Buying a house seemingly never happens the same way twice.
In a buyer’s market, you may have lots of choices but there’s always the fear you’re taking on someone else’s problem and you never quite know if you should push your budget higher. Yes, you have lots of choices, but once you own a house during a buyer’s market, you have a possession that someone else struggled to sell.
That’s not a big problem if you intend to live there for a long time, but any homebuyer should acknowledge that life can sometimes interfere with intentions. You have to at least consider that the forever home you’re buying may end up as the place you live for no more than a few years.
When it’s a seller’s market — as it is right now — buyers have much less choice. The U.S., of course, isn’t one real estate market, and even when most of the country is one type of market, different areas may have different conditions.
For example, South Florida has been an incredibly hot market since the pandemic began, and while prices have somewhat stabilized, they have not fallen due to heavy demand.
New York City, on the other hand, had a brief period during the worst of the pandemic where cooling demand led to a bit of a buyer’s market (relative to how high prices are in the city). That has mostly corrected, but Manhattan buyers may still face a relatively easier time buying than their counterparts in Miami.
Buying a house has never been easy, but rising prices in many areas have made both the “should I” and the “can I” bigger questions.
Image source: TheStreet.
Is Now the Time to Buy a House?
Houses, fortunately, don’t work like cars. Most of us need transportation and we need a place to live, but we don’t have to buy a house in an unfavorable market the way we need to buy a car. You can rent a place to live when buying conditions are unfavorable (or maybe move back in with family), but once many Americans find a stable job and life situation, owning a home becomes something worth pursuing.
Buying in a hot market has its risks, but those can be mitigated, a retired Realtor, Barbara Mergentime Morrison, told TheStreet.
“If someone buys now, they may need to remain in that house for many years or they may take a loss when they sell,” she wrote. “Prices have gone up so quickly in the last year or more that there is going to be a correction at some point in the next few years.”
Over time, buying a house has been a good long-term investment in most markets in the U.S., but it’s not always a smooth ride.
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“This always happens and the prices will drop, but not lower than they were before the huge increase. Eventually, they will go up again, the never-ending cycle.,” she added.
How to Balance FOMO With the Housing Market
Many people use rising prices to justify buying a house. Their logic is that prices only get higher and not acting now just means paying more later. There’s historically some truth to that, but fear of missing out isn’t justification to overspend.
Buying a house can make sense — especially given where mortgage interest rates are — but you have to consider the negatives of the current market.
“Inventory is extremely low, which means slim pickings and a very high rate of bidding wars. This drives up home prices and makes buying a house – not to mention affording one – even more difficult,” according to Mortgage Reports.
“In a seller’s market like this one, it’s common for bidders to go above asking price. And you may have to do the same if you’re hoping to secure a new home this year.”
Owning a home and building equity makes sense, but you also need to consider whether you’re paying too much simply because you want in on the action.
Every buyer should understand what it costs not to own a home (their rent or living expenses) and balance that against the costs and risks of owning.
“If you’re still paying off your mortgage, renting is cheaper than owning in each of the nation’s 50 largest metros. On average, renting is $606 cheaper than owning across the nation’s largest metro [areas],” LendingTree.com reported.
Consider that $600 a month — or $7,200 a year — that you might add to a down payment. Of course, prices may keep rising, but they may not — it’s never an easy equation and there’s no decided right time to buy.
You need to consider the market, your circumstances, the cost of not owning, potential opportunity costs lost by not owning, and your personal risk tolerance.
The sellers of a three-bedroom penthouse at 284 20th St., in Brooklyn’s Greenwood Heights, are eager to talk to interested buyers but you won’t find the place on any of the usual listing web sites. This is what’s called a whisper or pocket listing—or in real estate jargon, a private exclusive.
If the penthouse sells in the next few months, “it’s going to be by word of mouth,” says Alexandra Como Saghir, an agent with Compass, who represents the seller. Instead of being offered to the general public, a whisper listing is quietly shopped around and shown to select prospective buyers.
Getting your apartment seen by as many potential buyers as possible is the first rule for selling high—and maybe getting a bidding war—so why would someone want to whisper rather than shout about the sale of their place? Turns out there are lots of reasons, both personal and professional. But there are concerns whether whisper listings are fair if only certain buyers end up getting access.
Whisper listings increase during the pandemic
Anecdotally, Saghir says Covid has increased the number of whisper listings. She puts this down to sellers wanting less viewings during the pandemic due both to health concerns and the inconvenience of multiple showings when you’re working from home.
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Saghir says there are practical and personal reasons why a seller might take the whisper listing route. Perhaps the sale is part of a divorce, or a family member is ill, or the owner is relocating but hasn’t yet resigned from a job.
