Title insurance premiums surging during COVID-19

The title insurance industry saw a surge in premium volume in the second quarter of 2020, according to the American Land Title Association’s latest Market Share Analysis.

It’s no secret that lending volume is up in 2020. In fact, the latest Fannie Mae forecast says mortgage lending will hit an all-time high of $3.9 trillion this year, largely due to record volumes of refinancings.

“We continue to believe that a low-rate environment will support refinance demand over the forecast horizon,” Fannie Mae said in the forecast. “At the current interest rate of 2.86%, we estimate that nearly 69% of outstanding first-lien loan balances have at least a half-percentage point incentive to refinance.”

But title insurance premiums are also surging as a result. The title insurance industry generated $4.18 billion in title insurance premiums during the second quarter of 2020, ALTA’s report showed. This is up 8% from the same period last year.

“Despite the pandemic, low interest rates in the second quarter of 2020 has been positive and productive for the land title insurance industry,” ALTA CEO Diane Tomb said. “Title insurance premium volume is dependent on mortgage origination volume, and 45 states showed that second-quarter premiums written increased 8% compared with the second quarter of 2019.”

“Although we are not experiencing the near-historic origination volume we saw in the first quarter, the majority of the country is still trending upward,” Tomb said.

Overall, total operating income for the industry was up 8.2% and operating expenses were up 8.4%, but loss and loss adjustment expenses were down 27%, the ALTA report shows.

“We expect residential housing market and refinances—buoyed by low mortgage rates—to remain strong throughout the year,” Tomb said. “The question left outstanding is how the commercial market will rebound. Depending on how the commercial market performs during the rest of the year, 2020 could prove to be one of the strongest years on record.”

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Housing cliff meets fiscal cliff with COVID-19 relief delayed

The so-called housing cliff, referring to the expiration of programs in the CARES Act keeping people in their homes, is about to meet the government-funding cliff, as the Sept. 30 end of the federal fiscal year sometimes is called.

White House Chief of Staff Mark Meadows said Wednesday he is not optimistic about reaching a new coronavirus relief deal before the end of September, predicting House Speaker Nancy Pelosi will use the government funding cliff at the end of next month as leverage to strike a deal on pandemic aid,” a Politico story said.

The House of Representatives passed the Heroes Act at the end of May to provide funding to states overwhelmed with pandemic costs, extend the eviction moratorium in the CARES Act, and continue providing jobless Americans with a $600 a week enhancement to unemployment benefits to keep them current on bills such as mortgage and rent.

The Senate ignored the House’s $3 trillion act, proposed a $1 trillion bill of its own that never made it to the floor to be debated because it lacked Republican support, and then went on its August summer vacation without passing anything.

“It’s really been Speaker Pelosi really driving this train as a conductor more so than really anybody,” Meadows told Politico. “And I think privately she says she wants a deal and publicly she says she wants a deal, but when it comes to dealing with Republicans and the administration, we haven’t seen a lot of action.”

President Donald Trump signed an executive order and three memorandums in a ballroom of the Trump National Golf Club in Bedminster, New Jersey, on Aug. 8 that he said would give Americans the help that Congress had failed to provide.

But, the executive order he signed, touted as an extension of the eviction moratorium in the CARES Act that expired in July, only directed various federal departments and agencies to “consider” and “review” ways to keep renters in homes using existing government programs.

Another directive the president signed would provide a $300 a week extra payment for people receiving unemployment benefits – originally, it was $400 with the requirement that states kick in $100, but that provision was later walked back. The money is coming from a Federal Emergency Management Agency fund intended for hurricane relief.

FEMA has approved about 35 states to offer the “lost wages assistance” that amount to half the $600 a week aid in the CARES Act that expired July 31. Fewer than half a dozen states have completed the rejiggering to their benefits systems required so they can send the checks from the FEMA fund.

Pelosi has said the way to reach a compromise between the House’s $3 trillion bill and the Senate’s $1 trillion proposal is to split the difference: Pass a $2 trillion bill. At a press conference on Thursday, she said the Senate’s proposal lacked enough funds for schools dealing with the pandemic, housing, and other needed aid.

“We have said to them, `We’re willing to meet you in the middle.’” Pelosi said. “We have a pandemic, and they’re coming in with an eyedropper.”

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HUD resumes inspections of public housing units amid COVID-19 pandemic

The Department of Housing and Urban Development said it was resuming in-person inspections of public housing units, though families concerned about the spread of COVID-19 can decline to have a HUD worker in their home.

The so-called REAC inspections, which stands for Real Estate Assessment Center, are aimed at ensuring HUD properties like rental housing for low-income families, the elderly, and persons with disabilities “meet federal standards of health, safety, and accessibility,” HUD said. REAC visits were paused in March when COVID-19 began spreading in the U.S.

The REAC program will prioritize inspections based on COVID-19 data from Johns Hopkins University and health risk scoring methodology from the Harvard Global Health Institute, HUD said in a statement.

In a “heat map” on the REAC website, states such as Florida, Texas, Arizona and Nevada are portrayed in red, meaning they and six other states have a “high” risk with 25 or more new cases per 100,000 people a day.

