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Housing Markets In California, Illinois, And East Coast Still Top List Of Areas Around U.S. More Vulnerable To Declines

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Chicago and New York City Areas Remain More At Risk Based on Key Market Measures from Fourth Quarter of 2022; East Coast and Swaths of Interior California Also More Vulnerable to Downturns; South Region and Sections of Midwest are Less Vulnerable ATTOM, a leading curator of land, property, and real estate data, 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 and other measures in the fourth quarter of 2022. The report shows that inland California, Illinois, New Jersey, and Delaware continued to have some of the highest concentrations of the most-at-risk markets in the country, with the biggest clusters in the New York City and Chicago metropolitan areas. Southern and midwestern states remained less exposed. The fourth-quarter patterns – based on gaps in home affordability, underwater mortgages, foreclosures, and unemployment – revealed that New Jersey, Illinois, and California had 31 of the 50 counties most vulnerable to potential declines around the U.S. That was roughly the same as the 28 more-at-risk markets that were in those states in the third quarter of last year. During a time when the broader U.S. housing market boom stalled, those concentrations dwarfed other parts of the country. The 50 most at-risk included seven in the Chicago metropolitan area, five in and around New York City, three in or near Cleveland, OH, and 13 spread through northern, central, and southern California. The rest were clustered mainly in other parts of the East Coast, including two of the three counties in Delaware. At the other end of the risk spectrum, the South, Midwest, and western areas outside California continued to have the biggest concentration of markets considered least vulnerable to falling housing markets. “With the U.S. housing market cooling off considerably since the middle of last year, some areas of the country continue to show signs of being more at risk of a larger downturn than others. That’s based on several key factors that can either boost or damage local housing markets, including unusually high home ownership costs, foreclosures, and relatively weak homeowner equity,” said Rob Barber, chief executive officer at ATTOM. “It remains important to note that we are not identifying markets headed for an imminent fall, just those that look to be more exposed to market troubles. Heading into the peak buying season of 2023, we will keep monitoring those areas closely to see if anything changes.” 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 condos, 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 581 counties around the United States with sufficient data to analyze in the fourth quarter of 2022. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the four ranks. The ongoing wide disparities in risks throughout the country remained in place during a time when the overall U.S. housing market had one of its worst second-half performances in more than a decade. Key measures showed the national median home value decreasing 8 percent (down 4 percent specifically in the fourth quarter), while home-seller profits dipped lower, homeowner equity stopped growing, foreclosures continued to increase and mortgage lending plummeted to its lowest level in almost nine years. That happened as 30-year mortgages rates climbed close to 7 percent, inflation remained at a 40-year high and the stock market fell. Each of those forces cut into what home buyers could afford. Most-vulnerable counties again clustered in the Chicago, New York City and Cleveland areas, along with sections of California and Delaware Thirty of the 50 U.S. counties considered most vulnerable in the fourth quarter of 2022 to housing market troubles (from among 581 counties with enough data to be included in the report) were in the metropolitan areas around Chicago, IL, New York, NY, and Cleveland, OH, as well as in Delaware and California. California markets on the list remained mostly inland, away from the coast. The 50 most at-risk counties included seven in the Chicago area (Cook, De Kalb, Kane, Kendall, Lake, McHenry, and Will counties, all in Illinois), two in New York City (Kings and Richmond counties, which cover Brooklyn and Staten Island) and three in the New York City suburbs (Essex, Passaic and Sussex counties in New Jersey). The three in the Cleveland metro area that were among the top 50 in the fourth quarter were Cuyahoga, Lake, and Lorain counties. Elsewhere, California had 13 counties in the top 50 list: Butte County (outside Sacramento), Humboldt County (Eureka), San Joaquin (Stockton), Solano County (outside Sacramento) and Shasta County (Redding) in the northern part of the state; Fresno County, Madera County (outside Fresno), Merced County (outside Modesto), Stanislaus County (Modesto) and Tulare County (outside Fresno) in central California, and Kern County (Bakersfield), Riverside County and San Bernardino County in the southern part