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PURE Property Management Launches Institutional Management Division

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PURE Institutional Management responds to the growing demand for dedicated services that reduce the complexities and costs of managing institutional portfolios PURE Property Management, the fastest growing residential property management and technology company in the U.S., announced the launch of PURE Institutional Management, a dedicated division to service institutional investor clients and their residential portfolios across multiple locations within PURE’s rapidly expanding national footprint. “Institutions managing portfolio investments are challenged with complexity, inconsistency, and cost,” said Joseph Polverari, PURE’s co-founder and general partner. “Our flexible and tech-enabled property management services optimize for simplicity, consistency, and intelligence. This reduces cost and grows value at scale.” Portfolio managers face inconsistent and inflexible service options from having to engage with multiple independent property management providers across various locations. PURE provides best-of-breed high-tech, high-touch, and hyperlocal property management services consistently across multiple geographic locations and can scale as needed. PURE’s leaders and property managers have over 1,000 years of combined property management experience. “We worked with Skyline Properties in Atlanta and AHI Properties in Birmingham and Huntsville,” said Amir Peleg, founder and partner at Safe Future. “After Skyline and AHI joined PURE, we were introduced to PURE’s greater team and grander vision. We were immediately impressed with how focused they are on understanding our specific needs. As we continue to expand our new home development across the U.S., PURE Institutional Management will be a valuable growth partner.” Safe Future has developed more than $300 million in properties and is currently involved with over 2,000 properties in the U.S. With a vision to make the process of renting a home a simple and satisfying experience for all, PURE launched in October 2020 to quickly become one of the largest and most tech-forward residential property management companies in the U.S. PURE manages over 15,000 single-family residences on behalf of individual and institutional investors and operates in over 50 cities and metropolitan areas within 16 states. The company expects to operate in 25 states by end-of-year. PURE recently closed a $50 million financing which values the business at over $300 million. The financing is aimed at accelerating acquisitions of leading independent property management companies across the U.S. while increasing its commitment to tech-enabling its people and processes to deliver exceptional investor and resident experiences. “We’ve completed 35 acquisitions and many of those came with previously established institutional clients seeking simplicity and consistency,” said Michael Catalano, PURE’s co-founder and general partner. “The industry is highly fragmented and consolidation leads to consistency. Our ‘band-together-build-together’ mission resonates with seasoned owners of property management companies who share our ‘from-the-industry-for-the-industry’ mantra and are enthusiastic about our collective aim to improve and simplify the experience of renting a home.” Acquired property management companies and their employees enjoy greater benefits and career growth opportunities. Their experience and local market expertise are “upwardly mobile” within a culture of collaboration. PURE deploys scalable technologies while optimizing business processes and workflow automation to enable acquired operators to grow their services capability to drive increased value for investors, institutions, and residents. About PURE Property ManagementPURE Property Management is the fastest growing profitable residential property management and technology company in the U.S. Led by a team of experienced industry professionals and seasoned technology innovators, PURE acquires residential property management companies and invests in their people and processes. By deploying technology and providing operational efficiencies, PURE creates simple and satisfying experiences for residents and investors, including institutional portfolio managers. For more information, visit https://purepm.co

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Rapidly Rising Rates and Persistent Inflation Further Soften Economic Outlook