Vermont is the only U.S. state that the map shows as green, meaning the state has fewer than 1 new case a day per 100,000 people. States such as New York, New Jersey, Pennsylvania, Massachusetts, Michigan and Colorado are shown in yellow, meaning they are considered to have “moderate” risk with between 1 and 10 new cases a day per 100,000 people.

States including California, Virginia, Ohio, Kentucky, Washington and New Mexico are shown in orange, meaning the risk is “moderately high,” with between 10 and 25 new cases a day per 100,000 people.

“I believe we have found a solution to continue this important function while keeping staff, residents, and inspectors healthy,” said HUD Assistant Secretary for Public and Indian Housing Hunter Kurtz.

The Centers for Disease Control and Prevention has recommended that people refrain from having strangers inside their homes to prevent the spread of the virus. The World Health Organization and the CDC have said the virus can be transmitted through small particles that travel on a person’s breath, as well as through surface contamination.

HUD said the inspectors will use “strict safety protocols,” without specifying what that will entail. One of the challenges of the COVID-19 pandemic is the asymptomatic spread, meaning people who look and feel healthy may be spreading the virus.

Tenants concerned about the spread of the virus can refuse to have a HUD worker in their unit, a HUD spokesperson said in an email, responding to a HousingWire inquiry.

Families “can notify the public housing agency or the owner/agent that they do not want an inspector in their unit,” the spokesperson said. “We have alternate unit selections and this is part of our protocol.”

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Definitive COVID-19 housing data is still one month away

Monday’s existing home sales report showed a significant decline in the year-over-year metric for May. This May report showed sales were down 26.6%, the lowest sales print since the housing bust years at just over 3.9 million.

JUne's existing home sales

The stay-at-home orders have severely affected demand. These low points don’t truly reflect the real fundamentals of the U.S. housing market. This is why, for many months, I have stressed we need to wait until July 15 to get a real look at the landscape for housing data.

In fact, I have noted that everyone should put an asterisk on the March, April and May data due to stay-at-home orders and that June’s report should be an excellent base to work from for the rest of the year.

Logan Mohtashami
Logan Mohtashami

As mortgage rates stay low, I expect a rebound in the existing home sales data line in time. Don’t be surprised if we see a positive year-over-year growth print in the existing home sales report in the upcoming months. Housing data gets softer when mortgage rates get above 4.5% – outside stay-at-home orders, of course. 

The median existing-home price in May was $284,600, up 2.3% from May 2019.

As I mentioned in previous articles, the median sales price before the COVID-19 crisis was getting too hot, and we should be rooting for it to come down. The rate of growth on a month-to-month basis fell, so this is a good thing. In fact, I labeled the median sales price growth above 7% that we saw earlier in the year as an unfortunate aspect for housing.

Inventory data sits at a 4.8-month supply up from 4.0 months in April and up from 4.3-months for May 2019. Monthly supply does grow during the spring and summer months and retracts in fall and winter.

We have enough supply for sales to grow as demand has picked up in the last six weeks.

As we end the month of June, we have a different perspective on U.S. economics compared to how things looked in March and April.

The stay-at-home orders and the negative year-over-year data in the purchase application data brought fear into the housing market. Now, purchase applications are at an 11-year high with double-digit growth on the four-week moving average. Other data lines, like the St. Louis Financial Stress Index, are below zero, which means less stress in the marketplace.

618 STF2 0.0070%

In the coming months, we need to see where the home sales flattened out and where the median home price growth is. We don’t want to see anything above 4.6% growth in home prices this year, 2.3% year-over-year growth, which means real home price growth is negative year over year. That would be an outstanding housing data line that should be cheered.

In the upcoming months, I know a rebound in sales is coming, but context is critical. It’s working from a stay-at-home-virus low, that is it. 

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COVID-19 Threatens A New Eviction Crisis

The coronavirus has put America’s housing market on hold. As residents shelter in place, real estate listings have slowed to a trickle. State and federal policymakers, facing an unprecedented spike in unemployment and a pandemic simultaneously, have banned evictions to ease economic hardship during the crisis. 

But eventually all of this will have to end. When the eviction bans expire, millions of Americans will find themselves on the hook for months of back rent. Thirty million Americans — overwhelmingly the poor and renters — are newly jobless as unemployment hits previously unthinkable levels. 

“Eviction moratoriums are a great first step, but there’s a lot of evidence that landlords are still filing for eviction,” said Megan Hatch, a professor at Cleveland State University who studies urban policy. “When these restrictions are lifted, a huge number of people could be evicted right away.”

May 1 is the second rental due date since the start of the COVID-19 pandemic. Millions of renters will have to choose between paying their rent and buying essentials. Some have already reached the bottom of their savings.

Even before the pandemic, a significant percentage of Americans were struggling to pay rent. In a 2018 Pew Charitable Trusts survey, nearly 1 in 6 households reported spending more than half of their income on rent. Of the roughly 19 million American families who are eligible for rental assistance, only 4 million receive it.

In April, almost one-third of households said they couldn’t pay the rent. May is not looking any better.

“We know millions of households were one financial accident away from eviction,” said Sarah Saadian, the vice president of public policy for the National Low Income Housing Coalition. “This pandemic may be the breaking point.”

