News Updates

More First Quarter Home Sales Data to Consider

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Last week REI INK shared data about U.S. average homeownership tenure and sales price gains from ATTOM Data Solutions’ first quarter U.S. Home Sales Report. This week, we’ll look at the report’s data on cash sales, institutional investor sales, distressed sales and FHA buyers share. All-Cash Sales Overall, first quarter cash sales in first quarter 2019 (28%) decreased slightly versus the first quarter of 2018 (28.9%), but it beat all-cash sales of the previous quarter (27.7%). Metro areas with more than 1 million in population that showed the highest share of all-cash sales were Miami (44.6%); Tampa-St. Petersburg, Florida (40.7%); Birmingham, Alabama (40.6%); Detroit (40.1%); and Memphis, Tennessee (38.9%). Institutional Investor Sales For the report, institutional investors are considered entities that buy at least 10 properties in a calendar year. Nationwide, institutional investor shares of single-family home and condos were down nationwide, but they were up 29% in local markets. In first quarter 2019, these shares were 1.8%, compared to 3.7% in the previous quarter and 2.2% from first quarter 2018. Among 49 metropolitan statistical areas with a population of at least 200,000 and at least 40 institutional investor sales in Q1 2019, those with the highest share of institutional investor sales in the first quarter were Columbia, South Carolina (7.9%); Atlanta, Georgia (7.4%); Charlotte, North Carolina (5.6%); Memphis, Tennessee (5.1%); and Las Vegas, Nevada (5%). Distressed Sales Bank-owned (REO) sales, third-party foreclosure auction sales, and short sales—all considered distressed sales—made up 14.2% of all single-family and condo sales in the first quarter of 2019. That’s an increase from the 12.9% seen in the previous quarter but down from 15.2 % in the first quarter of 2018. Of the 135 metropolitan statistical areas with a population of at least 200,000 and at least 100 total distressed sales in first quarter 2019, the highest share of total distressed sales were in Atlantic City, New Jersey (33.1%); Trenton, New Jersey (28%); Rockford, Illinois (27.3%); Peoria, Illinois (26.1%); and Shreveport, Louisiana (25.9%). Of the 135 metro areas, 24% saw year-over-year increases in share of distressed sales. Among those metro areas were San Antonio, Texas, with a 22.2% increase; Salt Lake City, Utah, up 20.6%;); New Orleans, Louisiana at an 11.8% increase; Indianapolis, Indiana, up 10.6%; and Raleigh, North Carolina, up 8.9%. FHA Buyers FHA buyers are typically first-time homebuyers or buyers making a low down payment. FHA buyers share was 10.9% of all U.S. single-family and condo sales in first quarter 2019. That’s a slight increase from 10.8% percent of all sales in the previous quarter but a decrease from 11.8% in first quarter 2018. The number marked the eighth consecutive quarter with annual decreases. Among metro areas with a population of at least 1 million, those with the highest share of sales to FHA buyers were Indianapolis, Indiana (18.5%); Riverside, California (18%); Houston, Texas (17.3%); Providence, Rhode Island (16.2%); and Hartford, Connecticut (16.2%).

by Robert Rakowski
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Shortly after announcing its rebrand and the expansion of its Series B funding to $85 billion, Forge has acquired IRA Services. The acquisition is designed to enhance Forge’s ability to serve private-market investors. Forge will now be able to provide an integrated investing experience for investors who want to hold assets with an independent third-party custodian. IRA Services has emerged over the last several decades as a leading provider of custody and administrative services for individual investors, financial advisors, asset sponsors and financial institutions. According to Forge CEO Kelly Rodriques, the acquisition of IRA Services allows Forge to better serve the ongoing liquidity needs of the private market economy by empowering companies, investors, and institutions with liquidity, and providing safe and secure, transparent custodial services. “Recognizing that the private markets seed innovation, our mission is to serve the ongoing liquidity needs of the private-market economy,” Rodriques said. “In joining with IRA Services, Forge will expand its ability to meet the needs of private-market investors by providing an integrated custodial solution that allows them to seamlessly and securely invest in a wide range of innovation companies.” Once the acquisition is complete, IRA Services will be known as Forge Trust and will continue to work with its key partners to provide custodial services.

