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Mortgage

Biden Administration Looking To Reverse Trump-Era Mortgage Policy

The Trump-era policy removed a lot of protections for those who were dependent on loans for their payments, as well as created the space for riskier loans to be dealt out.

Real Estate Home & Keys

UK Housing Market Showing Major Increases In Housing Prices

House prices in the United Kingdom rose by 8.5% throughout 2020, this marks the largest annual growth rate for the nation since October 2014, according to new official figures released by the government. 

In December 2020, the average price of a house in the UK hit £252,000, which is equivalent to $355,370 in the United States. Government leaders believe this increase is due to the pandemic, but also due to the stamp duty holiday which is projected to finish at the end of March this year. 

The Office for National Statistics released figures this week that showed north-west England as experiencing the highest growth in pricing. Housing rose by 11.2%% last year for that sector, and prices in London rose by just 3.5%. By the end of 2020 the average price of a home in England was around $327,048 in American currency (£269,000).

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“In Wales prices grew 10.7% to an average of £184,000 ($223,706). Scotland had an 8.4% increase to an average of £163,000 ($198,174), while in Northern Ireland a house would typically set buyers back £148,000 ($179937) – up 5.3% on the figure for December 2019,” according to reports.

The fact that so many individuals have been working from home during the Covid-19 pandemic has obviously stunted how many individuals are willing to put their homes on the market during the worst global health and economic crisis in decades. There’s simply not enough supply to meet the demand, even if that demand is exponentially smaller than normal. 

The Office for National Statistics also claimed that the average price of detached properties rose by 10% in 2020 compared to a 5% growth in pricing for flats and maisonettes. 

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“Recent price increases may reflect a range of factors, including pent-up demand, some possible changes in housing preferences since the pandemic, and a response to the changes made to property transaction taxes across the nations.”

In July 2020 the chancellor announced a stamp duty holiday as a means of getting the property market moving. The holiday released property purchases in England and Northern Ireland up to the value of £500,000 ($607,897) from tax payments, according to reports. 

Sarah Coles is a personal finance analyst in the US who claims there’s already hopeful signs that the market will begin to cool down. “Early calculations from Halifax are that house prices fell back 0.3% in January, while the RICS survey showed sales had plummeted, and estate agents expect things to get worse as we go through the spring. A shortage of properties on the market should keep prices from falling, but there’s not going to be a great deal of enthusiasm for more rises.”

Coles went on to explain that “the chancellor could breathe some new life back into the market in the budget if he makes some kind of concession for people mid-sale when the stamp duty rules change. However, there’s no guarantee he’ll do this, and, even if he does, buyers and sellers may be reluctant to get back into the race.”

NYC Real Estate

How Commercial Real Estate Will Advance In 2021 Thanks To Digital Marketing 

The Biden administration has pledged to reduce the carbon footprint caused by US buildings by 50% by the year 2035. While the administration hasn’t announced a concrete plan on how they intend to do so, digital services that help businesses monitor their carbon emissions is already proving to show success for the commercial real estate sector.

For example, Carbon Lighthouse is a startup with over $67 million in funding that uses artificial intelligence to lower building emissions in commercial real estate. Their new Efficiency Production service allows building owners to directly monitor and measure carbon emissions in certain structures. This technology is thought to be extremely beneficial for older buildings that may be falling behind on meeting new climate goals. 

The 2021 Deloitte Commercial Real Estate Outlook Report shows data that proves the Covid-19 pandemic has also made a major systemic impact on commercial real estate for 2021 that will last the whole year. John D’Angelo is a US Real Estate Leader at Deloitte Consulting who helped write the report. He claimed the impact of the pandemic on commercial real estate is causing the industry to rely much more on technology.

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“As commercial real estate companies work to understand and respond to emerging behavior patterns, create safe building spaces, improve operational efficiency and identify asset- and portfolio-level risks and opportunities. We see the rise of digital twins, direct digital engagement, data and analytics, robotic press automation and digital maturity to drive commercial real estate  in 2021 and beyond,” D’Angelo explained. 

Jim Berry is the Vice Chairman and US Real Estate Leader at Deloitte, who also recently spoke with the media regarding the pandemics creation of unique obstacles for the industry to get through: “It is important to recognize that while the pandemic served as an accelerant in the market, it did not change the trends that were already occurring.”

