February 8, 2016
Monday’s Adjudication Roundup
- Bank of America settles for $6.2 million in notice class actions suit, in which class members accuse the bank of systematically failing to give timely mortgage satisfaction notices.
- Morgan Stanley will pay $63 million to the FDIC in state and federal claims that it misrepresented residential mortgage-backed securities.
- Deutsche Bank National Trust Co. will not escape the entire $3.1 billion Royal Park Investments class action suit. A NY federal judge dismissed only the derivative claims.
- Wells Fargo settles for $1.2 billion in suit for defrauding the FHA.
- HSBC settled, in multiple settlements, for $601 million with state and federal regulators and enforcement agencies in suits related to mortgage origination, servicing and foreclosure activities.
February 8, 2016 | Permalink | No Comments
February 5, 2016
Movin’ on up with TJ’s and Whole Foods?
TheStreet.com quoted me in Houses Near Trader Joe’s or Whole Foods Reap Better Property Value Returns. It opens,
The internal debate for people who are shopping for a home is never an easy one, as the location and potential for the property value to rise might outrank the appearance of the brick and mortar edifice. But new research from Zillow has reiterated beliefs that resale value should remain the higher priority.
Even first-time home buyers are aware of the importance and value of determining the resale value of a condo or house.
After examining 17 years of housing data from 1997 to 2014, Zillow, the Seattle-based real estate website, determined that homeowners realized greater gains when they were in close proximity to Trader Joe’s and Whole Foods, the national grocery store chains. The analysis included examining the values of condos, co-ops and houses within a mile of 451 Trader Joe and 375 Whole Foods locations, totaling nearly 3 million homes. The median value of these homes was compared to the median values of all homes during the same time period.
“These grocery stores are doing a great job of identifying places ready for quick home value appreciation,” said Svenja Gudell, chief economist of Zillow. “A Whole Foods or Trader Joe’s opening is a signal for home shoppers or homeowners that this is likely to be an up-and-coming location.”
One emerging trend is the desire of homebuyers to live in neighborhoods where walking to local stores and restaurants remain a feasible option.
“As more people are priced out of city centers and head to the suburbs, homebuyers still want amenity-rich neighborhoods and a more urban feel,” she said. “These stores are definitely among those amenities that are attractive to buyers.”
Other Amenities Sought
These two grocery stores resonate highly with consumers, and their preference has increased to the point where they have asked specifically if either one is within walking distance at showings of homes, said Samantha DeBianchi, CEO of DeBianchi Real Estate, a Fort Lauderdale, Fla. real estate firm.
“The old adage ‘location, location, location’ is really true,” she said.
The research conducted by Zillow revealed that through 2014, the homes located a mile of either Whole Foods or Trader Joe’s were valued at more than twice as much as the median home throughout the U.S.
Since these two grocery stores are always constructed in neighborhoods where the gross income is higher than the average salary, whether this phenomenon is simply a self-fulling prophecy is anybody’s guess.
Zillow contends that the stores provide the inertia to push up home prices, even in neighborhoods where the prices were falling behind those in the city itself. They also examined the effect of the construction of the stores on the property value three years before and after the opening of 40 Trader Joe’s locations and 40 Whole Foods stores. After a store opens, the prices of homes start to exceed those in the city overall.
“I am still skeptical of the claim when it comes to those two stores, but I would say that when you buy near a major amenity when it is under construction, you often see a bump when it is complete,” said David Reiss, a law professor at Brooklyn Law School.
February 5, 2016 | Permalink | No Comments
Friday’s Government Reports Roundup
- The D.C. Fiscal Policy Institute released a report finding that more than half of D.C.’s public housing needs major renovation, estimating costs for upgrades and replacements at about $1.3 billion.
- The Commerce Department released a report at the end of January finding that the U.S. economy grew at a 0.7 percent annual rate in the fourth quarter of 2015 bringing the total economic growth in 2015 to 2.4%.
February 5, 2016 | Permalink | No Comments
February 4, 2016
Tale of Two Airbnbs
CBRE has issued a report, The Sharing Economy Checks In: An Analysis of Airbnb in the United States. It opens,
The sharing economy has become a prominent though not well understood economic phenomenon over the past several years. Airbnb is the market leader as it relates to the temporary accommodations industry. CBRE Hotels’ Americas Research compiled select information from STR, Inc. and Airdna, a company that provides data on Airbnb, for hundreds of U.S. markets to assess the relevancy of this sharing platform to the traditional hotel industry.
Airbnb’s presence in key markets throughout the U.S. is growing at a rapid pace, with users spending $2.4 billion on lodging in the U.S. over the past year, according to analysis from CBRE Hotels. Over the study period of October 2014 – September 2015, more than 55 percent of the $2.4 billion generated was captured in only five U.S. cities (New York, Los Angeles, San Francisco, Miami and Boston), represents a significant portion of the lodging revenues in these markets.
