Yajnesh Rai

Billionaires Use Real Estate to Build Net Worth | Realtor Magazine

Real estate has been the sole road to wealth for many of the world’s billionaires. Overall, there are 256 billionaires in the world whose main business is in real estate—up by 17 a year ago, according to the Hurun Global Real Estate Rich List 2020.

China is the leader at 137, 54% of the international total, the report shows. Hong Kong is home to the most real estate billionaires.

Meanwhile, the U.S. boasts 34 real estate billionaires, or 13% of the world’s total. New York has the highest concentration of real estate billionaires in the U.S., at 15, followed by Los Angeles and Newport Beach, Calif., at two each.

As of January, there were 2,816 billionaires in the world, according to the report.

“Overall it [was] a good year for [the] world’s biggest real estate entrepreneurs,” says Rupert Hoogewerf, chairman and chief researcher of the Hurun Report. The report was issued prior to the coronavirus pandemic.

 

© Hurun Global Real Estate

 

 

Sight Unseen Offers Are Growing | Realtor Magazine

Real estate sales are continuing on within a global pandemic as the use of virtual tools is giving buyers a feel for homes—so much so that some are willing to put an offer on a home without even physically stepping inside.

A quarter of REALTORS® surveyed reported that their clients put contracts on homes this week without physically seeing the property. The survey was released Thursday by the National Association of REALTORS®.

As stay-at home orders keep more Americans physically distant, real estate pros are rushing to adapt their businesses and find ways to still show properties for those wanting to continue on with a home purchase. Virtual tours online are growing more common, whether through video or 3D models, and agents are conducting private video showings via platforms like Zoom, FaceTime, Skype, or others.

Real estate sales are continuing during the global pandemic as the use of virtual tools is giving buyers a feel for homes—so much so that they’re willing to put an offer without physically stepping inside.

A quarter of REALTORS® surveyed by the National Association of REALTORS® April 12–13 reported that their clients put contracts on homes this week without seeing the property in person.

As stay-at-home orders keep more Americans physically distant, real estate pros are rushing to adapt their businesses and find ways to show properties. Virtual tours online are growing more common, whether through video or 3D models, and agents are conducting private video showings via platforms like Zoom, FaceTime, Skype, and others.

These virtual options are leading to offers. The brokerage Redfin reported that for the week ending April 12, one in eight Redfin offers were written by customers who viewed the home via video chat. Some of these customers also viewed the home in person after viewing the home on video chat first. Mara Gemond, a real estate professional with Redfin in Virginia, said she’s had three buyers who’ve written offers based on a video tour.

Of those home buyers who put in an offer last week, they had viewed three homes prior, either virtually or in person, according to NAR’s latest Economic Pulse Flash Survey released Thursday. That indicates the buyers who are currently looking for a home are being very decisive and acting quickly. A previous 2019 survey from NAR shows that buyers typically look at nine homes prior to placing a contract on a home.

While some offers are continuing on—albeit in different ways—the real estate industry warns a slowdown is inevitable while the economy is shut down.

“Expect second-quarter home sales activity to slow down with the broad observance of stay-at-home orders, but sales will pick up when the economy reopens as many potential home buyers and sellers indicate they’re still in the market or will be in a couple of months,” says NAR’s Chief Economist Lawrence Yun. “Home prices remain stable as deals continue to happen with the growing use of new technology tools. Remarkably, 10% of REALTORS® report the same level or even more business activity now than before the economic lockdown.”

One-third of REALTORS®–or 33%—reported no closing delays from the COVID-19 outbreak. For those who did report delays, the top reasons cited were delays due to financing, appraisals, and home inspections.

Within the multifamily sector, property managers are reporting a surge in tenants who are facing rent payment issues. Forty-one percent of property managers reported being able to accommodate tenants who cannot pay rent, and about a quarter of individual landlords—or 24%—reported the same, the NAR survey showed.

NAR Calls for Servicing Relief as Banks Tighten Mortgages | Realtor Magazine

The real estate industry is growing alarmed over recent moves to tighten credit standards for new loans to home buyers as banks try to fend off disruption and losses during the COVID-19 pandemic. The National Association of REALTORS® warns that lending standards could grow even more stringent if federal regulators don’t step in soon to alleviate the servicer logjam in lending.

Starting Tuesday, JP Morgan Chase, the nation’s largest lender by assets, announced that the majority of new customers applying for a mortgage will need a minimum credit score of 700 and a down payment of at least 20% of the home’s value.

Over the past two weeks, other banks have enacted stricter eligibility requirements. Some are raising credit score minimums and others are completely halting jumbo mortgages. The tighter standards are making it more difficult for borrowers to take advantage of the lowest mortgage rates in history.

