One of the fastest growing and largest mortgage lenders in the country goes by the name PennyMac, not to be confused with Freddie Mac.
If you’re wondering what the rather odd name means, it stands for Private National Mortgage Acceptance Co.
While the company started as a buyer of distressed mortgage assets after the mortgage crisis in the early 2000s, it wasn’t long before they were originating their own home loans.
Today, they refer to themselves as a “top 3 lender in the U.S.,” which is likely driven by their strong correspondent lending business.
They purchase home loans from small and mid-sized banks, along with credit unions and other smaller mortgage lenders.
But they’re also becoming a major retail mortgage lender as well, serving consumers directly and beginning to make a household name for themselves.
In fact, in October 2019 they broke their one-month record by lending more than $1 billion directly to consumers.
If you’re looking to purchase a home or refinance an existing mortgage, PennyMac might be a lender worth looking into.
PennyMac Mortgage Quick Facts
Publicly-traded mortgage company launched in 2008
Former Countrywide Financial CFO is their founder
A top-3 mortgage lender licensed everywhere but NY
Nearly 4,000 employees, headquartered in Westlake Village, CA
Funded $125B in home loans during 2021 (6th largest lender nationally)
Services more than $368B in home loans for its customers
First a little history on PennyMac, which only stretches back to 2008. But they’ve been busy since.
Back then, they had only 72 employees, however, that total included some major mortgage players, namely former Countrywide Financial CFO and COO Stanford L. Kurland.
This might explain their explosive growth from startup to now one of the largest (if not largest) correspondent mortgage lenders in the country.
They also launched a wholesale mortgage division in 2018 to serve mortgage brokers known as “PennyMac Broker Direct.” It is now known as PennyMac TPO.
So they offer mortgages via the three major channels, including retail, correspondent, and wholesale.
They are also a top-10 residential mortgage servicer with over $368 billion in portfolio, and a publicly-traded company, with two stocks on the NYSE.
How to Apply for a Mortgage with PennyMac
Can apply online or by phone or visit a local sales office
Loan application powered by Mortgage Access Center (m.a.c)
Allows you to check loan status 24/7 and upload key documents
Can view your credit scores and access W-2s from your employer via The Work Number verification
I always give props to lenders that let you apply for a mortgage directly on their website. It’s 2020, so if this isn’t an option, and you’re a lender, you better make it one.
With PennyMac, you can apply right away or get pre-approved online by creating an account and filling out a digital loan application.
If you’re old school, or simply need some guidance, you can also enter your contact information on their website and a loan officer will reach out to you to answer questions and get the loan process started.
It’s also possible to simply call them up to get connected with a loan officer to go over mortgage rates and available loan programs.
Those who are just sniffing around can take advantage of PennyMac’s Home Value Estimator tool, which provides its own home price estimate along with Zillow’s Zestimate and price per square foot.
So if you want to more details on what a potential home purchase will cost, or want to know what your current property is valued at, you can do so for free on their website.
Anyway, once you do apply, you can take advantage of their digital loan experience known as m.a.c., short for Mortgage Access Center.
To make the experience quicker and easier, they allow you to import bank statements from your online banking account(s) and verify W-2s via The Work Number.
You’re also able to securely upload documents, access your credit scores, and check loan status 24/7.
As your loan progresses, you’ll receive status notifications and update calls from your dedicated m.a.c team.
Types of Loans Offered by PennyMac
Conventional loans: conforming and jumbo loan amounts
Government-backed loans: FHA, USDA, and VA loans
Home purchase and refinance loans (cash-out is an option)
Variety of fixed-rate and adjustable-rate mortgages
Like most lenders, they offer both home purchase loans and refinance loans, in both fixed-rate and adjustable-rate options.
You can get both a conventional loan backed by Fannie Mae or Freddie Mac, or a government-backed loan via the FHA, USDA, or VA.
They offer conforming loans and jumbo loans, so those with expensive properties are good to go.
With regard to loan type, you can get a fixed-rate mortgage with various terms, such as 30-year, 20-year, and 15-year.
Or an adjustable-rate mortgage with an initial fixed-rate period, such as a 3/1, 5/1, 7/1, or 10/1 ARM.
PennyMac also recently rolled out a home equity line of credit (HELOC) product to customers in select states, claiming to be the only major nonbank lender to directly offer one.
They lend on primary residences, second homes, and investment properties, so you’re covered regardless of occupancy type.
PennyMac Mortgage Rates
One plus to using PennyMac is that they’re fairly transparent about mortgage rates.
If you go to one of their loan product pages, you’ll see today’s mortgage rates listed. Be sure to view the assumptions and recognize that they’re just sample rates that meet certain criteria.
You can also get a customized quote on their website in about 30 seconds by answering a series of simple borrower- and property-related questions.
While the interest rate may not be set in stone, you can at least get a good idea of how competitive they are relative to other lenders.
Once you get your rate quote, you’ll see several loan options such as the 30-year fixed and 15-year, and possibly some ARMs as well.
They list the interest rate, APR, and mortgage points required for the rate in question.
You can also view additional rates to see what the rate would be with fewer or more discount points.
Assuming you like what you see, you can apply right then and there, which is nice. Or you can call them or have them call you.
All in all, their mortgage rates seem to be competitive from what I saw relative to other lenders, but always take the time to shop around.
PennyMac Better Rate Promise and Close On-Time Promise
PennyMac also makes a lot of promises that they back with real money if they don’t live up to them.
Their “Better Rate Promise” is their promise to beat any competitor’s mortgage rate and/or lender fees.
If they’re unable to do so, and you take your loan elsewhere, they’ll give you a $250 Visa gift card.
Their Close On-Time Promise is their promise to close your home loan on time. If there’s a delay that is their fault and not the borrower’s or a third party, you’ll be sent a $500 Visa gift card.
Both these promises, collectively known as “The PennyMac Promise,” only apply to home purchase loans, not refinances, and there are other various restrictions in the fine print.
PennyMac Mortgage Reviews
PennyMac has more than 19,000 customer reviews on SocialSurvey with a 4.57 out of 5-star rating.
They’ve also got a 4.25 rating out of 5 stars at Zillow based on 173 customer reviews. Many of those reviews indicate the interest rate and closing costs were lower than expected.
Additionally, they are an accredited business with the Better Business Bureau and have an A+ BBB rating.
They’ve got a near-4 star rating based on 421 customer reviews. But they’ve also got a healthy number of customer complaints, with more than 500 at last glance.
So you may want to dig through those if you’re concerned about their customer service.
PennyMac Pros and Cons
The Good Stuff
They openly display their mortgage rates
You can get a no-obligation quote on their website in seconds
Can apply online via digital loan process
Offer lots of different loan options for all types of borrowers
They service the home loans they originate
Free mortgage calculators and home estimate tool
Good customer reviews overall
Close On-Time Promise
Better Rate Promise
The Maybe Bad Stuff
Mortgage rates might not be the lowest
Lender fees are not listed on their website
Be sure to shop around the invoke the Better Rate Promise if necessary
“Where are you from?” It’s a common question when you meet someone new while traveling. And it’s an easy question for most people. But for me, it’s complicated if I want to give more details than “the United States.”
After all, my husband and I gave up our Austin, Texas, apartment in June 2017, sold or donated most of our belongings and then set out as digital nomads on July 2, 2017. So, excluding some extended time living with family early in the coronavirus pandemic, we’ve traveled full time while working remotely for the last six years.
In 2020, I wrote about my first three years as a digital nomad. But in this story, I’ll look back at the past six years. In doing so, I’ll discuss how I became a digital nomad, some of my travel statistics and how travel has changed for me during the past six years.
How I became a digital nomad
On a bus from Aguas Calientes to Machu Picchu in Peru in 2013, I first heard of a gap year or sabbatical year. I hadn’t gotten into points and miles yet, but my husband and I loved the idea of taking a year off to travel after I finished graduate school. Well, fast forward four years to 2017, when it was time to leave on our “gap year.” By this time, we were already working as writers in the award travel space.
So, we hit the road as digital nomads instead of taking a gap year. And we quickly fell in love with the freedom and flexibility of the lifestyle. I appreciate experiencing different cultures, landscapes, experiences and cuisines daily. And I’ve found that frequently visiting new destinations inspires me.