“In previous commercial real estate outlooks, we had pointed to a changing dynamic and need for the industry to seize better opportunities to utilize new and emerging technologies and data analytics to drive a different value proposition that focuses on tenant and end-user experience. Today, we continue to see – and what you can expect down the road – is a disruption in the value proposition of commercial real estate,” said Berry.

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“As memorable as 2020 events have been, 2021 and beyond will be telling, as certain commercial real estate companies begin to step into opportunities to better align their operations with those of the occupier and end-user.”

Berry believes that this newfound focus on these technologies will help advance development and shift the way the industry works overall for the better. The digitization of carbon emissions and other information regarding climate is essential for these businesses to maintain a greener footprint. 

“We will see commercial real estate businesses reevaluating the value proposition of properties by emphasizing experiential value and repositioning assets such as transforming the talent function – job roles, processes, and culture – to prepare for the future of work and balancing business recovery, seizing new opportunities and tenant and employee engagement. This will likely require a combination of elements, including breaking down functional silos, enhancing leadership and organizational agility, increasing collaboration and engaging in transparent and ethical decision-making.”

Berry believes that as the pandemic comes to an end, all the trends that were existing before it hit will still be around, but much more advanced, which will hopefully be beneficial to both the real estate industry overall in America, as well as the planet.

Silicon Valley Projected To See Rise In Commercial Real Estate Transactions This Year

Silicon Valley is currently projected to be a hot market for commercial real estate development and transactions as the coronavirus slump in business begins to dissipate with the release of multiple vaccines and new health and safety protocols implemented by the new administration in the White House. 

The San Jose metropolitan area, defined as Santa Clara County, is known as the nation’s number one market for the future development of commercial office spaces. It’s also being looked at as an amazing market for retail and apartment development as well. This shift is likely going to be partially caused by a greater desire to leave the suburbs after the pandemic and get back to the hustle and bustle of city life. 

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The East Bay and San Francisco-San Mateo metro regions are also being seen as prime spots for future office, retail, and apartment development, according to a report published by CBRE, a commercial real estate firm. Senior Manager at CBRE’s Silicon Valley office, Mark Schmidt, recently discussed this projected rise with the media. 

“Companies appreciate that a San Jose-area location is accessible to a wide swath of top-tier talent and affords room to grow.” 

The report ranked which of the 50 major markets in the US offered the best potential development opportunities post-Covid. The report considered all property types – office, retail, multifamily, and industrial – as well as all contributing factors to cost, such as land and construction. Santa Clara County was ranked at number 17 nationwide for development opportunities.

The San Francisco-San Mateoregion was ranked at number 22 and the East Bay ranked at number 23. Santa Clara County is ranked as the best region for office development opportunities, according to CBRE’s data and report; the group ranked the area as number 1 out of 50 metro areas in the US. 

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The South Bay also trumped other major office markets such as New York City, Chicago, Seattle, and Austin. The East Bay was ranked at number 16 for industrial development opportunities, number 20 for office, number 21 for retail, and number 26 for multifamily opportunities. 

“The East Bay has benefited as the more affordable neighbor of San Francisco, with industry advantages in information technology, professional business services, and a sizable construction labor force.”

CBRE is projecting that “the San Jose metro area will have the fastest growing economy post-recession, driven by an unparalleled high-tech ecosystem that takes advantage of research universities, abundant capital, and a strong start-up and entrepreneurial culture. New commercial properties will require enhanced amenities. Developers are prioritizing new features that promote health and safety, tenant flexibility and ease of access in response to COVID-related concerns.”

Nationwide the hopeful end of the Covid-19 pandemic is expected to shift the way a lot of industries develop and expand in the future. Time will tell how accurate these projections actually are, but based on past economic data, the US’s real estate industry should do just fine this year.

Buying a Home

The Most Popular Cities Millennial Homebuyers Are Investing In 

LendingTree recently compiled data on millennial real estate transactions to determine the most popular cities that the largest group of homebuyers in the US is currently looking to invest in. The survey looked at 50 of the largest metropolitans throughout the US to see which ones were more saturated with millennial buyers. 

