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In this Real Estate News Brief for the week ending March 18th, 2023… the latest reports on inflation, why homebuilders blame the media for skittish homebuyers, and what international buyers think about the U.S. real estate market.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   We begin with the latest economic news from this past week, and what a week it’s been. The banking crisis continues to underscore the impact that interest rate hikes can have on the economy. Economists are now predicting that the Fed may only raise rates a quarter point when it meets in the coming week, instead of the previously anticipated half point rate hike. (1)   The latest inflation reports are also encouraging. The Consumer Price Index was up .4% in February. That’s after a .5% increase in January. The lower rate of inflation brings the annual rate down to 6% from 6.4%, which is still high, but receding. The CPI’s core rate was

Just out, the Consumer Price Index for February and it shows that inflation cooled slightly for the month. Government figures show it rose .4% which brings the annual inflation rate down to 6%. It was 6.4% last month.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review.   The report on the CPI also shows a .5% rise in the core rate of inflation, which omits volatile pricing for food and energy. That’s slightly higher than a .4% estimate for the core rate, but the annual core rate of 5.5% was inline with expectations.    Economists Expect Soften Fed Policy   Overall, inflation went down in February, but likely not enough to prevent another rate hike when the Federal Reserve meets next week. Economists expect the banking turmoil to soften the Fed’s stance however.   The head of Evercore ISI’s global policy and central bank strategy, Krishna Guha, told CNBC: “While only moderately higher than consensus, in the pre-SVB crisis world

In this Real Estate News Brief for the week ending March 11th, 2023 and beyond… the collapse of three banks in one week, how this might change the Fed’s decision on a rate hike, and a new attempt to kill the 1031 exchange.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   We begin the latest economic reports and the failure of a huge bank in Silicon Valley. The collapse of Silicon Valley Bank happened in just 48 hours, after a $42 billion bank run. It’s now the second biggest bank collapse in U.S. history after the collapse of Washington Mutual in 2008.    The crisis began when the bank said it needed to raise $2.25 billion to shore up its balance sheet, but that spooked investors which include some of the biggest tech companies and venture capitalists in Silicon Valley. Withdrawals happened so rapidly that the company was forced to sell all of its available-for-sale bonds at a $1.8 billion loss. At the end of

The Fed may have a difficult time determining its progress against inflation later this year, as the two biggest inflation indicators contradict each other. The Federal Reserve prefers the Personal Consumption Expenditures index or PCE as a basis for its 2% inflation target. But due to the differences between the PCE and the Consumer Price Index or CPI, they might reverse their roles and cause confusion.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please don’t forget to subscribe to our podcast, and leave us a five-star review if you like what you hear!   The CPI is more closely watched by average Americans, and it’s been the one to show the highest level of inflation. But according to an analysis in the Wall Street Journal, as inflation subsides, it could drop below the PCE, making it difficult for the Fed to explain rate hikes based on the PCE. (1)   Difference Between the CPI and the PCE Indexes   Economists are betting that the CPI will fall to 2.6% in October while the PCE will dro

In this Real Estate News Brief for the week ending March 4th, 2023... the Fed Chief's testimony before Congress for the current week along with a forecast on home prices and what national rent growth is doing for single family homes and multi-families.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   We begin with comments from Fed Chief Jerome Powell about the central bank's fight against inflation. He spoke before the Senate Banking Committee and the House Financial Services Committee on March 7th and 8th. Bloomberg reports that he softened his tone slightly on the second day, saying that Fed officials will wait for new data on Jobs and inflation before they decide on the size of a rate hike when they meet later this month. He did say the rates will likely go higher than previously anticipated, but that depends on the new data and whether it indicates that the economy is still running hot. (1)   Recent econo

Home values have been coming down since they peaked in June of last year. A Redfin report shows the U.S. total went as high as $47.7 trillion before it dropped to $45.3 trillion in December. That’s a 4.9% decline and the largest June-to-December percentage drop since 2008. The report also shows that home values in some markets are holding up well, with double-digit year-over-year gains.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please don’t forget to subscribe to our podcast, and leave us a five-star review if you like what you hear!   According to Redfin, December year-over-year home values were still 6.5% higher nationally, but that’s the smallest year-over-year increase since August of 2020. The analysis included data on 99 million U.S. residential properties in the top 100 metros for population. (1)   Fight Against Inflation Impacting Home Values   Property values started declining after what seemed like an unstoppable run-up in home values. Inflation really took off after all the

I n this Real Estate News Brief for the week ending February 25th, 2023... the latest disappointing report on inflation, a Q4 report on investor home-buying activity, and a new prediction for institutional ownership of single-family rentals.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   We begin with economic news from this past week and a report that inflation remains stubbornly high. According to the Personal Consumption Expenditures index or PCE, the cost of goods and services rose .6% in January. That’s the largest increase since last summer, and raises the annual rate from 5.3% to 5.4%. The core rate, which excludes food and fuel, was also up .6% and raises the annual core rate of inflation from 4.6% to 4.7%. The disappointing results follow two other hot inflation reports for January. It’s not clear if this is just a blip in the battle against inflation or a change of course, but it does suggest that