“This will hurt home sales and weigh on the economy if lawmakers don’t act soon,” warns Ken Fears, NAR’s senior policy representative for banks, lending, and housing finance. “We are continuing to put pressure on regulators, and we are engaged in a number of calls to the Treasury to highlight that this isn’t just an issue of servicers but an issue for individuals and home buyers across the country in every market. If [lawmakers] don’t act, this problem on paper will hit main street.”

Banks are responding to the unprecedented, sudden wave of homeowners taking forbearance options to delay their mortgage payments as unemployment skyrockets, with more than 16 million out of work due to the pandemic. Around 2 million borrowers have already applied for forbearance programs as businesses have scale back at the direction of federal guidelines on the critical workforce and social distancing. But banks are still on the hook to make tens of billions of dollars in payments to securities investors even in the absence of those missed payments. This is now spilling over in servicers’ abilities to issue new loans for home purchases.

To prevent this, NAR—joined by other housing trade groups—has been calling on financial regulators to use available money and tools to help fund new loans, including the creation of a liquidity facility set up by the Fed and backed by the U.S. Treasury. The liquidity facility would provide a pool of money that servicers could use to make short-term loans and help ensure the stability of the housing finance market. Further, the Treasury has already provided Fannie Mae and Freddie Mac a $250 billion line of credit that could be used.

“We urge you to use these tools and others at your disposal to maintain market liquidity and support all consumers in these difficult circumstances,” NAR President Vince Malta wrotein a March 27 letter to the Treasury Department.

Refinancing Stabilizes, Home-buying Drives Markets

JP Morgan Chase said it was also motivated to tighten its lending standards in response to the growing number of refinancing requests that it’s been fielding in recent weeks as mortgage rates have dipped to new lows, prompting homeowners to rush in to lower their monthly payments.

But Fears warns that lenders can’t just cater to the refinance market. “Refinances help stabilize homeownership, but home sales help drive the economy,” Fears says. Each existing-home sale creates about $85,000 in economic activity and the category drives nearly 20% of the economy, NAR research shows. “If people can’t continue to buy homes, that can be destabilizing to the economy,” Fears says. “It’s crucial to continue to provide access to credit for home purchases.”

5 Tips for Moving During COVID-19

Amid travel bans, widespread stay-at-home orders and social-distancing mandates, millions of Americans are learning to adapt to the changes brought about by COVID-19. Countless events have been rescheduled or cancelled, but for a few people — including those who already made plans to move this spring — staying put is simply not an option. 

If you are about to move, you can still pull it off with a little extra planning and a few precautionary steps.

Here are some tips for making your move as safe, seamless and stress-free as possible. 

DIY if possible

Even though most states have designated moving services as “essential” and therefore still able to operate, many smaller companies have reduced hours or have paused business altogether. If you can, try to manage the move on your own.

If you need help, do your homework on the companies operating in your area. Call to ask about sanitation procedures, whether the movers have necessary supplies (like masks, gloves and booties), and confirm there is a reasonable cancellation policy in the event that you need to change your plans.  

Minimize contact

If you’re working with a moving company, ask for a virtual quote and see if the company offers fully contactless service. 

Forgo handshakes, for obvious reasons. A smile and a generous tip (sent through Venmo, PayPal or another contactless digital platform) are a welcome substitute. 

Take extra sanitary precautions

• Wear masks, gloves and booties. If you’re hiring a moving company, they’ll likely bring similar supplies for their workers, but consider having additional hygiene products available.
• Disinfect frequently touched objects and surfaces, paying particular attention to door knobs and handles.
• Place soap and paper towels next to sinks and hand sanitizer by doors.
• Buy new boxes: The coronavirus has been found to live on cardboard for up to 24 hours, so this might not be the time to pick up used moving supplies from stores that are recycling them. You can also use boxes that you already have in your home. 

Be transparent and flexible

In advance of your move, reach out to your neighbors — especially if you live in an apartment building — and share the date and time you plan to move. This gives everyone in your direct vicinity an opportunity to avoid unnecessary contact and let you know if your timing is a problem.

If you or any family members are experiencing coronavirus symptoms, postpone your moving plans. Though rescheduling is a pain, the health and safety of your community comes first. 

Help those in need and lighten your load

Even in the best of circumstances, nearly 40 million Americans are unable to afford groceries. As COVID-19 forces school closures, soup kitchen shutdowns and a surge of layoffs, the need for anti-hunger provisions is greater than ever. Donate your shelf-stable items to a local food bank or to Move for Hunger, a national organization that works with professional moving companies and their customers to feed those in need.

Moving is hard work no matter what, and it’s especially challenging right now. But by taking extra precautions, you can — and will — get past this hurdle.  

