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These 5 cities are at risk for housing crashes this year

A new GoBankingRates study published on Tuesday looked at the number of underwater mortgages, home vacancies as well as delinquency and foreclosure rates to identify the cities most at risk of a housing crisis in the coming years. A crash is generally defined as a market in which large numbers of properties are in negative equity, or worth less than the owners’ mortgage.

Here are the top 5 markets that are most at risk of a pending crash:

Newark, New Jersey

The housing market in Newark, New Jersey showed the biggest signs of trouble. Nearly 30 percent of mortgages have negative equity while vacancy rates for houses and rental units sit at 5.2 percent and 9.5 percent compared to the nationwide average of 1.7 percent and 6.1 percent, respectively. Approximately 6.5 percent of mortgage payments are in some sort of delinquency, which is more than six times the national average.

Detroit, Michigan

Post-crash, Detroit’s real estate challenges and opportunities have long been a nationwide topic of conversation. But in this study, Detroit came in second place for crash risk due to its floundering home values — $161,300 compared to the national median of $226,300. At 34.4 percent, the number of homes with negative equity is also the highest in the country while vacancy and delinquency rates are also higher than average.

Bridgeport, Connecticut

The largest city in Connecticut, Bridgeport has seen real estate values drop due to a high crime rate and low economic prospects. The median house in the city is worth $176,200 while 26.9 percent of mortgages are underwater.

“The city’s high delinquency and foreclosure rates are not inviting to people looking for the best place to buy their first home,” reads the report.

Baltimore, Maryland

Baltimore has been taking a hit from all sides lately — President Trump recently called parts of the city a “rat and rodent-infested mess” in attacks on local House Representative Elijah Cummings. But while the city’s low median home values ($119,200) and high negative equity rates (26.5 percent) put it fourth on the at-risk list, Baltimore in fact does see constant development and provides plenty of opportunities for investors.

Hartford, Connecticut

While only 22.4 percent of Hartford homes have negative equity, the capital of Connecticut has a high homeowner vacancy rate. At 4.3 percent, the rate is more than 2.5 times the national average. The number is even worse for rental units, which has a vacancy rate of 9.2 percent. A median home in Hartford is worth $130,900.

Critics slam presidential hopeful's plan to 'tax the hell out of' the rich

New York City Mayor Bill de Blasio came out last Wednesday night for his second presidential debate with his gloves off.

“When I’m president, we will even up the score and we will tax the hell out of the wealthy to make this a fairer country and to make sure it’s a country that puts working people first,” de Blasio declared during his opening remarks.

De Blasio repeated the comment at the end of the debate, while also plugging his new fundraising website TaxTheHell.com, and dropped the line again at the conclusion of the night during an interview with MSNBC.

The line is a catchy one with a certain Trumpian ring — you can imagine people chanting “tax the hell” at a rally — but now, critics are arguing that the actual policies behind de Blasio’s comments would in fact lead to financial problems, particularly in the real estate industry.

de Blasio’s proposal could negatively impact people who have their wealth locked up in property, which is valuable but not very liquid, wants to “repeal the estate tax… and replace it with a more aggressive inheritance tax.

In any case, it’s highly unlikely at this point that de Blasio will get anywhere near the White House. Polling and news site FiveThirtyEight currently has the mayor in a multi-way tie for last place among nearly two dozen candidates.

Beauty queen accused of interior design fraud by hotel mogul

A couple who hired a former Miss Sweden to decorate their opulent property in The Bahamas is now accusing the one-time beauty queen of interior design fraud. Hotel magnate Henry Silverman and his wife Karen Silverman have filed a suit against interior designer Sofia Joelsson in Florida federal court. With a registered net worth of $300 million, Henry Silverman has at one point controlled hotel brands Howard Johnson’s Ramada, Super 8 and Travelodge.

According to the complaint, Joelsson defrauded them out of millions of dollars by overcharging clients through a network of shell companies and inside vendors.

The lawsuit calls Joelsson a “penthouse queen” of South Beach and claims that she misled them to believe that her company was a licensed interior design firm when it wasn’t.

The Silvermans are asking for at least $7 million in damages based on alleged violations of the Racketeer Influenced and Corrupt Organizations Act and Florida Deceptive and Unfair Practices Act. They further claim that Joelsson would arrange for contractors to give overinflated invoices and then launder the funds through various real estate purchases while keeping several sets of records for each transaction to defraud tax authorities.

NYC competitor sues Compass over allegedly poaching manager

The well-funded New York City-based brokerage Compass has been hit with yet another lawsuit.