of the state. Counties most at-risk of downfalls seeing elevated levels of unaffordable housing, underwater mortgages, foreclosures and unemployment Major home ownership costs (mortgage payments, property taxes and insurance) on median-priced single-family homes and condos consumed more than one-third of average local wages in 34 of the 50 counties that were most vulnerable to market problems in the fourth quarter of 2022. The highest percentages in those markets were in Kings County (Brooklyn), NY (114.6. percent of average local wages needed for major ownership costs); Richmond County (Staten Island), NY (70.1 percent); Riverside County, CA (70 percent); San Joaquin County (Stockton), CA (63.6 percent) and Passaic County, NJ (outside New York City) (59.6 percent). Nationwide, major expenses

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The median U.S. asking rent is up just 1.7% from a year ago—the smallest gain in nearly two years—as landlords grapple with vacancies due to still-high rental costs and rising supply The median U.S. asking rent rose 1.7% year over year to $1,937 in February—the smallest increase in nearly two years and the lowest level in a year, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Rents were up nearly 10 times that much (16.5%) a year earlier. February was the ninth straight month in which rent growth slowed on a year-over-year basis. Rents fell 0.3% from a month earlier. Still, the median asking rent remained 21.4% higher than it was in February 2020, the month before the coronavirus was declared a pandemic. Rent growth has cooled as persistently high housing costs, inflation, recession fears and a slowdown in household formation have made people less likely to move, putting a damper on demand for new leases. A jump in supply due to a boom in apartment construction has also contributed to the slowdown in rent growth. The number of apartments under construction is up 24.9% year over year to 943,000, the highest level since 1974, according to a recent report from the National Association of Home Builders. “Landlords are slowing their roll on rent increases because they’re grappling with a rise in vacancies as an influx of new apartments hits the market and demand slows from its peak,” said Redfin Deputy Chief Economist Taylor Marr. “Rents are likely close to hitting a floor, though. That’s because stubbornly high inflation is boosting expenses for landlords, so instead of dropping rents they may seek to lure renters with other concessions, like free parking or a discounted security deposit.” Marr continued: “While rent growth has slowed, it hasn’t slowed quite as much as expected—in part because the labor market has held up better than anticipated, which has helped prop up demand. This is likely a reason overall inflation remains stubbornly high, as rent growth is a major contributor to inflation.” Rents Declined in 11 Major U.S. Metro Areas Raleigh Saw the Largest Rent Increase To view the full report, including charts, full metro-level breakouts and methodology, please visit: https://www.redfin.com/news/redfin-rental-report-february-2023/

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With so much industry emphasis on homeowners, proprietary survey data offers unprecedented and detailed insights into a rising segment of the more than 34% of the population that rents their homes Leading real estate consulting firm RCLCO Real Estate Consulting announced the availability for the first time of a new in-depth national research report on the consumer preferences of renters, a growing and influential market segment comprising over one third of the U.S. population. The report, “2023 Rental Consumer Preferences Survey,” will be available for purchase via RCLCO’s website, at the following link. “Despite media and government policy’s concentration on homeowners, more than 34% of the U.S. population are renters, and there is a dearth of information about the needs and preferences of this expanding market segment,” said Gregg Logan, Managing Director of RCLCO. “While we have seen a significant building boom in the multifamily sector (particularly the luxury market) over the past two decades, rental demand has been increasing since the economy reopened in 2021, and the survey indicates that there is also a potential unmet demand for single-family rentals. We think the data and insights in this report will be invaluable to builders, developers, property managers and architects when designing and renovating rental communities of all types.” As homeownership has become less affordable, single-family build-for-rent product types have increasingly been developed to meet the evolving preferences of renters. Approximately 6.9% of new single-family home starts were Build-for-Rent in 2022, a share that is increasing upwards. This report offers an in-depth look at what rental households are seeking in their ideal residence – and the motivating factors and preferences for groups seeking three major rental housing types – including multifamily, small single-family, and large single-family rental housing. It also delves