March 2024 – Page 3

Concessions cool as spring rental season approaches

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Property managers’ race to woo tenants eases, signaling a tighter market for renters this spring After a winter that saw nearly a third of rental listings offering tenants tempting concessions such as free months of rent or free parking, Zillow’s latest data reveals the share of rentals offering perks may have hit its peak. The good news for renters is that the market is friendlier than it was a year ago, with the share of rentals offering a concession rising 5.6 percentage points. As spring approaches, February data show 32.2% of rental listings on Zillow offered a concession, down slightly from December and up 5.6 percentage points from a year earlier. That marks the slowest annual growth pace since last June. After seven months of consecutive monthly increases to end 2023, the share of rentals offering concessions fell to 31.9% in January before a slight uptick last month. If past seasonal trends continue to hold, renters looking to secure a new lease in the upcoming spring or summer may encounter fewer incentives and increased competition. “The rental market always ebbs and flows with the seasons, so it’s no shock that we’re seeing concessions start to level off as we move into the warmer months,” said Anushna Prakash, an economic research data scientist at Zillow. “It looks like we’re beginning to see the market balance the ongoing high demand from renters with a competitive environment for property managers and landlords. While concessions are beginning to dip, they are more common than they were a year ago, helped by new buildings that have opened their doors.” While the expected seasonal shift accounts for the stabilization of concessions, the pace of rent growth and vacancy levels offer deeper insights. Recently, rents haven’t been going up as quickly as they did before the pandemic, and it looks like supply and demand are starting to balance out. The share of rental housing units that were vacant was at 6.6% in the fourth quarter of 2023, which is just a bit higher than the nearly forty-year low seen at the end of 2021. This indicates there are enough eager renters, nudging the market toward stability. The Metros Leading the Concession Charge Despite the national trend toward stabilization, certain markets continue to lead with high shares of concessions. These metros exemplify the diversity within the rental market, with strategies varying widely across regions to attract tenants. 10 Metro Areas with the Largest Share of Rental Concessions Metro Share of Rentalsw/ Concessions Year over Year(YoY) Change inShare ofConcessions Typical Rent inZillow ObservedRent Index (ZORI) YoY Change inZORI Salt Lake City, UT 60.3 % + 22.9 percentage points $1,656 1.6 % Austin, TX 55.0 % + 17.9 pp $1,735 -3.0 % Charlotte, NC 53.5 % + 19.0 pp $1,775 1.7 % Dallas, TX 50.7 % + 13.5 pp $1,747 0.5 % Raleigh, NC 50.6 % + 13.4 pp $1,747 1.2 % Nashville, TN 49.9 % + 9.9 pp $1,874 0.7 % Washington, DC 49.4 % – 2.9 pp $2,273 5.1 % Minneapolis, MN 49.4 % + 4.3 pp $1,615 2.9 % Phoenix, AZ 48.8 % + 8.6 pp $1,846 1.4 % Denver, CO 48.1 % + 8.5 pp $2,007 3.1 % United States 32.2 % + 5.6 pp $1,959 3.5 % In nine of the ten metros where the share of rental concessions is highest, rents are growing more slowly than the nationwide 3.5% annual rate, and they are outright falling in Austin. This could mean there are more apartments available than there are people looking to rent them. On the other hand, areas where there are fewer of these kinds of deals available, such as Providence, R.I. (12.3% of rentals offered concessions in February), Hartford, Conn. (16.3%), and Cincinnati, Ohio (18.9%), are seeing some of the fastest rent increases. In Providence, typical rents have jumped by 8.1% since last year. Hartford and Cincinnati both saw rents increase by 6.4%. Zillow provides a user-friendly platform for housing providers to share concessions information with prospective renters. Property managers can easily list concessions for their properties, and renters can find all available offers under the “Special Offers” tab on participating building detail pages, enabling them to make well-informed housing decisions.

