December 2023 – Page 4

Housing Sentiment Remains Stuck in Low-Level Plateau

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Only 14% of Consumers Believe It’s a Good Time to Buy a Home, a New Survey Low The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index® (HPSI) decreased 0.6 points in November, remaining within the bounds of the low-level plateau it established in the first half of 2023. Consumers’ perceptions of homebuying conditions remain overwhelmingly pessimistic, as only 14% of consumers believe it’s a good time to buy a home, a new survey low. Pluralities of respondents also continue to expect both home prices and mortgage rates to increase over the next 12 months. Overall, the full index is up 7.0 points compared to last year. “Over the past year, the HPSI has plateaued at a low level, evidence of persistent consumer pessimism regarding the state of the housing market,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Looking back, consumer belief that it’s a ‘bad time to buy a home’ hit a survey high several times this year – including this month – and each time the pessimism could be attributed to high home prices and high mortgage rates. At the end of 2022, as mortgage rates approached 7%, a rate level not seen in over a decade, a plurality of consumers said they expected home prices to decrease; however, that optimism faded over the course of 2023. A significant majority of respondents have also continued to expect mortgage rates to increase or stay the same, though these expectations have tempered over the year. At the same time, consumers have expressed a reduced sense of financial security, with fewer respondents reporting household income growth over the year and a higher percentage saying their incomes remained the same.” Duncan continued: “The combination of persistent affordability challenges and less rosy household finances remain the primary drivers of the low-level plateauing of housing sentiment. Even if mortgage rates decline over the next year, which we currently expect, it’s unlikely to meaningfully affect affordability. The lack of housing inventory is likely to remain a challenge for some time, and home purchase sentiment may continue to be suppressed as a result. As our forecast indicates, we believe it will be a couple years before homes sales return to more normal, pre-pandemic levels.” Home Purchase Sentiment Index – Component Highlights Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased in November by 0.6 points to 64.3. The HPSI is up 7.0 points compared to the same time last year. Read the full research report for additional information. To receive e-mail updates with other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here. SOURCE Fannie Mae

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Funding will go towards buying homes in major Midwest markets to address the public housing crisis and create economic mobility Simply Homes, an automated Single Family Rental (SFR) sourcing and underwriting platform developed to help solve the affordable housing crisis by mobilizing stagnant housing stock for use in the Housing Choice Voucher (HCV) program, announced $22M in funding for operations and real estate acquisitions. The financing is led by Gutter Capital and Watchung Capital, with participation from Village Global, Ambush Capital, RavenOne Ventures, Neil Parikh, Gabe Flateman, Luke Sherwin, and others. Harvard University’s Joint Center for Housing Studies 2023 State of the Nation’s Housing report found record unaffordability, extreme housing shortages and an urgent need for both public and private investment to combat these issues, as the current shortage in affordable housing is estimated to be as large as 7 million homes. Simply Homes is addressing this by implementing its platform to optimize the acquisition, renovation, and leasing of otherwise stagnant housing stock and making it available to lower-income families. Over 80% of Simply Homes’ tenant base are single parents who would need to work 150 hours a week to afford market-rate rent on a home. Utilizing HUD’s HCV program through Simply Homes, these families are paying no more than 30% of their income to provide a safe, well-maintained home for their family. The company is co-founded by CEO Brian Bagdasarian who brings two decades of experience in human process automation and machine learning, and previously was with HubSpot, having joined as part of the founding team of Motion.ai, and LogMeIn, where he led Digital Engagement Strategy, and CFO Robert Kavanagh, who, prior to Simply Homes, lead the acquisition of Ireland’s largest social housing portfolio, and previously spent 10 years as an investment banker at Jefferies and Cantor Fitzgerald in New York and London, specializing in infrastructure and ESG assets. “When we buy into a neighborhood, we are investing in the community,” said Brian Bagdasarian, CEO and Founder of Simply Homes. “We offer renovated homes, not just as shelter, but as a foundation for family growth and economic stability to address