5 Things I Learned at the HOPE NOW Symposium

 

HOPE NOW represents an alliance of some of the brightest and most talented professionals from mortgage, servicing, investors, non-profits, market participants and government bodies. The mandate of this group is to work together to provide outreach to homeowners in distress with the goal of helping them determine and navigate their housing options. Recently HOPE Now held an invitation only event in Washington DC and I was proud to represent Atlantic & Pacific Real Estate (by the way, we were the only real estate company in the country in attendance!). The focus of the event was Effective Planning and Implementation of Home Preservation Efforts through REO Rent to Own Strategies.

There is a certain energy that comes with being in the nation’s capital and this was certainly an engaged group. It was a day and a half of non-stop information. I took notes fast and furiously!

Here are a few of my take-aways.

  1. The homeownership rate in the US continues to drop. It is currently sitting around 65%, down from a high in the mid 2000’s of around 69%. For every percentage this number drops it represents about a million households turning from ownership to some other form of housing. This is the biggest reason the rental market is so strong. As real estate professionals, we need to be adding rental strategies to our business models.
  2. New Jersey, New York, Florida, California and Illinois represent 52% of all foreclosure inventories in the US. These states are being called the “Big 5”. Interesting to note that 4 out of 5 of these states are judicial states and have the longest foreclose time lines.
  3. Those of us in real estate deal with daily with the frustrations of working with distressed properties. Navigating asset managers, finding the right banking representatives, dealing with property preservation vendors and so on. It’s not easy. We often wonder why these institutions don’t have better processes and systems. The reality is, this is a new housing market. It never existed before and therefore processes to support millions of distressed properties have not existed. Listening to leaders from several of the largest financial institutions and servers in the country discuss this was truly eye-opening.
  4. This is the year of the short sale. There was much talk about working “upstream” in the distressed property continuum. So much value is retained in a house if the foreclosure process can be avoided. This is not only good for property values but also for community preservation. Over 50% of distressed homeowners never talk to anyone when they can no longer make their mortgage payments. Real estate professionals are the front line of defense in the local market. We have a huge opportunity to educate and support distressed homeowners sooner in the cycle and create a win-win for everybody.
  5. The biggest near term problem facing the housing market is the shadow inventory. If no additional volume was added it would take 38 months to clear the shadow inventory through the market at the current pace of liquidation of 85,000 unites per month. The challenge is there is an estimated 9.2 million homes in jeopardy of defaulting. This market isn’t changing anytime soon.

So, what does this all mean for the real estate industry? It means you better be aligned with a company that is expert in the distressed housing market because it will be dominating the majority of transactions for the next several years.

This article was originally published in “This Week @ APRE”. 

Published by Wendy Forsythe

I've spent my career working with people and organizations to help them build their brands. We live in a connected world where that line between a personal and professional persona has become nonexistent. Your brand is you 24/7. This blog is about me and my life. Some of it will relate to my passion for the real estate industry and some of it will just be about me living life and exploring my interests. The opinions expressed here are my own personal opinions.

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