Airbnb is continuing to fight back against restrictions imposed on it, even as cities continue to crack down on its short-term rentals business model.
The company is partnering with the Paris-based arm of the renowned real estate firm Century 21 in order to try and get around regulations that prevent tenants from subletting their homes on Airbnb.
In the past, apartment landlords in numerous cities around the world have complained that Airbnb encourages their tenants to break their contracts by subletting their rented homes. They argue that this creates unsafe conditions for other tenants, though it’s likely that in many cases the real reason for the discontent is that landlords are missing out on a larger profit.
Landlords are so upset at Airbnb that a group of U.S. property owners earlier this year announced their intent to sue the company.
Airbnb has already been subject to numerous regulations in some cities, who’re worried about its effect on local housing markets.
So now, Airbnb says it’s teaming up with Century 21 in Paris in a deal that it hopes will appease landlords and keep its business alive.
Paris has some especially tough regulations against Airbnb, but the city is also a massively popular tourist destination and therefore a key market. Under the deal with Century 21, landlords can now agree to allow their tenants to sublet on the platform, provided they get a cut of any deal. The agreement stipulates that landlords receive a 23 percent cut, and Airbnb will get 7 percent, from each guest stay.
“The goal is to make it easier to sublet so hosts can welcome guests up to 120 days per year on Airbnb,” Airbnb officials told HousingWire. “A win-win deal as tenants, landlords and the agency all share the income when a booking is made on Airbnb.”
“With the Airbnb-friendly lease, subletting will be much better supervised,” the company continued. “Moreover, this deal does not dry up the supply of housing in tense areas but encourages subletting of occupied homes.”
Airbnb said if the partnership proves to be successful, it will expand the program to other major cities.
Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
According to the NAR, total existing-home sales — completed transactions that include single-family homes, townhomes, condominiums, and co-ops — waned 2.2% from June to a seasonally adjusted annual rate of 4.07 million in July. Year-over-year, sales slumped 16.6% (down from 4.88 million in July 2022). “Two factors are driving current sales activity – inventory availability and mortgage rates,” said NAR Chief Economist Lawrence Yun. “Unfortunately, both have been unfavorable to buyers.” As we can see in the chart below, since 2010, whenever rates rise, demand falls. When rates fall, demand picks up again. What happened with existing home sales in February was that we had three months of positive purchase application data as mortgage rates fell from 7.37% to 5.99%. We had a massive one-month print from 4 million to 4.5 million. After that, little has been happening with existing home sales — mortgage rates and home prices are too high to push growth.
No movement in purchase apps
Purchase application data year to date has 16 negative prints versus 14 positive prints and one flat print. So, there is little movement in either direction. If I swing back to November 9, 2022, then we have 21 positive prints. Hopefully, this shows you the power of forward-looking purchase apps data, which aren’t collapsing currently, but they’re not growing either. We are stuck at deficient levels but heading lower as mortgage rates have risen.
Now let’s look at the buyer profile and the days on the market. Days on the market are growing year over year, positive for housing, but still too low for my taste. You must understand that days on the market are seasonal, so we will be entering the timeline when the days on the market will grow. The key is to focus on the year-over-year data rather than the seasonal fall and rise.
@NAR_Research
First-time buyers were responsible for 30% of sales in July; Individual investors purchased 16% of homes; All-cash sales accounted for 26% of transactions; Distressed sales represented 1% of sales; Properties typically remained on the market for 20 days. #NAREHS
“Total housing inventory registered at the end of July was 1.11 million units, up 3.7% from June but down 14.6% from one year ago (1.3 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 3.1 months in June and 3.2 months in July 2022,” according to NAR.
Historical inventory levels
Even with the biggest one-year sales crash ever, NAR-reported inventory levels are still near all-time lows. If most home sellers are buyers, then when they list their homes, they know they’re qualified to buy a home at current rates. Hopefully, this explains why we still have low active listings data. Traditionally, we have between 2-2.5 million active listings, currently at 1.11 million.
NAR Inventory data going back to 1982.
Today’s existing home sales data shows that we were slowing down again — even before the recent move in higher mortgage rates. However, home sales aren’t crashing like in 2022, and inventory has been negative year over year for some time now. This is a much different housing cycle than the ones we have seen in previous decades.
