By Robert Freedman, Senior Editor, REALTOR® Magazine
Well, there’s at least one big Wall Street banker that’s betting on the United States becoming a “rentership” society: Morgan Stanley.
The company released a report just a few weeks ago saying now is a great time for institutional investors to snap up distressed single-family homes and turn them into long-term rental units. The company says the properties don’t compete with the classic apartment rental property, so investors don’t have to worry about cannibalizing their multifamily rental investment portfolios to take advantage of the huge opportunities in single-family rental property ownership. What’s more, Morgan Stanley doesn’t see this shift to rentership as a temporary waypoint while the country sorts out its housing problems; it sees this as a fundamental shift in how the United States will define itself into the future.
“America is moving away from a home ownership society and towards a rentership society,” the company says in its report.
To emphasize the point, one of the report’s authors, Oliver Chang of Morgan Stanley’s Housing and Securitized Products Strategy division, said in a video interview (above, after a 30-second commercial), “This is really the first time in history where there’s an opportunity for institutions to own single-family rental properties as part of a larger asset allocation strategy.”
The reason for the shift to rentals, according to the company? Continue reading »
By Katherine Tarbox, Senior Editor, REALTOR® Magazine
The “Occupy” movement on Wall Street and in cities around the country (and throughout the world) has drawn people with a wide range of grievances—signage shows protesters demonstrating against war, immigration policy, high unemployment, income inequality, corporate lobbying, and a host of other issues. At a recent visit to Occupy D.C., however, I saw two key areas of focus emerging: the high cost of education and the housing crisis.
Occupy D.C. protests are centered in McPherson Square park, about two blocks from the White House and less than two miles from the NATIONAL ASSOCIATION OF REALTORS®’ D.C. building. A recent Huffington Post story estimated there were 120 tents, plus administrative facilities (a first aid tent, a meal area, a media tent, and so on). The group has a permit to occupy the park for eight months, according to one organizer who asked not to be named.
It’s a surprisingly well organized effort. There’s a daily schedule of events that starts with brainstorming sessions at 11 a.m. and ends with a general assembly at 6 p.m. In between is a sometimes incongruous mix of activities, including newcomer orientations and Tai Chi classes. (Saturday, a pumpkin carving party is planned.) Punctuating these activities are protest marches on various topics. Organizers are now planning a march, scheduled for Friday, to protest the student debt burden. Next week’s march focuses on affordable housing. Continue reading »
By Robert Freedman, Senior Editor, REALTOR® Magazine
The administration yesterday rolled out an initiative to boost refinancing so struggling underwater borrowers can take advantage of today’s historically low interest rates. The effort is being called HARP 2, with “HARP” standing for Home Affordable Refinance Program and “2” standing for the fact that the first iteration of the program, rolled out two years ago, hasn’t attracted the volume of refis that’s needed to match the scale of the problem.
Under the new version of the program, lenders process refi applications for borrowers no matter how deeply they’re underwater. Previously, the limit was set at borrowers whose loan-to-value ratio was no more than 125 percent. Even so, the program isn’t intended for all underwater borrowers; just those who have been conscientious in making their payments despite having to pay on a mortgage that’s larger than the value of their home. Those who have stopped making payments or who have a checkered history of making payments can’t apply.
For eligible borrowers, the refi option is available to them without the lender having to order a new appraisal, which saves them several hundred dollars, and they get a waiver on fees that Fannie Mae and Freddie Mac would otherwise charge them because they’re high risk (that is, they’re underwater). Lenders, in turn, get relief from having to make representations and warranties that would otherwise hold them liable for losses on defective loans.
There are other important pieces to the initiative, including a requirement in some cases for borrowers to refi into a shorter-term loan to get all of the benefits.
It’s too soon to know how much the initiative will help borrowers. Some of the provisions require federal guidance, so lenders can’t start processing applications right away. And Fannie Mae and Freddie Mac still have to do some updating of their automated underwriting programs, and lenders, in turn, have to update their underwriting procedures. In short, you can expect little to happen before the first part of next year. Continue reading »
By Robert Freedman, Senior Editor, REALTOR® Magazine
The dignitaries and media that were in Washington last weekend for the dedication of the Martin Luther King, Jr., memorial on the National Mall have packed up and gone home.
