Step into the world of Iowa’s small towns, where rich history, picturesque landscapes, and warm communities create an inviting tapestry of experiences. From outdoor adventures to local heritage, each town boasts its own unique character. Join us as we embark on a journey to explore the allure of 11 small towns in Iowa.
1. West Point, IA
Median sale price: $102,000
Walk Score: 36
West Point invites you to embrace its small-town ambiance and local offerings. The town’s connection to history is reflected in landmarks like the Santa Fe Depot Museum. Explore the local parks and green spaces, offering a serene escape from daily life. Whether you’re uncovering historical gems or participating in town celebrations, West Point captures the essence of Iowa’s welcoming spirit.
Homes for sale in West Point, IA
Apartments for rent in West Point, IA
2. Wayland, IA
Median sale price: $160,000
Walk Score: 28
Living in Wayland is a rural landscape that is perfect for outdoor enthusiasts, offering opportunities for hiking, birdwatching, and peaceful contemplation. Discover the Crooked Creek Park, which provides a natural retreat for residents and visitors alike. Wayland’s sense of community is celebrated through local gatherings and events.
Homes for sale in Wayland, IA
Apartments for rent in Wayland, IA
3. Danville, IA
Median sale price: $195,400
Walk Score: 17
Nestled amidst rolling hills and sprawling farmlands, living in Danville, means waking up to serene sunrises and enjoying leisurely strolls along the scenic trails of Geode State Park. The small town of Danville has a historic district, featuring charming architecture and local shops. Explore local parks and green spaces that offer recreational opportunities.
Homes for sale in Danville, IA
Apartments for rent in Danville, IA
4. Underwood, IA
Median sale price: $267,500
Walk Score: 11
The town’s scenic beauty is showcased in its parks and outdoor spaces, offering opportunities for picnics, nature walks, and outdoor play. Discover the Underwood community events that foster a strong sense of togetherness. Whether you’re enjoying nature’s tranquility or participating in town celebrations, Underwood captures the essence of Iowa’s peaceful charm.
Homes for sale in Underwood, IA
Apartments for rent in Underwood, IA
5. Maxwell, IA
Median sale price: $157,000
Walk Score: 38
Residing in Maxwell, IA offers a serene escape from the hustle and bustle of city life. The town’s community spirit shines through its local events and gatherings, fostering a sense of unity. The town’s proximity to the scenic Skunk River allows for leisurely outdoor activities like fishing and hiking.
Homes for sale in Maxwell, IA
Apartments for rent in Maxwell, IA
6. Armstrong, IA
Median sale price: $212,500
Walk Score: 23
Living in Armstrong presents a quintessential small-town experience. The town’s tight-knit community fosters strong relationships, where locals share a genuine sense of belonging. The picturesque landscape and nearby Five Island Lake offer opportunities for outdoor adventures like boating, fishing, and hiking.
Homes for sale in Armstrong, IA
Apartments for rent in Armstrong, IA
7. Victor, IA
Median sale price: $144,000
Walk Score: 33
Victor invites you to explore its peaceful surroundings and welcoming atmosphere. Discover the local parks and outdoor spaces that offer opportunities for relaxation and leisure activities. Victor’s sense of community shines through events like the Victor Fun Days, where there will be crafts, live music, amazing food and more. Whether you’re enjoying quiet retreats or participating in town celebrations, Victor captures the essence of Iowa’s serene charm.
Homes for sale in Victor, IA
Apartments for rent in Victor, IA
8. Redfield, IA
Median sale price: $178,000
Walk Score: 21
Known for its welcoming demeanor, Redfield offers a quiet and peaceful lifestyle with strong ties among its residents. The town’s proximity to the Raccoon River Valley Trail invites outdoor enthusiasts to enjoy biking and hiking adventures. Redfield beckons you to discover its small-town warmth. The town’s sense of unity is reflected in local events and festivities that bring residents together.
Homes for sale in Redfield, IA
Apartments for rent in Redfield, IA
9. Colo, IA
Median sale price: $185,000
Walk Score: 25
Surrounded by picturesque farmlands, Colo offers a tranquil and peaceful environment. The town’s sense of unity is celebrated through local events and gatherings that foster a strong sense of community. Colo’s commitment to its residents is evident in events like the Colo Crossroads Festival. Living in Colo means embracing the simplicity of rural life while cherishing the connections forged within the town’s friendly and supportive community.
Homes for sale in Colo, IA
Apartments for rent in Colo, IA
10. Long Grove, IA
Median sale price: $593,960
Walk Score: 25
Long Grove invites you to explore its unique charm and local treasures. Known for its historic architecture and scenic landscapes, the town exudes a tranquil ambiance. The annual Long Grove Strawberry Festival is a highlight, bringing the community together to celebrate local traditions and flavors. Living here means relishing in the beauty of the countryside, preserving the town’s historical character, and cherishing a strong sense of community identity.
Homes for sale in Long Grove, IA
Apartments for rent in Long Grove, IA
11. Sully, IA
Median sale price: $136,000
Walk Score: 34
Sully’s connection to its residents is celebrated through local events and gatherings that bring neighbors together. Explore the local parks and green spaces that offer opportunities for relaxation and outdoor enjoyment. Sully’s commitment to its community is evident in events like the Sully Freedom Fun Run/Walk.
Homes for sale in Sully, IA
Apartments for rent in Sully, IA
Wrapping up small towns in Iowa
From historic districts to outdoor retreats, each town invites you to immerse yourself in its local charm and celebrate the warmth of community spirit. Whether you’re drawn to historic streets, natural beauty, or engaging gatherings, Iowa’s small towns offer a rich tapestry of experiences waiting to be explored.
During the initial wave of the banking crisis in March, I published “Truist: Immense Unrealized Bond Losses Threaten Core Equity Stability.” At the time, Trust Financial Corp. (NYSE:TFC) had suffered the most significant drawdown among the top-ten US banks. Roughly five months ago, I was among the few analysts with a definitively bearish outlook on the bank, while many had viewed it as a dip-buying opportunity. My perspective was that although TFC’s “bank run” risk was low, the vast extent of its off-balance sheet losses left it with little safety for a potential rise in loan losses. Further, I expected that growing net interest margin pressures would substantially lower the bank’s income over the coming year, potentially compounding its risks.
Since then, TFC has declined by an additional ~11% in value and recently retraced back near its May bottom, associated with the failure of the Federal Republic. I believe the most recent wave of downside in at-risk banks is a notable signal that the market continues to underestimate systemic US financial system risks. Of course, following TFC’s most recent bearish pattern, I expect many investors to increase their position, viewing the company as significantly discounted. Accordingly, I believe it is an excellent time to take a closer look at the firm to estimate better its discount potential or the probability of Truist facing much more significant strains.
Estimating Truist’s Price-to-NAV
On the surface, TFC appears to have considerable discount potential. The stock’s TTM “P/E” is 6.3X compared to a sector median of 8.7X. Its forward “P/E” of 7.7X is also below the banking sector’s median of 9.3X. TFC’s dividend yield is currently at 7.2%, nearly twice as much as the sector median of 3.7%. Finally, its price-to-book is 0.66X, considerably lower than the sector median of 1.05X. Based on these more surface-level valuation metrics, TFC appears to be around trading around a 25% to 35% discount to the banking sector as a whole. Of course, we must consider whether or not this apparent discount is pricing for the bank’s elevated risk compared to others.
Importantly, Truist is one of the most impacted banks by the increase in long-term securities interest rates, giving the bank huge unrealized securities losses. Based on its most recent balance sheet (pg. 12), we can see that Truist has about $56B in held-to-maturity “HTM” agency mortgage-backed-securities “MBS” at amortized cost, worth ~$46B at fair value, giving Truist a $10B loss that is not accounted for in its book value. That figure has remained virtually unchanged since its Q4 2022 earnings report through Q2 2023; however, it will rise with mortgage rates since higher rates lower the fair value of MBS assets. Truist’s Q2 report also notes that all of its HTM MBS securities are at due over ten years, meaning they’re likely ~20-30 year mortgage assets that carry the most significant duration risk (or negative valuation impact from higher mortgage rates).
