2023 – Page 45

CORTLAND SURVEY SHOWS PET POLICIES AND PERKS BEAT OUT PRICE AND LOCATION IN HOME SEARCH

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Multifamily firm releases new pet data and announces a new brand hero timed with National Pet Month. Pet policies, such as size restrictions and pet deposits, are the top consideration for apartment dwelling dog-owners nationwide when looking for a new place to live (86%) – beating out considerations like cost (82%) and location (77%). This data is among findings from a new survey by Cortland, a vertically integrated, multifamily real estate investment, development and management company that manages more than 250 apartment communities comprised of more than 80,000 homes throughout the U.S. The survey also uncovered that 70% of respondents say they are more likely to do business with a company that openly supports dog causes and charities than one that does not and 76% of respondents think it’s important for their dogs to have pet friends nearby when considering where to live. Additional survey insights include: “The survey underscores that pets are as much of a priority for apartment dwellers as they are to us, which motivates our team to continue to provide our residents, with hospitality-driven apartment living experiences with the whole family in mind,” said Tim Hermeling, Cortland Executive Vice President of Marketing. “From yappy hours and other pet-friendly events to leash-free bark parks and dog grooming stations and spas, Cortland communities have a variety of amenities and policies that ensure that pets feel welcome and at home.” With pets top of mind and heart, Cortland has also rolled out a new brand campaign featuring a talking pug named Cortie, who speaks about Cortland’s continued commitment to unmatched hospitality that makes apartment residents feel valued at home. The fully integrated marketing campaign will include connected tv spots, billboards, and other advertising across Cortland’s key Sunbelt markets to support the key mission of building awareness and engagement among prospective renters. “We strongly believe that apartments are more than buildings. At Cortland, our apartment homes are just that – homes. We pride ourselves on providing residents with a better living experience built around friendship, personal engagement, family, and community,” said Hermeling. “Our new brand icon, Cortie, adorably embodies all those qualities, reflecting our brand promise and differentiation in a memorable and engaging way.” Cortland has more than 250 pet-friendly apartment communities across the United States and has partnered with many local animal shelters to help find shelter animals a good home. Most recently, the firm waived its pet fees for its community residents in Atlanta following an urgent call from the Dekalb County Animal Shelter, which led to the adoption of more than dogs now happily living in Cortland communities across metro Atlanta. For more details on pet-friendly policies, visit Cortland.com. About Cortland: Cortland is a vertically integrated, multifamily real estate investment, development, and management company focused on delivering resident-centric, hospitality-driven apartment living experiences. Headquartered in Atlanta, Cortland manages and is invested in, directly or indirectly, more than 250 apartment communities comprised of more than 80,000 homes in the U.S. with regional offices in Charlotte, Dallas, Denver, Houston, Orlando, and Phoenix. Cortland has significant experience in acquiring, developing, renovating, owning, and operating multifamily communities, leveraging the services of its construction, design, and property, asset, and investment management affiliates. Internationally, Cortland maintains a management and development platform in the UK.

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New Home Construction Solidifies as Prospective Buyers Shift Further Away from Existing Home Market The economy is still expected to enter a modest recession in the second half of the year, though unusual dynamics in the current economic cycle continue to complicate forecasting the exact timing, according to Fannie Mae’s Economic and Strategic Research (ESR) Group latest monthly commentary. Fundamentally, the ESR Group notes that consumer spending remains unsustainably high compared to incomes and that recession is the typical conclusion to a monetary policy tightening regimen. However, the usual channels through which monetary policy helps slow the economy may be disrupted, as evidenced by recent increases in new auto sales resulting from improving supply conditions and a more upbeat outlook from homebuilders. Still, the ESR Group believes a modest recession is the likeliest outcome – and that its timing remains the principal outstanding question – as the Fed is likely to maintain tighter policy for longer if wage-related inflationary pressures do not subside. Existing home sales have been largely in line with the ESR Group’s recent forecasts for further gradual declines throughout the year due to affordability constraints and an extraordinarily tight inventory of existing homes for sale. This is partially a result of the so-called “lock-in effect,” in which existing homeowners are disincentivized from listing their homes for sale because their existing mortgage rate is well below current market rates. As such, housing demand has shifted further toward the new home market, bolstering builder optimism and the ESR Group’s single-family starts forecast. However, on the multifamily side, the ESR Group continues to expect a significant slowdown in starts later this year resulting from tightening credit conditions, slower rent growth, and higher vacancy rates. “There are select data available to support several alternative views of the path of the economy, though we maintain our view that a modest recession will begin in the second half of 2023,” said Doug Duncan, Senior Vice President and Chief Economist, Fannie Mae. “Housing remains exhibit number one for why we expect the recession to be modest. It continues to outperform our expectations, and we expect that its relative strength will help kickstart the economy into expanding again in 2024. Inflation has been resistant to Fed efforts to drive it down, and we view the risks to our baseline forecast as tilted toward more tightening rather than easing – although, for the moment, the Fed has adopted a wait-and-see approach.” Visit the Economic & Strategic Research site at fanniemae.com to read the full May 2023 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. SOURCE Fannie Mae

