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Shopping malls get new lease on life as 24/7 communities

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Commercial real estate is facing a deadly “Doom Loop.” This type of scenario only happens during a shaky real estate market, where prices are falling, banks lock up their lending, owners are forced to sell, and prices crash. Once this cycle starts, it’s very hard to get it to stop, and the last time we saw a “Doom Loop,” America’s residential real estate market fell off a cliff. So, is the same in store for 2023?

There are promising signs that a “Doom Loop,” even on a small scale, could impact the commercial real estate market. Small banks, which are HIGHLY concentrated in commercial real estate lending, have a very bleak outlook with rates rising and short-term loans coming due. The good news? This could FINALLY force commercial real estate sellers to wake up to reality and offer their properties at a price the market agrees on. What’s going to happen next? Stick around and find out!

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0:00 The "Doom Loop"
2:02 The Commercial Real Estate Crash
3:41 Banks Buckle Under Pressure
7:58 Prices Crash, Defaults Spike
10:13 What Happens Next
13:01 Is Residential Real Estate Safe?
14:19 What to Do NOW

Are you looking to get a reasonable rate for your real estate investing journey? In this video, I'll show you how to get a 3% interest rate loan in 2023 using this strategy.

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Even though the 30-year fixed-rate mortgage (FRM) fell last week after hitting highs last seen tw

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A recent report published by Point2, which studies housing and real estate trends, placed Phoenix at No. 13 for the top cities with listings over $1 million. So, what is causing this trend in the metro area?

The Arizona economy is expected to post solid gains this year and next if the U.S. economy avoids a recession as expected, University of Arizona economists say.

Mobile homes house 22 million people in the U.S. and investing in them could be a solution to the housing and climate crises

Listen to Context with Mike DelPrete on Spotify. Conversations with industry leaders about the businesses and technologies changing real estate.

The "Rich Dad Poor Dad" markets guru has sounded the alarm for months of a coming US market crash, urging his followers to buy up real estate.

Maricopa County continues to be a hotspot for population growth. Here’s why building affordable housing in Phoenix is a challenge.

Roam Launches Service Connecting Homebuyers With Assumable Mortgages By September 13, 2023 Roam launched a service that helps homebuyers secure home loans as low as 2% through the mortgage assumption process.

Q3 has been a challenging quarter for Opendoor the stock, down 33% since the company reported Q2 earnings on August 3rd. Tepid forward guidanc

• These are the 10 things sellers can do to make the inspection go smoothly for them
  On inspection day the home should be empty of the owners - this gives the Buyer time to get acquainted with the property.
  Pets should be removed or crated.
  If something isn't working properly - don't try to hide it - inspectors will find it. You may raise questions that will cause concern for the Buyer and impact the sale. Simply leave a note indicating you know the item is broken.
  Replace blown lightbulbs in all parts of the home. Test all smoke detectors to make sure they are working properly.
  Please make sure your oven and stovetop are clean so they can be tested without setting off the smoke alarm.
  Have clear access to the electrical panel, water heater, attic, crawlspaces, heating systems, garage and garage GFCIs, and other areas that will need to be inspected.
  Change or replace your HVAC filter.
  If there is a septic inspection, please make sure the lid is accessible and exposed.
  If the house is vacant, please make sure all utilities are turned on.
  The house should be clean inside. Gutters should be clean outside. Trim trees and shrubs around the exterior.

Costs for America’s renters remain relatively high—with the median rent asking price in Augus

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Roam is trying to combat over-7% mortgage rates by taking advantage of assumable loans, which sees a seller transferring their mortgage at the rate they secured it at to a buyer.

Monthly home prices have hit an all-time high in recent weeks, driving down pending home sales by as much as 28%. 

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SEATTLE, September 13, 2023--(NASDAQ: RDFN) — Return-to-work policies are motivating one in every 10 (10.1%) U.S. home sellers to relocate, according to a new survey commissioned by Redfin (redfin.com), the technology-powered real estate brokerage. While returning to the office wasn’t the most common reason respondents listed for moving, the response rate is notable because back-to-office mandates are an emerging cause of relocation.

Maricopa County is continuing to see a record number of eviction filings, and August was the third-busiest month county courts have ever seen. 

More than 7,600 evictions were filed in August, a figure beaten only by August and September 2005. Last month trailed September 2005 by six eviction filings. 

“We are going straight ahead towards the iceberg,” said Ken Volk, president of Arizona Tenants Advocates, comparing the situation to the Titanic. “Everybody is avoiding taking responsibility for what is happening, and people suffer for it.”

Maricopa County has seen month after month now of record breaking eviction filings, with July seeing the most filings since 2008 — even as Arizona suffered through record-breaking heat. Tenant advocates like Volk have been sounding the alarm, saying that a continued lack of affordable housing, rising rents and the state’s already high homeless population are turning into a “perfect storm” that leaves the most vulnerable losing the most. 