This time, New York City-based competitor Elegran is suing Compass and one of its former managers over what it calls a “brazen scheme to unfairly compete with Elegran by stealing Elegran’s confidential information and trade secrets and using them to target Elegran’s other real estate brokers, clients, and potential clients.”

At the center of the complaint is Zino Angelides, a former manager who defected to Compass from Elegran. Compass allegedly recruited Angelides and three other brokers while they were still at Elegran. On June 24, 2019, Angelides and the three other brokers abruptly resigned from Elegran with no prior notice, according to the complaint, and immediately began working for Compass. They also took what could potentially be $10 million in leads, assuming they all close.

A Compass spokesperson, in a statement, told Inman that it is focused on providing the best experience for its employees, agents and their clients.

Compass has been the target of a number of lawsuits from Competitors, including, most recently, a la...

Closingtimepodcast.com for the latest news from the real estate world, helpful tips for buyers, sellers and other agents, and all of our previous podcast episodes. Keep up with us on Facebook and Instagram. We also offer home video tours, Realtor branding videos, ariel shots, live streams and more.. closingtimepodcast.com and click on the CMG Real Estate Link..

How to Get a $5,000 Amazon Credit: Buy a House Through Realogy

Over the past year, the decidedly analog business of buying and selling real estate has been upended by a flurry of new money and start-ups trying to usher in a world where homes are bought and sold online. Now, Amazon is creating a partnership that goes in the opposite direction by using its gigantic retail platform to facilitate phone calls with human real estate agents.

On Tuesday, Amazon said that it was working with Realogy, the nation’s largest residential real estate brokerage company and owner of Century 21, Coldwell Banker and other brands, to create TurnKey, a service that will help prospective home buyers find real estate agents. To entice customers, Amazon will give buyers up to $5,000 in home services and smart-home gear when they close.

Amazon is now as much a search engine as it is a store, and the deal fits into the company’s effort to capitalize on its status as an online destination by making money on advertising and other services. It’s also a way to encourage people to adopt products like Alexa speakers and Ring doorbells and to promote its list of handymen, furniture assemblers and other home services.

For Realogy, who will pay for those benefits, the partnership is a way of using Amazon to find home buyers and help its brokers separate the closers from the lookie-loos by rebating a portion of its commission, in the form of free Amazon stuff, to anyone who actually buys a house.

Keller Williams and Compass leaders spar (politely) over tech

Keller Williams Realty President Josh Team said Thursday during an Inman Connect panel that his brokerage is investing $1 billion into technology before directing a jab at Compass CEO Robert Reffkin: “Not buying marketshare.”

During a discussion entitled “The Inman Interview: Can Your Technology Compete?” Reffkin touted purportedly unrivaled engineering talent and Compass’ vision of building a first-of-its-kind property search platform. Teamcountered that Keller Williams is already delivering top-shelf technology to its agents.

The two executives never directly disparaged each other’s firms. But they traded some thinly-veiled barbs.

“This isn’t hyperbole or vision,” Team said about Keller Williams’ tech platform, implying that Compass’ is just that. “This is real.”

Keller Williams’ suite of tools combined with its integration of an in-house lender is helping agents guide customers from the time their contact information arrives in a database to the moment they order an appraisal, he said.

NRT CEO compares Compass' agent recruitment to 'shoplifting'

NRT CEO Ryan Gorman compared Compass’ recruitment of agents and efforts to gain market share in competing marketplaces to “shoplifting,” at Inman Connect Las Vegas Thursday morning

NRT’s parent company Realogy is suing Compass over “unfair business practices and illegal schemes to gain market share at all costs.”

“We don’t sue for show,” Gorman told interviewer Clelia Peters, the president of Warburg Realty. “This is the real deal… the industry should take it seriously.”

Gorman encouraged everyone in the audience to read beyond the headlines and take a full look at the lawsuit. He said after reading it, people won’t wonder why Realogy is suing Compass, but rather why it took them so long to do so.

Next recession will come in 2020 — but it won't be due to housing

Half of the real estate economists and experts surveyed by Zillow this week believe that the next recession is coming in 2020, according to the second quarter Zillow Home Price Expectations Survey.

Of the 100 real estate experts surveyed, half said a recession was likely to come in 2020 with 19 percent specifically pinpointing the third quarter of 2020 — which lines up directly with the months leading up to the presidential election. Thirty-five percent of those surveyed said they believe a recession is likely in 2021, meaning 85 of 100 experts believe a recession is coming in the next two years.