For a seller, a whisper listing is also an opportunity to test the water and see whether there is interest in your place. For many the pandemic has created uncertainty about what happens next and this more tentative approach can work if you’re not sure whether you’re ready to sell or if you’ll get the price you’re holding out for.
Pro Tip:
To find out what buyers are willing to pay for your co-op, condo, or brownstone, consider discreetly “pre-marketing” it. New York City real estate brokerage Triplemint has an entire data-driven pre-marketing platform that provides a way to quietly test your asking price and your marketing strategy among real-life qualified buyers before publicly listing your home. There’s no charge to participate and no obligation to enter a traditional listing agreement at the end of the pre-marketing period if your place hasn’t sold. Click here for more information.
Expensive and quirky apartments fit the profile
Kobi Lahav, director of sales at Living New York, just put a one bedroom at The Caledonia into contract. It’s a whisper listing and Lahav says unlike the strong demand for three- or four-bedroom apartments, the market is “tricky” for smaller apartments right now. Buyers are looking for more space and many still aren’t sure when they’ll need to be in the office full time. Although Lahav had marketing material for the apartment ready to go, making it an off-market sale worked out well for both sides.
“The buyer doesn’t have competition, the seller doesn’t have to make a decision and they both get the price they want,” he says.
Saghir says whisper listings tend to happen for very expensive or quirky listings. “There may be an odd configuration or it’s a ground floor with a garden and a spiral staircase—which isn’t for everyone—and might sit on the market for a while,” she says.
Nicole Gary, a broker with Keller Williams, has two whisper listings at the moment—one on Billionaires Row, the other Manhattan apartment is in the $4 million range and Gary says the sellers aren’t hugely motivated but will sell if they get the right price.
Fudging the data
There’s another reason sellers might want to sell an apartment as a whisper listing: If the apartment isn’t publicly for sale, there’s no way to determine the number of days it’s been on the market. This is a metric that’s calculated once a listing is active online.
It’s a useful data point for buyers who can see if a listing is lingering for some reason, perhaps it’s over priced or has some other red flag, like the spiral staircase.
How you’ll find whisper listings
You’re not going to find out about a whisper listing unless you have a broker.
“Buyers are entitled to representation and representation is free,” Saghir says. Remember, there’s no additional cost for a buyer to have a broker. It’s the seller who pays the broker’s commission which is then split between the seller’s and the buyer’s brokers.
Another new facet to the whisper listing is social media. In the past, a whisper listing was information in a broker’s head. Now Instagram and TikTok provide the perfect space to create “something exclusive and create scarcity,” Lahav says.
In most cases, however, a low profile sale with minimal publicity is one of the very reasons a seller decides on a whisper listing. This is why it’s a popular route for celebrities who don’t want people taking photos of their space. “Sometimes you don’t want all the photos and traffic and people coming in and seeing personal stuff,” Lahav says.
Can exclusive also be fair?
If something is exclusive can it also be fair? That’s the issue raised over whisper listings. Discrimination in the real estate industry has been well documented. As a result there are strict fair housing rules in New York, and you can’t indicate a preference in your advertising for a buyer with a specific race, gender, color, or sexual orientation.
But what about circling information about an apartment among a select few? Attorney Andrew Lieb represents brokerages at his firm Lieb at Law, and says although there’s never been a judicial ruling on whisper listings, there could be an argument that they create “disparate impact” discrimination—or unintentional discrimination. “Everything is a gray area until a judge rules,” he says.
The Real Estate Board of New York advises brokers against exclusive or pocket listings and warns they could face complaints if they’re selling apartments in this way.
Whispering for (rather than about) a listing
When inventory is low, as it is in New York right now, you might see the inverse of the whisper listing—that is, buyers’ brokers sending out requests for specific properties. Saghir is used to getting emails saying, for example, a client is in desperate need of a 20 feet wide two family in Windsor Terrace and to please get in touch if she knows of an interested seller. Ultimately, this could result in an off-market sale.
Lahav says the lack of inventory is resulting in a common theme for the whisper listings he’s getting word of: “The common denominator is that they are overpriced,” he says. He mentions a property in the West Village, which he says falls into this category. But he says some people “are fine about overpaying,” so the strategy may work out for the seller (and their broker). If it doesn’t sell it’ll probably be made available publicly, possibly with a price adjustment. A whisper listing can just as soon become a publicly available listing after a month or so, if the seller and their agent decide on a more standard route.
The national median rental price jumped 19.8% in January from a year ago, marking the eighth straight month of double-digit increases, according to a report from Realtor.com. The national median rent was $1,789 last month.
“US rental markets are more than making up for lost time,” said Danielle Hale, chief economist at Realtor.com. Rents have now gone up 21% from January 2020, prior to the onset of the pandemic.