The 30-year mortgage and low total housing cost has made the American home not only the best hedge against inflation but a hedge against an aggressive Federal Reserve. Remember, sellers are buyers, and we lack both to push more housing demand in the existing home sales market.
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One of the great joys of cinema is the many colors that can be brightly displayed on the screen. Whether that means a huge variety all on-screen simultaneously, two colors contrasted with one another, or an abundance of a single color, there’s a whole world of visual wonders to behold.
But what movie should you see if you were beholding all that glory for the first time? That’s what one movie lover asks in an online discussion forum. Their husband is colorblind but just got a pair of colorblind corrective glasses.
They aren’t sure what movie they should watch first, so she takes to the internet and asks for the help of their fellow film fans, who are more than happy to oblige with some beautifully colorful recommendations.
1. The Wizard of Oz
Photo Credit: Warner Home Video.
Several movie lovers say that the magic of the switch from black and white to color in The Wizard of Oz would be the most appropriate pick for a first movie to watch with the ability to see the whole range of colors. However, one respondent says whether you’re colorblind or not, that moment is “awe inspiring,” so it should only work that much more for a viewer seeing a full-color film for the first time.
2. Spider-Man: Into the Spider-Verse
Photo Credit: Sony Pictures Animation.
Many film fans, particularly animation fans, highlight Spider-Man: Into the Spider-Verse as an excellent choice for a first-color viewing. One user even considers the specifics that the original poster shared about which colors their husband hasn’t been able to see in the past and notes that the movie has a lot of reds, blues, and purples.
3. Willy Wonka & The Chocolate Factory
Photo Credit: Warner Bros.
Another technicolor dream, like The Wizard of Oz, Willy Wonka & The Chocolate Factory, receives several recommendations for their fantastical world of colorful candy. One user even goes so far as to call it “an o- of color.”
4. Hero
Photo Credit: Miramax Home Entertainment.
Martial arts fans note that Zhang Yimou’s Hero is one of the most breathtakingly colorful films ever made. The movie uses color to tell different versions of the same story, making its stunning visuals a joy to look at and a vital part of the narrative.
5. The Fall
Photo Credit: Fables.
Several recommend The Fall as the perfect movie for a first full-color experience. One even goes so far as to call the film, which visually portrays a fantastical story told to a child by a dying man, one of “the most gorgeous uses of color on film.”
6. Spirited Away
Photo Credit: Studio Ghibli.
Anime fans in the conversation agree that Hayao Miyazaki’s Spirited Away is one of the most astoundingly colorful films anyone could watch. It’s no wonder the movie is so colorful, given that it transports its characters to a different world full of spirits and witches.
7. Speed Racer
Photo Credit: Warner Bros. Entertainment.
Speed Racer, the Wachowski sisters’ adaptation of the anime of the same name, gets several mentions as an incredibly bright and colorful live-action film. One movie lover even jokes that watching this as the first full-color movie would be a “baptism of fire.”
8. Fantasia 2000
Photo Credit: Walt Disney Productions.
Both 1940 original and the 1999 update of Fantasia get multiple recommendations. But the consensus is that the turn of the millennium version is the more visually exciting of the two.
9. What Dreams May Come
Photo Credit: Interscope Communications.
What Dreams May Come gets into the double digits with how many movie lovers recommend it as a first-color viewing experience. Several users note that they’re recommending the film, which follows a man who goes to heaven after death and then travels to hell to save his wife, not only for its gorgeous colors but also for the romance.
10. The Grand Budapest Hotel
Photo Credit: Fox Searchlight Pictures.
While several respondents recommend any Wes Anderson movie, some specify that The Grand Budapest Hotel is the best option in its colorful filmography. The film follows a hotel owner and his apprentice as they attempt to clear the hotel owner’s name of murder. But despite that somewhat dark premise, the movie is a visual feast of bright pastels and ever-shifting aspect ratios.
This thread inspired this post.
Photo Credit: Shutterstock.
Some celebrities definitely seem to enjoy the limelight and keep working to stay in the public eye. While others quickly move out of the spotlight. Many of these actors and actresses stepped out of the spotlight to live a more private life without constant media pressures.
