Home Values? 4 Factors to Watch



These are the 4 factors that will change home values this year

1. DEMOGRAPHICS–

Demographics are the data that describes the composition of a population, such as age, race, gender, income, migration patterns, and population growth. These statistics are an often overlooked but significant factor that affects how real estate is priced and what types of properties are in demand

Urban flight in the wake of COVID-19 lockdowns, closed businesses, widespread civil unrest, riots, and increasing tax burdens in our largest cities. For example, since July 2019 rents are down 10% in Manhattan as former downtown residents move to the surrounding boroughs, to the suburbs,  or out of the state.

 

2. INTEREST RATES-

Today’s average interest rate on an adjustable-rate HECM range from… [read more]

…2.9% to 3.5% depending on the margins offered by the lender. For a 72-year-old man with a $350,000 home, a 3.125% rate would give him a gross principal limit (that’s the funds available before liens, fees, and set-asides) of $202,300… Before the pandemic and central banks slashing rates that the same individual would only qualify for $180,000 with a 4.125% interest rate. That’s a 12 percent reduction in loan proceeds.

Last Thursday Federal Reserve Chairman Jerome Powell announced a policy shift saying the Fed will focus on ‘average inflation targeting’. in essence, this means the prior target of 2% inflation which would typically trigger a rate hike is being abandoned for a higher inflationary tolerance. This means interest rates are expected to remain low for the foreseeable future- the Dow Jones spiked up 300 points in the hours following this announcement.

3. ECONOMIC PERFORMANCE & OUTLOOK. The US. GDP dropped by over 30% in response to the nationwide shutdown to slow the spread of the coronavirus.  The GDP is not expected to dramatically improve as today marks Day 168 from the original 15 Days to Slow the Spread which was enacted on March 16th.

4. GOVERNMENT INTERVENTION.  Tax credits- stimulus measures. Unemployment may rise when some employers find that some if not all of their forgivable Paycheck Protection Program monies received may be taxable. After 20 interim rule changes to the CARES Act, it’s quite apparent the program is literally evolving before our eyes. The IRS took that position in Notice 2020-32, stating that expenses otherwise deductible in a borrower’s trade or business are not deductible if they result in loan forgiveness under a PPP loan. This could lead to further layoffs for cash-strapped employers who took a PPP loan.

All which leads us to the conclusion that at this very moment, despite the pandemic and economic uncertainty, we are in an ideal lending environment to qualify the greatest possible number of potential homeowners for a reverse mortgage.

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American CE Institute & Security One launch realtor classes

FOR IMMEDIATE RELEASE

Contact:  Torrey Larsen

American CE Institute and Security One Lending Launch First of Series of Realtor based CE classes in Oregon

More than 70 Real Estate Agents attend recent class in Bend, Oregon

Security One Lending and American C.E. Institute have created a joint educational system that provides Real Estate Agents the opportunity to learn about the Reverse Mortgage and its impact on their business. American CE Institute has the only Reverse Mortgage CE Class offered by the National Association of Realtors (NAR) to its 1.2 million members.

Realtor Classes Results

Results from the most recent training have been nothing short of remarkable. The response from those attending the class are summarized by S1L’s Regional Manager, Sharon Falvey “Yesterdays’ class held close to 80 Realtors and was standing room only 24 hours after the close of the event here are my results (please take note that I am still receiving text messages, phone calls and e-mails)

  • 6 traditional HECM leads (4 have stated that they intend to move forward)
  • 1 purchase lead
  • 1 possible recruit
  • 1 Realtor married to an FPA that stated her husband “needs” this information
  • 1 Testimonial from a Realtor that I can use on Active Rain
  • Survey results have been requested from CE director in Oregon
  • Recommendation from the CE director to the other Boards in the Northwest”

See attached link from Reverse Fortunes and American CE Institute from recent classes by clicking here.

Reverse Mortgages

“The Purchase Reverse Mortgage product may very well be the ‘Sleeping Giant’ of the senior real estate market”, stated Michael Banner-Founder of American C.E. Institute. “Record low rates of returns on CD’s, Annuities and Savings (vehicles commonly used by seniors) combined with record losses in their investment portfolios in recent years have created the ‘Perfect Storm’ for so many seniors in this great nation. Realtors having the ability to offer a mortgage product with ‘no monthly principal & interest payment’ may just be the answer to literally millions of those seniors.”

Security One Lending

Security One Lending, a FNMA approved Seller/Servicer, based in San Diego, CA currently lends in 32 states and will expand to 40 states by  2012.  Security One Lending originates both traditional forward mortgages and reverse mortgages through multiple distribution channels, including retail, consumer direct, and wholesale.   S1L is an approved Seller/Servicer with FNMA

For more information on Security One Lending:Contact us here or
Call (866) 480-4715

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