I also enjoy using the topics I write about — points, miles, credit cards and elite status — on a daily basis. We make award redemptions most weeks (and often multiple times a week), and we’re constantly traveling. So, I know many of the airline, hotel and credit card programs I write about from personal experience. And I’m personally invested when these programs change or devalue their rewards.
Points and miles certainly fuel some of our travel. But we also book paid flights and nights when it makes sense. After all, we only have a finite amount of points and miles, and we’ve found that paid partner-operated premium-cabin flights are often the best way to earn airline elite status.
Related: 6 ways award travel and elite status pair well with my digital nomad life
1,121,959 miles on 575 flights
Over the last six years, I’ve taken 575 flights on 62 airlines to 180 airports in 58 countries. I’ve taken so many flights in the last six years that my flight map is difficult to read.
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I flew 1,121,959 direct flight miles in the last six years, with an average flight distance of 1,951 miles (about the distance from Atlanta to Los Angeles). My longest flight was 9,532 miles, from New York to Singapore. And my shortest flight was just 11 miles from Tahiti to Moorea in French Polynesia.
But my most memorable flight was on Sri Lanka’s Cinnamon Air from Polgolla Reservoir Aerodrome (KDZ) to Koggala Airport (KCT) on a Cessna 208 amphibious caravan.
I frequently fly American Airlines and often use Hartsfield-Jackson Atlanta International Airport (ATL) when visiting family. So, it’s not surprising that my three most frequent routes by flight segments are between American Airlines’ hubs and Atlanta. Here’s a look at my top 10 most frequent flight segments over the last six years:
New York’s LaGuardia Airport (LGA) to/from ATL: 15 flights
Dallas Fort Worth International Airport (DFW) to/from ATL: 11 flights
Charlotte Douglas International Airport (CLT) to/from ATL: 10 flights
Kuala Lumpur International Airport (KUL) to/from Kualanamu International Airport (KNO): 10 flights while I earned Malaysia Airlines Enrich Gold status in 2019
Los Angeles International Airport (LAX) to/from ATL: Nine flights
Las Vegas’ Harry Reid International Airport (LAS) to/from LAX: Eight flights
DFW to/from LGA: Six flights
London’s Heathrow Airport (LHR) to/from LAX: Six flights
Hong Kong International Airport (HKG) to/from Da Nang International Airport (DAD): Six flights booked during Cathay Pacific’s New Year’s deal in 2019
DFW to/from LAS: Five flights
And my loyalty to American Airlines AAdvantage and its Oneworld partners shows when you look at the airlines I flew most by flight segments:
American Airlines: 224 flights, including reviews of American’s A321T business class, 787-9 business class, 777-200 business class with B/E Aerospace Super Diamond seats, 787-8 Main Cabin Extra, 757-200 Main Cabin Extra and 757-200 business class
United Airlines: 31 flights, including reviews of United’s 787-8 economy class and 757-200 economy class
Southwest Airlines: 29 flights, including a review of Southwest’s 737-800 from Oakland, California, to Newark
Malaysia Airlines: 26 flights
Qatar Airways: 23 flights, including reviews of Qatar Qsuite on a 777-300ER and Qatar Qsuite on an A350-1000
Delta Air Lines: 22 flights, including when I was one of the first American tourists to fly to Italy on a COVID-19-tested flight
British Airways: 20 flights, including a review of British Airways’ A380 economy class
Cathay Pacific: 17 flights
Japan Airlines: 14 flights, including a review of Japan Airlines’ 777-300ER premium economy
Qantas: 12 flights
However, if you look at the airlines on which I flew the most mileage, the ranking is a bit different due to some mileage runs:
American Airlines: 404,296 miles
Cathay Pacific: 104,481 miles
Qatar Airways: 89,630 miles
British Airways: 53,357 miles
Delta Air Lines: 49,603 miles
United Airlines: 42,237 miles
Singapore Airlines: 36,176 miles, including a review of Singapore Airlines’ A350-900ULR premium economy
Japan Airlines: 33,756 miles
Air Canada: 30,792 miles
All Nippon Airways: 28,938 miles
I track all my flights in OpenFlights. So, although it’s relatively easy for me to gather statistics on my flights, I don’t have a simple way to determine the amount I paid in points and cash for my 575 flights during the last six years.
Related: The best credit cards for booking flights
1,103 nights in hotels
I’ve spent over half of the last six years living out of hotel rooms. In particular, I’ve spent 894 nights at 75 major hotel brands within the last six years. And I’ve spent 209 nights at other brands and independent hotels.
Here’s the breakdown of my stays by loyalty program and brand over the last six years, including notes about my favorite programs.
390 nights at 15 IHG brands
Holiday Inn Express: 120 nights
Holiday Inn: 66 nights
InterContinental Hotels & Resorts: 51 nights, including five nights at the InterContinental Hayman Island Resort in Australia, four nights at the InterContinental Phuket Resort in Thailand, four nights at the InterContinental Phu Quoc Long Beach Resort in Vietnam, three nights at the InterContinental Danang Sun Peninsula Resort in Vietnam, three nights at the InterContinental New York Times Square in New York and two nights at the InterContinental Fiji Golf Resort & Spa in Fiji
Candlewood Suites: 28 nights
Hotel Indigo: 26 nights, including five nights at the Hotel Indigo Austin Downtown-University in Texas and four nights at the Hotel Indigo Birmingham Five Points South – UAB in Alabama
Staybridge Suites: 22 nights
Crowne Plaza Hotels & Resorts: 19 nights, including three nights at the Crowne Plaza Beijing Wangfujing in China and three nights at the Crowne Plaza Times Square in New York
Holiday Inn Resort: 19 nights, including 10 nights at the Holiday Inn Resort Kandooma Maldives in the Maldives
Voco: 11 nights, including six nights at Voco Gold Coast in Australia
Regent: Nine nights
Kimpton Hotels & Restaurants: Eight nights
Six Senses: Six nights, including four nights at Six Senses Laamu in the Maldives and two nights at Six Senses Yao Noi in Thailand
Atwell Suites: Two nights at Atwell Suites Miami Brickell in Florida
Avid: Two nights at Avid hotel Oklahoma City — Quail Springs in Oklahoma
Even: One night
Over the last six years, I’ve stayed 161 paid nights at IHG properties for an average of $152 per night. The least I paid was $48 per night at the Holiday Inn Express Berlin — Alexanderplatz in Germany. And the most I paid was $1,564 per night during a review of the InterContinental Maldives Maamunagau Resort in the Maldives.
Meanwhile, we redeemed IHG points for 209 nights over the last six years, including 36 fourth-night-free rewards. On average, we redeemed 15,591 IHG points per night. We also redeemed 20 anniversary nights over the last six years, including at the InterContinental Bora Bora Resort & Thalasso Spa in French Polynesia and the Kimpton De Witt Amsterdam in the Netherlands.
You might wonder how we earned so many IHG points and anniversary nights. We maximize IHG promotions to earn points on stays. And we often buy points during IHG points sales with a 100% bonus when we can do so for 0.5 cents per point. As for the anniversary night certificates, we both have multiple IHG credit cards, so we’ve each earned two anniversary nights for most of the last six years.
We frequently stay at IHG One Rewards hotels and resorts due to the high value we often get when redeeming IHG points. But, with the launch of the new IHG One Rewards program last year, we are also getting good value from the annual lounge membership you can select through IHG’s Milestone Rewards program after staying 40 nights in a year.
Related: 9 budget strategies for getting the most out of your points and miles
209 nights at other brands and independent hotels
These days, we usually stay at major hotel brands to earn and use elite status perks and benefit from the consistency provided by these brands. But we often stayed at independent hotels when we first hit the road as digital nomads in 2017. And even now, we sometimes find ourselves in a destination without major hotel brands or where staying at a property outside our brand loyalties makes the most sense.
For example, we couldn’t pass up staying in a twin cell at YHA Fremantle Prison in Australia and a robot hotel in Japan. Likewise, staying within Addo Elephant and Kruger national parks in South Africa let us maximize our time seeing wildlife in these parks.
We often book these stays through online travel agencies since we don’t have to worry about missing out on elite status benefits and earnings while staying at properties outside our primary brands. For example, we’ll sometimes book through credit card portals to use credits, like the $50 hotel credit each account anniversary year on the Chase Sapphire Preferred Card. And we’ll occasionally book through American Express Fine Hotels + Resorts to snag extra perks and use the prepaid hotel credit we get each calendar year as a perk of The Platinum Card® from American Express. We’ll also sometimes use Rocketmiles to earn American Airlines miles and Loyalty Points on our stays.