“We have a responsibility as a society to take a stance for humanity or everything is going to fall apart,” Volk said. 

Others are less pessimistic about the situation, though they have a view that isn’t exactly optimistic. 

Anna Huberman, Maricopa County’s presiding justice of the peace, said in most of the eviction cases that come before her, tenants are able to find employment if they are in between jobs or were recently let go, something that is different from past eviction spikes. 

“It’s a landlord market,” Huberman told the Arizona Mirror, explaining that the housing market currently incentivizes landlords to push for higher rents and move tenants out. “A lot of the people who are being evicted are people who are on contracts that are less than a year old.”

In June, the courts saw just shy of 7,000 filings, up 27% from the average number of filings Maricopa County has seen over the same time frame during the pandemic, according to Evictions Lab. However, an eviction moratorium was in place during the pandemic and suspended evictions for non-payment of rent due to COVID-19 related issues. Those protections ended in October 2020. 

Not all eviction filings lead to a tenant being thrown out; up to one in three will be dismissed when tenants choose to pay and stay or the landlord does not pursue any court resolution, according to Maricopa County Justice Courts. 

Lawmakers are also taking notice of the issue, setting their sights on educating their colleagues and trying to see if bipartisan solutions exist at a state Capitol that is rife with partisanship. 

“When somebody loses their housing, their whole world crumbles,” Rep. Analise Ortiz, D-Phoenix, said to the Arizona Mirror. “It has ripple effects that impact the entire state.”

Ortiz and her colleague in the state senate, Phoenix Democrat Anna Hernandez, will be holding a joint study group aimed at affordable housing, rent and homeless issues. Both Ortiz and Hernandez represent districts that have been heavily impacted by the recent months of high evictions. 

Meanwhile, those on the ground are also looking to those in positions of power to start doing the work to address the emerging crisis. 

“It’s been crazy hot out, we’re wearing bullet proof vests and we’re outside most of the time,” Kyrene District Constable Bridget Bellavigna told the Mirror. Her district has also seen a large proportion of evictions. “We’re incredibly busy.” 

All hands on deck

Since 2000, the average number of eviction filings for the month of August is around 6,274. This year, Maricopa County saw a 22% increase, with 7,693 eviction filings for the month. 

The increase is generally consistent most of the year with each month having between a 16% and 26% increase in the average number of filings. The last few months have had 26% increases compared to the average number of filings. 

But what is driving the increase? 

“It was like being in shock. The community was in shock. The social system was in shock and it took a while for that system to get back into the normal greed, and that greed came back with a vengeance,” Volk said, saying that he believes that landlords are getting back into evictions without the fear of any federal or state moratoriums coming back. 

In California, for instance, landlords this week held a party to celebrate being able to evict people again.

According to Volk, the power to right the situation requires the legislative, judicial and executive branches working to create some sort of a solution. However, what that solution is or what it may be seems to be up in the air. 

“We are human, we have a hard time dealing with this day in and day out,” Huberman said, adding that she can’t change her ruling because she may feel for their story. 

Huberman, who disagrees with Volk’s assertion that the pandemic is to blame for the rise in evictions, believes that rising rents appear to be a major “driving factor” to the recent surge of evictions. She added that “legislative fixes” may be in order. 

For one, there is no incentive for landlords to go through any sort of settlement or mediation process, and the current eviction process moves fast. The ability for tenants to appear virtually has helped allow more people to participate in hearings, but Huberman continues to see that most lack an understanding of the process. 

Many landlords hire attorneys who specialize in evictions. Some have websites like “Doctor Evictor” and advertise fast wins for landlords. 

“Any person who finds themselves in court, it is a traumatic day for them,” Huberman said. “It is easy for us to say, ‘This is what you need to do’… People who are in crisis can’t necessarily think that clearly and get that information they need.” 

Volk has seen that play out many times and said some sort of ombudsman program or diversion program within the courts could be one solution. 

“The court has it within their power to look into that option,” Volk said. 

Huberman reiterated that the courts are “constantly” trying to get tenants the information they need, pointing to an information section of the court’s website that helps tenants and landlords understand tenant disputes and more. 

On the executive side, a spokesman for Gov. Katie Hobbs touted a historic investment into the state’s historically underfunded Housing Trust Fund to the tune of $150 million. The investment was part of budget negotiations with Republicans. Hobbs also secured $60 million to a fund for homelessness issues, $20 million of which has been distributed so far. 

However, of that $150 million, no money has yet been distributed. That can’t happen until a stakeholder process to determine how it will be used is completed, according to the Arizona Department of Housing. 