The memorial was designed to be thought-provoking, with its 30-foot high rendering of the slain civil rights leader emerging from a block of solid rock that itself emerges from a rock wall behind it. On the rendering of the rock is the inscription, “Out of the mountain of despair a stone of hope.”
It’s easy to forget the struggles of our friends, neighbors, coworkers, classmates, and everyone else who fought to be treated equally under the law, both in its spirit and to its letter. About 20 years ago, one of our NAR members, a broker who’s been selling real estate for some 25 years, faced a home seller who refused to let her show his home because she was a minority. It’s a sad commentary on how things were, but it’s also an uplifting commentary, because once the listing agent heard how his fellow real estate professional had been treated, he immediately cancelled his listing with the seller. One small stone of hope in a mountain of despair.
Today, instances of discrimination are more subtle but still just as real, which is why the Martin Luther King memorial is as much a living reminder of the work that still needs to be done as it is a tribute to the work of Dr. King. Continue reading »
By Stacey Moncrieff, Editor in Chief, REALTOR® Magazine
Volcker's comments were made at a Sept. 23 meeting of the Group of Thirty. Source: http://www.group30.org/
In “How Mr. Volcker Would Fix It,” New York Times business writer Gretchen Morgenson examines Paul Volcker’s speech at a Group of Thirty meeting, in which he called for an eventual end to secondary market agencies Fannie Mae and Freddie Mac. (Volcker was the inflation-fighting chairman of the Federal Reserve under Presidents Carter and Reagan and served President Obama for two years as chairman of the President’s Economic Recovery Advisory Board, now the President’s Council on Jobs and Competitiveness.)
In some respects, Volcker’s position parallels that of the NATIONAL ASSOCIATION OF REALTORS®, an organization that nurtured the formation of Fannie Mae during the Great Depression. In 2009, an NAR working group called for an end to the quasi-government status of the secondary market agencies, saying it was clear the agencies’ public mission and private profit motives were incompatible. The NAR called for the creation of a new purely public entity with an explicit government guarantee that would serve as a mortgage market backstop in times of economic uncertainty. (See “NAR Principles for Restructuring the Secondary Mortgage Market.“)
By Erica Christoffer, Multimedia Web Producer, REALTOR® Magazine
This week, I’m riding along with the Home Ownership Matters Bus Tour as it begins the southwestern leg of its journey across the United States. In case you haven’t heard about the bus tour, its purpose is to provide a forum and outreach to state and local REALTOR® associations, as well as talk to the public and the media about why public policy that supports home ownership is so vital, not only for the real estate industry, but for all current home owners.
From my perspective, it’s a wonderful opportunity to get out and meet members from different regions of the country, hear what’s happening in their market, and bring back their message to NAR. It also helps shape story ideas and tools REALTOR® Magazine can offer members in the future.
No doubt about it, the bus is working, the pro-real estate message is getting out, and people are listening. Numerous local and national media outlets have been writing about the housing industry. And guess what? Most of the stories have been spreading the message about the value of home ownership. Continue reading »
By Todd Carpenter, Director of Digital Engagement, National Association of REALTORS®
Facebook recently overhauled their page insights tools to help page administrators better measure engagement on their business pages. The new tools let users measure how viral a post is, the number of people talking about a page, and the cumulative total reach of a page — in other words, a bunch of stuff most real estate pros really don’t need to know.
A lot of importance has been placed on engagement. Opening and maintaining lines of communication with clients is tried and true, so of course this makes sense. But ask yourself — do I want my clients to:
- Like me on Facebook?
- Follow me back on Twitter?
- Comment on my blog?
- Buy a house?
When measuring a return on your investment, be sure to count the stuff that helps you attain your goals. If having more friends on Facebook is the goal, so be it. But most agents are trying to sell houses. Their engagement strategy should be to build real, lasting relationships with people who are likely to refer them business. Facebook likes, Twitter retweets, or the number of times someone clicked on a QR code may not reflect anything more than a shallow layer of casual and even lazy engagement on the part of their sphere of influence. Measure the stuff that really matters.
Recent Comments