Significantly, the long-term Treasury and mortgage rates have risen in recent weeks as the yield curve begins to steepen without the short-term rate outlook declining. See below:
From the late 2021 lows through the end of June, the long-term mortgage rate rose by around 4%, lowering Truist’s MBS HTM assets fair value by ~$10B, while its available-for-sale securities lost ~$11.9B in value (predominantly due to MBS assets as well). Accordingly, we can estimate that the duration of its securities portfolio (almost entirely agency MBS) is roughly $5.5B in estimated losses per 1% increase in mortgage rates. Since the end of June, mortgage rates have risen by approximately 35 bps, giving TFC an estimated Q3 securities loss of ~$1.9B. Around $1B should show up on TFC’s balance sheet and income, while ~$900M will remain unrealized based on its current AFS vs. HTM portioning.
For me, we must value TFC accounting for both. Total unrealized losses and estimated losses based on the most recent changes in long-term interest rates. That said, should mortgage rates reverse lower, Truist should not have that $1.9B estimated securities loss in Q3; however, should mortgage rates continue to rise, the bank should post an even more considerable securities loss. At the end of Q2, Truist had a tangible book value of $22.9B. After accounting for unrealized losses, that figure would be around $12.9B. After considering the losses associated with the recent mortgage rate spike, its “liquidation value” is likely closer to $11B. Of course, Truist has a massive ~$34B total intangibles position due to goodwill created in its acquisition spree over the past decade. Although relevant, I believe investors should be careful in accounting for goodwill due to the general decline of the financial sector in recent years.
While much focus has been placed on unrealized securities losses, the risk associated with those losses is vague. Truist can borrow money from the Federal Reserve at par against those assets, partially lowering the associated liquidity risk. However, the Fed’s financing program is at a much higher discount rate (compared to deposit rates) and only lasts one year, so it is not a permanent solution. Further, the unrealized securities losses are on held-to-maturity assets, meaning it will recoup the losses should the assets be held to maturity. Of course, that means it may take 20-30 years, and Truist may need that money before then.
Further, Truist has a substantial residential mortgage portfolio at a $56B cost value at the end of Q2 (data on pg. 48). Those loans had an annualized yield of 3.58% in 2022 and 3.77% in 2023; since the yield did not rise proportionally to mortgage rates, we know the vast majority of those loans are likely fixed-rate long-term. Since they’re not securities positions, Truist need not publish their changes in fair value; however, should Truist look to sell its residential mortgages, they would almost certainly sell at a similar total discount to its MBS assets, considering its yield level is akin to that of long-term fixed-rate mortgages before 2022. I believe the unrealized loss on those loans is likely around $10B.
The rest of Truist’s loan portfolio, worth $326B at cost, is predominantly commercial and industrial ($166B), “other” consumer ($28B), indirect auto ($26.5B), and CRE loans ($22.7B). Excluding residential mortgages, all of its loan portfolio segments have yields ranging from 6-8% (excluding credit cards at 11.5%), with those segments’ total yields rising by around 3-4% from June 2022 to 2023. Accordingly, it is virtually certain that most of its non-mortgage loans are either short-term or fixed-rate since their yields rose with Treasuries, meaning they do not likely face unrealized losses based on the increase in rates.
Overall, I believe that if Truist were to liquidate its assets, its net equity value for common stockholders would be roughly zero, technically $1B. That figure is based on its current tangible book value, subtracting known unrealized losses on securities (~$10B), estimated recent Q3 realized and unrealized losses (~$1.9B), and estimated unrealized mortgage residential loan losses (~$10B). While the bank does have some MSR assets, worth ~$3B, that are positively correlated to rates, I do not believe that segment will offset unrealized losses in any significant manner. Together, those figures equal its tangible book value and would lower the total book value to about $34B. However, in my view, intangibles are not appropriate to account for today because virtually all banks have lost value since its 2019 merger, making its goodwill an essentially meaningless figure.
From a NAV standpoint, TFC is not trading at a discount and is most likely trading at a significant premium. Further, based on these data, Truist is, in my view, seriously undercapitalized. Although TFC posts a CET1 ratio of 9.6%, which is also relatively low, its common tangible equity would be essentially zero if its loans and securities were all accounted for at fair value. To me, that is important because most of its losses are on ultra-long-term assets so it may need that lost solvency sometime before those assets’ maturity. Further, even its 9.6% CET1 ratio is close to its new regulatory minimum of 7.4%, so a slight increase in loan losses or a realization of its estimated ~$22B in unrealized losses would quickly push it below the regulatory minimum.
Truist Earnings Outlook Poor As Costs Rise
To me, Truist is not a value opportunity because it is not discounted to its tangible NAV value. Even its market capitalization is around 65% above its tangible book value, which does not account for its substantial unrealized losses. However, many investors are likely not particularly concerned with its solvency, as that could not be a significant issue if there are no increases in loan losses, declines in deposits, or sharp NIM compression. If Truist can maintain solid operating cash flows, that could compensate for its poor solvency profile.
Of course, TFC cannot continue to try to expand its EPS by increasing its leverage since it is objectively overleveraged, nearly failing its recent stress test. On that note, poor stress test results are essential, but “passing” is somewhat inconsequential, considering most of the recently failed banks would have passed with flying colors, as the test does not account for the substantial negative impacts of unrealized losses on fixed-income assets. That is likely because, when “stress testing” was designed, it was uncommon for long-term rates to spike with inflation as it had, and banks had much lower securities positions compared to loans. Thus, it is quite notable that TFC nearly failed a test that does not account for its substantial unrealized losses.
Looking forward, I believe it is very likely that Truist will face a notable decline in its net interest income over the coming year or more. Fundamentally, this is due to the decrease in Truist’s deposits, total bank deposits, and the money supply. As the Federal Reserve allows its assets to mature, money is effectively removed from the economy; thus, total commercial bank deposits are trending lower. Truist’s deposits are trending lower in line with total commercial banks. I expect Truist’s deposits to continue to slide as long as the Federal Reserve does not return to QE. As Truist competes for a smaller pool of deposits, its deposit costs should rise faster than its loan yields. Today, we’re starting to see the spread between prime loans and the 3-month CD contract, indicating that bank NIMs are declining. See below:
Truist’s core net interest margin has slid from 3.17% in Q4 2022 to 3.1% in Q1 2023 to 2.85% in Q2. Truist’s deposits (10-Q pg. 48) have generally fallen faster than its larger peers, so it needs to increase deposit costs more quickly. Over the past year, its total interest-bearing deposit rate rose from 14 bps to 2.19%, with the most significant rise in CDs to 3.73%.
Notably, Truist has increased its CD rate to the 4.5% to 5% range to try to attract depositors. However, the bank continues not to pay any yield on the bulk of its savings account products, causing a sharp increase in customers switching toward the many banks which pay closer to 5% today. Over the past year, the bank saw around $10B in outflows for interest-bearing deposits and about $25B from non-interest-bearing deposits, making up for those losses with new long-term debt and CDs. Problematically, that means Truist is rapidly losing more-secure liabilities to more fickle ones like CDs and the money market. While this effort may slow the inevitable decline of its NIMs, it will also increase Truist’s solvency risk because it’s becoming more dependent on less secure liquidity sources as people move money between CDs more frequently than opening and closing savings accounts at different banks.
Truist also faces increased expected loan losses due to a rise in late payments last quarter. That trend is correlated to the increase in consumer defaults and the sharp decline in manufacturing economic strength. See below:
Consumer defaults remain normal, but I believe they will rise as consumer savings levels continue to fall and should accelerate lower with student loan repayments. The low PMI figure shows many companies face negative business activity trends, increasing future loan loss risks on Truist’s vast commercial and industrial loan book. Of course, Truist also has a notable CRE loan portfolio, which faces critical risks associated with that sector’s colossal decline this year.