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Cost-of-living concerns are top of mind amongst Americans while rent-to-income ratios (RTI) remained elevated in Q1, according to Moody’s Analytics US State of Rent Burden report and data interactive tool. While seasonal slowness and rising multifamily inventory moderated rent growth, the number of US primary metros still experiencing higher rent burdens plummeted from 49 metros down to only five, a 91% drop from Q4 2022 to Q1 2023. RTI – the percentage of gross income a median-income tenant pays for the average monthly rent – finally cooled after more than three years of steepening rates nationwide. “The fever is finally breaking. Since Q4 2019, 82% of metros had higher rent-burdens compared to pre-COVID because rent disproportionately rose faster than incomes,” wrote Lu Chen, Senior Economist, and Mary Le, Economist, Moody’s Analytics. “Rising mortgage rates caused many households to be priced out from homebuying and would-be buyers to remain renters. Apartment demand surged as a result and drove rates sky high. The vast majority (91%) of all metros finally caught a break from growing rent burdens in Q1, as rent growth moderated or even declined given affordability pressures and slowing migration. However, we are not quite at an inflection point yet.” Even with this near-term relief, the cost of shelter remains significantly elevated relative to wages when compared to past decades. In 1999, just one metro was rent-burdened: New York City, with the median NYC household allocating 53.5% of their income to the average-priced apartment. Today, seven US metros fall within this designation: NYC (now 66.9% RTI), Miami (42%), Fort Lauderdale (36.8%), Los Angeles (34.7%), Palm Beach (34.2%), Northern New Jersey (33%), and Boston (32.8%). COVID-19 only exacerbated this issue. NYC’s RTI increased 8.4% between Q4 2019 and Q1 2023. Many metros followed suit, forcing several to become “rent-burdened”, meaning the typical household pays 30% or more of their income to rent. In Q4 2022, the US became “rent-burdened” nationwide for the first time in nearly 25 years of Moody’s Analytics tracking history. “As wage growth trails behind the cost of shelter, Americans are feeling financially distressed,” continued Chen and Le. “With rent growth projected to hover around 2% annually, national RTI will stay mostly flat for the year (29.7%). That is still uncomfortably elevated and only trailing behind last year’s broken record.” About Moody’s Analytics Moody’s Analytics provides financial intelligence and analytical tools to help business leaders make better, faster decisions. Our deep risk expertise, expansive information resources, and innovative application of technology help our clients confidently navigate an evolving marketplace. We are known for our industry-leading and award-winning solutions, made up of research, data, software, and professional services, assembled to deliver a seamless customer experience. Moody’s Analytics, Inc. is a subsidiary of Moody’s Corporation (NYSE: MCO). With approximately 14,000 employees in more than 40 countries, Moody’s combines international presence with local expertise and over a century of experience in financial markets. Contacts Julianne Wileyjulianne.wiley@moodys.com970.445.4768