January’s biggest rent jump was in the Miami, Fort Lauderdale and West Palm Beach areas of Florida where the median rent was $2,895 a month in January, up 52.4% from last year. Miami is now the fifth most expensive place to rent in the country after several cities in California: San Jose, San Diego, Los Angeles and San Francisco.
The report found that the monthly cost of buying a starter home was more affordable than renting a similar-sized unit in more than half of the 50 biggest US cities.
While many people looking for an affordable place to live feel stuck between a rock and a hard place as both rent and homebuying costs are rising, a number of factors could tip the affordability scale in favor of people buying a home for the first time this year, Hale said.
Rents are forecast to outpace for-sale listing price growth in 2022 and are already accelerating across all sizes of rentals. Additionally, she said, survey data shows the majority of landlords plan to further raise the rents they ask this year.
Where it’s better to buy
Looking at national median home prices and rents, the monthly cost of renting is still slightly cheaper than owning a starter home, the report found.
But in 26 of the 50 biggest cities, the monthly cost of buying a starter home was an average of 20.6% — or $323 — less than renting one in January, according to Realtor.com.
Buying was most advantageous in Birmingham, Alabama, where the cost of buying a starter home was 44.3% less than the cost of renting in January. It was followed by Cleveland, Pittsburgh, and St. Louis.
Two cities in Florida — Tampa and Orlando — saw some of January’s fastest annual rent growth. In Orlando, buying was 27.1% less than renting and in Tampa, buying was 25.5% less.
Just because it is better to buy in a city doesn’t mean home prices aren’t also making strong gains — often it is both. In eight of the top 10 markets favoring buying, both the monthly cost of buying a starter home and renting one increased over the past year, according to the report.
The rent-or-buy decision ultimately depends on personal circumstances, including location, financial situation and how long a buyer intends to live in the home.
Generally it is not financially favorable to buy if you plan to live in your home less than a few years and a common rule of thumb is to not spend more than 30% of your income on housing costs, Hale said.
Plus, buying a home is a lot easier said than done in many markets, as the inventory of homes to buy is at a record low.
And as mortgage rates continue climbing, the clock is ticking. Those looking to buy their first home in 2022 are more likely to find lower costs now than later in the year, said Hale. But inventory isn’t expected to improve until later this spring.
Where renting is better
Given the skyrocketing increase in home prices in some major cities, there are many places where it remains more affordable to rent rather than to dive into the high-priced, competitive housing market, according to the report.
In January, the monthly cost of buying was about 25% higher — or $536 more — than the cost of renting in 24 of the 50 largest metro areas, on average.
Austin, Texas, was the city where it was most beneficial to rent rather than buy in January. Monthly payments were about 76% higher — or $1,346 more — to buy a starter home in Austin than to rent, according to the analysis. It was followed by New York; San Francisco; San Jose; Seattle; Boston; Denver; Rochester, New York; Portland, Oregon; and Los Angeles.
In these top ten cities that favored renting, the monthly payments of buying a starter home were 41.6% — or $978 higher than rents — on average. For-sale starter homes in those places included a higher average share of condos than the national rate, and pricier home owner association fees.
“Deciding when to transition from renting to first-time buying is largely dependent on stage of life,” said Hale. “For young Americans like Gen Z who may have moved home to save money during Covid, renting in a big tech city offers flexibility and relative affordability even as rents recover in these areas.”
Nery Peña, 27, a first-grade English teacher, bought a two-bedroom apartment in Washington, D.C., overlooking the Washington Monument, for $50,000 in 2021. Similar apartments nearby start at $350,000.
The building is part of the Douglass Community Land Trust, a portfolio of properties purchased by former tenants and nonprofit groups, where qualifying buyers typically make between 30 and 70 percent of the area median income. In D.C., that could mean a family of three making roughly $35,000 to $81,000 a year. The land trust also includes rental apartments.
Ms. Peña, whose family rented in the building before it converted to a co-op in the 1990s, cobbled together $15,000 from her savings and a gift from her mother, and financed another $35,000 through a credit union.
She pays $1,420 a month, including co-op fees; similar units nearby rent for twice that amount. If she decides to sell the home, the sales price will be restricted to her purchase price, $50,000, plus 3 percent for every year she stays.
“Honestly, I never thought it would be possible,” she said. “‘The majority of people who live here have known me since I was 2.”
One of the model’s biggest problems is scale. There are about 250,000 households living in shared equity units in the United States, said Tony Pickett, the chief executive of Grounded Solutions Network, a national organization in that space. That includes about 1,200 H.D.F.C. co-ops in New York City.
A home is your haven, your comfort zone, the place you create memories, and almost certainly your most significant investment. And if you live in a hot real estate market where there are more buyers than sellers, your investment could pay off massive dividends. For proof, look no further than the current median list price for homes across America, which rose 25% in January compared with last year.
