All Forum Posts by: William Hull

Americans are increasingly favoring renting over home ownership according to the most recently conducted Freddie Mac renter survey. Furthermore, the survey takers responded that they do not see the current market climate as an appropriate time to purchase real estate. While the amount of renters not planning to buy a home has increased, the overall consumer confidence of those surveyed has risen by close to 20% to 47% from when the last survey was conducted. Essentially renters feel better about their present financial circumstances than they did in the past and have come to view renting in a more favorable light than the prospect of home ownership. Some respondents have also come to favor living in urban areas over rural areas, preferring to move to a small unit that if rent increases overall as well as being closer to a city center as affordability dictates. The general American sentiment towards home ownership be drastically altering its makeup, with a majority of survey respondents saying that they plan to rent and stay in the same place they are living in currently, with no impetus to move, as well as not financially or mentally planning for home ownership any time in the near future.

Key Takeaways:

• Renters believe increases in rent will be manageable and are not deterred by them.
• Americans are optimistic about their financial futures and current situations
• Even with the increased optimism with the rental market, the home buying market is also filled with optimism

"Renters expect that renting will stay affordable, but say they would move into a smaller rental unit to be closer to a city."

Read more: http://www.housingwire.com/articles/39832-freddie-mac-renters-say-they-expect-to-stay-where-they-are

What do college aged young adults and retirees have in common? Maybe more than you would think! Just as students move into communities based on common interests, in this case, academics, retirees seem to be following the same trend. In recent years the number of baby boomers moving into communities that are based around elder care have sky rocketed. There are many factors that are contributing to this trend including less responsibilities than owning a large home such as lawn maintenance and other upkeep duties. Another factor that is contributing to this trend is the fact that people are living longer. While this is true, it also leads to the fact that more elderly people are living with chronic conditions. So it would make sense to build communities around medical care that is age specific. The last major contributing factor to this trend is the fact that this generation getting ready to enter retirement is richer than the retirement generations before them. Without going into detail, this generation was born in the right time and the right place to be able to accrue more monetary wealth than the generations before them. This allows them to invest in communities that cater to their specific needs and allows them to get the health care they need in their own homes.

Key Takeaways:

• In the near future, a quarter of the UK's population will be over 65.
• Many retirees are choosing to own homes within communities rather than retirement homes.
• Many services are still provided in these communit, up to and including medical care when they are unable to care for themselves.

"Born into the post-WW2 baby boom these retirees want freedom from the responsibilities of a large home in their later years and are shoring up demand for luxury, condominium style retirement flats."

Read more: http://www.theinvestor.jll/news/emea/05/investment-to-pour-into-baby-boomer-retirement-properties/

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Does your home have value, but you're uneasy about mortgaging it to gain some actual capital? Other homeowners and couples have felt the same way, and one family in particular had some success. The Scotts met with a company specializing in Fixed Income iShares, a type of ETF. Also called a home ownership investment, these investments give home buyers or home owners some cash, using a partnership formed by the investor and home owner. The homes are used as an asset, alongside pension funds and endowments, to create quite a compelling investment for most institutional agents. The home ownership investment deal isn't a type of loan, but instead truly an investment in the home. This creates some long-term potential, and matched with the other two major assets, affords a degree of safety and predictability. Unison, the largest company for home ownership investors, has been working closely with lenders and regulators to push this new type of financing throughout the United States. Currently there are just 13 states working with Unison, but they plan to move their operations - and their home ownership investments - nationwide very soon. In fact, 3000 additional deals and partnerships will take place across the country by the end of this year. Home owners around the country can expect to see some form of home ownership investing come to their neck of the woods sooner than they think!

Key Takeaways:

• Unison has brought unique programs to market in HomeBuyer and HomeOwner.
• When rates are low, pension funds need to take on greater risk to achieve goals.
• Unison's home ownership program is not a loan, rather an investment. They only receive payment when the house is sold.