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Firm’s Customized Due Diligence and Document Management Services Enable Trading Participants to Reduce Risks and Act with Agility Incenter Diligence Solutions, a provider of due diligence and document management services for the mortgage industry, announces expanded offerings for the mortgage servicing rights (MSR) trading market. These offerings complement the trading services provided by Incenter Mortgage Advisors—another member of the Incenter LLC family of companies focused on improving mortgage operations. “In an active trading market, participants must be able to quickly identify and manage their short-term and long-term risks so that they can transfer assets with agility and seize new revenue opportunities,” said Pamela Hamrick, President of Incenter Diligence Solutions, formerly known as Edgemac. “Incenter Diligence is streamlining obstacle-ridden diligence processes without making them cookie-cutter. We are customizing each engagement to address the unique goals, strategies and best-execution practices of every client.” “In today’s high-volume trading environment, buyers and sellers need a diligence firm that can customize reporting in a timely manner. Sellers also benefit from a system for maintaining data consistency to ensure that they have all the elements regulators require—for CCAR purposes, for example. Our clients consider Incenter Diligence an invaluable partner in both these areas,” said Tom Piercy, Managing Director, Incenter Mortgage Advisors. For each buyer or seller, Incenter Diligence’s highly experienced due diligence team creates a tailored review scope based on seasoning, geography, performance and other key portfolio attributes. The firm also individualizes reporting and document delivery services. This approach encompasses all of Incenter Diligence’s MSR-related services, such as acquisition reviews, data to document validation, compliance reviews, document inventory, trailing document reconciliation, servicing boarding audits, and pay history reviews. When loan servicing institutions are selling the servicing rights to thousands of loans at once, they need to flag any potential issues that could affect the long-term collectability of these assets. Incenter Diligence’s document management solutions for scanning and automated data extraction utilize advanced technology to rapidly ingest all loan files, scrape critical data from the documents, and identify discrepancies and omissions across them. Moreover, Incenter Diligence is improving sellers’ visibility into their assets by transforming “information blobs” containing hundreds of pages of variously formatted loan documents into one clearly indexed, easy-to-search resource in a single format. Ms. Hamrick, who joined Incenter Diligence last fall, has spearheaded these enhanced services, drawing on her 35 years of mortgage industry experience. In prior roles, she has led all aspects of highly successful mortgage fulfillment operations platforms. For more information, see incenterdiligence.com or contact Ms. Hamrick at pamela.hamrick@incenterms.com. About Incenter Diligence Solutions Incenter Diligence Solutions provides due diligence and document management services for the mortgage industry—enabling originators and investors to streamline operations, reduce risks, and capitalize on growth opportunities with speed and agility. The firm, which also specializes in supporting the MSR trading ecosystem, tailors its review scope and document delivery services to clients’ unique requirements. For more information on Incenter Diligence, a Rating Agency approved, third-party review firm, see incenterdiligence.com. Contacts Contact Dawn Ringel, Incenter MarketingDawn.Ringel@incenterms.com or 617-285-0652

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Foreclosure Starts Decrease 7 Percent from Last Month;While Completed Foreclosures Decrease 39 Percent ATTOM, a leading curator of land, property, and real estate data, released its April 2023 U.S. Foreclosure Market Report, which shows there were a total of 32,977 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — down 10 percent from a month ago but up 8 percent from a year ago. Illinois, Maryland, and New Jersey post highest foreclosure ratesNationwide one in every 4,234 housing units had a foreclosure filing in April 2023. States with the highest foreclosure rates were Illinois (one in every 2,221 housing units with a foreclosure filing); Maryland (one in every 2,283 housing units); New Jersey (one in every 2,334 housing units); South Carolina (one in every 2,495 housing units); and Delaware (one in every 2,603 housing units). Among the 223 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in April 2023 were Atlantic City, NJ (one in every 1,356 housing units with a foreclosure filing); Cleveland, OH (one in every 1,580 housing units); Lakeland, FL (one in every 1,649 housing units); Columbia, SC (one in every 1,651 housing units); and Chicago, IL (one in every 1,950 housing units). “Foreclosure activity continues to stabilize and even correct itself in 2023, with April showing a 10 percent decrease in overall activity after a 20 percent increase last month,” said Rob Barber, chief executive officer at ATTOM. “While there is no apparent indication of a continued decline in the number of foreclosures, it’s important to note that the month of April typically exhibits a recurring trend of decreased activity. However, this trend underscores the significance of monitoring foreclosure rates and identifying any potential market shifts or trends.” Among those metropolitan areas with a population greater than 1 million, those with the worst foreclosure rates in April 2023, aside from Cleveland, OH and Chicago, IL, included: Riverside, CA (one in every 2,046 housing units); Philadelphia, PA (one in every 2,079 housing units); and Jacksonville, FL (one in every 2,091 housing units). Foreclosure starts decline 7 percent from last monthLenders started the foreclosure process on 22,455 U.S. properties in April 2023, down 7 percent from last month and up only 1 percent from a year ago. Counter to the national trend, states that had at least 100 foreclosure starts in April 2023 and saw the greatest monthly increases included: Maryland (up 55 percent); New Mexico (up 55 percent); Iowa (up 29 percent); Utah (up 13 percent); and Florida (up 12 percent). Those major metropolitan areas with a population greater than 1 million that had the greatest number of foreclosure starts in April 2023 included: New York, NY (1,711 foreclosure starts); Chicago, IL (1,153 foreclosure starts); Miami, FL (846 foreclosure starts); Los Angeles, CA (829 foreclosure starts); and Philadelphia, PA (747 foreclosure starts). Foreclosure completions decrease 39 percent monthlyLenders repossessed 2,919 U.S. properties through completed foreclosures (REOs) in April 2023, down 39 percent from last month but up 3 percent from last year. Those states that had the greatest number of REOs in April 2023 included: Illinois (334 REOs); Pennsylvania (218 REOs); New York (199 REOs); Texas (184 REOs); and California (171 REOs). Those major metropolitan statistical areas (MSAs) with a population greater than 200,000 that saw the greatest number of REOs in April 2023 included: Chicago, IL (259 REOs); New York, NY (165 REOs); Philadelphia, PA (128 REOs); St. Louis, MO (54 REOs); and Detroit, MI (52 REOs). Media Contact:Christine Stricker949.748.8428christine.stricker@attomdata.com SOURCE ATTOM