So if you bought a home two years ago for $400,000, in certain markets you could sell your home today for $500,000. Um, wow.
It’s no wonder some homeowners are choosing to sell their homes for a tidy profit. One catch: They still need a place to live. So in this tighter-than-tight real estate market, many are choosing to rent rather than buy a new home—and then buy again when the right opportunity comes along.
But can the sell-rent-buy strategy work for everyone? Yes and no.
Are you curious if cashing in on your home, raking in a profit, and waiting for better market conditions to buy again is right for you? Just be sure you know what could go wrong first.
One couple’s story
Jen and Ryan O’Connor of O’Fallon, MO, have kept an eye on home prices almost since they had their home built in 2011.
“We always thought of it as an investment,” says Jen. “The builder was offering amazing incentives at the time.”
The O’Connors landed a good deal, and over the years, the couple continued to improve their property. Ryan, who works in construction, is handy, and Jen has a good eye for design.
Still, the couple decided to put their home on the market when a neighbor in their development sold their home for an eye-popping price.
“We felt now was the time to get the largest return on investment, and we pulled the trigger,” says Jen. “We put the house on the market on a Thursday and accepted an offer Monday for over the asking price.”
Just how much did they make? About $150,000.
Now the couple and their two school-age daughters rent.
“We didn’t want to purchase at the height of the market,” says Jen.
Research rents
If you’re interested in following in the O’Connors’ footsteps, start by researching rent prices. If you own a home in a desirable area with high demand for housing and not enough supply, it’s likely those same market conditions apply to rentals.
“Before listing your home for sale, be sure to research how much a similar-sized rental home goes for in your neighborhood,” says Lisa Mark, real estate professional and co-founder of Oak & Co. in Ontario. “You may be shocked. And you may find yourself spending more than you anticipated.”
Also, consider your lifestyle when looking for a rental—you may have to downsize to a smaller house, townhouse, or apartment, or even move away from your current community.
And don’t forget your furry roommates.
“Many landlords won’t rent to you if you have pets,” adds Mark. “In particular, large dogs or having too many pets are red flags to landlords.”
Consider future mortgage rates
There’s a whole generation of homebuyers out there who have enjoyed low-interest rates. But with rising inflation and the Federal Reserve announcing it will increase interest rates over the next four years, jumping right back into homeownership isn’t a given. And sitting out the market could cost you down the line.
“Future homebuyers should take note of banking rates, trends, and projections,” says Tanya Vanterpool, a real estate professional in Miami. “Interest rates directly affect your purchasing power.”
Here’s how Vanterpool breaks that down: If you snagged a 2.5% fixed interest rate for a 30-year loan on a $500,000 home last year, you’re paying $1,976 in monthly mortgage. But if you end up with a 5% interest rate on the same loan down the line, you’ll be paying $2,684 per month.
And in a few years from now, a lender might not greenlight you for the same loan because approval all boils down to what you can afford to pay each month. If you can afford to pay $2,000 per month, a lender won’t process a loan that triggers payments over that amount.
“So the $500,000 house you could afford last year is now out of reach at a 5% interest rate,” adds Vanterpool.
Factor in additional costs
If you plan to cash out and then cash back in, first break down all those extra costs of buying and selling real estate. You’ll want to know if your net profit will be worth the inconvenience of selling, moving, renting, buying, and moving again.
“Real estate transactions have significant costs,” says Earl White, a real estate attorney focusing on residential and commercial sales and leasing. “Selling costs include agent commission, legal fees, transfer taxes, repairs if necessary, moving fees, and fees for municipal approvals and inspections.”
And when you’re ready to buy again, there will be a slew of outlays beyond closing costs. They could include the costs or fees for a home inspection, home appraisal, mortgage application, survey, title search, and insurance.
“Buying and selling may be less profitable than perceived once all costs are factored in,” adds White.
When sell-rent does work
The O’Connors took the opportunity of selling and renting to try something they’d always been interested in: country living.
“We stumbled across a rental property that sits on 130 acres of farmland,” says Jen. “Neither my husband nor I had experienced that and thought it would be a great way to test if we prefer living on land. We’ve been here about six months now, and we’ll never go back to a subdivision.”
But while the O’Connors are content to wait out the housing market during their two-year lease, they are mindful of the coming challenges.
“We’re watching the listings just to have a frame of reference,” says Jen. “We want to buy around the same area we currently live, which will be a challenge because the value of the land here is high and has been high for a while now.”
Meanwhile, there’s one bonus to renting Jen says she could grow used to: fewer home maintenance projects.
“We’re very happy to have a break from all the upkeep that comes with being a homeowner,” she says.
- Home value appreciation accelerated again in January, to a record 19.9% annual gain.
