In his article in the Fort Lauderdale Sun Sentinel, Paul Owers writes about a subject quite familiar to those working in Destination Services: the reluctant landlord. Due to the real estate crisis, many would-be home sellers across the United States owe much more than their property is currently worth and thus are unable to list their homes for sale. For many, this is a first-time experience – and not one that they find particularly enjoyable. Although the same real estate crisis has created a “red hot rental market”, finding a reliable, long-term tenant is still a challenge. Maintenance costs, tenants with pets and rent payments that do not cover the mortgage are additional headaches reported by these novice landlords.
For the international employee moving to the U.S., the inexperienced landlord creates a whole host of challenges. For example, first-time landlords are often reluctant to work with expats that have no US credit or rental history. Also, most have never heard of a diplomatic clause. And finally, inexperienced landlords do not understand why a Relocation Management Company is asking for their social security number on a W9 form and their bank account information in order to pay rent on behalf of the transferee. In many markets, the international transferee is competing with a long line of local rental applicants with acceptable US credit history and a ready check book. In such a fragile real estate market, it is important these international transferring employees use the best available resources to assist in finding a new home.
On January 12th, Bloomberg Businessweek reported that 2012 foreclosure activity across the nation could swell 25% as compared to 2011 with an estimated one million homes potentially being seized by lenders. According to RealtyTrac, the nation’s top resource and foremost authority on the foreclosure housing market, “the 2nd half of 2011 showed signs that lenders were beginning to push through some delayed foreclosures in select local markets”. This is likely to continue throughout 2012 “as lenders resume foreclosure actions”, according to Darren Blomquist with RealtyTrac.
Source: Bloomberg Businessweek, “Home Seizures May Jump 25% This Year as U.S. Foreclosures Resume” by Dan Levy
A recent Forbes.com article highlighted 13 cities that were exceptionally hard hit in 2011 as they saw dramatic home price drops throughout the year. The list contains those markets that were severely impacted early on in the subprime mortgage crisis like Las Vegas and Phoenix, but also includes other cities like Boise where rising unemployment has triggered an increase in foreclosure activity. Clearly the common thread in all of these markets is the ongoing high level of foreclosures and distressed property sales. The article indicated that over 50% of sales in these cities were distressed. With that level of distressed properties on the market, non-distressed home sale prices were forced downward to compete for the limited number of buyers.
Unfortunately for these cities, the experts are looking at 2012 as a continuation of the downward price trend they experienced in 2011.
Renting a home in the US is a process fraught with anxiety these days. With markets across the country reporting vacancy rates at record lows, cities have been in a race for who’s rental market can tighten the most over the last year. The results are in—the San Jose metropolitan area has clinched the title for 2011. According to a study done by Marcus & Millichap Research Services, San Jose reported a vacancy rate of 3.1% in the third quarter of 2011 which is significantly lower than the national average of 5.6% vacancy over the same timeframe. The good news is that the increase in the demand for rental housing seems to be tied to large economic growth for the region as tech workers flock to communities throughout the metro area. Please View the full article posted by The Silicon Valley/San Jose Business Journal.
Relocating employees to different regions of the country or the world has been ongoing for hundreds of years. The Dutch East India Company “began relocating” their employees to carry out colonial activities in Asia in 1602. Three centuries later in the 1950’s, corporate relocation as we know it began in the United States and it looked very different from the days of the Dutch East India Company. Modern companies relocate employees to locations where they are unable to hire specialized workers or in situations where widespread domestic or international experience is an important part of talent management.
Posted in Industry Trends
Tagged: Appraisal, appraiser, dwellworks, erc, erc appraisal, erc appraisal report, home sales, home values, relocation, relocation appraisal, relocation management
The face of the United States housing market is changing due to high unemployment, rising home foreclosures, and falling home prices for six consecutive quarters. Will 2012 be the Year of the Landlord? Yes, according to a recent report by Oliver Chang, an analyst at Morgan Stanley. Chang writes that “rents are rising, vacancies are falling, household formations are growing and rental supply is limited. We believe the demand for rental properties will continue to grow.” With nationwide rent prices rising by 2.4% over the past year, landlords will continue to be in the driver’s seat in 2012 with less room for renters to negotiate the terms and price of a lease. For more information, read the Financial Post article “Renters Transform US Housing Market.”