Although experts say housing won’t cause of the recession, the potential slowdown will have an impact. More than half of those surveyed said they expect home buying demand in 2020 to be significantly lower than in 2019, while about a third of those surveyed said they expected it to be about the same.

The combination of slowing demand and an impending recession could be good news for potential buyers in the short-term and cause further slowdowns in overall U.S. home value appreciation going forward.

Home values are currently growing at a 6.1 percent annual p...

Closingtimepodcast.com for the latest news from the real estate world, helpful tips for buyers, sellers and other agents, and all of our previous podcast episodes.
Keep up with us on Facebook and Instagram. We also offer home video tours, Realtor branding videos, aerial shots, live streams and more.. closingtimepodcast.com and click on the CMG Real Estate Link.

Why homeownership truly is the American dream

The three main reasons why owning a home is still a big component of the American dream.

1. There are proven psychological, physical and financial benefits to homeownership.

“You own your little corner of the world. You can customize your house, remodel, paint, and decorate without the need to get permission from a landlord.” That’s pride of ownership. 

But aside from the positive psychological effects of owning a home, homeowners in strong markets build equity. 

2. Homeownership positively impacts American families.

From having room for your kids to play to being able to entertain to having space to do the things you love, owning a home helps people realize their full potential.

It also provides a greater sense of stability and opportunity, while growing personal wealth. Homeownership by those who make down payments, and who stay in their houses over long periods of time can result in better academic and emotional outcomes for children.

3. People who invest in their home, invest in the community, and thus improve the local economy.

Nearly 60 percent of Americans own their homes, and for good reason. The National Association of Realtors points out the many social benefits, which include civic participation, financial education and poverty improvements.

Plus, a person who cares for their home is more likely to care for their community through donations and volunteer efforts that keep their neighborhood and schools safe, livable and thriving. In other words, you help yourself and others contribute to a fundamental sense of belonging and responsibility to the wider community.  

Homeownership also plays a critical role in the economy. 

According to the National Association of Home Builders, building 100 average single-family homes generates 305 jobs, $23.1 million in wage and business income, and $8.9 million in taxes and revenue for state, local and federal governments. 

Rents are rising, but the US lacks sufficient middle-income housing

Rents are climbing and more higher-income Americans are choosing to lease rather than buy, but while those conditions are a boon to investors many middle-income earners are nevertheless facing a lack of housing supply.

New research from data firm CoStar paints a picture of an overall booming U.S. rental industry that has seen uneven growth across different parts of the market. For starters, much of the multifamily housing being built today tends to be high-end luxury units.  The number of renter households in the U.S. has grown the most among those earning more than $100,000 per year. And those renters are being attracted to the locations and benefits of living in well-connected urban hot spots. 

CoStar found that since 2015 rent has grown by about 4 percent each year, which is between 1 percent and 1.5 percent more than incomes. The current tendency of people to move out of pricey states as they face affordability woes and into more affordable ones is well-documented, and is typical of what happens as an economic cycle reaches its high point.

All of this represents something of a two-edged sword: On the one hand conditions are tough and getting tougher for renters, but on the other those people who can afford to step onto the investment ladder stand to make reliable returns as rents continue to rise.

Home price growth accelerates for first time in 14 months

For the first time in 14 months, home price growth is accelerating.

Nationwide, home prices grew by 3.6 percent in May year-over-year and 0.9 percent from April, according to the latest data from CoreLogic. At 10.7 percent, Idaho had the highest growth rate out of all the states. Utah and South Dakota followed at 7.8 percent and 7.7 percent, respectively.

The growth can be attributed to a strong job market and decreased mortgage rates, according to CoreLogic. 

CoreLogic predicts that home prices will see even steeper growth in the coming year — 0.8 percent by next month but 5.6 percent by May 2020.

Due to years of consistent home price increases, many buyers are worried about their ability to afford a home. According to CoreLogic, 28 percent of homeowners are worried they won’t be able to afford buying a new home in the future. Only half are satisfied with the number of options available in their market while 40 percent believe they will have to relocate

Trump creates affordable housing council, taps Ben Carson as chair

Amid a growing sense of national crisis over the cost of housing, President Trump created a new government council Tuesday and tasked it with clearing “regulatory barriers,” such as zoning, that get in the way of building new homes.

Ben Carson — who leads the U.S. Department of Housing and Urban Development — will now also serve as the chair of the White House Council on Eliminating Barriers to Affordable Housing. In an executive order, Trump said the role of the council would be to increase the supply of homes in the U.S. in an effort to meet demand.

Trump also singled out an array of specific regulations that he argued are getting in the way of housing construction. The regulations include zoning, limits on population density, “undu...