REI INK

OPPORTUNITY ZONE REDEVELOPMENT AREAS CONTINUE TO TRACK NATIONWIDE HOME-PRICE INCREASES IN SECOND QUARTER

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Half of Zones Analyzed See Median Home Prices Rise At Least 5 Percent from First Quarter to Second Quarter of 2022, and At Least 20 Percent Annually in Half of All Zones ATTOM, a leading curator of real estate data nationwide for land and property data, released its second-quarter 2022 report analyzing qualified low-income Opportunity Zones targeted by Congress for economic redevelopment in the Tax Cuts and Jobs Act of 2017. In this report, ATTOM looked at 5,198 zones around the United States with sufficient data to analyze, meaning they had at least five home sales in the second quarter of 2022. The report found that median single-family home and condo prices rose from the first quarter of 2022 to the second quarter of 2022 in 63 percent of Opportunity Zones around the country and went up at least 5 percent in roughly half of zones analyzed with sufficient data. Typical values also shot up at least 20 percent annually in about half of Opportunity Zones with enough data to analyze across all quarters. Moreover, median values increased in about half the Opportunity Zones by more than the 8.8 percent quarterly and 15.3 percent year-over-year gain seen for all markets nationwide in the Spring of 2022. Those gains extended similar patterns seen over the past year as home prices in distressed neighborhoods around the nation continued to keep up with gains in the broader national housing market. Typical home values in Opportunity Zones remained lower than those in most other neighborhoods around the nation in the second quarter of 2022. Median second-quarter prices fell below the national median of $346,000 in 77 percent of Opportunity Zones, about the same portion as in earlier periods over the past year. Considerable price volatility also continued in those markets, as median values dropped quarterly in 37 percent of them, probably reflecting the small number of sales in many areas. “Homes in most Opportunity Zones represent affordable options for real estate investors and consumer homebuyers in a market where both home prices and mortgage rates have been rising,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “With home prices up 15 percent compared to a year ago and mortgage rates nearly doubled, both investors and homebuyers may find the lower purchase prices for homes available in Opportunity Zones very attractive.” Median prices also were under $200,000 in 49 percent of the zones during the second quarter of 2022. But that percentage under $200,000 was down from 58 percent in the second quarter of 2021 and 52 percent in the first quarter of 2022. In another ongoing sign of market strength, prices spiked at least 25 percent from the second quarter of last year to the same period this year in a larger portion of Opportunity Zones than in other neighborhoods around the country. Opportunity Zones are defined in the Tax Act legislation as census tracts in or alongside low-income neighborhoods that meet various criteria for redevelopment in all 50 states, the District of Columbia and U.S. territories. Census tracts, as defined by the U.S. Census Bureau, cover areas that have 1,200 to 8,000 residents, with an average of about 4,000 people. The ongoing price spikes inside Opportunity Zones in the second quarter was one of the latest signs of how high buyer demand coupled with tight supplies of homes for sale throughout the U.S. may have priced many households out of more upscale neighborhoods into lower-priced markets. Demand continued into the Spring buying season even as home mortgage rates rose in the second quarter to nearly 6 percent, gasoline and other fuel costs soared, inflation shot up to 40-year highs and economic uncertainty across the country increased. High-level findings from the report: Median prices of single-family houses and condominiums rose from the first quarter of 2022 to the second quarter of 2022 in 2,928 (63 percent) of the Opportunity Zones around the U.S. with sufficient data to analyze, while declining in 37 percent. They increased from the second quarter of 2021 to the same period this year in 3,692 (77 percent) of those zones. By comparison, median prices rose quarterly in 69 percent of census tracts outside of Opportunity Zones and annually in 82 percent. (Among the 5,198 Opportunity Zones included in the report, 4,654 had enough data to generate usable median-price comparisons from the first quarter to the second quarter of 2022; 4,793 had enough data to make comparisons between the second quarter of 2021 and the second quarter of 2022). Measured year over year, median home prices rose at least 25 percent in the second quarter of 2022 in 1,883 (39 percent) of Opportunity Zones with sufficient data. Prices rose that much during that time period in just 34 percent of all other census tracts outside of opportunity zones throughout the country. Among states that had at least 25 Opportunity Zones with enough data to analyze during the second quarter of 2022, those with the largest portion of zones where median prices rose year over year were in the West. They were led by Utah (median prices up, year over year, in 97 percent of zones), Arizona (93 percent), Nevada (93 percent), Oregon (89 percent) and Idaho (88 percent). Of the 5,198 zones in the report, 1,763 (34 percent) still had median prices in the second quarter of 2022 that were less than $150,000. That was down from 41 percent of those zones a year earlier. Another 778 zones (15 percent) had medians in the second quarter of this year ranging from $150,000 to $199,999. Median values in the second quarter of 2022 ranged from $200,000 to $299,999 in 1,118 Opportunity Zones (22 percent) while they topped the nationwide second-quarter median of $346,000 in 1,172 (23 percent). The Midwest continued in the second quarter of 2022 to have the highest portion of the least-expensive Opportunity Zone tracts, with median home prices of less than $175,000 (69 percent), followed by the Northeast (45 percent), the South (45 percent) and the West (6 percent). Median household incomes in 87 percent of the Opportunity Zones analyzed were less than the medians in the counties where they were located. Median incomes were less than three-quarters of county level

