A report from Bloomberg. “What’s flown largely under the radar amid the central bank’s efforts to bolster the economy, is the Fed’s role in pushing the $6.8 trillion mortgage-backed securities market to extremes. The Fed has bought more than $1 trillion of mortgage bonds since March, a record pace, and now holds $2 trillion of the securities on its balance sheet. That easily eclipses the previous high during the last economic recovery. It’s hard to see a way out of the mortgage market for the Fed without causing at least a hiccup in the U.S. housing market and an implosion at worst.”
“As the calendar turns to 2021, Fed officials will need to figure out how to engineer a soft landing for the housing market. The refinancing boom the central bank engineered has helped countless Americans get through the pandemic. But it can’t afford to see it go bust. Most likely, the Fed won’t be able to extricate itself from buying mortgage bonds for at least the next several years, and possibly longer, or else risk toppling the entire house of cards it built.”
From Bay News 9 on Florida. “More than 51% of Florida adults say they live in households that aren’t current on rent or mortgage payments — higher than any other state, according to the U.S. Census Bureau. Those respondents of the Bureau’s Household Pulse Survey also said they think eviction or foreclosure is at least somewhat likely in the next two months.”
From The Lens in Washington. “Robert Akhtar is a landlord of an apartment complex in SeaTac. Of the 13 units in the complex currently rented, he now has six tenants who are tens of thousands of dollars behind in their rent. Due to nonpayment, he has not paid his mortgage for the past three months, nor the electricity bill since April. Although he purchased the rental complex as a planned retirement investment, he now fears he may have to sell – or face foreclosure – if the moratorium is extended into 2021. ‘I don’t know what to do,’ he said. ‘It is very scary.’”
“‘We’re seeing that (anxiety) now amongst our membership all the time,’ said Kyle Woodring , a lobbyist for the Rental Housing Association of Washington, which represents 5,000 landlords in the state.. ‘They are certainly looking at selling. I am getting that question daily.’”
The Union Tribune in California. “San Diego County home prices in October did not increase from the previous month for the first time since May. Real estate agent Gary Kent said increased supply could mean there is less upward pressure on prices, but he — similar to many housing experts — was hesitant to say that prices could actually decrease. But, it might make the process of buying a little easier. ‘I don’t at all see some massive price drop,’ he said, ‘but people might say, ‘I don’t have to make an offer the first day over list price and maybe I could negotiate a bit.’”
“The resale single-family home median hit $730,000 in October, its highest ever. The resale condo price fell $10,000 from its peak in September to $475,000. The newly built home median was $726,000, down from the record $812,500 in October 2018 when there was an increase in luxury, single-family homes for sale.”
From CBS 8 on California. “The California exodus led among other states. As a person who specializes in finding people a new place to live, Sacramento realtor Kellie Swayne is not surprised. ‘Affordability has just plummeted over the years (in California),’ Swayne said. After spending his life in California and Stanislaus County, Jim DeMartini plans on being part of that migration trend for 2020. DeMartini has spent 16 years as a county supervisor, and even though it hurts to leave everything he knows and all his friends, he said he’s had enough of California.”
“‘California is not a good place to live or do business with anymore,’ DeMartini said. ‘I’ve been involved in local government here for 16 years, and I see California as just a basketcase.’”
From Fox Business. “Tech titan Keith Rabois announced this week that he is leaving California’s Silicon Valley and moving to the Floridian metropolis of Miami. ‘I think San Francisco is just so massively improperly run and managed that it’s impossible to stay here,’ he told Fortune’s Robert Hackett. ‘Bay Area searches for rent are in free-fall, they’re down like 30%,’ Rabois added.”
From Multi-Housing News. “The coronavirus crisis has fueled a significant exodus from densely populated gateway cities, dealing a sharp blow to the apartment industry in those markets, according to a presentation of the National Multifamily Housing Council’s 2020 OPTECH Virtual Conference. U.S. Postal Service change-of-address records filed from February through July indicate that Manhattan lost 110,978 net residents, while Brooklyn saw a net decrease of more than 43,000. San Francisco, Los Angeles and Chicago lost anywhere from roughly 26,000 to 31,000 residents each, the data compiled by Yardi Matrix and MYMOVE shows.”
“Jeff Adler, vice president of Yardi Matrix, noted that multifamily operating results have ‘tanked’ in the urban cores of major cities such as Manhattan, Boston, Washington, D.C., Chicago, Los Angeles, San Francisco, Miami and Seattle, with absorption weak in the first half of 2020 and occupancy falling by 5 percent to 8 percent or more in those markets. The same period also saw declines in rents on new leases, renewal rents and retention rates, particularly in the upper end of the market.”
From Bisnow Dallas-Fort Worth in Texas. “Multifamily has held fairly steady since the coronavirus pandemic began, with occupancy hovering around 91.2% and average rents staying relatively flat at $1,158 per unit, according to ApartmentData. However, concessions are rising, especially for Class-A product, where 60% of properties are now offering deals like move-in specials or months of free rent.”