The Bottom Line
Overall, I believe Truist has become even more undercapitalized since I covered it last. I also think Truist faces an increased risk of recession-related loan losses and has a more sharp NIM outlook. Even more significant increases in mortgage rates recently exacerbated strains on its capitalization, while its low savings rates should cause continued deposit outflows. Further, its increased CD rates should create growing negative net interest income pressure.
If there was no recessionary potential, as indicated by the manufacturing PMI, then TFC may manage to get through this period without severe strains; however, its EPS should still decline significantly due to rising deposit costs. That said, if Truist’s loan losses continue to grow due to increasing consumer and business headwinds, its low tangible capitalization leaves it at high risk of significant downsides. If its loan losses grow or its deposits decline, it will need to realize more losses on its assets, quickly pushing its CET1 ratio below its new regulatory minimum. Personally, I strongly expect TFC’s CET1 ratio will fall below the 7.5% level over the next year and could fall even lower if a more severe recession occurs.
I am very bearish on TFC and do not believe there is any realistic discount potential in the stock besides that generated by speculators. Since there is a significant retail speculative activity in TFC and some potential for positive government intervention due to its larger size, I would not short TFC. Although TFC downside risk appears significant, many factors could create sufficient temporary upside that it is not worth short–selling. That said, I believe Truist may be the most important financial risk in the US banking system due to its solvency concerns combined with its size and scope. Accordingly, regardless of their position in TFC, investors may want to keep a particularly close eye on the company because it may create more extensive financial market turbulence than seen from First Republic Bank should it continue to face strains.
Eight times every year, the Federal Reserve’s Federal Open Market Committee (FOMC) meets to discuss and possibly alter their position on monetary policy.
There are several different courses of action they could take, the most common being quantitative easing, buying and selling government securities, and raising or lowering the federal funds rate.
Most recently, the fed’s tool of choice has been adjusting the federal funds rate.
What is the federal funds rate?
The federal funds rate is the rate at which depository institutions (banks and credit unions) charge each other for overnight deposits.
Why would they need to lend each other money? All banks are required to have a certain amount of funds in their reserves (usually 10%), and sometimes customers withdraw enough money from the bank that the bank’s reserves are below the requirement. They now have two options: to borrow money from the fed or from another bank. The federal funds rate determines how much interest a bank will have to pay for that loan.
Click here for today’s mortgage rates.
How the federal funds rate affects the economy
The federal funds rate is an important base rate that has trickle down effects on the entire economy. After all, if the federal funds rate goes up and banks have to pay more for overnight loans, then it goes to reason that they are going to have to make up the higher cost by raising their own rates. Conversely, if the federal funds rate is lowered, banks can pass lower interest rates on to their borrowers.
With the benchmark federal funds rate lowered, rates on credit cards and business loans also decline, encouraging lending for both businesses and consumers. Businesses are able invest in infrastructure and hire more employees, while consumers make more payments on credit knowing that they don’t get charged as much on the interest.
This results in more financial transactions, ultimately contributing to economic growth of the nation at large. That’s why when the Fed wants to promote economic growth they lower the federal funds rate, and when they think the economy can handle it, they raise the federal funds rate.
Mortgage rates and the Federal Reserve
Understanding mortgage rates can be tricky. The way the situation with the Fed raising and lowering rates is portrayed in the news leads many people to believe that the Fed controls mortgage rates. This is not true—the Fed does not directly set mortgage rates at all. However, that’s not to say that it has no influence over mortgage rates.
Fedspeak
At the Federal Reserve, the forward guidance “fedspeak” that officials offer up to the markets is one of the most powerful tools they have. It’s actually a little bit of the opposite of that old saying that “Actions speak louder than words.”
Generally, when a fed official comes out and gives even the slightest hint that they are in favor of rising rates, investors move away from “safe” government bonds and into riskier assets like stocks. That’s good for the economy, but it causes mortgage rates to rise.
As we’ve seen several times this year, the fed can create a buzz about raising the fed funds rate (which can drive up mortgage rates), but then retreat back from that position and not raise rates (causing rates to fall back down).
It’s this cat and mouse game of talking and not delivering that has landed the Fed in hot water, with some critics claiming the Fed has a credibility problem. Regardless of whether or not you agree with them, it’s undeniable that what the Fed says can influence markets.
Click here for today’s mortgage rates.
How mortgage rates are actually set
If the Federal Reserve doesn’t set mortgage rates, who does?
Good question.
Just as is the case with many other aspects of the economy, market forces are to thank (or blame). Most of the action takes place on the secondary market, where mortgage-backed-securities (MBS) are bought and sold.
These mortgage bonds have prices and yields that move up and down just like stocks and bonds do. If the economy is performing well, investors expect higher yields, and vice versa when the economy is under-performing. So in a way, mortgage rates are a reflection of how well the economy is doing. Specifically, the three major drivers of mortgage rates are:
Stock prices
The labor market
Inflation
As stated, when stock prices are going up, so are mortgage rates. That’s because mortgage-backed-securities are traded as bonds, and conventional wisdom says that when investors are moving money into stocks, they’re taking money out of bonds.
With a decrease in demand for bonds, prices drop and yields rise–pushing rates higher. In the event that investors flood back into bonds, the opposite will happen, causing mortgage rates to drop.
It’s not a perfect relationship, but it’s generally how the market behaves. The relationship between bonds and mortgage rates is best illustrated by the yield on the U.S. 10-year treasury note, which is the best market indicator of where mortgage rates are going.
On any given day, looking at the 10-year yield will give you a fairly accurate picture of where mortgage rates are headed. If the yield is rising, mortgage rates most likely are too, and vice versa.
With the labor market, it’s all about how high unemployment is. The Bureau of Labor Statistics (BLS) releases a monthly employment situation report that is the most-watched report on the matter. If the U.S. economy added fewer jobs than expected and the unemployment rate rises, that’s bad news for the stock market, which as we now know pushes mortgage rates lower.
Most people understand inflation as a rise in the cost of living. That’s true, but what’s really happening is the devaluing of the dollar. As the value of the dollar declines, the purchasing power of the dollar diminishes, causing prices to rise.
Mortgage-backed-securities, like every other bond, are denominated in U.S. dollars. Since investors don’t want to own assets that are losing their value over time, they move away from MBS in times of high inflation. With a decrease in demand for MBS, the yields rise, driving mortgage rates higher.
Bottom line
When you’re trying to understand mortgage rates, remember: the Federal Reserve and the federal funds rate do not control mortgage rates. There are several other economic factors at play that anyone trying to track and predict where mortgage rates are going should pay attention to.
That being said, the Federal Reserve does play a major role by influencing how the economy functions, and it’s always important to keep an ear out for what they’re saying.
1. chart via wikipedia
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.
LibreMax Capital’s main fund notched returns of roughly 6% through July this year, according to a person familiar with the matter, after betting on asset-backed securities and rotating out of commercial and residential mortgage debt and collateralized loan obligations.
The LibreMax Partners Fund, which totals about $1 billion, invests in structured products tied to both corporate and consumer debt. The fund gained about 4% in the first half of last year, as previously reported by Bloomberg. Separately, LibreMax has raised $1 billion across two other funds, namely the LibreMax Core Fund and LibreMax Dislocation Fund, added the person, who declined to be identified as the details are private.
LibreMax believes that structured bonds, which repackage debt into securities of varying risk and size, will outperform junk debt, citing “historically high yields” and fundamentals underpinned by strong consumer finances and record-low unemployment, Chief Investment Officer Greg Lippmann wrote in a July 27 letter to investors, obtained by Bloomberg.
In that vein, the firm increased its ABS exposure while lowering its allocations to commercial mortgage debt, CLOs and residential mortgages. Within ABS, it invested across subprime auto bonds, consumer unsecured, aircraft, solar and credit card securities, the letter details.
The Dislocation Fund, launched earlier this year, capitalizes on market volatility by buying stressed structured bonds at a discount, which are likely to appreciate once the market normalizes, added the person close to the matter.
A LibreMax representative declined to comment.