- Inventory plunged below 900,000 listings, a record low – down 42.4% from January 2020.
- Annual rent growth of 15.9% was down slightly from previous peaks, and monthly growth was essentially flat.
Buyers are likely to face another challenging home shopping season later this year, contending with record-low inventory and unprecedented price growth. But if early-bird buyers in the market in the early months of the year were deterred by rising mortgage rates and prices, their absence didn’t register: Home price appreciation accelerated again, likely thanks to the record-low number of listings on offer.
The Zillow Home Value Index (ZHVI) rose 1.5% in January from December, to $325,677, up 19.9% from January 2021. The annual growth rate represents an all-time high in data dating back more than 20 years – and the monthly pace continued its re-acceleration since November’s recent low of 1.2%. If monthly price growth were to hold steady at January’s pace, that would translate to an annual growth rate of 19%, or almost equal to the current year-over-year gain.
The midwinter market heat was widespread across local markets. Monthly home value growth accelerated from December to January in 38 of the nation’s 50 largest metropolitan areas. Among the nation’s 50 largest markets, the slowest monthly growth in December was in Milwaukee (0.7%), followed by New York (0.7%) and Washington, DC (0.7%). The fastest was in Nashville (2.5%), San Diego (2.5%) and Las Vegas (2.5%).
Inventory Plunges to Record Lows
After December’s bone-dry inventory drought, home shoppers may have been looking ahead to January for listings to be replenished. But home sellers evidently didn’t get the memo. Active inventory dropped 13% from January – the 2nd straight double-digit monthly drop and the biggest monthly decline in at least three years. That left active inventory 22% lower than a year ago, and 42.4% lower than January 2020 – the eve of the pandemic outbreak.
The proximate cause of the shortfall was a sharp cutback in the flow of new listings hitting the market, which slackened by 19% from December’s rate of new listings. That also puts January’s flow of new listings below its two-year comparison month’s rate, for the first time since July, when monthly price appreciation peaked. That suggests that market conditions are only getting harder for buyers, at least for the time being.
Inventory was down in January from December in at least 49 of the nation’s 50 largest metros (monthly data for Nashville is unavailable), and was down year-over-year in 47 of the 48 largest metros for which full data is available (January 2021 data for Milwaukee and Nashville is unavailable). The largest annual inventory declines in January among the largest 50 markets were in Miami (-49.9%), Sacramento (-38.1%), and Denver (-37.7%). Inventory was up year-over-year in Austin (+18.7%).
Similar to December, if there is one small silver lining for frenzied would-be homebuyers contending with rapid home value appreciation and limited inventory, it’s that the speed of the market has gradually slowed down since reaching a peak early last summer – and appears to have stabilized for now. In June, the typical U.S. home spent just one week on the market before going under agreement. That time frame rose to roughly 13 days in December and January. It’s worth noting that homes typically take longer to sell in the fall and winter months as back-to-school, shorter days and the holiday season all tend to eat into both buyers’ and sellers’ schedules. But while homes staying on the market less than two weeks before selling is still incredibly fast for midwinter, those extra few days may matter a lot to those buyers that need a little more time to assess their options.
Even so, the reality of the situation on the ground is hard to ignore. Home buyers today are making bids and closing deals despite some of the most challenging conditions ever: record-few homes for sale to choose from, priced at double-digit gains from last year, financed at sharply rising mortgage rates. It remains to be seen how long buyers can weather this storm, and how long homeowners will watch values rise before deciding to list. This month’s data tell us neither have blinked yet. Expect a sizzling hot spring shopping season.
Peak rent growth?
The Zillow Observed Rent Index rose 15.9% year-over-year in January, to $1,856/month. But monthly rent appreciation plunged to 0.1%, as rents quite nearly flatlined. That means renters who signed 12-month leases last winter are likely in for some sticker shock on their renewal offers, but anyone who’s been browsing rentals earlier in the winter won’t see much of an uptick compared to last month.
Rents grew year-over-year in all 50 of the nation’s largest metros. Among the 50 largest metros, annual rent appreciation was fastest across the Sunbelt, with the fastest growth in Miami (30.6%), Tampa (28.2%), Phoenix (25.6%) and Las Vegas (24.8%). Annual rent growth was slowest in Minneapolis (5.9%), Pittsburgh (7.8%) and Milwaukee (8.1%).
The rapid growth in rents is now being picked up, after a delay earlier this year, in official measures of inflation. The main Consumer Price Index component measuring rents, the Rent of Primary Residence, rose 3.8% year-over-year in January, or just over 0.5% month-over-month. Combined with rising Owners’ Equivalent Rent, which was up 0.4% in January, the rising shelter components of the CPI are contributing to overall inflation – now registering its fastest growth in almost 40 years.