America’s housing crisis. Children that are able to move into lower-poverty neighborhoods can see a 31% increase in lifetime earnings. We’re making those meaningful changes, one family at a time.” After purchasing its first house in January of this year, Simply Homes closed on its 50th home in early November, and will have close to 100 units in its portfolio by year end. Through its Affordable Housing Vehicle, Simply Homes is investing millions of dollars to reinvigorate neighborhoods with its data-driven approach enabling rapid, effective deployment of capital across communities, all while working with the local residents to maintain a given community’s distinctiveness. “Simply Homes is showing up to this time of crisis with a solution that could change the affordability of housing nationwide,” said James Gettinger, Managing Partner at Gutter Capital. “Housing is least affordable for those that have the highest need and lowest income, and starter homes are rarely built today, leaving few options for the people who need to secure housing the most. By renovating the aging housing stock, Simply Homes is poised to vastly increase the supply of affordable and section-8 homes available.” Already active in Pittsburgh and Cleveland, Simply Homes is expanding into additional markets across the midwest in 2024, driving social and economic mobility in those areas by increasing the ability for those families most in need to achieve housing stability. The company is currently developing a series of AI-powered virtual analysts that rapidly interpret massive amounts of data that Simply Homes aggregates and leverages to make its acquisitions, further improving their ability to identify communities and individual properties where investment can lead to a positive next chapter for homes that need some love and families that need an opportunity. “Simply Homes has developed an impressive technology platform to help unlock capital like ours for the betterment of underserved communities and families,” said Tom Stults, Managing Partner of Watchung Capital. “We believe our partnership with Simply is an exciting opportunity to do well by doing good.” To learn more about Simply Homes, visit https://www.simplyhomes.com. About Simply HomesSimply Homes is an automated SFR sourcing and underwriting platform addressing the affordable housing crisis by mobilizing stagnant housing stock. Simply Homes leverages its proprietary ML and AI-powered automated sourcing and underwriting platform to identify, value, and acquire stagnant housing stock and make them available for their next family—primarily those eligible for HUD’s Housing Choice Voucher program. Press contact:BAM for Simply Homesgutter@bamtheagency.com SOURCE Simply Homes

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62% willing to wait for prices and/or rates to fall before buying a home, down from 85% just six months ago Prospective homebuyers’ patience may be waning, with fewer willing to wait until home prices or interest rates come down to purchase a home, according to new data from the Bank of America Homebuyer Insights Report (PDF). Today, 62% are willing to wait for prices and/or rates to fall before buying a home, down from 85% just six months ago. And they seem to be taking action: Sales of new single-family houses in September 2023 were a seasonally adjusted 759,000 – up from 679,00 sales in April 2023. “When it comes down to it, if buying a home is your goal and within your budget, the best time to buy is when you’re ready financially and you can find a home that fits your needs,” says Matt Vernon, head of consumer lending at Bank of America. “Even in the current interest rate environment, there are clear benefits to purchasing a home and beginning to build equity.” This latest research also explores what buyers would be willing to forgo in order to buy sooner, and what would motivate current homeowners to sell. Approximately 80% of outstanding U.S. mortgages have an interest rate below 5%. This gives homeowners an incentive to stay put because the average 30-year fixed mortgage rate hit 8% in October of this year. Younger people, Millennials in particular, are being hurt disproportionally by this trend, according to Bank of America Institute’s newly released Housing Morsel. The rate disparity is compressing the already limited supply of houses for sale, and begs the question: What does inspire homeowners to sell and free up inventory for would-be homebuyers in today’s environment? What Would Make Homeowners Sell?Half of current homeowners say they’d be prompted to sell if their dream home became available (50%) and/or if they found a more affordable area (54%) – even if it meant paying a higher interest rate for a new mortgage. Additional motivations for some, but not as many, to move and give up their current mortgage rate include: In fact, millions of people are moving to areas, including the Sun Belt (PDF), where they can afford to buy a home. Those surveyed say the following could or already has motivated them to move from one