The Top 10 Emerging Trends Shaping Real Estate in 2016
Source: Curbed
The Urban Land Institute (ULI) released its highly regarded forecast publication titled, “Emerging Trends
in Real Estate” for 2016 with commentary on the year ahead and the nation’s overall economic outlook.
The authors interviewed and surveyed hundreds of industry analysts and the ULI’s overall outlook for the
next 12 months is rosy. Some of the major trends identified in the analysis are presented below.
Making sense of the story

Second-tier cities take center stage: Places known as 18-hour cities, like Austin, Texas, are
expected to perform incredibly well this year. Cities such as Nashville, San Antonio, Portland,
Austin, and Raleigh-Durham benefit from lower costs of living and the increasing ease of staying
connected far from main hubs.

Millennial parents move to the suburbs: While this demographic has put off having kids longer
than previous generations, studies suggest a larger number will soon become parents, and quickly
fuel a suburban boom.

Investment in the changing office landscape: With the dominant trend toward open office plans
showing no signs of slowing down, expect continued development and redevelopment of existing
spaces, as well as a continued rise in co-working spaces.

New housing options and ideas: Due to affordability issues, there has been an increased demand
for rental housing, and a willingness to experiment with concepts such as microhousing.

Urban agriculture is on the rise: The ULI report suggests that there will be an increasing number
of viable urban farms and rooftop gardens.

Increasing need and role for niche lenders: The report also suggests a bifurcating lending market
is also changing the real estate industry. Bigger projects increasingly require more lead time and
more capital, leading many developers to turn toward larger banks.

Old-fashioned risk analysis: The report suggests that the notion of investment-by-algorithm and
other data-centric tools needs to be measured against old-fashioned intuition, and a deep, personal
understanding of the market.
Read the full story
http://curbed.com/archives/2016/01/27/top-10-real-estate-trends-of-2016.php
In other news …
How is Low Inventory Affecting the Housing Market?
Source: DSNews.com
While housing inventory has been declining, the demand for housing has not; the combination of thin
inventory and strong demand has pushed prices upward. Consequently, according to Shu Chen, an
economist with CoreLogic, the percentage of homes selling at list price or higher is back to pre-crisis
levels. While existing-home sales in 2015 experienced their best year since 2006, a repeat in 2016 is
unlikely if inventory remains at its current levels. The National Association of REALTORS® predicted
that the housing market will struggle in 2016 to replicate last year's 7 percent increase in sales.
Read the full story
http://www.dsnews.com/news/02-03-2016/how-is-low-inventory-affecting-the-housing-market
‘Glimmer of Hope’ That Homeownership Rate Is on the Upswing
Source: Wall St. Journal
The homeownership rate, not seasonally adjusted, increased slightly to 63.8 percent from 63.7 percent in
the third quarter, according to estimates published by the Commerce Department. It is also up from a 48year low of 63.4 percent in the second quarter. Notably, there was a significant improvement in the
homeownership rate among people ages 35 to 44, who were among the worst hit during the foreclosure
crisis. The homeownership rate among that group increased to 59.3 percent from 58.1 percent. That being
said, the homeownership rate was still down slightly year-over-year, from 64 percent in the fourth quarter
of 2014.
Read the full story
http://blogs.wsj.com/economics/2016/01/28/glimmer-of-hope-that-homeownership-rate-is-on-theupswing/
In Every State, Over One-Third of Households are 55 or Older
Source: NAHB
In the U.S. as a whole, there are a little over 48 million households headed by someone age 55 or older,
accounting for roughly 42 percent of all U.S. households. Of the 51 states (including the District of
Columbia), 35 are clustered in in a very narrow band with a 55+ share of all households between 40 and
45 percent. In no state do 55+ households account for less than 34 percent, or more than 49 percent, of all
households. At the high end, 55+ accounts for 48.3 percent of all households in West Virginia. California
is in the range of 35 to 40 percent. In every county, 55+ category accounts for over 20 percent of all
households.
Read the full story
http://eyeonhousing.org/2016/02/in-every-state-over-13-of-households-are-55/
Banks Get Concession on Mortgage Fights with Fannie, Freddie
Source: Bloomberg
Lending is still significantly tighter than it was prior to the housing crisis, in part because banks are
worried about the risk of buying back mortgages, according to the Housing Finance Policy Center at the
Urban Institute. New mortgages, which don’t include refinanced loans, dropped 33 percent to 3.1 million
in 2014 from 4.65 million in 2001, according to the Urban Institute. But under a new plan, mortgage
lenders will be able to take disputes over home loans to an independent arbitrator. According to David
Stevens, the president of the Mortgage Bankers Association, this step will provide much needed certainty
and transparency for lenders of all sizes and help broaden access to credit for borrowers.
Read the full story
http://www.bloomberg.com/news/articles/2016-02-02/mortgage-lenders-get-neutral-arbitration-toresolve-disputes
Owners cautiously taking cash out of homes
Source: CNBC
As home values rise, homeowners are once again tapping into that equity in the form of cash-out
mortgage refinances. For example, 42 percent of mortgage refinances last fall involved borrowers taking
cash out of their homes, not just lowering their interest rates. That is the highest share since 2008,
according to Black Knight. The average cash-out amount was over $60,000, but the average loan-to-value
ratio after the refinance was 67 percent, the lowest level on record. Borrowers left 33 percent equity still
in the home. The average credit score of borrowers doing cash-out refinances is also quite high at 748,
suggesting lenders are still highly risk-averse.
Read the full story
http://www.cnbc.com/2016/02/01/owners-cautiously-taking-cash-out-of-homes.html
Talking Points …

Mortgage rates sank even further, marking the fifth consecutive week of declines amid ongoing
market volatility, according to the latest Freddie Mac Primary Mortgage Market Survey.

The 30-year fixed-rate mortgage declined to 3.72 percent for the week ending Feb. 4, 2016, down
from last week when it averaged 3.79 percent. In 2015, the 30-year FRM averaged 3.59 percent.

This is its lowest point since the week of April 30, 2015 when it averaged 3.68 percent.
Additionally, the 15-year fixed-rate mortgage this week came in at 3.01 percent, down from 3.07
percent last week. A year ago at this time, the 15-year fixed-rate mortgage was at 2.92 percent.