LendingTree’s Chief Economist and Vice President Tendayi Kapfidze helped lead the study, and claimed that the goal was to figure out the most popular cities that this generation were gravitating towards, as their real estate transactions within the next year could very well help stimulate local economies which would benefit the entire nation as well. Beyond the most popular, the survey also determined the least popular cities as well as where the youngest individuals in the millennial generation were gravitating towards. 

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“We found that some of the more popular cities in the US were most attractive to older millennials with high-paying jobs in the tech industry.” 

Two of the most popular cities being San Jose and Boston, which are also some of the country’s most expensive, hence why these millennial residents all have high-paying jobs in the tech industry. Millennial’s living in San Jose, which ranked as the number one city being invested in, had the highest down payments within the last year, peaking at $158,040. 

According to Kapfidze, “those borrowers had the highest average requested loan amount of $704,318. The current home value in the San Jose metro is $1,275,627.” Boston is also a giant tech hub for the older millennial generation, especially for those who went to school in the Boston area and were able to get an occupation right after graduation. 

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Ranking at number two the typical home in Boston currently lists for above $1 million, but “tech companies attract younger and wealthier workers that can afford these expensive cities,” Kapfidze explained. 

Denver, Colorado came in at number three on the list of most popular metropolitans, as this market is much cheaper when compared to the top two cities. LendingTree’s data shows that the average loan requested from Millennial homebuyers in Denver is $345,433, and the average home value in the city is $474,618. 

Contrary to popular belief, cities with a warmer climate, such as Las Vegas, Tampa, or Phoenix, actually rank lowest on the list of popular cities for millennial homebuyers. The home values in these areas have subsequently risen due to the lack of action within the past year while the prices continue to drop. 

“With Millennials as the largest home buying segment, our mid-December data isn’t showing people fleeing those urban cores,” Kapfidze explained, adding that after a year of individuals fleeing to the suburbs to wait out the pandemic, major metropolitans in the US are about to see a major influx in young buyers, which will thus help the economy in America recover as well.

Cybersecurity Real Estate

Real Estate Agencies Creating ‘Incident Response Plans’ To Prepare For Potential Cyberattacks

The amount of personal information exchanged during a real estate transaction makes the industry especially vulnerable to these kinds of online attacks.

Candles in the Home

How Keeping Your Home Smelling Fresh Can Enhance Your Overall Wellbeing

When it comes to our homes personal scent, more times than not we can become so accustomed to how our homes smell that we don’t even notice when more foul smells start to appear. When bad smells are caused by things like trash, a lack of cleaning/dusting, laundry, etc. they tend to linger and attach themselves to parts of your home, unknown to you though. 

Joseph Allen is a professor at Harvard who recently discussed how for some individuals the “olfactory ambiance of their home can lead to what is known as ‘sick home’ syndrome. Thought to be caused by poor ventilation, mold and the accumulation of bad smells, the symptoms include headaches; eye, nose or throat irritation; dry or itchy skin; or mental fatigue.”

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Allen claims, however, that it’s unknown whether or not this syndrome is a physical response to the smells in one’s home, or if it’s more psychological, and has more to do with the mental health aspect that comes with maintaining a clean or messy space. He explained that often our brains tag unpleasant odors as dangerous due to an evolutionary response of associating negative smells with disease and death. 

Regardless of if this response is physiological or physical, you should always make sure your house is clean in terms of dusting and taking out the trash. Even further, making sure your house is always smelling pleasant and fresh is one of the most effective ways to enhance your overall mood and wellbeing. 

Think about when you find yourself in times of deep sadness or stress, entering into a messy space only adds more physical and psychological clutter to your life because it’s just one more thing to worry about. Smelling things like lavender, vanilla, or peppermint in times of overwhelming stress can help relax and center the body. 

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Pleasant and powerful scents such as rose, citrus, or cinnamon will take you out of whatever overwhelming line of thinking you’re in and return you to the present moment. By focusing on the scent of your home and that present moment you’re more easily able to figure out what you need to do for yourself in order to make your own life easier, and less stressful. 

According to research the scent of the South American heliotropin flower is thought to have an extremely calming effect on the body. Allen explained that this flower in particular is used as one of the main ingredients in baby powder, so the scent automatically transports your subconscious to the reassuring and simplistic memories of childhood.