by Robert Rakowski
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Welcome to the first newsletter of REI INK! REI INK is the weekly e-newsletter companion to the print version of REI INK magazine. Since REI INK is published bi-monthly, we thought it was important to send out weekly e-newsletters to keep our readers abreast of the changes occurring in our fast-paced industry, where breaking news occurs on an almost daily basis. We launched REI INK nationally at the Pitbull Conference in early March. The magazine was introduced to about 600 people as the “new kid in town” that has set a new standard for the real estate investment publishing industry. I could not agree more. Our talented staff did a tremendous job of putting the first issue together, and it’s only going to get better with age. Not only did we bring Monica Mansfield on board as our managing editor, but we also assembled a true editorial board (not just in name only to impress people) who will be helping to guide the magazine forward based on their experience and expertise. As a result of the team’s efforts, we attracted a new international client focusing on capital growth opportunities for investors in medical office buildings. We also gained the attention of some of the top names and companies in the real estate investment industry. And, the real achievement was adding Janet Moore to our team as the vice president of business development and marketing. It seems like everyone in the industry knows and respects Janet, so we were very lucky to get her on the team. We are moving forward at break-neck speed. The next issue is almost complete, the website is up and running, and you’re reading the first of our weekly e-newsletters. What’s in the works? E-mail campaigns for our clients, a media sponsorship for IMN, promotion campaigns by respected companies in the industry and lots more! We’re doing it all by being true to ourselves, respecting our competitors and providing over-the-top customer service. I would really welcome your feedback on both the newsletter and REI INK. Don’t hesitate to contact me at 816-623-0762 or email me at Robert@rei-ink.com. Also, be sure to visit www.rei-ink.com to read more articles and subscribe. Thank You and All the Best! Robert Rakowski, Publisher

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ATTOM Data Solutions released is first quarter 2019 U.S. Home Sales Report on April 25. Among its findings are a slight dip in U.S. average homeownership tenure and average sales price gains. “We are starting to see homes sales prices and profit margins softening for the nation, and the average homeownership tenure did see a slight dip from last quarter,” said Todd Teta, chief product officer at ATTOM Data Solutions. “However, home prices are still above pre-recession peaks in 59 percent of local markets, and as the buying season starts to kick into gear, the next few months may provide even more answers to the question of whether a lasso is indeed around the market or if the recent trend is a temporary bump in the ride.” Average Sales Price Gains Homeowners who sold in the first quarter saw an average price gain of $57,500 since purchase, or an average 31.5 percent return on their original purchase price. That’s down from an average gain of $60,000 in first quarter 2018 but up from an average gain of $56,733 in first quarter 2018. Of the 123 metropolitan statistical areas included in the report, those with the highest average home seller returns in first quarter 2019 were San Jose, California (84.1 percent); San Francisco, California (70.9 percent); Seattle, Washington (63.1 percent); Modesto, California (59.7 percent); and Salt Lake City, Utah (56.5 percent). Homeownership Tenure Homeowners who sold in the first quarter owned their homes an average of 8.05 years. How does that compare to previous quarters? According to the report, that average represents a decrease from a record-high average of 8.17 years in the fourth quarter of 2018, but it is up from the first quarter of 2018 when the average tenure was 7.75 years. Before the Great Recession, homeownership tenure averaged 4.21 years nationwide between the first quarter of 2000 and the third quarter of 2007. Average homeownership tenure was down from a year ago in Kansas City, Tucson, Boston, Orlando and Oklahoma City, however. Those cities were among 25 of the 108 metro areas in the report to run counter to the national trend. Among major metropolitan areas with a population of at least 1 million, those with the longest average homeownership tenure for home sellers who sold in the first quarter were Hartford, Connecticut (12.52 years); Boston, Massachusetts (12.36 years); Providence, Rhode Island (11.15 years); San Francisco, California (10.40 years); and San Jose, California (10.27 years).

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N ES Financial has contracted to provide its 20th Opportunity Zone Fund client with its purpose-built Opportunity Zone Fund Administration Suite, which is designed to provide security, transparency and compliance to fund managers and investors. NES Financial’s innovative, technology-enabled administration expertise, which has established best practices in private equity, EB-5 investor visas and tax-deferred 1031 property exchanges, is poised to do the same for Opportunity Zone Funds. “Pending further regulations, the OZ [Opportunity Zone] program is currently operating with a minimum in initial oversight,” said Reid Thomas, executive vice president at NES Financial. “On the one hand, this is a good thing—there’s very little red tape to deter fund formation and investment. However, this same flexibility also leaves the industry vulnerable to impropriety, intentional or otherwise. Our OZ Fund Administration Suite brings established best practices from other, more mature financial industries into the Opportunity Zone space, maximizing fund security, transparency and compliance and providing peace of mind to investors.”

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Software Advice has again named London Computer Systems’ product, Rent Manager® property management software, a FrontRunner for residential property management software. LCS develops business-critical software used in all 50 states and several global markets. “The property management technology space continues to change, and our goal is to be on the leading edge of that innovation,” said Brittany Christerson, director of sales and marketing for Rent Manager. FrontRunners is published on Software Advice, an online service for businesses navigating the software selection process. FrontRunners evaluates verified end-user reviews and product data, positioning the top-scoring products based on usability and user recommendations for businesses. Rent Manager had a Usability score of 4.41 and a User Recommended score of 4.28, both out of a possible score of 5. Rent Manager was ranked in the top three enterprise vendors for property management software programs included on the report. A total of 170 residential property management products were evaluated. FrontRunners constitute the subjective opinions of individual end-user reviews, ratings, and data applied against a documented methodology; they neither represent the views of, nor constitute an endorsement by, Software Advice or its affiliates.