A wave of evictions post-quarantine will mean many cities will see a significant increase in homelessness. In Seattle, a 2017 survey found that the majority of evicted renters ended up homeless. In New York, a 2018 study found that tenants who had experienced an eviction were more likely to move into a homeless shelter — and stay there longer — than tenants who had never been evicted. 

“Some people are going to be able to pay their rent with their savings for a few months,” Hatch said. “But if their savings run out and their job still hasn’t come back, a lot of those people are going to end up on the street or scrambling for a new place to live.”

The economic hardships brought on by the coronavirus pandemic have led some housing activists to call for rent strikes.

The economic hardships brought on by the coronavirus pandemic have led some housing activists to call for rent strikes.

A No-Win Situation 

Thousands of newly homeless people and thousands of empty apartments will create a situation that benefits neither renters, landlords nor cities. 

Michael Manville, a UCLA professor who studies urban planning, described a scenario in which a renter paying $800 a month loses her job. She can’t pay her rent, gets evicted and ends up moving in with a friend. 

If this happens to thousands of other people across the city, landlords may reduce rents to attract new tenants. But, Manville noted, even if the landlord lowered the rent on that apartment to $600, it would be too late for the previous tenant. She wouldn’t have the first month’s rent and deposit needed for a new place and would now have an eviction on her record to deter other landlords from renting to her. Meanwhile, her landlord may not find a new tenant for the apartment for months.

“It’s a collective action problem,” Manville said. “Individual landlords may be confident that if they evict tenants, they’ll be able to fill the vacant unit quickly. If a large number of landlords evict their tenants at the same time, however, there’s going to be too many empty apartments and not enough people with the savings to move into them. All these problems can be avoided by just letting people stay in their homes.” 

Only the federal government has the power to keep this problem from spiraling.
Michael Manville, UCLA professor

This scenario would have wide-ranging effects for cities themselves. High vacancy rates make it harder for developers to build new homes because banks won’t want to finance construction in places tenants aren’t paying rent. 

The social effects, too, may be long-lasting. Hatch noted that evicted tenants are more likely to lose their jobs, if they’re still employed in the first place. Their children show worse academic performance. They are more likely to move into lower-quality and overcrowded housing, affecting both their short- and long-term health. Even if cities don’t see a significant rise in homelessness, low-income populations may move en masse to cheaper suburbs. 

“Renters are being hit hardest and first,” said Jenny Schuetz, a fellow at the Brookings Institution’s Metropolitan Policy Program. “These are people without a lot of resources or choices. It’s not clear that when this is over they can move someplace else. They’re going to live wherever they can afford to.” 

Seattle has already converted an event space into a temporary men's shelter for the homeless during the coronavirus pandemic.

Seattle has already converted an event space into a temporary men’s shelter for the homeless during the coronavirus pandemic.

A Federal Challenge 

The severity of the coronavirus-driven housing shock will depend on the steps policymakers take to prevent it. 

At the federal level, the National Low Income Housing Coalition is asking Congress to include $100 billion in emergency rental assistance in the next economic stimulus package. This would cover back-rent for tenants so they aren’t evicted as soon as local governments lift the temporary bans. The nonprofit organization is also asking for $70 billion in infrastructure spending to retrofit public housing to help reduce health conditions that make residents more susceptible to COVID-19. 

States and cities could also do their part. Gary Painter, the director of the University of Southern California’s Sol Price Center for Social Innovation, said lawmakers could ban rent increases during the pandemic and its economic aftermath. They could also provide low-interest, long-term loans for renters and landlords to cover costs and help renegotiate lease terms, a process that is relatively routine in other parts of the housing market.

“If you own a strip mall and all of a sudden you lose two tenants, it’s not unusual to renegotiate new terms with your financial backers,” Painter said. Cities could extend the same principle to their residential housing by expanding their legal-assistance programs or initiating large-scale negotiations between landlord and renter representatives. 

The most important factor in all of these efforts will be keeping Americans in their homes as long as possible. A rise in homelessness is not only a moral catastrophe for cities but also a fiscal one. Nearly every study on the costs of homelessness finds that it is cheaper to prevent evictions than to mitigate their fallout. A 2018 study found that every eviction cost New York City roughly $8,000 in medical care, homeless services and lost wages.      

“It makes a lot of sense for the Congress to beef up the money flowing to the typical American, especially lower-income Americans,” Manville said. “Only the federal government has the power to keep this problem from spiraling.”

Failure to build public and low-income housing has contributed to a nationwide affordability crisis.

Failure to build public and low-income housing has contributed to a nationwide affordability crisis.

More Affordable Homes For More People

Saadian noted that the coronavirus should also be a call to reform the policies that made renters so vulnerable to homelessness in the first place. 

The Low-Income Housing Tax Credit, the federal government’s primary vehicle for encouraging affordable housing production, mostly goes to renters who earn around 60% of the local median income. In some cities, households earning as much as $117,400 are eligible for subsidized housing. Attacking the roots of the country’s eviction and homeless crises, Saadian said, will require targeting low-income renters and addressing the federal government’s decades-long underfunding of affordable housing. 

