Wells Fargo announced today that it expects to report record first quarter earnings of $3 billion thanks in part to the current mortgage bonanza.
“Business momentum in the quarter reflected strength in our traditional banking businesses, strong capital markets activities, and exceptionally strong mortgage banking results,” said Chief Financial Officer Howard Atkins, in a release.
“$100 billion in mortgage originations, with a 41 percent increase in the unclosed application pipeline to $100 billion at quarter end, an indication of strong second quarter mortgage originations.”
The San Francisco-based bank and mortgage lender said it realized roughly $175 billion in loan commitments, mortgage originations, and mortgage securities purchases during the quarter.
The company processed $190 billion in mortgage applications for more than 800,000 customers, a 64 percent increase from the fourth quarter, aided by a record $83 billion month in March.
Additionally, Wells funded more than $100 billion in mortgage loans, serving over 450,000 borrowers via purchase mortgage or refinance transactions.
I wonder what kind of mortgage market share Wells Fargo and Bank of America will end up with this year.
The bank also provided 150,000 “mortgage solutions,” such as loan modifications and repayment plans, to help homeowners stay put during the quarter.
Wachovia has also been a welcome addition to the bank, contributing about 40 percent of combined revenue.
“With the acquisition of Wachovia, we’re now serving almost one of every three U.S. households. Revenue synergies from cross-sell are a huge opportunity much like the Wells Fargo-Norwest merger ten years ago,” Atkins added.
But what about all those billions in option-arms? At some point they will be a big, big problem, whenever they decide to charge them off. Moratoriums don’t last forever.
Shares of Wells Fargo were up nearly three dollars, or about 20 percent, to $17.71 in midday trading on Wall Street.
The weather is finally beginning to cool off and Halloween is just around the corner. Oh, and The Walking Dead is back on TV. It must be fall.
Surely that means homes sales are going to slow down after the traditionally busier spring and summer sessions have now come to a close.
But aside from fewer transactions, there’s now talk (fear) about lower home prices as well, and even mention of a “triple dip” in home prices.
Will Home Prices Dip for a Third Time?
Lately, the stock market has been taking a beating thanks to weak global growth prospects and a number of geopolitical issues. In fact, the Dow recently turned negative for the year.
Does that mean home prices are going to follow a similar path? Are all those months of massive appreciation going to catch up to us?
I think everyone remembers home prices peaking around 2006 before taking a major dive. What followed was the worst housing crisis in recent memory. Foreclosures, short sales, loan mods, etc.
Then policymakers worked to buoy the housing market through a variety of efforts, including the popular first-time home buyer tax credit.
That pushed home prices higher in 2009 and 2010, but once the credit expired home prices turned negative yet again.
So now that home prices are hitting new record highs in many states (10 in August per CoreLogic) and the Fed is planning to halt its purchases of mortgage-backed securities, are we slated for a third decline?
After all, if home prices are no longer cheap and mortgage rates aren’t that low (they still are for now), the incentive to buy might not be very strong.
The latest release from the S&P/Case-Shiller Home Price Indices revealed that home price appreciation had declined markedly in July.
Nationally, home prices were up just 0.5% from June to July, compared to 0.9% from May to June. And none of the cities in the 20-City Composite saw home price gains improve on a year-over-year basis.
In San Francisco, home prices fell 0.4% from June to July, the largest decline since February 2012. Many suspect it could be in bubble territory right now, though others refer to it as an affordability crisis.
Meanwhile, only three cities (Las Vegas, Miami, SF) in the 20-City Composite posted double-digit gains year-over-year in July, though all 20 remain positive.
So the issue at the moment is decelerating home price gains, not falling home prices. The trend is expected to continue and some fear the housing market could weaken to the point where prices eventually go negative again.
Real Estate Not a ‘Screaming Bargain’
A commentary released last week by Wells Fargo addressed the potential of a triple dip in housing, and the good news is that the economists are confident we can avoid one.
They noted that despite recent deceleration, home price gains remain solidly in positive territory on a year-over-year basis.
In other words, it would take something really significant to push us into negative territory again after the recent stellar gains we’ve already realized.
The economists attributed the slowing of home price gains to a shift in the composition of the market, with single-family investors exiting faster than traditional and first-time home buyers are arriving.