The New York-based hedge fund anticipates more volatility over 2023 and into the first half of 2024, as persistently high inflation or a recession seem more likely than a soft landing, Lippmann wrote. Lippmann, a former Deutsche Bank AG trader, famously bet against subprime mortgages before the 2008 financial crisis. He appeared in Michael Lewis’s book “The Big Short” in 2010.
Boosting Credit Returns
The fundraising comes during a tough year for US credit markets, which have been roiled by aggressive interest rate hikes from the Federal Reserve and the collapse of multiple US regional banks. The banking tumult that started in March led to corporates postponing or pulling financings across the ABS market, while delinquencies in debt like subprime auto bonds and credit card-backed notes are expected to rise.
LibreMax sees opportunities in whole business debt in particular. It participated in a $90 million advance to Coinstar LLC, giving the coin kiosk operator flexibility to restructure about $1 billion in whole business securitization deals that reached a key repayment date in late April, as reported by Bloomberg.
“We will look to source similar investment opportunities going forward,” Lippmann wrote.
CLOs have had a slower 2023 compared to ABS. Issuance is down about 24% year-over-year at around $69 billion, while ABS sales are 7.6% lower year-over-year at $191.4 billion, data compiled by Bloomberg News shows. LibreMax moved away from lower-quality US CLO debt and equity, selling around $90 million in market value, according to the letter. Those proceeds were used to move up the capital stack with the purchase of about $75 million of US investment-grade debt. Still, the bulk of LibreMax’s activity was in Europe, where it invested in short-duration tranches, including equity, the letter noted.
Meanwhile, the CMBS market rout continues as landowners default on mortgages and credit risk spikes. LibreMax bought short-duration investment-grade bonds that may present low double-digit yields, where it believes “the market mispriced the extension likelihood and where returns are still attractive to moderate extensions.”
In residential mortgage bonds, LibreMax moved down the capital stack based on certain borrowers’ performance, reads the letter. The firm is also seeking out opportunities in single-family rental bonds, where companies have struggled to raise rents amid higher expenses.
Lippmann is also “concerned” about the unsecured private credit market, which he says may become “troublesome” if rates stay higher and economic growth slows. He also notes that LibreMax has increased the investment-grade portion of its portfolio to 28%, from 12% in December 2021.
LibreMax and its CLO platform Trimaran Advisors, which it acquired in 2018, collectively had about $9.6 billion of assets under management as of the end of June, according to the note.
The past year hasn’t been particularly good for tech or housing. As a consequence, the number of real estate, mortgage and general housing tech firms to make the annual Inc. Magazine list of the 5,000 fastest growing private companies in America declined in 2023. In all, 37 companies made the cut this year, down from 53 a year ago.
The self-reported list ranks U.S. based firms on percentage revenue growth from 2019 to 2022. To qualify, companies must have been founded and generating revenue by March 31, 2019. They must be U.S.-based, privately held, for-profit, and independent–not subsidiaries or divisions of other companies–as of December 31, 2029. The minimum revenues required are $100,000 for 2019 and $2 million for 2022.
The fastest-growing housing tech firm in 2023 was OptiFunder, which claims to produce the mortgage industry’s only optimization software built to systematically decision warehouse funding allocations and automate the complicated process of funding through loan sale. Based in Missouri, OptiFunder had a three-year growth rate of 4,767%. It was ranked the 98th-fastest growing private company in America in 2023.
Transactly, a real estate transaction platform that provides automation, integrations and tech-enabled services that significantly reduce process time, placed 126th in 2023. Another Missouri-based company, Transactly had a three-year growth rate of 3,852%.
Also appearing in the top 200 list was CertifID, an Austin, Texas-based company that makes software to cut down on wire fraud in the real estate industry. The company, led by Tyler Adams, raised $12.5 million in a Series A funding round in 2022.
Interestingly, none of the top three companies on the 2023 list made the cut in 2022. But several well-established housing tech companies made consecutive appearances in this year’s Inc. 5000 edition.
Homelight, a platform for homebuyers and sellers, was No. 403 in this year’s ranking with a 1,444% three-year growth rate. The company was ranked 351 last year.
LoanStar Technologies, which connects lenders with borrowers who are traditionally underbanked or unbanked, also made the list again. The company was No. 469 in this year’s ranking, up from 958 last year. Its three-year growth rate was 1,241%.
Mortgage origination platform Maxwell, which was in the top 200 last year and a HW Tech 100 award winner in 2021, was ranked No. 658 in the 2023 Inc. 5000 list.
Other established names to make the Inc. 5000 list in 2023 include home equity investment firm Point; co-living platform PadSplit; one-time unicorn Orchard, which operates a digital home buying and selling marketplace and was a 2023 HW Tech 100 award winner; single-family investment property marketplace Roofstock; RentSpree, a rental software platform that connects real estate agents, owners and renters; Curbio, one of leading tech-enabled pay-at-closing home improvement solutions; EasyKnock, a real estate firm that offers homeowners a way to access their home’s equity using a sale-leaseback program; and New Western, a marketplace that serves over 150,000 real estate investors across the country.
Two companies on the list have been on the Inc. 5000 list an impressive five times: Total Expert, which offers CRM and data-driven customer engagement solutions, turning customer insights into actions to increase loyalty and drive growth; and FirstClose, a tech solution provider for HELOC and home equity lenders.
Here’s the complete list of tech firms:
Rank
Company
Growth (3-yr Avg.)
Year Founded
Description
98
OptiFunder
4,767%
2018
Finance company helping independent mortgage lenders choose among funding options and streamline the process.
126
Transactly
3,852%
2017
Real estate transaction platform providing automation, integrations and tech-enabled services that significantly reduce process time.
193
CertifID
2,807%
2017
A company dedicated to fighting wire fraud for the real estate industry.
403
Homelight
1,444%
2012
Providing a platform that helps deliver better outcomes for homebuyers and sellers.
469
LoanStar Technologies
1,241%
2016
Enabling lenders to connect and lend to customers who are traditionally underbanked or unbanked.
487
LiveEasy
1,204%
2013
Real estate software company changing the way people manage their move and their homes.
497
BOSSCAT
1,175%
2018
Digitizing home inspection data to create instant repair estimates for homeowners and real estate professionals.
510
PadSplit
1,152%
2017
Creator of a co-living market platform enabling workers to live in the communities they serve.
533
ReBuilt
1,096%
2015
Vertically integrated marketplace helping homeowners sell their unwanted property and real estate investors find great off-market deals.
545
BatchService
1,081%
2018
A real estate data and SaaS provider using real-time intelligence to help businesses identify opportunities.
658
Maxwell
890%
2015
Digitizes the mortgage-origination process for small to midsize banks, credit unions, and independent mortgage lenders.
678
TriusLending
869%
2003
A mid-Atlantic real estate investment firm and financing lender focused on short-term private lending and long-term rental loans.
744
Point
791%
2015
Home equity investment firm that has enabled more than 10,000 homeowners to unlock their home’s equity without additional monthly expenses.
769
InstaLend
766%
2015
A tech-enabled real estate loan lender providing fast and affordable capital to residential developers through streamlined technology and automated workflow.
933
Coviance
630%
2015
Cloud-based financial firm enabling lenders to scale home equity loans and deliver a clear to close for borrowers in hours.
984
Orchard
602%
2017
Making home buying and selling stress-free, fair and simple with a focus on helping homeowners unlock their equity.
992
RentSpree
598%
2016
Rental software platform that connects real estate agents, owners and renters to simplify the rental process from listing to lease.
997
American Mortgage Mortgage
594%
2019
A 100% employee-owned company providing solutions to mortgage industry challenges, which benefit clients and employees.
1,032
Realync
575%
2013
A real estate video engagement platform unlocking authentic experiences that connect and convert across the prospective renter and resident lifecycle.
1,068
Fund That Flip
555%
2014
An end-to-end real estate investing solution for serious, experienced investors, including Saas products and financing for residential redevelopers and builders.