On average, I paid $83 per night on these stays. But, my least expensive night was $18 per night for a private room with a shared bathroom at Stella Di Notte in Belgrade, Serbia. And my most expensive night was $235 per night at the RLJ Kendeja Resort & Villas in Liberia during PeaceJam.
203 nights at 21 Marriott brands
Over the last six years, I’ve stayed 140 paid nights at Marriott properties for an average of $121 per night. The least I paid was $44 per night at the Four Points by Sheraton Bogota in Colombia. And the most I paid was $350 per night during a review of the Waikoloa Beach Marriott Resort & Spa in Hawaii.
Meanwhile, we redeemed Marriott points for 49 nights over the last six years, including six fifth-night-free benefits. On average, we redeemed 16,167 points per night on Marriott award stays. We also redeemed 14 free night awards we earned through Marriott credit cards and promotions over the last six years.
Related: Here’s why you need both a personal and business Marriott Bonvoy credit card
115 nights at 6 Choice brands
Ascend Hotel Collection: 54 nights, including 28 nights at Emotions All Inclusive Puerto Plata in the Dominican Republic, nine nights at Gowanus Inn & Yard in New York (no longer bookable through Choice Hotels) and three nights at Bluegreen Vacations Fountains in Florida
Comfort: 37 nights, including 19 nights in Japan
Quality Inn: 13 nights
Cambria Hotels: Four nights
Rodeway Inn: Four nights
Clarion: Three nights
Over the last six years, I’ve stayed 34 paid nights at Choice Privileges properties for an average of $93 per night. The least I paid was $54 per night at the Comfort Hotel Airport CDG in France. And the most I paid was $239 per night at Cambria Hotel New York — Times Square in New York.
Meanwhile, we redeemed Choice points for 81 nights over the last six years. On average, we redeemed 9,531 Choice points per night. I’ve found I can get excellent value when redeeming Choice points for unique redemptions and for stays in Japan, Europe and destinations that typically feature high paid hotel rates. So, as with IHG, we often buy Choice points during sales or through Daily Getaways promotions.
87 nights at 11 Hyatt brands and partners
I didn’t stay much with World of Hyatt until the program offered reduced qualification requirements and double elite night credits in early 2021. I earned Globalist status in 2021 for far fewer nights than is usually required, but I’ve prioritized maintaining it due to the on-site perks it provides.
I’ve stayed 53 paid nights at Hyatt properties for an average of $139 per night over the last six years. The least I paid was $24 per night at the Excalibur Hotel & Casino in Las Vegas. And the most I paid was $353 per night at Hyatt House New York/Chelsea in New York.
Meanwhile, I redeemed Hyatt points for 27 free nights over the last six years. I’ve found some excellent Category 1 Hyatt hotels that provide wonderful value on award stays. So, it isn’t surprising that I’ve redeemed 5,563 points per night on average and just 3,500 points per night for nine nights. Additionally, I redeemed seven free night certificates that I earned through Hyatt credit cards, Hyatt Milestone Rewards and the Hyatt Brand Explorer promotion over the last six years.
40 nights at 10 Wyndham brands
Days Inn: 10 nights
Ramada: Nine nights
Ramada Encore: Five nights
Microtel: Five nights
Club Wyndham: Three nights
Super 8: Three nights
Viva Wyndham: Two nights at Viva Wyndham Azteca — All-Inclusive Resort in Mexico
Baymont: One night
Howard Johnson: One night
Travelodge: One night
Over the last six years, I’ve stayed 29 paid nights at Wyndham properties for an average of $103 per night. The least I paid was $48 per night at the Days Inn Guam-Tamuning in Guam. And the most I paid was $200 per night during a review of the Viva Wyndham Azteca — All-Inclusive Resort in Mexico.
Meanwhile, we redeemed Wyndham points for 11 nights over the last six years. On average, we redeemed 9,068 points per night on Wyndham award stays. And we love getting a 10% redemption discount when we redeem Wyndham points as a benefit of our Wyndham Rewards credit card, as this brings an award night that would typically cost 7,500 points down to just 6,750 points.
32 nights at 6 Hilton brands
Over the last six years, I’ve stayed 18 paid nights at Hilton properties for an average of $130 per night. The least I’ve paid was $58 per night at the Hilton Jaipur in India. And the most I paid was $168 per night at the Hilton Niseko Village in Japan.
Meanwhile, we redeemed Hilton points for eight nights over the last six years, including one fifth-night-free benefit. On average, we redeemed 46,250 points per night on Hilton award stays. We also redeemed six Hilton free night certificates that we earned through Hilton credit cards over the last six years for excellent value at the Conrad New York Midtown, the Conrad Maldives Rangali Island and the Hilton Maldives Amingiri Resort & Spa.
The average amount we redeemed per night with Hilton Honors is significantly higher than with other hotel loyalty programs. This, combined with my struggle to get more than TPG’s valuation (0.6 cents per point) when redeeming Hilton points, is why I don’t frequently stay at Hilton brands despite having Hilton Diamond status through a Hilton credit card.
19 nights at 4 Accor brands
Ibis: 12 nights
Mercure: Four nights
Grand Mercure: Two nights
Ibis Budget: One night
Over the last six years, I’ve stayed 19 nights at Accor properties for an average of $56 per night. The least I paid was $36 per night at the Ibis Muenchen City Nord in Germany. And the most I paid was $84 per night at the Ibis Madrid Alcobendas in Spain.
8 nights at 2 Best Western brands
Best Western: Six nights
Best Western Plus: Two nights
Over the last six years, I’ve stayed eight nights at Best Western properties for an average of $78 per night. The least I paid was $57 per night at the Best Western Amsterdam Airport Hotel in the Netherlands. And the most I paid was $147 per night at the Best Western Plus Mountain View Auburn Inn in Washington.
452 nights camping
When I became a digital nomad in 2017, I didn’t think there was any chance I’d camp 452 nights in the next six years. And even three years ago, I’d only spent three nights tent camping for a concert at The Gorge in Washington state and three nights in a rental RV doing a relocation from Las Vegas to Denver.
But, as it became apparent the coronavirus pandemic would affect international travel for more than just a few months, my husband and I tried out a six-night RV relocation rental in July 2020. Then in August 2020, we decided to buy the same RV model we’d relocated.
When we bought our Class C RV, we expected we’d sell it as soon as international travel to most destinations became relatively simple again. But, we discovered we enjoy working remotely from our RV while in the U.S. We’ve now spent 440 nights camping in our RV since buying it — 97 nights in 2020, 234 nights in 2021, 80 nights in 2022 and 29 nights so far in 2023.
Nineteen nights in our RV have been free at locations (like select Walmarts, select Cracker Barrels and businesses that participate in Harvest Hosts) that allow RVers to stay overnight upon asking permission. We’ve also spent 37 nights sleeping in the driveways of friends and family while visiting them.
But we usually find paid RV campsites with power and water. We’ve paid for campsites on 393 nights as follows:
171 nights at city and county campgrounds ($32 per night on average)
133 nights at U.S. Army Corps of Engineers campgrounds ($27 per night on average)
66 nights at state park campgrounds ($34 per night on average)
37 nights at private campgrounds ($52 per night on average)
Four nights at national park campgrounds ($48 per night on average)
On average, we’ve paid $33 per night for our RV campsites. The highest we paid was $104 per night at Orlando / Kissimmee KOA Holiday in Florida. And the least we paid was $17 per night at Shady Grove Campground in Cumming, Georgia, during a half-off promotion.
Related: The cheapest place to stay at Disney World is a tent — so I tried it
443 nights with family and friends
One aspect my husband and I appreciate about being digital nomads is seeing our family more than when we lived in one place. Here’s a breakdown of our nights with friends and family over the last six years:
July 2 to the end of 2017: 32 nights
2018: 90 nights
2019: 83 nights
2020: 167 nights
2021: 29 nights
2022: 27 nights
So far in 2023: 15 nights
We spent significant time with each of our parents in March through August of 2020 as much of the world locked down. However, the nights since August 2020 are lower than pre-pandemic since we now stay in our RV (either in the driveway or a nearby campground) while visiting most friends and family members.
Related: 43 real-world family travel tips that actually work
104 nights in transit
Over the past six years, I’ve spent 101 nights in flight or sleeping in airports. I typically avoid overnight flights, but sometimes overnight flights are unavoidable (and they’re enjoyable if I book a lie-flat seat or luck into a row to myself in economy).