IRS Extends More Tax Deadlines for Individuals, Businesses | Realtor Magazine

The IRS extended more tax deadlines to cover individuals, trusts, estates, corporations, and more, including deadline extensions for both 1031 like-kind exchanges and opportunity zone investments. Both programs are to help spur economic growth in communities. The National Association of REALTORS® advocated for both extensions.

Last month, the IRS had announced that taxpayers have until July 15 to file and pay 2019 federal income taxes. The original deadline was April 15.

On Thursday, the IRS said it expanded that relief to additional returns and tax payments. Individuals, trusts, estates, corporations, and other noncorporate tax filers now have until July 15 to file their 2019 federal income tax returns and to pay any tax due.

One of the deadlines under the opportunity zone program has been extended. If an investor who sold a capital asset planned to roll over the gain into an opportunity fund, they may be able to extend the previous 180-day deadline if it fell between April 1 and July 15. Investors in those cases can make the investment on July 15, the IRS states.

Also, investors who were doing 1031 like-kind exchanges and had already taken the first step by selling the old property also received an extension to meet the requirements. If the 45-day or the 180-day deadline fell between April 1 and July 15, the deadline has been extended to July 15.

Further, sole proprietors who pay quarterly estimated taxes can postpone their second quarter payment from June 15 to July 15. The first quarter’s estimated tax payments had already been extended to July 15. Now, both payments are due at the same time, without penalty, the IRS said.

“During recent weeks, NAR strongly advocated for tax payment deadline extensions, including for 1031 like-kind exchanges and opportunity zone investments, as this pandemic left small businesses and independent contractors particularly vulnerable,” said Vince Malta, NAR’s president. “I want to commend the IRS for moving quickly to protect countless American workers and consumers.”

Freddie: Still ‘Room for Rates to Move Down’ | Realtor Magazine

© REALTOR® MAGAZINE

 

The 30-year fixed-rate mortgage held steady compared to last week, averaging 3.33%.

“There is room for rates to move down,” says Sam Khater, Freddie Mac’s chief economist. “This year the 10-year Treasury market has declined by over a full percentage point, yet mortgage rates have only declined by one-third of a point. As financial markets continue to heal, we expect mortgage rates will drift lower in the second half of 2020.”

Freddie Mac reported the following national averages with mortgage rates for the week ending April 9:

• 30-year fixed-rate mortgages: averaged 3.33%, with an average 0.7 point, unchanged from last week’s average. Last year at this time, 30-year rates averaged 4.12%.
• 15-year fixed-rate mortgages: averaged 2.77%, with an average 0.6 point, falling from last week’s 2.82% average. A year ago, 15-year rates averaged 3.60%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.40%, with an average 0.3 point, unchanged from last week. A year ago, 5-year ARMs averaged 3.80%.

Average commitment rates are reported above, along with the average fees and points, to reflect the total upfront costs of obtaining the mortgage.

Pros Bet on Post-Pandemic Rebound, Survey Finds | Realtor Magazine

The spring housing market will be slower than normal due to stay-at-home orders by many states and municipalities to control the outbreak of COVID-19. But the majority of real estate professionals see the slowdown as temporary and are optimistic that a turnaround will occur once social distancing measures are lifted.

Nearly six of 10 REALTORS® recently surveyed reported buyers were delaying home purchases for a couple of months. Similarly, 57% of real estate professionals said sellers were delaying home sales, according to the National Association of REALTORS®’ Economic Pulse Flash Survey, conducted April 5–6.

“Home sales will decline this spring season because of unique economic and social consequences resulting from the coronavirus outbreak, but much of the activity looks to reappear later in the year,” says Lawrence Yun, NAR’s chief economist. “Home prices will remain stable because of a pandemic-induced reduction in inventory coupled with less immediate concerns over foreclosures.”

Indeed,mortgage servicers are also saying they are unconcerned about a flood of foreclosures hampering the housing market since swift actions were taken to offer forbearance options to out-of-work homeowners. Home prices are thus largely expected to remain stable. Seventy-two percent of REALTORS® said sellers have not reduced prices to attract buyers, according to NAR’s Economic Pulse survey.

Real estate professionals are finding ways to work virtually to complete some transactions. The most common tools leveraged are e-signatures, social media, messaging apps, and virtual tours, the survey found.

Property managers are facing rent payment issues as more tenants request delays to making their monthly rent. Nearly half of property managers—46%–reported being able to accommodate tenants who cannot pay rent and 27% of individual landlords reported the same, the NAR survey shows. The Coronavirus Aid, Relief, and Economic Security (CARES) Act includes a provision for eviction prevention as well as small-business loans and grants for assisting the rental market.