state to another: Work-related reasons may also inspire homeowners to sell in this market, and work is a major driver of out-of-state moves. Those who have or would move to a new state for their careers are driven by increased job opportunities (57%), job requirements to relocate (29%) or the fact that they can work remotely and are no longer tied to an office (28%). Overall, regional labor market dynamics and migration trends are closely correlated, according to Bank of America Institute. Internal Bank of America data found that of the 26 Metropolitan Statistical Areas (MSAs) tracked, Boston and Portland, OR, are more likely to see inward migration due to job changes and cities such as Austin, San Antonio, Las Vegas and Tampa saw the biggest population inflow during the third quarter. What is more, relocating workers seem to be getting bigger pay increases than those who stayed in the same MSA. Willing to SacrificeWith inventory scarce, the Homebuyer Insights Report also explored how prospective buyers are adapting. The report found those surveyed would give up specific home features to increase their chances of finding a home in the year ahead. Notably, there are some differences in what older and younger generations are willing to sacrifice in order to buy a home. Gen Z (15%) are less likely to give up space than baby boomers (40%). However, Gen Z (24%) would sooner compromise on location, including proximity to work, schools, and amenities than baby boomers (6%). Across all generations, would-be buyers are most likely to give up the following if it increased the chances of finding a home to purchase: Homeownership Lays the Foundation for Financial SuccessThis survey asked participants if they view homeownership as a top indicator of success. Here’s how homeownership stacked up against other key markers of success in life: However, homeownership tops the list of how respondents define financial success (53%), according to those surveyed. Also important: saving enough money for an emergency fund (50%), paying down debt (45%) and being able to retire early (43%). Nearly two-thirds (63%) of these homeowners said owning a home is one of their greatest personal achievements – more than raising a family (50%), being in a committed relationship (32%) and/or overcoming a significant challenge (25%). Respondents continue to see homeownership as a reflection of significant achievement and driver of wealth creation that can help them build equity over time: “There’s a clear desire for homeownership, but for some, it has become more challenging to achieve due to current market realities,” shares Vernon. “That’s why we are committed to offering affordable homeownership solutions, which include grants to help homebuyers with their down payments and closing costs, with no repayment required.” Community Homeownership Commitment™Bank of America’s $15 billion Community Homeownership Commitment aims to help low- and moderate-income homebuyers across the country begin to build their personal wealth and family legacy through the power of homeownership. The program includes a combination of specially designed products, resources and expertise as well as one of the most generous grant programs in the industry. Bank of America offers up to $17,500 in combined down payment and closing costs grants and has already granted nearly $438 million in those grants as of the third quarter 2023, with 88% of those grants going to first-time homebuyers. About Bank of America’s Homebuyer Insights ReportSparks Research conducted a national online survey on behalf of Bank of America between September 25th and September 28th, 2023. A total of 1,000 surveys (500 homeowners / 500 renters) were completed by adults 18 years old or older, who make or share in household financial decisions, and who currently own a home/previously owned a home or plan to own a home in the future. Survey completions were monitored by gender and age and/or proper balancing. The margin of error for the total national quota of 1,000 surveys is +/-

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Integration enables faster syndication, accelerates time-to-market Rently, a leading provider of self-touring and smart home technology solutions, and PlanOmatic, a nationwide provider of quality photography, floor plans, and 3D tours for the single-family rental industry, are pleased to announce a new photo feed integration partnership that instantly syncs PlanOmatic property photos to their corresponding vacant listings on Rently’s ILS and its syndicated sites for single-family rental listings. The Rently-PlanOmatic photo feed integration eliminates the manual steps previously required for property managers to update property listings prior to syndication. Now, Rently clients no longer need to wait for the sync between PlanOmatic, their property management software and Rently. Once PlanOmatic completes a photo shoot for a mutual client, photos are automatically attached to their corresponding Rently listing and immediately syndicated. In