"Today, a home ownership investment provides cash financing to homebuyers or homeowners from investors seeking long-term price exposure to residential real estate. This new concept aligns the interests of the homeowner and the investor as partners"

Read more: https://www.forbes.com/sites/omribarzilay/2017/04/13/the-rise-of-a-new-asset-class-a-home-ownership-investment/

A report warning that young people are finding it harder to own a home than in the past. The report stated that 31 per cent of 25 to 29 year olds own their own home, compared to 63 per cent twenty five years ago. Also, the young are finding it increasingly difficult to secure a bank loan for home ownership, and are turning to their parents. 34% of first time buyers are now depending upon family loans, versus 20% seven years earlier. The study estimates this percentage to rise to 40% by 2029. The Commission's chairman sees this as an issue for the government to address. He feels that home ownership is a sign of upward mobility. The inability to own a home has negative impacts upon the social system. The government painted a less dire picture, noting a nine-year high in the total of buyers for the first time and starts in new home construction. The Commission has nevertheless urged the government to take action. The Commission recommended that the government build over three million new homes over the next ten years. The Commission argued that government could partially fund this effort by selling off some of its public property.

Key Takeaways:

• Young people don't have access to property ownership and that impedes social mobility
• Many people don't have enough resources and assets to put down for collateral or for a down payment
• Action by the government is necessary in order to increase the supply of housing properties

"Home ownership is increasingly out of reach for young people without “the bank of Mum and Dad”, a study warns today – demanding “radical action” from the Government."

The biggest foreign investments in commercial real estate in the United States last year relied heavily on China. The majority of over 1 billion dollars in invested were made mostly by Chinese insurance companies. This is only a small portion of the industry which is estimated altogether to be worth over 1.83 trillion dollars. The most attractive regions of the country were on the East and West coasts with almost half of the investments in New York alone while the other half were split between Southern California, Washington state and even a small portion in Chicago. Investments grew in San Francisco while they were reported to be steady from previous years in Los Angeles. Interest in Industrial properties have slowed dramatically while over 8.6 billion dollars was invested in the hotel and office space. However, due to a lengthy and more careful process, Chinese regulations are expected to take longer with more restrictions therefore slowing the outflow of future investments into foreign ventures. According to a senior management director who oversees China's direct investment at Cushman and Wakefield, Xinyi McKinny expects the halt to be temporary since most investors look to long term gains as opposed to short term cash flow.

Key Takeaways:

• With 19.2 Billion in investments the chinese comprise more then half the investors of commercial Realestate for 2016.
• Chinese investors make up 29% of America's total foreign investors they top even Canada which is the second largest investor.
• Chinese life insures make up over 50% of these investors, Mostly in buying up hotels and resorts.

"In a rush to diversify holdings and hedge against a slowing economy and depreciating yuan, Chinese investors have sought better returns overseas and become an important driver in U.S. commercial real estate. Much of their investment in the sector has been through mega deals. Most transactions in 2016, 62% to be exact, were over $1 billion."

Read more: https://www.forbes.com/sites/ellensheng/2017/03/13/chinese-now-the-largest-group-of-foreign-investors-in-u-s-commercial-real-estate/

His posts are always really informative.

@Sam Bates outstanding, good resource. Thanks for sharing this.

Looks great, Keep it Up.

The Federal Reserve is expected to raise interest rates next Wednesday. This will mark the third time it has done so in fifteen months, and is an indicator that further increases may be in store. In the past, an increase in the rate caused investors a great deal of worrying. However, the current reaction from investors is less sanguine. Instead, Wall Street remains excited and confident. Investors are still thrilled over the possibility of tax cuts, reduced federal restrictions, and increased spending on transportation and roads expected with the election of Donald J. Trump in November's presidential election. Investors are 91% sure of a rate hike given a February report showing 235,000 new jobs and a drop in unemployment to 4.7 per cent. Investors are not as worried about the rate hike now, as the country's economy is better and is almost at one hundred per cent employment. An economist at Moody's Analytics noted that in 2013, investors were worried about the state of the economy. Now, they are more confident in the ability of the economy to handle rate hikes. Indeed, economic experts predict the country can withstand four rate increases this year, versus the old estimate of three. Rate hikes in 2018 are expected to slow down activity.

Key Takeaways:

• The Fed's benchmark rate is historically low for the year 2016
• The benchmark rate ranges from .5-.75% after modest increases in the year
• A continuation of hikes in 2018 will result in a downward turn for economic activity

"The Fed’s benchmark rate, after modest increases in December 2015 and December 2016, ranges from 0.5 percent to 0.75 percent, quite low by historical standards. But if the Fed ends up raising rates three or four times this year and adds more hikes in 2018, its benchmark rate would be left at a level that might start to dampen economic activity"

Read more: http://www.journalgazette.net/business/Investors-not-fazed-by-likely-hike-ininterest-rate-18243731