10 Celebrities That Made the Big Times Then Disappeared Off The Face of the Earth
Image Credit: Troma Entertainment
We’ve all been there – sitting through a movie that we can’t help but cringe at, but somehow it still manages to hold a special place in our hearts.
These 10 Terrible Movies Are Still People’s Favorites
20 Cities So Bad People Will Never Visit Again
Photo Credit: Shutterstock.
Have you had a bad experience visiting a city and sworn never to return? Not every trip is a great experience.
20 Cities So Bad People Will Never Visit Again
10 of the Greatest American Bands of All Time
Image Credit: Shutterstock.
When it comes to music, the mantra “beauty lies in the eye of the beholder” holds truer than ever. Nevertheless, we’ve worked hard to pinpoint the best American bands ever.
10 of the Greatest American Bands of All Time
10 Crazy Good Movies Where Women Are the Bad Guys
Image Credit: Lionsgate
Are you looking for a movie night with a twist? Look no further than these Reddit-voted top ten films where women take on the destructive bad guy role.
Your friendly neighborhood actor has just put his California home on the market for $2,995,000.
This listing comes on the heels of the announcement that Maguire and his wife, Jennifer Meyer, have filed for divorce. They purchased the home for $2.7 million just a year ago.
The home was originally a single story 1920’s bungalow later expanded and renovated by architect Ruben Ojeda. Now it boasts 3 bedrooms, 2 1/2 bathrooms, and 2,401 square feet. The property also comes with two other structures: a studio with high ceilings and plenty of windows, and a converted gym.
Townstone Financial filed a response to the Consumer Financial Protection Bureau appealing the dismissal of a redlining suit it brought against the mortgage lender in 2020.
In a brief filed Aug. 14, the Chicago mortgage lender argued the Seventh Circuit Court of Appeals should affirm the U.S. District Court for the Northern District of Illinois decision, which granted the lender a victory and rejected the bureau’s argument that an anti-discrimination law protects prospective borrowers.
At the time, the District Court ruled that government watchdog’s suit was invalid because the Equal Credit Opportunity Act applies only to home loan applicants, not to potential applicants.
Richard Horn, co-managing partner at Garris Horn LLP and legal counsel for Townstone, called the CFPB’s appeal “an uphill battle” for the bureau and its “arguments weak.”
He noted he was not fully surprised the agency appealed the case because of the “level of hubris internally.”
“The [CFPB] may have some blinders to their legal risks because it doesn’t affect any of the staff there internally…everyone is getting paid and no one is getting fired,” he said. “If the CFPB loses, which we firmly believe they will, they could also appeal to the Supreme Court, so this could go on for a while.”
The CFPB declined to comment.
The Federal Trade Commission, however, did provide input in early June. An amicus brief authored by James Doty, an attorney for the FTC, said the “Congress’s aim of equal access to credit would be a nullity if creditors could blatantly broadcast to protected classes that their applications were not welcome.”
“In upending almost fifty years of law, the district court ignored Congress’s plain language directing regulators to further ECOA’s “purpose” and prevent its “evasion,” Doty’s letter reads.
The suit, launched by the government watchdog almost half a decade ago, accused Townstone of engaging in illegal redlining by discouraging prospective Black applicants from applying for home loans.
The bureau’s complaint alleged that from 2014 through 2017, the company’s CEO and president made statements that “discouraged prospective applicants living in African-American neighborhoods in the Chicago MSA from applying to Townstone for mortgage loans.”
Such alleged remarks included the company’s CEO describing the South Side of Chicago between Friday and Monday as “hoodlum weekend” and that the police are “the only ones between that turning into a real war zone and keeping it where it’s kind of at.”
In February, Judge Franklin Valderrama of the Illinois federal court gave Townstone a victory.
The case was dismissed with prejudice, which meant the CFPB could not refile the complaint. However, the Bureau still maintained a right to appeal. On April 3, it filed a notice with the Seventh Circuit Court of Appeals stating it would do that. The filing did not go into the specific reasons it elected to challenge Judge Valderrama’s ruling.
