Real estate is in a constant state of flux. With advances in technology, industry changes can happen faster than they ever did before. Such changes are happening again in real estate.
The Voice of Real Estate, an industry news reporting arm of the National Association of Realtors announced sweeping changes brought about by the Consumer Financial Protection Bureau that will affect the closing process nationwide. These changes include the retirement of the HUD-1 closing statement, the Good Faith Estimate, and Truth In Lending. They will be replaced by two new forms: the Loan Estimate and the Closing Disclosure. All paperwork must be finalized no later than 3 days prior to closing. If last minute changes are made, it could trigger the three-days to start over again.
Also covered in this latest news piece:
New proposed rules concerning the use of drones in real estate
Foreign investors increasingly interested in American commercial real estate
[APRIL 24, 2014] Starwood Capital Group Chairman and CEO Barry Sternlicht is expressing confidence that the single-family rental housing sector has the potential to become a major REIT asset class, but he acknowledges that investors remain skeptical.
[CNBC, 04/02/2014] a lot of folks thought that the housing recovery would weaken rental demand and in fact, that sentiment hit the apartment reits pretty hard last year. investors were concerned about overbuilding. fast forward to the first quarter of this year. rental demand is still very strong. vacancies down 20 basis points to just 4% according to reit. rents continue to grow up over 3% from a year ago. they would be higher but landlords say that weak income growth is holding them in check. so with all that, it seems that investors have come back to apartment reits this quarter with a vengeance. the sector returned 12.75% in q-1 making it the top yielding of all commercial reit sectors.
[JANUARY 15, 2014] Demand is up across the board as borrowers seek to buy debt back from special servicers; recapitalize properties; access capital for tenant improvements; or perhaps reestablish business plans for properties, notes Josh Zegen, managing member and co-founder of Madison Realty Capital in New York City. In addition, there is a healthy supply of “transitional” deals getting done for acquisition, rehab and new construction. Borrowers for those types of transactions often utilize bridge and mezzanine capital as a source of financing as they work to stabilize properties and improve NOI before going out and seeking permanent loans.
The Point of Sale Inspection required by many cities in Cleveland is a way for cities to keep their aging housing stock from falling further into disrepair which affects all house values in the neighborhood. Here’s how it works: As a condition of transferring title at closing, the seller must either show evidence that the violations have been corrected or escrow enough money to have the buyer fix the violations shortly after closing. A couple of examples of violations would be peeling paint on the outside of the home or a chimney that needs re-pointing. The Point of Sale Inspection has proven to be a very effective tool in keeping houses maintained and house values high. Other cities around the US should learn from Cleveland’s success and adopt a similar policy to help maintain the value of their housing.
“Washington, D.C.—The Housing Partnership Equity Trust (HPET), which was formed as a social-purpose REIT, announced that it has raised $100 million from Citi, Morgan Stanley, Prudential Financial Inc., the John D. and Catherine T. MacArthur Foundation and the Ford Foundation. It will begin investing in multifamily communities in partnership with 12 high-performing nonprofit housing providers.”
Three sluggish markets that Witten advises to be careful of include Virginia Beach, Va., which has demand challenges; Metro D.C., where developers are building for a demand that isn’t there; and Raleigh/Durham, N.C., which is also demand challenged. But Witten made sure to mention that developers and investors shouldn’t write off these metros completely.
Dallas—The multifamily sector will continue to be the darling of the commercial real estate industry throughout 2013 according to panelists on the “2013 Kick-Off Webinar for Apartment Development” hosted by Humphreys & Partners Architects. Although rental rate growth is slowing down, construction rates are on the rise and could approach peak levels of the past cycle by the end of 2013.
According to the Realtors® Confidence Index, the buyer traffic index stood at 60 in June while the seller index was 41, which shows a large imbalance between buyer and seller interest. A value of 50 implies neutral market conditions; the disparity between buyers and sellers began to grow in early spring and has been in a particularly large imbalance for the past two months.“Any bank-owned properties that have been held back in markets with inventory shortages should be released expeditiously to help meet market demand,” Yun said. “Housing starts will likely need to double over the next two years to satisfy the pent-up demand for both rentals and ownership.”