However, they point to a “lean” inventory of homes for sale, coupled with fewer delinquencies and improved credit availability (even if Bernanke can’t get a mortgage), so demand doesn’t necessarily need to be very strong to stay the course.
At the same time, they did add that the strong run of pricing power has come to an end, forcing builders to turn to incentives to sell new homes with affordability now under threat.
And they expect “much more modest” home price gains in 2015 and 2016, arguing that homes are no longer a “screaming bargain” today. By the way, the investors that have since left the market were the ones who drove prices up.
So be careful when buying a home today. Sure, the downside risk might not be what it was in 2006 or 2010, but the upside is also much more limited.
With many states already enjoying new record highs, you have to wonder if we haven’t reached a near-term peak in home prices.
Read more: Home Prices to Peak in 2016, Then Do Nothing Through 2022
Teresa Bryce Bazemore, who held a front-row seat during the bank liquidity crisis this year as president and CEO of the Federal Home Loan Bank of San Francisco, plans to retire when her term expires in 2024, citing personal reasons.
The San Francisco bank’s board chose not to renew Bazemore’s contract after she asked to retire in 2025, though her contract expires in 2024. The board instead initiated a search for a new CEO, said Simone Lagomarsino, the board’s chairman, who also is president and CEO at Luther Burbank Savings.
Bazemore “indicated that, due to personal and other considerations, she would like to retire in March 2025,” Lagomarsino said in a press release. “As a result, and in consultation with Teresa, the board has decided to move forward with a search to identify a new CEO who will deliver long-term continuity and engaged leadership.”
The decision followed “extensive deliberation and discussion” about the Home Loan bank’s long-term goals, including “the implementation and integration of strategic changes that may arise from the ‘FHLBank System at 100’ review currently being conducted by the Federal Housing Finance Agency,” Lagomarsino said in the release. “The board recognized the critical importance of a CEO who would be engaged for the next several years to lead the organization forward and implement a vision and strategy to align with the outcome of the FHFA’s review.”
The San Francisco Home Loan Bank played a central role in the bank liquidity crisis in March, when it served as lender of next-to-last-resort to Silicon Valley Bank, which was taken over by the Federal Deposit Insurance Corp. and ultimately sold to First Citizens BancShares in Raleigh, N.C. Other major borrowers of the San Francisco Home Loan bank this year included San Francisco-based First Republic Bank, which was sold to JPMorgan Chase in May, and Silvergate Bank of La Jolla, Calif., which self-liquidated in March.
Last year, Bazemore earned $2.4 million, which included a base salary of $910,000 and other incentive compensation. When she joined the San Francisco Home Loan bank in 2021, she received a $100,000 signing bonus. Her employment agreement provides for 12 months of severance pay, equal to her base salary, plus other awards, according to the Home Loan banks’ combined financial report for 2022.
Last year, the Federal Housing Finance Agency that oversees that Home Loan bank system, launched a holistic review of the government-sponsored enterprise, its first in 90 years. Critics have questioned the system’s hybrid public-private business model and whether the banks are engaged in the primary mission of supporting housing. FHFA Director Sandra Thompson is set to issue a report with policy and congressional recommendations sometime later this year.
Separately, Fitch Ratings on Thursday downgraded certain ratings of the Federal Home Loan banks of Atlanta and Des Moines citing the “high and growing general government debt burden,” of the U.S. government. The ratings actions followed the downgrade of the U.S. to ‘AA+,’ from ‘AAA.’
The Home Loan banks are bank cooperatives that provide low-cost funding to 6,500 members including banks, insurance companies and credit unions. Created in 1932 to bolster housing during the Depression, the system incentivizes banks to buy mortgage-backed securities and agency bonds that can be pledged as collateral in exchange for liquidity.
Redfin was in the red yet again in the second quarter, but its losses are narrowing and it’s tweaking its unique brokerage model to court more experienced agents in pricey coastal areas.
Redfin’s financials
Revenues at Redfin fell 21% year-over-year to $275.6 million, down from $606.9 million a year earlier. The brokerage and portal’s real estate services division, its principle source of revenue, dropped to $180.6 million, a 28% decline. In all, Redfin registered a $27 million net loss for the quarter, a 64.9% year-over-year decline from the $78.1 million loss in the second quarter of 2022.