Sales of existing homes slipped in July even as median prices sustained their record-high levels. The National Association of Realtors® (NAR) said the month’s sales of single-family homes, townhomes, condominiums, and cooperative apartments were at a seasonally adjusted annual rate of 4.07 million units, down 2.2 percent compared to June and 16.6 percent lower than in in the same month in 2022.
Single-family home sales slid to a seasonally adjusted annual rate of 3.65 million, a 1.9 percent month-over-month decline and down 16.3 percent from the previous year. Condo and co-op sales slipped 4.5 percent to 420,000 annual units: 19.2 percent fewer than a year earlier.
The median existing-home price for all housing types in July was $406,700, a 1.9 percent annual increase. NAR said It was the fourth time the monthly median sales price had exceeded $400,000 since it started keeping records. Previous such prices were logged in June 2023 ($410,000), and in both May and June of last year at $408,600 and $413,800, respectively. The median existing single-family home price was $412,300 in July, up 1.6 percent year-over-year, while condo prices rose 4.5 percent to a median of $357,600.
There were 1.11 million housing units available for sale at the end of July, an estimated 3.3-month supply at the current sales pace. This is an increase of 3.7 percent from the end of June when there was a 3.1-month supply but 14.6 percent below total inventory in July 2022.
NAR Chief Economist Lawrence Yun said, “Two factors are driving current sales activity – inventory availability and mortgage rates. Unfortunately, both have been unfavorable to buyers.”
“Most homeowners continue to enjoy large wealth gains from recent years with little concern about home price declines,” Yun said. “However, many renters are concerned as they’re facing growing affordability challenges because of high interest rates.”
Properties typically remained on the market for 20 days in July, up from 18 days in June and 14 days in July 2022. Seventy-four percent of homes sold in July were on the market for less than a month.
Thirty percent of homes sold during the month were purchased by first-time buyers, up from 27 percent in June and 29 percent a year earlier. Individual investors or second-home buyers accounted for 16 percent of sales and 26 percent of all transactions were all cash. Only 1 percent of sales were considered distressed, i.e., foreclosures or short sales.
Existing-home sales in the Northeast fell 5.9 percent from June and 23.8 percent on an annual basis to an annual rate of 480,000 units. The median price rose 5.5 percent on an annual basis to $467,500. The Midwest saw sales slip 3.0 percent to an annual rate of 960,000, a 20.0 percent deficit compared to the previous year. The median price in the Midwest was $304,600, up 3.9 percent compared to the prior July.
Sales in the South decreased by 2.6 percent and 14.3 percent from the two earlier periods to an annual rate of 1.86 million. Prices increased 1.7 percent to a median of $366,200. In the West, sales rose 2.7 percent to an annual rate of 770,000, down 12.5 percent from a year earlier. The median price was flat at $610,500.
Don’t call it a comeback, Good demographics and low mortgage rates have been here for years, Rockin’ the bubble boys Puttin’ the bears in fear
That’s a reference to the song “Mama Said Knock You Out” from L.L Cool J. I have used this in other articles and interviews, which runs in line with my big macro take that what drives the housing market are mortgage rates and demographics. So, you shouldn’t be surprised about what I am writing today.
Today, purchase application data confirmed what I needed to see to justify that we should get a positive total existing-home sales year in 2020. Yes, as crazy as it sounds, we can do this for the existing home sales market in 2020.
I wanted to see at least 20 straight weeks of double-digit year-over-year growth on average to make up for the nine negative weeks we saw due to COVID-19. Those nine negative weeks came at a crucial time for the MBA purchase application data as it was right in the data line’s heat months. So, we had a lot of work to do to get back to the point where we can go positive, but it happened.
The MBA report shows the year-over-year growth for the last eight weeks has been +21%, +22%,+25%,+6%, +40%,+28% +33% and +27%. As you can see in the chart, these last eight weeks have created enough demand to move the total volumes higher than we would see during the heat months, which is during the second week of January to the first week of May. Since this data looks out 30-90 days, it’s enough demand to help the existing home sales market, which is still a negative year to date, to be positive for the year. The only thing that can stop this is some non-economic events at this stage since we are in October.