1,375
Roofstock
425%
2015
End-to-end investing platform for the single-family rental home sector providing integrated, data-driven technology and curated investment recommendations for investors.
1,403
SavvyMoney
417%
2009
A leading provider of credit score solutions, serving over 1000 financial institutions by combining real-time data with digital personalization tools.
1,467
Curbio
393%
2017
Helping real estate agents prepare homes before they go to market so they sell quickly and for the best price.
1,486
Yoreevo
386%
2017
Offering streamlined, stress-free home shopping by providing a technology-driven approach executing transactions more efficiently and saving customers money.
1,522
MIOYM
377%
2008
Real estate firm that identifies and rehabilitates distressed single-family residential properties, later selling them to first-time home buyers nationwide.
1,532
EasyKnock
375%
2016
Real estate firm offering homeowners an innovative way to access their home’s equity using a sale-leaseback program.
1,588
Leverage Companies
358%
2019
Real estate investment firm that uses a proprietary, data-driven platform to source premium opportunities for investors.
1,943
EmpowerHome
289%
2006
A partner to real estate teams and agents, offering exclusive programs to ensure sellers get top dollar for their properties.
1,971
Mobility Market Intelligence
285%
2010
A market leader in data intelligence and market insight tools for the mortgage and real estate industries.
1,985
Keeping Current Matters
282%
2007
Helps real estate agents save time and build confidence with easy-to-deliver marketing content powered by the latest market insights.
2,669
LodeStar Software Solutions
197%
2013
Firm offering software that saves mortgage lenders and professionals time and money by automating their closing cost disclosure.
2,824
MoxiWorks
189%
2012
Firm offering cloud-based, real-estate-productivity technology helping brokerages and agents thrive in the residential real-estate space.
2,936
Lender Toolkit
179%
2015
Provider of automated, innovative and comprehensive AI-powered mortgage technology solutions that streamline the mortgage origination process for mortgage lenders.
3,370
Total Expert
149%
2012
CRM and data-driven customer engagement solutions for financial institutions, turning customer insights into actions to increase loyalty and drive growth.
4,105
FirstCloseFirstclose.
110%
2000
Technology solution provider for HELOC and home equity lenders nationwide, helping lenders increase profitability and reduce cost.
4,196
NewWestern
106%
2008
Real estate marketplace that connects more than 100,000 local investors looking to rehab houses with sellers.
4,423
Down Payment Resource
96%
2008
A technology provider helping the housing industry connect homebuyers with homebuyer assistance, to make affordable home financing opportunities more accessible.
Source: Inc. 5000 – 2023
Additionally, two appraisal firms were named to the Inc. 5000 list in 2023: Kairos Appraisal Services, a national appraisal management company implementing technology to expedite the appraisal process through data, geocoding, scheduling and interactive communication tools. Kairos was No. 1,283 on the Inc. 5000 list with a three-year growth rate of 457%. Miami-based Marketwise Valuation Services, another AMC, was No. 2,629 overall with a three-year growth rate of 205%.
Rank
Company
Growth (3-yr Avg.)
Year Founded
Description
1,283
Kairos Appraisal Services
457%
2015
National appraisal management company implementing innovative technology to expedite the appraisal process through data, geocoding, scheduling and interactive communication tools.
2,629
Marketwise Evaluation Services
205%
2017
Appraisal management company for the lending industry, dedicated to providing the highest quality appraisal management services and property condition inspections.
Inside: Are you looking for a safe and convenient way to buy and sell gift cards? If so, CardCash may be the perfect option for you. This comprehensive review will explore everything you need to know about this popular online marketplace.
Gift cards often seem like the perfect hassle-free gift solution, but receiving a card from a retailer that doesn’t align with your interests can result in unused potential and wasted money.
This is a common occurrence, with Americans currently holding around $21 billion in unused gift cards (source).
I know I have plenty of unused gift cards – probably around $300 worth laying around.
In response, companies like CardCash.com have stepped in to make these cards useful again and alleviate this universal frustration.
The simple goal is to help you extract value from those unwanted or unused gift cards by providing a platform to sell them safely. The solution not only converts unused cards into cash but also offers the opportunity to swap them for discounted cards from preferred retailers or a prepaid Mastercard.
Here is my CardCash review on the simplicity of getting cash for my unused gift cards.
In an era of savvy shopping and financial mindfulness, CardCash is a promising solution to make the most of every gift card.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
What is CardCash?
CardCash is a valuable online platform you can tap into for buying, selling, and exchanging gift cards. A brainchild of Elliot Bohm and Marc Ackerman, it was launched in 2009 with the goal of solving the problem of unused gift cards in America.
Via the CardCash platform, you can:
Sell your gift cards for up to 92% of the card’s value based on the popularity of the retailer.
Use CardCash to purchase gift cards, at a discounted rate, in bulk from over 1100 brands including big names like Amazon, Walmart, Starbucks, and CVS.
Swap your gift card for another retailer. You won’t get the same value though.
Remember, though, you won’t quite get the full value of your card as CardCash keeps a small percentage.
Does CardCash pay you instantly?
No, CardCash does not provide instant payments with cash.
Instead, after your order is approved, payments are typically made within a 48-hour window. This is due to standard processing times.
However, if you select another gift card. That will be available once your order is approved.
The invoice for the gift card claims to offer approximately 92% of the card’s value, but it’s worth noting that the actual payout can be lower at times.
How Does CardCash Work?
CardCash is a brilliant platform if you’re looking to sell, buy, or exchange gift cards. Here’s a quick guide on how you can get started:
Sign up on CardCash.com.
To sell a gift card, enter the merchant’s name and the balance on the gift card.
CardCash will give you an offer; if you accept, you get paid via mailed check, ACH payment, or PayPal. Or you can opt for a Prepaid Mastercard or another retailer gift card of your choice.
To buy a gift card, browse through the list of available cards and pick one that suits you.
Proceed to payment and enjoy your discounted gift card!
Pro Tip: Always check the price differences between the card value and the purchase price for the best deals.
How much does CardCash pay for gift cards?
Contrary to what CardCash claims, you won’t receive the full 92% of your gift card’s value.
The actual amount you’ll get depends largely on how popular the issuing merchant is. For popular sellers like Amazon or Walmart, you might get closer to their claim, but not always.
Sadly, for less-known retailers, offers might sink as low as 50% of your gift card’s worth.
Pros of CardCash
Considering an online platform for buying, selling, or swapping gift cards? CardCash is definitely one to consider.
Personally, I wanted to test it out and today you can find my CardCash Review.
The distinct features of CardCash include:
A wide selection of gift cards from over 1100 retailers
Instant payment in cash or a swap for another gift card when you sell your unused gift cards
Exclusive offers and discount opportunities for regular users
Convenience as the platform is easy to use and provides a hassle-free experience for users who buy or sell gift cards.
Unused gift cards can be sold for cash or swapped for your preferred merchant’s gift cards, giving value to otherwise wasted money.
Very user-friendly: It’s simple and effortless to buy and sell gift cards on this platform – a massive plus for users.
With all these advantages, CardCash makes a pretty compelling case as your go-to online gift card marketplace.
CardCash, a reputable gift card marketplace, might just be the perfect match for your needs!
Cons of CardCash
Before you decide to use CardCash, it’s important to weigh the drawbacks of the platform against its benefits.
Recognizing these concerns helps you make an informed decision and avoid potential hiccups along the way.
Here are the top cons to using CardCash:
Lower Payouts: When you decide to sell your gift cards on the platform, you might receive lower payouts than you’d expect. Be sure to carefully evaluate these potential losses.
Merchant isn’t on Platform: Not all merchants are available on the platform, which is unfortunate.
Short Buyer Protection Guarantee: Compared to other gift card marketplaces, CardCash’s 45-day buyer protection guarantee feels rather insufficient. For comparison, Raise offers a guarantee for a full year.
Disappearing Balances: Many users have reported issues with their card balances mysteriously disappearing, which can be quite unsettling. Learnwhy this unfortunately happens.
Is CardCash Legit?
Yes, CardCash is legit.