While candles and essential oils are also an amazing way to liven up the scent of any space, they’re not 100% necessary for when you find yourself in times of passing stress or anxiety. Introducing strong smells to your body can immediately jolt you into the present moment, energize your sense and clear your mind. Something as simple as smelling fresh coffee grounds in your cabinet, or garlic frying in a pan can help accomplish this. 

Allen explained that smells always retain their ability to evoke a specific memory and/or emotion in us. Compared to every other scent, smelling is the most powerful in terms of sensory cues taking us back to a very specific memory or time in our life. So go out and invest in some fresh flowers, a few cinnamon cloves, and maybe even a candle or two, oh, and also remember to take out your trash periodically.

Palm Beach Florida

How Palm Beach’s Real Estate Market Is Beginning To Thrive Again 

Suburbs in America helped keep the real estate market afloat throughout the past ten months of the Covid-19 pandemic. As individuals fled their small apartments in bustling metropolitans for a quieter, more secluded space to spend their quarantine, markets in city spaces began to decline. However, with the release of multiple vaccines, a new administration taking control over how we respond to this pandemic, and a new year on the market’s side, some areas of the country are already seeing an increase in desire to buy. 

The exclusive town of Palm Beach, Florida is a small sliver of an island that is typically home to some of the nation’s wealthiest individuals. Now, people throughout America are fleeing their Suburban spaces to get away to warm Palm Beach, creating a new sellers market that Guy Clark, an agent with Douglas Elliman Real Estate in Palm Beach, was truly not expecting. 

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“Anyone with money is currently fleeing places like New York and coming here, it’s a seller’s market like I’ve never experienced.” 

Some of the migration, according to Wall Street data, is due to a multitude of job relocation’s from New York to Florida. Some of the wealthiest in America who have the privilege and ability to move right now are also fleeing Covid hotspots to take advantage of Florida’s lack of state income tax.

The Palm Beach County Clerk’s office recorded more than 20 home sales in 2020, exceeding $20 million each; for reference in 2019 only 10 homes of the same pricing were sold. According to John Cregan, an agent at Sotheby’s International Realty, many of the homes currently being rented or sold are off the market and being done in private deals. Older homes are being torn down and renovated to prepare for a future influx in buying once the pandemic is over. 

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The rental market also picked up with the winter season, which is typically a hot time for buying in Palm Beach. Even with the limited supply that realtors were working with, rentals overall have been on the rise within the past few months. Some have even turned to hotels for long-term stars as an alternative to their suburban homes. 

According to Lesley Sheinberg and Barbara LeBrun of NAI/Merin Hunter Codman, migrants from around the nation are also looking for commercial spaces to rent to be used as an office space. 

“Every single showing this week we have there is from people up north or different states, either wanting to have a presence here, so they don’t have to commute back and forth, or wanting to get out and move their business here.”

The rise in rental markets, and the real estate market in Palm Beach overall, will have an amazing trickle down effect on the local economy. Interior design firms and other local businesses in Palm Beach all report a rise in transactions when the real estate market begins to rise in the area. Some businesses are already seeing this increase occur, and the hope is that as time moves on the positive effects of that spending will ripple out to the rest of the state.

NYC Real Estate

New York City Luxury Real Estate Expected To Thrive In 2021

Based on New York City real estate’s last quarter of 2020, the luxury sector of the market is expecting to thrive in 2021. Sales of homes that cost more than $4 million increased slightly when compared to how they were selling this time in 2019; a surprising shift in the market considering we’re currently in the worst phase of the Covid-19 pandemic yet. 

Donna Olshan is the president of luxury real estate broker Olshan Realty who claims this increase is partially due to “a demand that was never met because we lost the most important real estate quarter to the pandemic – the spring. The upward tick also occurred because most of these sales are [to] New Yorkers, or from the New York metro area, betting on the home team. They are getting Covid-19 discounts, they’re looking at the long-term prospects of New York, and they’re buying.”

Jonathan Miller is the president and chief executive officer of Miller Samuel appraisers who thinks that NYC will see a major uptick in sales in 2021 because while many made the move to the suburbs during the pandemic, that craze will soon be over as the world begins to reopen. 