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WORD OF THE DAY: Scantling

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[SKANT-ling] Part of speech: Noun Origin: Old French, early 16th century Definition: A specimen, sample, or small amount of something; the size to which a piece of wood or stone is measured and cut. Examples of Scantling in a sentence “There’s only a scantling of milk left, so please pick up a new carton.” “The shed door was built to a scantling of 7 feet tall.” About Scantling In addition to describing a small amount, scantling can apply to measurements of all sizes in woodworking or building. It can be the size of a certain cut of wood or stone. Or it could be a set of standard dimensions in shipbuilding. Then scantling could also just be a name for a particular type of wood. Use your context clues to decipher the scantling. Did you Know? Scantling, a little bit of something, comes from the Old French word “escantillon,” which means sample. While the words look very similar, scant (barely amounting to a specified number or quantity) does not share this root. Scant comes from the Od Norse word “skammr,” meaning short.

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INVESTING IN AMERICA’S HOTTEST MARKET – SAVANNAH, ga

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MARK YOUR CALENDARS FOR THE PODCAST RELEASE – AUGUST 24 Join the PIP Group’s Founder and CEO, Charles Sells, as he joins REI INK’s CEO, Robert Rakowski, as they discuss the amazing real estate investment opportunities available in Savannah, GA. In this presentation you can learn: – The benefits of investing in Savannah, GA – The Savannah “Power in Numbers” – More about the Savannah “Dream Maker” programs – Fix-and-Flip strategies in the Savannah market – Build-to-Rent strategies – Extreme flips and multi-unit flips strategies  – And much more, including actual case studies! Charles Sells and the PIP Group have 27 years of experience investing in distressed real estate. They have assisted countless investors passively invest in everything from tax liens to multifamily long-term rentals. They are the largest “flipper” of homes in their market and in the past 7 years have done about $90MM in flips/buy and hold properties. DO NOT MISS THIS IMPORTANT PODCAST!

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Incenter Insurance Solutions Announces Lender Insurance Services, Bringing More Efficiency to the Commercial Lending Process

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Offerings Include Real Estate Investment Portfolio Reviews and Specialty Insurance for Short-Term Opportunities Incenter Insurance Solutions, part of the Incenter family of companies, announced its Lender Insurance Services. These innovative programs are designed to give lenders a competitive advantage in the commercial and investor markets through two distinct offerings: 1) real estate investment portfolio reviews of existing insurance, and 2) specialty insurance products for short-term opportunities, such as fix and flips. “Our Lender Insurance Services not only empower our clients to ensure compliant insurance coverage across all investment properties; they help them do so efficiently while providing added value. This is what sets us apart in the marketplace,” said Royce Yeager, Director of Lender Insurance Services, Incenter Insurance Solutions. Through the portfolio review services, agents make sure adequate insurance coverage is in place for each asset, whether properties are all in one region or dispersed across the U.S.  Acting as consultants, they seek to determine whether existing policies are free of issues that could delay a closing or reduce the salability of a portfolio since the systematic acceptance of insufficient coverage can cause undue exposure to loss and potentially violate lender investor covenants. The work product includes written reports for loan files confirming all requirements have been met. Should the team identify any issues, they are available to work directly with borrowers and their third-party agents—freeing staff to remain focused on lending. If borrowers/investors are unable to produce acceptable insurance, Incenter Insurance Solutions can provide a quick and accurate quote as desired. Incenter Insurance Solutions’ short-term insurance program offers lenders a full suite of specialty policies for temporary rentals, bridge and construction loans, and fix and flip projects. Since many agencies are not agreeable to the extra servicing required to bind and cancel these temporary policies, Incenter Insurance Solutions is helping to fill a market gap. Furthermore, Incenter Insurance Solutions is able to provide quotes for every loan file well in advance of closings without any borrower identifiable information, using only the property address and information about any planned renovation or construction. Incenter Insurance Solutions is fully licensed and insured to write business in all 50 states. To learn more, visit https://incenterinsurance.com/ or contact Mr. Yeager at royce.yeager@incenterms.com. About Incenter Insurance Solutions Incenter Insurance Solutions provides insurance services and solutions that help clients obtain coverage while advancing their personal or business goals. The firm’s flexibility and partnerships with dozens of carriers enable them to custom-design solutions with creative precision. For more information, visit incenterinsurance.com.

