Will smaller cities see a boom from the coronavirus?

Will smaller cities see a boom from the coronavirus?

After the Great Recession, the number of big-city residents boomed. Flush with jobs and thirsting for modern high-rises, young adults and families moved into dense metro areas with amenities at their doorsteps and strips of restaurants blocks away.

But those walkable urban areas have become less affordable in recent years, and the quintessential dream of a single-family home, especially after the coronavirus-induced quarantine, may be multiplying.

In the last few years, population in larger metropolitan areas such as New York, Los Angeles and Chicago declined, while more people moved into mid- and smaller-sized metro areas.

Now, as local economies and subsequently corporate offices re-open with more leniency on working from home, demographers, Realtors and even companies like Redfin predict that this movement from high-cost-of-living urban cities to more affordable areas – whether suburbs of the same area or smaller metros altogether – will accelerate.

“Redfin is preparing for a seismic demographic shift toward smaller cities,” said Redfin Chief Executive Officer Glenn Kelman in a May 15 press release announcing a new survey of 900 homebuyers and sellers. “The whole narrative of the past 200 years, of the young person moving to the big city, may turn a little upside down in the years ahead.”

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As travel slows down, when will Airbnb owners recover?

As travel slows down, when will Airbnb owners recover?
As travel has been significantly minimized and less people are renting out Airbnb‘s, it leaves vacation rental owners in a bind, with some paying multiple mortgages.

While Airbnb has mended some of its policies to accommodate the extenuating circumstances, are vacation homeowners protected with mortgage forbearance?

Airbnb, which recently cut about 25% of its workforce due to COVID-19, has not spoken out on assistance for these homeowners. However, GSEs like Freddie Mac say that “While the Guide currently provides that only Mortgages secured by Primary Residences are eligible for a forbearance plan, until further notice the Mortgaged Premises may be a Primary Residence, second home or Investment Property.”

In an interview with the TODAY Show, Airbnb CEO Brian Chesky said that cleanliness is the company’s top priority when renting out homes.

“I think travel is going to shift,” Chesky said in the interview. “It’s going to be smaller, it’s going to be more intimate, it’s going to be smaller towns, it’s going to be smaller communities. More intimate, more local.”

“This is a storm,” Chesky continued. “But like all storms it will end. We will be ready when travel is back, hopefully this summer.”

In an interview with HousingWire, realtor.com’s Senior Economist George Ratiu said that while it’s hard to predict how the pandemic will play out, he doesn’t see travel traffic rebounding for the next three to five months.

“I think that for many owners, particularly those who have multiple properties, the road to recovery will be challenging,” Ratiu said. “Especially so because for most owners of multiple properties, they have financing so they have to meet mortgage obligations. These are investment properties. For many of them, the ability to leverage the option of selling them in the current environment is less desirable.”

How will those vacation rental homeowners recover from the fall of vacation travel? With spring break and some summer vacations cancelled, what’s next?

In a report from realtor.com, it says that some short-term rental owners are pivoting to renting out the properties long-term instead.

The report said that tourist destinations are actually seeing a significant increase in furnished seasonal rentals, with hosts locking in tenants for monthly or seasonal rentals.

Just since the end of February, realtor.com said that these Airbnb and Vrbo hubs saw an average increase of 74% in seasonal rentals.

Ratiu said that it will be the markets that are popular tourist destinations that will come out on top.

“Obviously, vacation hotspots are those that are likely to see the rebound,” Ratiu said. “I think here, most places near the beach, places near the mountains, it makes it easy for people to vacation while still maintaining a certain degree of social distancing.”

According to a survey from AirDNA, the average length of stay at Airbnb properties nearly doubled, from 3.76 days prior to March 10 to 6.4 days March 10 through March 18.

Bookings made on Airbnb in April are down 70% from 2019, the report said. There were 4.7 million bookings made in April 2020 vs 15.7 million bookings made in April 2019.

Meanwhile, 45% of hosts won’t be able to sustain operating costs if the pandemic lasts another six months, as 16% have already missed or delayed a mortgage payment on one or more of their properties. On average, hosts have lost $4,036 since Covid-19 began to spread in the US, a survey from IPX 1031 said.

“I think this summer will look a little bit different than the average summer, mostly because I think people will remain cautious,” Ratiu said. “Conversely, I am a little bit bullish on the summer travel outlook for a simple reason. As humans, we generally crave mobility and we crave social connection.”
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Startup profile: Brace

Startup profile: Brace
Taken from HousingWire Magazine’s May issue, the startup profile on Brace looks at a company that is about to start creating disruptions in the housing space.

With its sights set on the servicing industry, Brace recently closed a Series A funding round and is looking to bring automation and AI to servicing.

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Appraisal technology reduces risk for appraisers and homebuyers in the midst of COVID-19

Appraisal technology reduces risk for appraisers and homebuyers in the midst of COVID-19
As the majority of the housing industry transitioned to working from home due to COVID-19 health concerns, many appraisers remained on the front lines. 

The Appraisal Institute and several other organizations rallied to deem appraisers essential workers so they would be exempt from stay-at-home orders, but that designation also put them in harm’s way.

The FHFA took action, relaxing Fannie Mae’s and Freddie Mac’s appraisal standards in an effort to “to reduce the need for appraisers to inspect the interior of a home for eligible mortgages.”

This week the tech sector delivered another solution, as Black Knight released its property inspection app, SCOUT, which utilizes cloud-based technology for homeowners to safely collect data for the appraisal process. The fully remote app enables homeowners to compile the necessary property details and photos themselves – all without an appraiser ever stepping foot in their home.

Though the technology has arrived in a timely manner, as states continue to employ social distancing orders, SCOUT is the result of a six-year process at Black Knight. The app is the direct descendent of Black Knight’s REveal, their desktop version of an automated appraisal product.

“We had a long-term vision of modernizing the appraisal industry. To a large extent it’s really been operating in a very retro way, using forms that date back as long as 50 years, and techniques that really have not been made contemporary,” Michael Sklarz, Black Knight’s EVP and managing director said. “So, our vision had been with all the analytics – how could we help appraisers do their jobs more efficiently, more economically, and take advantage of all the data and information that’s out there?”

Once an AMC or lender orders a property inspection, an email is automatically sent to the borrower/homeowner with a SCOUT application link to facilitate the inspection and appraisal process. The app employs GPS technology to track the homeowner in the house, and instructs users on where to take the necessary photos.

Because the appraisal is in the hands of the homeowner, SCOUT implements various fraud measures such as pre-populated property information, location tracking with date/time stamps, direct input of photos to the application (no uploads) and finger signature certification by the homeowner.

Sklarz said SCOUT was in no way meant to replace existing appraisers, but rather enhance the productivity and speed at which appraisals occur.

“With a product like this, the existing appraisers can just do that many more appraisals per day than they would have trying to drive around and go inside of houses,” Sklarz said.

SCOUT arrived on the heels of several other technological advancements that are helping to shape the housing market amid the pandemic—including Zillow’s one-stop rental tool, Zillow Rentals and Redfin’s self-guided home tours, Direct Access. In addition, Built Technologies released limited access to their flagship CLA software to help lenders who have been impacted.

Right now, Black Knight is extending the free trial of SCOUT for AMCs and lenders to utilize through the duration of COVID-19.
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