The Department of Housing has distributed monies to the cities of Flagstaff, Mesa, Phoenix, Scottsdale, Tempe, Tucson and Coconino County to address homelessness, but none of those funds can be utilized to address evictions or emergency housing. 

A request to the Arizona Department of Economic Security, which does provide funds for emergency housing, was not returned. 

Finding solutions

Bellavigna, the constable, says she can’t really see too many trends in the evictions she’s been conducting, but she does have some thoughts on how to address the issue. 

“The only way to solve some of this is just throwing money at it and figuring out the right way to do it,” Bellavinga said. 

Bellavinga’s district covers Tempe, Ahwatukee and parts of Phoenix, and lately things have been “incredibly busy,” she said. 

She said she interacts with tenants everyday, many of whom think she is the sheriff, and she tries to help direct them to resources that will help them or give them the best advice she can. However, Bellavigna is hearing more often from folks that the waiting list for resources is stretching into up to three weeks. 

Evictions in Arizona can move at a lightning fast pace, often taking from 1 to 6 weeks. 

Bellavigna said she has also noticed fewer property managers willing to work with tenants who are actively pursuing resources, as they believe that many of the COVID-19 emergency resources have dried up, meaning that the landlord won’t get any money. 

Bellavigna, a property manager and real estate agent herself, has also been taken aback by what she says is the “corporate greed” she has been witnessing. 

“I believe in capitalism…but I am fully aware that there are a lot of major corporations that own a lot of single-family homes in Phoenix and around the country, frankly,” Bellavigna said. “They have a monopoly on housing here, and that is, frankly, wrong.”

To her mind, there is one solution she sees that could help ease renters’ woes: rent control.

That’s a solution eyed by Democrats at the state Capitol and tenant advocates. Democratic lawmakers pushed a series of bills during the recently completed legislative session that would have scrapped Arizona’s ban on the practice and implemented a cap on rental increases across the state. 

However, the bill was opposed by the state’s powerful landlord lobby and was never considered. 

Rent control would prevent landlords from increasing rents dramatically, but state law currently bans the practice. 

“We have not had any interest around rent control from our Republican colleagues. That doesn’t mean we are going to stop trying,” Ortiz, a Democratic lawmaker who proposed ending the state law blocking rent control, said. 

Ortiz cited Republican change in opinion on short-term rentals as an indicator of how the two parties could possibly try to find common ground on the issue. Both Ortiz and Bellavigna contended that rent control could be narrowly tailored to certain at-risk demographics, such as the elderly or families with young children. 

“Right now, this housing crisis is not just impacting low income folks,” Ortiz said. “It is impacting people across demographics.”

Lawmakers this year did offer some relief in the form of removing the rental tax levied by cities and rent started dropping slightly by late last year, so renters may start feeling some relief. But advocates are still concerned as homelessness in Arizona, and specifically in the metro Phoenix area, is still on the rise as housing remains unaffordable for many. 

Homelessness in Arizona increased by 21% from 2020 to 2022, according to the U.S. Department of Housing and Urban Development. It has led the federal government to give additional aid to Phoenix due to the increase. 

“I’m hopeful, and it will take a big lift for us to help our Republican colleagues to value that the state should do things to help people who need affordable housing,” Arizona Senate Minority Leader Mitizi Epstein said, adding that the bicameral study group will help make sure their members are not working in “silos” on the issue. 

There currently is no plan to bring legislation forward from the study group, Epstein said. 

For Ortiz, it is about getting everyone together to start sharing those ideas as they need “all levels of government” tackling the issue. 

The judicial branch plans to continue educating tenants when they can but will be following the law as they watch affordable housing continue to diminish in the state. 

“I just think that it will be cyclical and there will have to be a give in all of this,” Huberman said. “There are a lot of considerations. It is a very precise area of law, but it does have its nuances.”

One thing everyone agreed on was education. 

Tenants more often than not are confused on what their rights are, whether it is not knowing they can move out prior to an eviction to avoid having an eviction on their record for seven years or knowing the cure process. Everyone agreed that tenants are often unaware or misinformed of their rights, sometimes by their landlords. 

“A lot of this is locked in by the macro economics of people’s wages not being able to handle the exploding rent amounts,” Volk said. “I don’t see a solution unless you change the system.”

Volk compared the way many have treated the rising housing crisis to the climate crisis — one of denialism that has reached a point of no return. 

“You’re going to have increasing homelessness as it goes on and on and on, and people dying as our temperatures go up and up and up, and you’re going to have a dual economy,” Volk said. “The haves and the have nots being greater.”

SEATTLE, September 14, 2023--(NASDAQ: RDFN) — Mortgage-rate locks for second homes were down 47% from pre-pandemic levels on a seasonally adjusted basis in August, compared to a 33% decline for primary homes, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.