Posted in Market, Property Management
Tagged: dwellworks, dwellworks market focus, Foreclosure, foreclosures, home sales, home values, housing data, market focus, mortgage trends, rent vs buy, rental market trends, risk management
A recent CNN Money report indicates that home prices declined in October for the sixth straight month in 2011. Prices fell 1.2% compared with September and 3.4% a year ago according to the latest S&P/Case-Shiller 20–city index. Though recent reports on new home sales, existing home sales, and home building have been positive, this report puts a damper on the overall mood of the market. Homes have lost nearly 33% of their value since the beginning of the bust in 2006. Peter Morici, a professor of economics at the University of Maryland said home prices remain weak because demand for existing homes is soft. Many potential buyers are migrating to rental markets or buying new homes that had been sitting unsold for months. Read the CNN Money article here.
What are your thoughts?
On December 14th, Freddie Mac released its Economic Outlook for 2012 . The report predicts positive movement with the economy, unemployment and housing activity; but all will be very small improvements. Predicted low rates through mid-2012 will help the housing market; but the continued glut of distressed properties and uncertainty of buyers will continue to put a damper on things.
I think that Frank Nothaft, Chief Economist at Freddie Mac, summed it up best in the following quote: “While the headwinds remain strong going into 2012, there are indications the economy and the housing market are gaining ground, albeit slowly. Sustained and increased job growth beyond the average monthly payroll gains of 130,000 so far this year ending in November is essential. In housing, look for the rental market to lead the way and for some improvement in the single-family space in parts of the country. All told, next year will be another bumpy ride.”
According to RealtyTrac stats, close to 40% of foreclosed properties are/were occupied by renters. Karen Aho’s recent article for MSN Real Estate provides some excellent insight for renters should they be faced with an eviction from a foreclosed property.
As the article mentions, the renter is typically the last to know when a home is being foreclosed, and usually is unaware of the rights and options available to them under the law. For any renters or potential renters, this is a worthwhile article.
Dwellworks, LLC, a provider of innovative services for the relocation, real estate, and mortgage lending industries, is excited to announce its Supplier of the Year Award winners for 2011. Each supplier is recognized for the exceptional service consistently delivered on behalf of Dwellworks to each valued client. Award winners were selected based on a combination of performance statistics and feedback from each of Dwellworks’ operating teams.
The 2011 award winners are:
- Jean Mathopoullos of Houston, TX and Yvette Stachowiak of Seattle, WA – Destination Services division;
- Paul Bourque of Fallbrook, CA and Paul Moccio of Mount Vernon, NY – Property Management division;
- Paul Murray of Harbor Company, Inc in Towson, MD – Repairs, Maintenance & Improvements division;
- Mary Emmerich of Avon Lake, OH and Sharon McCormick of Durham, NC – Career Advisers division;
- Kathleen Offner of Houston – Educational Advisers division;
- Jim Gargano of Bomba Gargano Valuation, Inc. in Naperville, IL and Mark Hunter of Mission Viejo, CA. – Appraisal Management division.
Patrick Spicuzza, Senior Vice President of Network Services at Dwellworks, stated, “At Dwellworks, we understand the importance of having a dedicated network that believes in our value system of delivering outstanding service to our clients. As an extension of our organization, this year’s award winners are exceptional representatives and we are proud to call them our partners.”
“We are incredibly grateful for all of the hard work and dedication that these suppliers have provided throughout the year,” said Bob Rosing, CEO of Dwellworks. “Their high levels of service are critical as we continue to grow and serve our clients. We look forward to our continued partnership with all of our suppliers who continue to work hard and provide some of the best service in the industry.”
Dwellworks manages a supply chain of over 10,000 independent contractors throughout the United States on an annual basis. For information on becoming a part of Dwellworks’ Supplier Network please contact email@example.com.