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Market leaders join forces to create expanded network with extensive service offerings for preserving and maintaining communities nationwide MCS, the national property services company founded in 1986, announced it has acquired property preservation company Five Brothers Asset Management Solutions (“Five Brothers”),bringing two of the country’s leading property preservation and maintenance services companies together. MCS’s acquisition of Five Brothers creates a national property preservation and services market leader that combines complimentary business offerings to serve an extensive network of clients in the mortgage services and single-family rental sectors. Five Brothers will be integrated within MCS as the combined entity will offer superior property preservation, maintenance and renovation services throughout the country. “MCS has provided the highest standard of property preservation and related services for nearly 40 years, and the addition of Five Brothers elevates our capabilities and expands our resources even further,” said Craig Torrance, Chief Executive Officer of MCS. “With a 50-plus year history of delivering property preservation services, Five Brothers brings its own extensive track record of delivering outstanding service, solutions and technology that compliments the MCS services platform. We’re excited to bring together two strong company cultures centered around shared values and exceptional client servicing, along with a united commitment towards maintaining and beautifying neighborhoods across the country.” Headquartered in Warren, MI, Five Brothers has offered a variety of regulatory-compliant default, rental and REO residential and commercial property preservation services for over five decades, including services for the reverse mortgage industry which will be a new market for MCS. The family-owned company has built a nationwide network of field professionals delivering services designed to maximize asset value and returns for owners, while leveraging technology to ensure compliant and efficient service delivery. Nickalene Badalamenti-Kalas, President and CEO of Five Brothers, is very excited for Five Brothers to be joining forces with MCS to continue providing necessary and valuable nationwide field services, advanced technologies and unrivaled REVERSE/Home Equity Conversion Mortgage (HECM) expertise to its clients. “We are bringing together two purpose-driven organizations with common goals and synergies that will continue delivering superior value to clients, while improving communities across the country,” she noted. “Five Brothers is proud to join forces with the talented group of professionals within the MCS organization as we are well aligned in our business philosophy and culture. Our clients, field service partners and internal teams will greatly benefit from our collective experience and shared resources to provide reliably superior service.” MCS delivers its suite of property preservation and related services to clients through a hybrid service model featuring 25 self-performing markets, 30,000+ service partners and an industry-leading technology platform. The Five Brothers service provider network and technology solution, FiveOnline®, will be integrated with MCS, while Five Brothers’ clients will benefit from MCS’s local, boots-on-the-ground capabilities in strategic markets. “We look forward to integrating the Five Brothers team of property preservation experts as we deliver the same outstanding customer experience their clients have enjoyed for decades,” added Chad Mosley, President, Mortgage Services at MCS. “The immediate focus of our combined teams is ensuring continuity for those clients by leveraging existing technology and providing ongoing operational support.” About MCSMCS is an award-winning leading property services provider working across Commercial Properties, Single-Family Rentals, and the Property Preservation industry. For over 35 years, MCS has been committed to responsive care, industry-leading service standards, leveraging technology, and end-to-end transparency to protect, preserve and serve communities across the country. Some of the largest and most respected mortgage servicers, real estate owners and operators, and corporations trust MCS to perform property inspections, preservation, maintenance, renovations, and other property-related services. Learn how MCS is Making Communities Shine at MCS360.com.

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As businesses grapple with new SEC climate risk disclosures, rising insurance rates, and increasing losses from climate risk, AreaHub provides actionable environmental intelligence – efficiently and affordably. Amid the recent SEC climate risk disclosure rules, a changing insurance landscape, and increasing climate-related losses for businesses, AreaHub announced an Enterprise version of its climate and environmental intelligence platform for U.S. businesses and organizations. Last week, the SEC released its final climate disclosure rules, requiring large U.S. public companies to reveal information about their material climate risks and emissions to the public. According to USI’s 2024 Property & Casualty Market Outlook, natural catastrophe