Four Types of Property Ownership and the Transfer of Title

Little is more rewarding for a real estate agent than turning over the keys. You know that some new owners plan to live there for a lifetime and pass it on to their children, while others hope to build up enough equity to move on to something larger or at least establish that equity as the cornerstone of their estate. But what if an owner should die unexpectedly – or worse, without a will? How can owners assure that ownership of their home will be passed on as they wished?

The answer lies in how they hold title to the property. There may be slight variations on exactly how each ownership type works in different estates, but below is a general overview of the different ways to hold property.

• Sole Ownership – In this scenario, property is owned entirely by one person, who can do whatever he or she wishes with it without permission from another party. If the sole owner dies without a will, the property passes according to the state law where it is located. In some cases, the court that has jurisdiction will appoint an executor to oversee disposition of the estate.

• Joint Tenancy – As joint tenants, each person who has a share of ownership owns an equal share of the property. If one owner dies, that share passes automatically to the remaining owners.

• Tenants in Common – In this case, a property is owned by two or more people at the same time, but the proportionate interests and right to possess and enjoy the property need not be equal. The owners can sell their share of the property if they wish, and, upon death, the descendant’s interest passes to his/her heirs who then become new tenants in common with the surviving owners. (None of the tenants in common automatically receive the share of the descendant.)

• Community Property – In the nine states that recognize community property, including California, any property you acquire while married is considered community property, and is equally owned between you and your spouse. This becomes especially relevant in the event of divorce.

If there are detailed questions about ownership, you should consult a lawyer. However, it is a good idea to have a basic understanding of the different types of ownership.

 

Source: Four Types of Property Ownership and the Transfer of Title

https://www.creconsult.net/market-trends/four-types-of-property-ownership-and-the-transfer-of-title/

Grand Prairie 2nd

NEW LISTING: 4,408 SF Medical-Dental | Dallas-Fort Worth Market
eXp Commercial is pleased to present to the market a fully built-out, free-standing 4,408-square-foot medical/dental office building in Grand Prairie, Texas, centrally located 22 miles southwest of downtown Dallas and 26 miles southeast of downtown Fort Worth. Though the current use is for a dental office, the property is zoned PD267A (commercial development), allowing for a variety of medical and dental uses. The property is owner-occupied and will be vacated at closing, providing an ideal opportunity for another dental practice or any number of medical office users to utilize the property for their practice or an investor who works with medical office tenants to take advantage of an investment opportunity.
Listing Brokers:
Tyson Grona | tyson@tysongronagroup.com | 936.444.3635
Randolph Taylor | rtaylor@creconsult.net | 630.474.6441
https://properties.expcommercial.com/1253332-sale

Four words that sum up the apartment search in Chicago? A real “suite” challenge

Apartment seekers in Chicago are in for quite the challenge (Seriously, I toured 10 units in the last few weeks alone). But what if we told you snagging a suburban rental is even harder?

Actually, the challenge persists all across the Midwest. And while it’s great for the regional economy, it’s not so great for renter morale—or their wallets.

Though Miami was the most competitive rental market during this summer’s peak moving season, the Midwest has been declared America’s hottest apartment region, due to the wide range of housing options and a lower cost of living compared to the coasts.

In their newest report, RentCafe analyzed 139 markets in the U.S. where data was available, by using five relevant metrics to rank the nation’s hottest renting spots in peak season: (1) the number of days apartments stayed vacant; (2) the percentage of apartments that were occupied by renters; (3) how many renters applied for the same available apartment; (4) the percentage of renters who renewed their leases; and (5) the share of new apartments opened recently. To determine the rental market’s competitiveness, they calculated a Rental Competitivity Index (RCI). In peak rental season, the national score was 60, which means that the apartment market was moderately competitive during the year’s busiest time for renting.

Let’s get into it.

First up on the list, Milwaukee, Wisconsin, emerged as the second most competitive rental market in the country in peak rental season, with a RCI score of 116. Available rental apartments here fill within a month, with 16 renters competing for each vacant unit.

Following as the fourth-hottest rental market in the country, Suburban Chicago boasted a RCI score of 112. Cities like Joliet, Aurora, Naperville, Elgin or Skokie in Illinois—stretching as far as Gary and Hammond in Indiana—offer more space and a less congested place to call home, driving competition, based on the report.

In fact, Suburban Chicago climbed six spots since the start of the rental season. And with less that 5% of the rentals here available and little to no apartments built recently, 67.3% of apartment dwellers in the area decided to just stay put.

Not to mention, RentCafe reported that those who are looking for a new home must compete with 14 other renters to secure an apartment. On average, a vacant unit in Suburban Chicago is occupied within 33 days.

Other Midwestern markets that are highly competitive include Grand Rapids, Michigan; Omaha, Nebraska; Kansas City, Kansas; Cincinnati; and Chicago.