“The housing shortage is almost entirely at the low end of the income spectrum,” Saadian said. “If there isn’t sufficient housing at the low end, the problem ends up affecting people higher up the income spectrum.” 

The coronavirus may also provide an opportunity for cities to solve the other driver of the housing crisis: the near-impossibility of building more homes in overgrown cities.  

“We basically stopped building housing in 2008,” said Jeff Tucker, an economist for real estate listing site Zillow. “We have this huge housing deficit at the same time we have several million extra people in their 30s who are disproportionately renting right now and trying to transition to homeownership.” 

If cities don’t address this mismatch, the country could return to its trajectory of soaring home prices relatively quickly after the pandemic is over — or maybe even before. Tucker said that Zillow’s web traffic fell roughly 20% at the start of the pandemic but is now 20% higher than it was last year. “Virtual tours” of homes have increased sevenfold. 

Some of this increase is due to Americans having more time to browse real estate listings, but it may also indicate that some potential home buyers, especially affluent ones, plan to use the drop in demand to climb onto the housing ladder. If rents and prices continue to climb as they did before the pandemic, they will only increase the displacement and homelessness risks. 

The pandemic should be a call for cities to rethink their economic structures, Schuetz said. 

“This crisis makes it clear that housing has implications for our health,” Schuetz said. “We need to keep reminding people that everyone deserves good-quality housing not just for a pandemic but for everything that happens afterward.”

A HuffPost Guide To Coronavirus

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Real Estate Will Never Be The Same Post Covid-19. Here’s What The World’s Top Developers Want You To Know

In less than eight weeks, Covid-19 has re-ordered virtually every industry in the world.

But few more rapidly than real estate and development. Now that hundreds of millions of people have gotten a new taste of how important “home” actually is—as a safe haven, a de facto schoolhouse, an impromptu remote office, and a forced, familial psychological petri dish—the spaces we live in, and more importantly what we demand of them, stand to look profoundly different in the post-coronavirus world. 

Real estate development and architecture have always had a tail wags the dog relationship. Architects are paid to be visionaries and idea factories. But it’s often the developers who hire them that inspire the most transformative innovations. Long after the architects have moved on, they’re the ones who still answer to the customer, process feedback (and blowback), and are pushed continually to innovate and problem-solve.

In response to the Covid-19 pandemic, many of the world’s largest developers are rapidly rethinking their visions for the future of the built environment. Projects under construction are being re-designed on the fly. Floor plans are being redrawn. Cigar lounges with touchscreen humidors are being canned.

This top-down re-visioning of real estate will have an outsized, trickle-down impact on how we build, the materials we use, how we move and interact with one another in public and private places, and what ultimately “space” should be and do for years to come. So why isn’t anyone talking about it?

Few cities understand this real estate “space race” better than Miami.

Over the past decade, South Florida’s forward-thinking developers have pioneered many of real estate’s most boundary-bending amenities including: the high-rise car elevator (Porsche Design Tower), the flying car port (Paramount Miami Worldcenter), the private soccer pitch (Paramount Miami Worldcenter, again), in-unit aromatherapy and Circadian rhythm lighting (Muse Residences), the indoor ice skating rink, (Estates At Acqualina), and private rooftop helipads (1000 Museum).

In the process, they’ve challenged the world’s leading architecture firms, engineers, contractors, and technology companies to push the limits of what was previously design science fiction to re-shape “possibility” in the built environment.

Broadly speaking, the real estate development amenity paradigm over the past decade since the Great Recession has been fairly Trumpian in its expression: bigger, wider, flashier, more. Programmatically, it’s centered around a few core ideas: building community through open, interactive spaces, shared experiences through intimate group activities like cooking classes and kick-boxing lessons, and stuffing buildings full of digital innovation to eliminate mental and physical clutter with things like interactive touch-screen technology.

Three months into the Covid-19 pandemic, many of these concepts already seem woefully out of date, even irresponsible. Real estate’s new development buzzwords are quickly morphing. Buyers domestic and foreign all of a sudden seem vastly more interested in things like privacy, virtual, distanced, and mine.

So what, exactly, will real estate development’s new design paradigm look like post-corona?

Miami’s recently completed Paramount Worldcenter bills itself as America’s second largest master-planned development (Related Group’s Hudson Yards on Manhattan’s West Side is the first), and the most amenitized building in the world. That’s not marketing hyperbole.

Within the project’s 30 acres and 700’ towering feet are an elevated, full-sized soccer field, an indoor basketball court, tennis and racquetball courts, a golf simulator, conservatory, observatory, recording studio, jogging path, dog park, tai chi deck, yoga studio, two game rooms, five pools, a sky port for flying cars (when they come), and over five-hundred uber luxury residences with private elevators and foyers.

Dan Kodsi, Paramount Miami’s developer, always envisioned his building pushing the limits of possible when he first snatched up the land back in 2016.

At the time, Miami’s luxury condo market was booming again with Latin American (LATAM), Russian, and other foreign buyers looking for a safe haven for their money post-Recession and a healthier, more stable, experienced-based lifestyle. Kodsi saw an opportunity to deliver on both of those promises by setting a new standard in what he calls “ROL”, or Return On Lifestyle. Coming out of the Great Recession real estate at every price point was rotting everywhere. Staying relevant and being responsive, Kodsi reckoned, was what would set his buildings apart from the noise. That essential premise has never been more actionable than it is now.