The Washington Post. “‘In November 2018, there was a big spike in prices and lots of speculation about what Amazon would mean to Arlington, Crystal City and Potomac Yards,’ said Dawn Wilson, a real estate agent with TTR Sotheby’s International Realty in Arlington. ‘Investors wanted to buy everything, especially condos. But that died down a lot in 2019. We saw a small spike in closings in those neighborhoods again in February and March of 2020, but once the pandemic hit there was a big dip all over the DMV for a few months.’”
“In September, there were 44 active listings on the market in the 22202 Zip code, according to Bright MLS, an increase of 238 percent compared with the number of active listings available in September 2019. Nearly 1,000 new apartments opened and began leasing in the National Landing area between October 2019 and October this year, according to Chris LeBarton, a senior market analyst with CoStar.”
“‘Approximately 5,000 more apartments are in the pipeline for the National Landing area, including some that are under construction, some planned and undergoing the paperwork phase, and some that are proposed but not yet approved,’ said Doug Ressler, director of business intelligence for Yardi Matrix.”
“‘If Amazon’s employees can work remotely, then they don’t need to live close to the headquarters,’ said David Hawkins, executive vice president of McEnearney Associates in Alexandria. ‘There’s a slight risk that there could be an oversupply of apartments in the future.’”
From Arlington Now. “Arlington County and the broader Washington, D.C. area has been historically anchored by comparatively low unemployment rates, high salaries and world-class assets, spanning an award-winning school system and cultural attractions. Needless to say, a bit has been thrown out of whack thanks to the lingering COVID-19 pandemic.”
“As of November 17, there are 720 total residential real estate offerings on the market in Arlington County. This marks an uptick in inventory from last month, when there were 695 listings. Compared to last year — and this is true in select markets across the U.S. — inventory has increased. So, what does this mean for you? In the real estate realm, everyone’s scenario is different. If you are looking to buy, you have more options. If you are selling, our market is notably more competitive than last year.”
The Chicago Tribune in Illinois. “Billionaire Joe Mansueto has bought the Waldorf Astoria Chicago, scooping up the luxury hotel at a COVID-19 discount price of $54.5 million. That is a steep discount to previous sale prices for the Gold Coast hotel, which is in a 60-story tower that also includes condominiums. Condo owners are not affected by the hotel sale.”
“In 2015, the hotel sold for $111.9 million, when the buyers were longtime hotelier Laurence Geller and Wanxiang America Real Estate Group. The Geller venture defaulted on its loans and last year the property was taken back by lenders Wells Fargo Bank and a debt fund of Chicago developer Walton Street Capital. They were owed more than $90 million when they took the property back.”
“Since then, hotel values have plunged further as the travel industry has been devastated by the coronavirus pandemic. The owner of the historic Palmer House Hilton, New York-based Thor Equities, in August was hit with a $338 million foreclosure suit.”
From The Real Deal. “Short-term rental operator Domio is reportedly going out of business. The startup, which was founded in 2016, will shut down and sell its assets through an assignment for the benefit of creditors, with Sherwood Partners overseeing the sale, The Information reported. The company laid off the majority of its staff earlier this month after failing to raise $10 million in additional capital, according to the outlet.”
“The company’s co-founders, CEO Jay Roberts and Chief Strategy Officer Adrian Lam, resigned from their posts and stepped down from the board of directors in late September. The company’s decision to shed its assets comes shortly after the Related Group and its partner, Black Capital Group, put out feelers to sell the 175-unit Domio Wynwood in Miami, where the short-term rental operator has a 10-year master lease agreement. The owners are looking to sell the asset at a whisper price of $90 million.”
From Summit Daily in Colorado. “Officials are looking for ways to increase full-time residency in Frisco. The town is hoping to increase the proportion of full-time residents to at least 50% over the coming years, a move outlined as a priority in the town’s most recent strategic plan update to help increase financial stability and inclusivity. Frisco currently has a full-time residency of about 42%, according to Community Development Director Don Reimer. But the numbers are based primarily on data extrapolated from the 2010 census, and Reimer said officials wouldn’t have a better idea of the current residency situation until the 2020 census numbers are released next year.”
“‘It probably does not accurately reflect some of the things we’ve seen anecdotally with Airbnb and changes to our short-term rentals and long-term rentals and that sort of occupancy,’ Reimer said. ‘… We don’t really have a good feel of what our starting point is. … That said, we do know we’re not at 50% residential occupancy.’”
“The problem is occupancy, not a lack of housing. Frisco has 3,607 housing units, and a population of only about 3,135, according to Reimer’s report. About 2,079 of those units are vacant most of the year. There are 577 short-term rentals currently licensed with the town. In the Tenmile basin — which includes Frisco and unincorporated areas like Copper Mountain and Bill’s Ranch — there are a total of 4,666 units, 3,271 of which are frequently vacant, or more than 70%.”
“‘When you have 65% of your community that sits idle, or that has this massive turnover because of tourism and short-term rentals, you’re not being efficient with your property,’ council member Jessie Burley said. ‘… In difficult times like we’re seeing this year, when the four or five houses next to you are empty, that’s not providing resiliency. It takes a village, and if there’s not people in the village, what are we doing?’”