Redfin’s mortgage revenue was $38.4 million, down 28% year-over-year. Its attach rate was 19%, down from the 20% last quarter.
In an earnings call with analysts on Thursday, Redfin founder and CEO Glenn Kelman said high mortgage rates and a frozen existing-home sales market resulted in a slowdown for Redfin’s salaried agents and it will likely continue for a few more quarters.
“Sales volume is near rock bottom,” he said.
The company expects to break-even on an adjusted-EBITDA basis over the next 12 months, rather than reach that goal by the end of 2023, which Kelman described as “a setback.” He did note that company expects to improve its adjusted EBITDA this year by more than $140 million.
Redfin’s market share in the second quarter of 2023 declined nearly 10% on an annualized basis to 0.75%. Revenue per transaction dropped 2.88% year over year to $10,224, the company said.
Kelman told analysts that agent layoffs forced the company to reassign about a third of its active customers, and the closure of ibuying arm RedfinNow eliminated 12% of its listing demand.
On a positive note, Kelman said the portal’s visitor gains increased 9% annually in the second quarter of 2023. Without naming the rivals, he said Zillow and Realtor.com declined in visitors. He also spoke of an improving the user experience with artificial intelligence and the promise of its burgeoning rental platform.
A more ‘traditional’ approach to brokerage
Perhaps the most interesting talking point on the call was Redfin’s embrace of what could only be described as a more traditional real estate brokerage model.
Redfin is eschewing junior agents and its high-fixed cost, salaried approach in targeted coastal markets. Instead, it’s looking to hire more experienced agents in high-priced areas, and Kelman said the brokerage is targeting the San Francisco and Los Angeles markets for a pilot program.
“In the San Francisco Bay Area, our share is below 2%, but the share of people who bought a home and who had earlier contacted our agents for service is nearly 30%. It’s even higher for purchases above $1 million,” Kelman said, adding that “anyone launching a brokerage today with that much demand would have a massive advantage in recruiting and retaining the best agents.”
Starting in 2024, Redfin plans to give agents in the L.A. and San Francisco “the lion’s share of the commission” on self-sourced sales “while keeping for ourselves the high margins on Redfin-sourced sales,” Kelman said.
Redfin’s goal, he said, is “to hire and keep agents who can deliver better service and higher close rates for Redfin-sourced customers buying homes above $1 million and incremental profits from their own sales, too.”
If the pilot is a success, it will be rolled out to additional coastal markets.
“This is just a more traditional salesperson who wants to augment his or her income with Redfin-sourced sales and we’re switching our existing agents in those pilot markets to this pay plan,” he said.
“So, usually, the trade-off at Redfin when we approach agents is you’ll get more Redfin customers, but at a lower split. So, you have to close more sales to make the same amount of income or more income. Now, we’re trying to offer agents the best of both worlds where we allow agents to close sales from their personal network at a split with Redfin.
“That’s similar to what they would get at a traditional broker while retaining the high margins on Redfin-sourced sales. So, let’s say an agent has closed 10, 15 sales in California above $1 million, they could come over to Redfin and earn about the same income, but we could help them meet customers to close another 10 or 15 sales. And that would be incremental, and that would be at the Redfin margin. This is what our competitors fear we would do.”
Travelers are flocking away from overcrowded airport terminals and into airport lounges. And so, these lounges have a problem. The exclusive spaces that purportedly offer a refuge from packed airports have become just as chaotic as the general terminals.
Overrated or not, airport lounges still tend to stand superior to most airport terminals. In a lounge, travelers can at least munch on a cheese cube without boarding announcements blaring from the loudspeaker.
As a result, people go to great lengths to enter them. They pay hundreds of dollars in annual fees for credit cards that offer lounge access. They linger outside lounges until their names are off the waitlist.
But now, lounge operators have had to step in to reduce overcrowding. Many lounges often have standing room only, while other lounges enforce entry waitlists to prevent the problem entirely. In 2023, Delta Sky Club increased membership and guest fees and put a limit on how many hours people can spend in the lounge. Meanwhile, American Express made its Centurion Lounge guest policy more stringent to cut back on how many people can gain access.