If I have an overnight layover at an airport, I’ll book a hotel if the layover is long enough and I can find a modestly priced hotel on-site or with a free shuttle. But sometimes the layover is too short, or it just doesn’t make sense to get a hotel. In these cases, I’ll usually sleep in a lounge — ideally one with a sleeping area or at least lounge chairs — or in a Minute Suites (or a similar type of space) that participates in Priority Pass.
I’ve also spent three nights on trains, including two on the Amtrak Empire Builder from Portland, Oregon, to Chicago and one on a Trans-Mongolian train from Ulaanbaatar, Mongolia, to Hohhot, China. I thoroughly enjoyed both experiences, so it’s surprising that I haven’t taken any other overnight trains in the last six years. However, low-cost flights on many routes served by overnight trains often make flying a more convenient and less expensive alternative.
Related: 11 of the most scenic train rides on Earth
90 nights in vacation rentals
Vacation rentals are the accommodation of choice for many digital nomads, especially those who stay in each location for at least a month and appreciate having their own kitchen. And I spent 39 nights in vacation rentals in 2017 after becoming nomadic July 2.
However, one particularly bad Airbnb experience in 2018 and an increasing interest in hotel elite status caused me to switch most of my nights to hotels instead of vacation rentals. I stayed in vacation rentals for 17 nights in 2018 and 20 nights in 2019. I only stayed in one vacation rental each in 2020 (for three nights), 2021 (for two nights) and 2022 (for two nights). And so far, I’ve only stayed in one vacation rental (for seven nights) in 2023.
On average, I paid $53 per night for vacation rentals across my six years as a digital nomad. My least expensive vacation rental was $17 per night for a private studio apartment in Da Nang, Vietnam, that I booked through Airbnb. And my most expensive vacation rental was $129 per night for a waterfront apartment in Auckland, New Zealand, through Hotels.com.
I’ll still stay in vacation rentals when they’re my best option. But I generally prefer to stay at hotels for consistency and to earn and use my elite status perks.
Related: When a vacation rental makes more sense than a hotel
259 cities in 52 countries and territories
Finally, let’s talk about destinations. Over the last six years, I’ve visited 259 cities in 52 countries and territories. Here’s a look at the number of nights I stayed in each:
1,253 nights: United States of America (including 318 nights in hotels or vacation rentals)
88 nights: Germany
69 nights: Japan
56 nights: Australia
54 nights: South Africa (including 32 nights in or near South African national parks)
36 nights: Dominican Republic
27 nights: Maldives, Thailand
24 nights: Spain
22 nights: Hong Kong, Malaysia
21 nights: New Zealand, Serbia, Vietnam
20 nights: Canada, Colombia, Italy
19 nights: India
18 nights: Netherlands, United Arab Emirates
16 nights: Singapore
14 nights: Bahamas, French Polynesia, Indonesia
13 nights: Fiji, South Korea
11 nights: Brazil, Mongolia
10 nights: China
Nine nights: Bulgaria, England, France, Pakistan
Eight nights: Bosnia and Herzegovina, Latvia, Liberia, Mexico, Sri Lanka
Seven nights: Greece, Guam
Six nights: Turkey
Five nights: Belgium, Marshall Islands
Four nights: Sweden
Three nights: Argentina, Chile
Two nights: Panama
One night: Ethiopia, Finland, Ireland, Northern Mariana Islands, Taiwan
As you can see, I would have spent the most time in the U.S. even if the coronavirus pandemic hadn’t kept me in the country for much of 2020 and 2021. And interestingly, even my most visited country outside the U.S. (Germany) accounted for just 88 nights across the last six years.
I also visited 14 other countries and territories before becoming a digital nomad. So, although I’m not striving to visit every country in the world, I’ve visited 66 different countries and territories so far. My husband and I are trying to visit a few new-to-us countries each year while also returning to some of our favorite destinations like Germany, Japan, South Africa, Australia and Hong Kong.
Related: The 18 best places to travel in 2023
Bottom line
I feel incredibly thankful for the last six years I’ve spent as a digital nomad. I’ve grown significantly as a person and content creator while traveling full-time.
And I’ve had some amazing experiences, including swimming with manta rays in French Polynesia and the Maldives, watching a sea turtle dig a nest and lay her eggs on a Florida beach, staying at some awesome resorts (Six Senses Laamu, Six Senses Yao Noi and Alila Fort Bishangarh immediately come to mind), and overnighting in second-class hard bunks on a Trans-Mongolian train.
But it’s not these epic experiences that keep me on the road. After all, I could enjoy many of these experiences on vacation. Instead, the daily things like being surrounded by languages I don’t know, enjoying delicious local foods and exploring new cities and neighborhoods on foot keep me attached to the digital nomad lifestyle.
Mortgage rates are on track to finish out the week lower than where they started for the first time in 2018. This is obviously good news for borrowers looking to buy a home or refinance their current mortgage. If you want to take advantage of the dip, you should try and act quickly because rates could jump at a moment’s notice. Read on for more details.
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Market Recap 3.16.18 from Total Mortgage on Vimeo.
Where are mortgage rates going?
Rates up today but still down on the week
We got some strong economic data this morning, with consumer sentiment hitting a 14-year high, job openings hitting an all-time high, and industrial production with its biggest jump in four months.
The positive readings have helped push all of the major stock market indexes higher. With more investors going into stocks, fewer are in bonds, pushing up Treasury yields.
The yield on the 10-year Treasury note has moved up a little over two basis points to 2.85%. That’s still about five basis points below where it was during the week’s high on Monday.
Rate/Float Recommendation
Lock now before rates push higher
Mortgage rates are on track to wind up lower than where they started the week for the first time in 2018. This is great news for anyone who is thinking about purchasing a new home or refinancing their current mortgage.
Rates are expected to continue their climb and move significantly higher by the time 2019 rolls around, so we’re recommending that borrowers take action sooner rather than later to try and get the best deal.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
Housing Starts
Housing starts came in at an annualized rate of 1.236 million for February, while permits hit an annualized rate of 1.298 million.
Industrial Production
Production ticked up 1.1% in February. Manufacturing rose 1.2%. Both of those readings are well above the mark that analysts had expected.
Consumer Sentiment
Consumer sentiment hit a 102.0 in March. That’s well above the 98.8 that analysts had called for and is a 14-year high. Notably, inflation expectations are up 2 tenths to 2.9%.
JOLTS
According to the latest report from the Labor Department, there were 6.312 million job openings in January.
Notable events this week:
Monday:
10-Yr Note Auction
Tuesday:
NFIB Small Business Optimism Index
Consumer Price Index
Wednesday:
PPI-FD
Retail Sales
Business Inventories
EIA Petroleum Status Report
Thursday:
Jobless Claims
Philadelphia Fed
Empire State Mfg Survey
Import and Export Prices
Housing Market Index
Friday:
Housing Starts
Industrial Production
Consumer Sentiment
JOLTS
*Terms and conditions apply.
Carter Wessman
Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.
For many individuals and families, owning a home is a lifelong dream. However, with rising real estate prices, some may find themselves seeking financing beyond the conforming loan limit. This is where jumbo loans come into play.
What is a jumbo loan?
A jumbo loan in Utah is a type of mortgage that is used to finance homes that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). Oftentimes, this type of loan is necessary for high-end, luxury homes or homes located in expensive housing markets, like Salt Lake City or Park City.
If you find yourself in a situation where the home you wish to purchase requires borrowing beyond the conforming loan limit (CLL), then you’ll need to pursue a jumbo loan. It’s important for homebuyers to understand the requirements and implications of obtaining a jumbo loan in Utah. For instance, borrowers typically need a higher credit score and a larger down payment to qualify for a jumbo loan.
What is the jumbo loan limit in Utah?
In 2023, the conforming loan limit for a single-family home in most U.S. markets is $726,200. However, this limit can be higher in areas where the median home price is significantly above the national average.
$726,200 is the conforming loan limit in most Utah counties
$1,089,300 is the maximum limit in higher-cost counties
Keep in mind that the amount being borrowed is what determines whether or not you’ll need a jumbo loan, not the price of the home. So, if you were to put $100,000 down on a $780,000 home in Emery County, the mortgage would be $680,000, which is under the CLL for this area. In this case, your loan wouldn’t be considered a jumbo loan.