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A debt default is very unlikely, but new scenario projections from Zillow show sales would decrease sharply as mortgage costs balloon The U.S. government defaulting on its debt, which could become a reality as soon as June 1 without intervention, could send the typical cost of a mortgage soaring by 22%. Mortgage rates rising above 8% would likely overwhelm a small price dip to make affording a home an even steeper hill to climb and send home sales tumbling, according to a new Zillow® analysis. To be sure, the U.S. has never before defaulted on its debt, and it is very unlikely that the U.S. will fail to pay its debts now. This analysis projects what might happen in the unlikely worst-case scenario of a prolonged default, and it is not a prediction that a default will occur. “Home buyers and sellers finally have been adjusting to mortgage rates over 6% this spring, but a debt default could potentially raise borrowing costs even higher and send the market into a deep freeze,” said Zillow senior economist Jeff Tucker. “Home values might not see a notable drop, but higher mortgage rates would severely impair affordability, for first-time buyers especially. It is critically important to find a solution and not put more strain on Americans who are striving to achieve their homeownership dreams.” A debt default would almost certainly mean severe disruption for the economy, with the ripple effects taking their toll on the housing market. One highly likely consequence would be rising interest rates — including mortgage rates — as shaken confidence in Treasury bills being repaid means investors would require a greater return before purchasing them. Mortgage rates tend to follow Treasury rates and would be expected to rise as a result. Home shoppers already are finding few options they can afford this spring, and it’s estimated that a mortgage would cost 22% more in September in the event of a debt default than it otherwise would. That’s on top of an 82% rise over the past two years. A steep rise in mortgage rates — projected to peak at 8.4% in September in this scenario — would freeze sales in an already chilled market. If the affordability mountain grows even taller, fewer would-be buyers will be able to purchase a home. Higher mortgage rates also discourage homeowners, many of whom locked in their loans when mortgage rates were near 3%, from selling and reentering the market when their new loan would be much more costly. Zillow projects this combined impact of buyers and sellers pulling back would wipe nearly one-quarter of expected sales off the board in some months. If there were to be a debt default, the biggest projected deficit would come in September, with an estimated 23% fewer existing home sales. The thin silver lining for the overall health of the housing market is that Zillow economists don’t expect home values would lose much ground, even with a default. Home values have turned the corner this spring, returning to growth near historical norms after a period of overheating and then a short-lived downturn. Home values tend to fall sharply when there is a glut of listings flooding the market, but very low inventory in this scenario would act as a parachute, keeping prices from falling too far, too fast. Zillow forecasts that if the U.S. were to default on its debt, home values would begin to fall starting in August, but only by 1% from current levels through February 2024. Even in this pessimistic scenario, home values are expected to rise 1% from today to the end of next year. That’s down from a current expectation of 6.5% growth over that period. SOURCE Zillow