“Covid 19 has been a reminder to stay consistent on the things we always try to incorporate into everything we build,” says Kodsi, “In many ways we were already ahead of the curve on technology and delivering amenities that residents could enjoy without leaving the building. But as a developer, I am always conscious about adapting our projects as we design them to our buyers’ needs at any given time, the forms and function of our architecture, the amenities we build in, and even the way our buildings get cleaned and how we deliver fresh air and water.”

For the handful of U.S. developers capitalized to play in Kodsi’s multi-billion dollar real estate space, staying relevant, responsive, and “conscious” doesn’t come cheap. It involves a full-time design and construction staff on every project, as well as dozens of in-house architects who wake up every day translating napkin visions into constructable realities. This constant process of “staying cognizant” at the top of the real estate market—particularly now in the wake of a global pandemic—inevitably sets new global design paradigms into motion that eventually pull everyone else along. It’s trickle down theory—for real estate.

“Without hesitation I can say that the concepts we brought to life at Paramount Worldcenter came from our internal team’s understanding of our buyers’ needs and desires,” says Kodsi. “On top of that we executed on some pretty daring surprises that have proven to be wildly popular amongst our buyers, and those will eventually be adopted on a wider scale as the costs come down. Our internal team of architecture, interior design, and conceptual design professionals allows us to build our visions into reality and push new boundaries that we can share.”

Since the Covid-19 crisis hit, Kodsi’s development calculus is quickly future-proofing again. He’s not alone. A dozen other developers I spoke with for this story have never done more pivoting, re-evaluating, or re-aligning in their lives. Realtors and architects who don’t want to be left behind should be paying close attention to what they’re thinking about next.

Almost universally, every developer seems to agree that health and wellness will now be at the top of buyers’ wish lists, positioning people like Kodsi who’ve been doing it for years ahead of the curve.

“Air purification, cleaning protocols, aromatherapies, lighting, and water filtration have been becoming brand standards for us for a while, and we’re continuing to innovate in this area,” says Kodsi. “Our latest Hotel and Residences brand called Legacy includes a Center for Health and Performance as a pillar in all Legacy properties, fusing wellness with advanced diagnostics and medicine. These will be the places that athletes come from all over the world to improve their performance incrementally side by side with leading executives. We’re even convinced that what we are doing with this facility during a pandemic like Covid-19 would remain open and be deemed ‘essential’ for the community. Health is now the new wealth.”

Touchless “proptech” are next on developers’ mission-critical lists, especially where it relates to minimizing co-mingled surface contact.

“A lot of technology we already deploy is touchless and keyless,” says Kodsi, “But we plan to stay ahead in technology even more so now by utilizing biometrics like voice prints and optical recognition. Even thumb scans will soon be obsolete because they require everyone to scan their print on the same device which becomes a liability. There should be no need in the future for our residents to have to touch anything in the building, nor should our staff have to touch our residents’ items without protection protocols in areas like valet. Touchless is inevitably going to become the new normal.”

Not unexpectedly, Paramount’s Kodsi isn’t the only influential Miami developer looking to re-shape real estate post Covid-19, which puts additional levers on what the future of luxury real estate 2.0 might look like.  

Developer Edgardo Defortuna arrived in Miami from Cordova, Argentina in the mid-1980s, and in his words, “got lucky”.

“I was in the right place at the right time,” recalls Defortuna, “The Miami market at that time was just beginning to become a power player internationally versus Manhattan. I started out managing one property. Then one grew to ten. Then ten to fifty. I got my real estate license in 1986, and the rest is history.”

Since then, Defortuna’s company, the Fortune International Group, has built up a global reputation as one of South Florida’s leading developers specializing in rarified Latin American buyers, selling billions of dollars of prime waterfront real estate to many of South America’s elite families, including the company’s recently completed Ritz Carlton Residences Sunny Isles, just north of Miami Beach.

While recognizing the seismic impact Covid-19 likely will have on buyers’ demands over the next 3-12 months, Defortuna is also cautious about the risks of overcorrecting. Re-designing cigar lounges into yoga rooms might make sense today. But what about five years from now? How will expectations boomerang back when there’s a coronavirus vaccine?

“We are always aware of the trends,” says Defortuna. “We are in the business of knowing what our buyers want. But as developers we also have to be careful about changing course too quickly. Some trends, of course, are certain—and not just because of coronavirus. In future buildings, with the advent of more technology that optimizes remote access and living, we expect to see an increase in designated home offices. In terms of technology, we also anticipate more no-touch interfaces, preventing residents from ever needing to grab door handles or push elevator buttons. From a design perspective, living room-like terraces will also be a mainstay within projects in my opinion, as well as more private elevators. Common areas will also be smaller in the future, I think, and residents will want access to more fresh air and more outdoor space. Post-corona everything’s on the table.”

What’s ultimately playing out in real estate right now is something unexpectedly Darwinian that not even the Great Recession triggered. Crisis forces adaptation. Some species (businesses) respond. Others don’t. Post-corona, it will be developers who react quickly that decide what the new human environment looks like on the other side.  