The following counties in Utah have a conforming loan limit beyond $726,200 for 2023:
County
FHFA Conforming Loan Limit
Box Elder County
$744,050
Davis County
$744,050
Morgan County
$744,050
Summit County
$1,089,300
Wasatch County
$1,089,300
Weber County
$744,050
For more information on the conforming loan limit in your county, use the FHFA map.
What are the requirements for a jumbo loan in Utah?
Borrowers must meet stricter requirements to qualify for a jumbo loan than they would for a conforming loan. The specific requirements can vary from lender to lender, but below are the typical requirements for borrowers seeking a jumbo loan in Utah.
Higher credit score: In order to have your loan application approved for a jumbo loan, most lenders will require a credit score of 720 or higher. While some lenders may be more lenient and accept a score as low as 660, a score below this is generally not accepted. In contrast, a credit score as low as 620 could suffice for a conforming loan with some lenders.
Larger down payment: When applying for a Utah jumbo loan, keep in mind that down payment requirements are generally more substantial than for conforming loans. While the specific amount will depend on the lender and the borrower’s financial situation, many jumbo loan lenders require a down payment of at least 10%, and some require as much as 20% or more.
More assets: Jumbo loan borrowers are typically required to have more assets than those seeking conventional loans. Lenders will review a borrower’s assets to ensure they have enough liquid assets or savings to cover at least one year of loan payments. This requirement is in place to mitigate the increased risk associated with larger loan amounts.
Lower debt-to-income ratio (DTI): For Utah jumbo loans, lenders typically look for a borrower with a debt-to-income ratio (DTI) below 43%. Ideally, a DTI closer to 36% or lower is preferred. The DTI is calculated by dividing the sum of all monthly debt payments by gross monthly income. A lower DTI signifies a borrower’s ability to manage their current debt load while taking on additional mortgage payments. It also indicates greater financial stability and the ability to make on-time payments towards their jumbo loan.
Additional home appraisals: For a jumbo loan, lenders may require an additional home appraisal as a second opinion, especially if the property is located in an area with few comparable sales. This is to ensure that the home is worth the loan amount or more and to mitigate the lender’s risk. The cost of the appraisal may also be higher in housing markets with limited property sales.
Refinance mortgage loan applications dipped 31% year-to-year on the week ending Nov. 12, according to a survey published by the Mortgage Bankers Association (MBA) on Wednesday. The refi volume decreased 5% compared to the previous week.
Meanwhile, applications to purchase a new home declined 6% in one year. However, they were up 2% in comparison to the previous week.
Overall, the Market Composite Index, a measure of the mortgage loan application volume, decreased 2.8% compared to the previous week and 23% year-to-year.
Joel Kan, associate vice president of economic and industry forecasting at the MBA, said refi applications decreased for the seventh time in eight weeks, as mortgage rates increased following two weeks of declines.
The trade group estimates the average contract 30-year fixed-rate for conforming loans ($548,250 or less) increased to 3.20%, four basis points higher than the previous week. For jumbo loans (greater than $548,250), it remained at 3.26%.
The keys to lending in a post-refi boom world
As record refinance volumes disappear, lenders need to get intimately familiar with their database of customers. Being a resource for all real estate financing needs for your customers will become more important in the next few years than ever before.
Presented by: CIVIC Financial
“Activity has been particularly sensitive to rate movements, and last week’s decline was driven by a drop in conventional and FHA refinance applications, which offset an increase in VA refinance applications,” said Kan.
He added that purchase applications increased for conventional and government loans, as demand shows resiliency in late fall when home buying activity typically slows. Stronger sales activity may continue in the weeks to come, shows the survey.
Refi represented 62.9% of total applications, down from 63.5% the previous week. VA loans consisted of 10.8%, increasing six basis points. Meanwhile, FHA loans went from 8.8% to 8.9% in the period. The USDA share remained unchanged at 0.5% of the total.
In the purchase activity, real estate investors are more active than ever, challenging individual homebuyers. According to a Redfin report released this week, investors spent a record $63.6 billion to purchase homes in the third quarter, up 78% from a year earlier.
They were responsible for 18.2% of the U.S. homes purchased in the period, attracted by increasing returns on the investment.
Sheharyar Bokhari, a senior economist at Redfin, said that increasing home prices had created opportunities for investors to reap big profits. “Those same factors have pushed more Americans to rent, which also creates opportunities for investors,” he noted in a statement.
When it comes to purchasing a home, buyers may find it difficult to find financing beyond the conforming loan limit. In this instance, you may need to apply for a jumbo loan. Whether your sights are set on a Ranch-style home in Tulsa or a new-construction in Yukon, let’s break down what a jumbo loan is in Oklahoma, the 2023 conforming loan limits, and what’s needed to qualify for this type of loan.
What is a jumbo loan?
So what are jumbo loans in Oklahoma? They are large loans that exceed the loan limits set by the FHFA for conforming loans. Jumbo loans allow borrowers to finance homes that exceed the conforming loan limit (CLL), making it possible to buy high-end properties that may not be otherwise affordable.
If the home you’re purchasing will require you to borrow more than the CLL, you’ll need to apply for a jumbo loan. Because of the larger loan amounts, jumbo loans typically carry stricter requirements and higher interest rates than conforming loans. Lenders may require a higher down payment, a lower debt-to-income ratio, and a stronger credit score to qualify for a jumbo loan in Oklahoma.
What is the jumbo loan limit in Oklahoma?
In Oklahoma, the conforming loan limit is $726,200 across all counties. For example, if you’re buying a home in Tulsa County, where the median sale price is $275,000, a loan limit exceeding $726,200 would be considered a jumbo mortgage.
Keep in mind that the loan amount is what determines whether or not you’ll need a jumbo loan, not the home price. So, if you were to put $50,000 down on a $750,000 home in Bixby, the mortgage would be $700,000, which is under the conforming loan limit for this area. In this case, your loan wouldn’t be considered a jumbo loan.
This FHFA map will give you more specific information related to the conforming loan limits in your county.
What are the requirements for a jumbo loan in Oklahoma?
As previously mentioned, the requirements for a jumbo loan are much more stringent than a conforming loan. The specific requirements may vary from lender to lender, but below are the typical requirements for borrowers seeking a jumbo loan.
Higher credit score: To qualify for a jumbo mortgage in Oklahoma, borrowers typically need to have a credit score of at least 720. However, some lenders may be willing to accept scores as low as 660, although less frequently. A higher credit score demonstrates a borrower’s ability to manage credit responsibly and is a crucial factor that lenders evaluate when reviewing jumbo loan applications.
Larger down payment: Jumbo loans typically require larger down payments than conventional loans. Generally, lenders require a down payment of at least 20% of the home’s purchase price to qualify for a jumbo loan. However, some lenders may require a higher percentage, depending on the borrower’s creditworthiness and overall financial situation. Don’t forget that larger down payments can help to reduce monthly mortgage payments, as well as overall interest costs over the life of the loan.
More assets: Jumbo loan lenders generally require borrowers to demonstrate a strong financial profile, including substantial liquid assets or savings. To qualify for a jumbo loan, borrowers must have enough reserves to cover at least one year of mortgage payments. This requirement ensures that borrowers have the financial flexibility to meet their loan obligations in the event of a financial hardship.
Lower debt-to-income ratio (DTI): A mortgage lender will look at a borrower’s DTI (debt-to-income ratio) to assess their creditworthiness and spending habits. For a conforming loan, a DTI as high as 50% may be acceptable to some lenders. However, jumbo loan borrowers are required to have a lower DTI, ideally under 43% and closer to 36%. This is because jumbo loans are riskier for lenders due to the larger loan amounts. Applicants with a higher DTI may still qualify for a jumbo loan, but it could result in a higher interest rate or a stricter approval process.
Additional home appraisals: When you buy a home in Oklahoma, mortgage lenders will require a home appraisal to confirm that the property’s value is equal to or higher than the loan amount. In some cases, a lender may require an additional appraisal for a jumbo loan. In places with very few comparable property sales, the cost of the appraisal may be higher than in neighborhoods with more frequent sales.
“New home construction is taking on an increased role in the marketplace because many home owners with loans well below current mortgage rates are electing to stay put, and this is keeping the supply of existing homes at a very low level,” Alicia Huey, the NAHB chair, said in a statement. “While this is fueling cautious optimism among builders, they continue to face ongoing challenges to meet a growing demand for new construction. These include shortages of transformers and other building materials and tightening credit conditions for residential real estate development and construction brought on by the actions of the Federal Reserve to raise interest rates.”