The problem isn’t so much an obsession with airport lounges. Instead, it’s that most U.S. airport terminals are abysmal for a variety of reasons.
Reduced resources and dated design impact terminals
U.S. airports have a backlog of both approved and necessary infrastructure improvements that’s projected to cost $151 billion, according to Airports Council International-North America (ACI-NA), an airport trade association that represents about 300 airports in the U.S. and Canada. That’s a 31% increase from the $115 billion backlog cited in 2021. ACI-NA has pointed to inflation as one reason that figure ballooned.
A key revenue source for airport upkeep and maintenance is a passenger facility charge, which Congress capped at $4.50 per ticket. When the charge was introduced in 1992, it was just $3, but the charge hasn’t been increased since 2001.
For context, $4.50 in 2001 would be more than $7.50 today, according to the consumer price index, giving some reason to believe that the cap should be increased to align with today’s equivalent purchasing power.
When the COVID-19 pandemic cut travel, airports lost income from reduced passenger facility charges, as well as other revenue streams like parking and rental car fees, retail sales and concessions. Even with funding, implementing airport improvements can be slow.
“Overregulation of airport land use decisions have delayed project approvals,” according to the ACI-NA’s 2023 U.S. Airport Infrastructure Needs Report.
Airport design significantly changed after 9/11. The establishment of the Transportation Security Administration (TSA) in November 2001 led to a greater physical footprint for security checkpoints. Unpredictable queues have also increased the number of people in airports, as passengers who might previously have shown up 30 minutes before boarding now arrive much earlier, with hours to spare.
How to make U.S. airports better
If funding weren’t an issue, what improvements could make airport terminals more appealing than lounges?
Activities to pass the time
Singapore’s Jewel Changi Airport won a Tripadvisor Travelers’ Choice award as one of the country’s top attractions. The airport has a seven-story indoor waterfall, a rock wall and a hedge maze.
Airports don’t need to resemble a runway-lined Disneyland, but the best ones have amenities that are especially relevant during long flight delays, like yoga rooms, live music and museums.
Higher ceilings and bigger windows
Not every airport has the benefit of sitting within Grand Teton National Park, but Wyoming’s Jackson Hole Airport — considered one of America’s most charming airports — takes full advantage with soaring windows that frame the mountain range.
Even without picturesque views, other airports could curtail traveler anxiety and claustrophobia with higher ceilings and outdoor seating. Delta Sky Clubs’ Sky Decks are a good example of how airports could build a compelling outdoor space.
Quiet airport programs
In 2018, San Francisco International Airport (SFO) launched a Quiet Airport program. It cut back on sounds emitted from retailers and gate agents, including a reduction in audio paging and boarding announcements for passengers.
Within two years of implementation, SFO officials said that more than 90 minutes of unnecessary announcements had been eliminated daily in its international terminal alone, which they claim makes air travel less stressful for passengers.
Better food
Starbucks and Sbarro might be concession staples, but the best airports are foodie destinations. The 2023 Global Tastemakers Awards from Food & Wine magazine named SFO the winner of Best Airport for Food in America. SFO hosts outposts of beloved local joints, including Ritual Coffee and vegetarian fast food favorite, Amy’s Drive Thru (its owners also run the organic frozen food brand Amy’s Kitchen).
Even if the meals aren’t free (as they typically are in airport lounges), an order of Amy’s mac and cheese — whether the real stuff or vegan — is probably better than a cube of lounge cheese.
Sadly, these examples are the exception, not the norm. For now, options aren’t exactly promising for air travelers — either at crowded and chaotic airport terminals or crowded and chaotic airport lounges.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
This week I’ve got another behind the scenes look into my Sunset Magazine Reimagined Home project for you! For this edition, we’re talking sourcing. It’s often one of the hardest parts of decorating, right? To whet your appetite, here are a few sneak peeks of some of our final finds!
But let’s back up and discuss how I got there.
Finding that one perfect piece for your home can feel like a total needle in a haystack experience. Combing stores takes time and patience. The internet is such a vast and overwhelming place to find things. So where to start?!
The first step is setting parameters to help narrow down your search. To make it easier when shopping for my Sunset rooms, I kept three things in mind: our original room inspiration, scale and color palette. It is so easy to stray off your design path and lust over the next best idea. The key to success is to maintain focus. Eye on the prize my dears!!