They’re a longstanding player in the gift card industry, thanks to robust security measures and a user-friendly platform.
Established over a decade ago, they have experience in offering a secure platform for buying, selling, or trading gift cards.
How do you go about sending eGift cards to CardCash?
Converting eGift cards works essentially the same way as converting physical gift cards. You still get the same benefits whether you are converting eGift cards or physical ones.
All you need to provide is the relevant information about the eGift card.
The payment process for selling eGift and physical gift cards is the same.
You can receive payment in cash or you can exchange for another gift card of your choosing.
Expert Tip: Make sure to accurately provide all necessary details regarding your eGift card to ensure a smooth transaction process.
CardCash Common Questions
CardCash is a website that allows you to buy, sell, and trade gift cards.
I tested out the site with various gift cards as part of my Cardcash review.
As this concept may be new to you, let’s answer some common questions about CardCash and give you our honest opinion on whether or not it’s a legit website.
1. Are CardCash transactions safe?
CardCash transactions are generally safe.
As a reputable marketplace for gift cards, CardCash enforces strict security measures like other platforms such as eBay or Amazon. However, it’s important to remember that you’re dealing with third parties that could potentially misuse gift card PINs.
To counteract this, CardCash offers a money-back guarantee for unsatisfied purchases. For example, if a gift card you bought is exposed as fraudulent, you can get your money back.
Despite this, always exercise caution, and use common sense while making transactions.
2. Are there any fees when buying or selling a gift card?
When you’re buying or selling gift cards on CardCash, there are no fees applied to your transactions.
The platform allows free signup and doesn’t charge for usage.
Purchasing a gift card? Absolutely zero fees. All you pay for is the discounted cost of the card itself.
Selling a gift card? No worries, still no fees. After providing your card details and balance, you’ll receive an offer. If you accept, the payment goes directly to you via check, PayPal, or direct deposit with no extra charges.
For instance, you have a $50 Best Buy gift card. After inputting the details, CardCash offers $45. If you accept, the $45 is sent to you without any deductions.
3. Is there any risk of identity theft when buying or selling gift cards?
Identity theft is when someone unlawfully obtains and uses your personal information, often for fraudulent purposes.
No, there should not be the risk of identity theft when buying or selling gift cards.
4. Is CardCash safe to use?
CardCash is definitely safe for use.
Operating since 2009, the platform is not only registered but also provides users with advanced security measures to secure personal data and transactions.
With a physical address and listed contact number, assistance is always at hand. Think of CardCash like a vault – your unused gift cards are safe to sell on it and your personal details are locked away securely.
5. Does CardCash buy stolen gift cards?
No, CardCash does not buy stolen gift cards. That is 100%, not their intent.
When you sell a gift card to CardCash, they require you to provide certain personal details to comply with federal anti-money laundering laws. CardCash uses these details to verify the authenticity of the sale and the seller.
However, remember that CardCash is an online marketplace where third-party vendors sell cards. Although most users are honest, there’s a risk of encountering scams unfortunately, and you should always exercise caution when using the platform.
Learn how to handle an Amazon package says delivered but not received.
6. Is it safe to buy gift cards with a credit card?
It is safe to buy gift cards with a credit card as long as you are using a reputable source.
When you use a credit card, you have the added protection of being able to dispute the charges if you do not receive the gift card or if it is not what you expected.
Make sure you are on CardCash’s legit website and you see the lock on the search bar indicating a secured website.
7. Are there any drawbacks to using CardCash?
One key drawback is the misleading discount rates.
Partner websites listed on CardCash may promise higher discounts than they actually deliver, leaving you scratching your head when your wallet feels lighter than expected.
As part of my Cardcash review, my Red Robin gift card valued at $25 would only receive $15.75 cash, which is 63% of its value.
Another significant concern is the 45-day buyer protection. Your best bet is to use your gift card within this limited time frame to avoid losses.
8. What are CardCash’s payout options?
For most, you want a direct, monetary form of compensation which is quite advantageous for those individuals who prefer having cold, hard cash as opposed to holding onto a gift card that they will never use.
Here are CardCash’s payout options:
Cash: CardCash allows users to sell their gift cards in exchange for cash. You can get a mailed check, ACH payment, or PayPal.
Prepaid Mastercard: Besides cash, CardCash also gives users the option to receive their payment via a Prepaid Mastercard. This is a convenient option, especially for those who like to keep their funds digital or for those who might not have convenient access to a bank.
Another gift card: One of the unique payout options provided by CardCash is the ability to exchange a gift card for another one. This option typically gives you a higher payout amount as well. But, you are limited to the merchants offered.
Just remember, payouts can fluctuate and might be less depending on the popularity of the gift card’s merchant.
9. Is it safe to sell gift cards on CardCash?
CardCash is a trusted platform where you can safely sell your unwanted gift cards.
However, keep in mind that you probably won’t get the full face value of the card, as the company keeps around 8-10% of its value.
Despite this, it’s a reliable way to make some money from unused gift cards. Card Cash is not a scam
10. What should I do if I have a complaint about CardCash?
If you’ve got complaints about CardCash, it’s crucial to voice them right away – that’s how issues get resolved.
Try reaching out to their customer support using the “Contact Us” form on their website.
If your complaint is due to balance discrepancies within 45 days of purchase, then email [email protected].
If that doesn’t work, send a detailed email to [email protected]. Be sure to mention specific problems and desired outcomes.
Most importantly, if there’s an issue with a gift card you bought, ensure you file a complaint within 45 days of purchase to receive a full refund.
My CardCash Review
Having firsthand experience with CardCash, I can share my insights about the process and how it measures up to my expectations.
Firstly, the process was indeed straightforward to navigate. The platform has been designed in a very user-friendly way that facilitates convenience and efficiency. It’s quite simple to get onboard, sell, or purchase a gift card.
However, there was a slight hitch – the value percentage offered. This slippage is more than I anticipated.
According to my experience and perception, the payouts for selling gift cards felt a bit lower than expected.
Here were the values I was given:
=> Olive Garden = 71% of value => Red Robin = 63% of value => Chili’s = 70% of value => DoorDash = not an option to sell
Gauging the 45-day buyer protection guarantee initially, it seemed impressive as it ensures a refund if the gift cards don’t function as advertised. However, there’s a catch – the gift cards should be used within this 45-day window, as the 45-day guarantee goes away.
In a nutshell, the experience with CardCash has been a positive experience. Personally, I would have rather been given the cash to use as a please versus a gift card.
However, all of the local gift card exchange kiosks don’t trade in gift cards. So, I felt my options were limited and chose to use CardCash.
FAQ
Yes, selling gift cards for cash is legit.
You need to use a verified site to avoid a scam.
A credit card is needed on CardCash for several reasons.
In order to use the service, you must have a credit card so that you can be properly verified. This is necessary in order to protect both the buyer and the seller.
This CardCash Review Should Help You
So, you’re considering CardCash for buying or selling gift cards, huh?
Well, on the positive side, CardCash offers an easy channel for getting rid of unwanted gift cards or buying new ones with a discount – sounds like a good deal, right?
Buying gift cards with a credit card from sites like CardCash can be safe, provided you take some precautions.
For me, it was a simple process and I chose another gift card.
Consequently, it’s important to remember that you’re purchasing second-hand gift cards, which could potentially have odd issues come up.
To ensure your value, make use of the 45-day guarantee. For example, if you’re planning a big purchase next month, buy the gift card now and make sure to use it within this timeframe. This minimizes the risk of being left with a worthless card after the guarantee period.
So, do your homework, understand how CardCash operates before diving in, or consider other options for more reliable service.
Just remember, while buying, you pay about 90-92% of the card value, and while selling, you get the same.
Know someone else that needs this, too? Then, please share!!
Step into the inviting realm of Massachusetts’ charming small towns, where timeless beauty, community warmth, and a rich history blend harmoniously. From scenic landscapes to cultural treasures, each town unfolds a unique narrative waiting to be explored. Join us as we embark on a journey to discover 7 beautiful small towns in Massachusetts.