losses continue to increase by 5% to 7% annually. Additionally, as insurance rates rise and insurance companies scale back coverage in certain areas, property owners take on additional risk – leaving businesses exposed to increasing losses. The rise in insurance costs also correlates with the frequency of U.S. billion-dollar disasters. In 2023, the U.S. experienced a record-setting 28 billion-dollar climate and weather disasters, with damages costing over $92.9 billion, according to NOAA. “Climate and environmental risks are affecting businesses’ bottom line,” said AreaHub Co-Founder and CEO Alison Gregory. “Businesses need to incorporate environmental risk information into their strategies, decision making, and investments to prepare for and reduce the increasing effects of climate change on their finances and operations.” AreaHub Enterprise provides clear, synthesized, and localized climate environmental information (such as climate risks, nearby contaminated sites, infrastructure, and more) to help businesses make more informed decisions about any of their U.S. locations. By aggregating over 30 topics from credible, science-based sources, the platform offers enterprise clients address-specific information to proactively manage their locations and make informed decisions. AreaHub Enterprise services include: As public awareness and stakeholder pressure grows, businesses must align their governance and strategies with evolving climate and environmental expectations. “AreaHub Enterprise is ideal for businesses looking to identify the local climate and environmental factors that can impact their investments, finances, operations, and people,” continued Gregory. “Our data-driven platform enables clients to inform investments, mitigate exposures, and increase resiliency by leveraging the environmental risk profile of their locations to inform their operational planning or management strategies.” AreaHub also offers consumer plans catering to relocators, homeowners, or parents. The Basic plan provides limited free reports of select major U.S. cities, while AreaHub Pro’s extensive address-specific one-time paid reports include additional topics and access to expanded details, such as specific hazard locations and risk indicators. About AreaHub AreaHub is an environmental risk management platform that offers localized climate and environmental hazard information by aggregating credible, science-based data about climate risks, industrial hazards, pollution and other issues that can impact finances, operations, or health and safety. By leveraging their prior managerial, data processing, and startup experience, the co-founders built AreaHub to help businesses and individuals make healthier and wiser decisions with clearly presented, scientific, and locally relevant information. For more information, visit AreaHub.com or follow AreaHub on LinkedIn and Instagram. Contacts Media:Isabella Armas-Leonisabella@areahub.com

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Housing supply is finally rebounding as sellers get used to elevated mortgage rates, but it’s not rebounding enough to curb home price growth. High housing costs mean many house hunters remain hesitant to commit. New listings jumped 3.8% month over month on a seasonally adjusted basis in February to the highest level since September 2022, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. They were up 14.8% year over year, the largest annual gain since May 2021. Active listings, or the total supply of homes for sale, hit the highest level in a year. They climbed 0.8% from a month earlier on a seasonally adjusted basis, and were little changed (-0.1%) from a year earlier–the smallest annual decline in months. New listings rose fastest from a year earlier in Texas and active listings rose fastest in Florida–the two states that have been building the most homes. In Florida, condo listings in particular are contributing to the jump in supply amid a surge in HOA and insurance fees. “The housing market is nothing like it was two years ago during the pandemic homebuying frenzy, but it’s better than it was last year. It’s coming back,” said David Palmer, a Redfin Premier real estate agent in Seattle. “Sellers who were on the fence in 2023 are now listing. They’re more used to elevated rates now. There still aren’t enough listings to quench pent-up buyer demand, but it’s getting better.” Nationwide, housing supply is on the rise because the “lock-in effect” is easing; eventually, homeowners who have been holding on to their ultra-low mortgage rates simply have to move. “February was a mixed bag for the housing market and the economy,” said Redfin Economics Research Lead Chen Zhao. “Housing supply is finally starting to recover in a meaningful way, which is great news for buyers who for months have been competing for a tiny pool of homes for sale. Still, many house hunters are hesitant to pull the trigger because mortgage rates and home prices remain elevated.” Mortgage-purchase applications slid in February as mortgage rates ticked back up after dropping in December. The average 30-year-fixed mortgage rate was 6.78% last month, up from 6.64% in January. Mortgage rates will likely remain elevated a bit longer than expected after this week’s inflation report