Pinterest was also a big help here. As I mentioned during the presentations I gave during Celebration Weekend, Pinterest is a wonderful tool for discovery, inspiration and organization. I follow people on Pinterest with impeccable taste and they were often resources for some of my best finds. I also kept track of every source on room specific Pinterest boards. That way I never lost a single link. The boards also served as mini-lookbooks. I could browse each one to narrow down to the final selections.
This Ombre Console was one of the first pieces I discovered Pinterest. I love that it came from Etsy!! It drove the use of blue tones throughout the rest of my den.
Overall, I kept accessorizing very minimal, so I really wanted each piece selected to make a huge statement on its own! One way to do this is to look for pieces with beautiful lines like the Hexagon Side Table and Oskar Chair. Each have a strong architectural feel.
Or, you can choose to do something in an oversized scale like we did with this Starburst Tray, White Clock, and one of my favorite finds, a Bear Print created by an artist I came across at the Brooklyn Flea Market! Each one added a ton of visual interest. Here are some of our favorite pieces that made the final cut!
get your shop on: 1 // 2 // 3 // 4 // 5 // 6 // 7 // 8 // 9 // 10
Of course this isn’t everything I used in my rooms! I had the opportunity to work with some amazing designers who made or loaned awesome one-of-a-kind, unique, and vintage pieces. We’ll be taking you behind the scenes to some of the designers’ studios and into some gorgeous San Francisco store fronts over the coming weeks. I can’t wait to share them with you!
If you’re in the mood for a fun and cheesy action movie circa the 90s, this list will guide you through a great 90s movie marathon. From corny 90s staples like ticking clocks and invincible heroes to the predictable inspirational speeches, it’s so bad it’s good.
1. Face/Off (1997)
Topping off the list, we have 1997’s Face/Off starring none other than corny movie kings John Travolta and Nicholas Cage. This movie has a respectable rating on IMDb of 7.3 and was nominated for an Oscar for Best Sound Editing.
The plot is certifiably camp: an FBI agent gets a facial transplant to take on the identity of a criminal mastermind that killed his son to stop a terrorist attack. However, the killer whose face he’s transplanting wakes up too soon and is not too thrilled about it.
2. True Lies (1994)
Numerous cinephiles boast about how good True Lies is and recommend it. This 1994 film, directed by James Cameron, stars Arnold Schwarzenegger and Jamie Lee Curtis.
A fearless secret agent who takes down terrorists deals with inner turmoil when he discovers his wife could be having an affair with a used-car salesman while he’s dealing with the takedown of a terrorist who is trying to get nukes into the country.
3. Demolition Man (1993)
Several film enthusiasts insist Demolition Man should be on your corny 90s movie list. It came out in 1993 and stars Sylvester Stallone and Wesley Snipes in a tale about a police officer who has been in suspended animation (frozen) for several years. Now that society is crime-free, he is unfrozen to pursue a nemesis of his that is wreaking havoc on the law-abiding society.
4. Last Action Hero (1993)
One claims Last Action Hero is one of the best answers to a request for corny 90s action movies. Starring the ubiquitous Arnold Schwarzenegger, this 1993 action flick is about how a young movie buff is transported into the cinematic universe of his favorite action movie character thanks to a magic ticket.
5. Point Break (1991)
Point Break was a coveted corny 90s classic on many users’ lists. The movie stars Keanu Reeves and Patrick Swayze, but Reeves’ performance is famously ridiculed in this film. It’s about an FBI agent (Reeves) who infiltrates a group of surfers involved in several bank robberies.
As he befriends the leader of the group Bodhi (Swayze), things get complicated. Despite being directed by Kathryn Bigelow, one of only three women to win an Oscar for Best Director, it’s often lambasted as a terrible film with a cult following. Rated 7.2 on IMDb, it must be a sizeable cult.
6. The Fifth Element (1997)
A film lover listed a bunch of movies, including The Fifth Element, one of my favorites. This is peak Bruce Willis cinema; everyone is at the top of their game. So you have Gary Oldman as the cartoonish villain, Milla Jovovich as the supremely powerful alien in human form with strange orange hair, and Bruce Willis as the former special forces agent who saves the day.