Looking Ahead
Annual home value growth is projected to continue accelerating through the spring before peaking at 21.6% in May, before gradually slowing through January 2023. More than 6.2 million total existing homes are expected to sell in 2022.
Monthly home value growth is also expected to continue accelerating in coming months, rising to 1.7% in February and growing to 1.9% in April before slowing somewhat. By the end of January 2023, the typical U.S. home is expected to be worth more than $380,000. The robust long-term outlook is driven by our expectations for tight market conditions to persist, with demand for housing exceeding the supply of available homes.
The seasonally adjusted annual rate of existing home sales in January is expected to total more than 6.11 million, down 1.1% from December and 8.1% from January 2021 (January 2022 existing home sales data are scheduled to be released by the National Association of Realtors on Feb. 18, 2022). Existing sales volume (SAAR) is expected to grow throughout the spring home shopping season, before falling very slightly beginning in July. Overall, Zillow expects more than 6.2 million existing homes to sell in 2022, up 1.6% from an already strong 2021.
However, downside risks to our forecast remain. Rapidly rising mortgage rates present a major headwind to housing demand, particularly in more expensive markets.
Last year, investors bought nearly one in seven homes sold in America’s top metropolitan areas, the most in at least two decades, according to the realty company Redfin.
Those purchases come at a time when would-be buyers across the country are seeing wildly escalating prices, raising the question of what impact investors are having on prices for everyone else. Investors were even more aggressive in the final three months of the year, buying 15 percent of all homes that sold in the 40 markets.
Explore the data for 40 metro areas
25 percent of homes purchased in this area last year were bought by investors — more than the typical metro. That’s higher than its 2015 rate of 12 percent.
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Real estate investors can be large corporations, local companies or wealthy individuals, and they generally don’t live in the properties they are buying. Some look to flip homes to new buyers, while others rent them out.
Neighborhoods where a majority of residents are Black have been heavily targeted, according to a Washington Post analysis of Redfin data. Last year, 30 percent of home sales in majority Black neighborhoods were to investors, compared with 12 percent in other Zip codes, The Post’s analysis shows.
“We know historically that places where minorities live are undervalued or lower priced,” Redfin’s Sheharyar Bokhari said. That, he said, makes them more attractive to investors, driving up prices for residents.
[This block used to be for first-time homebuyers. Then global investors bought in.]
The effect of investor activity differs city to city. Regions with the highest share of investor purchases are in the south, stretching from Florida to Arizona, with a quarter of all home sales in Atlanta and Charlotte last year going to investors. But some of the most targeted Zip codes overall are in the Rust Belt, especially heavily minority neighborhoods in Detroit and Cleveland.
The growing number of investor purchases has drawn increasing scrutiny from Democratic lawmakers on Capitol Hill, particularly as buyers target minority neighborhoods.
“One of the reasons housing prices have gotten so out of control, is that corporate America sensed an opportunity,” said Sen. Sherrod Brown (D-Ohio) last week at a hearing of the Senate Committee on Banking, Housing and Urban Affairs, a panel he chairs.
Brown took direct aim at private equity firms and corporate landlords in particular.
“They bought up properties, they raised rents, they cut services, they priced out family home buyers, and they forced renters out of their homes,” he said.
Investors have been snapping up homes in and around downtown Cleveland at a staggering rate, putting three of the city’s Zip codes among the top 15 nationally in the rate of investor purchases last year.
Sally Accorti Martin, the former longtime housing director for South Euclid, a small city east of Cleveland, testified at the hearing that a majority of the city’s roughly 1,600 rental units are now owned by companies from other states, and that tenants have suffered as a result.
Martin said the city passed a series of ordinances aimed at stopping predatory behavior, to limited effect. One provision, called “pay to stay,” allows tenants to pay any unpaid rent and fees up until their eviction hearing.
“Unlike mom and pop landlords, large out-of-state investors typically don’t have much empathy for their tenants,” she said. “Residents can be a day late in paying rent and face an eviction notice.”
In other cases, investors buy properties that might otherwise be the first home purchases for families looking to accrue wealth that they can pass down to their children or grandchildren. A lower homeownership rate among minorities has contributed to a much lower rate of wealth accumulation.
“There is a massive racial homeownership gap in this country, which is a serious problem because owning a home is a key to building intergenerational wealth and reducing racial inequality overall,” Sen. Robert Menendez (D-N.J.) said.
In the hearing, Democrats as well as Republicans on the committee, led by Sen. Patrick J. Toomey (Pa.), raised concerns about an underlying problem: the stringent zoning rules in many cities that prevent more homes from being built.
Bokhari, from Redfin, echoed that concern in discussing his research. In the shortage that comes from too few homes being built, he said, there is profit to be made. “If we were building enough housing there wouldn’t be as much investing activity in the housing we have,” he said.