came in hotter than anticipated. Home sales rose 0.5% month over month on a seasonally adjusted basis in February, and fell 3.5% year over year. Home Prices Post Biggest Increase in Nearly a Year and a Half The median U.S. home sale price climbed 6.6% year over year–the biggest uptick since September 2022–to $412,778. Please note that home price data is not seasonally adjusted, which is why Redfin focuses on year-over-year changes for this metric. Prices continue to rise because despite the recent uptick in listings, there’s still not enough supply to meet demand. Both new listings and active listings remained far below pre-pandemic levels in February. “If you price your home reasonably, buyers will show up. If you don’t, buyers will wait for you to drop the price,” Palmer said. “I recently listed an estate sale fixer upper for $550,000 and it got 14 offers, sold for $75,000 over the asking price and the buyer waived every contingency.” In Seattle, 77.4% of homes that went under contract did so within two weeks–the highest share among the metros Redfin analyzed. It took the top spot from Rochester, which has held that title for months. The typical home that went under contract in Seattle did so in 11 days (versus a national median of 48 days). February 2024 Highlights: United States February 2024 Month-Over-MonthChange Year-Over-YearChange Median sale price $412,778 2.7% 6.6% Homes sold, seasonally adjusted 422,203 0.5% -3.5% New listings, seasonally adjusted 548,285 3.8% 14.8% All homes for sale, seasonally adjusted (active listings) 1,601,260 0.8% -0.1% Months of supply 2.7 -0.5 0 Median days on market 48 -2 -5 Share of for-sale homes with a price drop 16.1% -0.1 ppts 2.9 ppts Share of homes sold above final list price 26.1% 2 ppts 2.6 ppts Average sale-to-final-list-price ratio 98.7% 0.4 ppts 0.5 ppts Average 30-year fixed mortgage rate 6.78% 0.13 ppts 0.52 ppts Metro-Level Highlights: February 2024 To view the full report, including charts, please visit:https://www.redfin.com/news/housing-market-tracker-february-2024

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The 2024 ServiceLink State of Homebuying Report highlights generational preferences and trends from today’s homebuyers Gen Z and millennials are optimistic, eager and ready to buy a home. Relatively high mortgage rates and lower income levels aren’t stopping their plans to become homeowners in 2024. A new report released from ServiceLink, the nation’s premier provider of tech-enabled mortgage services, analyzes generational trends among today’s homebuyers, revealing their sentiment about the current housing market and their intentions to purchase, refinance and leverage home equity this year. Now in its fourth year, the 2024 ServiceLink State of Homebuying Report (SOHBR) features insights from homeowners who either purchased a home or tried to purchase a home within the past four years and focuses on yearly trends that provide valuable insights for lenders, servicers, investors and buyers alike. “This is an interesting and pivotal moment in the housing and mortgage industries as the younger generations are not only determined to buy but are seemingly undeterred by the higher price tags and interest rates,” said Dave Steinmetz, president of origination services, ServiceLink. “Our study suggests that Gen Z and millennials are poised to impact the market in several ways including purchase, refi and home equity, which is an opportunity for lenders to educate and usher these younger buyers through the process.” Key findings of the report include: Eagerness to buy: Younger generations plan to purchase a home in 2024 Tolerance for higher rates: There is a strong correlation between generations and the highest interest rate they would accept for a new 30-year mortgage Reasons to refinance: Many homeowners are looking to reduce their current rate Equity is rising: But fewer people plan to tap into it this year Auction is having its moment: Gen Z and millennials are interested in this alternative route to homeownership Market complexities: Some ‘would be’ homebuyers abandoned the process in the last year, but plan to try again Mortgage technology: Popular among all generations Read the full report here. CONTACT: Stephanie Hacke, 412-377-6629, Stephanie.hacke@svclnk.com

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Highest Potential SFR Returns around Vero Beach, St. Louis, Brownsville, Rochester and Augusta; Rental Margins Increasing in About Two-thirds of Nation ATTOM, a leading curator of land, property, and real estate data, released its Q1 2024 Single-Family Rental Market report, which ranks the best U.S. markets for buying single-family rental properties in 2024. The report analyzed single-family rental returns in 341 U.S. counties with a population of at least 100,000 and sufficient rental and home price data. The analysis for this report incorporated median rents and median home prices collected from ATTOM’s nationwide property database, as well as publicly recorded sales deed data licensed by ATTOM. View interactive map displaying SFR returns in all 341 counties analyzed The report shows that the average annual three-bedroom gross rental yield (annualized gross rent income divided by median purchase price) among the 341 counties