July 26, 2019 REsimpli’s Real Estate News and Market Update

By Sharad Mehta  
July 26, 2019

REsimpli’s Real Estate News and Market Update

Existing Homes Falling Despite Mortgage Rates

                Existing home sales dropped 1.7% to a seasonally adjusted annual rate of 5.27 million units in June, according to data from the National Association of Realtors. This is surprising that housing is performing weaker despite both lower unemployment and lower mortgage rates. This is now the 16th straight year-on-year decline in home sales. Supply seems to be the key problem because the lower-price segment of the housing market has almost no inventory; land, labor and materials are all contributing to rising homebuilding costs. Sales actually rose in the Northeast and Midwest but fell in the South and the West.

                The 30-year fixed mortgage rate has dropped to an average of 3.81% according to data from Fredddie Mac, and the Federal Reserve is widely predicted to cut interest rates next week which will be the first time in a decade. The inventory increased from 1.91 million in May to 1.93 million homes in June. Prices rose 4.3% compared to a year ago to $285,700 in June. This is a new all time high. Inventory sits at about 4.4 month’s supply which is slightly higher than 4.3 months in May. Six to seven months of supply is seen as a healthy balance of housing supply.

Tech Giants Moving into the Real Estate Sector?

                Amazon has now partnered with Realogy to offer TurnKey, a program that connects homebuyers through the Amazon portal with a Realogy real estate agent. If someone purchases a home through this program, they get Amazon Home Services and products worth up to $5000; this includes smart home products in addition to standard services like painting or appliances that require installation or setup.

                Realogy is the largest residential real estate brokerage company in the US and its stock surged more than 25% in Tuesday’s premarket after they announced this large deal with Amazon. Realogy is the owner of Coldwell Banker, Century 21, Sotheby’s International Realty, Corcoran, ERA and Better Homes and Gardens Real Estate. They are competing against tech real estate firms like Redfin and Compass. It’s important to understand the importance of technology and its impact on the real estate industry that has been around for a long time.

Federal Reserve Key Information:

The Federal Reserve policy affects all asset prices – from housing to stocks. Thus knowing the outlook gives investors insight and better predictability of the future.

Interest Rate: On January 30, 2019 the Federal Reserve said that it would keep its target range for its benchmark interest rate at 2.25% to 2.5%; they’ve kept this policy unchanged. The last release was on June 19 and they’ve decided to maintain the same rate.

Federal Reserve Outlook: The last meeting was June 19 and they are still holding steady. They think that although economic outlook is still generally positive (low unemployment, solid consumer spending), there are negative factors that they are keeping a close eye on. These include a slowdown in manufacturing, declining business investment, and trade tensions.

St. Louis Fed President James Bullard actually voted to cut the Federal Funds rate immediately which is a dramatic change from the policy which was to potentially continue raising rates. The fact that the Fed is now talking about potentially cutting or lowering rates is a dramatic change and has Wall Street and real estate investors excited as all asset bubbles inflate further.

Source: https://www.federalreserve.gov/newsevents/pressreleases/monetary20190619a.htm

 

Other Key Data:

Data is backward looking and takes time to compile. The data for June just was released On July 23. Home sales data from the National Association of Realtors:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

sources:
https://www.nar.realtor/sites/default/files/documents/ehs-06-2019-summary-2019-07-23.pdf
https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales

Unemployment Rate: 3.7 percent in June, up from the 3.6 in April and May

source: http://www.ncsl.org/research/labor-and-employment/national-employment-monthly-update.aspx

Author Bio

REsimpli is founded by Sharad Mehta, a very active real estate investor. Sharad has done over 400 deals in last 6 years since he became a full-time real estate investor and over the years he has developed systems to automate many parts of his real estate investing. Sharad is a very active investor i See more >>

REsimpli is founded by Sharad Mehta, a very active real estate investor. Sharad has done over 400 deals in last 6 years since he became a full-time real estate investor and over the years he has developed systems to automate many parts of his real estate investing. Sharad is a very active investor in Lake County, Indiana market and he manages his entire business from Carlsbad, California, where he lives. Using the systems that Sharad has developed, he is able to manage 3-4 rehabs a month from a distance.

At reSimpli, our mission is to ‘Simplify Real Estate Investing Through Technology.’ Our team is passionate about using technology to reduce the time and energy required to build and manage a successful real estate business. reSimpli is a cloud-based system that makes real estate investing more efficient by automating tasks and helping the investor manage their business more efficiently.

We are constantly building and improving features that aid in: creating accurate and detailed scope of work for rehab projects, creating contracts with digital signature support, deal analysis tools, etc. We are a team of very active real estate investors so everything we are developing is something we find useful in our day to day investing.


Our passion is to create the best software for your real estate investing business and aim to be the only software program that a real estate investor needs to run a successful, scalable business. See less >>

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