“If we had enough homes to meet this demand,” he added, “everyone would be able to buy a home.”
Ted Mellnik contributed to this report.
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Effective January 1, 2022, Chubb Insurance Company has clarified some of the terms of coverage under US Sailing’s commercial insurance as it pertains to Certified Race Officials and Certified Instructors. This change has resulted in a change to secondary liability insurance coverage for Certified Race Officials and Certified Instructors under the US Sailing policy.
Starting this year, US Sailing’s commercial insurance will provide liability coverage for Certified Instructors and Certified Race Officials only when volunteering or working at US Sailing Championships, US Sailing Events and US Sailing Courses.
US Sailing’s insurance will apply to Certified Instructors when they are volunteers for US Sailing or are paid by US Sailing to coach, teach, or help run a US Sailing Championship, a US Sailing Event, or a US Sailing Course. It does not apply to Certified Instructors employed by (or volunteering at) a sailing school or organization, community program, sailing club, or other organization outside of a US Sailing US Sailing Championship, a US Sailing Event, or a US Sailing run Course.
Coverage under US Sailing’s commercial policy does not apply to Certified Instructors who are a sole proprietor or owner of a Corporation/LLC to teach sailing, coach sailing, coach a race team(s), or offer private lessons.
US Sailing’s insurance will apply to Certified Race Officials when they are volunteers for US Sailing or are paid by US Sailing for actions related to being a Certified Race Official at a US Sailing Championship, a US Sailing Event, or a US Sailing Course. It does not apply to Certified Race Officials employed by (or volunteering at) a sailing school or organization, community program, sailing club, or other organization, outside of a US Sailing US Sailing Championship, a US Sailing Event, or a US Sailing run Course.
Coverage under US Sailing’s commercial policy does not apply to Certified Race Officials who are the sole proprietor or owner of a Corporation/LLC for actions related to being a Certified Race Official, outside of a US Sailing US Sailing Championship, a US Sailing Event, or a US Sailing run Course.
As has always been the case, where Certified Instructors and/or Certified Race Officials are employed by or volunteer at a sailing school, club or organization, primary insurance should be provided by the sailing school, club, or organization. In cases where a Certified Instructor or Certified Race Official establishes their own coaching/sailing establishment, insurance should be purchased by the individual.
In light of these changes, US Sailing encourages each Certified Instructor and Certified Race Official to be cognizant of the insurance policy in place at the sailing school, club or organization where they may work or volunteer.
This change was not initiated by US Sailing, but rather due to the underwriter’s desire to clarify the extent of liability coverage provided under the US Sailing commercial policy because of a recent, significant claim; the only claim that has been made under the secondary liability coverage. Additionally, this is a result of an increasingly challenging insurance environment.
Since US Sailing was informed of the change that the underwriter was making, we have been working to both obtain the necessary details to appropriately communicate the effects of the change as well as finding alternative solutions. We have made progress in both of those areas and while the right solution has not yet been created, we are continuing to talk with a variety of insurers and others in the insurance market in that regard and have been able to obtain sufficient clarity in the necessary details so as to be able to effectively communicate with you now. US Sailing will of course continue to work with the appropriate people in the insurance market to provide the best and most appropriate options for our stakeholders and provide updates when those are available.
We understand you may have questions about how these changes affect you and/or your club. US Sailing has set up a Frequently Asked Questions document for you to access here https://www.ussailing.org/education/instructor/resources/instructor-insurance/ and/or https://www.ussailing.org/competition/rules-officiating/resources/competition-rules-officiating-resources-insurance-for-race-officials. If you have further questions, please email insurance@ussailing.org.
To see when you qualify for coverage as a Certified Instructor, read more here: https://www.gowrie.com/pdfs/USSailing_CertifiedInstructors_GowrieInsurance.pdf
To see when you qualify for coverage as a Certified Race Official, read more here:
https://www.gowrie.com/pdfs/USSailing_CertifiedRaceOfficials_GowrieInsurance.pdf
Q I am nearing the end of the fixed-rate deal for the mortgage on my flat. My partner and I are planning on moving in together sometime in the next 12 months. My flat doesn’t suit both of our needs, so we would probably need to rent a new property together.
Am I better off selling my flat and having the equity (and existing cash savings) ready to put down as a deposit on a new home, either jointly or independently, in a year or two; or should I seek to rent out my flat? I don’t have much knowledge of agents’ fees, and other costs and taxes associated with renting it out; what can I expect? Based on my initial workings, I suspect I would be hoping to at best break even rather than to make a profit from renting it out.
