In this week’s Real Estate News in Brief, a landlord loses control of his properties after tenants violated city rules on short-term rentals, Apple Stores are becoming the mall’s best friend, and homeownership is going to the dogs among millennial buyers.
We begin with economic news from Market Watch:
Pending home sales broke out of a three-month slump with a 1.5% increase in June. The National Association of Realtors says that sales would be stronger if we had more homes on the market to sell. NAR says the economy has added a net 2.2 million new jobs over the last year, but contract signings for the first half of 2017 are about the same as they were one year ago.
Personal income was flat in June but consumer spending notched up a tenth of a percent, along with core inflation. Commerce Department data shows that households spent more on health care, but saved money on gas — and that Americans are taking a cautious attitude despite continued economic growth, and low unemployment.
Construction spending fell 1.3% in June to a seasonally adjusted rate of $1.21 trillion. Economists had expected a 0.4% increase.
Interest Rates from Freddie Mac
Mortgage rates did not change much. Freddie Mac says the 30-year fixed-rate mortgage rose just 1 basis point, to 3.93%. If typically follows the 10-year Treasury yield, which was flat.
Other Real Estate News Making Headlines:
Judge Yanks Control of Property Over Short-Term Rental Violations
A new warning for landlords with tenants who don’t follow city rules for short-term rentals. A Manhattan judge yanked control of two properties from a landlord accused of violating the rules. It’s a first-of-its-kind decision that will put the properties into receivership, under the control of an independent manager. The owner, Salim Assa, has appealed the decision, so he will retain control until the appeal is heard.
The New York Post writes that Assa’s lawyers say the landlord is being victimized, because the renters are the ones violating the rules, with “no” repercussions. Attorney Anthony Genovesi said in the Post: “The landlords can’t control a tenant’s bad decision. In this case, the landlord did absolutely nothing wrong and had no involvement in any temporary residences. The landlord terminated the lease of any and every tenant who permitted a temporary residence.”
Atlanta Attracts Institutional Investors
Institutional investors are showing more interest in Atlanta’s real estate market. The Wall Street Journal reports that the city has experienced rapid job growth, creating a need for more housing. This past week, JLL Income Property Trust announced the purchase of a $47 million dollar apartment complex in an affluent part of the city.
Atlanta is the ninth largest metro in the country, and is recognized as an economic hub in the south east. Almost 5.8 million people live there, and job growth is outpacing the national average. Last year, the city gained 77,000 new jobs. It also ranked third on a list of “Best Cities to Live” by USA Today.
Homeownership Going to the Dogs
A new survey for SunTrust Mortgage has discovered an interesting fact about Millennials and homeownership. It says that having a place for a dog ranked as the third most-important reason for buying a home among Millennials. The number one reason is to have more living space, followed by the desire to build equity. Dogs came next, before marriage or the creation of a family.
Among millennials who’ve never bought a home, 42% say that their dog, or plans to get one, are important decision-making factors for buying a home in the future. SunTrust CEO Dorinda Smith says: “For those with dogs, renting can be more expensive and a hassle.” She says: “Millennials have strong bonds with their dogs, so it makes sense that their furry family members are driving home-buying decisions.”
Apple May Save U.S. Malls
Malls that are struggling to remain relevant, are getting a big boost from Apple Stores. The Street writes that Apple has triggered a new phenomenon that is helping its mall neighbors and it’s called “foot traffic”.
If you’ve been to an Apple Store, you’ve probably seen a lot of activity. Apple Stores attract people. The Street writes that about 140 million people in the U.S. have iPhones, and that millions will go to the Apple store for service. While they are waiting they might go shopping, or they may stop at other stores on their way out. The Apple Store has essentially become the hot new mall “anchor store”.
From “Gold Rush” to “Green Rush” for one California Town
An Arizona pot grower bought an old California mining town, with plans to turn it into a pot-friendly tourist destination. Medical cannabis technology company American Green bought the tiny town of Nipton, in San Bernardino County, for about $5 million. It’s on the upper side of the Mojave National Preserve, across the border from Nevada. It’s about 1 hour from Las Vegas, and about 3 hours from Los Angeles.
The company plans to invest $2.5 million to revitalize the town and add pot-related attractions and marijuana manufacturing facilities. Business Insider writes that that could include a marijuana farm, pot dispensaries, and a pot-friendly bed-and-breakfast complete with a morning “toke”. The company says one of the first products will be water from a local aquifer that’s infused with hemp oil, which is believed by some to have medicinal benefits, without getting you high.
A consultant working on the project told Business Insider that the company wants to “create a community that is accepting and understanding” of marijuana use. Construction is expected to begin immediately, but it could take a while to set up any cultivation sites. The town is unincorporated and must incorporate before it can apply for a grower’s license.