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Emerging Trends in Real Estate: ULI Report Offers Outlook Source: Urban Land Institute The Urban Land Institute has released its annual report on the key emerging trends that will shape the real estate market in 2015. Commenting on the report, Mitch Roschelle, a U.S. real estate advisory practice leader with PwC, stated, “Unlike previous reports and previous cycles, we are seeing sustained growth. In the past several years, we reported that real estate market participants’ main fears revolved around the uncertainty with the economy. Now, the trepidation in their eyes has more to do with the ability of the growing real estate markets to adapt to a series of mega trends impacting society and the global economy.” Making sense of the story The report states that housing is well on the way to recovery, according to survey respondents, and they rank urban/infill as the top opportunity for 2015. Yet, the after-effect of the housing bubble has not fully dissipated, and this will partially shape demand for the next several years. While the tendency of millennials to postpone homeownership and rent longer will affect the apartment sector over the next several years, many survey interviewees noted that investors should consider how the housing preferences of millennials could change in the 2020s. The report anticipates further industry changes resulting from the emergence of the smaller “Generation Z.” Planning for a nation with lesser household formation, fewer new consumers, and a meager number of workforce entrants is the challenge ahead for a real estate industry with its eye on the 2020s. Downtown transformations have combined the key ingredients of housing, retail, dining, and walk-to-work offices to generate urban cores, spurring investment and development and raising the quality of life for a roster of cities. Buyers have more markets to consider now that the 18hour centers are putting the elements in place to attract investment. The trend in residential real estate, according to interviewees, looks to be returning to the classic principles of supply and demand. As this major segment of the economy returns to textbook fundamentals, confidence in the residential sector should continue to rise. In most cycles, overbuilding and excess leverage would likely have already started building momentum by now. To the degree that hasn’t happened, the industry looks like it has learned some lessons in self-regulation and self-correction. Key markets to watch for real estate, according to the report, are Houston, Austin, San Francisco, Denver, and Dallas/Fort Worth because they present opportunistic-style investments in major markets. Read the full story http://uli.org/research/centers-initiatives/center-for-capital-markets/emerging-trends-in-real-estate/ In other news … Good Signs for Housing in 2015 Source: U.S. News With job growth and solid economic expansion, household formation experiences a boost and demand for rental and owner-occupied housing increases. As the economy continues to improve, there are promising signs for the housing industry because housing demand creates jobs and in turn fosters additional demand for construction. While prices have continued to rise on average, they have done so at slower rate over the course of 2014, and that trend is expected to continue in 2015. Read the full story http://www.usnews.com/opinion/economic-intelligence/2015/01/14/housing-market-showing-signs-of-agood-2015 Nearly half of home buyers don't shop for a mortgage Source: CNBC A report from the Consumer Financial Protection Bureau reveals that almost half of consumers seeking a loan to purchase a home do not shop lenders. Consumers are cheating themselves of the opportunity to have a lower monthly payment, and the borrower with the cheaper loan will also build equity faster. Furthermore, a majority of home buyers seek information on mortgage choices from sources that have a stake in their decision. Just 20 percent said they rely heavily on websites, despite the ready availability of mortgage-related information online. Read the full story http://www.cnbc.com/id/102330641 Homeowners Win U.S. High Court Clash on Canceling Mortgages Source: Bloomberg A new ruling from the Supreme Court gives homeowners the ability to cancel their mortgages if lenders don’t provide the required disclosures. The Truth in Lending Act stipulates that borrowers have three days to rescind a mortgage after they receive the disclosures, and that right expires after three years. The justices unanimously ruled that borrowers don’t have to file suit within three years and instead can meet the deadline by sending a letter to lenders. Read the full story http://www.bloomberg.com/news/2015-01-13/homeowners-win-u-s-supreme-court-clash-on-cancelingmortgages.html FHA fee cut won't help many first time homebuyers in California Source: KPCC Recently the Obama administration dropped the fees on FHA loans, the mortgages taken out by most first-time buyers. These loans are popular with first-time buyers because they only require a down payment of 3.5 percent with a credit score of 580. The change in fees was applauded by the CALIFORNIA ASSOCIATION OF REALTORS®, and the trade association’s president, Chris Kutzkey, said, “Anything that goes toward assisting buyers getting loans is something that we embrace wholeheartedly.” But there are concerns that the fee cut may not make much of a difference in California for many buyers. Read the full story http://www.scpr.org/news/2015/01/12/49231/fha-fee-cut-won-t-help-many-first-time-homebuyers/ Homeownership: Do immigrants want it more? Source: HousingWire During the past two decades, immigrants have accounted for 27.5 percent of all household growth, according to the Harvard Joint Center for Housing Studies. Immigrant households made up 11.2 percent of owner-occupied housing last year, according to the JCHS, which is an increase from only 6.8 percent in 1994. Dowell Myers, a professor at the Sol Price School of Public Policy at USC, commented, “They view homeownership as the American Dream and they buy into that.” Read the full story http://www.housingwire.com/articles/32559-homeownership-do-immigrants-want-it-more Castro: It’s Time to ‘Remove the Stigma’ Promoting Homeownership Source: DSNews.com In a recent speech, Secretary for the U.S. Department of Housing and Urban Development (HUD) Julián Castro defended the Obama Administration's initiatives to increase homeownership, particularly relaxed lending standards. Commenting on critics of the administration's focus on expanding homeownership, Castro said, “Some have been surprised by this focus. A few have even suggested that this is a return to the mania that fueled the crisis. It’s not. Our nation is smart enough to heed the lessons of the past without forsaking our future. The answer isn’t to deny responsible Americans homeownership — it’s to do it right.” Read the full story http://dsnews.com/news/01-13-2015/castro-time-remove-stigma-promoting-homeownership Talking Points … California’s regional housing markets ended the year with mixed results as statewide home sales inched up from a year ago for the first time in nearly a year and a half, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Sales in December were down 2.9 percent from a revised 376,890 in November but up a slight 0.6 percent from a revised 363,740 in December 2013. The negligible year-to-year increase was the first since July 2013. For 2014 as a whole, a preliminary 383,320 single-family homes closed escrow in California, down 7.6 percent from a revised 2013 figure of 414,900.