into how preferences vary by life stage, or by renters seeking niche products such as 55+ rentals or luxury apartments. The 58 page report offers an overview of the national rental market and the shifting consumer preferences of this population, including: “We’re excited to share this information with the real estate community as we believe it will be a valuable tool for those planning new apartment and BFR communities,” said Kelly Mangold, Principal at RCLCO. “Although we prepare similar proprietary studies for our clients, focused on specific properties in particular markets, we believe this study goes a long way towards broadening our industry’s understanding of consumer desires and we’re happy to make it available to a wider audience.” More featured findings from this data: Due to the continuing structural undersupply of rental housing and strong market fundamentals, and with the pipeline of new deliveries slowing in 2024 and 2025, now is a good time to be planning new multifamily and build-for-rent units for the 2024 to 2025 timeframe. The consumer research data included in RCLCO’s 2023 Renter Consumer Preferences Report is intended to provide insights regarding who renters are and what they’re looking for in new rental housing. The report is available for purchase for $295 directly on the RCLCO website at https://www.rclco.com/publication/rclco-2023-renter-consumer-preference-survey/. Existing RCLCO clients can obtain a complimentary copy by contacting their project leads, or Kelly Mangold at kmangold@rclco.com. SOURCE RCLCO

U.S. Foreclosure Activity Declines Monthly In February 2023 But Continues To Increase Annually

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Overall Foreclosure Activity Down 3 Percent from January 2023; While Foreclosure Completions Increase 45 Percent from Last Year ATTOM, a leading curator of land, property, and real estate data, released its February 2023 U.S. Foreclosure Market Report, which shows there were a total of 30,528 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — down 3 percent from a month ago and up 18 percent from a year ago. “Foreclosure activity finally started to stabilize in February after 21 straight months of increases,” said Rob Barber, chief executive officer at ATTOM. “The numbers don’t yet show a clear trend toward fewer foreclosures, partly because February is a short month. But with historically high levels of home equity flowing from a decade of rising values, we may be seeing a growing number of delinquent mortgage payers with at least the option to sell before facing foreclosure.” Foreclosure completion numbers increase 45 percent from last year Lenders repossessed 3,831 U.S. properties through completed foreclosures (REOs) in February 2023, dipping 2 percent from last month but increasing 45 percent from last year. States that had at least 100 or more REOs and saw the greatest annual increase in completed foreclosures in February 2023 included: New York (up 268 percent); Georgia (up 237 percent); California (up 132 percent); Texas (up 87 percent); and Virginia (up 73 percent). Those major metropolitan statistical areas (MSAs) with a population greater than 200,000 that saw the greatest number of completed foreclosures (REOs) in February 2023 included: Chicago, IL (193 REOs); New York, NY (170 REOs); Detroit, MI (112 REOs); Philadelphia, PA (104 REOs); and St. Louis, MO (97 REOs). Foreclosure starts decrease monthly in 25 states including the District of Colombia Lenders started the foreclosure process on 20,360 U.S. properties in February 2023, down 2 percent from last month but up 23 percent from a year ago. Those states that saw the greatest numbers of foreclosures starts in February 2023 included: Texas (2,187 foreclosure starts); California (2,133 foreclosure starts); Florida (1,831 foreclosure starts); New York (1,318 foreclosure starts); and Illinois (1,170 foreclosure starts). Among the 223 metropolitan statistical areas with a population of at least 200,000, those that had the greatest numbers of foreclosure starts in February 2023, included: New York, NY (1,554 foreclosure starts); Chicago, IL (1,034 foreclosure starts); Los Angeles, CA (710 foreclosure starts); Houston, TX (699 foreclosure starts); and Philadelphia, PA (565 foreclosure starts). Highest foreclosure rates in New Jersey, Maryland, and Illinois Nationwide one in every 4,574 housing units had a foreclosure filing in February 2023. States with the highest foreclosure rates were New Jersey (one in every 2,271 housing units with a foreclosure filing); Maryland (one in every 2,390 housing units); Illinois (one in every 2,443 housing units); Nevada (one in every 2,854 housing units); and Indiana (one in every 2,956 housing units). Among the 223 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in February 2023 were Fayetteville, NC (one in every 1,627 housing units with a foreclosure filing); Atlantic City, NJ (one in every 1,708 housing units); Florence, SC (one in every 1,833 housing units); Jacksonville, NC (one in every 1,934 housing units); and Cleveland, OH (one in every 2,049 housing units). Other than Cleveland, among the metropolitan areas with a population greater than 1 million, those with the worst foreclosure rates in February 2023 included: Chicago, IL (one in every 2,300 housing units); Las Vegas, NV (one in every 2,305 housing units); Riverside, CA (one in every 2,450 housing); and Baltimore, MD (one in every 2,510 housing units). Media Contact: Christine Stricker 949.748.8428 christine.stricker@attomdata.com