In this Real Estate News Brief for the week ending February 18th, 2023... a double dose of inflation data, why investors might save the day for the housing market, and what remote workers are worried about this winter.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   We begin with economic news from this past week. The government released “two” inflation reports, that show we’re not making as much progress as we’d like in taming those high prices. The Consumer Price Index or CPI shows that the cost of living was up .5% in January, with a slight drop in the annual rate from 6.5% to 6.4%. The core rate, which omits food and gas, was also higher than expected at .4% for January and an annual rate of 5.6%.   Most of the increase was due to higher housing costs and gas prices, and was higher than Wall Street economists expected. Rents were up .7% in January while the yearly cost for shelter jumped to a new peak of

Population growth, job growth, and infrastructure growth are some of the essential ingredients for a healthy real estate market. They all feed into housing demand, and should be important considerations for determining where to buy rental property. A recent NAR report on population growth puts Florida and Texas at the very top of a national list for population growth in 2022.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   “Where People Moved in 2022”   The National Association of Realtors published an article called “Where People Moved in 2022.” It is based on data from the Census Bureau data on net migration for each state. Not only did Florida have the highest number of newcomers at 318,855 people, it also had the highest percentage of population growth at 1.9%.   Other states with impressive statistics include Texas, which was second on the list for the highest number of new residents. The data shows 230,961 people moved

A debate over the definition of an accredited investor is underway ahead of an SEC meeting that could make it tougher to quality. The SEC Chairman is reportedly in favor of making the definition more restrictive, and that’s raising concerns among lawmakers, financial scholars and business startups who feel that opportunities for investing should be expanded, not diminished. (1)   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   What is an Accredited Investor?   If you’ve been wanting to invest in a private placement, such as an apartment or storage syndication, but haven’t yet met the requirements of an accredited investor, you may be feeling the frustration. The SEC requires an individual to earn at least $200,000 a year as an individual, $300,000 a year as a couple, or a networth of $1,000,000 or more which excludes the value of a primary residence.   Accredited vs. Sophisticated   The SEC does allow a small number of non-acc

In this Real Estate News Brief for the week ending February 11th, 2023... What’s ahead for single-family rentals and build-to-rent homes, along with a look at why Los Angeles landlords may be fuming right now, over a new law.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   We begin with economic news from this past week, and comments from Fed Chief Jerome Powell, about last week’s surprisingly strong January jobs report. He said of the report: “It was certainly stronger than anyone I know expected.” (1) The blowout report surpassed expectations with 517,000 new jobs, and a decrease in the unemployment rate to 3.4%. (2)    With 5 million more jobs than there are workers to fill them, Powell is concerned that competition for workers will lead to continued inflationary wage growth. He says the “disinflationary” process has begun, and expects to see significant declines in inflation this year, but expects it will

Tension between the U.S. and China has spilled into the U.S. real estate market, with specific concern about the ownership of American farmland. There’s new legislation by two House members that would prohibit the purchase of farmland by Chinese citizens. There’s also an increasing number of states that are approving or considering similar limits or bans, including one that’s creating a lot of controversy right now in Texas.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   As a headline in Fortune warns: “Forget the Chinese balloon – selling farmland to foreign nationals is the real worry.” You’ve probably been following the balloon incident. It was first spotted by a cattle rancher in Washington state, although defense officials said the next day that they were tracking what they suspected was a Chinese spy balloon. (1)   Chinese Surveillance Balloon Shot Down   U.S. officials allowed it to float all the way across the U.S.

In this Real Estate News Brief for the week ending February 4th, 2023... another Fed rate hike with an encouraging forecast for the coming months, what Elon Musk is doing with Lennar in Texas, and why real estate agents are embracing an artificial intelligence chatbot called ChatGPT.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   We begin with economic news from the past week. The Federal Reserve’s Open Market Committee hiked short-term rates by another quarter point, as expected. That raises the Federal Funds rate to a range of 4.5 to 4.75%. It’s the highest it’s been since October of 2007, and will likely go higher before the Federal Reserve is convinced that inflation is subsiding. During a news conference, Fed Chief Jerome Powell said: “While recent developments are encouraging, we will need substantially more evidence to be confident that inflation is on a sustained downward path.” (1)   Economists are

The Biden Administration launched a broad-based effort by federal agencies to “improve the quality of life for renters.” The announcement comes at a time when 40% of renters are struggling to keep up with their rent payments, but raises questions about how to make housing affordable in a way that is fair for both renters and landlords. (1)   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   U.S. Rent Growth   Rents have been soaring across the country, as housing demand continues to outpace supply, but it has also been slowing down as the Federal Reserve works to slow inflation with rate hikes. According to Zillow, typical U.S. asking rents are $1,981, which represents a yearly growth rate of 7.4%. That’s down from a peak of 17.1% last February. (2)   Rents and rent growth vary wildly from market to market. In Miami, year-over-year rent growth is 11.7% while Las Vegas is showing a negative .9% increase. A few other examples incl