In the future, a cab driver (Willis) accidentally becomes the central target in a search for a legendary cosmic weapon. This 1997 film is clearly loved by most, as it’s rated 7.6 on IMDb.
7. Batman Returns (1992)
Tim Burton’s 1992 Batman Returns is a sequel to Batman. It explores iconic characters like The Penguin, played by Danny Devito, and Catwoman, played by Michelle Pfeiffer, and of course, Michael Keaton stars as Batman. It was nominated for 2 Oscars and has earned a 7.1 rating on IMDb, so corny or not, it’s cemented its way into cinema history as an iconic Batman film.
8. The Rock (1996)
The Rock is a 1996 film that users were most excited about, with one person referring to it as “arguably the pinnacle of the action genre.” It’s rated 7.4 on IMDb and directed by Michael Bay.
A renegade general, played by Ed Harris, threatens the government to launch rockets on San Francisco. Still, a mild-mannered chemist and former convict, played by Sean Connery and Nicholas Cage, team up to stop him.
9. Independence Day (1996)
Independence Day, which landed among a few individual’s lists, is a 90s classic starring Will Smith. This 1996 film is about humankind’s willpower to survive an attack on Earth by an alien race. This huge blockbuster film grossed over $817 million worldwide and has a 7 rating on IMDb.
10. Total Recall (1990)
Yet another Arnold Schwarzenegger film makes this list, with 1990’s Total Recall which is beloved much more than its 2012 remake. Rated 7.5 on IMDb, it’s about a man who has had false memories about living on Mars implanted into his brain, and the people responsible are trying to have him killed.
Source: Reddit.
Who is one actress you can never stand watching, no matter their role? After polling the internet, these were the top-voted actresses that people couldn’t stand watching.
10 Actresses People Despise Watching Regardless of Their Role
These 7 Celebrities are Genuinely Good People
We’ve all heard the famous adage that “no publicity is bad publicity,” and while it tends to be accurate, there are certainly exceptions. But what about those few stars who stay out of the limelight and get along without a hint of trouble?
These 7 Celebrities are Genuinely Good People
Have you ever known someone and thought you liked them—until you learned about their hobbies? Then you get to know them and then you’re like, “Wow, red flag.” Well, you’re not alone.
These 10 Activities Are an Immediate Red Flag
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
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
RealtyTrac has released a new report that identifies potential bubble markets based upon three early warning signs.
There has been increased fear of another housing bubble for a while now, with some markets already identified as bubbles and others supposedly suffering from an affordability crisis.
Signs of a possible housing bubble include the following:
– A market that was less affordable in October 2014 than its peak price during the previous bubble between 2005 and 2008 – A market that was less affordable in October 2014 compared to its historical average since 2000 – A market with a rising foreclosure rate on loans originated this year compared to last year
Overall, the price of a median-priced home required 26% of median income in October in 475 counties nationwide.
This compares to a historical average of 28% going back to January 2000, and is still well below the 41% average seen in each county’s peak month during the most recent housing bubble.
In fact, just six counties were deemed less affordable in October than during their peak between 2005 and 2008, thanks in part to higher incomes and low mortgage rates.
The short list includes Suffolk County, Massachusetts, Travis County, Texas, Jefferson County, Alabama, Brazos County, Texas, Allegan County, Michigan, and Montgomery County, Tennessee.
These counties correspond to the metro areas of Boston, Austin, Birmingham, College Station, Grand Rapids, and Clarksville.
However, 21% of counties nationwide are now less affordable than their historic averages, including hot spots like Los Angeles, Orange County, San Francisco, Dallas, San Antonio, and even parts of Detroit.
Meanwhile, 37% of counties are reporting rising foreclosure rates on loans originated this year compared to last, including places like Chicago, San Diego, Brooklyn, Miami, Las Vegas, and Seattle.
And six percent (30%) of counties are both unaffordable by historic measures and experiencing rising foreclosure rates on recent loans.
This combined problem list includes places like the San Francisco metro area, Suffolk County, Orange County, Honolulu, Denver, the St. George, Utah metro area, and the Bend, Oregon metro area.
RealtyTrac vice president Daren Blomquist noted in the report that affordability and foreclosure rate by loan vintage are key metrics that help determine if a certain market is at risk of another pricing bubble.