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White households had three times as many affordable housing options as Black households Roughly one in five (21%) U.S. homes for sale in 2022 was affordable for the typical household, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s down from two in five (40%) in 2021 and the lowest share on record. A listing is considered affordable if the estimated monthly mortgage payment is no more than 30% of the local county’s median income. The number of affordable listings fell 53% from a year earlier in 2022—the largest annual drop in Redfin’s records, which date back to 2013. While that’s partly due to a decline in listings in general—new listings fell 10% year over year—it’s mostly due to the fact that higher mortgage rates made the listings hitting the market less affordable. The housing affordability crisis has intensified for three primary reasons: “Housing affordability is at the lowest level in history, which will widen the wealth gap—especially between millennials,” said Redfin Deputy Chief Economist Taylor Marr. “Many millennials were able to buy their first home before or during the pandemic homebuying boom, but many others were priced out of homeownership and forced to keep renting. That means a lot of young adults missed out on a major wealth building opportunity: the value of homes owned by millennials has risen nearly 30% in the past year. ” Marr continued: “The good news is that housing affordability should improve. Mortgage rates will eventually come down as the Fed makes progress fighting inflation, and home prices have already begun falling. Incomes are also growing faster than the historical norm.” The Biden Administration recently announced that it’s cutting mortgage-insurance rates for homebuyers who take out loans backed by the Federal Housing Administration (FHA). The move is estimated to save roughly 850,000 homebuyers, many of whom are low-income and/or first-time buyers, an average of $800 per year. It goes into effect March 20. Some states, including California and Oregon, have also passed legislation that allows for the construction of more starter homes. Increased supply could help limit home-price growth over time. If executed well, these new laws could serve as a blueprint for other areas grappling with housing shortages. White Households Can Afford Three Times as Many Homes as Black Households Only 9% of homes for sale last year were affordable for the typical Black household, compared with 28% for the typical white household and the lowest share of any race in this analysis. The share was nearly as low for Hispanic/Latino households (14%) and was highest for Asian households (34%). Affordability has also fallen slightly faster for Black households than for white households. The share of listings affordable for the typical Black household was cut in half (9% in 2022 vs 18% in 2021), while the share affordable for the typical white household fell by less than half (28% vs 50%). The number of listings affordable for the typical Black household dropped a record 57% in 2022 from the year before—a larger decline than any other race in this analysis—while the number of listings affordable for the typical white household fell a record 49%. Hispanic/Latino and Asian households also experienced record declines in the number of listings affordable. “Housing has become incredibly unaffordable for a lot of Americans, but Black families have been hit especially hard because they’re often less wealthy to begin with,” said Redfin Chief Economist Daryl Fairweather. “On average, Black Americans earn less money, have less generational wealth, and have lower credit scores (and sometimes no credit scores at all) than white Americans. That makes it tougher to afford a down payment and qualify for a low mortgage rate. They also frequently face racial bias during the homebuying process.” The racial housing affordability gap exists nationwide, from the least affordable to the most affordable. In Detroit, for example, 33% of listings were affordable for the typical Black household last year—the highest share in the country. But that’s still less than half the share affordable for the typical white household (70%). In Los Angeles, one of the most expensive markets in the country, people across the board have a hard time finding affordable housing. Still, Black house hunters have fewer options. Close to zero (0.1%) listings were affordable for the typical Black household in 2022, compared with 2% for the typical white household. There are a few slivers of good news, Fairweather said. The Black unemployment rate has been falling on a seasonally-adjusted basis, helping