 

Source: Four words that sum up the apartment search in Chicago? A real “suite” challenge

https://www.creconsult.net/market-trends/four-words-that-sum-up-the-apartment-search-in-chicago-a-real-suite-challenge/

1120 E Ogden Ave

New Listing | Retail-Office For Sale Naperville IL
eXp Commercial is pleased to present to market 1120 E Ogden Avenue, a highly visible 10,860 square foot retail-office property on 1.26 acres in desirable affluent Naperville, Illinois, along the I-88 E-W corridor approximately 28 miles west of Chicago. The property is currently owner-occupied and will be fully vacated shortly after closing, with the seller seeking approximately 60 days of post-closing possession. Flexible B3 zoning allows for a number of retail and office uses, ideal for an investor, owner-user, or redevelopment of the property.
Listing Broker: Randolph Taylor | rtaylor@creconsult.net

https://www.creconsult.net/retail-office-for-sale-1120-e-ogden-ave-naperville-il-60563/

Here's Where To Find the Nation's Strongest and Weakest Apartment Rent Growth

Chicago Posts Top Rent Growth, Outpacing Other Major Markets

For the first time in more than 20 years, Chicago’s apartment rent growth is the highest among its major market peers over the course of three consecutive quarters.

Apartment rents in Chicago are rising 3.6% annually, three times higher than the national average of 1.2%. Chicago’s annual rent growth also is more than five times the average of nearly 20 other major metropolitan areas.

Boston, with annual rent growth of 3.4%, is in second place. Philadelphia came in third with annual rent growth of 2.6% — almost 30% lower than Chicago’s. The markets with the lowest annual rent growth were Austin, Texas, then Phoenix, Arizona, and Atlanta, Georgia, all posting year-over-year respective losses of 3.9%, 2.5% and 2.3%.

While Chicago’s apartment rent growth rate may be tepid at times, it is frequently steady. As such, Chicago’s apartment rent gains never topped the 7.9% growth it posted during the first quarter of 2022, while other markets’ rents went sky high. Though the current 3.6% year-over-year rent growth rate is lower than the rate posted 20 months ago, it is above the market’s 2.3% all-time average.

Contrast with Phoenix, which recorded annual multifamily rent growth of almost 20%, while annual growth in Austin and Atlanta topped 17% during 2022's first quarter. These three markets may be settling into a period of price adjustment for area residents.

Chicago’s multifamily market is also balanced with a just-in-time inventory mindset. For example, the 13,000 units in the under-construction pipeline represent an inventory expansion of only 2.3%. To put this number into context, the national average for inventory growth is 5.2%, while the identified 20 major markets are expanding by 6.8% on average.

With no inventory boom putting outsized pressure on established area landlords to lower their rents to fill their units, owners of three-star apartments are in a unique position to raise their rents in response to demand in the market.

It is no wonder that with limited new inventory competition, three-star properties, which dominate Chicago’s landscape, can maintain their rent growth ascendency established almost a year ago. Therefore, CoStar’s multifamily rent growth forecast calls for three-star properties’ yearly dominance over one- and two-, as well as four- and five-star properties to persist through at least the second quarter of 2024.

 

Source: Here’s Where To Find the Nation’s Strongest and Weakest Apartment Rent Growth

https://www.creconsult.net/market-trends/heres-where-to-find-the-nations-strongest-and-weakest-apartment-rent-growth/

How Rising Interest Is Affecting Floating Rate Refis

And that’s before considering the effect of rising Treasurys yields.

The CRE refi market is tough as anyone in the business knows at this point. But the dual explanation of interest rates being high and many lenders — banks in particular — tightening standards and even pulling back from the markets is still fuzzy.

CRED iQ did some data analysis to get a better numeric understanding of at least one mechanism in place based on the Secured Overnight Financing Rate (SOFR). Rather than looking at a rate range the Federal Reserve sets for the federal funds rate, this is “a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities,” as the Federal Reserve Bangk of New York explains. Unlike the old LIBOR measure, the data is based on collected transaction costs and not self-reported numbers that banks could manipulate for gain.

The firm mentioned that floating rate CRE loans are a challenge when interest rates are rising, which makes sense. Unless an investor, developer, owner, or operator has planned ahead, the increasing rate tide means a good chance that whatever floating rate a plan has anticipated won’t be enough.

“CRED iQ’s report on Floating loans revealed that ~44% of floating rate loans with near term expirations will see rate cap agreements expiring before those loans mature,” the firm said. “Based on SOFR data posted by the Federal Reserve Bank of New York, its apparent the rise in SOFR is having a dramatic effect on pending floating rate loan maturities.”

A reminder that correlations aren’t the same as causations. Two sets of data can trend in the same direction and still not entirely or even partially cause one another’s movements. CRED iQ did find many apparent relationships in lending and SOFR. They found “effects of the rising interest rate environment when analyzing Fannie Mae floating rate issuance, including the aggregate Average Original Note Rate, Average Loan Scheduled Interest Due, and how these metrics vary by Seller.”

“When analyzing the trailing twelve-month (TTM) data, it’s evident that the average interest due on Fannie Mae loans has surged by over 280%,” CRED iQ wrote. “This surge is exerting substantial pressure on Debt Service Coverage Ratio (DSCR) and Loan-to-Value (LTV) ratios for these properties.” If rates jump on a floating rate loan, then more money goes into rent-taking with less available to improve DSCR and lower property values increasing LTV.