Also, throwing this out there. What happened to the ‘we have no homes to buy’ crowd, and the idea that credit is getting too tight? It looks like credit is getting tighter on the surface, and that we have no homes to buy. However, both ideas are incorrect, as I have been talking about all year. Once demand picks up, sales will pick as we have plenty of homes to buy to get sales back positive. I have also tried my best all year to try to debunk the tight credit thesis, which is a common fairy tale these days. More on that here.
While the Bubble Boys were talking smack that we were in trouble and the Forbearance Crash Bros were snarling at us, king demographics and low mortgage rates showed these kids who was really in charge. However, jobs are not done; let’s get 2020 into positive territory to show these overrated rookies who are the real bosses.
The new week begins with bond yields at the highest levels since 2007 in what has been a broadly linear uptrend since late July. Up until that point, rates had been holding in a narrow range for months more than 50bps below current levels. If the Fed was/is “data dependent,” and if the most recent NFP/CPI reports were arguably bond-friendly, why has the trend been so unfriendly?
Data has indeed mattered, but the bond market’s strategic shift has mattered more. In early July, markets returned from the Independence Day holiday to find a hawkish Fed Minutes release on Wednesday and a glut of unfriendly data on Thursday (including that ADP that came in at 497k). This culminated in the first of two “apprehensive and defensive” sell-offs highlighted in the chart below.
In both cases, the selling pressure was driven by data and the Fed in the run up to NFP. In both cases NFP helped calm the bond market’s nerves with CPI solidifying the friendly bounce in the following week. In the most recent example, the post-CPI resolve lasted only a few hours before bonds were blasting back toward the previous week’s highs. At the time, losses were exacerbated by Treasury supply concerns and foreign central bank selling in China/Japan.
Fed policy is hurting long-term rates due to the yield curve. Short-term rates are now high enough to hold mostly flat. Until now, stronger data was able to do more to push Fed rate expectations (and 2yr Treasury yields) rapidly higher. Higher rate expectations + the reality of tighter policy were like offsetting penalties for longer-term rates, thus allowing them to remain in a range. But with the Fed shifting gears on short-term rates, bond market influences have a more direct impact on longer-term rates–all at a time when supply is increasing, foreign governments are selling, and the Fed is saying it’s fine cutting short-term rates in the future while continuing to shrink the balance sheet.
To all of the above, add the fact that other economic data suggests the economy continues to chug along. Some of the data suggests things are quite a bit stronger than expected. The balance of all the available econ data adds general pressure (i.e. it supports the strategic shift to higher rates).
Last but not least, there is buzz around the topic of the “neutral rate” or “R-Star” moving higher (the imaginary level of the Fed Funds Rate that keeps inflation and growth in a balanced homeostasis). Some of the proponents of said buzz think Powell will discuss this Friday in Jackson Hole. While a discussion wouldn’t be a surprise, it would be a surprise if Powell were to say something about it moving higher. If anything, there’s an opportunity for Powell to put some of the rumors to bed by reiterating recent Fed communications regarding the absence of any change in the R-Star outlook. At the very least, that would let us know how much this sentiment has affected the uptrend in yields recently.
Let me be contrarian: Get ready, because mortgage rates are going to rise in 2021. Now before you respond, just read the rest as to why.
The Mortgage Bankers Association in its most recent forecast sees two things that stand out. First, 2020 will prove itself to be the second biggest mortgage year in history. Topping $3 trillion will put it only behind 2003 in single family mortgage production history.
Second, the MBA joined the GSEs and other economists who forecast a significant drop in mortgage production in 2021, with most estimating declines in the range of $700 – $800 billion year over year.
Some will try to argue, “but wait, Powell said the Federal Reserve would keep rates low for the foreseeable future! You must be wrong.” There is a difference here. Yes, the Fed will likely keep short rates low, but mortgage rates and some longer-term Treasuries likely won’t enjoy the same ride.
Here are the reasons why upward pressure on mortgage rates could stall the refinance wave and cut overall national originations volume in 2021:
1. The Fed: The Federal reserve is the single biggest buyer of agency mortgage backed securities (MBS) in the world. According to the Urban Institute, “In March the Fed bought $292.2 billion in agency MBS, and April clocked in at $295.1 billion, the largest two months of mortgage purchases ever; and well over 100 percent of gross issuance for each of those two months. After the market stabilized, the Fed slowed its purchases to around $100 billion per month in May, June and July. Fed purchases in July were $104.6 billion, 35 percent of monthly issuance, still sizable from a historical perspective.”