He added that about 20% of markets have now surpassed their historical affordability norms, a “strong sign” that a bubble is forming or that appreciation will soon plateau until wages have a chance to catch up.
The fact that foreclosure rates are rising on new loans could be an indication that affordability is once again a concern as buyers stretch themselves too thin.
12% of Counties Have Reached New Home Price Peaks
In October, a total of 58 counties had higher median home prices than their prior peaks seen in 2005 to 2008.
The usual suspects made this list too, including San Fran, New York, Boston, and Denver, along with Charlotte, Raleigh, and Buffalo.
However, low interest rates are keeping homes in these highly sought-after areas affordable. But if rates rise and home prices continue to climb, the story could change in a hurry.
But nearly half (48%) of counties nationwide are still historically affordable and experiencing flat or declining foreclosure rates. So the whole nation isn’t yet at risk of another housing bubble.
The most affordable regions include Lansing, Syracuse, Cincinnati, Atlanta, and Buffalo.
There’s clearly some divergence in terms of affordability and home price peaks. Put another way, some areas of the country are experiencing new all-time highs but are still historically affordable.
The concerning thing is the unaffordable places, especially at a time when interest rates have never been lower. It doesn’t bode well for them or those at new highs, unless interest rates stay low forever.
Read more: When will the next housing crash take place?
Dallas-based Pinnacle Realty Advisors, the world’s pioneering Brokerage-as-a-Service (BaaS) platform, is expanding into the California real estate market. The subscription-based cloud brokerage model, which started in Texas, will now be available to residential and commercial agents in California, ranking as the second strongest real estate market in the US, behind Texas.
“We are proud to offer agents a platform that unlocks vast opportunities for single agents and teams seeking autonomy over their brand and business,” said Sam Sawyer, CEO of Pinnacle Realty Advisors in a statement.
To spearhead their growth in California, the firm appointed Michael Locke as the new Director of Growth for the region. Locke’s extensive experience in the industry, including notable roles at Side and HomeLight, positions him as a valuable asset in providing unparalleled services and support to agents in California.
Deniz Kahramaner, the agent leading the Atlasa team, is the first team addition in California. With an impressive sales record and a high ranking by RealTrends in San Francisco. He shares his perspective, stating, “Their Brokerage-as-a-Service platform combined with their wide knowledge of the region empowers me and my team to take control of our brand and allocate resources wisely, focusing on what truly matters for our specific business.”
Established in 2020, Pinnacle Realty Advisors is a cloud-based real estate brokerage company that offers the world’s first BaaS “Brokerage-as-a-Service” model for agents.
This content was generated using AI and was edited by HousingWire’s editors.
San Francisco-based bank and mortgage lender Wells Fargo is reportedly looking to venture into warehouse lending, according to Bloomberg.
The paper, which cited two people familiar with the matter, said the business would be based out of Atlanta, and headed by Kenneth Lognan, who was acquired via the Wachovia merger.
Back in February, Wells chief John Stumpf said the bank had been out of the warehouse game for at least five years, as the company’s risk appetite was too conservative for the market.
But things have changed in recent months; Wells Fargo was the top mortgage originator in January with $24 billion in first-mortgage loans, beating out rival Bank of America by roughly $1 billion.
Mortgage applications in January and February totaled $107 billion, close to the total during the fourth quarter total of $116 billion, which was up 158 percent from a quarter earlier.
The proposed move comes at a time when warehouse lending has all but dried up, with only $20 to $25 billion in available capacity, down from approximately $200 billion in 2007.
Warehouse lending provides short-term funding to smaller, independent mortgage bankers so they can compete with the likes of larger depository banks and lenders.
Demand has grown recently as mortgage brokers convert to mortgage banks to stay relevant.
Yesterday, Colonial BancGroup Inc. received a $300 million investment from client Taylor, Bean, and Whitaker Mortgage Co., which along with other private investments, will make the large warehouse lender eligible for much needed TARP funds.
Last week, the MBA suggested that new risk-based capital weightings for warehouse lines of credit be slashed so they’re aligned with risks comparable to conventional loans and government-insured mortgage (FHA loan, VA loan) exposures to ease pressure on banks’ balance sheets, a major reason many have left the business.