1. Adams, MA
Median sale price: $162,000
Walk Score: 82
This town’s heritage is reflected in its historical sites and museums, offering glimpses into its past. Adams’ community thrives through local events that bring residents together in celebration. Whether you’re indulging in local cuisine, exploring cultural gems, or partaking in town gatherings, everyone can find something to love in Adams.
Homes for sale in Adams, MA
Apartments for rent in Adams, MA
2. Athol, MA
Median sale price: $360,000
Walk Score: 66
Athol opens its arms to those seeking a blend of nature and culture. The town’s natural beauty is mirrored in its outdoor spaces and recreational opportunities. Athol’s artistic soul is showcased through local galleries and creative workshops. If you’re wandering amidst natural wonders or immersing yourself in artistic expression, Athol offers a peaceful escape for all who live there.
Homes for sale in Athol, MA
Apartments for rent in Athol, MA
3. Lenox, MA
Median sale price: $700,000
Walk Score: 65
Lenox provides an elevated New England experience with a plethora of cultural attractions. You’ll often find locals at the renowned Tanglewood Music Center, enjoying outdoor concerts in the stunning Berkshire Hills. Looking for more to do? The historic Ventfort Hall provides a glimpse into Gilded Age opulence, while hiking trails in Kennedy Park offer opportunities to appreciate the region’s natural beauty.
Homes for sale in Lenox, MA
Apartments for rent in Lenox, MA
4. Hardwick, MA
Median sale price: $318,600
Walk Score: 25
Hardwick offers a quiet retreat where history and nature converge in harmony. Residents often explore the iconic Hardwick Common, a historic district with preserved colonial-era architecture. The Hardwick Winery provides a delightful spot for tastings and events, while the Quabbin Reservoir invites outdoor enthusiasts for hiking and birdwatching.
Homes for sale in Hardwick, MA
Apartments for rent in Hardwick, MA
5. Dighton, MA
Median sale price: $551,000
Walk Score: 4
Dighton beckons with a rural charm that resonates with those who appreciate simplicity. The town’s scenic landscapes invite leisurely walks and opportunities for rural exploration. Dighton’s strong sense of community is upheld through local gatherings and shared appreciation for its surroundings.
Homes for sale in Dighton, MA
Apartments for rent in Dighton, MA
6. Marion, MA
Median sale price: $882,500
Walk Score: 13
Marion encourages you to savor coastal beauty and a maritime heritage. The town’s connection to the sea is mirrored in its waterfront activities and nautical charm. Marion’s spirit is celebrated through events that honor its seafaring traditions and bring neighbors together. The town’s artistic flair is showcased in local galleries and creative workshops.
Homes for sale in Marion, MA
Apartments for rent in Marion, MA
7. Essex, MA
Median sale price: $800,000
Walk Score: 54
With its seaside features, Essex provides a unique and enriching place to call home. Locals often enjoy exploring the Essex Shipbuilding Museum, delving into the town’s history of boat building. The stunning Crane Beach becomes a sanctuary for relaxation and outdoor activities during the summer months, while the annual Essex ClamFest celebrates the area’s culinary delights.
Homes for sale in Essex, MA
Apartments for rent in Essex, MA
Wrapping up small towns in Massachusetts
Massachusetts’ small towns offer a diverse array of experiences that celebrate nature, history, and community. Each town unveils its unique character through cultural offerings, natural beauty, and shared gatherings. Whether you’re drawn to cultural sophistication, serene landscapes, or coastal retreats, these small towns in Massachusetts are sure to delight.
New homes made up close to one-third of for-sale units in the second quarter, as an ongoing scarcity of existing inventory helped keep the level near a record high, Redfin reported.
New construction accounted for 31.4% of the market, the largest portion in the quarterly period on record. The number increased from 30.3% between April and June last year, but was down from the first-quarter all-time record of 33.6%.
By comparison, new homes represented just 17% of for-sale inventory in the second-quarter of pre-pandemic 2019.
A combination of pandemic-related factors are propping up new-home numbers, even as builders are producing a smaller number of units compared to a few years ago. Surging interest rates, which are almost 4% higher today from their level in early 2022, resulted in a lock-in effect, where homeowners are now hesitant to move to take out a new mortgage at current levels, leaving the existing-sales market sluggish.
Meanwhile, outstanding inventory remains from a pandemic-fueled building rush in 2021 and early 2022, providing some potential opportunities for aspiring buyers while resale-home availability remains low, Redfin said.
“Builders are still building but homeowners aren’t selling, so new construction is the only option for many buyers,” said Shauna Pendleton, a Redfin agent in Boise, Idaho.
In June, the total amount of for-sale inventory fell 15% on an annual basis to an all-time low, the real estate brokerage said. The existing-home market fueled the drop, with an 18% decline year-over-year. The number of newly built single-family homes for sale, though, increased 4.5% by comparison, leading builders to offer a number of concessions to buyers in order to move units off the market.
Redfin’s quarterly data coincides with similar recent findings by other housing researchers. Online listing service Realtor.com said overall home selling trends were pointing to the potentially lowest sales numbers this year in over a decade.
At the same time, new-home buying activity is showing hints of resilience in the overall housing market. Consumers are still willing to consider purchasing even amid elevated rates, economists have noted. The volume of loans taken out to purchase newly built units is consistently higher in 2023 compared to year-ago levels, according to the Mortgage Bankers Association, which also recently said the segment would be “key to the housing market recovery in 2023.”
The market with the highest share of new homes for sale relative to total numbers was El Paso, Texas, at 52.1%; followed by Omaha, Nebraska; Raleigh, North Carolina; and Oklahoma City, at 45.5%, 42.1% and 39.3%, respectively.
While builder-constructed homes in Boise made up a 38.3% slice of inventory in the second quarter, landing the city fifth on the list of metropolitan areas ranked by total market share, it also experienced the largest annual decline in new houses put up for sale. The share decreased by almost 11 percentage points from 49% one year earlier.
The city that experienced the second largest decline was Austin, Texas, where new homes on the market decreased to 30.4% of inventory compared to 34.5% in the second quarter of 2022. Honolulu, which ranked third in this category, saw its new-home share drop to 2.8% from 6.4%.
While Fed rate hike forecasts indicate the worst is behind us, mortgage rates are still going up.
In fact, they hit a new 52-week high this morning, surpassing the brief highs seen back in October.
That puts the 30-year fixed at its highest level in more than 20 years, averaging around 7.5%.
This will likely grind the housing market to a halt, which was already grappling with affordability woes prior to this most recent leg up in rates.
The question is why are mortgage rates still increasing if long-term signals indicate that relief is in sight?
The 30-Year Fixed Mortgage Is Now Priced Close to 7.5%
Depending on the data you rely on, the popular 30-year fixed is now averaging roughly 7.5%, up from around 6% to start the year.
If we go back to the start of 2022, this rate was closer to 3.5%, which is a shocking 115% increase in little over a year.
And while mortgage rates in the 1980s were significantly higher, it’s the speed of the increase that has crushed the housing market.
Additionally, the divide between outstanding mortgage rates held by existing homeowners and prevailing market rates has created a mortgage rate lock-in effect.
In short, the higher mortgage rates go, the less incentive there is to sell your home, assuming you need to buy a replacement.
Aside from it being extremely unattractive to trade a 3% mortgage for a rate of 7% or higher, it can be out of reach for many due to sheer unaffordability.
As such, the housing market will likely enter the doldrums if mortgage rates remain at these 20-year highs.
But Isn’t the Fed Done Hiking Rates?
As a quick refresher, the Federal Reserve does not set consumer mortgage rates, but it does make adjustments to its own federal funds rate.
This short-term rate can dictate the direction of longer-term rates, such as 30-year mortgages, which track the 10-year Treasury pretty reliably.
Mortgage-backed securities (MBS) and 10-year bonds attract the same investors because the loans generally last the same amount of time.
Typically, investors get a premium of about 170 basis points (1.70%) when they buy MBS as opposed to government-guaranteed bonds.