“Real estate development is the business of evolution,” says Bruce Eichner, founder of Manhattan-based Continuum Company. “Most of the real estate and development world is inhabited by creatures who are in the business of replication. They see what makes money now. And they repeat it over and over again. I’ve always looked at where the world is going and how can I fit into that world. That’s how you design for the future.”

When you talk to Eichner, a few things about him become immediately clear. There’s no flash and cash, feather puffing South Florida bravado. He’s “too old for that”, he says. Eichner cut his development chops putting up some of Brooklyn and Long Island’s most audacious buildings through the 1980s and 90s. So he knows how to navigate politics and labor far better than a Ferrari.  

Eichner’s also often not given credit for many of the things he pioneered because taking credit for things makes you a target—which he prefers to avoid. In rarified development circles, however, Eichner is lauded with innovating many of real estate’s design-based sales tactics that are now industry standard.

In the 1980s and 90s, Eichner was one of the first developers to design his buildings with the smallest units on the lower floors and the larger units on top (hello three-story penthouse). He also was one of the first developers to demand that his contractors fit out the lobbies first, while the steel was still topping out 400’ overhead, knowing prospective buyers could be sold early on first impressions. He built the first model apartments in New York City on the highest floors to maximize the marketing advantage of the best views.

When Eichner shifted his focus to Las Vegas—one of America’s top tourist destinations desperate for its first actual 4-star, high-rise hotel that was not a thematic, horizonal monstrosity—he developed the Cosmopolitan. It was the first Las Vegas development ever wrapped in glass and steel to design balconies into every room. Casino incumbents, like Steve Wynn, thought Eichner was crazy.

“Everyone in Las Vegas told me ‘You can’t have balconies. People will jump from them’”, says Eichner, “So I said ‘Let’s build balconies’. I’m from New York. We love balconies. And we sold 1,700 units in less than nine months.”

Post Covid-19, Eichner senses another tectonic real estate development opportunity happening—though he’s still keeping his cards close to his vest on what that is.  

“Every 5-7 years, I end up coming up with some non-linear idea that results in a project,” Eichner teases. “And that’s after I spend 5 to 7 years learning more about the real estate market and understanding how I need to adapt to it. This virus has the potential to change everything about how we live. We just don’t know what it is yet. One of the inevitable consequences of this pandemic is that real estate is going to morph into something else that it wasn’t before. I don’t know what it is yet. But I have my ideas.”

One idea every developer seems to agree on is re-assessing the materials we build with—both from a health and sanitation standpoint as well as supply chain perspective, since more than 30% of America’s building materials currently are sourced from China.

“For certain there will be fewer porous or difficult to clean materials used,” says Paramount Miami’s Kodsi, “Certain materials that were in vogue just 5 years ago, like concrete countertops, would not even be considered in our developments moving forward at this point. Our priority, now more than ever, is to create sanitary and safe environments that people can enjoy and our maintenance teams can properly clean. Luxury has to co-exist with the “new normal” we’re returning to and it’s our job to find out what that is. We also have to make sure we’re not overly dependent on construction materials that can’t be produced right here in the U.S.”

Real estate’s new development paradigm will take some time to shake out. There’s still massive uncertainty in the markets and Covid-19’s longer term persistence is still unknown. If many regions of the country real estate and construction are still considered ‘non-essential’ and shut down entirely. But certain new “normals” seem certain.

“Gatherings amongst friends and residents will never change. People crave contact, and we hope this spirit is never lost in our buildings. It’s what they’re all about,” says Paramount Miami’s Kodsi. “But how that happens may have to change in the near-term future. Hand sanitizer in all public areas will become the new norm. Amenity spaces will have to encourage more elbow room, and seating will need to be farther apart to encourage natural physical distancing. Some amenities may also become more virtual, like cooking and yoga classes. Corona is going to accelerate some trends that were already happening. But what we all have to realize is that this isn’t going away any time soon. This is going to change everything.”

Now that the top down shift has commenced, architects, real estate brokerages, and realtors should be paying attention to what happens next.

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5 Tips for Moving During COVID-19

By taking extra safety precautions and minimizing social contact, you can still move safely.

Amid travel bans, widespread stay-at-home orders and social-distancing mandates, millions of Americans are learning to adapt to the changes brought about by COVID-19. Countless events have been rescheduled or cancelled, but for a few people — including those who already made plans to move this spring — staying put is simply not an option. 

If you are about to move, you can still pull it off with a little extra planning and a few precautionary steps.

Here are some tips for making your move as safe, seamless and stress-free as possible. 

DIY if possible

Even though most states have designated moving services as “essential” and therefore still able to operate, many smaller companies have reduced hours or have paused business altogether. If you can, try to manage the move on your own.

If you need help, do your homework on the companies operating in your area. Call to ask about sanitation procedures, whether the movers have necessary supplies (like masks, gloves and booties), and confirm there is a reasonable cancellation policy in the event that you need to change your plans.  

Minimize contact

If you’re working with a moving company, ask for a virtual quote and see if the company offers fully contactless service. 