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“The way I think of the suburbs is that they had their moment. The ‘fleeing the city’ narrative is already extremely dated. While suburban sales are still up year over year, it’s just no longer a rocket ship of growth.” Miller also believes that this over-saturation of individuals in these suburbs are going to drive those markets way up, along with the prices of property. “And the jump in pricing, largely caused by what I would call panic buying—where people left the city out of fear—that was front end-loaded, and I don’t see a compelling reason why that [price growth] can be sustainable.”

Olshan believes that Brooklyn in general will stay as hot on the market as it has been; the pandemic hasn’t really impacted the real estate in the borough. “Luxury” real estate in Brooklyn is also much “cheaper” when compared to what’s considered luxury on the Upper East Side. Any home over $2 million in Brooklyn is considered luxury, which according to Miller is the main reason the area is so popular. 

“Brooklyn is certainly accelerating, and I don’t see any reason for that to stop I mean a million dollars buys you more space, and once you get into that luxury sector, that value grows quite a bit.”

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Foreign buyers investing in luxury New York City properties throughout the pandemic have certainly helped keep the industry, and economy, afloat, however, this has also caused the pricing to increase exponentially, and considering we’re in the middle of one of the worst economic disasters in US history, less American investors are likely to purchase these properties. 

In Manhattan this will especially be an issue considering how large the luxury condominium market is now in the borough, which Miller describes as being “burdened with a tremendous amount of supply.” 

“In 2020 we had 8.7 years of sellout, meaning it would take 8.7 years to sell all unsold Manhattan new-development condos. That is likely to drop to 7.2 years in 2021, because there’s an anticipated decline of new products coming into the market. Plus, additional sales will occur as buyers are drawn by discounted pricing. I think in 2021 we’ll see a continued drop in price trends.”

The next few months will be determined by how well the economy is able to recover with the new Covdi-19 economic relief packages, as well as how the country begins to recover with the rollout of two vaccines. 

Technology’s Major New Role In The Real Estate Industry 

Technology has been implemented within the real estate industry for more than a decade now, however, with the Covid-19 pandemic using the multitude of tools and websites available on the internet has never been more crucial for the survival of this industry. When the pandemic inevitable begins to slow-down in 2021, industry leaders will have to make sure to take advantage of all the technology that they have available to them to help the markets in America grow again, and thus help the economy recover. 

Buyers are able to virtually access almost any property online now. This type of “virtual open house” technology has existed long before the pandemic, however, during an era where we’re meant to stay home indefinitely, these tools have never felt more relevant. 

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In the old school days of real estate, agencies would have thick binders full of printed stats, graphics and plans for each of their listings. Today it’s all condensed into a PDF to be easily shared via tablet for easy viewing. The conversion of paper to digital has been a massive cultural shift for the entire world and its many industries, however, for the real estate industry, this shift has made it easy for anyone to grow their business from anywhere. 

Clients and agents can easily contact each other from far distances, and in the middle of a pandemic where certain individuals may be looking for a complete change in scenery, that’s everything. Many agencies also opt for virtual interactive “house maps” that allow prospective buyers to virtually “walk around” a certain property thanks to 360 degree imaging. 

Retail and commercial real estate businesses tend to use other technology to advance their own operations. For example, many commercial real estate owners use apps that help track credit card data to understand how their clients shop or utilize their own companies website. For retailers looking at consumer behavior and data is crucial for its success. 

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One of the biggest advantages that technology offers real estate agencies, as well as any major industry in America, is the multitude of marketing opportunities. Social media makes it easier than ever for any agency, no matter how small, to get their name out there. Creating not only a website, but profiles on platforms such as Facebook, Twitter, or even Instagram, can help spread the word about certain property listings, agent recommendations and business opportunities for your clients; who can then easily share your profiles with their friends. 

For any industry technology is crucial for creating a solid marketing strategy, it also can provide an amazing learning opportunity for older individuals who have watched the real estate industry grow and develop within the past two decades. The older generation learning from the younger generation of real estate professionals, and vice versa, can create an amazing environment for learning, growth, and most importantly, success. 

As the Covid-19 pandemic continues to impact the nation and its multitude of businesses, technology will also continue to impact the way in which we perform these business transactions. As the world begins to reopen and the virus eventually dissipates, these technologies will continue to grow and exist as well, so take advantage now!