In this Real Estate News Brief for the week ending January 28th, 2023... what’s happening with inflation, a new surge in foreclosures, and the affordability of renting versus buying.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   We begin with economic news from this past week. The latest report on the cost of goods and services shows that inflation is cooling off. The PCE index is the Federal Reserve’s preferred measure of inflation and it shows a tiny .1% increase for December. That reduces the annual rate from 5.5% to 5%. When you eliminate the cost of food and gas, the monthly increase was .3% with an annual rate that’s down from 4.7% to 4.4%. PCE stands for Personal Consumption Expenditures. (1)   We also have a new report on the GDP. The government reports that the Gross Domestic Product grew at a solid 2.9% in the fourth quarter of last year. That’s after a reading of 3.2% in the third quarter, and tw

It’s a worst-case scenario for homeowners in a suburb of Scottsdale, Arizona. Due to drought conditions in the Southwest, the water supply for Rio Verde Foothills has been shut off. Residents have been left scrambling for water. They have filed a lawsuit, but the bigger question is whether the building boom can continue in Arizona. Land has been inexpensive in Arizona but without enough water, is land really that cheap?   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Scottsdale supplied Rio Verde Foothills with water for decades, since it sprouted into existence in the 1970’s. It’s an unincorporated part of Maricopa county with about 600 homes and about 1,000 residents. The water was trucked in, but with a decades-long drought and a shrinking supply of water from the Colorado River, Scottsdale says it needs to conserve water for its own residents and can no longer deliver water to Rio Verde.    It’s not just a wake-up call f

In this Real Estate News Brief for the week ending January 21st, 2023... why mortgage rates are looking more attractive, the new office space investing opportunity, and a new home design trend called “Barkitecture” that makes pets a priority.    Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   We begin with economic news from this past week and more evidence that prices are coming back down to earth. The government reports that wholesale prices were .5% lower in December. It was the biggest drop in the Producer Price Index since April of 2020 when the economy shut down because of Covid. The monthly decline brings the annual rate of wholesale price inflation down from 7.2% to 6.2%. (1)   The Federal Reserve will be analyzing the latest reports on inflation ahead of a rate hike decision on February 1st. The Federal Funds rate is currently within the range of 4.25 and 4.50%. Now that inflation is receding, several

The Fed’s relentless effort to stomp out inflation is having a huge impact on one of the nation’s biggest builders. KB Homes reported a homebuyer cancellation rate of 68% in December. And the “housing market reset” isn’t over yet. Although the latest inflation reports show that inflation is subsiding, the cost of a home is still too high for many buyers.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Inflation is Slowly Decreasing   A report on the Consumer Price Index shows a decline of .1% in December with an annual rate of 6.5%. (1) It’s the lowest rate of inflation we’ve seen in more than a year, and a big drop from a peak of 9.1% last summer. Lower oil prices accounted for most of the latest decline.   When you remove prices for fuel and food, the monthly core rate of inflation was .3% with an annual rate of 5.7%. According to MarketWatch, there were few negatives in the CPI report, although the cost of housing is stil

In this Real Estate News Brief for the week ending January 14th, 2023… the good news about inflation, a few new potentially hot real estate markets, and the recent surge in U.S. population growth.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   We begin with economic news from this past week, and good news about inflation. For the first time since the beginning of the pandemic, consumer prices were down. The Labor Department reports that the Consumer Price Index fell .1% in December. The decline brings the annual rate of inflation down from 7.1% to 6.5%. It was up as high as 9.1% last summer. The core rate of inflation is considered a more accurate gauge of inflation because it eliminates food and gas prices which can be volatile. That rate was down .3% to a core rate of 5.7%. (1)   The December reading is proof that inflation is subsiding, and is giving economists hope that the Federal Reserve will back off

In this Real Estate News Brief for the week ending January 7th, 2023... home loan rates are hitting home prices, rent growth slows on apartments and single-family rentals, and lumber prices have returned to pre-pandemic levels.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.   Economic News   We begin with economic news from this past week. Federal Reserve officials are seeing a long-term need for higher interest rates, according to the minutes of their last meeting. They raised the short-term rate by a half point at that meeting to a range of 4.25% to 4.50%. That’s after four three-quarter point rate hikes during past meetings. Minneapolis Fed President Neel Kashkari sees the federal funds rate going as high as 5.4%, or higher if inflation doesn’t settle back down. Their preferred inflation gauge showed a core rate of 4.7% in November, which is well above their target rate of 2%. (1)   At this point, the economy remains stron