If I decided to (and was able to) rent it out, I would want to be a good landlord, including by offering the option of longer-term tenancies. Regardless of any changes to my relationship status, I do not want to remain living in my flat for the long term. Selling the flat seems like the simplest option, and would give me a bigger deposit for my next home, but what are the risks in doing so? Would keeping my flat serve me better as a long-term investment?
SH
A Given that you don’t want to stay in your flat long term and are going to sell it at some point, I wondered why you don’t just sell it now and buy another property that does suit both of your needs. But maybe your partner doesn’t want to live in a property that is owned by you (not that I can think why that would be a problem). If that is the case, then your choice, as you have laid out, is between selling your flat and renting it out.
Selling is, as you say, the simplest option but if you are not planning to buy somewhere else straight away, you’ll miss out on any growth in the flat’s value in the next year or two. Any interest you earn on the cash made by selling is unlikely to match property price growth. This would not be the case if you chose to rent the property out. Taking that option would also mean that you had somewhere to move back to if living together doesn’t work out.
But that assumes you can let your flat. It could well be that your lease says that you’re not allowed to. Even if you can, you will need to establish that you are able either to convert your mortgage to a buy to let or get permission from your current lender to let the flat. Converting to a buy-to-let mortgage is only an option if the mortgage would represent 75% or less of the value of the flat. If your current mortgage is more than 75% of the flat’s value you’ll have to hope that your current lender will give you permission to let the property.
There is another potential barrier to getting a buy-to-let mortgage: the rent you get from the flat must cover the mortgage payments by 125%.
The other factors to take into account are agents’ fees – which can be as much as 20% (including VAT) of rent paid if you choose a full management service, the cost of safety checks and income tax on the rent less expenses. Rightmove has a useful guide to becoming a landlord at rightmove.co.uk/advice/landlord.
Feb 14, 2022
The Los Angeles Rams fought back to win yesterday’s Super Bowl in the last two minutes of the game, with its biggest stars — Cooper Kupp and Aaron Donald — making sure that victory would not slip through the team’s grasp.
The game also offered an opportunity for brands to compete for the attention of consumers on the nation’s biggest broadcast stage. Some came up big, like the Ram’s stars, while others will just have to wait ‘til next year.
Adweek’s top 10 spots put Coinbase’s homage to “Pong” at number one. The commercial featured a color-changing QR code that slowly bounced around the screen. Viewers who scanned the code were linked to a landing page with a promotional credit.
The other spots making Adweek’s top 10 included Frito-Lay’s “Golden Memories”, Rocket Mortgage “Dream House”, FTX “Don’t Miss Out”, General Motors “Dr. EV-il”, Squarespace “Sally’s Seashells”, Nissan “Thrill Driver”, Amazon Studios “Lord of the Rings: The Rings of Power” and Planet Fitness “What’s Gotten Into Lindsay?”.
Ad Age broke its list of top spots out by the game’s quarters, and Expedia’s “Stuff” took the top spot in the first. The commercial starring Ewan MacGregor asks the question, “Do you think any of us will look back on our lives and regret the things we didn’t buy or the places we didn’t go?”
The second quarter came up big for five-star spots, according to the publication.
Uber Eats’ “Uber Don’t Eats” enlisted celebrities Nicholas Braun, Jennifer Coolidge and Gwyneth Paltow to show that the company does more than just deliver meals from restaurants.
Rocket Mortgage’s “Barbie Dream House” mixed realities to bring home the message that there is one place to go if you’re looking to finance a home purchase.
General Motors’ “New Generation” spots featured Jamie-Lynn Siegler from the Sopranos driving a Chevy Silverado EV to pick up her brother from the show. Tony may be gone, but his stage kids are driving on.
Toyota’s “The Joneses” pitted Tommy Lee Jones, Leslie Jones and Rashida Jones in a race behind the wheels of the auto maker’s Tundra truck. (LOL.)
The third quarter had two winners. Google Pixel’s “Seen on Pixel” spot, which shows that the company’s smartphone now fixes a problem with traditional cameras that cause Black Americans to be photographed as too dark. The spot uses personal testimonials to make the case particularly compelling. Pringles “Stuck In” took a much lighter approach and a gentle jab at its own stacked packaging.
The fourth quarter may have provided the most exciting moments, but were a dud in terms of commercials, according to Ad Age.
DISCUSSION QUESTIONS: How did this year’s Super Bowl commercials stack up against previous years? Which of the current Super Bowl commercials stood out most to you?
Braintrust
“The winner was the unproduced, amateurish, yet brilliant Coinbase QR code commercial. Coinbase’s bouncing QR code Super Bowl ad was so popular it crashed the app.”
“It is a shame that advertisers feel so compelled to use celebrities that I found myself watching to see if any of them chose not use a celebrity.”
“I spent the whole Coinbase Pong ad trying to plug in my Atari remote…”