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Housing Activity Expected to Slow Further as Affordability Worsens Persistent inflation, rising interest rates, and a slowdown of global economic growth are the primary contributing factors to updated expectations that full-year 2022 real GDP will grow at the reduced rate of 1.3 percent, 0.8 percentage points less than previously predicted, according to the May 2022 commentary from the Fannie Mae (OTCQB: FNMA) Economic and Strategic Research (ESR) Group.The ESR Group’s latest forecast sees second quarter 2022 growth rebounding to 1.6 percent following last month’s news that the economy contracted by 1.4 percent in the first quarter. The ESR Group continues to believe that the Fed’s efforts to curtail inflation by tightening monetary policy are unlikely to result in a so-called “soft landing.” Expectations for a modest recession beginning in the second half of 2023 remain unchanged, though the risk of such a contraction occurring sooner have increased as consumer spending power is increasingly constrained by elevated inflation and a rapidly rising rate environment. The ESR Group also expects a meaningful slowdown in home sales for the second and third quarters of 2022, followed by a softening in construction activity and, ultimately, a large deceleration in home price growth. With mortgage rates having risen faster in the last 5 months than in any period since 1981, the ESR Group expects both purchase and refinance originations to decline meaningfully. With only 1.4 percent of mortgages now predicted to have a 50-plus-basis point incentive to refinance, it’s expected that, going forward, a majority share of refinance activity will be of the cash-out variety. “Financial conditions have tightened significantly, and the economy is slowing faster than previously expected as markets adjust to the Federal Reserve’s tightening guidance,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Uncertainty continues to weigh heavily on markets, with geopolitical risks rising as the Russian war on Ukraine extends into its third month. The impact to prices of expected reductions in agricultural production, as well as continued increases in house prices, suggest to us a difficult path for the Fed to return inflation to its two-percent target rate in a timely manner – and, of course, in the absence of an economic downturn.” “Rising mortgage rates are reducing affordability through higher mortgage-related costs, all while house prices continue to grow. Historically, rapid and substantial rises in mortgage rates have had the effect of slowing activity, which we reflect in our forecast. Not only is the worsening affordability of homes a problem for potential entry-level homebuyers, but current homeowners are less likely to trade in their existing lower-rate mortgages and list their homes for sale, both of which will likely weigh on sales.” Visit the Economic & Strategic Research site at fanniemae.com to read the full May 2022 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary. To receive e-mail updates with other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here.

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WORD OF THE DAY: Abstruse

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[əb-STROOS] Part of speech: Adjective Origin: Latin, late 16th century Definition: Difficult to understand; obscure. Examples of Abstruse in a sentence “The single was critically acclaimed despite its abstruse lyrics.” “The movie’s ending was far too abstruse for the general public.” About Abstruse Abstruse comes from the Latin word “abstrusus” (put away, hidden). This word developed in turn from the word “abstrudere” (conceal), a combination of “ab” (from) + “trudere” (to push). Did you Know? Although this word sounds similar to “obtuse” (slow or difficult to understand), abstruse has both a different meaning and word root. Abstruse is derived from the Latin word “abstrusus” (hidden, put away), while obtuse is derived from the Latin word “obtustus” (to beat against). Although they have similar pronunciation and meanings, abstruse references something that has been obscured or is difficult to understand, while obtuse can also refer to someone who has difficulty understanding a clear situation.

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WORD OF THE DAY: Palindrome

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[pa-lən-ˌdrōm] Part of speech: noun Definitions: A word that reads the same when spelled forward and backward; a verse or sentence that can be reversed and spelled exactly the same Examples of Palindrome in a sentence “”Race car” is one of my favorite palindromes.” “In addition to being a funny thing to say, “Madam, I’m Adam” is also a palindrome.” About Palindrome In 1961, C.C. Bombaugh coined the term semordnilap in his book Oddities and Curiosities of Words and Literature. You might recognize it as palindrome spelled backward. A semordnilap is a word that spells a different word when reversed. For example, desserts spelled backwards makes stressed. Did you Know? The word palindrome comes to us from the Greek word palindromos, meaning “running back again.”

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Redfin Reports Growth in Asking Rents Slows for the 1st Time in a Year

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Rents rose 15% year over year in April, down from March’s 17% increase. Still, Austin, Portland and South Florida saw rents surge more than 30% The median monthly asking rent in the U.S. increased 15% year over year to a record high of $1,962 in April, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s below March’s 17% increase, marking the first slowdown in a year. “The fact that rents are growing at a slower pace may be a very early sign that the Fed’s tactic of raising interest rates to quell inflation is working,” said Redfin Chief Economist Daryl Fairweather. “However, rents are still growing at nearly double the rate of overall inflation. Landlords in hot migration destinations like Austin, Portland and South Florida are charging new tenants 30% more than last year’s rent.” Austin Sees Rents Soar Nearly 50%—the Biggest Increase in the Country Asking rents surged 46% year over year in Austin, TX—the largest increase on record in any metro area since at least the beginning of Redfin’s rental data in 2019. Portland, OR and south Florida also saw asking rents increase over 30% from a year earlier. Top 10 Metro Areas With Fastest-Rising Rents Year Over Year Austin, TX (+46%) Portland, OR (+33%) Miami, FL (+31%) Fort Lauderdale, FL (+31%) West Palm Beach, FL (+31%) Seattle, WA (+31%) New York, NY (+28%) Newark, NJ (+28%) Nassau County, NY (+28%) New Brunswick, NJ (+28%) Just three of the 50 most-populous metro areas saw rents fall in April from a year earlier. Rents declined 8% in Milwaukee, WI, 4% in Kansas City and 2% in Minneapolis. This was the first annual decline in Redfin’s data for Minneapolis. Metro Areas Where Rents Declined Year Over Year Milwaukee, WI (-8%) Kansas City, MO (-4%) Minneapolis, MN (-2%) To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/redfin-rental-report-april-2022/

