today’s crazy economic and political climate, real estate marketing can be complicated, to say the least. As this rapidly changing environment continues to affect the market, look to these real estate trends to point you in the right direction:

Interest Rates
The benchmark lending rate rose in December by 1/4 point, to 1.25-1.5%. Three hikes for 2018 are projected, with the federal funds rate forecasted for 2.1% by the end-of-year, and a rate of 2.7% projected for 2019. Despite these forecasts, the 10-year Treasury rate has remained stable, indicating the market is not so sure of these rate hikes, and looking to inflation as an indicator of their propensity.

Until then, the cost of borrowing and property values should remain stable. However, absent rate hikes, a bubble risk remains, as does the potential for economic stagnation hindering sales.

Retail & Industrial
2017 was an astoundingly terrible year for retail. Store closings over-tripled, with over 600 bankruptcies reported in the retail sector alone, including heavy hitters like Sears/Kmart, JCP, Macy’s, ToysRUs, and HHGregg. Retail closings are expected to jump at least 33% this year, with more closings already announced. Even Walmart/Sam’s is closing stores.

E-commerce is having an effect on commercial real estate, causing these spaces to shift to industrial: Warehouses and distribution centers, where giants like Amazon will play a role. Industrial properties will be in high-demand in 2018, outperforming other commercial segments.

Foreign Lending
Changing U.S. tax laws could have a negative effect on U.S. and foreign banks that do business, particularly in the commercial real estate lending arena. The implementation and repercussions of BEAT, legislation intended to keep profits at home rather than losing them to countries with lower tax rates, are also unclear, and may affect multinational lenders.

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1 in 3 Real Estate Buyers Now Make a Purchase Decision from Only Photo and Video

Buyers are increasingly relying on video usage in real estate marketing, making 1 in 3 purchases sight-unseen according to the latest Redfin statistics – up from 1 in 5 just a year ago. Are you missing out on speedier sales by failing to take advantage of this increasingly popular marketing medium?

Tight Market & Technological Advances Are Fueling the Trend
A lack of affordable homes has buyers willing to jump in, sight unseen, to snag a home. With today’s technology, they are relying on video usage in real estate marketing and online information on neighborhoods to avoid surprises.

As expected, millennial home buyers are leading this trend, accounting for 41% of recent sight-unseen offers – three times more than baby boomers. To make offers competitive but get some protection, typically the only contingency is an inspection clause in the purchase agreement.

Video Tours & Drone Advancements Make Sight-Unseen Purchases Easier
For those simply unable to view a home in person, such as long distance buyers, as well as those looking to get a leg up on the competition, video tours with the right imagery and information give can give buyers enough confidence to forge ahead without kicking tires in-person.

For long-distance buyers, some are even engaging in live walkthroughs with agents via FaceTime or Skype, engaging in an interactive, Q&A experience to put their minds at-ease.

Video Marketing Tips to Gain Buyer Confidence:

Enlist a Drone
Tour the neighborhood and offer bird’s eye home views via drone videography.

Cover all the Bases
Including closets, outside, and mundane things like electrical panels and water pressure.

Add a Public Service Announcement
“Out-of-state and considering buying sight-unseen? Contact me to arrange a live video walkthrough, or enlist the help of a licensed home inspector today.”

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The 2018 Real Estate Market Heats Us

Bucking the Trend: Dropping Mortgage Rates

Despite expected real estate trends, the average interest rates for 30-year fixed-rate mortgages have experienced an unexpected drop. Typically, when the Fed raises interest rates, mortgage rates likewise climb, as seen in recent short-term hikes as recently as March (and with two more that are expected later this year).

However, for the first time since November 2016, Freddie Mac reported rates below 4%. In fact, as of the week following Memorial Day, 30-year fixed-rate mortgages averaged 3.94%, dropping to rates even lower than the same time last year, reaching a new 2017 low.

What Gives?
As nail-biting would-be buyers raise their eyebrows, Wall Street investors are nodding their heads – because while mortgage interest rates are influenced by the Fed’s short-term interest rates, they’re more closely tied to the 1-year U.S. Treasury bond market. Investors consider the short-term bond market safer than volatile stocks.