Lately, these mortgage spreads have nearly doubled, to over 300 basis points, as seen in Black Knight’s graphic above, thanks to general volatility and an expectation these loans will be refinanced sooner rather than later.
But what’s strange is both the 10-year yield and mortgage rates have continued to rise, despite the Fed’s tightening campaign being seemingly over.
To illustrate, a recent Reuters poll found that the Fed is likely done raising interest rates, “according to a strong majority of economists.”
And we’re talking strong. A 90% majority, or 99 of the 110 economists, polled between August 14-18, believe the federal funds rate will stand pat at its 5.25-5.50% range during the September meeting.
And about 80% of these economists expect no further rate hikes this year, which tells you we’ve already peaked.
Meanwhile, a majority among the 95 economists who have forecasts through mid-2024 believe there will be at least one rate cut by then.
So not only are the Fed rate hikes supposedly done, rate cuts are on the horizon. Wouldn’t that indicate that there’s relief in sight for other interest rates, such as mortgage rates?
Mortgage Rates Need Some Convincing Before They Fall Again
As I wrote last week in my why are mortgage rates so high post, nobody (including the Fed) is convinced that the inflation fight is over.
Yes, we’ve had some decent reports that indicate falling inflation. But declaring victory seems foolish at this juncture.
We haven’t really experienced much pain, as the Fed warned when it began hiking rates in early 2022.
The housing market also remains unfettered, with home prices rising in many areas of the country, already at all-time highs.
So to think it’s job done would appear crazy. Instead, we might see a cautious return to lower rates over a longer period of time.
In other words, these higher mortgage rates might be sticky and hard to shake, instead of a quick return to 5-6%, or lower.
At the same time, the argument for 8% mortgage rates or higher doesn’t seem to make a lot of sense either.
The one caveat is if the Fed does change its mind on rate hikes and resume its inflation fight.
But that would require most economists to be wrong. The other wrinkle is increased Treasury issuance thanks to government spending and concurrent selling of Treasuries by other countries.
This could create a supply glut that lower prices and increases yields. But remember mortgage rates can tighten up considerably versus Treasuries because spreads are double the norm.
To sum things up, I believe mortgage rates took longer than anticipated to reach cycle highs, will stay higher for longer, but likely won’t go much higher from here.
Now that short-term rates seem to have peaked, as the Fed watchers indicate, long-term rates will need to slowly digest that and act accordingly.
In the meantime, we’re going to see even less for-sale inventory hit the market at a time when supply has rarely been lower. This should at least keep home prices afloat.
A short ladder attack is a supposed trading condition in which hedge fund sellers come together to drive down a stock price that is already undergoing bearish pressure. Retail investors are often seen as the victims in this situation.
While not a purely defined strategy, some individual investors believe that these efforts work to the detriment of smaller traders. The theory is that as an asset’s price moves lower it prompts other investors to dump shares, leading to prices spiraling even lower.
How Does a Short Ladder Attack Work?
The short ladder attack strategy became notorious during the meme stock craze of early 2021 when shares of companies like GameStop (GME) and AMC Entertainment (AMC) experienced intense volatility and massive short squeezes. It was alleged that large investors responded with short ladder attacks to drive prices back down.
In 2022, there was even some chatter that various cryptocurrencies were targeted for the same bearish strategy.
A short ladder attack begins when an institution builds a large short position in a security. Being short involves buying shares, then immediately lending them out with the goal of re-acquiring them at a lower price. As the asset drops in value, the short seller profits.
The maximum profit on a short play is when the asset drops to $0, perhaps when bankruptcy is made official by the targeted company. A short ladder attack is meant to give the impression that shares of a stock (or any asset) are not worth what bullish investors believe, thus inducing other traders to dump shares or simply discourage others from buying.
Are Short Ladder Attacks Legal?
Short ladder attacks are usually legal trading tactics, but when market manipulation laws are breached, it becomes a serious crime. It is important to recognize that short selling volatile assets is an age-old Wall Street practice.
In general, there is nothing nefarious about shorting a stock. In fact, according to the U.S. Securities and Exchange Commission (SEC), short sellers add liquidity to the market. More liquidity can reduce trading costs for other market participants.
During bear markets, however, short sellers often come under scrutiny from both regulators and the investing public for their perceived efforts to bring down key stocks and the broader market.
In extraordinary situations, shorting stocks is sometimes ruled illegal — at least temporarily. Regulators will occasionally ban selling groups of assets short with the goal of stabilizing financial markets during periods of turmoil, such as during the Great Depression and the financial crisis of 2008-09. Beyond those instances, short selling is not illegal.
Short ladder attacks are infamous in the sense that traders engaging in such a strategy seek to drive asset prices lower. The tactic is not illegal, however. At times, though, there can be illegal attempts to take a stock price down.
Where is the line drawn? It’s when a trader manipulates the laws using malicious activities like lying about a company, bribing others to not buy shares of the targeted firm, or the practice of spoofing.
Example of a Short Ladder Attack
Short ladder attacks are not something traders see every day. In fact, they can be hard to spot. It’s not a truly defined term, rather it is a loose theory.
Still, market analysts and traders can suspect a certain stock is under this “attack.” Potential examples include popular Wallstreetbets meme stocks from early- to mid-2021: GameStop (GME), AMC Entertainment (AMC), and Bed Bath & Beyond (BBBY).
When shares of those companies began to falter during the first quarter of 2021, after their meteoric rise in the preceding weeks, conspiracies began to arise within internet chat rooms. Retail investors, who had lost money by being long those shares, claimed they were victims of unscrupulous trading strategies employed by large funds by way of short ladder attacks. It was thought that hedge funds came together to enter low bids that drove those securities lower.
Ask a short seller, and they might tell you that this strategy does not exist. After all, conspiracies to drive down a share price could venture into the market manipulation area, which would be against financial market rules.
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How Can You Identify a Short Ladder Attack?
Even as big-time traders dismiss the practice, short ladder attacks are thought by some retail traders to be a normal practice. Spotting these maneuvers is no easy task since selling pressure can come from a host of market participants for a variety of reasons.
Perhaps there is bad news about a company that might fundamentally bring about the bears (who have no ill intent). Maybe a stock drops below a key technical level, leading to further selling. Moreover, it could be that major company insiders are dumping shares simply to raise cash for personal reasons. All these scenarios can give the impression of a short ladder attack.
You still might wonder, “what is a short ladder attack?” in real life. Some possible hallmarks could be high volume on downward price moves. Also, be on the lookout for brief squeezes in which short sellers are forced to engage in covering — when bears quickly buy back stock they are short to avoid steep losses. Also, stocks with high short interest could be targets of a short ladder attack. Basically, whenever floods of offers hit a stock for no apparent reason, that could be a short ladder attack signature.
You might recall the mother of all short squeezes (colloquially named MOASS) term. It’s when a flood of buyers bid up shares that were being shorted by other investors. GameStop’s example was one to behold in that the price jumped hundreds of percent over the course of a few days.
Short Ladder Attacks and Wallstreetbets
According to those on Wallstreetbets, short ladder attacks exist to work against individual investors. By flooding the market with offers, the supply/demand balance tips greatly in favor of the bears. Posts on Wallstreetbets attempted to call out the practice, but little (if any) regulatory action has been taken.
This abusive ploy is alleged to be executed by a consortium of hedge funds, prime brokers, and even potentially regulators and clearinghouses. Target stocks are determined and prioritized, almost like a hit list. After driving shares lower, the short sellers avoid capital gains tax since they never have to cover their shares.
The Takeaway
Short ladder attacks are alleged bearish trading activities performed by large institutional traders that work against retail traders who are long a stock.
While the practice is not illegal on its own, crossing the line into market manipulation will catch the eye of regulators. Many large hedge fund managers claim to be unaware of such a practice. Additionally, research firm Muddy Waters is highly skeptical that short ladder attacks truly exist. Still, retail traders on internet stock trading forums claim they were victimized by short ladder attacks.
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