Although interest rates have more than doubled since 2021, home builders are still cautiously optimistic about business, something the NAHB attributes to builders’ usage of buyer incentives. However, as sales have picked up this spring and existing home sales remain at record lows, the use of sales inducements from homebuilders has slowed.
In May, the share of homebuilders reducing home prices dropped to 27%, down from 30% in April and 36% in November 2022, with the average price reduction hovering at 6%, unchanged for the past four months. Additionally, the share of homebuilders offering some type of incentive dropped to 54% in May, compared to 59% in April and 62% last December.
“Lack of existing inventory continues to drive buyers to new construction,” Robert Dietz, the NAHB’s chief economist, said in a statement. “In March, 33% of homes listed for sale were new homes in various stages of construction. That share from 2000-2019 was a 12.7% average. With limited available housing inventory, new construction will continue to be a significant part of prospective buyers’ search in the quarters ahead.”
The three other indices monitored by the NAHB rose in May. The gauge measuring current sales conditions rose to 56, up five points month over month. The component analyzing sales expectations for the next six months rose seven points to a reading of 57. Compared to a month prior, the gauge measuring traffic of prospective buyers rose two points to 33.
Regionally, the three-month moving averages for HMI rose in three out of the four regions, with the West gaining three points to a reading of 41, the South increasing three points to 52, and the Midwest rising two points to a reading of 39. The Northeast held steady month over month at a reading of 45.
Another survey, the BTIG/HomeSphere State of the Industry Report, also reported an improvement in homebuilder outlook.
According to the survey, nearly twice as many builders reported sales that were better than expected (38%), than those who report sales that were worse than expected (20%) in April. In addition, nearly three times as many builders saw traffic as better than expected (42%) versus worse than expected (15%). The share of builders reporting a year over year decrease in sales also shrank to 34% in April, compared to 40% in March.
The BTIG/HomeSphere study is an electronic survey of approximately 75-125 small- to mid-sized homebuilders that sell, on average, 50-100 homes per year throughout the nation. In April, the survey had 124 respondents.
Like the homebuilder confidence survey, the BTIG survey also found that homebuilders are easing up on buyer incentives. Of the 124 respondents, 17% cut some, most of all prices versus 22% last month, while just 22% of surveyed builders reported increasing some, most or all incentives compared to 27% a month prior. In addition, 30% of homebuilders reported raising some, most or all base prices in April, up from 21% in March.
“New home demand momentum has continued to accelerate throughout the spring season, which is in-line with anecdotal public builder commentary,” Carl Reichardt, a BTIG analyst, said in a statement. “With comparisons for both sales and traffic beginning to ease meaningfully, we expect results should become stronger on a year/year basis next month.”
As the pandemic shut down office life in Los Angeles’ downtown financial district, Claude Cognian tried to keep his gastropub Public School 213 open. But the evacuation of white-collar workers made way for an influx of homeless people and drug users — and more than a few troublemakers striding in the front door.
“It was hard to keep hostesses at the door, because they got scared,” said Cognian, chief executive of the restaurant’s parent company, Grill Concepts Inc.
Three break-ins cost as much as $12,000 each time just to repair the windows, all while the bottom line was cratering in the absence of the office employees who used to gather for lunch and after-work drinks. With sales down 75% from pre-pandemic days, his company closed the downtown gastropub in August and is not planning to return.
“Our bet was that downtown was going to come back, and it hasn’t,” Cognian said.
For decades the Los Angeles financial district was the beating heart of downtown, the corporate muscle that gave the city of sprawl a soaring glass skyline. But the pandemic and the wave of remote work hollowed out its skyscrapers and helped shut many restaurants and businesses that relied on crowds of workers. Though the neighborhood shows signs of recovery, few expect it to return to being the bustling hive of suits and ties that it was.
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To many insiders — the urban planners, real estate developers and business owners with interests in it — the area will recover only if its identity grows more textured than a zone of white-collar office space.
Desirable office addresses were already spreading beyond the financial district before the pandemic, as downtown experienced a renaissance in housing, art and entertainment on blocks previously shunned by investors and residents.
To the south, billions of dollars were spent improving the blocks around Crypto.com Arena with hotels, housing and entertainment venues. Obsolete century-old commercial and industrial buildings to the east were renovated into desirable housing and fashionably unconventional offices. Billions more were spent north on Bunker Hill where the Music Center including Walt Disney Concert Hall and office skyscrapers have been joined by museums, apartments and a high-rise hotel.
The housing boom drew residents to the financial district as well, and that has kept it from turning into a ghost town.
But for the area to truly come back to life, many say it will need to follow the path of Lower Manhattan. The financial capital of New York faced an exodus after 9/11, but city officials and investors staved it off by making it a place of more diverse uses. It is still an office district but is far more lively than it used to be since it also became a residential neighborhood with more shops, restaurants, parks and hotels than it had before the attacks. A performing arts center will open in September.
“Cities evolve. That’s what they do,” said downtown L.A. business representative Nick Griffin. “From natural disasters, wars and pandemics. They evolve with market changes, customer preferences and cultural shifts. Downtown has evolved pretty dramatically over the last 20 years and the next five or so are going to be very interesting.”
Many companies have returned to their offices, but on a limited basis as their employees work some days from home. “For Lease” signs clutter building fronts, tacked over restaurants and bars that once served lively hordes of office workers. Graffiti marks windows.
At Public School 213, the chairs are stacked neatly on tables as if it just closed for the night. Other former restaurants have been gutted by their landlords. Sidewalks are quiet, sometimes eerily so.
Downtown’s centers of gravity have shifted numerous times since its days as a remote Spanish pueblo.
The plaza by Olvera Street near the Los Angeles River was el centro until the late 19th century. When the railroads arrived in the American era, the business elite shifted the commercial district south from the plaza toward 1st Street in the Anglo section of the racially divided city, said Greg Fischer, an expert on the history of downtown who worked on planning matters for former City Councilwoman Jan Perry. Main, Spring, Broadway and Hill streets became the business hub.
In the early 20th century, elite social clubs such as the Jonathan Club, the California Club and the Los Angeles Athletic Club erected new buildings on the west side of downtown where property was relatively cheap. Soon the rooming houses, small apartment buildings and ramshackle Victorian homes there gave way. Richfield and other oil companies headquartered there, the seeds of today’s financial district.
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In “the Jetsons era,” as Fischer described the 1960s, corporate leaders viewed the Spring Street-centered office district as increasingly obsolete and passé and moved to newer buildings in the financial district. Downtown lost a lot of itslifeblood during that time, he said.
“In the years after World War II, downtown was a shopping, office and entertainment area,” Fischer said. “By the 1960s the office component had shifted west, most entertainment went to suburbs and housing just evaporated.”
Among the big businesses with offices in the west were the Richfield, Union, Signal, National and Superior oil companies. Pacific Mutual Life Insurance Co. was headquartered there and Bank of America had a big presence.
The boundaries of the financial district are not officially outlined, but property brokerage CBRE defines it as the office center south of Bunker Hill and 4th Street, flanked on the west by the 110 Freeway and on the east by Hill Street and extending south to 8th Street.
By the 1980s, much of downtown was moribund; buildings that once thrummed with commerce were dilapidated and vacant or underused. There were pockets of vibrancy, notably the Jewelry District and a Latino-centric shopping zone that emerged among aging buildings along Broadway in the Historic Core. The Civic Center around City Hallremained one of the largest concentrations of public administrative buildings in the country, employing thousands of workers.
But the financial district was the shinythriving part of the city, a high-rise office park for lawyers, bankers and accountants who piled into their cars for a mass exodus at the end of each workday.
To many, the neighborhood felt like a corporate fortress, invisibly walled off from the rest of downtown. Business leaders were painfully aware that downtown L.A. lacked the vibrancy of other big cities because it had so few residents, but was stuck in a chicken-and-egg dilemma: People didn’t want to live there because it lacked restaurants, grocery stores and other typical city-life amenities, but merchants didn’t want to set up shop because few lived there.
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The stalemate began to break around 2000 with an ordinance that made it easier to redevelop obsolete office buildings into housing. The relocation of the Lakers, Clippers and Kings pro sports teams to the new downtown arena then known as Staples Center brought thousands of sports and music fans and led a wave of development south of the financial district.