As stay-at-home orders to fight the COVID-19 outbreak prevent business as usual, some real estate brokerages have furloughed their agents so that their agents can then take advantage of unemployment aid until the market turns around. On Tuesday, Redfin’s Glenn Kelman announced 41% of the firm’s real estate agents would be furloughed, likely until Sept. 1.

“Today is the worst day for Redfin, but the service being performed by the agents and support staff who will remain is more important than ever,”Kelman noted in a post to its website on Tuesday.“The pandemic will end. … To those who have been asked to leave Redfin today, thank you. I can’t imagine the grief we’ve caused you. I’m sorry we let you down. We’ll fight like wild animals to bring everyone on furlough back.”

Top New-Home Features in 2020 | Realtor Magazine

Closets, energy efficiency, and laundry rooms appear to be home builders’ top priorities in the single-family homes they’re constructing this year.

The National Association of Home Builders conducts a nationwide survey each year to find out what home features builders are most likely to include in a typical new home. The walk-in closet in the master bedroom was the most popular home feature builders cited, according to the survey. Energy-efficient features were popular, too, such as efficient lighting, programmable thermostat, Energy Star–rated appliances, and windows. Kitchens were most likely to have a central island, a walk-in pantry, and granite countertops, the NAHB survey shows.

 

© National Association of Home Builders

 

On the other hand, the least likely features builders were to include in the price of the home were cork flooring for the living areas on the main floor, geothermal heat pumps, solar power systems, and dual toilets in the master bath. Also, specialty rooms unlikely to be included were sun rooms, media rooms, and two-story family rooms or foyers.

The Difference Between Mortgage Deferment and Forbearance | Realtor Magazine

More homeowners are in search of mortgage relief due to the COVID-19 pandemic, and options like mortgage deferment and mortgage forbearance are becoming readily available to those in need.

But “we are seeing the terms being used interchangeably,” Sara Singhas, director of loan administration for the Mortgage Bankers Association, told realtor.com®.

Mortgage deferment and mortgage forbearance allow borrowers to temporarily stop making their monthly payments, but they differ in what happens afterwards. At the end of a forbearance period, the amount of payments missed are due in a lump sum, Singhas explains. However, lenders may choose to work with borrowers to structure a payment plan.

On the other hand, deferment is allowing borrowers to repay the money over time or add it to the end of their loan period.

“Technically, a mortgage forbearance agreement is when you’ve possibly been late, and the lender agrees not to foreclosure during that forbearance period,” Krista Allred, a mortgage loan originator, told realtor.com®.

In the current landscape, many borrowers haven’t become past due on their mortgage yet. But an the pandemic causes unemployment numbers to rise, borrowers are in a rush to seek help before they default.

“The moral of the story right now is to call your lender,” Allred says. “Don’t just assume you can skip a payment. Call them, let them know, and make arrangements.”

Forbearance and deferment aren’t the only options. Some lenders are doing loan modifications, too.

The bottom line is that lenders want to remind consumers: Nothing is free.

“It’s not free mortgage payments; it’s not free money. [Forbearance] is temporarily hitting the pause button on your mortgage, and not having to make the payment,” Mary Bell Carlson, a certified financial planner who operates a blog under “Chief Financial Mom,” told realtor.com®. “It does not necessarily pause the interest that is accruing, and it does mean that you’re going to have to make that principal and interest payment at a later date.”

Home Offices Expected to Become Essential for Buyers | Realtor Magazine

As more people shift to work remotely during the COVID-19 pandemic, real estate professionals predict that a home office will become a hot amenity for the long term. Fifty-five percent of homeowners and practitioners recently surveyed by remodeling website Houzz say they have a home office. A quarter of respondents say they work from their dining room or kitchen table, and 11% work from their sofa.

Respondents report that the top challenges of a sudden shift to working from home include finding a private or quiet location away from high-traffic living areas (30%), securing a computer with a strong Wi-Fi connection (25%), and creating a comfortable workspace (25%).

Photo by Ashton Woods – More home office ideas

 

Houzz U.S. editor Anne Colby offers tips for setting up an efficient workspace at home, including:

• Pick the right location. If you don’t have a dedicated space for a home office, consider transforming a spare bedroom, dining room, den, or even a backyard shed. Consider whether you want to be near family while working or need a quieter corner, Colby suggests.
• Pay attention to the lighting. Diffuse the lights and position fixtures just right to avoid eyestrain from glares on the computer screen, Colby says. Layer lights from multiple sources—like an overhead light, desktop light, and natural light—to create the right ambience.
• Make it ergonomic. Keep your home office efficient and safe with the arrangement of your chair, desk, computer, keyboard, mouse, and phone. Make sure you’re comfortable. It will keep you working more productive and also prevent repetitive injuries, Colby says.