Expected Air Date: 12/28/17

Opening:

Roger sees 2017 out and makes his predictions for real estate and real estate investors for 2018. What will happen with home prices, interest rates, the housing market, foreclosures, and more. It’s what we are tracking in our own business and it’s the data you should have.

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News: 

• From CoreLogic
  • Mortgage Loans Exhibit Higher Credit Quality Since the Great Recession
  • Refinance-Loan Risk Up Year Over Year Due to Lower Credit Scores and Higher DTI
  • Overall Mortgage Delinquency Rate Fell to 0.2 Percentage Points YoY
  • Early-Stage Delinquencies Rose 0.3 of a Percentage Point YoY
  • Prices Starting to Out-Pace Value With 50 Percent of the Top 50 Markets Overvalued

  • October Marks Second Consecutive Month of 7 Percent YOY Increases

  • Home Prices Projected to Increase 4.2 Percent by October 2018
  • All States Posted Year-Over-Year Price Gains in October 2017
• Get em before they’re gone! Million dollar condos in Paris, soon will be worth $2m. https://www.mansionglobal.com/articles/84479-time-to-buy-in-paris-amid-booming-real-estate-market Also interesting is that a pro-business, anti-socialist President is seeing a huge rebound in the French economy. Go figure. 
• The experts are now agreeing with predictions I was making last March! https://www.marketwatch.com/story/what-to-expect-from-the-real-estate-market-in-2018-2017-12-28
• And another… https://www.dailyforexreport.com/trends-watch-2018-real-estate-market/
• They manage to work global warming into an article on real estate. https://www.bloomberg.com/news/features/2017-12-29/south-florida-s-real-estate-reckoning-could-be-closer-than-you-think
• Tis the season to invest in Real Estate? https://www.entrepreneur.com/article/306639
• https://www.forbes.com/sites/forbesrealestatecouncil/2017/12/28/buying-rental-property-vs-investing-in-a-reit-part-i/#10f2ec0c62ce
• https://www.cnbc.com/2017/12/27/how-creativity-helped-barbara-corcorans-real-estate-career.html Creativity! You should not pursue creativity first, however. This is an edge that can set you apart when the market is efficient.
• Buy from Government auctions. https://www.washingtonpost.com/lifestyle/home/how-to-score-big-at-government-auctions-on-everything-from-real-estate-to-bugles/2017/12/28/cfd9a2d0-e415-11e7-833f-155031558ff4_story.html?utm_term=.6ad503bbc34d
• https://www.realtor.com/news/trends/hottest-real-estate-markets-winners-losers-2017/
• And now the Top Ten Hipster Markets in the US in 2017 – cause no one else is going to tell you this… https://www.realtor.com/news/trends/hottest-hipster-markets-america/
• One more Top 10 list – Small Towns where you’d actually want to live. https://www.realtor.com/news/trends/most-affordable-small-town-youd-actually-want-to-live-2017/

Topics:

Looking Ahead to 2018

By the end of the year:

1. Interest rates will be up – between 4.5-5.
2. Values nationally will continue to climb, but not as much as over the previous 12 months. 4-5% vs 7% in each of the past two years (and 10-12% the years before that).
3. The coastal areas will see slowing in sales
4. All areas will see movement back toward a balanced market.
5. Foreclosures will be at an all time low for six months and begin to creep back up toward the end of the year. Levels will still be at all-time lows.
6. The hedge funds that are still in houses won’t be going anywhere in 18. They have finally started making money. 
7. Fix and Flip opportunities remain:
   1. What the Funds don’t want.
   2. In the areas where the Funds don’t operate
   3. Smaller older homes in booming areas.
8. When you buy right – the opportunities are there everywhere. 
9. No reason to change your max offer.
10. Buy right, buy and hold. Shoot for 8-9% cash on cash return. Higher if borrowing the money.
11.  REITs and crowdfunds to consider – NOT retail space. Office space, industrial or manufacturing space. Look for funds that grow equity as well as dividends. 
12. Choose partnerships in SFR rentals where you can find them. 
13. Highest passive returns will be in funding flips. Always been true but especially this year. 
14. Flips accounted for 5.8% of sales over the past 12 months. I expect this percentage to dip slightly in the next 12 months, but it won’t be a significant change. 
15. There’s PLENTY of room for new investors to get in, but urban markets are getting saturated with real estate investor wannabes. 
16. More opportunities will be available in medium size cities and suburbs, but opportunity will still remain in gentrifying location. Gentrification is similar to the “buy in the path of progress” adage. 
17.  BIGGEST opportunity of 2018 – for anyone who can figure out how to make monty building affordable housing in key urban areas.