Keep in mind that there are other influences, like rising yields for Treasurys. They serve as gauges for safe returns to help determine risk-adjusted management. The short end of the Treasurys are over 5.5% yields. A 1-year on Monday, September 25 is 5.46% The 10-year is 4.44. Investors want a substantial return to walk away from a safe investment. And BlackRock, the largest asset manager, thinks that rates will continue high and could keep climbing from 16-year highs.

 

Source: How Rising Interest Is Affecting Floating Rate Refis

https://www.creconsult.net/market-trends/how-rising-interest-is-affecting-floating-rate-refis/

Housing Market Crash Not Likely To Happen Soon, Say Experts

Gravity eventually brings everything back down to earth. But when it comes to the housing market, it’s not clear just when that might happen.

High home prices and mortgage rates north of 7% have kept many would-be buyers on the sidelines, hoping that an overheated market will lead to a housing crash that will make homes more affordable. But economists say that’s unlikely to happen.

Even if there is a crash, they say, it probably won’t be the type of severe downturn that followed the 2008 financial crisis, when prices fell 33% nationally, according to CoreLogic figures.

“Trying to wait for home prices to crash, that’s wishful thinking,” says Lawrence Yun, chief economist at the National Association of Realtors, or NAR. “That’s a long way out, or may not even happen at all.”

The median price of an existing home jumped 3.9% from August 2022 to August of this year, Yun’s group reported on Thursday. Prices rose year over year in all regions of the country.

A severe shortage of homes available for sale is keeping prices elevated. And Yun says if mortgage rates come down, even by just a little, more prospective homeowners could enter the market, which could drive up prices even more.

“With a [mortgage] rate decline, we will have more buyers for sure. Hopefully, we’ll have some pent-up sellers coming to the market,” Yun says. But “prices can certainly increase.”

Why the Housing Market Remains Strong

Intense competition for homes that are on the market, helped along by a resilient economy, may be the biggest reason there has not yet been a housing crash. As the jobs market remains strong, people have the resources to compete for a dwindling number of available homes despite higher mortgage rates and elevated home prices.

The supply of homes on the market hit a low point after the start of the Covid pandemic, when record-low mortgage rates and pandemic relief checks prompted a wave of home buying. Housing inventory fell to a low of just over 346,000 listed units in February 2022—down from the pre-pandemic November 2019 level of 1.14 million listings, according to St. Louis Federal Reserve data.

Since then, inventory has picked up somewhat.  There were 669,173 listings in August, but that’s a far cry from the millions of homes needed to meet demand, experts say.

“Since the Great Recession, the U.S. has not built enough housing to keep pace with demand created by job and population growth, leading to historically low vacancy rates and rapidly rising costs,” said Jenny Schuetz, a senior fellow at Brookings Metro, in testimony September 12 before a Senate Banking subcommittee.

“Researchers estimate that the U.S. needs roughly 3.8 million additional homes nationally to address this gap,” Schuetz told lawmakers.

When Will Home Prices Drop?

Inventory remains low, so home prices are continuing to move higher. The median sales price for existing homes rose to $407,100 in August, according to NAR data. It was just the fifth time in the survey’s decades-long history that the median price has exceeded $400,000.

Likewise, CoreLogic released a report September 12 showing that in July, home prices were up 0.4% from the previous month and 2.5% year-over-year. CoreLogic forecasts that home prices will have increased 3.5% for the 12 months ending in July 2024.

While few economists expect a housing crash in the near future, many do think the market will cool off because current mortgage rates are making buying a home even less affordable. Average rates for a 30-year fixed-rate mortgage have remained above 7% for the past five weeks, according to mortgage buyer Freddie Mac.

“High mortgage rates have slowed additional price surges, with monthly increases returning to regular seasonal averages,” said Selma Hepp, CoreLogic’s chief economist, in a news release. “In other words, home prices are still growing but are in line with historic seasonal expectations.”

Will Mortgage Rates Continue to Rise?

The Federal Reserve’s Federal Open Market Committee has raised its federal funds rate 11 times since March 2022. Though Fed policymakers decided not to raise the rate in September, they have repeatedly indicated there might be one more rate hike this year in order to keep lowering inflation. The Fed doesn’t set mortgage rates, but its benchmark interest rate influences them.

High rates will continue to deter some home shoppers who want to avoid a costly mortgage. Meanwhile, decreased demand could give builders more time to build new homes and allow more sellers of existing homes to return to the market, some economists contend.

“With mortgage rates at a 22-year high, mortgage demand has fallen. The combination of higher rates and typical seasonal factors is allowing supply—the number of newly built homes—to catch up,” says Orphe Divounguy, senior economist at Zillow.

“A moderate uptick in inventory in the coming months should provide more options for prospective buyers,” Divounguy adds. “And absent another large economic shock, we should see a more balanced, healthier housing market as a result.”

 

Source: Housing Market Crash Not Likely To Happen Soon, Say Experts

https://www.creconsult.net/market-trends/housing-market-crash-not-likely-to-happen-soon-say-experts/