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Home Buyers May Find Less Competition Near City Centers for the First Time in Years

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Suburbs are generally seeing home values grow more than urban areas, indicating more competition Suburban home values have been growing faster than those in urban areas since July 2021, a reversal from previous norms and from the first 15 months of the pandemic. With remote work now an option for more households, many buyers are prioritizing affordability over proximity to the workplace. Understanding which areas are most competitive can help home shoppers navigate today’s hot sellers market. For the first time since the Great Recession, buyers may have an easier time buying a home in the city than in nearby suburbs this home shopping season. That’s because homes in the suburbs recently have been appreciating faster than urban homes, a new Zillow® analysis shows, indicating stronger demand and fiercer competition. While competition is strong in most of the country, there are pockets of opportunity for home buyers.  Home values in suburban ZIP codes have been growing faster than those in urban areas since July 2021. The typical home in the suburbs gained $66,490 in value in the past year, compared to $61,671 for the typical urban home. That is a reversal from previous norms and from the first 15 months of the pandemic. From January 2013 — about the time when home values began to recover following the housing crash — through June 2021, urban homes were generally gaining value more quickly. “In the beginning of the pandemic, home values in urban areas generally outpaced suburban areas, counter to what many expected during the rush for more space,” said Zillow economist Nicole Bachaud. “And while urban home value gains have continued to accelerate, the suburbs are even hotter, showing just how strong demand is for limited suburban inventory. That could mean competition for homes will be lighter near city centers this home shopping season, something we haven’t been able to say for nearly a decade. That’s not to say shopping for a home in the city will be a leisurely affair, but any sliver of opportunity for buyers is welcome in this market.” Faster home value growth in the suburbs comes as remote work has changed the U.S. housing landscape. Research from the National Bureau of Economic Research found the shift to remote work is responsible for more than half of the gain in U.S. home prices since late 2019, and that the evolution of remote work is likely to have a major impact on the future path of home values.  To be sure, urban real estate has seen incredible growth, as well. This is not a case of housing in the suburbs gaining value at the expense of urban real estate; rather, it’s something akin to one world-class sprinter edging out another. And there are signs that demand may be shifting back in favor of urban homes. In each of the first three months of this year, the gap between annual home value growth in the suburbs and in urban areas has shrunk. Annual suburban home value growth outpaced urban home value growth by about $7,250 in December, but only by about $4,820 in March. The shift has been more pronounced in a few metro areas where suburban home values grew especially fast compared to urban home values in 2021: San Francisco, Columbus, Seattle and Boston. This may reflect home buyers reacting to employers’ return-to-office plans, realizing that the cost savings of a move to the suburbs are not as big as they once were, or sensing that competition may not be as stiff for homes in urban parts of the metro.  Nashville and Raleigh are two notable counterexamples. In both metros, urban home values rose more than those in the suburbs in 2021. However, after the first three months of 2022, those positions have been reversed. In the year ending March 2022, the typical suburban home in Nashville gained $7,350 more than the typical urban home, and in Raleigh, the typical suburban home gained about $9,800 more. This could signal a shift in demand in these markets, with home shoppers searching for more-affordable options in the suburbs, especially as mortgage rates keep rising.  In today’s hot sellers market, buyers should consider Zillow’s tips to win a competitive bid. Hiring the right local agent and embracing new real estate technology for a speed advantage can help during the home search. Securing mortgage pre-approval and using strategies such as submitting an offer before the offer review date can help an offer stand out.

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