CBRE Hotels compiled select information for hundreds of U.S. markets to assess the relevancy of this sharing platform to the traditional hotel industry. From this data, the firm has developed an Airbnb Competition Index. This measure incorporates a comparison of Airbnb’s Average Daily Room rates (ADR) to traditional hotel ADR’s; the scale of the active Airbnb inventory in a market to the supply of traditional hotels, and the overall growth of active Airbnb supply in that market, into a measure of potential risk. New York was identified as the number one domestic market at risk from the growth of Airbnb, with an Airbnb Risk Index of 81.4, followed by San Francisco, Miami, Oakland and Oahu. (1)
What I find interesting about this is that Airbnb’s footprint is so hyperlocal. On a national level, just a handful of markets account for a majority of its revenues. But then, if you look at one of those individual markets, New York, just a handful of neighborhoods account for a majority of the revenue coming from that market. I cannot yet imagine what the hospitality sector will look like once the sharing economy fully saturates it, but it will surely be different that what it is today.
February 4, 2016 | Permalink | No Comments
Thursday’s Advocacy & Think Tank Roundup
- According to data from the federal Early Childhood Longitudinal Survey, educators must tailor support for the disadvantaged children in new environments (suburbs and small towns, as opposed to rural and inner-city areas) because they have different stressors and challenges.
- The Landscape and Urban Planning journal published a new study finding that upward mobility is significantly higher in compact areas than in metropolitan areas due to job accessibility.
February 4, 2016 | Permalink | No Comments
February 3, 2016
Dirt Law Jobs Up
The National Jurist quoted me in Hot Practice Areas For J.D.s. It opens,
Real Estate is hot again
Real estate is one of the most fickle industries around — hot when the economy is growing and cold when it is not. The good news is that real estate is growing again and that means more jobs for entry-level attorneys.
Robert Half Legal, a legal staffing agency, reports that real estate lawyer is the third most in-demand legal position in the South Atlantic region. Real estate is the second-fastest-growing legal industry in the South Atlantic region and the fourth fastest in the Mountain and Pacific regions.
At Brooklyn Law School, real estate law has become the most popular specialization. Graduates are finding more jobs in the specialization’s niche areas such as cooperative and condominium representation, said professor David Reiss.
“This is, in part because of our externship program that provides students with experience in the applicable government agencies and law firms, but also because of our Real Estate Certificate program, our wide array of real estate courses and the availability of courses at nearby urban planning schools,” Reiss said. “We also offer a Real Estate Law Certificate, and we find that most or all those receiving certificates are employed pretty quickly in any given year.”
Richard Hermann, a professor of Concord Law School who has written extensively about legal careers, recommends earning certificates in niche areas of the law, as they are inexpensive ways to increase your qualifications.
“Many such programs are available, and quite a few are online and inexpensive,” he said.
While real estate can be up and down, Reiss said real estate law could be a good field even during slower economic times.
“No matter what the economy as a whole is doing, clients are still buying and selling properties, financing and refinancing them, entering into property leases”, he said.
To prepare for careers in real estate law, Brooklyn Law School encourages its students to have very focused resumes, which increases their marketability. “We find that students with focused with focused resumes, can make a compelling case to a range of real estate employers, even if their overall GPA is not high,” Reiss said.
February 3, 2016 | Permalink | No Comments
Wednesday’s Academic Roundup
- Can Short-Term Rental Arrangements Increase Home Values?: A Case for Airbnb and Other Home Sharing Arrangements, Jamila Jefferson-Jones, The Cornell Real Estate Review, Vol. 13, June 2015.
- Residential Land Values in the Washington, DC Metro Area: New Insights from Big Data, Morris A. Davis, Stephen D. Oliner, Edward Pinto & Sankar Bokka.
- The Law of Banksy: Who Owns Street Art?, Peter N. Salib, University of Chicago Law Review, Vol. 83, No. 4, 2016.
- An Ethnic Roller Coaster: Disparate Impacts of the Housing Boom and Bust, Olga Gorbachev, Brendan O’Flaherty & Rajiv Sethi.
- Measuring House Price Bubbles, Steven C. Bourassa, Martin Hoesli & Elias Oikarinen, Swiss Finance Institute Research Paper No. 16-01.
- Cause for Rebellion? Examining How Federal Land Management Agencies & Local Governments Collaborate on Land Use Planning, Michelle Bryan, 6 Journal of Energy & Environmental Law 1 (2015).
- Macroprudential Regulation of Mortgage Lending, Steven L. Schwarcz, Southern Methodist University Law Review, Forthcoming.
- Fee Simple Obsolete, Lee Anne Fennell, University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 739; U of Chicago, Public Law Working Paper No. 559.
- Financial and Housing Wealth, Expenditures and the Dividend to Ownership, Sheng Guo & William G. Hardin III.
- Macroeconomic Effects of Bankruptcy and Foreclosure, Kurt Mitman, CEPR Discussion Paper No. DP11043 (Paid Access).
February 3, 2016 | Permalink | No Comments