Decades of efforts to add rail service and thousands of apartments and condominiums helped create a more vibrant downtown that was taking on the flavor of other big cities before the pandemic.
“All of a sudden people were walking dogs and pushing baby carriages,” architect Martha Welborne said. “New restaurants came in, even destination restaurants that weren’t just for the people who worked downtown or lived there.”
Fortunately for downtown’s future prospects, its apartment towers remain nearly fully occupied. More than 35,000 units were built after 1999, when so few people lived there that downtown didn’t even have a big-chain grocery store.
Three new hotels have recently opened and a 42-story apartment tower will start leasing later this year. Bottega Louie, one of the region’s top-grossing restaurants before it shut down during the pandemic, reopened in 2021. A few blocks away, legendary Beverly Hills steakhouse Mastro’s also opened a seafood restaurant last year near Crypto.com Arena.
And last week, Metro opened its new Regional Connector, a 1.9-mile underground downtown track adding three stations and linking different lines to make travel more seamless.
Though some business owners have abandoned the financial district, others see an opportunity to get in at an affordable price during what they hope is a temporary economic dip.
Restaurateur Prince Riley recently leased a spot on Grand Avenue that was last home to the Red Herring restaurant. He grabbed it because he liked the location and it was already built-out for upscale dining.
“You can see all the love and care that went into this space,” he said. “They were a casualty of COVID.”
Riley and his wife plan to open their restaurant, named Joyce, in July, featuring a raw bar and Southern-style seafood such as crudo and ceviche. They moved into the apartment building upstairs to be close to it.
The couple like being near Bottega Louie, a popular Whole Foods grocery store and the recently opened Hotel Per La, which took over a lavishly refurbished 1920s building last occupied by another hotel that closed early in the pandemic.
“I can see business picking up,” Riley said. “This is an opportunity from a terrible tragedy like COVID. We wouldn’t have had this otherwise.”
A key factor keeping downtown teetering between recovery and a further downward slide appears to be discomfort with the streets and the sense that they are not as safe as they were before the pandemic.
The blocks close to Metro’s underground 7th Street/Metro Center station, where multiple light and heavy rail train lines meet, are among those that have changed the most since the pandemic as the Metro system struggles to combat rampant drug use and serious crimes such as robbery, rape and aggravated assault on its lines.
Thegrowing number of homeless people on the streets has been an issue in other cities too, said Cognian of Public School 213. His company also closed restaurants in Seattle and San Francisco because customers at their urban locations trickled away as unhoused people commandeered the sidewalks.
“Hopefully, we as a city, as a state, find a solution for the homeless,” he said. “If the homeless situation doesn’t get solved in some fashion that allows tourists, office workers and businesses to operate, it’s just going to bring down the area.”
Real estate broker Derrick Moore of CBRE, who specializes in matching restaurant and shop operators with landlords, said leasing of retail space downtown has improved in recent months, especially compared to the dark days of the 2020pandemic shutdown when downtown fell silent.
“It seems like ancient history,” Moore said, “but it was very devastating to one’s psyche.” And to downtown businesses.
In the wake of the COVID shutdown, downtown overall lost more than 100 food and beverage establishments with a combined footprint of more than 1 million square feet, Moore said.
“That’s restaurants, bars and lounges, juice bars, boutique coffee operators and even national brands,” Moore said. “A good portion of those remain vacant.”
Replacement tenants like Joyce restaurant are starting to come in, he said, with leasing and property showings picking up in the first quarter at a “resoundingly” busier pace than early 2022. Moore has taken potential tenants to the empty Public School space, where across the street the failed Standard Hotel just reopened under new management as the Delphi.
Faced with a challenging market, retail landlords have cut their asking rents as much as 50% from pre-COVID prices, Moore said, and more than doubled the amount they are willing to spend on tenant upgrades such as installing restaurant kitchens and restrooms, and providing periods of free rent.
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The financial district also faces a struggle of changing tastes, with many firms bypassing the gleaming skyscrapers that were the height of prestige in the late 20th century in favor of campus-style offices anda more laid-back vibe.
Even legal firms, long a stalwart in the financial district, are turning elsewhere in some cases. One firm established in February recently opted out of putting its office there.
“When we started to look at space it became very clear to us that locating in the financial district was a very different proposition than it used to be,” said Matt Umhofer, a partner at Umhofer, Mitchell & King. “Downtown has changed dramatically, and we wanted to rethink what it means to be a law firm in Los Angeles and let go of preconceived notions of needing to be in the financial district in order to be relevant.”
The fledgling firm opted instead for an office in Row DTLA, a campus of shops, restaurants and offices created out of century-old warehouses near the Arts District, east of the financial center, even though office rents in the Arts District are often higher than they are in the glitzy skyscrapers.
“The short version is, being in the financial district isn’t as cool as maybe it was in the past,” Umhofer said.
The spotty attendance of office workers has changed the character of business centers across the country, said Mark Grinis, leader of consulting firm EY‘s real estate, hospitality and construction practice.
An analysis by EY found that offices are being used at only 25% to 50% of the level they were before the pandemic.
“In some locations, three-quarters of the people that normally would have gone in, didn’t,” Grinis said. “People are not on the subway, ordering sandwiches at lunch or having a drink after work.”
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Vacant offices and storefronts can hinder recovery, he said, because people shy away from empty spaces.
“Three blocks of vacant houses in a residential neighborhood ultimately becomes a negative,” he said. “An office center is not that different.”
The physical appearance of vacancy becomes more alarming when graffiti, litter and grime follow and create a bad “multiplier effect,” Grinis said.
Stopping the spiral starts with making the streets safe and getting homeless residents into better housing, but there are also public policy decisions that could help landlords convert office buildings to housing if they are no longer competitive on the office leasing market.
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And the market has been brutal. Owners of some of downtown’s office high-rises have faced defaults, foreclosures and rushed sales in the face of falling demand, real estate data provider CoStar said.
The owner of two of the financial district’s premier office towers, 777 Tower and Gas Company Tower, said in February that it defaulted on loans tied to the buildings. Other high-rise owners are in similar straits.
In the face of rising vacancy rates, “those defaults could signal pain to come for the 69-million-square-foot downtown L.A. office market,” CoStar said.
Owners of buildings facing foreclosure sometimes don’t have enough money to build out new tenants’ offices, as is customary, which hinders strapped landlords from recovering financially.
Commercial landlords are getting hit on multiple fronts, said Jessica Lall, managing director of the downtown office of CBRE.
“What we’re seeing is a perfect storm when it comes to the office distress in downtown L.A.,” she said.
Loans on large-scale properties are maturing at a time when interest rates are high, making refinancing a challenge, Lall said. There is widespread uncertainty among tenants about how much space they will need to rent in the future if employees work remotely at least some of the time.
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Those issues are compounded by “the general perception around downtown being unsafe,” she said. “All urban centers are grappling with that issue right now.”
The downtown office vacancy rate — the share of total space that is unleased — climbed to 24% in the first quarter, up from 21.1% a year ago, according to CBRE. More empty space is coming, the brokerage said, pushing estimated availability to a daunting 30% as some companies shrink their offices or move away from downtown.
Law firm Skadden, for example, a large longtime tenant in downtown’s Bunker Hill district, has decided to move its offices to Century City .
The landlord of the U.S. Bank Tower, downtown’s tallest office tower at 72 stories, remains bullish on the market in spite of its troubles and recently spent $60 million to make the building more attractive to tenants by adding hotel-like amenities.
“People need offices,” said Marty Burger, chief executive of Silverstein Properties, which owns the tower. “Not every company in every industry needs an office, but the majority of them do.”
Among the reasons for offices are collaboration and education, he said. “How do you mentor the young folks who are coming up in your industry if the older people aren’t in the office for younger people to learn from? There is a whole ecosystem where you need people in an office now.”
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Companies may end up using their offices fewer days of the week than they used to as remote work and shortened schedules grow in popularity, he acknowledged: “Fridays may never be Fridays again.”
Burger says his optimism about downtown L.A.’s potential for improvement has a foundation in New York, where Silverstein built One World Trade Center on the site of the Twin Towers.
“After 9/11, everyone said that no one would ever live there or work there again,” Burger said.
In 2001, the neighborhood had about 20,000 residents and saw little activity after office hours. Now rebuilt, the neighborhood has about 75,000 residents and a greater mix of office tenants including businesses in tech and advertising in what was mostly a banking center before, Burger said.