The question is what happens after a covid vaccine and a normalization of economic activity which is expected next year. The Fed is already being very careful not to commit to MBS purchases after the end of this year, a lack of commitment very different to their clear stance on fed funds. If the fed continues to slow or stop, something which is inevitable, the supply imbalance will force rates higher as MBS prices drop in search buyers to take up the excess.
Click image to expand
2. The Debt: The national debt is now at 100% of GDP, the highest level since WWII. Per
CBO’s September paper, “By the end of 2020, federal debt held by the public is projected to equal 98% of GDP. The projected budget deficits would boost federal debt to 104% of GDP in 2021, to 107% of GDP (the highest amount in the nation’s history) in 2023, and to 195% of GDP by 2050.”
The CBO’s projections for the U.S. deficits looking forward and the mounting debt load threaten the nation’s ability to do many things, as the majority of spending will be to mandatory expenditures that include interest on the growing debt load. Inflationary pressure will result from the need to finance these deficits through new issuance of treasuries, thus putting upward pressure across the stack of interest rates, a far different outcome than what the Fed may do to keep short rates low.
3. The GSE Capital Rule: The FHFA just closed off the comment window on the proposed capital rule for Fannie and Freddie. This rule is a critical component to FHFA’s plan to release the GSEs from conservatorship. The proposed rule is considered onerous by many with the consensus view stating in comment letters that rates would rise between 20-30 bps. Former Freddie Mac CEO Don Layton, former Arch MI CEO Andrew Reppert, and Fannie Mae each stated the same in their comment letters.
4. The Adverse Market Fee: This arbitrary add-on for most refinance mortgages from the GSEs of 50 bps equates to roughly an increase in rate of .125. This goes into effect on Dec. 1 of this year.
5. Release from Conservatorship: FHFA Director Calabria is working feverishly to release Fannie and Freddie from conservatorship and moving at a pace to lock in as much of this as possible quickly given the risk of an administration change. There have been outcries from MBS investors, including some of the largest buyers.
As reported, in a letter to Mark Calabria, director of the Federal Housing Finance Agency, PIMCO said freeing the companies by executive fiat would be interpreted by investors as an end to the government’s guarantee of the MBS. “That would boost mortgage rates and force some investors to sell the bonds,” the PIMCO executives said. Investors would demand a higher return for the increased risk. “Mortgage rates will increase, homeownership will likely suffer and the national mortgage rate will no longer exist,” the executives wrote.
For those in the mortgage industry, it doesn’t take all of these things to result in the forecasted 700-800 billion drop next year. Frankly just the slowing of MBS purchases and the implementation of the capital rule alone would do it. In fact, MBA’s forecast of the volume decline assumes only the slightest increase in mortgage rates, remaining in the low 3% range next year. In my conversations with economists, the view is that we will end the year with a good first quarter in 2021 simply based on year end overflow.
The second quarter may start off well, but the general sense is that by the third and fourth quarters the market will reflect the impact of coupon burn out and any of these events above beginning to take shape. One thing for certain is that the Fed does not like being in this deep, we saw that following QE activities during the Great Recession.
As MBA’sFratantoni states in his recent Housing Wire article, “2020 has been a banner year for mortgage originators and the millions of households who have benefitted from record-low rates through refinancing. The industry will enjoy this boom for a while longer, but our expectation is that the refi wave is cresting.”
“Make hay while the sun shines” is an old expression. The sun is clearly shining on our industry this year. But it’s important for mortgage banking executives to not misread the statements of Chairman Powell as a commitment to anything more than short rates. The rally you are experiencing this year is due to interventions in the market due to a pandemic recession. Normalization will take out buyers, eliminate the supply “short,” and inflation will ultimately do its thing on rates just enough to cut the market by 25%-30% in 2021 and a bit more in 2022.
Planning ahead for that environment is critically important as market contractions will reduce spreads as well as volume. Thinking about the appropriate right sizing and forward-looking market strategies now will separate the winners from the rest.