addition, clients avoid having to log in to three different platforms to upload photos. “Our partnership with PlanOmatic demonstrates the power of best-in-class vendors working together to help clients optimize their operations and marketing workflows. This new photo feed integration makes it easier and faster for our mutual clients to publish and syndicate their vacant rental listings with top-quality PlanOmatic property photos,” stated Merrick Lackner, CEO and Founder at Rently. “In order for operators to gain efficiencies, it’s essential that their key leasing automations work together seamlessly.” “Our integration with Rently ensures that property managers’ workflow velocity is uninterrupted right up until a listing appears. With this integration, our mutual clients no longer have to download, upload, and publish their listing media. We are working towards a future where photos, floor plans, and 3D can be ordered with just one click, and content will be syndicated automatically across internet listing services. Rently has taken the bold step of being a trailblazer in this space, and we are excited to partner on this journey.” As Kori Covrigaru, CEO at PlanOmatic, puts it, “This direct integration with Rently is the first of many to come.” For more information about the Rently-PlanOmatic integration or to schedule a consultation, please click here. About RentlyRently is the leader in self-touring and smart home technology. We offer best-in-class proptech solutions for the rental housing industry. We combine top-tier hardware with an innovative software platform that allows real estate operators to optimize their leasing efficiency and expand revenue opportunities. Rently.com About PlanOmaticPlanOmatic provides professional Photography, Interactive Floor Plans, and 3D Tours to the Single-Family Rental industry with speed and at scale, nationwide. With a network of photographers across the US, PlanOmatic serves property management companies and SFR owners/operators. As a client-centric company, PlanOmatic provides customizable business intelligence insights and workflow automation solutions to streamline client operations and marketing. www.planomatic.com Contacts: Becca NevarrezSenior Director, Marketing at Rentlybecca@rently.comor media@rently.com Kendall JarvisMarketing Manager at Planomatickjarvis@planomatic.com SOURCE Rently

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New York City and Chicago Areas Again Have Higher Concentrations of Markets More Exposed to Declines, Based on Third-Quarter Data; At-Risk Markets Have Weaker Foreclosure, Underwater and Job Measures; Less-Vulnerable Areas Mainly in South, Midwest and New England ATTOM, a leading curator of land, property, and real estate data, today released a Special Housing Risk Report spotlighting county-level housing markets around the United States that are more or less vulnerable to declines, based on home affordability, foreclosures, underwater mortgages and other measures in the third quarter of 2023. The report shows that California, New Jersey and Illinois have the highest concentrations of the most-at-risk markets in the country, with the biggest clusters in the New York City and Chicago areas, as well as central California. Less-vulnerable markets are spread mainly throughout the South, Midwest and Northeast. The third-quarter patterns – derived from gaps in home affordability, underwater mortgages, foreclosures and unemployment – revealed that California, New Jersey and Illinois had 33 of the 50 counties considered most vulnerable to potential drop-offs. Those concentrations dwarfed other parts of the country at a time of mixed market trends when home prices and homeowner equity improved but home affordability and foreclosure activity worsened. The 50 counties on the most-exposed list included nine in and around New York City, seven in the Chicago metropolitan area and five in central California. The rest were scattered around northern and southern California and widely across other parts of the country. At the other end of the risk spectrum, the South had the most markets considered least likely to decline, followed closely by the Midwest and a group of states in New England. “Some parts of the country continue to pop up on the radar as places to watch for signs of housing-market drop-offs, based on key quarterly measures,” said Rob Barber, CEO at ATTOM. “Once again, it is important to stress that getting onto the most-vulnerable list doesn’t signal an imminent crash for any local market. It just means that they have greater potential tripwires that could lead to a decline. Those remain areas to watch, especially given the overall varied trends in the market.” Counties were considered more or less at risk based on the percentage of homes facing possible foreclosure, the portion with mortgage balances that exceeded estimated property values, the percentage of average local wages required to pay for major home ownership expenses on median-priced single-family homes, and local unemployment rates. The conclusions were drawn from an analysis of the most recent home affordability, equity and foreclosure reports prepared by ATTOM. Unemployment rates came from federal government data. Rankings were based on a combination of those four categories in 578 counties around the United States with sufficient data to analyze in the third quarter of 2023. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the four ranks. Most-vulnerable counties bunched in Chicago and New York City metros, plus parts of California The metropolitan areas around Chicago, IL, and New York, NY, as well as central California, had 21 of the 50 U.S. counties considered most vulnerable in the third quarter of 2023 to housing market troubles (from among 578 counties with enough data to analyze). The 50 most at-risk counties included three in New York City (Kings and Richmond counties, which cover Brooklyn and Staten Island, and Bronx County), six in the New York City suburbs (Bergen, Essex, Ocean, Passaic, Sussex and Union counties, all in New Jersey) and seven in the Chicago metropolitan area (Cook, De Kalb, Kane, Lake, McHenry and Will counties in Illinois, and Lake County in Indiana). The five in central California were Fresno County, Madera County (outside Fresno), Merced County (outside Fresno); San Joaquin County (Stockton) and Stanislas County (Modesto). Elsewhere, the top-50 list included three each in northern California, southern California and the Philadelphia, PA, metro area. They were Butte County (outside Sacramento), El Dorado County (outside Sacramento) and Humboldt County (Eureka) in northern California and Kern County (Bakersfield), Riverside County and San Bernardino County in southern California. Those in the Philadelphia area were Philadelphia County, Gloucester County, NJ, and Camden County, NJ. Counties most at-risk of downfalls again have higher levels of underwater mortgages, foreclosures and unemployment At least 5 percent of residential mortgages were underwater in the third quarter of 2023 in 30 of the 50 most-at-risk counties. Nationwide, 5.2 percent of mortgages fell into that category, with homeowners owing more on their mortgages than the estimated value of their properties. Those with the highest underwater rates among the 50 most at-risk counties were Webb County (Laredo), TX (56.6 percent underwater); Tangipahoa Parish, LA (east of Baton Rouge) (24.3 percent); Philadelphia County, PA (17.4 percent); Saint Clair County, IL (outside St. Louis, MO) (15.3 percent) and Peoria County, IL (14.3 percent). Nationwide, one in 1,389 homes received a foreclosure filing in Q3 2023. (Foreclosure actions have risen since the expiration in July 2021 of a federal moratorium on lenders taking back properties from homeowners who fell behind on their mortgages during the early part of the Coronavirus pandemic that hit in 2020. While foreclosure rates remain low, nearly four times as many cases were open in the third quarter of this year compared to the point when the moratorium was lifted.) The highest foreclosure rates among the top 50 counties were in Cumberland County (Vineland), NJ, (one in 359 residential properties facing possible foreclosure); Warren County, NJ (outside Allentown, PA) (one in 459); Sussex County, NJ (outside New York City) (one in 461); Gloucester County, NJ (outside Philadelphia, PA) (one in 470) and Camden County, NJ (one in 509). The August 2023 unemployment rate was at least 5 percent in 35 of the 50 most at-risk counties, while the nationwide figure stood at 3.9 percent. The highest rates in the top 50 counties were in Merced County, CA (outside Fresno) (8.9 percent); Kern County (Bakersfield), CA (8 percent); Cumberland County (Vineland), NJ (7.3 percent); Bronx County,

Dwellsy

by Carole VanSickle Ellis
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A Functional Marketplace on Multiple Levels By Carole VanSickle Ellis Renting has been difficult in the 2020s, and that goes for all parties involved. While residents tend to make the headlines most frequently due to housing shortages and skyrocketing rent rates, landlords and institutional property owners have struggled as well with the emergence of astounding levels of fraudulent rental-related activity, confusing pandemic-related regulations, and rising demand for bigger, remote-work-friendly single family rental (SFR) properties. At the same time, “traditional” methods of connecting potential residents and property owners have become more treacherous, with online platforms like Craigslist and even Zillow falling prey to bad actors who use publicly available information to create fake listings, misdirect security deposits and rent payments, and sometimes “squat” in properties for months while the owners struggle with the legalities of evicting someone who was never a tenant in the first place. Fortunately for all parties, in 2019, Dwellsy co-founders Jonas and Rosalind Bordo debuted their game-changing “rental search experience” platform that is, the company states, “a new paradigm of genuine empathy for renter experience.” This