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WORD OF THE DAY: Moil

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[moyl] Part of speech: Verb Origin: Latin, mid-16th century Definition: Work hard; Move around in confusion or agitation. Examples of Moil in a sentence “You’ll moil to plant your spring garden, but it’s worth the effort.” “She seemed lost as she moiled around the street corner.” About Moil As a verb, moil means to be working very hard. But if you work too hard you might get overhwhelmed or overheated. In comes the second definition of moil, meaning to move around in agitation. Did you Know? The modern definition of moil is the opposite of its roots. In Latin, “mollis” means soft, and moil originally meant to wetten or soften a substance. But if you’re laboring in mud, it’s probably pretty hard work, and that’s likely how moil came to mean strenuous work.

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Redfin Reports Early Stage Demand Picks Up as Mortgage Rates Fall to a Four-Month Low

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Measures of homebuyer activity such as online searches, requests for tours and agents’ help, and mortgage applications rose as mortgage rates fell below 5% More homebuyers are returning to the market, motivated by a decline in mortgage rates and a record share of listings with price drops, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Redfin’s Homebuyer Demand Index—a measure of requests for home tours and other home-buying services from Redfin agents—rose 7 points during the last week of July, and mortgage purchase applications rose for the first time in five weeks. So far this rebound has not moved through to actual home sales. Pending sales in July posted their largest decline since May 2020. Home sellers are also reluctant to enter the market—new listings fell 11% from a year ago, the largest decline since June 2020. “Homebuyers may catch a break this month as rates have come down nearly a point from the recent high on fears of a recession,” said Redfin Deputy Chief Economist Taylor Marr. “There are deals to be had on some homes that have been sitting on the market with reduced prices. General economic uncertainty may continue to keep a lid on homebuyer demand and keep mortgage rates volatile, but the labor market remains a beacon of strength in the economy and the housing market in particular.” Leading indicators of homebuying activity: For the week ending August 4, 30-year mortgage rates fell to 4.99%, the lowest level in four months. This was down from a 2022 high of 5.81% but up from 3.11% at the start of the year. Fewer people searched for “homes for sale” on Google—searches during the week ending July 30 were down 24% from a year earlier, but are up 9% since late May. The seasonally-adjusted Redfin Homebuyer Demand Index was down 9% year over year during the week ending July 31, but has risen 21 points since the week of June 19. Touring activity as of July 31 was down 7% from the start of the year, compared to a 15% increase at the same time last year, according to home tour technology company ShowingTime. Mortgage purchase applications were down 16% from a year earlier during the week ending July 29, while the seasonally-adjusted index was up 1% week over week, the first increase in five weeks. Key housing market takeaways for 400+ U.S. metro areas: Unless otherwise noted, this data covers the four-week period ending July 31. Redfin’s weekly housing market data goes back through 2015. The median home sale price was $380,187, up 8% year over year, the slowest growth rate since July 2020. Prices fell 3.8% from their peak during the four-week period ending June 19. A year ago they rose 0.7% during the same period. San Francisco was the only metro area that saw a year-over-year decline in the median home sale price. Prices fell 8% from a year earlier. The median asking price of newly listed homes increased 13% year over year to $394,375, but was down 2.6% from the all-time high set during the four-week period ending May 22. Last year during the same period median prices were down just 0.1%. The monthly mortgage payment on the median asking price home hit $2,267 at the current 4.99% mortgage rate, up 37% from $1,655 a year earlier, when mortgage rates were 2.77%. That’s down slightly from the peak of $2,467 reached during the four weeks ending June 12. Pending home sales were down 16% year over year, the largest decline since May 2020. New listings of homes for sale were down 11% from a year earlier, the largest decline since June 2020. Active listings (the number of homes listed for sale at any point during the period) rose 4% year over year. 38% of homes that went under contract had an accepted offer within the first two weeks on the market, down from 45% a year earlier. 26% of homes that went under contract had an accepted offer within one week of hitting the market, down from 31% a year earlier. Homes that sold were on the market for a median of 21 days, up from 19 days a year earlier and up from the record low of 16 days set in May and early June. 45% of homes sold above list price, down from 53% a year earlier. On average, 7.7% of homes for sale each week had a price drop, a record high as far back as the data goes, through the beginning of 2015. The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, declined to 100.8%. In other words, the average home sold for 0.8% above its asking price. This was down from 101.9% a year earlier. To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/housing-market-update-demand-picks-up-rates-below-5-pct/

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