When investors get spooked (think: market downturn or an unpredictable government administration), they shift their money into bonds, which mortgage rates are an inverse reflection of: Bonds up = mortgages down.

How Long Will it Last?
As lower interest rates translate into lower monthly payments for buyers, many are watching the market with a hopeful eye. Even 15-year fixed-rate mortgages and five-year adjustable rate mortgages are riding the downward trend, pushing buyers into a home-buying frenzy. And with good reason: Rates are expected to continue their gradual climb.

However, with today’s financial and political uncertainty, the ‘when’ is anybody’s guess. Meanwhile, home shoppers are trying to take advantage of added opportunities to up-scale (size, location, amenities) as even mere fractions of a point could add up to hundreds more per month in mortgage payments.

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The 2018 Real Estate Market Heats Us

Inman’s Savvy Predictions for Real Estate Selling in 2017

Can This Near-Term Market Boost Go The Distance?

According to Brad Inman, founder and sole owner of Inman, real estate selling’s leading name in news, 2017 promises to be a fun and exciting year…

What does this innovator and thought leader predict for 2017 that others may have overlooked?

• In 2017, home sellers will come out on top
Between the market itself and home seller-centered tech innovations such as Opendoor and Knock, sellers are expected to sit down to – and leave the table – smiling throughout the majority of the year.

• The market to experience a temporary boost
Thanks to the Donald, job creation, and IRA jumps. However, this may not hold thanks to robot job theft.

• A woman won’t lead the country, but one will lead the NAR
Inman forecasts the National Association of Realtors will make a woman the CEO, despite “the old guard” lobbying for one of its own.

• Zillow will venture overseas
Acquiring a European portal in efforts to fill valuation expectations.

Opendoor will do just that for nontraditional sellers
Becoming the second-largest broker in the U.S. after NRT, offering sellers the certainty they cannot get with traditional tactics.

• Redfin hits Wall Street
Taking the money and running to capture more share in existing markets as well as on the recruiting lines to fuel innovative and technological advancements.

• DocuSign hits the street, too
The IPO of the paperless crusader could be huge.

• Equity sharing goes mainstream
Supported by Freddie, Fannie, and other big lenders as buyers short on funds look for solutions to down payment dilemmas in pricey markets.

• The luxury market re-emerges post-facelift
Walkable neighborhoods are what all buyers are ogling, and as high-end cash hoarders tiptoe back into the market, green will fly.

Dropped your crystal ball? We’re here to help, from real estate selling predictions to legislation surprises. Buckle up your seatbelts for 2017. Properties Online is here to help you hang on through the bumpy ride.

What is Compass and Why Is It In the News?

What Will a Trump Presidency Look Like for Real Estate?

In his next 4 years as president, Donald Trump could have a major impact on real estate selling across the U.S. Licensed real estate brokers and agents nationwide are looking to Trump and how his time in office could change their industry.
What are some possible outcomes of the Trump presidency?
Trump has centered his platform around deregulation to further the recovery of the financial market, and there are a host of changes that could be made that would affect real estate sales…
• Lower premiums.
While Trump hasn’t articulated much on his housing platform, he has expressed interest in boosting home ownership and cutting fees for Fannie Mae and Freddie Mac. Lowering premiums for FHA loans could offer the boost consumers need to make owning a home an affordable reality.
• Potential reforms.
Fannie and Freddie could also be on the chopping block for cutbacks, alongside such programs as the Low Income Housing Tax Credit and Section 8 housing vouchers.
• Loosening lending regulations.
Trump, alongside the Republican party, have been vocal about changing banking regulations, including significantly altering the Consumer Financial Protection Bureau (CFPB) and the Dodd-Frank Act’s regulations on lenders to replace it with something else that would allow for easier securement of home loans.
• Preservation of mortgage interest tax deductions.
Trump explicitly stated his desire to preserve mortgage interest deduction in a tax plan he shared last year. However, his current plan has yet to detail this issue.
• Construction deregulation.
In Trump’s August meeting with the National Association of Home Builders, he pointed to over regulation in the industry, with some 25% of costs to build a home tied to regulations, and announcing his desire to get that down to 2%. This alone could greatly lower the costs of real estate selling and home ownership.
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