empathy combined with a practical approach to the entire rental process is helping to fill what Jonas Bordo calls a “gap in the market” that was putting both residents and landlords at ongoing risk. “When we first started thinking about Dwellsy, it was because we realized that there was a real need to solve the problem that there really was no functional marketplace for renters,” Bordo explained. “Craigslist had been an amazing tool, but by the end of 2018, the majority of listings contained some element of fraud.” That is not just Bordo slamming the competition; just last year the FBI released a public statement warning that real estate fraud had risen 64% year-over-year and citing Craigslist by name. “There was a huge need for a new marketplace and, at the same time, there was a huge need for high quality rent data throughout the industry.” Prior to founding Dwellsy, Bordo had spent more than a decade working in the real estate industry at large real estate investment firms and handling operational services for a publicly traded real estate investment trust (REIT) with ownership interest in tens of thousands of residential units primarily on the west coast. In this position, Bordo often found he needed timely, accurate, high-quality data about rental trends in different markets around the country but, despite the vast resources at his fingertips, was unable to find it. “It just was not available,” he recalled. “I would talk to every vendor I could find in the [data space], and even when you could get access, it was often aggregated in ways that made the information challenging to use or the timeliness was lacking.” In 2018, Bordo and his co-founder realized that meeting the need for a new way to for landlords and tenants to connect would also enable them to create a veritable fount of real-time real estate and rental data. Shortly thereafter, they founded Dwellsy and took the platform live. “I saw that if we could create a marketplace where we could, first and foremost, do a great job of serving renters and landlords, helping renters find their next home and helping landlords get their places rented, we would be providing a truly valuable and in-demand service,” Bordo said. He continued, “In the process of creating that platform, we would gain access to marketing feeds, data streams, and, if we were successful in our primary goal, large volumes of relevant and timely information about the market that we could provide to landlords and others who needed that information to run their businesses more effectively.” The co-founders agreed there was no need to ever place a “toll” on tenants or property owners using the platform to find a home or fill a vacancy because the value of the data pool would far outweigh any listing fees they could possibly charge. “That was the opportunity, and it really took off quickly,” Bordo said. In fact, in just under four years, the company has expanded to offer listing access anywhere in the United States and offers data coverage for about 800 metropolitan statistical areas (MSAs) nationwide. They only claim data coverage for areas with substantial enough listing populations that true trend identification and analysis may be performed; if the data volume is too small and “choppy” to draw statistically valid conclusions then Dwellsy does not claim that market as covered. “We do not create data or do aggregation to create numbers or statistics where otherwise that information would not exist,” Bordo said proudly. “Our analysis is straightforward and transparent with our primary focus on getting the data points to meet our clients’ needs.” How & Why Dwellsy Works As any analyst will tell you, often the most groundbreaking insights come from the most straightforward of data sets. Similarly, any landlord will tell you that the best policy for rentals is to keep things simple (and easy) for residents. With that in mind, Dwellsy accomplishes one simple thing: making it easier for renters to find “hard-to-find” rentals. As the company’s website observes, “Right now, all rentals are ‘hard-to-find’ because properties exist across disparate inventories…paid placement interferes with organic search results… [and] amenity tagging and searching is limited.” Furthermore, the entire process has been clouded by fraud and is plagued by mistrust and uncertainty for all parties. Dwellsy tackles these issues with a direct, take-no-prisoners strategy that includes eliminating “pay-to-play” listings, offering early access contact services that alert would-be renters when a property that meets their predetermined parameters becomes available, and providing a fraud-detection framework under their Dwellsy Edge program that uses artificial intelligence and proprietary algorithms to identify fraudulent listings before they ever go live. “One of the biggest challenges in this business is the level of fraud,” Bordo said. “We apply a variety of algorithms to every incoming listing to keep things as safe as they can possibly be, and we offer a $2,000 warranty to renters as part