Forgo handshakes, for obvious reasons. A smile and a generous tip (sent through Venmo, PayPal or another contactless digital platform) are a welcome substitute. 

Take extra sanitary precautions

  • Wear masks, gloves and booties. If you’re hiring a moving company, they’ll likely bring similar supplies for their workers, but consider having additional hygiene products available.
  • Disinfect frequently touched objects and surfaces, paying particular attention to door knobs and handles.
  • Place soap and paper towels next to sinks and hand sanitizer by doors.
  • Buy new boxes: The coronavirus has been found to live on cardboard for up to 24 hours, so this might not be the time to pick up used moving supplies from stores that are recycling them. You can also use boxes that you already have in your home. 

Be transparent and flexible

In advance of your move, reach out to your neighbors — especially if you live in an apartment building — and share the date and time you plan to move. This gives everyone in your direct vicinity an opportunity to avoid unnecessary contact and let you know if your timing is a problem.

If you or any family members are experiencing coronavirus symptoms, postpone your moving plans. Though rescheduling is a pain, the health and safety of your community comes first. 

Help those in need and lighten your load

Even in the best of circumstances, nearly 40 million Americans are unable to afford groceries. As COVID-19 forces school closures, soup kitchen shutdowns and a surge of layoffs, the need for anti-hunger provisions is greater than ever. Donate your shelf-stable items to a local food bank or to Move for Hunger, a national organization that works with professional moving companies and their customers to feed those in need.

Moving is hard work no matter what, and it’s especially challenging right now. But by taking extra precautions, you can — and will — get past this hurdle.  

Additional resources:

See below for a roundup of popular moving companies that are continuing service during coronavirus. The list is not exhaustive or provided as a recommendation of their services, and we encourage you to check the company websites for up-to-date information. 

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Mortgage Relief Requests Skyrocket As Homeowners Feel The Burn Of COVID-19

Homeowners are seeking mortgage relief in record-breaking numbers. 

According to the Mortgage Bankers Association, forbearance requests jumped 1,270% between March 2 and March 16 and another 1,896% between March 16 and March 30. In total, 2.66% of all mortgage loans are now in forbearance—a type of relief program that allows borrowers to pause payments for an established period of time.

Jeff Taylor, whose Digital Risk platform powers some of the nation’s biggest loan servicers, says the uptick in forbearance requests has been “staggering” in recent weeks.

“Each of the top five servicers has already received more forbearance requests in the last month than in the entire financial crisis of 2008,” says Taylor, managing partner at Digital Risk. “Servicers are up over 50 times in forbearance requests in one month compared to an entire normal year like 2019.”

MBA’s data shows that the number of loans in forbearance jumped from just 0.25% of all mortgages to 2.66% over the course of March. 

According to Mike Fratantoni, MBA’s senior vice president and chief economist, the requests are hitting independent mortgage bank servicers (non-depository servicing companies) the hardest. Among loans serviced by these organizations, 3.45% are now in forbearance.

Mr. Cooper is one of such independent servicer seeing a surge in requests. According to an 8-K form filed with the SEC on Monday, the company has placed 86,000 borrowers on forbearance plans—a whopping 2.5% of all its customers. The servicer has processed anywhere from 8,000 to 22,000 forbearance requests per day since March 27, the day the CARES Act was signed into law.

An 8-K filing from service Ocwen also shows significant forbearance volume. As of March 31, the company has issued 27,500 forbearances. 

“It is expected that requests will continue to skyrocket at an unsustainable pace in the coming weeks, putting insurmountable cash flow constraints on many servicers—especially [independent mortgage banks],” Fratantoni says. 

Call center and online search data certainly supports his prediction. According to MBA’s latest call volume survey, servicers are seeing more calls than ever. 

Hold times have jumped from two minutes to a whopping 17.5 minutes each, and call abandonment rates are up to 25%—meaning one in four customers eventually drops their call. 

Meanwhile, on the web, searches for terms like “mortgage relief” and “mortgage modification” have reached at all-time high. Even at the height of the housing crisis, relief-related web searches only accounted for only 20% of their current volume.

As Elizabeth Renter, a data analyst with NerdWallet, explains: “When compared with similar terms used during the housing crisis and Great Recession, the search interest for ‘mortgage relief’ in March 2020 is unprecedented.”

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Jared Kushner’s COVID-19 Brainstorms Stole Time From Scientists Racing The Clock: Report

A parallel COVID-19 strategy run by White House senior adviser Jared Kushner has sucked valuable time from health experts scrambling to respond to the surging pandemic and save lives, sources have told The Washington Post.

Comments and requests from President Donald Trump’s son-in-law that task force members felt compelled to respond to — no matter how “ill-conceived” — set them even further back on an already-delayed path, according to the Post.

The Kushner complication has been just one of a series of stumbles that hampered the U.S. response to COVID-19, costing the country its most valuable weapon in a fight against any pandemic: time, according to a scathing chronology of the battle by the Post. Though the U.S. has the wealth and knowledge to conquer a disease, it has been plagued by the president’s time-costing denial of the threat, a subsequent sluggish response, and a lack of efficient management, the newspaper reported.

As Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, and Health and Human Services Secretary Alex Azar worked to head off the surging cases of the new coronavirus, Trump tended to turn for advice to others with “no credentials, experience or discernible insight in navigating a pandemic,” the Post noted. One of those was Kushner, a former real estate developer with no previous government or medical experience, who ran a parallel COVID-19 team from a floor of the HHS, and cooked up a series of half-formed ideas, according to the Post.

One brainstorm was for Google to set up a national website to direct people to testing sites in Walmart parking lots across America, the Post noted. The multiple Walmart sites haven’t yet materialized. And Google was taken by surprise when Trump announced at a press briefing last month that it was creating a national testing website. The company was just beginning to design a map testing site — and only for the San Francisco Bay Area, where Google’s headquarters are located.

Another idea — pushed by Oracle chairman Larry Ellison — involved using software to monitor the use of anti-malaria drugs to fight COVID-19, according to the Post. The drugs have not yet been proven to be effective.

Such floated strategies often interrupted work of those already under “immense pressure” to catch up to the pandemic, the Post reported.

“Right now, Fauci is trying to roll out the most ambitious clinical trial ever implemented” to speed the development of a vaccine, a former senior administration official, who talks frequently to former colleagues, told the Post. Yet the top health officials “are getting calls from the White House or Jared’s team asking, ‘Wouldn’t it be nice to do this with Oracle?’ ”

For the first time on Thursday, Kushner spoke at Trump’s daily press briefing about battling COVID-19. Vice President Mike Pence announced that Kushner is now in charge of working with the Federal Emergency Management Agency to oversee the distribution of direly needed medical supplies. 

Ironically, Kushner noted that this was a time to judge the management capabilities of leaders. But he was talking about local leaders — governors and senators — not the president.

He also said that the Strategic National Stockpile of supplies was not for states to use in an emergency — which is exactly what they’re intended for, according to its own website at the time. The site has since been modified to conform with Kushner’s inaccurate claims.

Kushner also insisted, without citing any data, that cities do not need as many life-saving ventilators as they’re requesting. That same idea was expressed last month by Trump, who said he didn’t believe New York needed the ventilators Gov. Andrew Cuomo was requesting. “I have a feeling,” Trump told Sean Hannity on Fox News.

Cuomo responded the following day that estimates are based on mathematical projections by public health experts drawn from expected increases in COVID-19 cases and patient need. “I don’t operate on opinion. I operate on facts, data, projections,” Cuomo said at his daily press briefings. “All the projections say you could have an apex of 40,000 ventilators.”

The state on Saturday arranged to obtain 1,000 more ventilators — from China.

A HuffPost Guide To Coronavirus

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People Have Been Flocking To Rural Areas During COVID-19 Lockdowns

With much of the world on lockdown due to the spread of COVID-19, the last week has seen many city dwellers realise that they may be restricted to one place for a relatively prolonged period of time.

Rural areas from the U.K. to the U.S. have reported a dramatic increase in arrivals looking to self-isolate around nature.

However, the message from many is clear: we are closed to guests.

Just last weekend, the Snowdonia National Park in Wales experienced their busiest day in history. Other villages in Wales have been erecting signs that tell tourists to return home due to COVID-19 travel and isolation restrictions imposed by the government.

A spokesperson for Snowdonia National Park said: “Specific guidance is needed on what ‘necessary travel’ actually entails. We also call on all visitor and holiday owners to heed government advice and avoid all but essential travel, and to stay at home to stay safe.”

With people seemingly trying to escape to rural areas in the U.K., the government’s message has remained clear and firm: to stay at home unless strictly necessary to leave.

Derbyshire police have gone a step further and actually dyed the well-know Buxton “Blue Lagoon” the color black, to deter tourists from visiting.

Luxury properties in the countryside around the world have seen higher demand for the Easter period with city-dwellers moving to rural retreats during lockdowns.

In the Hamptons bookings for family homes have been reported to have increased ten-fold in the last two weeks, mostly driven by residents fleeing New York City.

With the Easter holidays approaching, demand for rural retreats has seemingly been one area of the travel market that has fared relatively well with lockdowns in place. One of the greatest testaments to globalization in 2020 is the fact that supply chains have remained robust and open despite the wider situation. Even with many people temporarily isolating in rural areas, there seems little concern about delivery and availability of essential items including groceries.

The message from governments, however, has remained clear: stay at home. With towns in the U.K. and the U.S. pushing back against new visitors, the same message is echoed even down in Australia.

The seaside town of Robe which lays close to the South Australian state border has also encouraged people not to visit during lockdowns. The town’s mayor noted an increase in “older travelers” that are stretching the resources of a destination that has just one doctor and one clinic.

In Scotland, East Lothian has also reported that their seaside town is becoming an “isolation hotspot.” The rural setting is just 30 minutes drive from the city of Edinburgh and locals have reported  a similar influx of visitors that are “waiting it out.”

Scotland’s First Minister, Nicola Sturgeon,  addressed these concerns directly in a statement. She urged people to practise social distancing and said: “It may well be an understandable human instinct to think we can outrun a virus – but the fact is we can’t. What we do is risk taking it to the places we go. And in our remote and rural communities that means extra pressure on essential services and on health services that are already more distant from people.”

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