“It’s a vibrant 24/7 community,” he said.
Many see this as the best future for L.A.’s financial district.
The city’s tight housing market combined with the downturn in office rentals opens the possibility to convert some office buildings into housing or hotels.
More residents and visitors would make the neighborhood more dynamic and better able to support restaurants, shops and nightlife, said Griffin, executive director of the privately funded Downtown Center Business Improvement District, a nonprofit coalition of more than 2,000 property owners.
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“If we trade some office for residential, that’s a good thing.”
The pandemic’s blow to the office market “is an opportunity that none of us ever imagined happening,” Welborne said, “transforming office buildings into residential buildings and reimagining our entire downtown.”
Mortgage rates are more than double what they were this time last year. Homes are sitting on market longer and longer, and there’s a major disconnect between buyers and sellers. In Andrew Perrie’s market, the average offer coming in now is $200,000 below asking price. On today’s State of the Market podcast, we give our predictions on rate reductions, share strategies for getting deals done right now, and offer encouragement to agents who are struggling with slowing sales.
Listen to today’s show and learn:
Seven rate increases in Canada since February [3:20]
How real estate markets in Canada have changed since early 2022 [4:07]
Texas real estate markets [5:34]
The biggest problem with traditional listing strategies right now [7:35]
Setting expectations with today’s sellers [8:47]
Houses not getting offers at asking price [11:14]
Wholesalers tying up and reselling homes in Texas [16:21]
Investors with ARM loans running into trouble [20:06]
Canadian real estate investors writing off losses [21:44]
Pivoting away from online leads [26:15]
Ideas for in-person real estate events [26:58]
Goals to grow a real estate business in 2023 [29:59]
Andrew’s predictions on rate reductions [38:12]
Canada’s home shortage [40:05]
The buyers winning in this real estate market [42:57]
Where to find and follow Andrew Perrie [45:52]
Andrew’s final thoughts [46:17]
Related Links and Resources:
Thank You Rockstars!
It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email. -Aaron Amuchastegui
Starting a Roth IRA is one of the easiest — and best — steps you can take to save for retirement. But you should understand the Roth IRA rules before investing in them.
I know I’ve written a lot about the Roth IRA in the past, but I still get questions all the time. People find them intimidating. For example, Lynn wrote last week:
I’m a 36-year-old single mother of two. I want to start investing for my future, but I am so overwhelmed by all the information. I was wondering if you could give me some advice on my best options for a Roth IRA. I am a school teacher and earn $41,000 per year.
I am going to do more research, but I would appreciate some advice from someone who already has expertise in this area. I am not sure what I need to start a Roth IRA, or who I should go with. I don’t know much about mutual funds or anything of that sort, so any help and advice would be appreciated.
Let’s clear things up: A Roth IRA does not need to be confusing. In fact, a Roth IRA is actually fairly easy to understand.
Note: This post is going to keep things basic. For more detailed info, see the resources at the end of this article, or consult a financial planner.
Roth IRA Basics
The Roth IRA is an individual retirement arrangement: It lets you save and invest for your future. An IRA is simply a holding account. It’s a label. When you own a Roth IRA, it contains nothing. It’s like a bucket, a place for you to put things. (Most people think of an IRA as an individual retirement account, which is fine, but it’s actually an “arrangement.”)
The things you put in your bucket are investments. You might, for example, buy a stock to put in your retirement account. Or maybe government bonds. Or certificates of deposit. The important thing to understand is that a Roth IRA is not an investment — it’s a place to put investments.
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With many retirement accounts — such as 401(k)s and traditional IRAs — you contribute pre-tax money and are taxed when you take the money out during retirement. Because they work with after-tax money, earnings from a Roth IRA can be withdrawn tax-free at retirement.
Roth IRA Rules and Requirements
Because Roth IRAs are meant to encourage ordinary people to save for retirement, not everyone qualifies for them. If you do qualify, you can contribute up to $5,000 to your Roth IRA every year. If you’re 50 or over, you can contribute $6,000.
Who qualifies? Nearly everyone. However:
If your tax filing status is single and you earn more than $105,000 per year, your contributions are restricted.
If you’re married filing jointly, your contributions are limited if your household earns more than $160,000 per year.
You can use a Roth IRA even if you have a 401(k) or other retirement plan, but you must make your contributions by the tax deadline each year.
The rules are a little more complex than that, but those are the basics. If you need more info, take a look at the resources listed at the end of this article.
Where to Open a Roth IRA
Deciding where to start your Roth IRA is the most difficult part of the process. Many financial institutions offer IRAs. Each has its own strengths and weaknesses. Don’t fret about finding the perfect match — find a good match and then get started.
To make things simple, here are four big companies that provide Roth IRAs (though these are by no means your only options):
Fidelity Investments offers a no-fee IRA. There’s a $2,500 minimum initial investment, but this is waived if you commit to $200/month automatic contributions. They offer 4,600 mutual funds, about a quarter of which have no transaction fee. In short, you can open a no-cost IRA at Fidelity with a $200 starting investment if you invest in mutual funds and you agree to contribute $200/month. Apply for a Roth IRA with Fidelity.
It’s also possible to open a no-cost Roth IRA at The Vanguard Groupif you elect to receive electronic statements. Otherwise, a $20 annual fee is charged until your Roth IRA balance is over $10,000. Your minimum to get started is $3,000 — except that you can start with just $1,000 in the company’s STAR fund. (The STAR fund is an mutual fund of mutual funds, a safe choice for beginners.) Additional contributions require a minimum of $100 unless you use their Automatic Investment Plan, in which case the minimum is $50. There are no fees to purchase the STAR fund. Start a Roth IRA at Vanguard.
T. Rowe Price charges $10/year for Roth IRA accounts until you have a balance above $5,000, after which there is no fee. You need $1,000 to open your IRA, but this minimum goes away if you sign up to contribute at least $50/month with the Automatic Asset Builder. There are no sales fees or commissions to invest this money in T. Rowe Price mutual funds. Open an IRA at T. Rowe Price.
Scottrade resists charging its customers set-up, annual or maintenance fees for its online trading services and also offers them the opportunity to get a refund of up to $100 in transfer fees from other brokers for bringing their Roth IRA to Scottrade. Scottrade’s pricing on trades is fairly simple: $7 for stocks $1 and above for online market and limit equity orders. You might also consider a Scottrade checking, savings or money market account. These can be joined with a trading account to help easily fund transactions.
Opening a Roth IRA is easy. You’ll need some minimal bank account info and about 30-60 minutes of free time. If you’ve ever filled out a job application or applied for a credit card, you can certainly open a Roth IRA. Once you’ve completed your application, you can transfer money to the account. It might have to sit in a money market fund until you have enough saved to buy your first mutual fund, but that’s okay. You’re developing the saving habit!
Note: I’m a big fan of automatic investment plans. Most of these companies offer some sort of program that will pull money from your bank account every month to invest in stocks or mutual funds that you designate. By setting aside $50 or $100 or $500 in this way, saving becomes a habit.
Which Investments to Choose
Here’s where I cop out. I’m not a financial adviser. I don’t know your goals or risk tolerance. I can’t tell you were to invest.
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And to be honest, where you invest doesn’t matter nearly as much as the fact that you do invest. To get some ideas, browse through the investing archives here at Get Rich Slowly. (Maybe start with these “lazy portfolios.”)
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If you’re really stressed, pick a target-date fund that most closely matches the year you’ll retire. This probably isn’t the best option, but it’s fine. Just use it while you get in the habit of making contributions. You can always switch the money to something more appropriate later.
Related >> Choosing a Target-Date Fund
Learning More About the Roth IRA
In 2007, I ran a four-part series exploring the benefits of a Roth IRA. If you need more info about these accounts — or if you have questions — you should start here first:
I’ve revised these articles and compiled them into a free e-book called The Get Rich Slowly Guide to Roth IRAs (518kb PDF). (Note that this e-book was produced in April 2008, so some of the info is a little out of date, especially about Zecco.) And if you want the official word on the subject, check out IRS publication 590, which is all about IRAs.
Now’s the part where you can tell Lynn how easy it is to set up a Roth IRA. (And share what sort of things you’ve invested in.) My own Roth IRA started with stupid stock picks (Countrywide, The Sharper Image) and has moved toward index funds. I’m all about making things easy right now!