to shrink the gap between the white and Black unemployment rates. Rent growth has also been slowing, which disproportionately affects Black Americans because they’re more likely to be renters. Pandemic Boomtowns and Pricey Coastal Cities Saw Largest Declines in Number of Affordable Homes The 100 most populous U.S. metro areas all had fewer affordable homes for sale in 2022 than in 2021. In Boise, ID, the number of home listings affordable to the typical local household plunged 86% year over year. It was followed by San Diego (-85%), Salt Lake City (-84%), Oxnard, CA (-83%) and Austin, TX (-82%). Some of the metros above, including San Diego and Oxnard, have long been expensive. That means that many homes were verging on unaffordable before the pandemic, and have since been pushed over the threshold due to rising prices and mortgage rates. Other metros, including Boise, Salt Lake City and Austin, were relatively affordable before the pandemic, but the homebuying boom pushed prices out of reach for many house hunters. These areas surged in popularity as scores of remote workers moved in, searching for space and affordability. Relatively affordable places saw the smallest declines in the number of affordable homes. In Detroit, the number of affordable listings fell 16% year over year in 2022. Next came Akron, OH (-24%), Cleveland (-25%), Pittsburgh (-27%) and Philadelphia (-28%). To view the full report, including charts, methodology, and a metro-level breakdown, please visit: https://www.redfin.com/news/share-of-homes-affordable-2022

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Building Local Team of Project Managers and Service Techs to Serve Property Owners and Financial Institutions with Field Property Solutions MCS, the national property services company founded in 1986, announced the opening of its own self-performing Service Center in Dallas. The Service Center is staffed with a market operations director, project managers, inspectors, estimators and highly trained service technicians to execute the field property services needs of the firm’s Single-Family Rental, Commercial and Mortgage Services lines of business. The Dallas Service Center currently has a team of thirteen to manage the field services needs of its customers in the region with plans to add more employees over the next few months, helping support the local community through new jobs and economic investment. MCS is actively recruiting licensed, certified project managers and technicians who can perform a full range of property services within the property management environment, as well as seeking qualified, third-party service partners to provide additional support in key trades to perform property maintenance, inspections, repairs and rehab services. MCS also announced that Kelly Carney will lead the local market team in Dallas as Operations Director. Carney brings over 30 years of operations experience and a vast network of local connections to MCS’s Dallas operation. A Marine Corps veteran, Carney has extensive experience with renovation and new build projects totaling over $500 million dollars for Axtell Development Partners and Carter Family Office. MCS’s hybrid service model combines its own “boots-on-the-ground” services with its expansive network of local vendors to create efficiencies, enhance quality control and code compliance, and ensure transparency for owner/operators through aggregation and innovative technology-driven processes. “We’re pleased to add to our growing national network of self-performing Service Centers by making an investment in Dallas as we continue to expand our property service offerings,” said Andrew Nolan, President, Commercial and SFR Services, for MCS. “Our hybrid Service Center model combines the advantage of MCS’s own team with local vendor expertise to create efficiencies and improve service delivery through aggregation and technology-driven processes.” Each Service Center leverages MCS’s own self-performing teams with regional know-how and connections, along with a network of local service providers, to facilitate the most appropriate property servicing solutions on everything from inspection services and occupied maintenance to turns and renovations for SFR properties, as well as preserving foreclosed and vacant properties. MCS Service Centers also provide a robust suite of offerings for commercial/retail locations, including general maintenance, landscaping, electrical and lighting, parking lot maintenance, and plumbing, among others. “The Dallas-Fort Worth market continues on an incredible growth trajectory on many levels, which includes over 325,000 single-family rental properties and more on the way,” added Carney. “DFW’s business-friendly environment, consistent stream of corporate relocations and steady job creation, combined with strong population growth predictions, only adds to the appeal of the market for investors and property owners. Our local expertise will be a valuable asset for commercial and residential properties across the DFW metro.” About MCS MCS is a 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.