analyzed is projected to be 7.55 percent in 2024. That is up slightly from an average of 7.39 percent in those same markets a year ago, marking the second year of rising projections after three years of declines. Investment returns for landlords continue to increase as rents are going up slightly faster than home prices across a majority of the country. From 2023 to 2024, median three-bedroom rents rose more than median single-family home prices in 216, or 63 percent, of the markets analyzed. The gaps were small – usually less than one percentage point – but enough to push rental yields upward. That has happened amid a combination of market forces spurring demand for rentals. They include a historically tight supply of homes for sale and home-price increases that have slowed but not enough to make buying widely affordable for average wage earners. “The U.S. home sales market cooled off a good bit last year, with some of the weakest gains over the past decade. But that wasn’t enough to make home prices affordable for most workers, which likely fed enough demand to push up rents and yields for investors who lease out single-family properties,” said Rob Barber, CEO at ATTOM. “The fact that so few homes are available for sale in many markets clearly further helped increase rental demand for landlords and boost their bottom lines.” Top rental returns in Indian River, St. Lous, Cameron, Monroe and Richmond counties, as well as other parts of Midwest, Northeast and South Counties with the highest potential annual gross rental yields on three-bedroom properties for 2024 are Indian River County, FL, in the Sebastian-Vero Beach metro area (14.6 percent); St. Lous City, MO, (14.6 percent); Cameron County, TX, in the Brownsville-Harlingen metro area (13.2 percent); Monroe County, NY, in the Rochester metro area (12.8 percent) and Richmond County, GA, in the Augusta-Richmond County metro area (12.7 percent). The highest potential annual three-bedroom gross rental yields in 2024 among counties with a population of at least 1 million are in Wayne County (Detroit), MI (12 percent); Allegheny County (Pittsburgh), PA (11.2 percent); Cuyahoga County (Cleveland), OH (10.2 percent); Cook County (Chicago), IL (10.1 percent) and Riverside County, CA (9.7 percent). Rental returns increase across majority of nation Potential annual three-bedroom gross rental yields for 2024 have increased compared to 2023 in 216 of the 341 counties analyzed in the report (63 percent). They are led by Taylor County (Abilene), TX (yield up from 7.6 percent in 2023 to 11.3 percent in 2024); Jefferson County (Birmingham), AL (up from 8.5 percent to 12.1 percent); Richmond County (Augusta), GA (up from 9.6 percent to 12.7 percent); Midland County, TX (up from 8.7 percent to 11.7 percent) and Aiken County, SC (outside Augusta, GA) (up from 8.4 percent to 11.1 percent). The biggest increases in potential annual gross rental yields from 2023 to 2024 among counties with a population of at least 1 million are in Riverside County, CA (yield up from 7.4 percent in 2023 to 9.7 percent in 2024); Los Angeles County, CA (up from 5.6 percent to 7.1 percent); Fulton County (Atlanta), GA (up from 6 percent to 6.8 percent); Montgomery County, MD (outside Washington, DC) (up from 4.4 percent to 5.2 percent) and Dallas County, TX (up from 7.4 percent to 8.1 percent). Metro areas with a population of 1 million of more showing decreases in potential gross three-bedroom rental yields from 2023 to 2024 are led by Kings County, Brooklyn, NY (yield down from 8 percent to 4.4 percent); Cook County (Chicago), IL (down from 11 percent to 10.1 percent); Wayne County (Detroit), MI (down from 12.8 percent to 12 percent); Miami-Dade County, FL (down from 7.9 percent to 7.3 percent) and Nassau County, NY (outside New York City) (down from 7.1 percent to 6.8 percent). Lowest rental returns in San Francisco, San Jose, Nashville and Washington, D.C., metro areas, along with other western markets Counties with the lowest potential annual gross returns for 2024 on three-bedroom rentals are Santa Clara County, CA, in the San Jose metro area (3 percent); San Mateo County, CA, in the San Francisco metro area (3.4 percent); Arlington County, VA, in the Washington, DC, metro area (3.8 percent); Williamson County, TN, in the Nashville metro area (3.9 percent) and San Francisco County, CA (3.9 percent). Aside from Santa Clara County, the lowest potential annual gross three-bedroom rental yields in 2024 among counties with a population of at least 1 million are in Honolulu County, HI (4.1 percent); Fairfax County, VA (outside Washington, D.C.) (4.2 percent); Kings County (Brooklyn), NY (4.4 percent) and Alameda County (Oakland), CA (4.4 percent). Rents rising faster than wages in majority of counties measured Median three-bedroom rents are rising faster than average wages in 197 of the 341 counties analyzed (58 percent), including Los Angeles County, CA; Harris County (Houston), TX; Maricopa County (Phoenix), AZ); San Diego County, CA, and Orange County, CA (outside Los Angeles). Average wages are increasing faster than median three-bedroom rents in 144 of the 341 counties analyzed (42 percent), including Cook County (Chicago), IL; Miami-Dade County, FL; Kings County (Brooklyn), NY; Queens County, NY,